Aviva and RSA profits take frost damage in Canada blow

A big freeze in Canada dented profits at two of Britain’s biggest insurers Aviva and RSA in the first six months.

Aviva’s operating profits slipped 2% to £1.4 billion after subsidiary Aviva Canada fell to a loss while RSA, which also has a big presence in Canada, saw operating profits down 15% to £304 million.

Canada experienced severe weather conditions in the first six months of 2018, including freezing temperatures and hazardous ice storms in Toronto and the rest of Ontario.

Aviva chief executive Mark Wilson said the problem Canadian division, which also posted a loss in the final six months of 2017, was showing signs of improvement after he hired a new chief executive.

“We got absolutely whacked by the weather in Canada,” he said. “It’s a good franchise and it certainly should have done better. I am happy with the progress of the turnaround.”

Aviva’s profits were ahead of expectations and it pledged to hit a 5% growth target this year.

RSA’s Canadian division’s operating profits fell to £25 million from £68 million.

“Adverse weather was the dominant feature and the comparison is further distorted by a benign first-half 2017,” said the company.