Aviva Plc · LSE:AV.
Aviva — FY2014 Earnings Presentation
26 slides from Aviva's earnings presentation, March 2015
Slide 1: 2014 Results
AVIVA 2014 Results
Slide 2: Disclaimer
Disclaimer Cautionary statements: This 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 announcement contains, and we may make other verbal or written “forward-looking statements” wi
Slide 3: Investment Thesis – Cash flow plus growth
Investment Thesis – “Cash flow plus growth” 1. Life Value of new business Remittances from business units less Cash flow Growth 2. GI Underwriting result central and debt financing costs 3. AI External net fund flows 3
Slide 4: Full Year 2014 Results summary
Full Year 2014 Results summary AVIVA ™ Holding company excess cash flow? up 65% to £692 million (FY13: £420 million), vs. 2016 target of £800 million Cash flow Cash remittances up 11% to £1,412 million (FY13: £1,269 million) ™ Final dividend up 30% to 12.25p. Total dividend 18.1p (FY13: 15.0p) = Ope
Slide 5: Key metrics
5 key metrics AVIVA £1,412m £2,173m - im | FY13 FY13 FY14 Value of new business Combined operating ratio £1,009m £904m 95.7% FY13 1, VNB on constant currency basis. Operating expenses £3,006m 15.0p 30% 12.25p
Slide 6: Progress on cash flow
Progress on cash flow AVIVA Historical issue / priority FY update plan Ss + S 1 i ot i » ! Excess cash flow up |} More tan dou! ple ' : 9 | i 3 ; 65% tof0.7bn =| £0.8bn by 2016 = _—— 1 i = i £0.3bn from UK Life ; | Increaselcash flow, : ra j i efficiency and ] % i back book ; | H ] U ! tf retention
Slide 7: Progress on growth
Progress on growth AVIVA *o» Growth Historical issue / priority FY update @ Growth in VNB & Underwriting profit €2, 7bn Life fund flows H Aviva Investors | + building distribution | 1.7 average product © Cross-sell holding 1.3 million ! @ _ Digital and direct i registrations H H H ; Over £1bn in rev
Slide 8: Transaction Rationale – Financial and strategic
Transaction Rationale – Financial and strategic Financial Strategic • • Secures leading position in our home market • Brings c.5 million2 Friends Life customers to Aviva • Leverage consistent with S&P AA rating – no further need to de-lever • Adds significant scale and expertise to our back book ini
Slide 9: 2014 Results – Tom Stoddard, Chief Financial Officer
AVIVA 2014 Results Tom Stoddard Chief Financial Officer
Slide 10: Operating profit improvement
Operating profit improvement AVIVA Operating profit £m FY13 Change Life 1,901: 1,979 4% Operating profit FY13 2,049 General Insurance & Health 797 808 1% Foreign exchange (87) Fund Management 93 86 (8)% UK individual annuities (70) Other operations (90) (105) (17)% Disposals (42) ech eae 2,701 i 2,7
Slide 11: Operating earnings per share & ROE
Operating earnings per share & ROE al AVIVA Operating EPS £ million FY13 FY14 Group Operating profit 2,049 2,173 _ Da Less operating tax (534) (561) Minority interest (174) (143) 47.0p DCI and fixed rate tier 1 notes (70) (69) Preference shares (17) (17) Total operating earnings after tax, MI & DCI
Slide 12: Net asset value
Net asset value al AVIVA Net asset value per share IFRS MCEV! Opening NAV per share at 31 December 2013 270p 463p Operating profit 47p 62p Dividends (15)p (15)p Investment variances & AFS equity movements 5p (2)p Pension fund 45p 45p Integration and restructuring costs, goodwill impairment, other (1
Slide 13: UK Life
