AVIVA NDB records Rs 693 m net profit in 2011

AVIVA NDB Insurance composite financial results recorded a commendable profit after tax of Rs 693 million, an increase of 15.1%, despite lower investment income. “It was also very much a year where risk awareness and management dominated our agenda. We enhanced our Enterprise Risk Management (ERM) framework to enable us to make better business decisions and are forging forward.” said Managing Director Shah Rouf.

In 2011, AVIVA NDB Insurance continued with the incredible momentum achieved from the business transformation, although it was more challenging with the sharp downturn in the stock market and the replacement of the company’s life product suite by a world-class contemporary range.

The success of the new product range, especially the new flagship brand AVIVA NDB pensions was evident by the 13.1% growth over the previous year in life new business. Life gross written premium grew marginally to Rs 7,865 million in a year that was dominated by challenge and change. The company declared a life surplus of Rs 355 million which improved by 8.3% compared to the prior year, through a keen focus on expense control and optimization of the cost base.

Despite general insurance pricing remaining a challenge in 2011, the claims ratio improved significantly over the previous year from 79.1% to 64.8% and the combined operating ratio improved from 117.5% to 104.5%. This was an impressive reflection of the focus on quality underwriting, pricing and expense control. A post tax profit of Rs 338 million was reported by general insurance for the financial year ending December31,2011.

Significant improvement in the profitability of the combined composite business was recorded compared to the corresponding period in 2010, due to prudent investment strategies that helped mitigate the significant impact of a decrease in investment income from unrealized equity losses caused by a decline in the capital markets.

A noteworthy improvement in the bottom line performance was a result of the focus on optimizing the expense base as well as stringent underwriting and repricing initiatives in general insurance. Embedding the new product suite with wealth planners, bank assurance partners and policyholders without detracting from the momentum gained in 2010 was another challenge faced successfully.

The Company implemented seven risk policies containing 58 risk standards to improve every aspect of the business.