Aviva Ireland posted a decline in overall insurance operating profit for the first half, with the insurer describing current market conditions as “more challenging”.
viva reported an operating profit from non-life insurance of €15 million in the first half of 2022, down from €25 million in the first half of 2021.
This was due to higher claims and lower profits in the personal lines business, according to chief executive Declan O’Rourke, “due to delays in the introduction of personal injury reform benefits.”
Gross written premiums increased slightly from €244 million to €253 million due to growth in private customer business.
The company’s combined operating ratio, a measure of overall insurance profitability, also increased.
The ratio rose to 96 per cent from 90 per cent in the same period last year, growth attributed to higher and normalized claims incidence following the lifting of Covid restrictions.
Aviva also reported growth in both its construction and financial divisions portfolios.
Mr O’Rourke said the insurer fully supports the Government’s action plan for insurance reform.
“We welcome the recent report from the Personal Injuries Assessment Board (PIAB) on the positive impact of the new personal injury guidelines in reducing personal injury premiums for minor injuries,” he said, adding that this has resulted in a double-digit reduction in motor vehicle Insurance premiums have contributed.
However, Mr O’Rourke said rising rejection rates for PIAB applicants, which now stand at 63 per cent, is an area of ”major concern”. This is an increase from 49 percent before the new guidelines were implemented.
“This will lead to more claims going to court, which is the most expensive way to settle claims due to the high legal costs, and will undermine the impact of reforms,” he concluded.
“We call on the government to urgently implement ongoing legislation to strengthen the PIAB’s powers and enforce early engagement in resolving claims and reducing the percentage of claims going to court.”
https://www.independent.ie/business/irish/avivas-half-year-profit-declines-in-more-challenging-market-41902295.html Aviva’s half-year profit falls in ‘more challenging market’