focus on profit - aviva...focus on profit igal mayer, 3rd june 2009. disclaimer this presentation...
TRANSCRIPT
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Insurance Excellence in UKGIFocus on ProfitIgal Mayer, 3rd June 2009
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Disclaimer
This presentation may include oral and written “forward-looking statements” with respect to certain of Aviva’s plans and its current goals and expectations relating to its future financial condition, performance and results. These forward-looking statements sometimes use words such as ‘anticipate’, ‘target’, ‘expect’, ‘estimate’, ‘intend’, ‘plan’, ‘goal’, ‘believe’ or other words of similar meaning. By their nature, all forward-looking statements involve risk and uncertainty because they relate to future events and circumstances which may be beyond Aviva’s control, including, among other things, UK domestic and global economic and business conditions, market-related risks such as fluctuations in interest rates and exchange rates, the policies and actions of regulatory authorities, the impact of competition, the possible effects of inflation or deflation, the timing impact and other uncertainties relating to acquisitions by the Aviva Group and relating to other future acquisitions or combinations within relevant industries, the impact of tax and other legislation and regulations in the jurisdictions in which Aviva and its affiliates operate, as well as the other risks and uncertainties set forth in our 2008 Annual Report to Shareholders. As a result, Aviva’s actual future financial condition, performance and results may differ materially from the plans, goals and expectations set forth in Aviva’s forward-looking statements, and persons receiving this presentation should not place undue reliance on forward-looking statements.
Aviva undertakes no obligation to update the forward-looking statements made in this presentation or any other forward-looking statements we may make. Forward-looking statements made in this presentation are current only as of the date on which such statements are made.
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Overview
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10%
40%
£30
£60
FY 2000 FY 2008
An increasingly global company
(1) 2008 total long-term savings new business sales and G.I. and health net written premiums
34%
34%
24%5%
42%
26%
11%
14%
7% 22%General
Insurance
78%Long Term
Savings
FY 2008 sales £51.4bn (1)
Asia Pacific
North America
UK Life
Europe
UK GI
billion
billion
3%
-
General Insurance
Long Term savings
Composite
Manage the composite portfolioDiversity, cash flow, resilient product range
-
Bancassurance
Direct Sales
Independent Agents
Multi-distribution
Increase customer reachAccess to customers through preferred channels
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Key financials - FY 2008 / Q1 2009
• Strong Full year 2008 operating results• Life & pensions sales up 11% to £36,283m
• General insurance result improved and combined operating ratio on target at 98%
• Operating profits: IFRS up 4% to £2,297 million and MCEV up 10% to £3,358 million
• Total profits impacted by adverse investment variances
• Full year 2008 dividend maintained at 33.0p
• Resilient Q1 2009 trading • Q1 2009 life and pension sales up 11%, with margins maintained
• Group COR in line with 98% “meet or beat” target
• Strong balance sheet• Strengthened reserves and provisions, with immaterial actual losses to date
