Aviva’s Irish sales dip 47% in 6 months

INTERNATIONAL insurance giant Aviva made a return to profit in the first half of this year, but its Irish operations saw a 47% year-on-year drop in sales for the six-month period.

The British group – which owns the Hibernian brand here and recently bought the naming rights to the redeveloped Lansdowne Road stadium – made an after-tax profit of £747 million (€876m) for the first half of this year; up from a loss of £84m (€98.18m) for the same period last year.

Group life and pensions sales were down by 4%, on a year-on-year basis, however, and operating profits slipped from just over £1.2bn a year ago to just over £1bn. The company’s interim dividend was also reduced by 31% to 9p per share.

Group chief executive, Andrew Moss, said that Aviva’s diversity and innovation – in terms of products and services – had served shareholders and customers well “in difficult economic times.”

Management said that a sharp decline in the life and pensions market – due to the economic downturn – here led to the 47% drop in sales at Hibernian Aviva.

“There is lower demand across both retail and bancassurance channels with consumers beinginfluenced by volatile equity markets, the slowdown in economic growth and property market uncertainty,” Aviva said of the Irish market.

New business, during the period in question, at the Irish operations amounted to £4m – as opposed to £8m at the same stage last year.

Overall operating profit for the first half at Hibernian Aviva was up from £28m to £29m, but operating profit in its general and health insurance arm (Hibernian bought a controlling stake in Vivas Health last year) fell from £63m to £47m, on a year-on-year basis.

Operating profit at Aviva Europe – the combined entity of the group’s European markets outside Britain and 51% of its total life and pension sales – fell from £614 to £607m, with life/pension sales down from £9.06bn to £8.85bn.

“The nature of the downturn varies considerably in different markets, with countries such as Ireland and Hungary anticipating a significant and extended slowdown, while others, such as Poland and France, are expected to experience a shallower recession and to bounce back more quickly,” the group said.