By: Luke Jones, Published on April 26, 2018 04:22 PM, Last Update on April 26, 2018 01:23 PM
The Canadian insurance market suffered a difficult 2017 with increased catastrophes and a tough auto market. As the second largest P&C in the country, Aviva Canada was among the worst hit, while parent company Aviva also had a tough year.
However, Aviva Canada was one of the worst performing divisions of the British insurance giant. Operating profit for the subsidiary fell from $482.5 million in 2016 to just $82.52 million in 2017. The combined operating ratio of 102.2% was a sizeable rise from 93.0% in 2016. When announcing its financial, the company cited “adverse prior year reserve development across auto and property insurance portfolios together with weaker accident year profitability in the auto insurance market.”
Maurice Tulloch, CEO of Aviva International Insurance says it was a poor year, but the company still targets growth in Canada.
“I’ve been working in general insurance for more than 20 years, so I can say Aviva Canada’s combined ratio of 102.2% was a disappointing year. But Aviva’s journey in Canada is very much a growth story. If you look at general insurance in a one-year window, you would be crazy. The market had a tough year in 2017 – these things happen. I think as a Group our response to the challenges of 2017 has been appropriate, and we’re confident in getting back to our target core operating range of 94-96%.”
With 11% of the market share and a presence in Canada for over a century, it is unlikely that Aviva’s poor performance will have the company running. In other words, it has seen problems come and go in the Canadian market. Colm Holmes, former CEO of Aviva UK General Insurance has replaced Greg Somerville as president and CEO of Aviva Canada. He will be tasked to guiding the company back to market growth.
“Colm replaces Greg, who has been a great friend of mine for many years and has done a wonderful job running Aviva Canada,” Tulloch told Insurance Business. “Greg has grown our business from $3 billion to £5 billion, and, more importantly, he has encouraged Aviva Canada to champion the customer. He has contributed greatly to transforming Aviva Canada into a leading insurer, which is a legacy he can be tremendously proud of.”
“Colm is a true technician in the business of insurance,” Tulloch continued. “He will be very detailed on pricing, risks, exposure and indemnity, and he’ll also keep a close eye on fraud. He has his own unique style, and I’m sure he will continue to make a difference in the market and will continue to build on the amazing work we’ve been doing as an organization.
“Colm’s appointment reflects the quality and depth of the management team across Aviva. I have worked closely with Colm for the last four years – he has a strong track record of delivering sustainable growth and a deep understanding of what customers and brokers need from Aviva. With his credentials, I’m confident Colm will drive Aviva Canada from strength to strength.”