Deathwatch: Aviva lose £618m in half a year

9 August 2012

aviva-logoThings are looking pretty bleak at Aviva after they reported a loss after tax of more than £680m in the first half of the year. The insurer has not been doing well for a while, accidentally firing over a thousand members of staff, handing out unbelievably awful quotes and indulging in a publicity stunt that woefully backfired.

But losing £680m in six months is something else.

Aviva are looking at a radical shake-up as it tries to get its house in order, planning to sell or close more than a quarter of its businesses in a bid to save £400m. The insurer has appointed investment banks to help them get through this like Daniel Bedingfield.

It appears that they'll be getting rid of their US division (AmerUs) which was bought for £1.8bn in 2006 and they've written down £876m of goodwill with Pat Regan, Aviva's finance chief, saying: "It's a test of recoverability of goodwill. It's no more than that."

Not in preparation of trying to flog the business to someone else then?

This £681m loss is particularly spectacular if you look at the fact that, earlier in the year, Aviva made a profit of £465m. If you're an Aviva customer, it might be time to start shopping around elsewhere.

TOPICS:   Banking   Investments   High Street News   Insurance

15 comments

  • Spencer
    Better put everyones premiums up then. Bastards.
  • mike b.
    If you don't understand finance then I would suggest you don't publish garbage such as this. The reality is that something bought for 1.8$ billion is now though to be worth 800$ million, so in paper terms the group if worth less, this reduction is offset against profits. The true picture is that Aviva is still a very healthy company, and yes I do work there in a junior position
  • Spencer
    Hey Mike, would you care to explain the difference... in company terms between cost, worth and value. And please make reference to why a 1.8billion company had to be written down.
  • Spencer
    And while you're at it.... would you care to let us know how operational loses are NOT a reflection of a company's net worth?
  • mike b.
    bad decison/markets, simple as that. What I object to is the overall tone that all is bad, it isn't, in poor conditions for all companies Aviva manged to be within 10% of forecasts, and has a plan for the future (God knows it needed it)
  • mike b.
    Oh god, don't want to get into a spam war here, the company was valued at X, it turns out that X in reality is worth X - 800, simple as that really, the markets seem to have a very different view to Bitter Wallet as the share price has barely moved, and thats after a run of 15% rises in the last two weeks. My last contribution on the matter
  • Late
    "Deathwatch: Aviva lose £618m in half a year" Is that title supposed to say £681m? With such numerical skills (and disregard for sixty three million quid) you could probably get a high level position at Aviva...
  • Spencer
    No Spam war - just a difference of opinion. Losing $1Billion on a bad purchase and pretending it doesn't matter is, by most standards a 'bad' thing.
  • mike
    Apologies, it does matter, don't think I said at any point it didn't, my point was (obviously badly made) that over the last financial year in terms of P + L before write downs Aviva did ok, not great, but not badly either, what you saw today was a result of buying something years ago and realising that the value isn't there that you paid for it.
  • Me
    @ Mike Inbred man. Chill out man. Is just another badly written article by Moff.
  • Nikey H.
    Mike, since you work for AVIVA, you might want to help me out with something. I worked for a company and paid pension contribution for a few months, which was handled by AVIVA. After I left, I got sent a letter : Anniversary certificate, Aviva Defined contribution replacement policy , transfer value - £268.65 What is this ? If I call Aviva, I can get this amount transferred to my bank account ?
  • catweazle
    No wonder they're losing money, if you watch their adverts, all their policy holders are the same bloke.
  • Martin
    @ Nikey - if you or your employer have paid £268.65 into a pension then you can access it when you retire. It's not a savings account where you can withdraw it at any time.
  • Nikey H.
    Thanks Martin.
  • moss
    holy shit someone actually helped. :O

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