Aviva sees modest financial impact from UK storm

Thu Nov 7, 2013 4:08am EST
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By Chris Vellacott

LONDON (Reuters) - October's hurricane-strength storm in southern Britain cost insurer Aviva PLC (AV.L: Quote) just 10 million pounds, a fraction of the hit suffered by some sector rivals, its chief executive said on Thursday.

Speaking to journalists after publishing third quarter earnings, new boss Mark Wilson said the financial impact of the storm was a "relatively modest".

"That was a significant event in terms of numbers of people (affected)... in terms of financial impact it wasn't as significant an event as some were expecting," he said.

Floods in Canada earlier in the year had a bigger impact - around 120 million pounds - he added, though the cost remains "in line with guidance" given by the company.

In contrast, UK insurer (RSA.L: Quote) said on Tuesday the same Canadian and European severe weather events resulted in bigger than expected claims bills from customers and that full year returns to shareholders would suffer.

Aviva said the Canadian floods had stifled progress in operating capital generation, a precursor to cashflow, which was unchanged from a year earlier at 1.3 billion pounds ($2.1 billion).

However, cost cutting measures had "more than offset" the impact of losses in Canada on cash flow, Aviva said.

Wilson, former boss at Asian rival AIA 1299.hk, joined Aviva at the end of 2012 and has pushed a restructuring agenda across the group, selling off non core businesses, cutting costs and improving profitability.   Continued...