Aviva sees general insurance premiums leap higher as cost of cover rises

Aviva has seen UK general insurance premiums surge by nearly a fifth at the start of 2024 (PA)

Insurance giant Aviva has seen UK general insurance premiums surge by nearly a fifth at the start of 2024 as it hiked the cost of cover.

The group reported a 19% jump in UK general insurance premiums to £1.7 billion for the three months to March 31, with personal lines up 27%.

Aviva said this reflected “continued strong rate discipline in the high inflationary environment” as well as new business growth.

Overall, group wide general insurance premiums lifted 16% to £2.7 billion.

The insurance sector has been increasing the cost of cover in response to the soaring cost of repairs and labour.

Recent figures from the Association of British Insurers (ABI) showed that the average home insurance policy cost 19% more – up £60 – year-on-year in the first quarter of 2024, while comprehensive motor cover was about a third, or £157, higher.

Aviva said it remains focused on “pricing appropriately” in its general insurance business over the remainder of the year.

Its first quarter results also showed that its performance was boosted by strong demand for health insurance, with sales at its protection and health arm up 5% at £106 million.

It saw solid inflows to its asset management business, with net flows up 15%, while its workplace pensions arm saw £2 billion of net flows after the group won 136 new schemes.

Amanda Blanc, group chief executive of Aviva, said: “This is another set of excellent results, extending our track record of consistently strong trading.”

She added: “Aviva is in great health. We are financially strong, we are trading well, and our investments in new products and customer service are paying off.”

In March, the firm said that group operating profits increased by 9% to £1.47 billion for 2023, which saw it up its dividend and announce a share buyback programme to purchase £300 million in shares from investors.

It also announced in March that it had struck a £242 million deal to buy Probitas in a move that will see it return to the Lloyd’s of London specialist insurance market for the first time in more than two decades.

Probitas, which provides insurance ranging from professional liability to property catastrophe cover, will boost Aviva’s global corporate and speciality business.