Aviva plc net income falls 28%

AVIVA plc, the owner of Hibernian Insurance, said yesterday first-half net income fell 28% as the value of its investments declined.

Operating profit rose, beating analysts’ estimates, as earnings from the property and casualty unit surged.

Net income dropped to £379 million (€573.84 million), in the six months through June, from £523 million, in the year-earlier period.

Operating profit rose 36% to £1.13bn. To help boost profitability, Aviva chief executive officer Richard Harvey, aged 54, is cutting costs at the property and casualty business by transferring jobs to India. The London-based company, which is benefiting from higher prices for home and motor insurance, expects to save £200m at the unit annually.

Shares of Aviva fell 16p, or 2.8%, to 548.5p in early trade in London. The stock has gained 12% this year, making it the fifth-best performer in the 25-member Bloomberg Europe 500 Insurance Index, which has declined 5.3%.

Aviva raised its interim dividend 4% to 9.36 pence a share from 9 pence a share.