Hibernian reports 21% profits rise to €150 million

HIBERNIAN Group has reported a 21% increase in operating profits to €150 million in the first six months of the year. The group covers life, pensions and general insurance and is the country’s largest insurer.

It said lower claims have pushed the cost of motor insurance down to 1999 levels at this stage for many motorists, a claim made recently by Axa which has been the dominant player in the Irish car insurance market.

The CSO said in July 2005 the overall cost of motor cover in the Irish market was still over 8% higher than in 1999, but confirmed the cost of cover has fallen significantly from its peak in 2003.

This was the result of lower compensation claims and tighter cost controls and the industry in Ireland is getting back to more acceptable levels of car and general insurance cover.

This year’s first-half profit compares with a figure of €123.7m for the same period last year. In the six months to the end of June, life and pensions grew new business by 16% to €74.2m compared to 2004. However, general insurance premium income was down to €394m, the group said in its statement with the results.

“We have seen six strong months of growth across the business,” said Bryan Jenkins, chief executive of the group. Profits grew in the general insurance sector despite a fall in premium income with the good result reflecting a combination of “disciplined underwriting and lower claims costs”, he said.

In the case of car cover, Mr Jenkins said the group has striven to put the customer first and to reduce the cost of insurance cover, while at the same time rewarding responsible driving. As a consequence, many customers have seen their motor insurance return to 1999 levels, the group said.

Market competitiveness had kept margins down in its life and pensions division. He added results were helped by strong growth in single premium pension sales, including securing a number of large pension contracts.

Hibernian’s parent company Aviva, Britain’s biggest insurer, reported a 22% rise in its interim operating profits, helped by a strong performance in general insurance and robust growth its European life and pensions business.

Aviva said operating profits climbed to £1.318 billion in the six months to June 30 against £1.076bn for the first half of last year.