Aviva Canada results strong, while parent company sees 10% profit loss due to restructuring

Aviva plc reported its first-half 2012 interim operating profits were down 10% as a result of restructuring costs, foreign exchange and inclement weather in the United Kingdom.

“Operating profit (including restructuring costs) was down 10% to £935 million [Cdn$1.45 billion]… as a result of the sale of RAC, adverse foreign exchange movements, the adverse impact of recent U.K. weather and higher restructuring costs as we implement the strategic plan. Interim operating profit before restructuring costs was down 2% to £1.121 billion [Cdn$1.74 billion],” the company announced in a press release.

The company’s half-year 2011 operating profit was £1.035 billion [Cdn$1.6 billion].

Aviva announced its restructuring plan on July 5 in London, including a sharper division of the company’s 58 business segments into “performing, improve or non-core” categories, according to new chairman John McFarlane.

Canada’s personal property insurance was identified as one of 15 “performing” segments with “unusually high return or growth.”

Aviva Canada reported a 2012 half-year profit of £173 million [Cdn$268.3 million], up from its £118 million [Cdn$183 million] total during the same period in 2011. Also, its combined ratio dropped to 90% for the first six months of 2012, down from 96% over the same period in 2011.

“In Canada, sophisticated pricing and underwriting combined with the benefits of benign weather led to a particularly strong performance during the first six months of 2012,” Aviva plc commented in a press release announcing its results.

“Net written premiums increased 5% to £1.081 billion [$1.68 billion] reflecting rate increases, higher retention and new business wins. Our business remains strong — we have more than 3 million customers and we have grown our customer numbers by 45,000 since HY11.”