Commercial lines saw room for growth and continued rate momentum
Aviva reported that its general insurance (GI) gross written premium was up by 5% at £6.5bn in its Q3 trading update this morning – this is the highest it has been in a decade.
Last year in Q3 Aviva’s GWP in GI was £6.2bn. Meanwhile, this quarter saw the UK deliver growth of 7%.
Amanda Blanc, group chief executive, said: “General Insurance premiums grew 5% year-to-date reflecting solid customer retention and new business wins, particularly in commercial lines.
“We continue to make excellent and rapid strategic progress, right across Aviva. “
Aviva expects to achieve a core operating ratio across its continuing GI arm of less than 94% in 2021.
Meanwhile, Adam Winslow, Aviva’s chief executive UK and Ireland GI, added: “The improvement in our UKGI COR [core operating ratio] is largely due to a strong underwriting performance and a reduction in Covid-19 related claims, partly offset by the impact of the July floods in the UK.”
Motor claims low but increasing
Aviva reported that claims frequency in motor lines began to normalise as the UK emerged from lockdown restrictions, but this is still below pre-pandemic levels, while the softer rate environment in motor in the UK, Ireland and Canada is now being reflected in earnings.
However, for Ireland premiums were 3% higher at constant currency with strong growth in commercial lines this was partially offset by continued soft rate environment in motor.
Winslow said: “As we return to more normal conditions, motor claims are increasing as the roads become busier.
“We are pushing forward with other practical, sustainable options for customers, including cover for electric vehicles on our motor policies and solar panels included on our home cover with no additional charge.
“Our renewable energy business is growing as we support commercial customers in onshore wind-farms, solar power and battery storage.”
Engine room for growth
UK commercial lines saw growth of 16% which the insurer believes was driven by well-priced new business opportunities, strong retention, and continued rate momentum, including growth of 20% in Global Corporate and Specialty (GCS) lines and 12% in SME.
Winslow added: “Commercial lines has proven an engine room for growth with well-priced new business opportunities, strong customer retention and continued rate momentum.”
Aviva’s retail personal lines business in the UK grew by 4% with customers up 7% to 3.4 million.
Winslow said growth in the retail personal lines business reflected the benefits of Aviva’s own brands on price comparison sites, which has helped to offset the soft market conditions, the lower sales through some of its distribution partners and reduced demand for travel insurance.
Total UK personal lines premiums were 1% lower with the growth in retail being offset by lower sales through some of its distribution partners and very low demand for travel insurance in 2021.
Winslow added: “We have invested in our business, bringing in additional underwriting expertise, extending profitable areas such as high net worth and increasing our digital capabilities.
“We have continued to simplify our business, remaining resolutely focused on the immediate and long-term insurance needs of our customers.”