Aviva’s business concentration in Europe, and the expected rises in business interruption claims, is expected to affect the insurers’ profits in 2020. However, the spread of COVID-19 prompted the insurer to invest in the diversification of its product portfolio and digital services to improve its market outreach. Combined with Aviva’s strong online channels and good usage of technology, the company is well-placed to deal with the pandemic, according to GlobalData, a leading data and analytics company.

Aviva has a diversified business structure, with operations across most lines. It is largely concentrated in Europe, which accounted for 72.7% of total premiums in 2018. Projections suggest that GDP decline in the EU could be worse than that of the economic slowdown of 2008-2009. While Aviva’s 25.9% share of premiums in Italy look particularly vulnerable, its 11% premiums in the Asia-Pacific region appears comparatively better placed for growth prospects.

In terms of business lines, Aviva has a diversified portfolio – 55% in life, 43% in non-life and 2% in health.

Deblina Mitra, Insurance Analyst at GlobalData, commented: “Aviva’s life segment will be subject to volatility in investment returns, due to recessionary pressure on economies. Its non-life sector is predominantly motor and property, which combined accounts for 88%. These are relatively safe lines, though GlobalData does expect declines in both claims and premiums in motor insurance. Its business interruption policies will be its biggest concern in non-life due to the possible spike in claims.”