8/4/2019 Aviva : Corporate Profile September 2011

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Company Overview

Aviva is the world’s sixth largest insurance company providingcustomers with insurance, savings and investment products.

We are the UK’s largest insurer and one o Europe’s leadingproviders o lie and general insurance.

We combine strong lie and general insurance businesses under asingle, strong brand, ocused on providing customers withprosperity and peace o mind.

This model gives us reliable revenues rom diverse sources, and

helps us und and grow our business more eiciently.

Regional View

UK

Aviva is the leading insurance brand in the UK. We are the UK’s largest

insurer and one in three households has a relationship with us. We are

ranked as one o the UK’s top ten most valuable brands.

  Interim Results 2011▪ IFRS operating prot up to £709 million (£691 million HY 2010). IFRS

operating prot up 17% on an underlying basis with the exclusion o

2010’s special distribution benet o £84 million.

▪ Strong general insurance results. UK general insurance operating prot

has increased to £242 million, up 6%. Sales up 14% to £2,222 million,

General insurance COR improved to 96%. Lie IRR increased to 16%.

▪ We now have over two million personal motor customers, and have

attracted an additional 670,000 new customers since the start o 2010.

 ▪ The business is well-positioned to become the undisputed leader in

the UK market. As a diversied player with a strong brand we stand to

benet rom growth within the market and regulatory changes such as

the Retail Distribution Review and pensions auto enrolment..

Europe

We provide 18 million customers across Europe with lie, general

and health insurance products through our multi-channel

distribution network. Our chosen presence in Europe combines

large, developed economies (France, Spain, Ireland, Italy, and

Poland,) with the emerging markets o Turkey and Russia.

  Interim Results 2011

▪ A 21% increase in IFRS operating prot to £525 million due to

changes to the business mix and growth in unds under management.

 ▪ We are a clear and undisputed leader in bancassurance with more

than 50 agreements across the region. Insurance sold though banks is

the primary route to market across the region.um

▪ General insurance sales up by 5% to £1,123 million with COR improving

to 97% (HY10: 102%.)

North America

The North America region is home to two o the world’s largest and

richest economies. We are ocusing on building our position and

competitiveness to capitalise actively on Aviva’s inancial strength

and leverage our strong, high quality relationships with our

distribution partners.

  Interim Results 2011 ▪ IFRS operating prot grew 5% to £219 million.

 ▪ Lie insurance operating prots increased 27% due to a growth in

the business and disciplined pricing. In general insurance underwriting

prots increased oset by lower long term investment returns.

Asia Paciic

We continue to progress against our strategic priorities across nine

Asian markets, pursuing ranchise growth through organic

investment and improved margins. We have urther sharpened our

ocus on markets where we have strength and scale such as China

and India where we expect to generate a signiicant proportion o

our new business growth.

  Interim Results 2011 ▪  IRFS operating prot up 21% to £17 million.the Austrd in 2009).

 ▪ 17% growth in long-term savings sales to £1,180 million. Lie and

pensions sales increased 14% to £902 million.since 2009.

Aviva Investors

Aviva Investors is the integrated asset management businesso the Aviva Group, managing unds or Aviva as well as a growing

range o third party clients.

Interim Results 2011 ▪ Strong investment perormance with 75% o institutional unds perormed

above benchmark where a benchmark is specied.

 ▪ Good growth in external sales. Net external sales (excluding liquidity unds)

in the rst hal o the year were £2.5 billion, greater than the £2.4 billion

achieved in the whole o 2010.

Igal MayerChie executiveEurope

Richard HoskinsChie executiveNorth America

Simon MachellChie executiveAsia Pacic

Alain DromerChie executiveAviva Investors

Interim Results – August 2011

Total operating proit up to £1,337 million

“This has been a successul six months. We are beating all ouroperational targets. Operating proits rose in the UK and have

increased by 21% in Europe despite tough economicconditions.

“Ater recent disposals, Aviva is itter, stronger and wellpositioned to be the undisputed leader in the UK market and

to build on our strong European ranchises.“Markets may well continue to be volatile, but our strongbalance sheet and capital position underpins our conidence inour continued momentum and our plans or growth.”

Andrew Moss, Group chie executive, Aviva plc

 ▪ Single, strong brand

 ▪ 53 million customers

 ▪  36,100 employees

 ▪ Strong market positions acrossthe UK and Europe

 ▪ Over 300 years o heritage

 ▪ Market capitalisation £10.73billion (as o 3 August 2011)

 ▪ 2010 ull year dividend 25.5p,yield o 6.5%

▪ £402 billion o unds undermanagement (as o 31December 2010)

 ▪ 12.8% IFRS return on equity(HY 2011)

Andrew Moss

Group chie executivePat Regan

Chie nancial ocer

▪▪  

Trevor MatthewsChie executiveUK *

We are one Aviva...

IFRS Group Operting proit FY10

 ▪ UK 42 % ▪ Europe 43 % ▪ North America 11 %

 ▪

Asia Paciic 1 % ▪ Aviva Investors 3 %

 ▪ UK 35 % ▪ Europe 46 % ▪ North America 14 %

 ▪

Asia Paciic 5 %

Sales FY10

*As announced in June , Trevor Matthews has been appointed chie executive o Aviva UK, subject to FSA approval.

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We combine excellence in both lie and generalinsurance or the beneit o our customers and ourshareholders alike.

 ▪ 53 million customers worldwide. One o the UK’s top ten most valuable brands.

 ▪ UK and Europe: we have strength and scale in two o the largest and most

1attractive insurance markets in the world.

