Friday 24 February 2017

Five reasons insurer was struggling

•Health insurance

Aviva Health is the smallest of the three players in the market after VHI and Quinn. All private health insurers have been hit hard by consumers switching to rivals and choosing cheaper plans. Medical inflation is also an issue.

•Levies

A raft of levies have made life hard. There is a 1pc levy on all premiums paid to all life assurance companies. The Government imposed a 0.6pc levy on private pensions this year, and there will be a new 2pc levy on general insurance, such as motor and home policies, from next year.

•Pensions

Aviva has been hit hard by people radically pulling back on their spending on pension investments. Aviva said its life and pensions business was down 50pc.

•Claims have surged

The downturn caused people to make claims for smaller accidents on their home or motor policy, while the harsh winter pushed up claim costs.

•Premium income down

Consumers are opting for cheaper home and motor insurance as they seek cuts in outgoings. They are taking a higher excess -- the amount you pay first when you make a claim. This means that although insurance is getting more expensive for households, premium income is down for Aviva.

Irish Independent

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