Health cover sector a black spot as Aviva Ireland profits almost double
Operating profit at Aviva Ireland nearly doubled from €25m to €45m across the firm's three businesses in the first six months of the year.
Profit in the group's general insurance business more than doubled to €23m compared to €11m in the half-year period in 2014. The amount of general insurance business grew by 8pc while its combined operating ratio, a key measure of profitability in insurance, was 93.5pc - 3.2pc better than the year before.
The ratio represents claims and operating expenses as a percentage of premium income. A ratio above 100pc means that a firm is paying out more money in claims that it is receiving from premiums while a ratio below 100pc indicates that the company is making an underwriting profit. Underwriting profit is the profit that an insurance company generates after paying out claims and expenses.
The group's life insurance business saw operating profit rise to €19.5m from €9m. Growth was aided by one-off benefits associated with the branching of our life business from the UK at the end of last year.
However profits halved from €5.1m to €2.6m at the firm's health business. Aviva said it was affected by a rise in claims costs and frequency. The firm added that average premiums have fallen as customers opt for lower priced plans at renewal.
Hugh Hessing, Aviva Ireland chief executive officer, inset, said the results show that Aviva "continues to build on last year's solid performance".
Meanwhile, Irish Life contributed €45m to the profits of its parent company, Great-West Lifeco, in the second quarter.
This was an improvement of €7m on the same period the year before, when Irish Life contributed €38m.
Irish Life was acquired by Canadian life insurance firm Lifeco two years ago.
Irish Life chief executive Bill Kyle says that the company's integration into Lifeco is now complete, representing an investment of €56.5m.
Total revenue at Lifeco hit $24.5bn in the second quarter, up 52pc from the same period in 2014. European sales increased by 21pc to $3.4bn on the back of strong growth in Ireland and Germany.