Aviva to cut focus on Asia, Europe as profit drops 12%

© Reuters.

LONDON (Reuters) – British life, motor and home insurer Aviva (L:) said on Thursday it would reduce its focus on its Asia and Europe businesses as it posted a 12% drop in first-half operating profit to 1.2 billion pounds.

In addition to Britain and Ireland, Aviva’s European operations include France, Italy and Poland.

Aviva said last year it was selling its stake in its Hong Kong business but its Asian operations include Singapore and a joint venture in China.

“Our focus will be on building and extending our leadership in the UK, Ireland and Canada,” new Chief Executive Amanda Blanc said in a statement, adding that for Europe and Asia: “where we cannot meet our strategic objectives, we will be decisive and we will withdraw capital.”

Analysts had expected a change in strategy from Blanc, Aviva’s third chief executive in less than two years, as the company’s share price has disappointed 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 1.1 billion pounds, according to a company-supplied consensus forecast, helped by strong results in UK annuities.

The company set aside 165 million pounds in its general insurance business for COVID-19 related claims.

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 six pence.

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($1 = 0.7590 pounds)

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