Net premiums falls by 3% to £5.4bn as COR hits 100%
Aviva, parent company of Norwich Union, has seen its general insurance profits plummet 39% to £1.033bn, and its combined operating ratio (COR) climb 6% to 100%.
Norwich Union itself accounted for a £433m profit, little over a third of the £1.12bn it posted in 2006.
The company's net premiums also shrank by 3% to £5.4bn.
Aviva blamed the £475m losses from the summer’s floods for its poor 2007 results, claiming its COR would otherwise have been 95%. It also pointed to competitive conditions in most lines of business in the UK.
The company released reserves of £430m last year.
The insurer retained a healthy balance sheet, it said, with net asset value per share up 13% to 772 pence and a dividend increase of 10% to 33 pence. It claimed that the balance sheet had not been materially affected by the global credit crunch.
Group chief executive Andrew Moss said: “The advantage of our diverse business model is demonstrated by robust financial results which show our fast-growing life business offsetting the exceptional losses caused by the worst UK floods for 60 years. In volatile investment markets our conservative approach to investment risk has served us well.”
In a statement the company said that it was considering a review of its reinsurance contracts.
