Rise in weather related claims makes dent in Aviva’s first half profits | City A.M.

Insurer Aviva said profits took a slight dip in the first half of 2018 as business was hit by divestments, weak earnings in its Canada division and a rise in weather related claims.

The figures

Operating profit was down two per cent to £1.4bn – excluding disposals it rose four per cent to £1.4bn.

It gave investors a 10 per cent boost to the interim dividend, its fourth consecutive half-year rise.

The company’s capital surplus also remains strong, it said, coming in around £11bn.

Despite the fall in operating profits, Aviva said it was still on track to hit its target of five per cent growth this year.

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Why it’s important

Aviva said this half had been particularly tough due to weak results in Canadian motor insurance, and interestingly, adverse weather conditions leading to a rise in claims.

But the firm remains confident, keeping investors happy with another hike in its dividend.

Aviva took a small hit to shares in early trading, as its price declined 0.7 per cent.

What Aviva said

Mark Wilson, Aviva chief executive, said:

The 10 per cent increase in the interim dividend is our fourth consecutive half-year of double digit dividend growth and further proof of Aviva’s progress. During these choppy market conditions, it is reassuring that Aviva’s results are consistent, dependable and growing.

Aviva remains financially strong with a capital surplus of £11bn. In the first half of 2018, we started a £600m share buy-back and paid off €500m of expensive debt.

We remain on track to achieve our financial targets.

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