Aviva Plc · LSE:AV.
Aviva — Investor Presentation (May 2005)
20 slides from Aviva's investor presentation, May 11, 2005
Slide 1: Ready, steady, grow
Ready, steady, grow Richard Harvey Group Chief Executive 11 May 2005 © Aviva plc 1
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 uncertai
Slide 3: Agenda
Agenda • The market – changing times • Life – customer insight • Property and casualty – adding value • Summary © Aviva plc 3
Slide 4: A strong set of results in 2004
A strong set of results in 2004 • Operating profit* £2,344m + 25% • Life & pensions sales** £20.7 bn + 12% • New business contribution £706m +11% • General insurance COR 96.7% (2003 100%) • GI operating profit £1,326m + 47% • Full year dividend 25.36p +5% Strongly covered • ROCE 14.4% 2003 : 13.1% *
Slide 5: Market overview
Market overview • Confidence among savers gradually returning • In-depth knowledge of customer needs is essential • Increased competition for investors’ money • Power of brands: trust and reputation are key • Change in personal lines to non-traditional distributors • Need to go beyond the insurance
Slide 6: Long-term savings
Long-term savings © Aviva plc 6
Slide 7: Where to compete?
Where to compete? Latin America Life & Pensions Assets % CAGR (2002-2013) Rest of the World Asia-Pacific North America Europe Japan Life & Pensions Assets 2002 ($bn) Area of bubble = Increase in Total L&P to 2013 Source : Long term savings project: Detailed internal analysis projecting future Person
Slide 8: Customer Franchise
Customer Franchise Which one of the following timescales is most important to you when thinking about savings and investments? % Now Within the next 5 years Next 5-10 years Over 10 years 100 80 60 40 20 0 POL CH TUR ITA FRA AUS UK SPA IND IRE NL US GER The short term remains the primary savings hori
Slide 9: Changes in the UK life market
Changes in the UK life market • Pension reform – Turner report • Low interest rate environment/ stable equity markets • Slowing housing market • Changes in stakeholder pricing • Reducing level of regulatory change • Changes in distribution Strong medium term growth prospects © Aviva plc 9
Slide 10: UK focus: Growing the return on capital
UK focus: Growing the return on capital Indicative Return from New Business IRR 1% annual growth 15% Product mix Product design Tools Commission 10% Cost reduction Capital management 2004 2005 2006 2007 © Aviva plc 10
Slide 11: Trends occurring in Europe
Trends occurring in Europe • Ongoing pension reform in France and Italy • Strong housing market in many markets • Low interest rate environment • Return to equity-backed products © Aviva plc 11
Slide 12: Continental Europe – operational priorities
Continental Europe – operational priorities • Embedding bancassurance % Unit linked sales as % relationships to complement 18 of group sales our distribution: 16 – ABN AMRO in the 14 Netherlands – Crédit du Nord in 12 France 10 • Focus on driving efficiencies 8 in these businesses by 6 using common
Slide 13: Asia – priorities for growth
Asia –priorities for growth • In China to achieve 10% of market share in each city where licensed by 2010 • To cement and further develop our distribution capabilities in India • To maintain and build on our strong positions in Singapore and Hong Kong • To examine the possibilities to enter other ma
Slide 14: Worldwide Q1 new business strong
Worldwide Q1 new business strong £m • Total worldwide life and pension 6,000 4% International sales up 17% to £5,659m 5,000 4% • Worldwide life and pension new 38% UK business contribution up 18% at 4,000 £197m – margins up to 3.5% 44% • Sales in continental Europe up 3,000 31% to 3,270m – 58% of to
Slide 15: Property and casualty
Property and casualty © Aviva plc 15
Slide 16: Excellent P&C results: ahead of target
Excellent P&C results: ahead of target % of total P&C Combined operating ratios premiums 2004 2003 62 UK 97% 99% 6 France 101% 102% 6 Ireland 87% 97% 8 Netherlands 95% 101% 14 Canada 97% 108% Group 97% 100% Confident of meeting COR target of 100% in 2005 and 2006 © Aviva plc 16
Slide 17: Property & casualty priorities
Property & casualty priorities • Disciplined underwriting as the underwriting cycle slowly turns • Meet or beat 100% COR target in 2005 & 2006 • Substantial savings from supply chain (claims) & off-shoring • Technical innovation • Growing direct sell related services • Adding value to the insurance
Slide 18: UK P&C: multi-channel
UK P&C: multi-channel • Growing direct personal lines business • Over 40% of book is “direct” • Converting 500,000 policies from HHH to NU Direct in 2004/5 Net written premium % by channel 100% 36% Commercial: 40% Broker 75% 50% 31% 17% Personal: Broker Personal: Corp 26% 25% 24% partnerships 9% 17%
Slide 19: Aviva: a thriving business
Aviva: a thriving business • Strong growth in profits • Brighter outlook for long-term savings • Strong and sustainable outlook for property & casualty • Underpinned by a value-creating brand portfolio • Healthy dividend growth and cover Aviva is financially fit and strongly positioned for profitabl
Slide 20: Questions and Discussion
Questions and Discussion © Aviva plc 20