Aviva said today that its general insurance business in Ireland performed positively in a more challenging market in the first half of 2022.
Aviva said its Combined Operating Ratio for half year - a key measure of profitability in general insurance - moved to 96% from 90% the same time last year.
This comes after a return to higher, more normalised, claims frequency as Covid restrictions were lifted.
The company's operating profit fell to €15m from €25m on the back of higher claims and reduced personal lines profit, which it said was due to delays in the emergence of benefit from personal injury reform.
Gross written premiums increased marginally to €253m from €244m, due to strong growth in commercial lines business, Aviva added.
"We continue to expand both our product and service offerings to large commercial and high net worth customers," Declan O'Rourke, Aviva Insurance Ireland's chief executive.
"We have grown both our construction and financial lines portfolios. We have also deployed significant new capacity in areas where insurance capacity is scarce, for example, the charity, leisure, and community sectors," he noted.
Mr O'Rourke also said the company remains fully supportive of the Government's Action Plan for Insurance Reform.
"We welcome the Personal Injuries Assessment Board's recent report on the positive impact of the new personal injury guidelines in reducing personal injury award levels for minor injuries. This has contributed to a double digit reduction in motor insurance premiums," he said.
But he added that an area of major concern is the rejection rates by claimants in PIAB, which now stands at 63%. This is up from 49% before the implementation of the personal injury guidelines.
He said 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.
"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. We believe that for reforms to be successful, the rejection rate needs to reduce to something like 5% from the current 63%," he concluded.
Aviva plans further capital return as H1 profit rises
Meanwhile, Aviva's UK parent said today it planned to give more money back to shareholders as it posted a better-than-expected 14% rise in first-half operating profit, helped by strong performance in commercial lines.
Aviva is under pressure from activist investor Cevian Capital, a holder of 6% of the insurer's shares, to boost investor payouts.
Aviva has already given £4.75 billion back to shareholders after raising £7.5 billion following a string of disposals around the globe since Amanda Blanc was appointed chief executive in July 2020.
Cevian has previously called on Aviva to return £5 billion to shareholders by the end of 2022.
Aviva said it planned to launch the share buyback with its 2022 results, and the board would decide on its size at year-end.
"We are increasingly confident in Aviva's prospects," Blanc said in a trading statement, describing trading as "encouraging" across all the firm's major businesses.
Operating profit rose 14% to £829m compared to £742m seen in a company-supplied consensus forecast.
However, Aviva Investors' assets under management dropped by 13% in the first half to £232 billion, hit by falling markets.
Aviva said it would pay an interim dividend of 10.3 pence, in line with its full-year 2022 dividend guidance of around 31.0 pence.
Cevian has said Aviva has capacity to make larger dividend payments in future.
