General insurance gets a mention in Q1 results for first time.
In its first-quarter results released today Aviva said its general insurance division is on track to meet or beat its profitability target of a combined ratio of 98%.
For the three months to 31 March, the insurer said that while competition remains strong in many of its general and health insurance markets, it had seen some premium growth in Europe.
In its UK general insurance business, the company said it is taking action to transform its business model but its priorities remain focused on disciplined underwriting and cost reduction. As announced last year, it restated it remains on track to deliver £200m cost savings in 2008. The company said it continues to lead in rating action and it also predicted commercial lines should begin to harden in smaller accounts.
Aviva has over 70 general insurance products in the UK but its strategy is to simplify its offering to less than 20 products.
Andrew Moss, group chief executive, said: “The UK general insurance market continues to be competitive and we remained focused on profitability, and on reducing complexity in our products and processes.
“Overall, we are making good progress towards the group’s medium-term performance targets and the cost savings we announced last year. While we expect some further short-term uncertainty in some of our markets, the strength of our balance sheet and the prudent management actions we took last year will help us ride out economic turbulence.”
It is the first time the company has provided a first-quarter general insurance update, which it did as part of the EU Transparency Directive. But full figures will not be available until interim and final-year results.
Meanwhile in its overall group results, worldwide sales rose 2% to £9.4m and life and pension sales were up 5% to £8.16m.
The 5% hike in sales beat forecasts due to growth in the US and Asia but Aviva said it expects the UK market to shrink in the coming months. UK sales have fallen 3% in the first quarter.
