7th Nov 2013 08:24
LONDON (Alliance News) - Aviva PLC Thursday said it has attracted stronger levels of new business over the first nine months of the year, buoyed by its performance in France, Poland and Turkey.
The general insurer's UK core division also attracted higher levels of new business, up 5% to GBP302 million.
Overall, Aviva's value of new business was GBP571 million over the first nine months over the year to September 30, up 14% compared with the same period last year, driven by a 33% increase to GBP112 million in France and somewhat higher rises in Poland, Turkey and Asia, with the combined value of new business from those markets totaling GBP128 million.
The good performance in those markets offset a decline in the value of new business attracted in Spain, which saw a decline to GBP19 million from GBP32 million, and Italy, which saw a decline to GBP7 million from GBP19 million.
However, in line with previous guidance, Aviva said it expects overall growth of new business to "moderate" in the final quarter of the year, primarily due to a strong corresponding quarter last year.
Aviva last month completed the sale of its US operations to Athene Holding Ltd. in deal worth USD2.6 billion, some USD800 million more than previously announced.
It said Thursday it had seen a stable performance in its general insurance business, which reported a combined operating ratio, a measure of underwriting profitability, of 96.9%, broadly flat on last year's figure.
Aviva said its combined operating ratio's stability was down to its geographic diversification, while the UK operation's combined operating ratio was 95.5%, as a result of lower expenses and favourable weather conditions. The insurer said it expects the losses from the St. Jude Day storm in the UK in October to be about GBP10 million.
Net written premiums in Aviva's general insurance and health business were 2% lower at GBP6.60 billion.
"In summary, overall operating performance continues to be satisfactory, and Aviva is where I thought it would be at this point in its transformation," Mark Wilson, chief executive, said in a statement. "Although the macroeconomic environment is showing signs of improvement, our plans do not require this. The turnaround at Aviva is still in its infancy; we have made progress this year and whilst there is room for optimism there remains much to do."
Meanwhile, cost cutting remained high on Aviva's agenda with operating expenses 10% below the 2011 baseline expense level and 7% lower year-on-year.
The insurer said it was on track to deliver a cost-base in 2014 which is GBP400 million lower than reported in 2011, "regardless of the impact of inflation", it said.
Restructuring costs for 2013 are expected to be in line with the company's expectations, lower than the GBP461 million reported in 2012, while the insurer expects the costs to be "materially lower in 2014".
Aviva shares were early Thursday quoted at 444.70 pence, down 0.1%.
By Samuel Agini; [email protected]; @samuelagini
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