Aviva one of Ireland leading insurance companies have announced an increase in operating profits of almost 15% even in what it calls a difficult climate. A key sponsor of several leading Irish sports teams and stadiums, Aviva is synovitis in Ireland as one of the Irelands leading insurance companies, so this will be welcome news for those with a stake in the company.

Aviva employs almost 1300 staff in Ireland spread across centres in Getaways, Cook and Dublin. They are part of the global Aviva group which operates in 16 markets providing life insurance, general insurance and asset management services.

They are also the primary sponsor of Aviva stadium home to Irish soccer and Rugby.  They also support several grassroots organisations throughout Ireland.

Operating profits

All three primary sectors of Aviva saw an increase in their profits on the previous year as announced by their media department.

There was a 14% rise in business premiums in its Life Insurance sector, going up from €1.197bn in 2017 to €1.367bn last year.

Its pensions and protection sector rose by 31% bring its profits up from €38m to €50m.

Meanwhile, its general sector went up 4% to €63 million.

John Quinlan, Aviva Ireland Chief Executive Officer said:

“Today, Aviva Ireland reports Operating Profits of €113 million. This is an increase of 15% on our prior year result (2017: €99 million) and is the fourth consecutive year of double-digit percentage growth across our Life and General Insurance businesses.

Friends first purchase

The Purchase of Friends first has definitely helped bolster profits for the company. The acquisition took its share of life insurance premiums in the state up to 15%, the same stake it has in its general insurance sector.

“The integration of the two businesses is progressing well,” said Aviva Ireland chief executive John Quinlan. 

The media department also stated ” Aviva’s acquisition of Friends First completed on 1st June 2018. The integration of the two businesses is progressing well with Friends First contributing significantly to Life Operating Profits in 2018″.

This positive news also came in a week of announcements regarding Brexit and planned by Aviva to avert any major impact on its customers.

Post-Brexit plans for Ireland

With headquarters in London, it was also apparent that Aviva has made contingency plans post Brexit. This includes the movement of an asset to Dublin and the merging of legal entities to ensure the smooth transition of its operations post-Brexit.

Its insurance sectors will now be regulated from Ireland so there are no conflicting interests.

On February 14th, A London court approved the transfer of about €9 billion of assets from the company’s UK parent, Aviva plc, to the Irish business.

Personal injuries claims

During his statement to the company Mr Quinlan also called for further government-led progress in reducing personal injury claims costs. He said that this will allow Aviva and other insurance companies to reduce premiums for drivers. But that large claim payments are one of the main factors stopping this possibility.

“The high levels of personal injury awards have also been a factor in the increased cost of commercial insurance for our business customers and further reforms are required here to reduce claims costs,” he added.

Post- Brexit uncertainty

Given the Uks current positon on Brexit there was also a number in the company who voiced concern over the companies future plans.

“Given current uncertainties, including the unknown future impacts of Brexit on the economies of the United Kingdom and Europe, our near-term outlook entering 2019 is more muted than our outlook a year ago,” said chief financial officer Thomas Stoddard. As reported in RTE.

“Uncertainty in the political and economic backdrop intensified during the year and this was reflected in a difficult year for investment market performance across most asset classes,” said Chairman Adrian Montague.

“In our home market, the UK, the prolonged and fraught process of negotiating Britain’s exit from the European Union has weighed down on growth in the economy.

“But Aviva is well placed to deal with this; our locally incorporated and locally regulated businesses in Europe have prepared to minimise the potential operational impact,” he added.

As with many of our reports over the last week and from many other news sources Brexit is still the main factor for 2019. Of course, the movement of business to Ireland is promising at the moment but the long term impact of Brexit may change that.

Like many companies, Aviva is doing its utmost to ensure a smooth transition as political manoeuvring seems to be forcing many companies to take the initiative in terms of sharing up uncertainty among its customers.