2nd Aug 2018 08:38
LONDON (Alliance News) - Aviva PLC on Thursday reported a drop in interim earnings due to challenging market conditions in Canadian motor insurance, a significant increase in weather related claims, and business disposals.
The insurer, however, added that the these factors are expected to reverse in the second half, and the company remains confident of meeting its target of greater than 5% growth in operating earnings per share.
Operating profit, excluding disposals, for the six months to June-end totalled GBP1.44 billion, down 2% on GBP1.47 billion recorded a year ago. Reported operating profit and earnings per share rose 4% to GBP1.42 billion and 26.8 pence per share, respectively.
First half pretax profit plummeted to GBP432 million from GBP1.03 billion a year ago, on net premiums of GBP13.79 billion and GBP12.14 billion, respectively.
Combined operating ratio - a key profit measure for insurers - stood at 97.4% versus 94.5%. A ratio below 100% indicates that the company is making underwriting profit, while a ratio above 100% means that it is paying out more money in claims that it is receiving from premiums.
Aviva declared an interim dividend of 9.25 pence per share, up from 8.40p paid a year ago. The 10% increase in the interim dividend is its fourth consecutive half-year of double-digit dividend growth and further proof of Aviva's progress, the company said.
Shares in Aviva were trading 1.2% lower at 489.90 pence per share on Thursday morning.
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