Aviva sets aside £165m for Covid-19 claims

Insurance giant Aviva has set aside £165m for Covid-19 related claims, covering disruption to business and travel caused by the pandemic.
Aviva and the British Red Cross have created a hardship fund to provide financial support to people across the UK during coronavirusAviva and the British Red Cross have created a hardship fund to provide financial support to people across the UK during coronavirus
Aviva and the British Red Cross have created a hardship fund to provide financial support to people across the UK during coronavirus

The life, motor and home insurer, which employs 2,000 people at its life and general insurance business in York and 1,500 at its life and health insurance operation in Sheffield, set aside the sum after announcing a 12 per cent fall in first half operating profit to £1.2bn.

The group said its focus going forward will be on extending its leadership in the UK, Ireland and Canada.

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New chief executive Amanda Blanc said the firm will be decisive and will withdraw capital where it cannot meet its strategic objectives, implying a reduced focus on its Asian and European operations.

Analysts had expected a change in strategy from Ms Blanc as the company’s share price has fallen in recent years.

Former CEO Maurice Tulloch carried out a strategic review of the Asian businesses last year, but sources said he was unable to secure a high enough price to sell the insurer’s Singapore unit. Aviva also said at the time it was looking at strategic options for Vietnam and Indonesia.

Operating profit came in above expectations of £1.1bn, helped by strong results in UK annuities.

Aviva, which like several other insurers suspended its final dividend for 2019 earlier this year, said it would pay a 2019 second interim dividend of 6p a share.