Aviva Plc · LSE:AV.
Aviva — Investor Day (October 2009)
44 slides from Aviva's investor day presentation, Oct 22, 2009
Slide 1: Aviva Europe: Making a Quantum Leap
Aviva Europe Making a Quantum Leap page 1
Slide 2: Disclaimer
Disclaimer This presentation is for information purposes only. It should be read in conjunction with the documents filed by Aviva plc (the “Company” or “Aviva”) with the United States Securities and Exchange Commission (“SEC”). This presentation contains certain “forward-looking statements” with res
Slide 3: Andrew Moss, Aviva Group CEO
Andrew Moss Aviva Group CEO Aviva Europe – Making a Quantum Leap 3 22 October 2009 Page 3
Slide 4: Aviva Europe Investor and Analyst Event
Aviva Europe Investor and Analyst Event Purpose • Two years into the five year “One Aviva, Prosperity & twice the value” strategy peace of mind Vision One Aviva, • We have communicated plans and progress in UK Life, UK GI, North twice the value Strategic Targets America and Aviva Investors prioritie
Slide 5: Europe in context
Europe in context Significant part of the Aviva group • Strong historic foundations • Unique opportunity to establish a leadership position • Clear execution strategies are already beginning to make a difference • Poised to make a ‘Quantum Leap’ Long-term savings GI and Health sales IFRS Operating p
Slide 6: Andrea Moneta, Aviva Europe CEO
Andrea Moneta Aviva Europe CEO Aviva Europe – Making a Quantum Leap 6 22 October 2009 Page 6
Slide 7: The three key things I want you to take away today
The three key things I want you to take away today Great franchise in Quantum Leap to ‘One Aviva, twice the world’s largest become the the value’ delivered market undisputed leader by 2012 Aviva Europe – Making a Quantum Leap 22 October 2009 Page 7 Source: UN (2009), CEA (2009), Aviva PFA Model (200
Slide 8: Our Quantum Leap
Our Making money Conclusions Our opportunity Focus Quantum and creating and in Europe sessions Leap value Q&A Aviva Europe – Making a Quantum Leap 8 22 October 2009 Page 8
Slide 9: A huge market with significant growth potential
A huge market with significant growth potential €40tr personal financial assets €4tr premiums in 800m+ population next five years €4tr L&P assets Emerging markets with Large mature markets significant potential Composite Aviva’s presence Life & pensions Source: CEA, AXCO Aviva Analysis 2009 Aviva Eu
Slide 10: Leadership is there to be grasped
Leadership is there to be grasped European Market Shares, 2007 European (LifeInsurance Market Shares and Non-Life GWP) (Life and Non-Life GWP) 9% 8% 7.3% 7% 6.3% 5.8% • Highly fragmented market 6% Market Share 4.8% 5% 4% • Macro, micro and industry 3.0% 3% 2.4% 2.4% trends 1.7% 1.7% 1.6% 2% 1% 0% •
Slide 11: Aviva is uniquely positioned
Aviva is uniquely positioned Region Aviva Strengths in 15 markets Share of GDP L&P PVNBP GI NWP H1 09 €m H1 09 €m France 14.5% Top 10 2,733 631 Covering 80% of GDP and premium Ireland 1.4% Top 5 478 Top 5 294 Italy 11.7% Top 10 2,461 190 Lithuania 0.2% Top 5 49 - Poland 2.7% Top 5 572 20 Russia 8.5%
Slide 12: Aviva is uniquely positioned: Life insurance penetration
Aviva is uniquely positioned Strengths in 15 markets Covering 80% of GDP and premium In different stages of development 10 Developed markets Life Insurance Penetration (GWP/GDP) % 8 France Ireland Belgium 6 Netherlands Italy High potential 4 markets Spain Germany Poland Hungary 2 Slovakia Czech Rep
Slide 13: Aviva is uniquely positioned: Regionalisation
Aviva is uniquely positioned Strengths in 15 markets Covering 80% of GDP and premium 80% In different stages of development 70% With an enviable competitive 60% Generali footprint 50% AXA Allianz Regionalisation* 40% Zurich 30% ING Credit AEGON 20% Agricole CNP 10% Groupama Bubble size proportionate
Slide 14: Aviva is uniquely positioned
Aviva is uniquely positioned Strengths in 15 markets Covering 80% of GDP and premium In different stages of development With an enviable competitive footprint Capabilities across all product lines and distribution channels Life Distribution Models Our Our Making money Conclusions Source: CEA, 2009 A
Slide 15: Aviva is uniquely positioned
Aviva is uniquely positioned Strengths in 15 markets Covering 80% of GDP and premium In different stages of development With an enviable competitive footprint Capabilities across all product lines and distribution channels Two clear leading brands Our Our Making money Conclusions Aviva Europe – Maki
Slide 16: A clear strategy to exploit the European opportunity
