John Quinlan, Aviva Ireland Chief Executive Officer said:
“Today’s results show that Aviva Ireland continues to grow profitably by providing our customers with the protection they need at a price that is sustainable. Profit across the businesses increased by 11% to €57m.
| IFRS operating profit | Aviva Ireland operating profit up by 11% at €57m (HY17: €51m)1 |
| Combined operating ratio | Combined operating ratio (GI business) remains strong at 87.1% (HY17 84.7%) |
| Growth | PVNBP (Present Value of New Business Premiums) down 14% to €494m (HY17: €574m) NWP (Net written premium) of €255m (HY17: €256m) |
In our general insurance business, our combined operating ratio, our key measure for profitability in general insurance, remains strong at 87.1%, despite a deterioration on last year. Profit at €43m is slightly down year on year (HY2017 €44m) and our net written premium is in line with the first half of 2017 at €255m.
We are pricing on a realistic and sustainable basis in order to protect our customers from the volatility in the cost of premiums this market has seen in recent years. Lessons must be learnt from the recent past to create a sustainable, competitive trading landscape in which prudent, well regulated insurers can serve the best interests of their customers.
Aviva continues to support the work of Mr Justice Nicholas Kearns in the Personal Injuries Commission. Its benchmarking of Ireland’s personal injury award levels against international norms will provide a solid basis for reform of our compensation system. Once published, we would urge the government to implement its recommendations without delay so that sustainable reductions in claims’ costs can be achieved and passed on to customers.
In our life insurance business, the present value of new business premiums is €494m, down from €574m in 2017, reflecting a very competitive market. Profit is €14m, up from €7m in HY 2017 due to an improving outlook for the performance of our existing book of business.
In June, we formally welcomed our Friends First colleagues and customers into the Aviva Group, following regulatory approval of the acquisition. The coming together of our two businesses will increase the scale and competitiveness of our life operations in Ireland.
We are glad to report that in recent days, the Central Bank of Ireland has approved the establishment of a separate legal entity for our general insurance business. This completes the authorisation process for both our businesses to be regulated in Ireland, allowing us to serve our customers’ needs whatever the outcome of Brexit negotiations.
We will be writing to customers over the coming months about the transfer of their policies to our new legal entities in Ireland. We look forward to growing our businesses sustainably as Irish regulated subsidiaries of Aviva Group."
1. Operating profit of €54m (HY17: €48m) after deduction in respect of staff pension charges and expenses