UK underwriting business pulls up operating profits to £313m
Aviva's UK general insurance business, Norwich Union (NU) Insurance, reported that operating profits rose to £313m in the first six months of 2003, compared to £303m in the same period last year.
The major change came in underwriting results, which improved from a loss of £35m in the first half of 2002 to a profit of £10m for the first half of this year.
NU's combined operating ratio fell to 99% compared to 101% for the first half of 2002.
The only cloud on the horizon was a 1% increase in personal lines combined operating ratio from 99% to 100% for the first half of 2003. This included better than expected weather-related claims which saved £30m in the first quarter of 2003.
Aviva board director Patrick Snowball said: "We get minor movements up and down, it's not that material."
NU reported a 2% rise in premiums for motor policies, while its household premiums increased by 4% over the period.
Snowball said: "We are looking for consistency of earnings and that means that we will not be chasing volume in the motor market.
"We have improved out personal motor by 0.5% when the motor market is off."
Snowball said the Direct Line/Churchill deal would not affect NU.
"We are still the biggest insurer. They are bigger in a specific class. But having been involved in a major takeover and merger, I know the focus of attention it will take by management over the next couple of years to drive through the advantages of scale," said Snowball
NU's UK commercial arm improved its operating ratio to 99%, down from 104% in the first half of 2002. During the first six months of the 2003, commercial property rates rose by 16%, while liability rates grew by 31%.
Group chief executive Richard Harvey said: "Our cash-generative general insurance businesses are an important part of our strategy and we have strong positions in the markets in which we operate.
"Our businesses experienced a strong start to 2003 benefiting from both a favourable rating environment and better than expected weather-related claims experience across our major European businesses."