UK insurer Aviva’s Irish general insurance operating profit fell 35 per cent in 2020 as the business recorded lower revenues and higher expenses.
Operating profit in the unit dropped to €35 million, down from €54 million in the previous year, while its net written premiums declined 7 per cent to €440 million primarily due to the effects of Covid-19.
The division’s combined operating ratio – the cost of claims and administrative expenses relative to premiums earned – deteriorated to 95.2 per cent, compared to 92.6 per cent in 2019. This represented an underwriting margin of 5 per cent, the company said on Thursday.
Companies in the industry typically target a ratio between 90 per cent and 95 per cent.
Aviva Insurance Ireland chief executive Declan O'Rourke said it had been "a mixed year" for the general insurance business.
“2020 was a challenging year for all business in Ireland with the impact of Covid-19. Aviva responded with a range of customer support which has now been further extended until the end of April 2021,” he said.
“We are very aware that many businesses continued to struggle with the cost and availability of insurance.”
Mr O’Rourke added that Aviva was “fully supportive” of the Government’s action plan for insurance reform.
"We call on the Judicial Council to implement awards that are aligned with the UK and Europe, especially for minor/moderate injuries which are 4.4 times higher in Ireland than England/Wales".