Aviva profits decline after flood claims
by Kay Murchie
Britain’s biggest property insurer, Aviva Plc, has noted a decline in first-half profits by 5% after U.K. flood claims eroded revenue gains overseas.
Net income dropped to £807 million, or 30.7 pence a share, from £856 million, or 35 pence a share, 12 months earlier. The company announced that long-term savings product sales increased 25% to £19.3 billion, driven by strength in the U.S. and Asia.
Aviva had £340 million of claims following Britain’s worst flooding in 60 years. In the US, the world’s biggest retirement-saving market, Aviva increased sales after buying Des Moines, Iowa-based AmerUs Group Co. in 2006 for $3.1 billion. Aviva raised its dividend 10% and predicted considerable growth amid a buoyant world economy.
Aviva shares are down 14% this year, making them the second-worst performing stock in the 28-member Bloomberg Europe insurance index, which lost 1.2%.
A spokesperson for Aviva commented that losses in the UK, related to severe weather, have been countered by strong growth across our life and asset management businesses. The USA has continued to be the star performer.
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