Aviva Ireland profits up 13%

The Irish arm of UK insurance giant Aviva grew its profits by 13% last year, with management stating the business is now “more sustainable” and well-placed to benefit from the country’s economic recovery.

On a group-wide basis, Aviva yesterday reported a 6% increase in operating profit to £2.17bn (€3bn). In Ireland, meanwhile, it saw a 13% jump in profit, across its three business lines, to €69m; with sales/revenue (gross written premium) and policy count — on the general insurance side — growing for the first time in eight years.

“Our results show that Aviva Ireland ended 2014 in a good position. We have more to do and we have a clear strategy in place to build on our performance in 2015,” said chief executive Hugh Hessing.

“We believe we are well-placed to take full advantage of the strong and broadly based recovery now underway in the Irish economy.”

Aviva Ireland last year transfered its life assurance portfolio to the UK, which management said has reduced the Irish operation’s capital requirements and made it more sustainable. The life arm saw operating profits grow by 7% last year to €28m, with the value of new business rising by 30%.

In general insurance, the company’s combined operating ratio — a key measure for profitability in the general area — improved by 2.6 percentage points to 96.6%, despite an increase in claims costs in the wider market.

The general division also saw a 1% rise in profit to €29m on the back of a continued focus on expense management, and its customer satisfaction scores increased by 13 points.

Despite the challenging market conditions and uncertain regulatory environment, Aviva’s Irish health business generated profits of €12m, last year, albeit down by 34% on the previous year.

“Customer retention levels were strong, reflecting the quality and competitiveness of Aviva’s health policies and held up well in a highly competitive market. Our product innovation, particularly in the corporate channel, led to some significant new corporate clients,” Mr Hessing added.

Value of new business in life and pensions, meanwhile, rose by 30% to €13m.

“We are investing in the simplification of our business and in pricing sophistication. We will seek to take advantage of our position as the only composite insurer in the market for the benefit of our customers and our partners,” Mr Hessing said.