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Aviva Ireland’s Full Year Financial Results 2018
IFRS operating profit
Aviva Ireland Operating Profits up by 15% at €113 million1 (2017: €99 million)
Combined operating ratio
Combined Operating Ratio (General Insurance business) 91.5% (2017: 91.4%)
PVNBP (Present Value of New Business Premiums) €1,367 million (2017: €1,197 million)
NWP (Net Written Premiums) of €485 million (2017: €498 million)
John Quinlan, Aviva Ireland Chief Executive Officer said:
“Today, Aviva Ireland reports Operating Profits of €113 million1. This is an increase of 15% on our prior year result (2017: €99 million) and is the fourth consecutive year of double-digit percentage growth across our Life and General Insurance businesses.
In our General Insurance business, despite more challenging market conditions, Operating Profits increased by 4% to €63 million (2017: €61 million). Our Combined Operating Ratio, a key measure of profitability, remains robust at 91.5% and in line with 2017 (2017: 91.4%). Net Written Premiums declined marginally by 2% to €485 million (2017: €498 million) in an increasingly competitive market.
Aviva publicly supported the final recommendations of the Personal Injuries Commission and we wrote to our customers encouraging them to petition for its proposals to be implemented quickly. We now need further government led progress in reducing personal injury claims costs to enable insurers to bring motor insurance premiums down to more sustainable long-term levels. The high levels of personal injury awards have also been a factor in the increased cost of Commercial Insurance for our business customers and further reforms are required here to reduce claims costs.
In our Life Insurance business, the Present Value of New Business Premiums increased by 14% to €1,367 million (2017: €1,197 million) with significant growth in sales of Individual Pensions and Protection. Operating Profits increased by 31% to €50 million (2017: €38 million).
Aviva’s acquisition of Friends First completed on 1st June 2018. The integration of the two businesses is progressing well with Friends First contributing significantly to Life Operating Profits in 2018. In November a new integrated Group Risk proposition was launched to the Corporate market which will be followed by the launches of a new Individual Protection product suite and a combined Pensions, Investment and Fund proposition.
Aviva is supportive of measures to increase pensions coverage among those in full-time employment from its current level of less than 50%. We are supportive of a new Auto-Enrollment retirement savings system as a supplement to existing private pension arrangements, but advocate that existing tax reliefs for retirement savings should not be further reduced. We are also advocating that customers should be able to access independent financial advice for all forms of retirement savings, including Auto-Enrollment when launched.
In February 2019, we completed the establishment of a separate Irish legal entity for our General Insurance business which completed the authorisation process for both our Life and General Insurance businesses to be regulated in Ireland. This allows us to continue to protect our customers and serve their best interests in Ireland post-Brexit.
Aviva continues to deliver sustainable results for all our stakeholders through our market-leading Composite insurance propositions. Aviva is focused on growing our Life and General Insurance businesses in the Irish market for the benefit of our customers and supported by our Broker distribution partners. Our focus on our customers is highlighted in growing customer satisfaction while our strong brand continued to shine as we achieved the most trusted insurance brand in 2018. This has been achieved through the commitment of our 1,600 staff nationwide who reflect the social and ethnic diversity and dynamism of the Irish workforce.”
1. Operating profit of €108 million (2017: €93 million) after deduction in respect of staff pension charges and expenses.