SRI LANKA AVIVA UNIT POSTS US$703,760 LOSS IN MARCH 2010 QUARTER

Sri Lanka's Aviva NDB Insurance made an 80 million rupee (US$703,760) loss in March 2010 quarter from a year ago, as wage and sales costs rose and it faced higher claims, accounts filed at the stock exchange showed.

Aviva NDB Insurance made 98.3 million rupee profit during March quarter last year.

In the March 2010 quarter, Aviva NDB Insurance group's gross premium income was up 34.4 per cent to 2.08 billion rupees, while its re-insurance premium had dipped 4.3 per cent to 290.6 million, resulting in a net written premium income of 1.8 billion rupees, up 43.4 per cent.

The group made a loss of 2.68 rupees per share in the March quarter, compared with earnings of 3.28 rupees in the same period last year.

Aviva NDB Insurance, formerly known as Eagle Insurance, was taken over by Aviva Insurance of the UK, the world's sixth largest insurance company, in January 2010.

"The loss reported was due to the higher claims experience and the prudent increase of

the IBNR (incured but not reported) provision of the general insurance business and the brand migration expenses borne by shareholders," Bill Lisle, chairman of Aviva NDB Insurance in a statement said.

"Group Profit before tax prior to brand migration expenses amounted to 119 million rupees."

In the March quarter claims rose almost 50 per cent to 95.2 million rupees.

Indirect expenses which included staff costs rose 41.7 per cent, to 208.4 million rupees, administration costs were up 15.8 per cent, to 128.1 million rupees and sales costs were up 235 per cent to 238.6 million rupees.

Investment income rose 48.4 per cent to 978.1 million rupees, and other income was almost flat at 56 million rupees, the results showed.

Aviva NDB Insurance group's March quarter gross assets rose 18.2 per cent to 25.7 billion rupees from the corresponding period of 2009.