Premiums rise, but underwriting stays in the red in half-year results

Aviva's operating profit from general insurance jumped 13% to £480m for the first six months of the year.

The group's combined ratio fell to 101% from 103% in the same period last year, when the operating profit was £427m.

The company reported a UK combined ratio of 103%, ranging from as low as 95% for homeowners up to 128% for commercial liability.

Group chief executive Richard Harvey said the result showed Aviva could sustain a combined ratio of 102% regardless of the underwriting cycle.

General insurance premiums after reinsurance for the six months to 30 June rose to £2.3bn in 2002 from £2.4bn in 2001.

Aviva's general insurance operating profit in the UK increased to £303m in the first six months of 2002 from £254m last year.

Underwriting still lost money, but less than last year.

The UK's general insurance underwriting for the first six months of 2002 lost £35m, compared to a loss of £69m in the same period of 2001.

The claims ratio, which measures claims as a percentage of net earned premiums, fell to 71% from 71.5% last time and the expense ratio, which measures expenses excluding commissions as a percentage of net written premiums, fell to 10.4% from 10.6% last time.

The group's overall operating profit for the six months to 30 June was £757m, up from £728m last time.

The group's pension fund needs another £330m to meet its obligations, calculated under the controversial FRS17 pension rules.