Aviva Ireland reports 80% jump in H1 profits

Profits across Aviva Ireland’s three businesses rose by 80 per cent to €45 million in the first half of the year, up from €25m in 2014, as the insurer said it is in a good position to take “full advantage” of the economic recovery.

Hugh Hessing, Aviva Ireland chief executive officer, said the results show that Aviva "continues to build on last year's solid performance".

“Our results show that Aviva Ireland is making good progress. We have more to do to simplify our customers’ journey and to give them value for money and peace of mind. Our staregy to do this is clear and we are confident we are in a good position to take full advantage of the strong recovery in the Irish economy”.

Aviva grew its gross written premium and policy count by 8 per cent in its general insurance business in the six months to June 30th, while its combined operating ratio, a key measure of profitability in general insurance, was up by 3.2 percentage points to 93.5 per cent. Profit, at € 23m, was up from €11m in the same period in 2014.

Mr Hessing said that the improvement was driven by technical underwriting and pricing actions taken to ensure long-term sustainable growth in challenging market conditions. Benign weather in the year so far also benefited Aviva’s performance.

Aviva reported a 17 per cent increase in the value of its new life business, up to €9.3m, on the back of increased sales in pensions and annuities as well as investment products. Operating profit for its life division rose to € 19.5m, up from € 9m, aided by one-off benefits associated with the branching of its life business from the UK at the end of last year, the company said.

Mr Hessing noted that the group’s health insurance business was hit by an increase in claims costs and in claims frequency.

“At the same time, average premium has fallen as customers opt for lower priced plans at renewal,” he said, noting that profit is down to € 2.6m from € 5.1m, “but is better than anticipated due to effective management of expenses and claims”.Aviva reported a 17 per cent increase in the value of its new life business, up to €9.3m, on the back of increased sales in pensions and annuities as well as investment products

Operating expenses at Aviva fell by 4.5 per cent to €64m.