Aviva Plc · LSE:AV.
Aviva — Merrill Lynch Conference 2009
15 slides from Aviva's conference presentation, Dec 22, 2009
Slide 1: Merrill Lynch Conference
2009 Merrill Lynch Conference Andrew Moss Chief Executive 1
Slide 2: Disclaimer
Disclaimer This presentation may include oral and written “forwardlooking statements” with respect to certain of Aviva’s plans and its current goals and expectations relating to its future financial condition, performance, strategic initiatives and results. These forwardlooking statements sometime
Slide 3: Building a Position of Strength in a Tough Market
Building a Position of Strength in a Tough Market • Tackling the market downturn – IGD solvency surplus of £3.2 billion – £1.1 billion untouched provisions against the UK annuity book • Benefitting from the market recovery – Increased NAV from equity and credit spread improvements – Continued focus
Slide 4: Reducing complexity
Reducing complexity Valuations and returns IGD solvency surplus – the hygiene factor • A conservative measure of capital that is surplus to requirements IFRS profits – important for the dividend • A conservative profit reporting methodology MCEV – a measure of value for long term cash flow business
Slide 5: Focus on earnings
Focus on earnings Life and Pensions margins maintained Sales Life General and Pensions insurance Margins £18.2bn £17.5bn COR2 12 months 6 months NA/Asia 2009 % NA/Asia 2008 % £3.1bn £15 bn UK 1.7% 2.1% £3.9bn Europe 2.6% Life Europe 2.8% Europe North America 1.0% 0.5% 36% Europe Asia Pacific 2.5% 2.
Slide 6: Focus on earnings
Focus on earnings 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 Europe 97% 96% £1.0bn Life Europe North America 99% 97% 36% DL £1.1bn £3 bn £ 0.5bn 33% Total
Slide 7: 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 complexity in UK Life £2,300m • Closing 13 operational 9.0% £2
Slide 8: UK Life
UK Life Significant improvement through operational excellence • Market share increased to 12% HY1 08 HY1 09 +/ from 11% whilst also increasing margins • Management action taken on product mix, Life and Pension sales £6,010m £4,735m 21% increased pricing sophistication, reduced commissions and exp
Slide 9: UK General Insurance
UK General Insurance Transforming the business • Execution of strategy is improving the HY1 08 HY1 09 +/ quality of earnings • Actively exiting poor performing business Net written premium £2,589m £2,049m 21% • Rating increases above inflation on all COR 98% 99% +1pps major classes • Improving cur
Slide 10: Europe Excluding Delta Lloyd
Europe Excluding Delta Lloyd Strength from diversity • Strong bancassurance performance limits Local fall in life and pension sales HY1 08 HY1 09 Currency • Margins: Growth • Customer preference for lower margin products with guarantees Life and pension sales £6,979m £7,071m 9% (With Profits sales
Slide 11: Focussed on long term value generation
Focussed on long term value generation Investing in Customers and Brand
Slide 12: Progress with Strategic Allocation of Capital
Progress with Strategic Allocation of Capital Sale of Australian business – transaction confirmed today Sale of Australian Business • Realises value from a business where Aviva had limited growth opportunities • Australian return of 11% is lower than Aviva’s average in UK, GI and Europe (excl Delta
Slide 13: Progress with Strategic Allocation of Capital
Progress with Strategic Allocation of Capital The inherited estate – transaction confirmed today Making better use of capital • Over 800.000 customers will benefit from a £470 million cash payout • 87% of customers by value have accepted, equating to a transfer of £1.1 billion within the With Profit
Slide 14: Building a Position of Strength in a Tough Market
Building a Position of Strength in a Tough Market • Tackling the market downturn • Benefitting from the market recovery • Capitalising on the current environment 14
Slide 15: Questions
Questions AVIVA 15