Aviva Plc · LSE:AV.
Aviva — Investor Day (October 2009)
23 slides from Aviva's investor day presentation, Oct 22, 2009
Slide 1: Aviva Europe: Making a Quantum Leap
Aviva Europe Making a Quantum Leap
Slide 2: Disclaimer
Disclaimer This presentation is for information purposes only. It 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 presentation contains certain “forward-looking statements” with res
Slide 3: Andrea Moneta, Aviva Europe CEO
Andrea Moneta Aviva Europe CEO Aviva Europe – Making a Quantum Leap 3 22 October 2009 Page 3
Slide 4: Recap
Recap Our Quantum Leap is transforming our business by bold, clear and high value strategies Grow at marginal cost, improve mix, increase Exploit Leading penetration by leveraging compelling business Bancassurance Position model Grasp Retail franchise Increase sales force profitability, improve mix
Slide 5: Our opportunity in Europe
Our Making money Conclusions Our opportunity Focus Quantum and creating and in Europe sessions Leap value Q&A Aviva Europe – Making a Quantum Leap 22 October 2009 Page 5
Slide 6: Making money and creating value
Making money and creating value “The insurance business is complicated”. NO, it is not ! Though it can be explained better As per every business … • Value comes from profit, growth and VIF PVFP return on capital MCEV CNHR • Never forget the basics VNB TVOG - Balance sheet PVNBP - Cash flow - P&L • U
Slide 7: Value components: Life
Value components: Life Shareholders’ funds MCEV NPV of in force business EEV NPV of Appraisal future investment value spreads NPV of new business in future years Our Our Making money Conclusions Aviva Europe – Making a Quantum Leap Focus opportunity in Quantum and creating and 22 October 2009 sessio
Slide 8: The value of the Life in force business
The value of the “Life in force business” Generating cash on a sustainable basis Expected free surplus generation from life in-force book* Over 40% of MCEV profit and required capital released to free surplus in first 5 years 1,200 1,000 800 €m 600 400 200 0 2008 2009 2010 2011 2012 2013 2014 2015 2
Slide 9: The value of the Life in force business
The value of the “Life in force business” Generating cash on a sustainable basis Self-funding new Free surplus generated by life in-force book, full year 2008 business 2,500 112 2,000 252 522 1,500 1,075 €m 229 1,000 1,162 500 979 - Opening free Opening Expected free free Expected Operating free Ope
Slide 10: The value of the Life in force business
The value of the “Life in force business” Generating cash on a sustainable basis Self-funding new Free surplus generated by life in-force book, full year 2008 business 2,500 112 252 Transferring significant 2,000 value to shareholders 522 1,500 1,075 €m 229 1,000 1,162 500 979 - Opening free Opening
Slide 11: Making money in insurance
Making money in insurance A straightforward P&L ... … with clear profit sources Profits from Profits from investments investments Investment margin Investment margin Profits Profitsfrom from taking risk taking risk Underwriting margin Underwriting margin Investment Investment to grow grow Newbusines
Slide 12: How we make money
How we make money For both life and general insurance 1,000 Underwriting 800 margin Investment margin 600 1H 09 €m IFRS Profit Profit after tax and 400 minorities GI 200 Life 0 Other (200) Taxation and minority interests (400) Life GI Overheads New business (600) acquisition Our Our Making money Con
Slide 13: Our Quantum Leap is all about value and money
Our Quantum Leap is all about value and money Transforming the business … … by executing strategies with high impact on all key value drivers Our Our Making money Conclusions Aviva Europe – Making a Quantum Leap Focus opportunity in Quantum and creating and 22 October 2009 sessions Page 13 Europe Le
Slide 14: Sustainable profit growth
Sustainable profit growth Increase assets under management and profitability 1,000 Underwriting Bancassurance margin 800 • sales at minimal marginal cost Investment margin 600 Retail • increase sales force productivity and retention Profit after tax 400 • portfolio rebalancing and minorities Improve
Slide 15: Sustainable profit growth
Sustainable profit growth Risk selection and pricing 1,000 Underwriting Underwriting best practice margin 800 Investment Customer segmentation margin 600 Higher penetration of protection business Profit after tax 400 Effective claims management and minorities Fraud reduction 200 Lower unit costs 0 •
Slide 16: Sustainable profit growth
Sustainable profit growth Reduce average acquisition costs 1,000 Underwriting Grow Bancassurance at marginal cost margin 800 Investment Improve Retail sales force productivity margin 600 Increase cross/up sell Profit after tax 400 Improve quality of leads and minorities Customer centric and innovati
Slide 17: Sustainable profit growth
Sustainable profit growth Pan-European governance, operations & IT 1,000 Underwriting Single head office and streamlined organisation margin 800 Investment Efficient IT / shared services margin 600 Single product catalogue 400 Single change portfolio andProfit centralised after tax procurement and m
Slide 18: Sustainable profit growth
Sustainable profit growth Single holding company 1,000 Underwriting EU carrier and branches margin 800 Investment Central risk and investment management margin 600 Product factories CEE 16-20% 400 Tax and capital efficiencyProfit after tax and minorities Spain 200 30% Poland France 0 19% 34% Other M
Slide 19: Our Quantum Leap is all about value and money
Our Quantum Leap is all about value and money Sustainable 1,000 profit growth Underwriting 800 Investment margin margin 600 400 200 GI Life 0 Other Minority interests (200) Taxation (400) Life GI Overheads New business (600) acquisition Our Our Making money Conclusions Aviva Europe – Making a Quantu
Slide 20: Doubling 2007 IFRS net profit by 2012
Our Quantum Leap is all about value and money Sustainable profit growth 1,000 Underwriting 800 margin Investment 600 margin Doubling 400 2007 IFRS GI 200 net profit by Life 0 (200) 2012 Taxation Minority interests Other (400) Life GI Overheads New business (600) acquisition Our Our Making money Conc
Slide 21: Our opportunity in Europe
Our Making money Conclusions Our opportunity Focus Quantum and creating and in Europe sessions Leap value Q&A Aviva Europe – Making a Quantum Leap 22 October 2009 Page 21
Slide 22: Questions & Answers
ae AT AVIVA .-.In performance
Slide 23: To conclude
To conclude Great franchise in Quantum Leap to ‘One Aviva, twice the world’s largest become the the value’ delivered market undisputed leader by 2012 Aviva Europe – Making a Quantum Leap 22 October 2009 Page 23 Source: UN (2009), CEA (2009), Aviva PFA Model (2008)