BRITAIN'S biggest insurer today said it faced a £100 million claims bill following the severe weather and flooding seen at the end of last year.
Flood and storm damage in Cumbria in the final three months of 2009 cost Aviva up to £20 million, while claims relating to flooding in Ireland generated around £80 million, the group said.
The Association of British Insurers recently warned the cost of the damage from the Cumbria floods last year to the industry as a whole had topped £200 million.
This was twice the amount originally forecast by the industry after insurers handled 36,000 flood and storm damage claims from customers since the downpours in November.
Aviva - which recently rebranded its Norwich Union insurance arm under the Aviva banner - said the claims would impact its 2009 combined operating ratio, which measures how much is paid out in claims and costs as a proportion of money earned in premiums.
But there was some good news from the insurer as sales figures revealed a marked rebound since the third quarter of 2009 amid signs that the downturn in the life and pensions market may have bottomed out.
Fourth quarter sales figures showed a 21% rise in total life and pensions sales between the third and fourth quarter, at £7.9 million.
Andrew Moss, group chief executive of Aviva, said the group had seen the "first signs of an improved appetite to save among our customers".
Aviva said it had suffered a rise in the number of vehicle accident claims as motorists struggled in last month's snow and ice in the coldest January for more than 20 years.
But the group added that fewer numbers of cars on the road in the adverse conditions would mean that there was no material impact on the group.
Today’s figures showed that 2009 sales suffered amid the recession despite the fourth quarter boost, with UK life and pensions new business plunging 25% to £8.9 billion.
Long-term savings new business also fell 29% in the UK, to £1 billion.
Aviva said the economic conditions impacted consumer confidence, but confirmed a shift in sentiment.
"Sales in the fourth quarter were encouraging and we saw an improvement in customers’ propensity to save. Life and pensions sales were higher in all regions compared to the previous quarter," said the group.
There was also greater appetite for risk among investors, according to the firm, although investment sales failed to receive the fourth quarter pick-up, falling 25% between the third and fourth quarter.
Improvements in stock markets have helped its balance sheet strength more than double since the end of 2008, with its capital surplus at £4.5 billion compared with £2 billion.