Aviva Plc · LSE:AV.

Aviva — H1 2002 Earnings Presentation

36 slides from Aviva's earnings presentation, Aug 1, 2002

  1. Slide 1: Aviva plc 2002 Interim Results

    Aviva plc 2002 Interim Results 1 August 2002

  2. Slide 2: Agenda

    Agenda „ Business review Richard Harvey „ Financial review Mike Biggs „ Results „ Capital update „ Questions & answers

  3. Slide 3: Highlights

    Highlights „ Group operating profit1 at £979m (2001: £977m) „ On MSSB basis operating profit at £757m (2001: £728m) „ Long-term savings new business up 9% on APE basis „ New business contribution2 up 6% to £289m „ General insurance profit of £480m with worldwide COR of 101% (2001: 103%) „ Interim di

  4. Slide 4: Aviva the largest life & pensions provider to Europe

    Aviva the largest life & pensions provider to Europe GWP (€ bn bn)) 28 „ European strategic focus 21 „ Strong market 14 positions 7 0 Aviva Allianz Axa Generali Rank 2001 1 3 2 4 2000 4 3 1 2 1999 4 2 1 3 Source: Company accounts, Morgan Stanley

  5. Slide 5: Life & pension new business up 11%

    Life & pension new business up 11% Life and pension sales - APE £m APE growth UK + 12% France - 10% Ireland + 30% Italy + 25% Neths - 15% Spain + 26% Int'l + 44% 0 75 150 225 700 300 Strong growth from geographical diversity

  6. Slide 6: Bancassurance sales doubled

    Bancassurance sales doubled Total Increase sales in sales £m „ Royal Bank of Scotland Group 391 339% „ Italy 504 87% „ Spain 352 31% „ DBS (Singapore) 97 n/a Bancassurance accounts for 20% of Group life & pension sales

  7. Slide 7: Value from bancassurance

    Value from bancassurance „ Structured to meet IRR „ Incentivise bank sales „ Structure according to markets Insurer Bank -Products 50% equity Fee -Sales -Admin -Marketing -Asset mgt Fee 50% equity -CRM Joint Board aims to maximise value of JV

  8. Slide 8: Assessing shareholder value in a Sandler environment

    Assessing shareholder value in a Sandler environment „ Recognition of need to stimulate savings „ Principles favour providers with scale, brand and operational efficiencies „ Examination of the viability of the new stakeholder product proposals „ Assessment of the attribution of the inherited estate

  9. Slide 9: Benefiting from refocused general insurance

    Benefiting from refocused general insurance COR* 2002 2001 „ Excellent results % % „ Improving risk profile UK 101 103 France 100 103 „ Profit not volume Ireland 100 104 „ Strongly capitalised Netherlands 102 104 and cash generative Aust & NZ 102 103 businesses Canada 103 104 GROUP 101 103 * Combine

  10. Slide 10: Financial Review

    Financial Review

  11. Slide 11: Group financials

    Group financials „ Group operating profit1 maintained at £979m „ New business contribution2 up 6% to £289m „ General insurance profit of £480m with worldwide COR of 101% (2001: 103%) „ On MSSB basis operating profit at £757m (2001: £728m) „ Operating EPS1 at 27.4p (2001: 27.5p) „ Net asset value3 at

  12. Slide 12: New business profitability

    New business profitability £m Group UK France Spain Italy New business 289 164 34 33 16 contribution Annual premium 1,202 676 110 63 69 equivalent New business 24.0% 24.3% 31.0% 52.3% 23.3% margin New business margin - 25.5% 25.8% 33.9% 46.5% 22.2% FY 2001

  13. Slide 13: Life achieved operating profit

    Life achieved operating profit 2002 2001 „ UK: Impact of lower £m £m embedded value UK 424 465 „ Benefits from France 111 110 bancassurance Ireland 37 37 partnerships in Spain, Italy 30 24 Italy and DBS in Netherlands 87 93 International Poland 47 44 Spain 38 31 „ Minimal operating Other Europe - 28

  14. Slide 14: General insurance result

    General insurance result „ Operating profit1 up £53m to £480m „ Underwriting result1 improvement of £74m „ UK + £34m „ Other + £40m „ Improved COR1 ratio at 101% (2001: 103%) „ Longer-term investment return1 down £21m at £558m 1 From continuing operations

  15. Slide 15: Capital

    Capital

  16. Slide 16: Strong and resilient capital base

    Strong and resilient capital base „ AA rating (“very strong”) reaffirmed by S&P „ GI & health capital - £1.3bn in excess of risk based requirement „ £3.2bn capital available to support overseas life businesses „ UK life with-profits „ Free asset ratio: 14.1% at 30 June 10.1% excluding implicit items

  17. Slide 17: Agenda

    Agenda „ Capital at group level „ Operational capital strength „ Financing growth

