Operating profits soared to €282 million, driven largely by a 72% hike in profits from the general insurance business, which includes home and motor policies. Home and motor premiums income fell €100 million to €835m but operating profits from the division were €94m higher at €224m.
This more than made up for a €23m tumble in profits from the life and pensions business, which came in at €57m. Gross premium income was 5% higher, but the contribution from new business disappointed at €27m, down from €40m in 2003.
Hibernian chief executive Bryan Jenkins said the results were solid. “The strong operating result in general insurance reflects a combination of our disciplined underwriting, lower claims costs and fewer than expected weather-related events,” said Mr Jenkins. “The company has continued in its efforts to reduce the cost of insurance cover, particularly in motor insurance.”
Mr Jenkins added that the company supported moves to get the Personal Injuries Assessment Board (PIAB), the state organisation that aims to fast-track compensation claims and cut legal costs, up-and-running, and said the reforms proposed by the government would cut insurance costs if implemented as intended.
Hibernian Life & Pensions toughed it out during the year, with difficult market conditions and strong competition affecting performance. But the business managed to retain the number three slot in the market and won 11% of new business during the year. Margins were squeezed by other insurers cutting charges to win business, while profits also suffered from a once-off accounting change. In a separate development yesterday, Hibernian parent Aviva announced a £1.1bn (€1.6bn) takeover of British motoring organisation RAC. The deal has been backed by the RAC and is expected to result in over 1,700 job losses. Aviva announced full-year profits of £2.3bn (€3.4bn) yesterday.