Insurer Aviva Ireland’s operating profit increased by 12 per cent to €48 million in the first half of the year amid strong growth in net written premiums and benign weather.
The company's combined operating ratio, a keenly-followed gauge of net insurance claims and expenses divided earned premium, fell to 84.7 per cent in Ireland from 91.9 per cent for the year-earlier period. A combined ratio below 100 per cent indicates an insurer is making an underwriting profit.
The private motor business delivered a combined ratio of 95 per cent, though the company said that this segment of the market “remains a challenging part of our business”.
Still, the insurer has stood out as a strong spot in a loss-making industry in recent years, having dropped about a quarter of its motor portfolio as part of a wider Irish restructuring in 2012 and 2013 when it cut 550 jobs and closed its branch network.
RSA Insurance Ireland, which was hit by an accounting scandal in 2013, said this week it returned to net earnings in the first half. FBD, which bounced back to underwriting profit last year with a combined ratio of 99 per cent, is expected to report continued progress as it reports interim results on Friday, according to analysts at Davy.
Aviva, which employs 1,150 in Ireland, said it continues to “invest significantly in our fraud prevention and detection systems and are relentless in fighting all suspected cases of fraud, at considerable cost”.
In the company’s life business, it saw “significant growth in sales of retirement products and bulk purchase annuities, with the net present value of new business premiums rising to €574 million from €434 million in 2016.
Aviva Ireland is working closely with the Central Bank to secure authorisation as a full subsidiary of the wider Aviva Group, compared to its current structure as a branch of the UK group. The planned change "removes the uncertainty caused by Brexit" for the company and its customers, it said.
The wider Aviva Group raised its first-half dividend as it reported its operating profit increased by 11 per cent to £1.47 billion (€1.63 billion), which was in line with analysts’ expectations.
