Aviva Canada’s operating profit up 6 per cent in 2022

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By Alain Castonguay | March 15, 2023, 10:52 a.m.

AVIVA | Financial results

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Despite the return to normal claims experience, Aviva plc's Canadian branch improved its results in 2022.

Aviva Canada reported an operating profit of £433 million (M) for the full year 2022, compared to £406 M in 2021. This represents an improvement of 6 per cent or £27 M.

The results announcement issued on March 9 indicate that profit was boosted by the returns on long-term investments while claims frequency returned to normal levels.

Combined ratio

Aviva Canada reported a combined ratio of 92.5 per cent in 2022, compared to 90.7 per cent in 2021. However, this 1.8 point deterioration is described as “strong performance” in the annual report, given the “challenging conditions.” The increase in claims frequency was nevertheless partially offset by lower weather-related catastrophe losses.

Looking at the results in closer detail:

In commercial lines, the combined ratio edged upward by 1.8 points to 88.6 per cent;

In personal lines, the combined ratio deteriorated by 2.1 points to 94.7 per cent.

Underwriting profit

Aviva Canada reported an underwriting profit of £270 M in 2022, versus £293 M in 2021. This represents a decrease of 8 per cent or £23 M.

The company attributes this decline to the increase in claims frequency and the impact of inflation on claims costs.

Premiums

Aviva Canada’s gross written premiums exceeded £4 B in 2022, compared to £3.5 B in 2021. The increase amounts to £554 M or 16 per cent.

Looking at the results in closer detail:

In commercial lines, gross written premiums were £1.5 B in 2022, versus £1.3 B in 2021, for an increase of £275 M or 22 per cent. On a constant currency basis, the increase is 14 per cent;
In personal lines, gross written premiums were £2.5 B, compared with £2.2 B in 2021. The increase is £279 M or 13 per cent. On a constant currency basis, the growth equals 6 per cent.

In the press release announcing Aviva Canada’s 2022 results, CEO Jason Storah notes that the insurer is the second largest in the Canadian P&C insurance market.

“Despite inflationary impacts, increased claims frequency and unique challenges with reinsurance, we’re continuing to invest significantly in Aviva’s future,” adds Storah.