Aviva’s chief executive called the cost-of-living crisis “the worst in decades”
(Picture: Aviva)There was fresh insight into the impact of soaring inflation in the UK from two FTSE 100 insurance companies alongside their latest financial results on Wednesday.
Aviva’s chief executive, Amanda Blanc, called the cost-of-living crisis “the worst in decades”, and said as well as launching more “affordable products”, the FTSE 100 company would “extend premium deferrals” and was also supporting 7000 of its own staff with one-off payments to help with energy costs.
“What we have definitely seen over the last few months is customers looking to buy more value-based products, the essential product as opposed to the products that have got more bells and whistles.”
Aviva’s Gross written premiums for the period reached £4.7 billion, up 6% and the key industry measure of “own funds generated” was up 46% to £538 million.
It also announced its intention to return more cash to investors -- saying it planned to announce details of a share buyback alongside its full-year results -- while there was potential for some of its excess cash to be used for bolt-on acquisitions.
Insurance companies are among the beneficiaries of rising interest rates, which help boost their capital reserves. Aviva also announced an interim dividend of 10.3 pence per share, in line with guidance.
Meanwhile, Admiral, the car insurer, said it had recently launched “an essential product” while its policies including in-vehicle telematics could make cover “more affordable”.
Milena Mondini de Focatiis, chief executive, said Admiral was prepared to help its customers in “specific financial difficulties” by offering “payment holidays, or cancelling late-payment fees, or in our loans business, increasing loan terms.”
Admiral’s half-year group pre-tax profit fell 48% year-on-year to £251.3 million, though that was against tough comparatives when there were fewer claims with people driving less during pandemic restrictions. Compared with 2019, before the pandemic, profit rose by 19%.
Shares in Admiral rose 5% to 2066p, while Aviva’s stock was up almost 9% to 451.3p.
