John Quinlan, Aviva Ireland Chief Executive Officer said:
“Today’s results show that Aviva Ireland continues to report solid results by providing our customers with the protection they need at a price that is sustainable. Profit across our businesses increased by 7% to €61m, as a result of material growth in life operating profits. Delivering sustainable profits enables us to continue to serve our Irish customers over the long term.
| IFRS operating profit | Aviva Ireland operating profit up by 7% at €61 million (HY18: €57m)1 |
| Combined operating ratio | Combined operating ratio (GI business) 91% (HY18: 87%) |
| Growth | PVNBP (Present Value of New Business Premiums) up 74% to €859m (HY18: €494m) NWP (Net written premium) of €248m (HY18: €255m) |
In our general insurance business, operating profit is down year on year to €31m (HY2018: €43m) and net written premium is marginally down on the first half of 2018 at €248m (HY2018: €255m). Our combined operating ratio, our key measure for profitability in general insurance remains robust at 91% (HY18: 87%), but has been adversely impacted by a new industry wide levy introduced in 2019 and an increasingly competitive market.
Aviva welcomes the recent passing of the Judicial Council Bill into law. This is a major step towards the material reduction in the levels of personal injury compensation awards. Aviva maintains that until soft tissue injury award levels reduce significantly from current levels of 4.4 times those in England and Wales, we cannot deliver a sustainable reduction in claims costs and premiums for customers. We now urge government to establish the Judicial Council with the support of all stakeholders as soon as possible and would like to see a timetable for the recalibration of personal injury compensation awards.
In our life insurance business, the present value of new business premiums increased to €859m (HY2018: €494m) and operating profit grew by 104% to €30m (HY2018: €14m), as a result of expense savings and the full inclusion of Friends First in the 2019 figures.
Following Aviva’s acquisition of Friends First in June 2018, the integration of the two life businesses has progressed significantly leading to the increase in life operating profit. Our integrated life business has been rebranded Aviva and we have delivered new Group and Individual Product Protection product suites to the market which will be followed by a new Pensions, Investment and Fund Proposition.
Aviva is a financially strong insurance provider that can meet its long term commitments to customers. In July S&P Global Ratings raised its long-term issuer credit and financial strength ratings on the Aviva group's core operating entities to 'AA' from 'A+' and raised the issuer credit rating on Aviva PLC to 'A' from 'A-'.”
1. Operating profit of €59m (HY18: €54m) after deduction in respect of staff pension charges and expenses