Despite the boost provided by the acquisition of AIB's life assurance subsidiary Ark Life last year, Hibernian's life and pensions division suffered a loss of €63.3 million. This compares to an operating profit of €13.4 million recorded in 2005. Caroline Maddenreports.

Hibernian attributed last year's loss, as measured using the European Embedded Value, to once-off "assumption changes". These changes were made in order to reflect industry trends, such as a shift by consumers away from traditional annual premium products towards single premium policies, and improved annuitant mortality rates, chief executive Stuart Purdy said yesterday.

"This is a short-term setback," he said. "These changes are a one-off adjustment to accounts, which has been made to position the company for strong growth in the future."

He pointed out that the division's operating profit, on International Financial Reporting Standards, actually grew by 91 per cent to €72.3 million. This jump was largely due to the integration of Ark Life.

Hibernian's strategic partnership with AIB also opened up opportunities during the year, Mr Purdy said. "We're getting great results from that relationship."

Sales through the bank channel reached €603 million last year, with Hibernian's re-opened property fund and pension products proving particularly popular.

Meanwhile, the group's general insurance division put in a solid performance, with operating profits growing to €252.2 million, offsetting the loss recorded on the life and pensions side. "The great bedrock of Hibernian is the stability of its general insurance division," Mr Purdy said.