Aviva, R&SA Assess UK Flood Costs

The UK’s two largest insurers, Aviva plc and Royal & SunAlliance Insurance Group plc, have both issued preliminary estimates of how the claims from the recent floods (See IJ web site June 27, 29 and July 2) would impact their results.

Aviva put the cost of claims relating to the floods to be in the region of £175 million ($351.8 million), indicating that they would “impact the group’s general insurance results in the first half of 2007.”

R&SA put its preliminary estimate at £55 million ($110.5 million), net of reinsurance recoveries.

Both companies stressed that the estimates were just that, and that they were awaiting further claims developments. They also indicated that the floods would not seriously affect their earnings projections.

Aviva said it “remains committed to meet or beat a combined operating ratio of 98 percent.”

R&SA’s bulletin stated: “The financial impact of these floods will be included in the Group’s first half results, but does not affect its full year guidance, and the Group reaffirms its expectation of a combined operating ratio of better than 95 percent for 2007.”