Aviva Plc · LSE:AV.
Aviva — Investor Presentation (December 2005)
23 slides from Aviva's investor presentation, Dec 1, 2005
Slide 1: Sustainable growth
Sustainable growth Richard Harvey Group Chief Executive 1 December 2005
Slide 2: Disclaimer
Disclaimer This presentation may contain certain forward looking statements with respect to certain of Aviva’s plans and its current goals and expectations relating to its future financial condition, performance and results. By their nature, all forward looking statements involve risk and uncertaint
Slide 3: Agenda
Agenda • The winning composite model - General Insurance – COR and RAC - International Life – a review of the portfolio - UK Life – action & resilience leading to growth • Aviva – a brand to invest in • Conclusion
Slide 4: The Aviva Portfolio
The Aviva Portfolio • The balanced portfolio - Flexibility - Strength - Resilience - Reliability • Generating capital in to fund new business and small acquisitions • And a 5% growth in dividend
Slide 5: General insurance
General insurance General Insurance – COR and RAC International Life – a review of the portfolio UK Life - action and resilience leading to growth Aviva – a brand to invest in
Slide 6: GI - worldwide 98% COR target
GI - worldwide 98% COR target Target < 100% COR to 2006 102% 102% 102% Target < 98% COR 100% 98% 97% 95% 94% 2001 2002 2003 2004 HY 2005
Slide 7: GI's UK business is uniquely balanced
GI’s UK business is uniquely balanced 100% 11% 90% 35% 8% Commercial: Broker 80% Personal: Broker 70% 27% 72% 60% Personal: Partnerships 14% 50% Personal: Direct 40% 25% RAC income stream 30% 54% 20% 15% 16% 10% 4% 10% 9% 0% NUI 2005 HY RBSI 2004 (e) Zurich 2004 (e) Source: 2004 FSA Returns and NUI
Slide 8: GI – Stability and growth
GI – Stability and growth Direct Net Written Premiums 1000 22% 750 • Multi-distribution model £m 20% 9% 500 • Substantial direct growth 250 2001 2002 2003 2004 • 22% in 2004 • 22% in half year 2005 Partnership Net Written Premiums 1750 1700 £m 1650 • Significant partnership growth 1600 1550 1500 200
Slide 9: RAC – a platform for insurance growth
RAC – a platform for insurance growth • RAC Direct Insurance Brand Consideration Who would you consider using first for motor insurance? - Significant growth 25% Unprompted potential Prompted 20% - Additional 600k+ 15% customers by 2008 10% - Conversion rate on direct 5% book up 15% 0% Direct Line A
Slide 10: RAC – substantial value creation
RAC – substantial value creation • RAC integration ahead of plan • Cost saving: - Confirm £100m profit impact in 2006 - Run rate £130m p.a. by 2008 • Increasingly positive on income benefits - Over 1.4m additional RAC customers by 2008 • £250m pre-tax profit p.a. by 2008* *Profit stream associated w
Slide 11: International life
International life General Insurance – COR and RAC International Life – a review of the portfolio UK Life - action and resilience leading to growth Aviva – a brand to invest in
Slide 12: The International Portfolio
The International Portfolio International new business contribution 500 20% H1 growth Strong Growth 250 Full year Half Year 0 2003 2004 2005 International new business contribution 100% Good balance of Other channels businesses 50% Bancassurance 0% 2003 2004 2005
Slide 13: A valuable bancassurance franchise
A valuable bancassurance franchise • Over 30 bancassurance relationships across the world • 28% increase in sales Q3 2005 vs 2004 to £4.6bn • 30% increase in new business profit to £219m • An arrangement that genuinely works for both partners • Fast becoming “partner of first choice” • Expertise tha
Slide 14: Steady expansion
Steady expansion Ireland • Joint Venture with Allied Irish Banks • 280 branches, 1.6m customers • Hibernian owns 75% of the combined life business • Distribution agreement renewable to 2031 India • Bancassurance programme with 11 co-operative banks • 400 branches across 4 states • Target of 6,000 po
Slide 15: UK Life
UK Life General Insurance – COR and RAC International Life – a review of the portfolio UK Life - action and resilience leading to growth Aviva – a brand to invest in
Slide 16: UK Life – Turner Report
UK Life – Turner Report Pensions Commission established to review pensions gap Interim report set out options: • Revitalisation of the voluntary system • Changes to the state system • Increased compulsion Our position • Cost effective retirement solutions required • Remove unnecessary legislation an
Slide 17: UK Life - action and resilience
UK Life - action and resilience • Competitive market • Maintaining a balance of market presence and value • Broad distribution network • Broad product offering • All new business written above cost of capital
Slide 18: UK Life – scale and a balanced portfolio
UK Life – scale and a balanced portfolio APE Q3 2004 vs Q3 2005 1,000 Q304 Q305 Q305 £m 800 Q305 Q304 600 Q304 400 Q305 Q304 200 0 Norwich Union Prudential L&G Friends Provident Individual Pensions Group Pensions Annuities Protection Investments Collective investments
Slide 19: UK Life – transformation activities
UK Life – transformation activities • Aggressively addressing service standards • Significant growth in bancassurance • Lifetime wrap product launch • Major SIPP product development • Review of orphan estate
Slide 20: The Aviva Brand
The Aviva Brand General Insurance – COR and RAC International Life – a review of the portfolio UK Life – action and resilience leading to growth Aviva – a brand to invest in
Slide 21: Aviva
Aviva
Slide 22: Aviva - the foundations for sustainable growth
Aviva - the foundations for sustainable growth 2000-2003 2004-2005 2006 > Surviving Positioning Delivering growth the storm for growth and value • Cost reduction • Capital structure • Winning composite business model • Operational • RAC acquisition • Building on the foundations excellence • China /
Slide 23: Questions and Discussion
i AVIV Forward thinking Questions and Discussion