British insurer Aviva reported weaker 2009 life sales, and said its general insurance arm had been hit by weather claims from Ireland and the UK in the final quarter.
The company had total 2009 life and pensions sales of £32 billion, down 12 per cent from £36.24 billion the previous year, as tough economic conditions in the UK had an adverse impact. Analysts had expected sales of £31.3 billion.
In Ireland, sales in life and pensions for the year were over £1 billion, 17 per cent down in sterling terms on 2008, and a decline of 25 per cent in euro.
Retail sales in the region fell 2 per cent to £636 million, from £646 million in 2008, but accounted for an 11 per cent decline in local currency.
"This reflects the poor economic climate, which impacted the Irish life insurance industry as a whole and an increasingly competitive marketplace," the company said.
However, Aviva said overall sales in the fourth quarter of the year were "encouraging", with life and pensions growing 21 per cent from the third quarter to £8 billion.
"We saw an improvement in customers’ propensity to save. Life and pensions sales were higher in all regions compared to the previous quarter, with a particularly strong performance in both bancassurance and retail channels in Europe," the company said in a statement.
The insurer said its general insurance profits for 2009 would be dented by £100 million pounds of claims for damage from storms in Ireland and the UK during the final three months of the year. Some £80 million of that relates to Ireland.
"When flood waters impacted their businesses and homes, Aviva was more than happy to be there to help them, and that translates clearly into the claims that we pay out," spokesman for Aviva Ireland Alan Tyrrell said.
Aviva had a capital surplus of £4.5 billion at the end of 2009, compared with £2 billion a year earlier, the company added.
Insurers' shares fell steeply in early 2009 because of worries that sliding financial markets could erode their solvency capital, prompting companies across the sector to build up their reserves.
But Aviva said its life sales rose 21 per cent in the final quarter of 2009, and added that it was well-placed to benefit from an economic upturn in its major markets.
"We start 2010 in a strong position," chief executive Andrew Moss said.
Aviva shares closed at 398 pence yesterday, valuing the company at about £11 billion.
Additional reporting - Reuters
