Aviva sees profits double to €18m

Pre-tax profits at Aviva Health Insurance more than doubled last year to €18m in spite of a loss in market share.

New figures show that pre-tax profits at Aviva Health Insurance Ireland Ltd increased by 151%, going from €7.23m to €18.06m.

This followed revenues increasing marginally from €170.1m to €172m in the 12 months to the end of December 31st last.

Separate figures from the Health Insurance Authority show that AvivaHealth’s market share last year decreased from 16.9% to 15.3% with the entrance of Glo Health into the market, increasing its share from 1% to 3.6%, a contributor to Aviva’s market share loss.

At the end of December last, the market leader remained VHI with 54% market share — down 2.3% on 2012.

Aviva Health only entered the health insurance market here in 2006, quickly building up to a 10.4% share in five years. The firm’s market share peaked in 2011 with 17.7% and has sustained two years of decline in market share since then.

The overall numbers on health insurance last year reduced by almost 50,000 from 2.098m in 2012 to 2.049m last December.

The private health insurance market has lost 247,926 customers since a 2008 peak of 2.297m customers.

According to the directors’ report for Aviva Health, “the company performed well in a challenging market in 2013. The Focus Plan range, designed on the basis of extensive customer research, was launched mid-year.”

The report added “the plans are designed to address the affordability concerns of many of our customers. Claims and expense management remain key focus areas for the company.

The firm’s gross written premiums last year reduced from €345.6m to €333m, with €216.3m ceded to re-insurers resulting in net premiums earned reducing from €117.86m to €116.99m.

Fees and commission income last year increased from €50.5m to €55.3m, contributing to total revenues of €172m.

The total amount paid out in claims last year — net of recoveries from re-insurers — reduced from €87.35m to €80.38m.

The firm’s total expenses last year reduced from €162.94m to €154.83m, that also included operating expenses of €68.78m — down from €73.87m in 2012.

The figures show that the average number of employees last year increased from 94 to 116 with staff costs reducing from €11m to €10.7m.

The staff costs last year included redundancy payments of €301,000 compared to €562,000 under that heading in 2012.

Salaries and other short term benefits to directors last year reduced by almost 50% from €1.38m to €701,000.