Aviva: July floods will cost £165m

Following the July floods in Gloucestershire and the surrounding areas, Aviva has estimated the cost of this event to be in the region of £165m.

These costs will impact the group's general insurance results in the second half of the year.

The initial cost estimate of £175m for the June floods remains unchanged. In a statement the company said: “While Aviva remains fully committed to a group [combined ratio] target of 98%, due to the exceptional nature of the recent bad weather claims in the UK in 2007 there is a degree of uncertainty concerning Aviva's ability to meet the group target in 2007.”

Aviva said it had exercised its reinsurance option to limit the maximum cost of future similar events in the UK this year to £110m, the cost of which is included in the estimate of £165m.

A network of loss adjusters, contractors and claims team swas on site at all flood areas to assess the full extent of the damage, while call centre staff numbers have been doubled, the insurer said.

A fully equipped mobile advice centre had been sent to Gloucestershire, manned by claims and repair specialists, to provide practical help and advice on dealing with the aftermath of homes and businesses being flooded. Work also continued in the north of England following the floods in June.

Igal Mayer, chief executive of Norwich Union Insurance, said: "Having visited Gloucestershire myself, I've witnessed at first hand the traumatic and emotional impact the floods have had on our customers.

"We're bringing in additional contractors and specialist equipment to ensure repairs are carried out as quickly as possible, and we're in discussions with local authorities to find the best solution to providing temporary accommodation for those who have had to leave their homes.

“We will continue to do everything we can to help our customers affected by these devastating events return to normal as soon as possible."