It has been a strong start to 2020 for insurance giant Aviva – albeit with more than a cautionary word or two about what may be around the corner amid the COVID-19 pandemic.
The company today revealed that its general insurance net written premium had risen to £2.4 billion (around AU$4.46 billion) – up from £2.3 billion (around AU$4.27 billion) in the same period a year earlier. This included a climb on its home turf of the UK of 1% year-on-year to £1.0 billion (around AU$1.85 billion); while net written premiums in Canada were up 8% to stand at £0.6 billion (around AU$1.11 billion) reflecting premium rate increases across all lines. Excluding COVID-19 impacts, Canadian underwriting was a particular point of success for the firm with benign weather helping to boost the overall result.
Meanwhile, the firm’s life new business sales surged – up 28% to £12.3 billion (around AU$22.85 billion), while the value of new business grew 18% to £311 million (around AU$577.9 million). UK life new business sales soared by 162%, while Singapore enjoyed a 57% increase.
However, what about that COVID-19 shaped cloud?
According to CEO Maurice Tulloch, the insurer was quick off the mark in addressing the pandemic.
“In responding to COVID-19, Aviva moved quickly to support our customers, introducing a range of new measures to help, including financial assistance,” he said. “I am proud of how Aviva’s people have adapted and maintained excellent day to day service to our customers why they need us most.
“At March 31, our estimated solvency ratio remains strong at 182% and incorporates COVID-19 related impacts. The economic outlook remains uncertain and will impact our business, however the strength of our capital and liquidity means we are well positioned to manage this crisis and continue to support our customers.”
Overall, based on an analysis on April 30, Aviva predicts COVID-19 related claims in its general insurance business to reach £160 million (around AU$297.3 million). It noted that early second quarter trends have seen new business volumes decline across many of its businesses due to Government-enforced lockdown measures. It added that customer activity levels have risen recently, but it still expects an overall decline in sales volumes for the year as a whole.
It also estimated claims for business interruption at £200 million (around AU$371.7 million).
“The vast majority of our commercial insurance policies do not cover business interruption claims arising from COVID-19,” it said in its statement. “However, we anticipate potential areas of exposure in certain specialist schemes and broker programmes, and we have paid claims in the UK and Canada where coverage exists.”
It noted that it remains committed to its 2022 targets, but that COVID-19 would present additional challenges to achieving them.