6th Aug 2020 09:01
(Alliance News) - Aviva PLC on Thursday said its financial performance in the first half of 2020 was "solid", thanks to a diverse range of products, excellent partners and swift operational response to the Covid-19 pandemic.
The insurer added that it will pay a second interim dividend of 6.0 pence per share and has decided to review its longer-term dividend policy "in light of our strategic priorities and the future shape of the group".
The company in April withdrew its final dividend for 2019 for ordinary shareholders in view of the extreme uncertainty prevailing at the time and following a request from Bank of England.
Earlier this week, peer Direct Line Insurance Group PLC said it would make a special shareholder payout alongside an increased interim dividend, despite a fall in first-half profit.
Aviva's pretax profit for the six months to June 30 slumped 61% to GBP804 million from GBP2.05 billion recorded a year ago.
Operating profit - the company's preferred profit measure - fell 12% to GBP1.23 billion from GBP1.39 billion.
Excluding Covid-19 impact on general insurance claims of GBP165 million, operating profit was flat year-on-year.
First-half income dived 75% to GBP10.51 billion from GBP42.57 billion. The sharp drop was primarily due to a investment loss of GBP3.64 billion versus GBP28.01 billion income.
Gross written premium was broadly flat at GBP15.23 billion in the interim period, while net premium were down slightly to GBP13.03 billion from GBP13.49 billion.
"Our interim results clearly reflect the challenges Covid-19 has brought in terms of increased insurance claims, reduced customer activity levels, lower asset values and additional expenditure on operational readiness and risk management initiatives. However, the results also demonstrate some of the fundamental strengths of our businesses and our disciplined and effective response during what was a period of extreme uncertainty and disruption," Aviva said.
Looking ahead, the company said growth and profitability targets will be harder to deliver due to persisting uncertainty created by the virus outbreak and a gradual recovery in customer activity.
Shares in Aviva were up 6.5% at 302.70 pence each in London on Thursday morning, the best performer in the FTSE 100 index.
By Tapan Panchal; [email protected]
Copyright 2020 Alliance News Limited. All Rights Reserved.
Related Shares:
Aviva