Impact of the July UK weather event on Aviva

Article date: 2 August 2007

Following the July floods in Gloucestershire and the surrounding areas, Aviva plc ("Aviva") estimates the cost of this event, and reinsurance to limit the costs of future similar events in the UK, to be in the region of £165 million. These costs will impact the group's general insurance results in the second half of the year.

The priority for Aviva's UK general insurance business, Norwich Union Insurance, continues to be helping those impacted by these devastating events through an exceptionally difficult time. A network of loss adjusters, contractors and claims teams is on site at all flood areas to assess the full extent of the damage. Call centre staff numbers have been doubled to deal with the extra calls. A fully equipped mobile advice centre has
been sent to Gloucestershire, manned by claims and repair specialists, to provide practical help and advice on dealing with the aftermath of homes and businesses being flooded. Work also continues in the north of England following the floods in June.

Igal Mayer, chief executive of Norwich Union Insurance, said: "Having visited Gloucestershire myself, I've witnessed at first hand the traumatic and emotional impact the floods have had on our customers. We're bringing in additional contractors and specialist equipment to ensure repairs are carried out as quickly as possible, and we're in discussions with local authorities to find the best solution to providing temporary accommodation for those who have had to leave their homes. We will continue to do everything we can to help our customers affected by these devastating events return to normal as soon as possible."

The initial cost estimate of £175m for the June floods remains unchanged. Whilst Aviva remains fully committed to a group COR target of 98% due to the exceptional nature of the recent bad weather claims in the UK in 2007 there is a degree of uncertainty concerning Aviva's ability to meet the group target in 2007. Aviva has exercised its reinsurance option to limit the maximum cost of future similar events in the UK this year to £110m, the cost of which is included in the estimate of £165 million above.

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Notes to editors:

  • Aviva is the leading provider of life and pensions to Europe with substantial positions in other markets around the world, making it the world's fifth largest insurance group based on gross worldwide premiums at 31 December 2006.
  • Aviva's principal business activities are long-term savings, fund management and general insurance, with worldwide total sales of £41.5 billion and assets under management of £364 billion at 31 December 2006.
  • The Aviva media centre at www.aviva.com/media includes images, company and product information and a news release archive.

 

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