By 31 March, Aviva’s Solvency II cover ratio reduced to 182% from 206% year-on-year, reflecting the impact of the Covid-19 pandemic
Aviva head office at St. Helen's, London. (Credit: Flickr/Aviva plc.)
Aviva said that its life new business sales had risen 28% to £12.3bn for the first quarter of 2020, compared to £9.6bn for the first quarter of last year.
Aviva’s value of new business had also grown by 18% to £311m from £263m for the corresponding period of last year.
The company’s general insurance net written premium had increased slightly by 3% to £2.4bn for the period, compared to £2.3bn for last year’s first quarter.
Excluding the impact of Covid-19, the company claims to have achieved strong underwriting in Canada and the UK, it was affected by the storms in February.
The company said that it is taking a prudent approach on capital and cash given the uncertain economic situation due to the Covid-19 pandemic.
As of 31 March, Aviva’s Solvency II cover ratio got reduced to 182% from 206% year-on-year, reflecting the impact of the pandemic.
The reduction is considered to be consistent with the company’s sensitivities and reflects the impact of the pandemic on capital markets and in particular has widened corporate credit spreads, reduction in risk yields and decline in equity markets. As of 30 April, the company’s liquidity stood at £2.5bn.
Aviva Group CEO Maurice Tulloch said: “In responding to COVID-19, Aviva moved quickly to support our customers, introducing a range of measures to help, including financial assistance. I am proud of how Aviva’s people have adapted and maintained excellent day to day service for our customers when they need us most.”
“Aviva had a solid first quarter of trading. General Insurance sales increased 3% and we had a strong performance in Life Insurance where new business increased 28%. Based on analysis as at 30 April, our estimate of the COVID-19 claims impact on general insurance, incorporating notified and projected claims, is £160 million net of reinsurance.”