Aviva revises down pandemic BI claims cost estimate

Aviva has revised down its business interruption claims exposure because of lower than expected claims frequency during the third quarter of the year, the company said today.

”At 30 September 2020, our estimate of Covid-19 related claims in our general insurance businesses, incorporating notified and projected claims for business interruption, other commercial lines and travel insurance, net of offsetting favourable impacts in other product lines, is c£100m net of reinsurance,” Aviva said in its third quarter group trading update.

Earlier in the year it had predicted a figure of £165m.

Aviva said the trading impact of the second lockdown remained uncertain, but it expected ”no significant increase in net BI claims”.

Earlier this week the group announced the sale of its 80% share in Italian life insurer Aviva Vita for €400m (£350m), having previously said it was selling its Singapore and Indonesian life businesses.

Signalling further divestiture, the company said it was “exploring options across our manage-for-value portfolio, including in France, Poland, the remainder of Italy and our joint ventures”.

The company saw success in its commercial lines business in the first three quarters of the year, with premiums growing by 10% following rate increases and targeted growth, it said.

But this was offset by lower personal lines premiums as the company ”prioritised profitability by simplifying our portfolio and remediating poor performing segments”.

Aviva’s chief executive, Amanda Blanc said: ”Our trading performance is robust and our financial position is strong with a capital surplus of £11.8bn. The first nine months have demonstrated Aviva’s ability to grow in core markets where we have attractive, long-term growth prospects.”