Aviva Plc · LSE:AV.
Aviva — Investor Presentation (2004)
10 slides from Aviva's investor presentation, 2004
Slide 1: Driving for Value - Mike Urmston, Chief Actuary
Mike Urmston Chief Actuary Driving for Value
Slide 2: Driving for Value - Agenda
Driving for Value - Agenda • Building a flexible financing model • Improving efficiency of capital structure • Impact of non-profit Fund Merger Mike Urmston • Estate re-attribution • Annuitant mortality • PSB / ICA • Changing market • Cost savings • Management actions on New Business Jim Newman • Ma
Slide 3: Building a flexible financing model
Building a flexible financing model • Applying banking techniques and developing new financing tools - eg Securitisation • Capability built to use for Protection new business • Further options around existing business • Continuation of effective financing solutions • Use of re-insurance financing, s
Slide 4: Securitisation of New Business Strain: market leading approach
Securitisation of New Business Strain: market leading approach • Innovative financing arrangement with RBSG • Creates £200m facility, financed via conduit US dollar CP issuance • Creates matched funding for our new term and mortgage protection life insurance business • Provides alternative source to
Slide 5: Improving efficiency of Capital Structure: Impact of Fund Merger
Improving efficiency of Capital Structure: Impact of Fund Merger • Good progress in merging Norwich Union Linked Life and Norwich Union Life and Pensions non-profit funds • 9 funds in total • Around 5m policyholders • Improves operational efficiency • Reduces solvency requirements by c£200m: freeing
Slide 6: Improving efficiency of Capital Structure: Estate re-attribution
Improving efficiency of Capital Structure: Estate re-attribution • With-profit funds extremely strong with estate of £4.2bn, 30 June 2004 (CULAC £1.5bn, CGNU £1.4bn, NULAP £1.3bn) • CP 04/14 gives greater clarity from FSA on options and process involved and validates this option • Will continue to a
Slide 7: Annuitant Mortality: MSS Basis
Annuitant Mortality: MSS Basis • Strong MSS reserving basis with prudence in base table as well as assumption for future improvements • Future improvements in mortality based on medium cohort (males 100%, females 75%) but subject to overriding minimum of 0.5% p.a • Explicit, prudent allowance for an
Slide 8: Annuitant Mortality: Other Issues
Annuitant Mortality: Other Issues • Achieved Profits • Current actual experience in line with assumptions • Same assumption for future improvements in mortality as for MSS basis • Includes best estimate allowance for anti-selection • CMI Report 21 • Latest report from CMI indicates that “experience
Slide 9: Initial Prudential Sourcebook Developments
Prudential Sourcebook Developments • ICA modelling capability developed for non profit business in Q1 04 • Initial estimates of ICA produced 30 June 04 • Results finalised on 30 September 2004 • Expecting no adverse impact on Shareholder Capital • With Profit realistic reporting - initial views on c
Slide 10: Implications of ICA modelling developments
Implications of ICA modelling developments • Market leading understanding established of risks to capital position has been gained • Shifted management focus from a traditional insurance model, focusing on APE and margin, to a banking model, focusing on return on capital • Clarified understanding of