Aviva Ireland’s half year financial results 2015
|Cash flow||Cash remittance at €26.8 million (HY14: €0 million)|
|IFRS operating profit||Aviva Ireland operating profit up 80% to €45 million (HY14: €25million)|
|Operating expenses||Operating expenses down by 4.5% to €64 million (HY14: €67 million)|
|Value of new business||Value of new business in life & pensions up 17% to €9.3 million (HY14: €7.9million)|
|Combined operating ratio||Combined operating ratio (general insurance business) improved by 3.2 percentage points to 93.5% (HY14: 96.7%)
Combined operating ratio (health business) 98.0% (HY14: 96.8%)
Dublin, 07 August 2015
Hugh Hessing, Aviva Ireland Chief Executive Officer said:
Today’s results show that Aviva Ireland continues to build on last year’s solid performance. Profit across the three businesses stands at €45m, up from €25m at half year 2014.
In our general insurance business, we grew gross written premium and policy count by 8%: the second consecutive year of growth. Our combined operating ratio, our key measure of profitability in general insurance, at 93.5% is 3.2 percentage points better than the same period last year. Profit, at €23m is up significantly year on year (€11m in HY2014). This improvement is 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 has also benefited our performance. We continue to focus on expense and claims management, with specific emphasis on fraud, to enable us to deliver sustainable and competitive premiums for our customers, while retaining our market leading satisfaction scores.
In our life business, the value of new business, the future profit expected on business written the previous year, is up by 17% to €9.3m. Increased sales in pensions and annuities as well as investment products are the key drivers of this growth. Life insurance operating profit at €19.5m is up from €9m, aided by one-off benefits associated with the branching of our life business from the UK at the end of last year. Our flagship multi-strategy product, AIMS Target Return Fund has been a stand out success attracting over €100m in investment since launch in October 2014. In its first year, this fund has returned 8%, which is above target and ahead of peers. Investment in our risk targetted Multi Asset Funds exceeds €760m.
Our health business has been impacted 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. Profit is down to €2.6m from €5.1m, but is better than anticipated due to effective management of expenses and claims. An example is our Health in the Home service, a claims savings initiative which enables customers to be treated, where clinically appropriate, in the comfort of their own homes . Customer retention remains strong while innovative benefits such as ‘Babylon Health’ GP consultations via Smartphone, helped us win more than our market share in the Government’s recent Lifetime Community Rating initiative to attract younger people into the health insurance market.
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 strategy 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.”
For further information, please contact:
Cathy Herbert - 087 2395393