Aviva hails resilience after turbulent year

Insurer Aviva today reported a 10% rise in operating profits and said it would maintain its dividend despite a “tumultuous year” for the industry.

Aviva said the profits figure of £3.36bn (€3.77bn) reflected a solid trading performance after growth in both life and pensions and general insurance.

However, the company’s bottom-line result was impacted by the performance of investment markets following falls in equity, property and bond values. Using the industry’s new reporting measure, Aviva posted losses of £7.71bn (€8.67bn).

Aviva insisted its capital position remained strong and said its solvency surplus was £2bn (€2.25bn) at the end of 2008, a figure which would fall to £1.2bn (€1.35bn) if equity markets were to decline by a further 40%.

Aviva said it was more able to withstand the tough market conditions because it was less dependant on earnings from long-term savings new business.

“This is an important factor in setting our dividend. Our geographic spread across four continents and diverse distribution also brings resilience.”

Aviva said its total dividend would remain at 33p a share.

Chief executive Andrew Moss added: “In a tumultuous year, our underlying business has shown great resilience. Operating profits are up and we have maintained our dividend.”

The company is known as Aviva in most of its markets and recently its Hibernian brand became Hibernian Aviva in Ireland, while the company have also bought the naming rights to the new Lansdowne Road stadium.