Aviva Plc · LSE:AV.
Aviva — SG Premium Review Conference 2009
25 slides from Aviva's conference presentation, Dec 22, 2009
Slide 1: SG Premium Review Conference
2009 SG Premium Review Conference Andrea Moneta Chief Executive, Aviva Europe & Aviva plc Board Member
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: Introduction
Introduction 1) Group • Global company – 2 years into our 5 year strategy • Focus on margins, profit and cost management • Strong balance sheet 2) Europe 3
Slide 4: An increasingly global company
An increasingly global company £30 billion H1 2009 sales £24.4bn (1) Asia Pacific 6% 20% 10% General North America 17% Insurance UK GI 9% £15 billion UK Life 21% 80% Long 5% 5% Term 24% Savings Europe* 47% 32% 40% 34% H1 2000 H1 2009 (1) 4 Total long-term savings new business sales and G.I. and heal
Slide 5: 2 years into our 5 year strategy
2 years into our 5 year strategy Purpose Prosperity & peace of mind Vision One Aviva, twice the value Strategic Targets priorities • Manage composite • 98% meet or beat COR portfolio • £500m cost savings by 2010 • Build global Asset • Double IFRS EPS by 2012 at Management the latest • Allocate capit
Slide 6: Focus on margins vs sales
Focus on margins vs sales Life and Pensions margins maintained Sales Life General and Pensions insurance Margins £18.2bn £17.5bn COR2 12 months 6 months NA/Asia 2008 % 2009 % NA/Asia £3.1bn £15 bn UK 1.7% 2.1% £3.9bn Europe Europe* 2.8% 2.6% Life Europe* North America 1.0% 0.5% 36% Europe* Asia Paci
Slide 7: Focus on profitability vs premiums
Focus on profitability vs premiums General Insurance COR improved NWP £5.1bn General General Insurance insurance CORs COR2 £5 bn £4.9bn NA/Asia 6 months 12 months £0.8bn 2008 % 2009 % NA/Asia £0.9bn UK 99% 99% Europe* Europe* 97% 96% £1.0bn Europe Life Europe* North America 99% 97% 36% DL £1.1bn £3
Slide 8: Focus on improving returns
Focus on improving returns Strong Cost Management £2,700m (£38m) £72m (£80m) £2,622m (£118m) • Ahead of run rate £500 £148m £2,493m million cost saving targets (£75m) £2,500m (£38m) • Eliminating cost over runs and reducing operational £2,300m complexity in UK Life 9.0% - £239m • Closing 13 operatio
Slide 9: Strong balance sheet
Strong balance sheet • Enhanced IGD solvency surplus of £3.7bn* • £1.1bn default provision against UK annuity book remains unutilised, with no material default experience • Increased NAV per share – IFRS 409p (H109: 349p); MCEV 520p (H109: 416p) • Net unrealised gain of £0.4bn on debt securities in
Slide 10: Reallocating capital to generate increasing returns
Reallocating capital to generate increasing returns Sale of Australian business completed • Realises value from a business where Aviva had limited organic growth opportunities • £452 million selling price at 16 x IFRS earnings Reattribution of the inherited estate • Over 800,000 customers will benef
Slide 11: Delivering against a consistent strategy
Delivering against a consistent strategy • A strong balance sheet • Increasing profits through operational improvements • Reallocating capital to generate increasing returns • Improving net asset values 11
Slide 12: Group / Europe
1) Group 2) Europe • Significant part of the Group • Unique position with 15 markets • Quantum Leap – already delivering results 12
Slide 13: 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 s
Slide 14: Aviva is uniquely positioned in Europe
Aviva is uniquely positioned in Europe 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 R
Slide 15: Aviva is uniquely positioned in Europe: life insurance penetration
Aviva is uniquely positioned in Europe Strengths in 15 markets Covering 80% of GDP and premium 10 Developed markets Life Insurance Penetration (GWP/GDP) % In different stages of development 8 France Ireland Belgium 6 Netherlands Italy High potential 4 markets Spain Germany Poland Hungary 2 Slovakia
Slide 16: Aviva is uniquely positioned in Europe: regionalisation
Aviva is uniquely positioned in Europe Strengths in 15 markets 80% Covering 80% of GDP and premium 70% 60% In different stages of development Generali AXA 50% Allianz Regionalisation* 40% With an enviable competitive Zurich footprint 30% ING Credit AEGON 20% Agricole CNP 10% Groupama Bubble size pro
Slide 17: 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’ • Total gross cash proceeds c £1billion for a 41% stake • Significant strategic milestone • Enhances value and liquidity of retained stake in Del
Slide 18: Aviva Europe's Quantum Leap
Aviva Europe’s 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 Simpli
Slide 19: 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 9 Pan Euro
Slide 20: Bancassurance: our leading position
Bancassurance: our leading position 50 45 • Successfully executing our 40 strategy 35 N o . o f p artners 30 • Increasing number of high 25 quality partners 20 15 10 5 0 Aviva Other insurers • 46 agreements • Over 20,000 branches • Access to over 30m bank customers Source: The Banker, 2008
Slide 21: Bancassurance – an exciting opportunity
Bancassurance – an exciting opportunity Common channel Significant mix & growth approach opportunities • Leverage unique business model • Aviva in a box - scalable bancassurance • Focus on protection platform • GI growth opportunity • Managed through multiple points of • Leverage low cost per policy
Slide 22: 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 busin
Slide 23: 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 24: To conclude
To conclude Great franchise in Quantum Leap to ‘One Aviva, twice the world’s become the the value’ largest market undisputed delivered by 2012 leader 24
Slide 25: Questions
Questions 25