  18. Slide 18: Capital at group level

    Capital at group level

  19. Slide 19: Capital at group level

    Capital at group level „ AA rating (“very strong”) reaffirmed by S&P „ EU Directive Group solvency basis „ 31 December 2001 £1.7bn excess „ estimate at 30 June 2002 £1.5bn excess „ excludes strength of UK with-profit fund „ Equity shareholder funds at 30 June of £11.3bn „ Capital employed in our bus

  20. Slide 20: Operational capital strength

    Operational capital strength Regulatory Realistic

  21. Slide 21: Operational capital strength

    Operational capital strength Regulatory Realistic perspective perspective CGUII Group XSM* / solvency cover - NU Insurance XSM* / solvency cover - Worldwide - Risk based capital general insurance and health UK life Free asset ratio Orphan estate * XSM represents excess solvency capital over required

  22. Slide 22: Operational capital - regulatory

    Operational capital - regulatory Group structure Aviva plc Australia CGUII plc NU Insurance UK Life Life General Major overseas subsidiaries

  23. Slide 23: Operational capital - regulatory

    Operational capital - regulatory Excess solvency over required minimum margin Aviva plc CGUII plc NU Insurance Life General Major overseas subsidiaries XSM* 31 Dec 01 £2.7bn £0.4bn 30 June 02 (est (est)) £2.7bn £0.4bn * XSM represents excess solvency capital over required minimum margin m argin

  24. Slide 24: Operational capital - regulatory

    Operational capital - regulatory CGUII plc NU Insurance Life General Major overseas subsidiaries CGUII CGUII plc group NU Insurance Available assets £3.1bn £5.2bn Available assets £0.8bn Required minimum £0.4bn £2.5bn Required minimum £0.4bn margin margin XSM* - 30 June £2.7bn £2.7bn XSM* - 30 June

  25. Slide 25: Operational capital - realistic

    Operational capital - realistic Risk based capital - worldwide GI & health Aviva plc Australia CGUII plc NU Insurance UK Life Life General Major overseas subsidiaries

  26. Slide 26: Risk based capital

    Risk based capital Worldwide general insurance & health Shareholders’ £4.6bn capital employed* Risk based £3.3bn at 30 June 2002 capital Net written premium** 36% £9.2bn * excluding goodwill of £0.3bn and after adding back the equalisation provision of £0.3bn ** net written premium represents 12 mon

  27. Slide 27: Operational capital strength

    Operational capital strength Summary so far… „ Efficient structuring CGUII plc NU Insurance „ Strong solvency Life General Major overseas subsidiaries „ Resilience to equity market movements Regulated available assets* - 30 June £6.0bn „ £3.2bn available to Add: equalisation provision £0.3bn support

  28. Slide 28: Operational capital - regulatory

    Operational capital - regulatory UK life structure UK Life CU life Unit-- linked Unit CGNU life NU life & pensions

  29. Slide 29: UK life free asset ratio

    UK life free asset ratio Free asset ratio of 14.1% at 30 June Free asset ratio* ratio * Including Excluding implicit implicit items items 31 Dec 2001 14.7% 10.8% 30 June 2002 14.1% 10.1% * incorporating resilience rules as at 30 June 2002 Free asset ratio definition: total assets less total liabilit

  30. Slide 30: Operational capital UK with-profit - orphan estate

    Operational capital UK with-profit - orphan estate £bn „ Represents realistic 6 £5.2bn measure of with-profit £4.7bn strength 4 „ After a realistic estimate of policyholders’ reasonable expectations 2 „ With-profit funds of £48bn at 30 June 0 31 Dec 01 30 Jun 02

  31. Slide 31: Financing growth

    Financing growth

  32. Slide 32: Internal capital generation

    Internal capital generation Post-tax statutory operating profits Post- 2001 Actual £bn Actual Pro forma 6 months 2002 Profit from in- in-force 1.4 1.4 0.7 Cash strain from new non- non-profit business (0.6) (0.6) (0.3) Life statutory profits (after new business strain) 0.8 0.8 0.4 GI & health 0.6 0.

  33. Slide 33: Strong and resilient capital base

    Strong and resilient capital base „ AA rating (“very strong”) reaffirmed by S&P „ GI & health capital - £1.3bn in excess of risk based requirement „ £3.2bn capital available to support overseas life businesses „ UK life with-profits „ Free asset ratio: 14.1% at 30 June 10.1% excluding implicit items

  34. Slide 34: Summary

    Summary „ Solid results despite environment „ Capital strength „ AA rating (“very strong”) reaffirmed by S&P „ Driving performance out of each business A resilient and well- well- diversified business

  35. Slide 35: Questions & Answers

    _t AVIVA Questions & Answers

  36. Slide 36: Slide 36

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