• IGD surplus of £2.5 billion at 31 March 2009, with increased equity hedging – 40% fall reduces surplus by £200m, 40% rise increases surplus by £800m
• Net asset value per share at 31 December 2008: IFRS 416p and MCEV 486p
• Consistent strategy, with focus on capital management
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The right strategy
Purpose
Prosperity &peace of mind
Strategic priorities
• Manage composite portfolio
• Build global Asset Management
• Allocate capital rigorously
• Increase customer reach
• Boost productivity
Targets
Vision
One Aviva,twice the value
• 98% meet or beat COR• £500m cost savings by
2010• Double IFRS EPS by
2012 at the latest• 1.5 – 2 x dividend cover
on IFRS post tax operating earnings
UKMarket leadership●Address legacy● Transform business
model ●Exploit UK synergies●Generate capital
N. America● Optimise business
mix, growth & margin● Generate net capital
returns● Contribute to doubling
IFRS EPS by 2012
EuropeScale, growth, capital●Seize unique growth
opportunities● Leverage scale●Generate capital
Asia PacificScale, growth● Prioritised portfolio● Regional operating
model● Investment required
Asset ManagementAsset ManagementAviva Investors
• Globally integrated business • Transform the investment model • Increase third party business
• Focus on target to double IFRS EPS by 2012
• Increasing emphasis on capital efficiency
• Decreasing emphasis on sales targets
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Strong presence in our home market
Competitive strength from market leadership in the UK
• Half of IFRS regional operating profits derived from UK businesses
UK Life• Highest ever sales in 2008
• UK Life market share jumped 3% to 14% in Q4 2008
• 6 May investor day
UK GI• Transformational change progressing
• Visible signs of rate hardening
• Voted General Insurer of the year for sixth year running
2008 IFRS operating profit
by region
UK Life & GI
Europe North America, Asia Pacific & Aviva Investors
£m
-1000
0
1000
2000
3000
Central charges
-
UK General Insurance
-
UK General insurance
Strategy
• There are 7 strategic priorities:
• Win the Customer• Win the Broker• Building Core Insurance Capability• Claims Inflation Busting• Delivering the Promise of Scale• Lean Manufacturing• Win our People
2008 Performance (UKGI only)
• General insurance operating profit of £566m
• General insurance COR of 99% (2007: 106%)
• General insurance net written premiums (NWP) of £4,981m (2007: £5,440m), down 8%
• Expense ratio improved to 12.1% (2007: 13.9%), reflecting benefits from cost saving initiatives
Current position
• Operates in the mature UK market• Aviva UKGI enjoys a 14% market share - the largest UK
P&C insurer• Top one or two position in all our major classes• Focus on insurance excellence• Generation of capital and cashflow for Aviva
Diversified portfolio
Diversified portfolio of products and distribution channels
Commercial - Broker
Commercial - Other
Personal - Broker
Personal - Partnership
Personal - Direct
RAC income stream
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DIRECT BROKERS PARTNERS
#1 in the SME market
Insurer of the year 2003 to 2008
… over 100 othersPowerful brands
3,000 brokers
Unparalleled customer reach
RAC - Best roadside assistance provider 2006 to
2008
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Delivering the Promise of Scale• Sub 11% expense ratio• Halve IT costs• Exploit UK synergies
Lean Manufacturing• Mass customisation• Service & process centre reengineering
