Aviva posts €40m profit despite rise in claims
Published 11/03/2016 | 02:30
Aviva Ireland bucked the trend by making money in the general insurance market here last year.
It spotted three years ago that there was a problem with rising claims costs, and took action to raise its rates and aggressively fight fraudulent and exaggerated claims.
The company made a profit of €40m last year in general insurance, which includes motor cover for private and commercial drivers and property insurance.
Profits were up 38.5pc when compared with the results for 2014.
The move comes despite a crisis in the motor insurance market, with separate figures from the Central Statistics Office showing a rise of 29.5pc in motor premiums in the year to February.
Across the market, drivers with a claim on their policy are being turned down for cover, with insurers, including Aviva, refusing to cover cars that are more than 15 years old.
Young drivers are being priced out of the market and even drivers with a full no-claims bonus and no penalty points are being hit with huge premium rises.
Across all its activities here, Aviva Ireland said its operating profit rose by 39pc at €85m for last year - up from €61.1m the previous year, and its best performance in five years.
Most rivals are making losses on general insurance, with a number of them hiking motor premiums by up to 50pc for private drivers.
Aviva Ireland boss Hugh Hessing said the company realised in 2011/2012 there was a "problem on the liability side".
He said: "We saw a negative claims environment two to three years ago and we addressed our prices."
He would not say how much its motor rates went up last year, but said the rises this year will be modest.
The insurer also beefed up its claims detection department, appointing former Garda superintendent Rob Smyth to head up this section.
Meanwhile, the Motor Insurers' Bureau of Ireland has decided to challenge the Court of Appeal decision to find it liable for the €90m liabilities of collapsed Setanta Insurance.