Aviva unveils claims hit of £50m from December freeze
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Aviva is receiving £50 million claims from December’s freeze following spate of burst water pipes
- Aviva said it had focused on helping customers during the cold snap
- The insurer saw the share price fall by about 20% in the past year
Aviva is facing a claim of around £50 million as a result of last month’s freezing weather, it told investors on Wednesday.
The insurance group said it had focused on supporting customers during December’s prolonged cold spell, with households across the UK suffering burst pipes and water tanks, as well as other damage.
But the company said its group-wide exposure to “weather experience” in the fourth quarter was only marginally above its long-term average.
Responsible: Amanda Blanc is the boss of insurance giant Aviva
Earlier this month, its rival, Direct Line Insurance, revealed a significant blow from the freezing weather, pushing claims costs to around £90m.
Aviva said it performed as expected by management for 2022 and reiterated its guidance on dividends and capital returns.
The group’s combined ratio for the full year, which measures costs as a percentage of revenues, was estimated at approximately 94.6 percent. A ratio of 100 percent or more indicates a loss.
General insurance in the UK, Ireland and Canada continued to trade positively in the closing months of 2022, demonstrating the “clear benefits” of Aviva’s diversification across general insurance products and geographies, the group said.
Management also said policies were priced appropriately to account for a high-inflation environment. That was especially true for British personal lines, it added.
In the fourth quarter, the group’s weather experience was slightly above its long-term average.
On an annual basis, however, it was roughly in line with the long-term average.
Shares: Aviva’s share price is down about 20% over the past 12 months
Today’s trading update was provided ahead of the ‘In Focus’ investor and analyst briefing on the UK General Insurance Personal Lines business scheduled for later today.
Aviva shares were up 2.99 percent or 13.18 pence this afternoon to 454.48 pence, after falling about 20 percent over the past year. Since October, however, equities have been gaining some ground.
In November, the group reported a 46 percent increase in new business value, with improved margins. Business looked positive across the board, it added.
Chief executive Amanda Blanc said in November: “We are on track to meet our financial targets and trading momentum is increasing.
Our dividend guidance remains unchanged and, as previously announced, we expect to begin our full year 2022 results with additional capital returns to shareholders.