Aviva’s profits rise to record £3.2 billion
PUBLISHED: 08:49 05 March 2020 | UPDATED: 09:44 05 March 2020
Insurance giant Aviva has posted a record annual earnings haul – but stated coronavirus is affecting its business.
The group, with a base in Surrey Street, Norwich reported a 6% rise in operating profits for 2019 to a record £3.2 billion as new business lifted 2% to £1.2 billion.
But it has subsequently said it faces a £70 million bill so far from the recent UK winter storms and has also seen coronavirus hit its Asian and Italian businesses.
The group received weather-related calls from 13,000 customers, but stressed it was "responding quickly by helping fix damaged properties and using the latest technology to settle claims" after Storms Ciara, Dennis and Jorge.
Meanwhile it added that the coronavirus outbreak "presents a new uncertainty" to the outlook for 2020 and revealed it has been testing contingency plans for staff to work remotely if needed.
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Aviva said it was "early days" in assessing the impact on the business of the outbreak, but that activity had been knocked across its Asian and Italian businesses and it had received around 500 travel claims so far and paid out £500,000.
Chief executive Maurice Tulloch said the group is "well prepared - we're ready to respond".
Mr Tulloch said the results showed signs that the overhaul at the group is starting to pay off. Results showed the group made savings of £72 million over 2019 under a programme to eventually cut costs by around £300 million a year.
In June the group announced plans to axe 1,800 jobs, just months into Mr Tulloch's tenure at the top.
The group confirmed that around 1,200 of these job cuts have been made so far.
Aviva - which employs around 30,000 staff in total - said at the time that savings would also be made across central costs, contractor and consultant spend, reduction in project spend, and in other areas.
"In 2019, we set out our priorities and financial targets, strengthened our leadership team and remained focused on helping our customers prepare for a better future," said Mr Tulloch.
"We've made good progress, but there is much more to do."
Mr Tulloch also revealed a structural shake-up in November and plans to sell off its Hong Kong arm, but said it would keep businesses in Singapore and China. Aviva has been divided across five operating divisions - investments, savings and retirement; UK life; general insurance; Europe life; and Asia life.
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