Aviva (LSE:AV.) shares have been getting a lot of attention from investors in 2025. And with the insurance giant’s share price rising by 36% since the start of the year, along with an extra 7% from dividends, it isn’t hard to see why.
A £5,000 investment in the last 12 months is now worth around £7,150. But if the analyst team at RBC Capital Markets is correct, even more growth is coming around the corner.
Let’s take a look at how much money these experts think investors could make with Aviva shares in 2026.
Aviva’s 2026 growth potential
Mandeep Jagpal is the co-head of insurance equity research at RBC and his forecast of Aviva shares climbing to 760p by this time next year currently stands out as one of the most bullish institutional predictions. Yet, when looking at his investment thesis, his optimism might be justified.
With Aviva recently gobbling up Direct Line, the firm has rapidly accelerated its strategic shift towards becoming a capital-light general insurance enterprise from its current life insurance-heavy structure. And since the deal was announced, Aviva has already almost doubled its initial estimate for cost synergies from £125m to £225m by 2028.
This came paired with new and upgraded three-year growth targets, including:
- An average of 11% underlying earnings per share (EPS) growth a year by 2028.
- Boosting its return on equity above 20% by 2028.
- And generating at least £7bn in cash through its operating subsidiaries after covering local expenses.
As such, Jagpal sees the business continuing to reward shareholders with chunky dividends and share buybacks, perhaps more so than its primary competitors.
Some of this growth is undoubtedly already priced into its current valuation. But the RBC forecast still suggests another near-18% potential gain remains on the table along with today’s 5.7% dividend yield. In other words, assuming this projection’s accurate, another £5,000 investment today could grow to £6,185.
What could go wrong?
While Aviva appears to be on an exciting trajectory, it’s important to remember that forecasts and not set in stone. And with several looming headwinds, the stock could end up leaving investors disappointed.
Even if the integration of Direct Line continues to proceed flawlessly (which is by no means guaranteed), there’s a wider macroeconomic threat still plaguing the insurance industry right now – inflation.
Despite best efforts, inflation remains a tricky challenge, particularly for general insurance groups where the cost of claims can rise rapidly, particularly for cars and houses. The result could be an erosion of profit margins and capital buffers.
Furthermore, the Autumn Budget may have also created a new, less obvious headwind. With long-term economic growth revised downward alongside new tax hikes, demand for Aviva’s retirement and pension-related products could suffer in the coming years. While this isn’t likely to cause massive disruption, it does make hitting its new 11% EPS growth target more of a challenge.
The macroeconomic threats aren’t unique to Aviva. Almost every British insurance group will likely have to grapple with the evolving landscape. But with its financials already in top-notch condition, Aviva could be better positioned to adapt and outperform. That’s why I think Aviva shares are worth a closer look. But it’s not the only FTSE 100 insurance enterprise on my radar today.
