LONDON (Reuters) - October’s hurricane-strength storm in southern Britain cost insurer Aviva PLC (AV.L) 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) 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.
Efforts to turn the business around are bearing fruit, Wilson said, pointing to the sale of its U.S. business in October for $2.6 billion and some significant changes in top level management.
But he stressed Aviva’s revamp, launched after a 2012 shareholder rebellion which led to the exit of its then chief executive following years of rising costs and disappointing share price performance, is “still in its infancy”.
“We are not there yet,” he conceded.
New business at Aviva rose 14 percent across the group in the first nine months of 2013, buoyed by its core UK life operation and double digit growth in France and emerging markets, the company said.
Value of new business, Aviva’s key measure of growth, was 571 million pounds, the group said, up from 503 million pounds in the first nine months of 2012.
However, the company cautioned it expects new business growth to moderate in the final quarter of 2013 relative to a strong period of growth at the end of 2012. ($1 = 0.6219 British pounds)
Reporting by Chris Vellacott, editing by Sinead Cruise