May 7, 2015 by Canadian Underwriter
London, U.K.-based Aviva plc reported on Thursday that in Canada, the combined operating ratio (COR) improved 4.6 percentage points to 98.1% in Q1 2015 compared to 102.7% in Q1 2014, “reflecting better overall weather experience,” although claims frequency remained above long-term average. Net written premiums were also 1% lower, mainly due to selected exits from unprofitable business lines.
For General Insurance, the COR improved to 96.4%, from 97.7% in Q1 2014. The UK COR was 98.3% for the three months ending March 31, compared to 98.6% in Q1 2014. The Europe COR was of 89.8%, compared to 92.0% in the first quarter of 2014.
Aviva plc credited “an improved expense ratio and lower weather losses” with the improvement in general insurance COR. General insurance and health net written premiums were also 2% higher in constant currency at 2,037 million pounds (£).
“It’s been a busy quarter,” said Mark Wilson, Group CEO, in a press release. “Value of new business is up, our general insurance combined operating ratio has improved and our IFRS book value has grown over the quarter. In the face of unpredictable global markets, we continue to improve the Group’s resilience.” [click image below to enlarge]
Aviva also acquired Friends Life on April 14. In the first quarter, Friends Life value of new business declined to £20 million (1Q14: £32 million), “driven principally by a decline in retirement income VNB (value of new business), following last year’s budget changes regarding annuities.”
“With completion of the Friends Life acquisition, we now have the opportunity to execute on our detailed integration plans,” the release said. “In the other parts of the Group that are not impacted by the integration, our focus is on improving cash flow and growth.”