British insurance giant Aviva, which owns Hibernian Aviva here, has reported a net loss of £885m sterling in 2008, citing the falling value of its assets. Operating profits - earnings before tax and other payments - were up 4% to £2.297 billion.
'Bottom line earnings have been affected by investment markets which have predictably created significant unrealised losses during the year,' Aviva's CEO Andrew Moss said in its earnings statement.
'In a tumultuous year, our underlying business has shown great resilience," he said, however. 'Operating profits are up and we have maintained our dividend.'
In its European division, Aviva said that growth in the developing economies of central and eastern Europe offset more difficult conditions in the more mature markets of Italy and Ireland.
Hibernian Aviva said its operating profit halved last year to €181m, reflecting the costs of moving to new IT systems.
Figures from its parent company said that Hibernian Aviva's general insurance operating profit in Ireland decreased to £63m from £162m in 2007 as a result of storms in July and August, intensive competitive pressure in the market and the economy slipping into recession. It saw an underwriting result of a £4m loss compared to a £101m profit in 2007.
Net written premiums rose to £494m from £474m the previous year. The health business recorded net written premiums for the first time of £19m following the acquisition of VIVAS Health during the year. This has now been rebranded to Hibernian Aviva Health.
Aviva said that its Irish sales were down 27% reflecting reduced demand for unit-linked products across both retail and bancassurance channels. This is blamed on consumers being deterred by volatile equity markets and the slowdown in economic growth.
Aviva said the value of its new business was down to £15m from a restated figure of £37m in 200, reflecting the impact of lower sales and the downturn in economic conditions affecting consumer confidence.
Last year the firm announced that its was transferring 450 Irish jobs to India in an effort to cut costs.
The Hibernian Aviva Group has a 19.2% market share of the general insurance business in Ireland and remains the third largest player in the life and pensions sector with a 16.7% market share. In the health insurance market, it has grown its share from 5% to 8%.
'We are continuing to invest in our business and brands and are taking strong decisions now to ensure that we are well positioned for growth when the wider economic landscape improves,' comments Stuart Purdy, Hibernian Aviva's Group CEO.
