Aviva 2007 Annual Report Download - page 40
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Annual Report and
Accounts 2007
Business review continued:
Europe continued
36
Business
review
General insurance and health
Our French general insurance business has a 4% share
of the agent and broker market, selling predominantly
personal and small commercial insurance through our
875-strong agent network and our direct insurer, Eurofil,
the second-largest direct distributor.
In 2007 we launched new household and multi-risk
products, both of which were well supported by agents.
We are collaborating with Generali to achieve supply
chain economies of scale in respect of motor repairs
and we are continuing to develop our internet portal for
agents. In addition, since the year end we have transferred
our roadside assistance service to RAC.
The general insurance combined operating ratio
remained stable at 99% (2006: 99%) with the claims ratio
reflecting a continuation of favourable claims experience
and strong control of costs. The underwriting result was
£11 million (2006: £6 million) and total operating profit,
including longer term investment return, progressed to
£70 million (2006: £63 million).
Ireland
Life
Operating as Hibernian Life, we are a top three life and
pension provider in Ireland. We distribute our products
through a successful broker network and our
bancassurance partnership with Allied Irish Banks (AIB),
which has the largest branch network in the country.
The full integration of Ark Life with Hibernian is now
complete. Sales from both companies are now processed
on a single new business platform, representing an
important step in terms of future operational efficiency.
A number of new product initiatives were completed
during 2007. These included a re-launch of our term
assurance protection products and the introduction of
several new funds across both channels, including the
launch of the highly successful Secure Capital Fund.
On an EEV basis, life operating profit in 2007 increased
to £77 million (2006: £40 million loss). The loss reported
in 2006 reflected an exceptional level of operating
assumption changes. Total life and pension sales increased
strongly, by 35%, to £1,730 million (2006: £1,273 million).
Growth in the bancassurance channel was 46%
while sales through the broker channel grew by 26%.
New business contribution has doubled from £15 million
to £30 million reflecting growth in volumes, efficiency
gains and an increased focus on higher margin products.
The new business margin increased to 1.7% (2006: 1.2%).
The outlook for 2008 remains positive although a
slowing in the rate of Irish economic growth and greater
uncertainty in the Irish property market is expected to
reduce the rate of market growth. Hibernian is well placed
to capture the market opportunities through its leading
broker distribution and by building on the current
momentum in the bank channel.
General insurance
Hibernian is the largest general insurer in Ireland, and
has maintained its market share against the backdrop of
intense market competition. The majority of our business
is sourced through brokers with an increasing proportion
sourced from direct and corporate partners.
In 2007 we launched Hibernian Rescue and Hibernian
Driving School and a number of innovative product
offerings, including a multi-vehicle
policy called “All Drive”
.
We now sell direct motor insurance through AIB’s website,
consolidating our position as distribution leaders. During
2007, we teamed up with the Road Safety Authority
as the sponsor of the new high-profile multimedia Irish
road safety campaign. We also successfully retained the
Excellence Ireland Quality Association (EIQA) Q Mark
award in October 2007.
We continue to develop our internet presence
and the number of policies sold directly is increasing.
Further development is planned for 2008 to ensure our
internet capability remains market leading. The changes
in the claims environment have enabled more efficient
settlement of claims, which has led to strong profits.
The combined operating ratio was 80% (2006:
77%) and our underwriting result was £101 million (2006:
£121 million) reflecting competitive market conditions,
increasing pressure on premium rates and increasing claims
frequency. Total operating profit, including longer term
investment return, was £162 million (2006: £172 million).
Although market profitability is expected to decline
during 2008, reflecting continued pressure on premium
rates, Hibernian is well positioned to grow while maintaining
acceptable levels of profitability, due to its innovative
product lines, scale and strong distribution capability.
Hibernian going
the extra mile
In Ireland, staff looked at how
they could make a difference
to customer service by changing
behaviours and “going the extra
mile”. We focused on a different
theme each month, such as
improving the way we handle
phone calls and reducing the
amount of jargon in our
communications. The programme
emphasised Hibernian’s commitment
to being a leader in customer
service within the industry.
For more information visit
www.hibernian.ie