HIBERNIAN AVIVA has implemented a pay freeze for all staff at managerial level and above.

This announcement came yesterday as the insurance group reported that its operating profit halved to €181 million in 2008 due to the economic downturn.

Sales in its life, pensions and savings business fell by 27 per cent in sterling terms (or 38 per cent in euro terms), as customers were deterred by volatile stock markets. There was a particularly marked fall-off in single premium investment volumes, according to chief executive Stuart Purdy.

The group maintained its leadership position in the Irish general insurance market, with a market share of over 19 per cent, but its net insurance claims bill escalated by about 30 per cent last year, Mr Purdy said.

He added that the group’s premium rates are likely to rise across most lines of general insurance by an average of between 7.5 per cent and 12.5 per cent in 2009.

The group has made “great progress” in the health insurance market since acquiring a 70 per cent stake in Vivas Healthcare (now rebranded as Hibernian Aviva Health) last year, he continued.

“In the health insurance business we have grown our share from 5 per cent to 8 per cent and continue to deliver significant growth in this area,” he said.

Hibernian Aviva Health currently insures just over 180,000 individuals.

The group’s medium-term objective is to build this to half a million, which would move its market share up to around 25 per cent. For 2009, it aims to grow the number of individuals covered by its health insurance products to 250,000.

Mr Purdy confirmed that the plan to transfer 450 Irish jobs to India over the next three years is “on track” and will be achieved through a combination of natural attrition and a programme of voluntary redundancies.

Hibernian Aviva is currently in “active dialogue” with union representatives in relation to the pay conditions of the majority of its staff. A pay review is normally carried out in the company at this time of the year.

A conclusion has not yet been reached in these discussions, he said.

The group’s UK-based parent Aviva confirmed yesterday that it would maintain its total dividend for 2008 at 33 pence per share, in line with the previous year.