Life insurer Aviva lost $995M in 2008

Aviva PLC, Europe’s biggest provider of life insurance products, posted a loss of $995 million for 2008, down from a profit of $2.98 billion in 2007.
MAR 05, 2009
By  Bloomberg
Aviva PLC, Europe’s biggest provider of life insurance products, posted a loss of $995 million for 2008, down from a profit of $2.98 billion in 2007. The company also started reporting its results using the so-called mark-to-market accounting, which requires European carriers to consider investment risks and state their investment returns using a market-appropriate standard rate. Using this method, the loss was as large as $10.9 trillion, compared with 1.95 billion pounds ($3.88 billion) in 2007. Tumultuous equity markets took their toll on the insurance company, affecting bottom line results, Andrew Moss, chief executive of London-based Aviva, said in a statement. Aviva said that its corporate-bond portfolio had some $278 million in defaults last year, representing 0.2% of the total corporate-debt portfolio, including losses on American International Group Inc. of New York, Fannie Mae of Washington, Freddie Mac of McLean, Va., Lehman Brothers Holdings Inc. of New York and Washington Mutual Inc. of Seattle. Still, the company reported an operating profit of $3.24 billion, up 4% from 2007. Life and pension sales increased by 11% to $51.3 billion. Despite the loss last year, the company decided to keep its 33-pence-per-share dividend, which is the same as it was last year.

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