Aviva 2006 Annual Report Download - page 43

Overview Business review Governance Financial statements Other information
Aviva plc
Annual Report and Accounts 2006 39
Europe – General insurance and health
2006
IFRS
profit IFRS Combined Net
before operating operating w ritten Underwriting
tax profit ratio* premium result
£m £m % £m £m
France 77 63 99 735 6
Ireland 297 172 77 519 121
Netherlands 107 139 89 1,755 50
Other Europe 26 43 100 278 12
Continental
Europe 507 417 89 3,287 189
2005
IFRS
profit IFRS Combined Net
before operating operating w ritten Underwriting
tax profit ratio* premium result
£m £m % £m £m
France 68 35 101 726 (21)
Ireland 181 171 78 499 116
Netherlands 171 137 93 1,270 54
Other Europe 17 47 95 259 15
Continental
Europe 437 390 92 2,754 164
* General insurance business only.
* * The “ Loi Chatel” introduced in August 2005 requires that an insurer must now
inform their client in the annual review notice that the client has the right to cancel
the policy.
France
Our French general insurance business sells predominantly personal,
small commercial and health insurance and has a market share of
2% . We sell products primarily through an 875-strong agent
network. Our agent network is particularly focused in provincial
cities where its key strength is its proximity to, and understanding
of, customers. Eurofil is the second-largest direct insurer in the
French market and is fully integrated with our other general
insurance operations.
We continue to focus on increasing profitability through
improvements to the quality of our underwriting and processes,
and through further successful development of our agent network.
To achieve these goals we have recruited additional agents this
year as part of our strategy to renew and grow our agent network.
We are also seeking to increase cross-selling of life products
through our agents, particularly AFER unit-linked products.
During 2006, we have increased activity in our commercial
operations, predominantly in our health business, and for self-
employed customers in order to maintain the product spread of our
portfolio. Wealso launched a credit insurance product on new car
sales and plan to launch a new household product in 2007.
Following the release of a single IT system for agents and head
office, all agents will soon be using a common portal and sharing
claims functionality in addition to online sales information with
head office.
Our combined general insurance and health business reported
an operating profit of £63 million (2005: £35 million) with an
underwriting result of £6 million (2005: loss of £21 million).
The underwriting result benefited from cost savings due to our
head office relocation and a favourable claims experience resulting
in an improved general insurance COR of 99% (2005: 101%).
Our performance reflects a highly competitive market place where
competition is fierce and the cycle is following a downward trend.
Our net written premiums increased by 2% to £735 million (2005:
£726 million) reflecting limited rating increases. However, policy
retention rates remain high, despite a change in the regulations
regarding annually renewable policies* * .
Ireland
Hibernian is the largest general insurer in Ireland, with a market
share of 20% The majority of our business is sourced through
brokers with an increasing proportion sourced from direct and
corporate partners. We expect further growth in the proportion
of business written through our direct channel, particularly in the
motor market, while broker distribution will continue to dominate
the commercial market. Our strong brand name and expertise in
the management of underwriting and claims has allowed us to
maintain our leading position.
iHibernian Direct
launches partnership
with Vivas Health
Hibernian Direct has linked up with health insurance
provider Vivas Health to provide private medical cover
under the brand name Hibernian Health Insurance Plan.
The plan, launched in November 2006 on a pilot basis
for six months, offers customers hospital cover,
maternity benefits, out-patient benefits, accident and
emergency cover abroad and comprehensive cover for
scans. The partnership enhances the range of products
that we can offer our customers in Ireland.
UFor more information on Hibernian’s healthcare
products please visit www.hibernian.ie