Aviva Ireland profit rises but competition hits life insurance
General insurance business sees profit fall slightly
Staff enter the Aviva Offices on Hatch Street in Dublin. Photograph: Alan Betson
Profit at Aviva Ireland rose 11 per cent in the first half of the year as the company continued to grow its business.
Operating profit at the company reached €57 million in the first six months of the year, compared with €51 million in the same period a year earlier.
In its general insurance business, profit was slightly down at €43 million in 2018, compared with 2017’s figure of €44 million.
Despite a deterioration, its combined operating ratio, a key measure for profitability in its general insurance business, was unchanged at 87.1 per cent. Net written premium was relatively unchanged at €255 million.
The present value of new business premiums in its life insurance business was down 14 per cent to €494 million, amid fiercer competition. Profit was €14 million, a rise from the €7 million in the first half of 2017. Aviva Ireland said this was due to an improving outlook for the performance of its existing book of business.
“Today’s results show that Aviva Ireland continues to grow profitably by providing our customers with the protection they need at a price that is sustainable,” said Aviva Ireland chief executive John Quinlan.
“We are pricing on a realistic and sustainable basis in order to protect our customers from the volatility in the cost of premiums this market has seen in recent years. Lessons must be learnt from the recent past to create a sustainable, competitive trading landscape in which prudent, well regulated insurers can serve the best interests of their customers.”
Aviva is preparing for Brexit, receiving Central Bank in recent days for the establishment of a separate legal entity for its general insurance business.
“This completes the authorisation process for both our businesses to be regulated in Ireland, allowing us to serve our customers’ needs whatever the outcome of Brexit negotiations,” Mr Quinlan said.
The company also called on the Government to implement the recommendations of the Personal Injuries Commission “without delay” once its benchmarking of Ireland’s personal injury award levels against international levels are published.
Aviva Ireland employs around 1,650 people in Dublin, Galway and Cork.