Win the Customer• NUD fightback• RAC membership• Partnerships moments of truth
Win the Broker• War for distribution
Building Core Insurance Capability• Sophisticated pricing• Rating leadership• Price & product optimisation
Claims Inflation Busting• Sustainable benefits year on year
UKGI’s 7 strategic priorities
Win our People• No1 for employees• Build core insurance skills• Pride & passion for insurance
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UKGI’s 7 strategic priorities
RESHAPING THE BOOK
BUILDING CORE INSURANCE CAPABILITY
DELIVERING THE PROMISE OF SCALE
Win our People• No1 for employees• Build core insurance skills• Pride & passion for insurance
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Reshaping the book
PERSONAL LINESMulti channel approachDirect means directRAC Panel for aggregatorsRe‐grow with brokersPrice competitive sophisticated pricing
COMMERCIAL LINESGrow small/medium independent brokersReduce commission significantlyRaise rates significantlyRetain Insurer of the Year – for 7th year
ProductsPubs restaurants RAC
RESCUEManufacturing & wholesaling
Shop & salon
Property owners
Self employed
Office surgery
Sustainable growth and sustainable distribution cost
• Profitable & growing medium sized brokers• Unique package • Increase market share
With Mass Customisation we can point everyone to the same engine and each "partner"
will get the correct product and price.
Direct is ‘Direct’
Leverage Membership Panels / Aggregators
Partners: Moments of Truth
Personal Lines: A Crystal-Clear Strategy
3rd Party Data
All web applications are built on the“NUD in a Box”standard
All partner integrationis provided using “NUD in a Pipe”
WebApplication
IntegratedPartner
Application3rd Party Data
AvivaWeb
Call CentreScreens
PolicyAdministration Real-time
Pricing
PartnerIntegration
PartnerWebs
RAC Panel
Store QTE
DataFeedsPrice
RiskBrokerWebs
Small Brokers & National Accounts
BrokerIntegration
Quote
MI
MTA
NB
Brokers e-platform
Platinum CoverGold CoverValue CoverBuildings & ContentsSums InsuredSpecified Inner LimitsFrozen Food
Blanket Higher
Inner Li
mitUnlimited
Blanket BlanketHigher Inne
r Limi
t
Low Inne
r Limi
t£400 Limit £200 Limit
Loss of rent and a
£12,000 Limit£6,000 LimitUnlimited £1,000
£1,000
Single Product Platform
Single Process
One Price List
Common Pricing/Products
Financial strength & reassurance
Truly global peer groupLeveraged marketing
Direct Fightback
• Direct is direct• Sophisticated pricing
Panel
• 11 panel insurers• 30-40% share
Moments of Truth • Profitable & growing smaller brokers• Unique package • Increase market share
‘Fast Trade’• e-broking portal
• Straight thro processing
• Fast referrals
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Reshaping the bookSummary
By 2011 our UKGI book will have changed…
• Direct grows
• Brokers grow
• Partnerships fall
• RAC steady in Rescue but doubles in size for insurance
• Motor grows
• Home falls
• Creditor falls
• Commercial lines grow
Right balance of volume and profit
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Personal Lines – transforming pricing
Commercial Lines – transforming underwriting
Price Optimisation
Sep ’08
Make/ModelVogueVogue SEHSTHSEHST SCHSE SC
3rd Party Data
CUE
Investment in underwritingInsight on geographical risk
Hawkeye
Total PremiumTotal
PremiumTotal Premium
Mass Customisation
Mar ’09 Multi Peril
Total Premium
Combined peril
Multi peril
ACC DAMAGE3rd PTY INJURY
3rd PTY DAMAGE
Total Premium
Building core insurance capability
