Ireland: Hibernian Group results 2005

Hibernian Group, today announced details of its performance for the year ended 31 December 2005. Group operating profit including EEV operating return, restated to take account of the new IFRS reporting basis was up 3.4% to €264 million in 2005 (2004: €255.4 million). The components of Group operating profit were €13.4 million (2004: €57.4 million) in Life & Pensions (based on European Embedded Value) and €250.6 million in General Insurance (2004:€198.0 million). Life & Pensions new business on an APE basis was up 17% to €146.7 million (2004: €125.6 million) while in General Insurance gross written premiums were down to €755.3 million from €835 million.

Commenting on the results Bryan Jenkins, group chief executive, said: “The 2005 performance was positive for the group overall. In general insurance, this performance was underpinned by a combination of our disciplined underwriting, lower claims costs and fewer than expected weather related events. 2005 was the third consecutive year we delivered reductions in motor insurance premiums to the vast majority of our customers and average premiums are now at 1999 levels.

"We are optimistic about the potential for our life and pensions business following the successful completion of our joint venture with AIB, which increases our market share to around 16%, and through a wider distribution channel brings further opportunities for growth. In the coming year, we are excited about the upcoming opportunities in pensions and investments as SSIA accounts begin to mature, and are committed to providing an attractive proposition to all business partners.”

In Life and Pensions, 2005 new business growth was led by single premiums, reflecting the continued success of our guaranteed funds and an attractive choice of fund managers. The present value of new business premiums increased to €970 million (2004: €825 million). New business contribution of €19.0 million (2004: €26.6 million) provides a reduced new business margin of 2.0% (2004: 3.2%) reflecting continued strong market competition, a less positive business mix and revised view of future persistency experience. Life EEV operating return was €13.4 million (2004: €57.4 million) adversely affected by the same factors as well as forecast improvements in annuity mortality experience.

The new bancassurance joint venture agreement with Allied Irish Banks, (AIB), completed on 27 January 2006. Total sales on an annual premium equivalent (APE) basis for the combined entities in 2005 were €254.3 million.

The general insurance market remains highly competitive leading to a reduction in net written premiums to €728.5 million (2004: €800.8 million). Operating profit increased to €250.6 million (2004: €198.0 million). Underwriting profit increased to €170.1 million (2004: €120.6 million). Weather-related claims were better than long-term averages benefiting the result by €10 million (2004: neutral impact).

Aviva plc shareholders entitled to receive a dividend converted to euro will receive €0.2551 per share. The payment date of the dividend will be 17 May 2006 and the record date will be 10 March 2006.

Appendix: Hibernian Group
12 months to December 2005 financial summary