Irish insurer Aviva said operating profit for the first six months of the year rose 40 per cent driven by increased business and cost management, but the firm warned it would pay up to €100 million in weather-related claims.
The company said profit for period from January to June was €115 million, compared with €82 million in the same six months a year earlier.
"This has been driven by the strength of our composite model, growth in our multi-line portfolio, and a one-off benefit resulting from more efficient use of our capital," the company said in a statement.
Volumes in its life and pensions business and its health insurance unit rose in the first half of year. Aviva now has some 280,000 health insurance customers.
Aviva said the results were partly offset by claims for floods and freezing weather, which are expected to amount to €100 million.
"Strong and sustainable growth across our portfolio allied with continued focus on cost management and efficient use of capital has contributed to a strong set of results," said chief executive Jim Dowdall.
Aviva has more than 1.2 million customers across its general insurance, life & pensions and health business in Ireland. It rebranded from Hibernian to Aviva in January 2010.
The wider Aviva group reported first-half profit rose 21 per cent, beating analysts' estimates, as it earned more from selling long-term savings products.
Operating profit climbed to £1.27 billion, ahead of estimates for £1.17 billion. Net income rose to £1.08 billion from £675 million a year earlier.
Aviva "grew sales for the third consecutive quarter and improved the group's margin," chief executive Andrew Moss said in the statement. "We remain alert to the macroeconomic environment and risks in financial markets."
Aviva is increasing sales of life and pension products in Europe as it seeks to raise its dividend after a 33 per cent cut last year. Like UK competitors Standard Life and Legal and General, the insurer is selling products with fewer guarantees to customers so it can reduce the amount of capital it's required
to hold in reserve.
Aviva has risen 12 per cent in the past three months, the biggest increase in the FTSE ASX Life Insurance Index, as investors speculated the firm would raise its divided.
The insurer raised its half-year payout to investors to 9.5 pence a share from 9 pence a share a year earlier, matching the analysts' estimate. The six-month dividend was 13.1 pence in 2008.
Profit margins across the group climbed to 2.4 per cent from 2.1 per cent a year earlier, largely driven by improvements in the UK, Aviva said. Life and pension sales advanced 12 per cent to £18.1 billion in the six-month period.
Additional reporting: Bloomberg
