Aviva exceeds expectations as 'green shoots' begin to show.

(From Insurance Day)

Byline: Jon Guy

UK insurance group Aviva beat market expectations for the first half of the year with its general insurance operations bolstering a stagnant UK life performance.

The insurer saw operating profits fall 13% year-on-year to GBP828m ($1.3bn) on the back of a 1% increase in life new business.

Analysts had predicted a profit of between GBP719m to GBP777m with the result beating top-end market expectations by 6%.

The fall from the 2002 figure was largely due to a GBP65m fall in investment returns and a GBP70m increase in Canadian claims reserves. Operating profits for the life insurance unit were 11% down at GBP705m, with the general insurance operating profits falling 15% to GBP387m. Aviva's group executive director, general insurance, Patrick Snowball, said the company was pleased to have beaten even the most optimistic of the City's forecasts. "The group had three big issues in the first half of the year," he said. "The 56% growth in European bancassurance business, the sustained level of our UK life and pensions business and another excellent set of general insurance results."

Mr Snowball added: "It is still a tough market, but customers are starting to return to saving for their futures and we believe the equity markets are now over the worst. In a way we are starting to see the green shoots of recovery."