UK Life An Value of new business Operating profit Remittance to group £ million FY13 FY14. Annuities 279 234 | (16)% £930m £1.016m £300m £390m Protection 75 95 27% Pensions 78 60 (23)% Equity release & other 37 84 127% Total 469 473 1% FY13 FY14 FY13 FY14 * 30% increase in cash remittance . . . Oper
Slide 14: UK GI
UK Gl AVIVA Operating profit Operating profit Net written premium £m FY13 FY14 £431m £455m £3.8bn Underwriting result 117 199 £3.7bn Inv Income internal loan 221 151 £314m £256m Other Inv Income 93 105 Total 431 455 £117m £199m Combined operating ratio FY13 FY14 FY13 FY14 Personal Motor 96% 97% Mtr
Slide 15: Europe
Europe Value of new business* FY13 FY14 Protection 164 174 6% Unit linked savings 95 123 29% Pensions 22 28 27% Other savings 48 67 40% Total 329 392 19% * Operating profit up 9%! in constant currency * VNB growth from volumes, improved mix and management actions on with-profits * Expense reduction
Slide 16: Canada
AVIVA Canada Combined operating ratio FY13 FY14 Personal Motor 90% 93% Home 100% 103% Commercial 97% 96% Total 95% 96% currency basis exchange of £28m profit year on year * Expense ratio improved by 7O0bps * Net written premiums up 6% on constant + Adverse operating profit impact of foreign * Additi
Slide 17: Value of new business
Value of new business AVIVA (9) o a] Constant FY132 FY14. Currency UK & Ireland 0 Ty «2. | France 172 B 19% 4 205 B 25% 4 Poland! Ce 25° An) 31% 1 Turkey 37 30 Asia! 103 _ E7127 30% 4 Italy’ 17% 55% if Spain! 2 Ep” 3 | Dy Aviva Investors - Bona 9 x nla Total VNB" eS 11% A 15% New tuines | 0% a x | O
Slide 18: General Insurance Combined Operating Ratio
General Insurance Combined Operating Ratio al AVIVA Current year Weather vs Prior year Combined underlying + LTA + reserve + Expense ratio == operating loss ratio movement ratio 9 97.3% 32.8% 31.7% ” 95.7% 64.7% 65.4% ee a (0.9)% — (1.6)% FY13 FY14 FY13 FY14 FY13 FY14 FY13 FY14 FY13 FY14 1 Commissio
Slide 19: A focus on improving efficiency ratios
A focus on improving efficiency ratios Lal AVIVA Segmental efficiency ratios Group ratio 54.1% 51.5 % 50% 33.3% 30.1% 15.1%. 0, 15.8%45,7% Ll 12bps 12bps oo Life Gl FM Health Group Expenses per PDA Expenses Op Expenses Op Expenses Op Expenses Profit Dri 7 : 7 Anal sis! (PDA) Net Written Average Fund
Slide 20: Cash remittances & dividend cover
Cash remittances & dividend cover al AVIVA Excess Centre Cash? £ million 2013 UK & Ireland Life : 370 UK &lreland GI 347 Europe ; 388 Canada i 130 Asia 20 FM & Other! 14 Total 1,269 Debt costs (647) Centre costs (202) Excess centre cash flow E 420 2014 437 294 454 138 23 66 1,412 (576) (144) 692 18%
Slide 21: Improving financial flexibility
Improving financial flexibility AVIVA Economic capital surplus’ fbn 10 84 Final FY14 8 Dividend 6 : i 2 : - 2012 2013 2014 Inter-company loan £bn 6 4 Plan in 0 2012 Feb-14 Feb-15 Dec-15 Holding company liquidity fbn 1.85 1.6 1.2 4 1.1 0.6 | 0.2 0 | January 2013 February 2014 February 2015 48% 2013 E
Slide 22: 2014 Results – Mark Wilson, Group Chief Executive Officer
AVIVA 2014 Results Mark Wilson Group Chief Executive Officer
Slide 23: Q&A
AVIVA 2014 Results Q&A
Slide 24: Appendix
AVIVA 2014 Results Appendix
Slide 25: Operating Expense Ratio
Operating Expense Ratio AVIVA Operating Expense Ratio — <p. 51.5% FY13 FY14 Components of Operating Expense Ratio £ million FY13 FY14 Market operating profit 2,701 2,768 Less corporate centre (150) (132) Group operating profit excluding debt costs and pension income 2,551 2,636 Add operating expense
Slide 26: Aviva and Friends Life disclosure
Aviva Friends Life (As per Aviva disclosure) (As per Friends Life disclosure) 26