Aviva UK's general insurance profits and GWP fell in 2009

Aviva UK's general insurance operating result fell to £520m (2008: £642m) in 2009. Its combined operating ratio remained static at 99%.

Net UK general insurance written premiums in 2009 reduced to £3,866m from £4,981m in 2008, mainly as a result of stripping out some creditor and commercial business. Overall the group operating profit from general insurance and health businesses decreased by 20% to £960m (2008: £1,198m). This figure benefited from releases of £372m, net of reinsurance, in 2009 which reflect releases from the 2008 accident year and prior (2008: £690m).

The global general insurance and health underwriting result decreased to £104m (2008: £181m).

"Within this result we continue to see a marked improvement in current year profitability with 2009 current year operating profits up £38m on 2008, despite the fact that investment returns have declined from £549m in 2008 to £417m in 2009 (due to a combination of lower interest rates, investment mix and lower asset values) and an increase in creditor claims resulting from the recession," Aviva said in a statement.

The overall result has also been impacted by a reduction in savings on prior year claims development to £105 million in 2009 (2008: £285 million). Aviva's commission ratio has improved to 22% (2008: 25%), which, the company claimed, reflected its work to reshape the book, so that the business it writes through brokers and partners is on more sustainably profitable terms as well as a reduction in creditor business.

"The improvement in the commission and expense ratios has been offset by deterioration in the claims ratio, reflecting the lower levels of prior year savings and increased creditor claims. However, the current year claims ratio has improved across most classes of business, with the notable exception being creditor, reflecting the benefit that our strategic initiatives have had on underlying performance," Aviva continued.

Group CEO Andrew Moss added: "Aviva's general insurance businesses are a vital component of our composite model, bringing diversification of earnings and giving Aviva further resilience. "General insurance and health premiums were lower at £9,193 m (2008: £11,137 m), although they were only reduced by 7% when allowing for the sale of the Delta Lloyd health business at the start of the year.

"Our group expense ratio improved to 12.6% from 13.4% in 2008, reflecting increased productivity. The combined operating ratio for 2009 was 99%, having been impacted by increased unemployment claims from UK creditor customers and the adverse weather in Europe. This claims experience, together with the reduced investment return on a lower asset base, resulted in a 20% decrease in the general insurance operating profit, to £960m.

"We continued to deliver excellent service to our customers when they needed us most. For example, in Ireland, we took the unprecedented step of launching an advance payment mechanism to help householders and businesses facing hardship in the aftermath of the severe floods."