Insurer Aviva Ireland has said it will lower insurance premiums if reform of personal injury payouts and fraud is tackled, as it posted a 15% increase in operating profit to €113m last year.
Boosted by its acquisition of Friends First, the Irish arm posted a significant increase in profits, according to Aviva figures. Operating profit in its Irish general insurance business increased by 4% to €63m, despite what it called “challenging market conditions”.
Its combined operating ratio, which is a key measure of profitability in general insurance, “remains robust at 91.5% and in line with 2017”, the firm said.
Aviva Ireland defended the cost of premiums for motorists and businesses, saying savings would be passed onto their customers if there was reform of personal injuries and fraud.
“Aviva Ireland has been actively lobbying for major reform of the personal injury landscape for some time now. In addition, we are taking a very firm stance on insurance fraud and, where we suspect that a claim is fraudulent, we will challenge it.
“We have taken a number of successful cases to date and will continue to do so. Our policy is to continue to take a firm stance on insurance fraud and to support a focus on reform so that a sustainable reduction in personal injury claims’ costs can be achieved and, in turn, passed on to our customers,” a spokeswoman for the firm said.
Despite figures from the CSO showing premiums falling for motorists in the past two years, TDs and Senators have queried insurance costs, saying anecdotal evidence has shown otherwise.
Business groups such as marts and the Irish Farmers Association, as well as the GAA and community organisations have publicly testified at Oireachtas committee hearings on rising costs of premiums.
Aviva Ireland chief executive John Quinlan said the firm publicly supported the final recommendations of the Personal Injuries Commission, which said high payouts was disproportionately affecting businesses and consumers.
“We now need further Government-led progress in reducing personal injury claims costs to enable insurers to bring motor insurance premiums down to more sustainable long-term levels. The high levels of personal injury awards have also been a factor in the increased cost of commercial insurance for our business customers and further reforms are required here to reduce claims costs,” Mr Quinlan said.
Overall, the Aviva Group posted a 2% rise in full-year operating profit, boosted by gains in its life insurance business. Aviva said operating profit across its business was £3.12m (€3.64bn) in 2018, up from £3.06bn a year earlier.
Additional reporting Reuters