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Aviva plc’s combined ratio for Canada improves to 93.8% in 2015, from 96.1% in 2014

March 10, 2016   by Canadian Underwriter


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Aviva plc announced on Thursday that its combined ratio for Canada has improved to 93.8% in 2015, from 96.1% in 2014.

Aviva released its preliminary results announcement on Thursday, noting a combined operating ratio in its general insurance business of 94.6% in 2015, a 1.1 percentage point improvement from 95.7% for the full year of 2014 and “the best in nine years, despite the recent floods.” The combined ratio for the United Kingdom remained steady at 95.1% in 2015, compared to 94.8% for full-year 2014, despite the 132 million pound cost of the floods last December, Aviva said in a statement. [click image below to enlarge]

General insurance business in the United Kingdom, Canada, France, Ireland and Italy all delivered a combined operating ratio below 96%

“Consistency is a key feature of our general insurance operating performance,” the statement noted. “Our largest general insurance businesses in the U.K., Canada, France, Ireland and Italy all delivered a [combined operating ratio] below 96%.”

Aviva, which provides life insurance, general insurance, health insurance and asset management to an estimated 34 million customers across 16 markets worldwide, also pointed to the January acquisition of RBC General Insurance Company, in line with its “strategy of rebalancing [its] portfolio and allocating capital to [its] stronger businesses. This will consolidate Aviva’s position as a leading general insurer in Canada and provides diversification of distribution,” the statement said.

The preliminary results for the full year of 2015 ending Dec. 31 showed that the Canada general insurance business achieved a strong rebound in operating profits to 214 million pounds last year, compared to 189 million pounds in 2014. The combined operating ratio improved to 93.8% (FY14: 96.1%) due to improved weather experience and higher prior year reserve releases from personal lines, Aviva reported. Operating expenses increased by 1% in constant currency terms, though this was linked to the 4% constant currency increase in gross written premiums – the commission and expense ratio fell by 0.1 percentage point to 30.5% (FY14: 30.6%).

Aviva’s operating profit was up 20% to 2.665 billion pounds in 2015, compared to 2.213 billion pounds in 2014. Value of new business also increased 24%, representing twelve consecutive quarters of growth.

“We enter 2016 from a position of strength,” said Group CEO Mark Wilson in the statement. “2015 was about stability and growth at Aviva, against a background of market volatility and uncertainty. Aviva is now a stronger and more focused business.”

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