Interim profit rises 19% to £57m at Hibernian Group

Hibernian Group, the life and general insurance company, has announced a 19 per cent increase in operating profit from £47.7 million (€60.6 million) to £56.7 million (€72 million) in the six months ended June 30th, 2000.

The results are the first set of figures from the merged Irish operations of Hibernian, CGU and Norwich Union. They show that all the impetus to growth came from the life side, while the general insurance side experienced a profit contraction. The operating profit from life and pensions rose by 32 per cent from £32.2 million to £42.5 million, but the operating profit from general insurance fell by 8 per cent from £15.5 million to £14.2 million due to a doubling of the underwriting losses from £6 million to £13 million.

Chief executive Mr Pat McGorrian said he was "very pleased" with the results. "Following the merger of CGU and Norwich Union in May, the integration of the businesses is moving ahead rapidly," he said. The newly merged group of Hibernian, CGU and Norwich Union is to trade under the Hibernian brand name in the Irish market, as will Celtic Insurance, whose acquisition was recently announced.

Apart from the growth in group operating profit, net premium income increased by 27 per cent from £469.5 million to £597.3 million. "This is a very considerable achievement given the level of integration activity through this period," said Mr McGorrian. And he expressed confidence that "we will continue our success for the remainder of the year and into the future".

In general insurance, there was an 18 per cent rise in net written premium income from £201 million to £237.4 million. Mr McGorrian said the number of motor claims were still rising pro rata to the car population. Considering the move towards safer driving, "we expected fewer accidents". However, the "frequency of claims has not declined". Asked if this would lead to increased motor insurance premiums, he said he did not expect any increase in the near future, and he noted the increased competition in the market.

In life and pensions, the embedded value increased by 13 per cent from £513.5 million to £578.2 million. New business contributions doubled from £7.7 million to £15.5 million, while new business premiums rose by 47 per cent from £39.5 million to £58 million.

The shareholders who are entitled to a dividend are to receive 18.09p per share. This will be paid on November 17th. The Irish shareholders may participate in the company's dividend reinvestment plan which enables dividends to be reinvested in the company's shares at reduced dealing cost.