Credit
5%
7%
9%
11%
13%
15%
17%
19%
21%
1 2 3 4 5 6 7 8 9 10
Freq
uenc
y
50%
60%
70%
80%
90%
100%
110%
120%
Loss
Rat
io
Loss Ratio - Retro Sep 08 Written FrequencyARI Segment
5%
7%
9%
11%
13%
15%
17%
19%
21%
1 2 3 4 5 6 7 8 9 10
Freq
uenc
y
50%
60%
70%
80%
90%
100%
110%
120%
Loss
Rat
io
Loss Ratio - Retro Sep 08 Written FrequencyARI Segment
Sep ’08 MotorDec ’08 Home
Rating
5pts improvement in 2008Trend positive so far Q1 ‘09
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
Jan-07
Feb-07
M ar-
07Apr
-07M a
y-07
Jun-07
Ju l-07
Aug-07
Sep-07
Oc t-07
N ov-07
Dec-07
Jan-08
Feb-08
M ar-
08Apr
-08M a
y-08
Jun-08
Ju l-08
Aug-08
Sep-08
O c t-08
Nov-08
D ec-08
Jan-09
Feb-09
M ar-
09Apr
-09
PROPERTY LIABILITY (Incl PI) MOTOR (Fleet/Minifleet) ZERO
Commercial Rates to Apr ‘096.3%
5.7%3.0%
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
Jan-07
Feb-07
M ar-
07Apr
-07M a
y-07
Jun-07
Ju l-07
Aug-07
Sep-07
Oc t-07
N ov-07
Dec-07
Jan-08
Feb-08
M ar-
08Apr
-08M a
y-08
Jun-08
Ju l-08
Aug-08
Sep-08
O c t-08
Nov-08
D ec-08
Jan-09
Feb-09
M ar-
09Apr
-09
PROPERTY LIABILITY (Incl PI) MOTOR (Fleet/Minifleet) ZERO
Commercial Rates to Apr ‘096.3%
5.7%3.0%
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
CTB Other
GW
P (£
M)
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
140.0%
160.0%3-
Year
Cor
e Cl
aim
s Ra
tio
GWP 3-Year Core ECR
Cleanse the Book
Exit 60% & carry 30% rate uplift on rest
Monitor, MentorMeasure
Case level management
TOTAL IB
Region 2 Yr GWP2 Yr Core
NECR 2 Yr GWP2 Yr Core
NECR 2 Yr GWP2 Yr Core
NECR 2 Yr GWP2 Yr Core
NECR 2 Yr GWP2 Yr Core
NECR 2 Yr GWP2 Yr Core
NECR 2 Yr GWP2 Yr Core
NECR 2 Yr GWP2 Yr Core
NECR 2 Yr GWP2 Yr Core
NECRSouth £71.9 28.7% £8.8 52.7% £64.6 28.3% £24.5 46.1% £29.2 28.2% £39.7 56.2% £0.8 39.7% £10.6 29.5% £41.0 51.0%West & South Wales £8.7 30.0% £9.9 60.6% £62.9 39.5% £29.8 59.8% £27.9 33.9% £41.2 58.3% £4.3 55.3% £8.7 32.8% £38.8 41.5%London City £72.5 30.1% £41.9 40.0% £41.0 28.0% £10.2 46.3% £32.7 24.2% £14.9 69.9% £9.4 68.8% £3.0 44.4% £19.0 46.2%London NB £112.3 23.3% £8.5 66.7% £61.2 33.8% £5.5 28.1% £43.1 19.6% £5.8 84.4% £1.7 55.4% £12.3 31.0% £8.5 34.7%Midlands £11.0 29.3% £6.5 50.6% £50.7 42.3% £24.0 51.5% £26.7 27.7% £33.6 63.1% £1.4 39.7% £6.4 37.4% £20.2 46.3%Scotland & NI £11.6 40.1% £16.4 35.3% £50.1 38.0% £23.0 60.0% £37.2 32.5% £28.0 51.0% £11.7 49.8% £11.3 41.7% £36.6 47.4%North East £25.8 44.1% £12.3 51.1% £55.6 42.2% £16.3 57.9% £16.8 27.0% £29.0 60.2% £1.7 43.3% £11.7 30.7% £21.4 44.2%North West £35.1 36.1% £3.6 19.6% £47.7 36.4% £20.4 57.9% £15.4 18.9% £32.6 54.6% £3.3 46.4% £4.1 30.4% £16.0 48.9%East £20.0 65.3% £24.1 46.0% £42.1 28.5% £19.3 33.1% £31.3 55.7% £22.0 49.2% £7.4 76.5% £1.3 50.1% £15.9 45.4%National Accounts £2.0 38.5% £115.1 33.1% £9.9 43.2% £3.0 51.6% £8.9 13.0% £6.5 75.3% £12.7 67.4% £2.1 36.3% £5.0 45.7%Leicester NB £4.5 37.9% £0.0 0.0% £23.8 47.1% £7.0 106.6% £10.8 48.0% £13.5 67.1% £0.6 96.4% £12.0 30.2% £10.2 30.5%Birmingham NB £5.6 37.4% £5.8 24.3% £24.7 42.9% £1.8 52.9% £4.4 32.4% £5.2 72.0% £0.1 12.5% £4.2 32.5% £2.0 27.1%ManchesterNB £1.0 32.7% £0.1 1.2% £19.6 39.0% £1.8 26.3% £1.1 23.7% £2.7 64.2% £0.0 0.0% £3.3 17.2% £2.5 20.7%Glasgow NB £0.0 5.3% £0.0 0.0% £14.9 47.2% £1.2 26.6% £10.3 31.4% £2.8 52.0% £1.3 18.6% £5.2 22.7% £0.9 16.0%Unallocated £3.4 8.3% £0.0 0.0% £3.7 22.3% £1.5 20.9% £1.5 4.3% £2.7 59.3% £0.8 65.7% £0.0 0.0% £0.1 408.3%Belfast NB £0.2 40.8% £0.0 0.0% £5.1 31.0% £2.9 110.9% £3.1 15.4% £1.4 48.3% £0.1 98.8% £1.5 24.0% £2.1 33.9%Total £386.4 31.9% £252.9 39.8% £577.8 36.4% £192.2 53.4% £300.5 30.0% £281.8 59.2% £57.5 59.7% £97.9 32.7% £240.2 44.8%
