Aviva plc announced on March 7 its financial results for fiscal 2023. Its Canadian subsidiary reported progress on the sales side, but higher claims experience in the second half weighed on the insurer's combined ratio.

For general insurance activities, operating profit reached £399 million for Aviva Canada in 2023. In 2022, Aviva reported a profit of £352 million in Canada. This is a 13 per cent increase in profits for Canadian operations. The increase is 18 per cent in constant currencies.

A press release issued by Aviva Canada on the same day confirms that operating profit reached C$670 million. 

Premiums  

In Canada, where Aviva is present only in property-casualty insurance, the company reported a 6 per cent increase in gross written premiums in 2023 compared with the previous year. The increase was 10 per cent in constant currencies over the same period.

Gross written premiums in Canada totalled £4.2 billion in 2023, compared with £4 billion in 2022. This is a year-on-year increase of £237 million.

In commercial lines insurance, gross written premiums in Canada totalled £1.7 billion in 2023, an increase of £131 million, or 9 per cent, on the £1.5 billion reported the previous year. At equal currency values, the year-on-year increase is 10 per cent, the company confirms in its annual report.

In personal lines insurance, gross written premiums in Canada reached £2.6 billion in 2023. This is an increase of £108 million, or 4 per cent, over the previous year. This is an increase of 9 per cent in constant currency terms.

While noting the impact of the adverse weather experienced in Canada and the increase in auto thefts in 2023, Aviva Canada CEO Tracy Garrad said she was pleased with the results in combined ratio, gross written premium and operating profit.

“In 2024, we’ll be relentless in our focus on executing our strategy, maintaining underwriting discipline and improving customer, broker and partnership experiences through targeted investment,” stated Ms. Garrad. 

“We have leading businesses in growing markets, a fantastic brand, and we are investing substantially to make service better for our 19 million customers. All the ingredients are in place to ensure Aviva continues to deliver an outstanding performance for our customers and our shareholders, stated Chief Operating Officer Amanda Blanc. 

Combined ratio  

The undiscounted combined ratio in Canada was 95.3 per cent in 2023, compared with 93.7 per cent in 2022. This is a difference of 1.6 percentage points.

The new IFRS 17 standards oblige Aviva to also display the combined ratio based on the adjustment to the standard. The adjusted combined ratio was 91.4 per cent in 2023, compared with 92 per cent in 2022.

In commercial lines, the undiscounted combined ratio was 88 per cent in 2023, compared with 90.9 per cent in 2022. This is a difference of 2.9 percentage points.

In personal lines, the undiscounted combined ratio climbed from 95.2 per cent in 2022 to 99.5 per cent in 2023. This is a difference of 4.3 percentage points.

Aviva Canada's loss ratio was 55.9 per cent in 2023, compared with 59.5 per cent in 2022.

The loss ratio for all Aviva subsidiaries was 60.5 per cent in 2023, compared with 61.2 per cent in 2022.

There is a 0.9 percentage point difference between the Canadian combined ratio and that of the Group as a whole, which reached 96.2 per cent in 2023. 

Underwriting result  

Aviva Canada's underwriting result in 2023 was £331m, compared with £293m in 2022. This is an increase of 13 per cent in one year, or 18 per cent in constant currency.

According to the annual report, Aviva attributes this result to an improvement in investment income due to higher yields, and a strong underwriting result, particularly in commercial lines.

Underwriting result was down in both segments in Canada in the second half of 2023, compared with the underwriting result reported in the first half.

Canada is Aviva's second largest market. In its presentation to investors, the company states that the increase in premiums is partly attributable to the brokerage network and to revised pricing across the portfolio.

Operating profit for the Group as a whole rose by 35 per cent in 2023 to £851 million.

For fiscal 2023, the Canadian division accounted for 39 per cent of gross written premium volume, but brought in 47 per cent of operating profit.

A small portion – 4.1 per cent – of the Group's total gross written premiums, comes from life and health insurance sold in the Irish market.