independent

Friday 25 April 2014

Aviva's Irish sales plunge nearly 40pc this year

SALES at Aviva's Irish business plunged nearly 40pc in the first nine months of this year following a performance the company itself describes as "not acceptable".

In an interim statement to mark the end of the insurer's third quarter, Aviva said sales in Ireland dived 38pc to £469m (€587m) during the nine months to the end of September from £757m a year earlier.

Ireland was by far the worst performing region on Aviva's books during the year with only Italy and "other developed" nations seeing anything like these declines.

Company chairman John McFarlane said that in Ireland, "while a number of good actions are underway to improve performance, the results are not yet acceptable".

Low sales were not the only problem for the Irish business. The investment rate of return on assets here fell to 2pc, well below the group average of 13.8pc. After Ireland, the next lowest IRR was 12pc in Italy.

Overall, Mr McFarlane said results had been "mixed" across the group so far this year.

"We nevertheless have strong positions in the UK, Canada, France and Singapore and our performance has been good in these markets.

"In our life business in Spain and Italy markets are tough, driven by the external economic environment, with new business volumes considerably reduced," he added.

The company is set to sell its US business shortly. The final fee will be less than the £2.4bn it has valued the business at, but will free up capital.

Aviva is four months into a reorganisation which will see some 16 business sold. The revamp was launched in July by chairman John MacFarlane, who took day-to-day charge of the company in May when chief executive Andrew Moss resigned after shareholders voted against his pay packet.

Aviva's US business, which it bought in 2006, is the biggest asset in a for-sale list that also includes a minority stake in Dutch insurer Delta Lloyd.

A further eight businesses will probably be sold next year, Aviva said, declining to name them.

In a statement, Mr McFarlane said the company hoped to hire a "high-quality chief executive" as well as focusing the group on its core businesses and building its profitability.

Elsewhere, RSA said it posted "good growth" in Ireland. Its net written premiums here fell 2pc to £265m but on a constant currency basis that represented 5pc growth.

The company's 123.ie brand was the main drive of growth, with its premiums up 19pc year on year.

Irish Independent

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