Hibernian profits rise on drop in claims

Hibernian Group has reported a 17 per cent increase in first half operating profit to €127.1 million, helped by a 60 per cent jump in profits in its general insurance operations.

The company, which is the largest provider of general insurance in the Irish market, said that although gross written premiums fell to €450 million from €505 million in the first half of 2003, operating profits rose to €101 million from €63 million.

"Motor performed very well while liability also improved," said Dick O'Driscoll, head of general insurance at Hibernian. A lack of adverse weather events over the last year and a half also helped the performance of its property book, he said.

Mr O'Driscoll said the introduction of penalty points and the potential benefits of reforms such as the introduction of the Personal Injury Assessment Board (PIAB) were resulting in lower claims costs.

As a result, premiums have been falling and are now at levels last seen in 1999, Hibernian said. Between November last year and November this year, Hibernian's customers will have seen a drop of more than 20 per cent in their insurance premiums, Mr O'Driscoll added.

But further falls will hinge on getting the accident rate on Irish roads down further and improved road traffic enforcement, he said.

However, the performance of Hibernian's life division was not as strong in the first half. New business premium income rose by 13 per cent to €64.1 million but operating profit fell by 42 per cent to €26.1 million.

While sales growth in term assurance and pensions was positive, performance was hit by the lack of confidence in stock markets which negatively affected lump sum investments.

Hibernian, which is owned by the world's fifth largest insurance group, Aviva, said funds under management at the end of June totalled €8.1 billion compared to €7.2 billion at the same time last year. Aviva said operating profit rose to £1.13 billion sterling from £828 million in the first six months.