March 13, 2017 by Canadian Underwriter
Aviva plc announced a 0.8-point increase in its combined ratio in Canada while operating profit was up 16%.
London-based Aviva released March 9 its preliminary results for 2016.
General insurance net premiums written, worldwide, increased 15%, from £7.177 billion in 2015 to £8.211 billion last year. The pound closed Friday at $1.64.
Aviva attributed the increase in premiums, in part, to “new distribution partnerships,” including the five-year strategic agreement between Royal Bank of Canada Insurance and Aviva Canada, in which Aviva Canada provides policy administration and claims services.
Aviva announced July 1, 2016 that it completed its $582-million acquisition of RBC General Insurance Company, whose coverages included home and auto.
Another distribution partner is Britain’s HomeServe, whose services include plumbing, drainage, electrics and heating. Aviva announced Feb 13 an agreement with Homeserve in which, through Aviva Response, the companies will ” support customers in the event of problems around the home, including gas boiler breakdowns, plumbing issues and electrical wiring emergencies.” Insurance coverage will be available from Aviva, while repairs and servicing will be carried out by HomeServe’s engineers.
In Canada, Aviva reported its net premiums written increased 14% (in Canadian dollars) from 2015 to 2016. Net premiums written were £2.453 billion pounds last year, up from £1.992 billion pounds in 2015.
In Canada, Aviva “delivered operating profit of £269 million,” up from £214 million in 2015, an increase of 16% in local currency terms.
The combined operating ratio in Canada was up 0.8 points, from 93.8% in 2015 to 94.6% last year.
Earlier this year, Aviva Canada announced it is partnering with Maple Leaf Sports and Entertainment to offer “team-branded” home and auto insurance directly to fans of Toronto’s Raptors and Maple Leafs teams.
Aviva Agency Services Inc. will offer and administer the insurance online, which will be underwritten by S&Y Insurance Company.
Within days of the MLSE announcement, the Insurance Brokers Association of Ontario said it was suspending its parternship with Aviva Canada, but Aviva Canada responded that it “remains fully committed” to its broker partners.
IBAO said at the time that it “cannot continue to promote Aviva as a supporter of broker distribution in Ontario” if Aviva is using the Aviva brand for direct-to-consumer products.
With Aviva’s purchase of RBC General, Toronto Dominion is the only Big 5 bank that actually writes home and auto insurance. When the deal was announced in 2016, Aviva said it would gain “certain home and auto insurance manufacturing capabilities including claims, underwriting and product development.” The 15-year partnership “will allow us to maintain our deep client relationships, while offering a full suite of property and casualty insurance products,” Neil Skelding, President and CEO of RBC Insurance, stated at the time.