INSURER AVIVA saw life and pension retail sales fall by 17 per cent in Ireland last year amid “challenging” economic conditions and “aggressive competitor pricing actions” on pension products.
Sales in this division fell from £636 million (€741 million) to £525 million, which Aviva said reflected the “current condition of the Irish economy”.
It said changes made by the Government to retirement savings and income drawdown products in the latter part of 2010 meant the “seasonal increase in pension sales was significantly lower” than in 2009.
Aviva’s net written premiums for general insurance fell from £422 million to £397 million, with operating profit on this element of the business falling from £49 million to £32 million.
Operating profits on health insurance increased from £8 million to £19 million on the back of a year-on-year rise in sales from £52 million to £62 million.
Bancassurance sales in Ireland decreased by 5 per cent to £413 million. Aviva said this was “a resilient performance given the current challenges facing the Irish economy”.
Internationally, Aviva reported a forecast beating 26 per cent increase in profits last year, helped by cost cuts and stronger sales of high-margin life policies.
It recorded a 2010 operating profit of £2.55 billion, up from £2.02 billion the previous year.
Analysts had expected a profit of £2.44 billion, according to the company’s own calculation of consensus expectations.
“By focusing on what we do best in the markets where we have strength and scale, we will continue to prosper in 2011,” chief executive Andrew Moss said in a statement yesterday.
Aviva has been cutting costs, paying off debt and focusing on cash generation in an effort to improve shareholder returns, amid criticism from some investors that it has underperformed its main rivals in Britain, where the company is the second-biggest insurer by market value.
Aviva, which generates about 70 per cent of its sales in Britain and mainland Europe, pledged to focus on the markets where it is strongest.
The profits improvement last year was driven by Aviva’s life insurance business, where operating profits rose 23 per cent to £2.32 billion.
The company benefited from £149 million of cost cuts.
Aviva is paying a total dividend of 25.5 pence per share, an increase of 6 per cent.
