Hibernian Group: Review and results for the half year to 30 June 2007

9th August 2007

Hibernian’s parent, Aviva plc today announced to the London Stock Exchange financial results for the half year to 30 June 2007.

Hibernian Group financial results for the half-year to 30 June 2007 show group operating profit of €166.9 million representing an increase of €30.5 million on the corresponding period in 2006 (2006: €136.4 million).

The highlights of Hibernian’s results are (see appendix for details):

22% increase in total group operating profit to €166.9 million
Total life and pensions business sales (PVNBP) increased by 62% to €1.3 billion
General insurance premium income down marginally to €375.9 million
General insurance operating profit down 8% to €118 million
Funds under management increased to €16.4 billion

Commenting on the interim results, Stuart Purdy, Chief Executive of Hibernian Group said:

“We have seen a good six months for the business. The interim results show strong growth for Hibernian Group and I am particularly pleased that Hibernian Life is seeing this growth reflected in its operating profit.”

With regard to Hibernian Life, Stuart Purdy continued:

“We are very pleased with the strong set of results for the first half of the year from the life business. We have entered into a period of growth after realigning and restructuring elements of our business in 2006, with total life and pensions sales increasing 62% to €1.3 billion. Good product offerings such as the Secure Capital Fund and the recently launched European Commercial Property Fund, together with favourable market conditions have contributed to the increase in single premium and pensions sales in both bancassurance and broker channels. Sales through the bancassurance channel increased by 74%** . This substantial increase is reflective of the breadth of the product offering now available to customers through AIB Bank. Customers can now access the broadest range of life, savings and investments and pension products and our successful partnership with the AIB retail network has helped revitalise sales through this channel.

The broker channel has also enjoyed strong new business volumes. In addition to the success of the Secure Capital Fund and the European Commercial Property Fund we also saw the impact of a strong performance from our High Yield Equity fund from Hibernian Investment Managers, and the continued success of our Horizon product on pension sales figures. The recent opening of a dedicated broker service centre and link ups with broker representative bodies IBA, PIBA and IMAF together with continued product development is expected to contribute further to the broker channel this year.”

Speaking about Hibernian General Insurance, Stuart Purdy said:

“Our general insurance business has performed extremely well in a competitive market and continues to offer customers excellent value which has been reflected in a growth in policy count over the first half of the year. The marginal decrease in profits is a direct result of the premium reductions offered to our customers and an increase in claims frequency, which may in time provide less scope for further falls in premium rates.

We are confident of maintaining our market leading position through strong underwriting and by expanding our range of services for customers. In the first half of this year, our Miniature Prices campaign has impressed young drivers. The launch of our first Motoring Report and Hibernian Driving Schools reinforces our commitment to educate young drivers and reward responsible behaviour. We will continue to invest our efforts in initiatives that encourage customers to play their part and work with us to find a route to better premiums.

We also teamed up with the Road Safety Authority to sponsor the latest Irish road safety campaign, in partnership with the Department of the Environment and our sister organisation Norwich Union in Northern Ireland to make the campaign an All-Ireland initiative.

The recent launch of Hibernian Rescue saw us move into a full motoring service arena with branded patrols servicing breakdowns in Dublin and Cork. Hibernian will now teach motorists to drive safely, get them on the road with competitive insurance and when they breakdown get them back on their journey as quickly as possible.”

In summary, Stuart Purdy said:

“The Hibernian business continues to deliver a market leading performance in general insurance while demonstrating the real strength of our distribution in our life business with our strong broker position being supplemented by the newer bank channel.

Other highlights in the first six months of the year included winning awards in March from the Irish Brokers Association (IBA) for best general insurer, best commercial insurer and best personal lines insurer. This represented a clean sweep of all awards Hibernian was nominated for! We also retained our place as one of Ireland’s Top 50 companies to work for.”

Notes: * - Based on Annual Premium Equivalent (APE) measure, sales increased by 65% to €193.7 million. ** - Pro-forma sales (on an APE basis) growth for the six month period including the period prior to the beginning of the partnership with AIB.