Ireland was the only territory in which British insurance giant Aviva failed to meet investment return targets last year.
The group, which is currently negotiating with trade unions over lowering its workforce here from 1,770 to closer to 1,000, ranks return on investment as a key annual growth metric.
On a group-wide basis, Aviva achieved 14.4% investment return in 2011; well above its 12% target. Out of its international subsidiaries, only Aviva Ireland failed to come close to the 12% target, showing only a 6% return on new investment.
Sean Egan, chief executive of Aviva Ireland, said theresults merely underline the importance of implementing the company’s transformation programme; which is also due to see the closure of its 26 retail outlets here and the Irish business being subsumed into a new Britain and Ireland division within the group.
“These are disappointing but not unexpected results. The Irish insurance market is shrinking, costs are high and competitiveness is not where it needs to be. While the challenge is clear, the appetite to transform and recover is strong,” Mr Egan said.
He added that profits in Aviva Ireland’s life and general insurance division remained stable in 2011, but fell in its health insurance arm. Despite the loss of its Ark Life joint venture with AIB, Mr Egan said that Aviva should still grow market share in the life area and will remain the biggest insurer in Ireland; a market which it still views as being key.
Mr Egan said that a healthy level of interest has been shown in acquiring Aviva’s 26 retail branches here, which currently employ around 150 people between them.
“Aviva is in Ireland for the long term. Despite the challenges, we’re fully focused on delivering the improvements necessary to ensure a strong future in Ireland for our customers, our brokers and our staff,” he added.
On a group-wide basis, Aviva reported a 6% increase in operating profit, for 2011, to £2.5bn, with life insurance operating profit up by 7% to £2.1bn.
Group chief executive, Andrew Moss said that the business is continuing to perform well in tough times, making “great progress” in the British market, where operating targets for 2012 have been raised.
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