Hibernian Aviva operating profits halve to €181m

Operating profits for Hibernian Aviva halved last year to €181 million due to the impact of the economic downturn.

The company said it has also made “significant progress” on its restructuring plan which will see the company move 450 roles to India over the next three years.

The net impact of this will see the company’s Irish workforce of 2,200 fall to more than 1,600 although Hibernian Aviva says it has set not specific target for the number of people who will leave the company.

It claims it can achieve this level of job losses through normal staff turnover.

Hibernian Aviva chief executive Stuart Purdy said the company has a 19.2 per cent market share in the general insurance business and is the third largest provider of life and pensions products with a16.7 per cent market share.

"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."

The company has secured a 10-year deal for the naming rights of the redeveloped Lansdowne Road for a sum believed to be in the region of €44 million, at the lower end of expectations by the IRFU and FAI.

Hibernian Aviva’s results come as its UK-based patent Aviva said it was maintaining its dividend, soothing concerns the payout could be cut to conserve capital, and reported annual profits that broadly met forecasts.

Aviva said it had a 2008 operating profit of £2.29 billion ($3.25 billion) on an IFRS basis, up 4 per cent compared with the previous year.

Analysts had expected an IFRS operating profit of £2.27 billion, according to the average of 12 estimates collected by the company. Aviva said it was setting its total dividend for the year at 33 pence, unchanged from 2007.

Investors had been concerned that the company might have to cut or cancel the payout in order to shore up its capital reserves as weak financial markets dent its investment performance.

The company said it was setting aside a further £550 million for possible defaults against its corporate bond and mortgage portfolio, bringing the total provision to £1.13 billion.

The insurer took a 140 million pound hit from corporate bond defaults in 2008, equivalent to 0.2 per cent of its total corporate debt investments. Aviva also said it is setting aside £304 million against a possible rise in asbestos-related claims.

Under the newly-introduced Market Consistent Embedded Value standard, Aviva had a 2008 operating profit of £3.358 billion, up 10 per cent from the previous year.

The stock has fallen by about 51 per cent in the past year, weighed by capital concerns and by worries insurance sales may suffer amid the economic downturn.

Additional reporting Reuters