The Aviva (LSE: AV) share price has done what few other FTSE 100 financials have managed over the last year… put on a bit of a show.

As somebody who holds Legal & General Group, M&G and Phoenix Group Holdings, I find this rather annoying. Their shares are all down since I bought them last year (although their bumper dividends compensate). 

Aviva’s the one that got away but even its shares have plateaued lately, along with the rest of the FTSE. Not today though.

This FTSE 100 financial stock is beating its rivals

They’ve jumped 4.66% so far this morning following a well-received set of Q3 results, which showed double-digit growth in general insurance premiums, life insurance and retirement sales, and even wealth net flows.

General insurance premiums climbed 15% over the first nine months of the 2024 financial year to £9.1bn. Protection and health sales leapt 22% to £403m, boosted by April’s acquisition of AIG UK.

Retirement sales were the big winner though, up 67% to £7.3bn. The big insurers have identified bulk purchase annuities as a massive growth area, and so it’s proved with Aviva’s revenues almost doubling to £6.1bn.

Bulk annuities involve taking over a company’s pension schemes to bear the risk on behalf of management. It’s given insurers a big new market to aim at. There’s a lot of competition with L&G, M&G, Phoenix and others jostling for share, but Aviva’s clearly holding its own.

Chief executive Amanda Blanc declared Q3 “very strong” and pinned it on Aviva’s consistent strategy, scale, diversification and financial strength.

Aviva’s still forecasting £2bn of operating profit by 2026, up from £1.47bn in 2023. Shareholders should get their rewards, with Blanc confident of “growing the dividend” and making “regular and sustainable returns of capital”.

Dividends aren’t guaranteed and Aviva’s haven’t recaptured their pre-pandemic highs, as this chart shows.

Chart by TradingView

However, they’ve still been climbing steadily and today’s bumper trailing yield of 7.02% is forecast to hit 7.81% in 2024 and 8.39% in 2025.

A high rate of dividend income and growth prospects

Aviva looks decent value with a trailing price-to-earnings (P/E) ratio of just 12.6. That’s below the FTSE 100 average of 14.2 times.

There are downsides though. The big FTSE 100 financials haven’t offered much share price growth for years. Aviva’s up 10.3% over 12 months, and a modest 18.09% over three years. The dividend has to do a lot of heavy lifting to keep shareholders happy.

I expected Aviva and the other FTSE 100 financials to get a major boost as central bankers slashed interest rates. This would make the income they pay look even more dazzling relative to savings rates and bond yields.

Also, I hoped rate cuts would light a fire under their share prices, but with inflation expected to remain sticky, I’m not so sure today. So its shares may idle despite strong sales growth. Imagine if they slow down?

I’d still buy Aviva like a shot but I’m already over-exposed to this sector thanks to Legal & General, M&G and Phoenix. If I had a time machine I’d fly back and swap the lot of them for Aviva. Alas…