Aviva’s Irish general insurance and life and pensions operations witnessed an 81% increase in their combined operating profits in the previous year to €87m, primarily due to elevated investment returns in the general coverage division. Avia Insurance Ireland, the third biggest residential and business insurer in the country, experienced a growth in operating profit due to a rise by €72m from the year before, reaching €32m in total. This was a result of a 5% increase in the premiums amounting to €521m and a favourable high-interest rate environment for its investment fund.
The combined operating ratio of Aviva, a metric assessing claims, costs and expenses relative to premiums, remained constant at 96 per cent. Any value below 100 suggests the insurance firm is making profits.
An upward trajectory in commissions was attributed to the solid growth in commercial business lines and resurgence in personal lines, as noted by Declan O’Rourke, Aviva Insurance Ireland’s CEO. He also lauds the government’s significant strides in implementing the 2023 Insurance Reform Action Plan. The reform focuses on areas like anti-fraud measures, redefining duty of care, and instating mediation through the Injuries Resolution Board (IRB).
Despite the anticipation of a considerable decrease in the rejection of IRB claim assessments by plaintiffs’ solicitors following the introduction of personal injury guidelines a few years ago, the rate has surged from 49% to 56%. These dismissals undercut the benefits of the reform, prolong compensation payouts, augment legal expenses, and ultimately result in heightened premiums for clients.
On the other hand, a significant quantity of personal injury cases, ones in litigation or predicted to be, are pending Supreme Court judgement on a considerable test case challenging the constitutionality of the awards guidelines.
In parallel circumstances, Aviva Life and Pensions Ireland, the national fourth largest life and pensions provider led by CEO Barry Cudmore experienced a slight downturn in operating profit, registering €15m compared to the €16m earned the previous year.
Stay informed by locating The Irish Times on WhatsApp. Additionally, catch the most recent issues discussed in our Inside Business podcast which we release on a weekly basis.