Financial services group Aviva Ireland continued to improve its performance in 2014, with operating profit across its three businesses up by 13 per cent to € 69 million the company said on Thursday.
Hugh Hessing, Aviva Ireland chief executive officer said: “Today’s results show that Aviva Ireland continues to improve its performance. Profit across the three businesses was up by 13 per cent to € 69m. We returned € 96m to group, up 20 per cent on last year.”
However, Mr Hessing said that while the results show that Aviva ended 2014 “in a good position”, the company has more to do.
“We have a clear strategy in place to build on our performance in 2015. We are investing in the simplification of our business and in pricing sophistication. We will seek to take full advantage of our position as the only composite insurer in the market for the benefit of our customers and our partners,” he said.
In general insurance, Aviva grew its gross written premium and policy count for the first time in eight years, while its combined operating ratio, its key measure for profitability in general insurance, improved by 2.6 percentage points to 96.6 per cent, despite the increase in claims costs in the market. It also grew profits by 1 per cent to €29m “despite the impact of weather related claims in Q1 2014”.
In life, operating profits advanced by 7 per cent to € 28m, while the value of new business grew significantly in 2014, up 30 per cent to € 13m, driven by a continued focus on protection and annuity business.
Protection sales increased by 58 per cent, and Aviva said its new AIMS (Aviva Investors Multi Strategy Fund) fund has attracted investment of € 38m since its launch last October.
Aviva’s health insurance was also profitable in 2014, although profits fell by 34 per cent from 2013 to € 12m. The combined operating ratio was 95.7 per cent, in line with last year’s performance Aviva said.
Aviva completed the transfer of its life portfolio during the year and said that this business is now a branch of the UK.
“This significantly reduces our capital requirement making our business in Ireland more sustainable,” Aviva said.
Aviva group
At group level, Mark Wilson, group chief executive officer, said that the results show "tangible progress", with all key metrics moving in the right direction.
"Cash is up 65 per cent, operating earnings per share is up 10 per cent, value of new business is up 15 per cent and book value is 26 per cent higher. Operating expenses are £571 million lower than our 2011 base-line, debt ratios are down and our full year combined ratio of 95.7 per cent is the best in eight years," he said, adding that the group has entered 2015 "in a position of strength".
However, he said that “ it would be wrong to assume that our turnaround is nearing completion as we have further to travel than the distance we have come.”
Aviva grew its new business in the year to December 31st 2014 by 15 per cent to a record £1.1bn, while growth markets in Poland, Turkey and Asia advanced by 25 per cent. In UK and Ireland new business grew by 1 per cent to £482 million.
The group’s life business reported a 4 per cent increase in operating profit, up to £1.97 billion, with general insurance and health up 1 per cent to £808m and fund management down 8 per cent to £86m, although Aviva pointed to a turnaround in its asset management business “with the first tangible signs of higher margin fund inflows emerging”.
Aviva has increased its final dividend by 30 per cent up to 12.25 pence.
