SALES AT Hibernian's life and pensions operations declined by 37 per cent in the first nine months of 2008, as turmoil in financial markets, combined with uncertainty in the Irish property market, led to a drop-off in demand for the firm's products.
The firm was also hit by the one-off impact of Special Savings Investment Accounts maturing in 2007.
According to an interim statement published by Hibernian's UK parent company Aviva, sales of life and pensions products fell by 27 per cent, or 37 per cent in euro terms, down to £949 million (€ 1.2 billion) from £1.3 billion for the same period last year.
Earlier this week, actuarial consultants Life Strategies published statistics showing that overall life and pension sales in Ireland have fallen by 28 per cent so far this year.
Hibernian suffered from significant falling sales in its bancassurance channels, with sales declining by 36 per cent in euro terms, or 25 per cent in sterling, with the present value of new business premiums down to £485 million from £651 million for the first nine months of 2007. Its main distribution channel is through AIB.
Although specific results for the firm's general insurance businesses were not reported, Aviva said that the environment remains poor, and is "characterised by aggressive competition and declining rates". The firm also noted that it was hit by exceptional weather-related claims during the third quarter of 2008.
Overall, Aviva, which is the world's fifth largest insurance company, reported a better-than-expected 12 per cent rise in its nine month sales, as life and pensions sales grew to £25.6 billion in the nine months to September 30th, up from £22.9 billion for the same period last year.
The firm also said that its capital position was "strong", with a capital surplus of £1.3 billion at October 24th, down from £1.9 billion on September 30th. The company estimated its surplus would fall by another £400 million in the event of stock markets falling by a further 20 per cent.
Aviva also announced that it may attempt to renegotiate a £1 billion payout to policyholders. A couple of thousand Irish policyholders are eligible to benefit if, and when, the payout goes ahead.
