UK insurer Aviva warns outlook weaker on Brexit uncertainty

UK insurer Aviva warns outlook weaker on Brexit uncertainty

LONDON: British insurer Aviva on Thursday (Mar 7) warned that its outlook would be weakened by economic uncertainty surrounding Brexit, but added it was well positioned to "minimise" adverse impact.

Aviva, which appointed new chief executive Maurice Tulloch at the start of the week, issued the gloomy warning in its mixed 2018 results statement.

"Given current uncertainties, including the unknown future impacts of Brexit on the economies of the United Kingdom and Europe, our near-term outlook entering 2019 is more muted than our outlook a year ago," said chief financial officer Thomas Stoddard.

He added that "it will be difficult" to sustain underlying earnings of seven per cent this year - a level enjoyed by the group in 2017 and 2018.

Aviva said net profit rose 4.7 per cent to almost £1.6 billion (US$2.1 billion, €1.8 billion) in 2018 from a year earlier, helped by lower tax charges.

Chairman Adrian Montague admitted however that it had experienced a "difficult" year, with Britain set to leave the European Union at the end of this month.

"Uncertainty in the political and economic backdrop intensified during the year and this was reflected in a difficult year for investment market performance across most asset classes," Montague said.

"In our home market, the UK, the prolonged and fraught process of negotiating Britain's exit from the European Union has weighed down on growth in the economy.

"But Aviva is well placed to deal with this; our locally incorporated and locally regulated businesses in Europe have prepared to minimise the potential operational impact."

Tulloch meanwhile was appointed on Monday with immediate effect, leaving his job as head of the group's international division.

He took over from Mark Wilson who stepped down late last year.

Source: AFP/ec