A clear strategy to exploit the European opportunity Quantum Leap – ‘game changing’ for the industry Aviva Europe Delta Lloyd IPO – ‘strategic management’ Our Our Making money Conclusions Aviva Europe – Making a Quantum Leap Focus opportunity in Quantum and creating and 22 October 2009 sessions Page
Slide 17: Our opportunity in Europe
Our Making money Conclusions Our opportunity Focus Quantum and creating and in Europe sessions Leap value Q&A All data in the following sections refers to Aviva Europe excluding Delta Lloyd Aviva Europe – Making a Quantum Leap 22 October 2009 Page 17
Slide 18: Our Quantum Leap is transforming our business
Our Quantum Leap is transforming our business From the pack to undisputed leader From twelve businesses to one Our Our Making money Conclusions Aviva Europe – Making a Quantum Leap Focus opportunity in Quantum and creating and 22 October 2009 sessions Page 18 Europe Leap value Q&A
Slide 19: We set the vision and defined the journey
We set the vision and defined the journey Today we focus on the first phase Value Repositioning and new growth Which will deliver our ‘Twice the value’ commitment by 2012 Integration of new businesses By extracting value and 2X building capabilities Consolidation and reorganisation of existing Thank
Slide 20: Our Quantum Leap is built on three pillars
Our Quantum Leap is built on three pillars Our Our Making money Conclusions Aviva Europe – Making a Quantum Leap Focus opportunity in Quantum and creating and 22 October 2009 sessions Page 20 Europe Leap value Q&A
Slide 21: Single operating model: IT, Operations & Shared Services
Single operating model • Markets focused on distribution with a Distribution strong centralised support IT, Operations & Shared Services In markets Customer management • Synergies in IT, operations, customer & Marketing service with pan European sharing of services Product Pooled • Centralisation of
Slide 22: Markets: strong management and clear accountability
Strong management and clear accountability Customer IT and Human Bancassurance Retail Management Products Finance Operations Resources and Marketing David Adam Alfredo Stephen Cathryn Andrew Tim Angulo Uszpolewicz Montalbano Marini Riley Moffat Harris Markets 7 Markets Markets Jean Pierre Ignacio St
Slide 23: Executing a clear and bold master plan
Executing a clear and bold master plan Seven key strands that impact all aspects of our business Banca Retail CMM Products IT & Ops HR Finance Retail Customer Products IT & Human Finance Management Operations Resources & Marketing Customer Management Grow revenue and profitability – making sales and
Slide 24: This is our Quantum Leap
This is our Quantum Leap From To Twelve federated businesses One Pan European Business One Head Office Pan European distribution organisation Customer centric product catalogue Multiple, complex products and shorter time to market Multiple systems Shared systems and processes and processes Simplifie
Slide 25: Our journey has started
Our journey has started … and it’s already delivering … 9 PLC Board approve vision & strategy 30 Sep 08 9 New management & accountability in place 21 Nov 08 9 Pan European capital allocation & risk management 01 Jan 09 9 Launch of Quantum Leap 01 Apr 09 9 Centralised procurement 30 Apr 09 continued
Slide 26: Our journey has started
Our journey has started … and it’s already delivering … 9 Pan European GI claims laboratory 1 May 09 9 Pan European retention initiative 12 May 09 9 Single change portfolio 5 Jul 09 9 Delta Lloyd strategy and relationship clarified 6 Aug 09 9 Pan European holding company 12 Oct 09 continued … Our Ou
Slide 27: Our journey has started: robust set of financial results
Our journey has started … and it’s already delivering … 9 Robust set of financial results Our Our Making money Conclusions Aviva Europe – Making a Quantum Leap Focus opportunity in Quantum and creating and 22 October 2009 sessions Page 27 Europe Leap value Q&A
Slide 28: Robust set of financial results
Robust set of financial results Achieved in tough times Life Local Currency - sales flat in difficult market HY1 08 HY1 09 Growth - margins improved due to action on product mix, partly offset by Life and pension sales €8,039m(1) €7,920m Adv 1% customer preference for guarantees Margin 3.7%(1) 3.8%
Slide 29: Robust set of financial results: cost base falls 7%
