Aviva GI premium jumps 9% in Q1, combined ratio slips on catastrophe losses

By Ryan Hewlett

May 15 - (The Insurer) - UK insurer Aviva reported a 9.0% jump in first-quarter general insurance (GI) premiums on Thursday, and confirmed its acquisition of Direct Line Insurance Group remains “firmly on track” despite a probe from Britain’s competition watchdog.

The Amanda Blanc-led insurer’s GI unit posted gross written premiums of 2.9 billion pounds ($3.9 billion) in the first quarter, up 9.0% year on year or 7.0% at reported currency. The firm said the result was driven by double-digit growth in UK commercial lines and its personal lines book in Ireland.

UK GI written premiums rose 11.0% to 1.85 billion pounds, with 6.0% growth in personal lines and 17.0% growth in commercial.

Aviva said its UK commercial lines premiums included 33.0% growth in Global Corporate & Specialty (GCS) and 5.0% growth in SME. Excluding newly acquired Lloyd’s platform Probitas, commercial lines growth was 7.0%, driven by new business in GCS and pricing actions in SME.

GI premiums in Canada rose to 0.9 million pounds, up 5.0% at constant currency or flat in reported currency, with personal lines up 10.0% driven by pricing actions. Commercial lines contracted 2.0% as the company sought to maintain margins.

The London-listed insurer’s GI unit reported an undiscounted combined ratio of 96.6%, a 0.8 percentage point deterioration year on year driven by elevated catastrophe activity including the impact of Storm Eowyn.

Aviva’s estimated Solvency II shareholder cover ratio remains deteriorated by 2.0 points to 201% in the first quarter.

The insurer said it remained confident in meeting the medium-term financial targets set out last year, which includes posting a full-year operating profit of 2.0 billion pounds and Solvency II own funds generation of 1.8 billion pounds by 2026.

Aviva also confirmed in its trading statement that it remains on track to close its planned 3.7 billion pound takeover of Direct Line in mid-2025.

“The acquisition of Direct Line is firmly on track. Direct Line shareholders voted overwhelmingly in favour of the transaction and we expect to complete the deal in the middle of the year,” Aviva CEO Blanc said.

Britain’s Competition and Markets Authority confirmed on Wednesday that it would probe the deal, which would make Aviva the largest home and motor insurer in the UK.