Aviva today revealed that claims from St Jude storm are likely to cost it no more than £10 million, a fraction of the hit facing rival RSA Insurance.
The windstorm hit Europe at the end of last month, and is expected to lead to £130 million of damage in the UK alone, with 105,000 claims anticipated for damage to homes, businesses and vehicles.
Chief executive Mark Wilson said the financial hit to Aviva’s balance sheet was likely to be modest.
RSA issued a profit warning on Tuesday, admitting that the storm could cost it up to £65 million because it also hit Scandinavia, where it has a large business. Both companies were also hit by heavy flooding in Canada earlier this year.
Shares in Aviva were flat today as analysts and investors digested the latest update from Wilson, who joined the company at the beginning of the year.
He has since shaken up its management team and sold businesses, and is on course to have cuts costs by £400 million by next year.
The company’s new business sales rose 14% to £571 million during the first nine months of the year, yet Wilson conceded that there is still much that needs doing.
He added: “Aviva remains in the early stages of turnaround. While we have resolved a key issue in the disposal of our US business and have made progress in a number of areas, there remains much work to be done.
“Progress is in line with our expectations and we remain focused on delivering cash flow plus growth. In the first nine months of 2013 our key measure of growth, value of new business, increased by 14%.
“We had strong performances from France and our growth markets of Turkey, Poland and Asia. Conversely, value of new business remains depressed in our turnaround businesses of Italy and Spain, and this is being addressed.”
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Wilson remained tight-lipped on the future of Aviva’s Indian business despite speculation it could be sold off. He said the company planned to invest heavily in areas such as IT as it continued to sharpen up its operations following years of underperformance under former boss Andrew Moss, who left the company last year following an embarrassing shareholder revolt.
