Aviva, the UK’s largest insurer, also reported some of the largest growth figures for the first half of 2007, with “worldwide sales” up 25 percent to £19.294 billion ($38.816 billion).
Other earnings higlights included:
— Life EEV operating profit up 24 percent to £1.251 billion ($2.515 billion), with growth across all regions
— UK: Record half year; sales up 7 percent to £7.415 billion ($14.91 billion); higher margins, improved service and lower costs
— Europe: Excellent performance; sales up 14 percent to £8.131 billion ($16.35 billion); strong growth in Southern and Eastern Europe
— US: Outstanding performance; sales up 51 percent to £1.716 billion ($3.45 billion); integration on track
— Asia Pacific: Continued strong sales growth, up 72 percent to £2.032 billion ($4.086 billion); new markets entered.
However, the Group’s UK profits, which include Norwich Union, were impacted by the floods that hit the country in June and July. As a result the Group’s combined ratio rose to 97 percent – still ahead of Aviva’s “meet or beat” goal of 98 percent.
First half general insurance and health profits were down by 34 percent to £560 million ($1.125 billion). The “exceptional UK weather losses,” of which only the June floods are included in the current earnings statement, have so far cost the Group £235 million ($472.37 million). The July flood costs are estimated at around £165 million ($331.46 million), and will be reported for the second half of the year.
Group Chief Executive Andrew Moss discussed the far reaching “generational changes” in the Group’s management that have taken place over the last six months. “My new management team brings energy, pace and fresh thinking to Aviva,” he noted. “Our top priority is to realize the full potential of our existing businesses.
“Our new regional structure gets us closer to our customers, making it easier to offer products that are relevant in today’s changing market with better service,” Moss continued. “Constant attention to meeting the needs of our current and future customers will create extra sales momentum and deliver growth. By eliminating unnecessary complexity, and drawing our operations across the world closer together, we will boost productivity and deliver further value to our customers and shareholders.
“Overall, Aviva has performed well in the first half of 2007. Substantial weather related losses in the UK have been countered by strong growth across our life and asset management businesses. The US has continued to be our star performer.”
The complete report and a web cast of the investors and analysts’s conference may be obtained on the Group’s web site at: http://www.aviva.com.
The bulletin also noted that a replay facility will be available until 24 August 2007 on +44 (0)20 7806 1970. The pass code is 4352983# for the whole presentation including Question & Answer session or 3161418# for Question & Answer session only.
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