Robust set of financial results Cost base falls 7% in real terms after absorbing wage cost inflation €m 650 16 44 15 600 550 7% reduction 500 450 606 593 578 400 350 300 HY 2008 Inflation Cost savings BaU cost base Rebranding Published cost HY 2009 and base HY 2009 restructuring costs Our Our Making
Slide 30: Supported by a high quality balance sheet
Robust set of financial results Supported by a high quality balance sheet Total investments Fair Fair Total Other €bn value 1 value 2 Debt Securities - Government 25 23 2 - Debt Securities - Corporate bonds 39 25 14 - Debt Securities - Other 3 1 2 - Total Debt Securities 67 49 18 - Equity 4 3 - 1 Pr
Slide 31: Aviva Europe – Making a Quantum Leap 22 October 2009 Page
Aviva Europe – Making a Quantum Leap 22 October 2009 Page Page 31 31
Slide 32: Aviva Europe – Making a Quantum Leap 22 October 2009 Page
Aviva Europe – Making a Quantum Leap 22 October 2009 Page Page 32 32
Slide 33: Aviva Europe – Making a Quantum Leap 22 October 2009 Page
Aviva Europe – Making a Quantum Leap 22 October 2009 Page Page 33 33
Slide 34: Channel view: a well balanced mix
Channel View – a well balanced mix H1 09 Investments Retail €82bn H1 H10909sales sales • Significant retail franchise with cash €4.5bn 400 generative back book 1H 09 €m IFRS Operating Profit 350 Life EB €275 m €118m GI at 96% COR GI profit €118 m 300 Bancassurance Life NB €(42)m 250 €31bn Total reta
Slide 35: Product view: a diverse product portfolio
Product view - a diverse product portfolio Payback Period LIFE & PENSIONS Margin IRR (Years) Savings and pensions 2.0% 9% 8.2 H1 09 IFRS Operating Profit Protection 22.0% 31% 5.7 Annuity 3.7% 9% 8.4 €121m GI Aviva Europe 3.8% 13% 7.8 96% COR Mainly 12.4% ROE Retail • Life IRR 13%, impacted by tough
Slide 36: Bancassurance: committed and growing
Bancassurance: committed and growing • Consistently dominated life distribution in key markets - before, during and after the financial crisis • Significant GI growth opportunity Life Bancassurance Market Shares (2000–08) GI Bancassurance Growth (2004-08) Bancassurance Share of GI Market (%) 80% 12%
Slide 37: Bancassurance: our leading position
Bancassurance: our leading position 50 45 • Successfully executing our 40 strategy 35 No. of partners 30 • Increasing number of high quality 25 partners 20 15 10 5 0 Aviva Other insurers • 46 agreements • Over 20,000 branches • Access to over 30m bank customers Source: The Banker, Our Our Making mon
Slide 38: Bancassurance: mutually compelling agreements
Bancassurance: mutually compelling agreements Deliver high value through a state of the art business model • Perpetual agreements with robust exit clauses • Growth at marginal cost • Aviva retains management control • Alignment of partner interests • Single distribution platform drives cost effectiv
Slide 39: Bancassurance: an exciting opportunity
Bancassurance – an exciting opportunity Common channel Significant mix & growth approach opportunities • Leverage unique business model • Focus on protection • Aviva in a box - scalable bancassurance • GI growth opportunity platform • Leverage low cost per policy • Managed through multiple points of
Slide 40: European Retail Market
European Retail Market European Retail Market (Life and GI) Total Life • €620bn market €105bn €58bn €35bn €15bn €10bn €23bn €246bn and GI GWP 100% (€260bn Life, €360bn GI) 90% 2.5% 1.0% 0% 20.0% 0.4% 0.8% 1.8% Aviva GI Retail 80% Market Share • Aviva Retail share 4.3%* 70% Share of Market – Life 7.8
Slide 41: Retail: a great and growing franchise
Retail – a great and growing franchise Retail – steady growth builds significant franchise Aviva Europe Retail sales • 9 million customers €m 12,000 CAGR +6% • Diverse distribution 10,000 - IFAs/Brokers (8,000) 8,000 - DSF (10,000) 6,000 - Phone/Web 4,000 • Captive networks generate 75% of new 2,000
Slide 42: Retail: an exciting opportunity
Retail – an exciting opportunity New governance New tools • Single channel ownership • Innovative front end • Performance benchmarking • Product bundling and dynamic pricing • De-couple distribution from production • Remunerate for value Improve performance 2009-2012 • Increase productivity by 30% •
Slide 43: Our opportunity in Europe
Our Making money Conclusions Our opportunity Focus Quantum and creating and in Europe sessions Leap value Q&A Aviva Europe – Making a Quantum Leap 22 October 2009 Page 43
Slide 44: Now let's look in detail
Now let's look in detail Our Our Making money Conclusions Aviva Europe – Making a Quantum Leap Focus opportunity in Quantum and creating and 22 October 2009 sessions Page 44 Europe Leap value Q&A