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Aviva sets aside £165m war chest for coronavirus claims

PUBLISHED: 14:58 06 August 2020 | UPDATED: 16:57 06 August 2020

Aviva in Norwich has said the virus will cost it an expected £165m. Pic: Archant

Aviva in Norwich has said the virus will cost it an expected £165m. Pic: Archant

Archant

Aviva says it expects to make pay outs in excess of £165m to customers as a result of the coronavirus pandemic.

The company, which is a major employer in Norfolk with around 5,000 people working out of offices in Norwich’s Surrey Street, revealed the figure in interim results published on Thursday.

Aviva’s general insurance arm said this includes travel and business interruption claims currently accounted for as well as future expected claims.

However despite the blow to finances – which saw operating profit drop 12pc from £1.38bn in the first six months of 2019 to £1.22bn in the first six months of this year - Aviva maintained it was in a strong position.

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Amanda Blanc, chief executive officer, said: “Aviva’s financial performance in the first half of 2020 was solid. Our financial position is strong and operating profit of £1.2bn was robust, thanks to our diverse range of products, excellent partners and our swift operational response to the Covid-19 pandemic.

“I am proud of the way our people have gone above and beyond to help our customers during this crisis.”

The company announced in May it expected to pay out around £160m in Covid-19 claims, however this figure has risen as lockdown and economic inactivity has rumbled on.

However there have been some boosts in interests as people shift their money to safer harbours during the pandemic.

The report states: “New business sales in annuities and equity releases rose 73pc to £3.8bn in the first six months of 2020 while value of new business increased fivefold to £173m reflecting favourable trends in the bulk price annuity (BPA) market, with strong demand and attractive pricing.

“The BPA market has been less affected by Covid-19 restrictions and our deal pipeline remains strong, although pricing and competitive intensity had returned to more normal levels by the end of the first half.”

Ms Blanc added: “I have been chief executive for one month and I am confident we have many of the ingredients to make Aviva a winner. From this moment on, we must deliver. Nothing else will do. My focus is making sure it happens and at pace.”


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