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Aviva’s half year profit declines in ‘more challenging market’

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Aviva

Aviva

Aviva

Aviva Ireland recorded a decline in general insurance operating profit in the first half of the year, with the insurer describing current market conditions as “more challenging.”

Aviva reported an operating profit on general insurance of €15m in the first half of 2022, a decrease from the €25m in the first half of 2021.

This was driven by higher claims and reduced personal lines profit “due to delays in the emergence of benefit from personal injury reform,” according to chief executive Declan O’Rourke.

Gross written premiums increased slightly to €253m from €244m due to commercial lines business growth.

The company’s combined operating ratio, a measure for general insurance profitability, was also on the rise.

The ratio rose to 96pc from 90pc in the same period last year, a growth that was attributed to higher and more normalised claims frequency after Covid restrictions were lifted.

Aviva also reported growth in both its construction and financial lines portfolio.

Mr O’Rourke said the insurer fully supported the Government's action plan for insurance reform.

“We welcome the Personal Injuries Assessment Board’s (PIAB) recent report on the positive impact of the new personal injury guidelines in reducing personal injury award levels for minor injuries,” he said, adding that this has contributed to a double digit reduction in motor insurance premiums.

However, Mr O’Rourke said that an area of “major concern” is the rising rejection rates by PIAB claimants, which now stands at 63pc. This is an increase from 49pc prior to the implementation of the new guidelines.

“This is leading to more claims going to court, which is the most expensive claims settlement channel due to high legal costs and will undermine the impact of reforms,” he concluded.

“We call on government to urgently implement in progress legislation to strengthen the powers of PIAB and to compel early engagement in settling claims and reduce the percentage of claims going to the courts.”

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