 ▪ One o the world’s largest bancassurance ranchises with over 100 partnerships1worldwide.

 ▪ We continue to generate signicant value rom our combination o excellent1insurance and lie businesses.

 ▪ Supported by a strong global asset manager.

 

...and play a positive and dynamic role in societyto deliver prosperity and peace o mind.

For us, insurance is about people and not policies. Our business helps ourcustomers to manage the risks o everyday lie and protects them long into the

uture. We must be there or them throughout their lives and beyond, so it’s

crucial we are a sustainable and protable business, or the mutual benet o

our customers, our shareholders, and uture generations.

We want to encourage as many people as possible to secure their nancial

utures. We’re committed to working with our customers, governments,

regulators, charity partners and business partners to nd solutions that increase

the nancial wellbeing o individuals and society. It is our duty as an industry

leader to campaign and encourage governments to properly address the

challenge o long-term savings and pensions. It’s one o the most important

nancial issues o our time, and we are all in it together.

Last updated 04.08.2011

We are delivering on a clear and ocused strategy...

In the irst hal o 2011:

 ▪ Total operating proit up 5% to £1,337 million (HY10: £1,270 million); up

13% excluding impact o £84 million special distribution beneit in 2010.

 ▪ Operating proits in Europe up 21% to £525 million despite inancial and

economic diiculties in the eurozone.

 ▪ 14% lie insurance new business internal rate o return (IRR) against a target

o 12% *.

 ▪ 96% group combined operating ratio (COR), against a target o 97%*.

 ▪ £0.8 billion net operational capital generation in H1 towards the £1.5 billion

FY11 target. Now targeting between £1.5 billion and £1.8 billion in FY11.

 ▪ On track to deliver £400 million cost and eiciency savings by FY12.

Our strategy

1. We’re increasing our geographic ocus on our prioritymarkets where we have strength and scale.

 ▪ We are ocusing our eort and capital on our leading market positions in

the UK and Europe which together comprise the world’s largest lie andpensions market. Our ocus in Europe is on the eight markets o UK, France,Ireland, Italy, Poland, Spain, Russia and Turkey.

 ▪ North America will continue to be a net capital contributor or the groupand we will continue to ocus on protable and organic growth.

 ▪ In Asia we will continue to pursue ranchise growth though organicinvestment, ocusing on our key markets such as China and India.

2. We are beneitting rom the combination o lie andgeneral insurance.

 ▪ Our lie and general insurance operations are excellent businesses in theirown right but in addition to their inherent strengths there are signicantadvantages to running these businesses under one brand in one group.These include:

 ▪ Capital: The combination o our businesses provides capital benets bydiversiying risks.

 ▪ Cash ow: The diversity o our business drives more resilient cash fowsand earnings than single-line insurers through the cycle. Hal o Aviva’s netcashfow is generated rom the general insurance business.

 ▪ Cost and efciency: We gain clear scale benets and cost synergiesrom having lie, general insurance and asset management in one group,including the operational benets o shared back-oce unctions, IT andnance resources.

 ▪ Customer distribution: The power o Aviva’s brand dierentiates our lie,general insurance and asset management businesses. This combinationmakes Aviva an attractive business partner and has allowed us to developglobal leadership in bancassaurance. We create cross-selling opportunitieswith our single trusted brand which is able to meet our customers’

complete insurance, pension and investment needs.3. We are building on our core strengths

 ▪ We will succeed by ocusing on our strengths in marketing and distributionexpertise, technical excellence, operational eectiveness and nancialdiscipline.

▪ We already perorm well in those areas, but by ocusing our eorts andresource we aim to excel at each o them, and enhance Aviva’s position asa leading insurer.

...which has made us inancially stronger, providing uswith a great platorm or urther proitable growth.

 ▪ Sale o RAC at 17x earnings or £1 billion will release signiicant shareholdervalue.

 ▪ Delta Lloyd: by reducing our shareholding we’ve raised £0.4 billon and removed

risk rom our balance sheet.

 ▪ We have eliminated the deicit in the Group’s pension scheme and it is now

marginally in surplus.

 ▪ Pro orma economic capital surplus, including the impact o the sale o the RAC,

up 23% at £6.9 billion (FY10: £5.6 billion.)

We’re delivering on our strategy...

 ▪ The sale o the RAC at 17x earning or £1 billion will release signicant

1shareholder value.

 ▪ Reduced shareholding and deconsolidation o Delta Lloyd raising £0.4

1billion and urther de-risking our balance sheet.

...and our targets ▪ Success in the rst hal o 2011 owes much to the benets o the

1management actions we have taken over the past ew years. As a result o

1those actions we have:

 ▪ Reduced our cost base rom £5.8 billion in 2008 to £4.0 billion (annualised1HY11.)

 ▪ Improved protability – lie IRR o 14% and COR or 96% ahead o targets.

 ▪ Grown the value o our in-orce book (excluding Delta Lloyd) rom £4.21billion in 2008 to £6.6 billion.

We’ve built a strong platorm or growth

We are confdent about Aviva’s prospects and ability to deliver our fnancial

targets while growing the business. In lie insurance we are poised to

extend our proftable growth as we beneft rom our diverse product range,

excellent distribution and the need or people to save more or retirement.

We expect the momentum we have built in our general insurance business

to continue. We take strength rom the long term nature o our business, the

actions we have taken to restructure the Group and our ocus on meeting

customer needs. We have the right platorm to deliver proftable growth.

...itter and stronger

One o Aviva’s mobile learning

centres, bringing education to

children in India.

*Excluding Delta Lloyd