2009 Plan Core NECR 32.0% 37.8% 38.0% 42.5% 32.2% 46.0% 47.3% 37.9% 38.7%
Key :NECR worse than Target by 5% pointsNECR within +/- 5% points of TargetNECR better than Target by 5% points
Red Rate Target £69.6 10.1% £70.1 6.6% £48.7 10.3% £128.1 10.2% £42.0 12.6% £230.4 7.7% £37.1 6.1% £4.3 6.3% £175.3 4.8%Amber Rate Target £200.1 6.9% £173.3 6.4% £372.5 6.2% £34.8 9.2% £135.8 6.9% £51.4 7.7% £16.7 6.0% £19.8 6.3% £49.4 4.8%Green Rate Target £115.7 5.0% £9.5 5.0% £156.6 5.0% £29.3 5.0% £122.7 5.0% £0.0 7.7% £3.7 5.0% £73.7 6.3% £15.6 4.8%
Overall Rate Target £385.4 6.9% £252.9 6.4% £577.8 6.2% £192.2 9.2% £300.5 6.9% £281.8 7.7% £57.5 6.0% £97.8 6.3% £240.2 4.8%
CHC
Large Property Owners General Combined
OSP/PRP etcCMT CMEAGRCCI CTC
Construction Combined
Commercial Property OwnersComplex Schemes
CHC CPO
Motor Trade AgricultureGeneral Commercial
Combined (legacy Bonus)
Package Products
Monitor, MentorMeasure
Case level management
TOTAL IB
Region 2 Yr GWP2 Yr Core
NECR 2 Yr GWP2 Yr Core
NECR 2 Yr GWP2 Yr Core
NECR 2 Yr GWP2 Yr Core
NECR 2 Yr GWP2 Yr Core
NECR 2 Yr GWP2 Yr Core
NECR 2 Yr GWP2 Yr Core
NECR 2 Yr GWP2 Yr Core
NECR 2 Yr GWP2 Yr Core
NECRSouth £71.9 28.7% £8.8 52.7% £64.6 28.3% £24.5 46.1% £29.2 28.2% £39.7 56.2% £0.8 39.7% £10.6 29.5% £41.0 51.0%West & South Wales £8.7 30.0% £9.9 60.6% £62.9 39.5% £29.8 59.8% £27.9 33.9% £41.2 58.3% £4.3 55.3% £8.7 32.8% £38.8 41.5%London City £72.5 30.1% £41.9 40.0% £41.0 28.0% £10.2 46.3% £32.7 24.2% £14.9 69.9% £9.4 68.8% £3.0 44.4% £19.0 46.2%London NB £112.3 23.3% £8.5 66.7% £61.2 33.8% £5.5 28.1% £43.1 19.6% £5.8 84.4% £1.7 55.4% £12.3 31.0% £8.5 34.7%Midlands £11.0 29.3% £6.5 50.6% £50.7 42.3% £24.0 51.5% £26.7 27.7% £33.6 63.1% £1.4 39.7% £6.4 37.4% £20.2 46.3%Scotland & NI £11.6 40.1% £16.4 35.3% £50.1 38.0% £23.0 60.0% £37.2 32.5% £28.0 51.0% £11.7 49.8% £11.3 41.7% £36.6 47.4%North East £25.8 44.1% £12.3 51.1% £55.6 42.2% £16.3 57.9% £16.8 27.0% £29.0 60.2% £1.7 43.3% £11.7 30.7% £21.4 44.2%North West £35.1 36.1% £3.6 19.6% £47.7 36.4% £20.4 57.9% £15.4 18.9% £32.6 54.6% £3.3 46.4% £4.1 30.4% £16.0 48.9%East £20.0 65.3% £24.1 46.0% £42.1 28.5% £19.3 33.1% £31.3 55.7% £22.0 49.2% £7.4 76.5% £1.3 50.1% £15.9 45.4%National Accounts £2.0 38.5% £115.1 33.1% £9.9 43.2% £3.0 51.6% £8.9 13.0% £6.5 75.3% £12.7 67.4% £2.1 36.3% £5.0 45.7%Leicester NB £4.5 37.9% £0.0 0.0% £23.8 47.1% £7.0 106.6% £10.8 48.0% £13.5 67.1% £0.6 96.4% £12.0 30.2% £10.2 30.5%Birmingham NB £5.6 37.4% £5.8 24.3% £24.7 42.9% £1.8 52.9% £4.4 32.4% £5.2 72.0% £0.1 12.5% £4.2 32.5% £2.0 27.1%ManchesterNB £1.0 32.7% £0.1 1.2% £19.6 39.0% £1.8 26.3% £1.1 23.7% £2.7 64.2% £0.0 0.0% £3.3 17.2% £2.5 20.7%Glasgow NB £0.0 5.3% £0.0 0.0% £14.9 47.2% £1.2 26.6% £10.3 31.4% £2.8 52.0% £1.3 18.6% £5.2 22.7% £0.9 16.0%Unallocated £3.4 8.3% £0.0 0.0% £3.7 22.3% £1.5 20.9% £1.5 4.3% £2.7 59.3% £0.8 65.7% £0.0 0.0% £0.1 408.3%Belfast NB £0.2 40.8% £0.0 0.0% £5.1 31.0% £2.9 110.9% £3.1 15.4% £1.4 48.3% £0.1 98.8% £1.5 24.0% £2.1 33.9%Total £386.4 31.9% £252.9 39.8% £577.8 36.4% £192.2 53.4% £300.5 30.0% £281.8 59.2% £57.5 59.7% £97.9 32.7% £240.2 44.8%
2009 Plan Core NECR 32.0% 37.8% 38.0% 42.5% 32.2% 46.0% 47.3% 37.9% 38.7%
Key :NECR worse than Target by 5% pointsNECR within +/- 5% points of TargetNECR better than Target by 5% points
Red Rate Target £69.6 10.1% £70.1 6.6% £48.7 10.3% £128.1 10.2% £42.0 12.6% £230.4 7.7% £37.1 6.1% £4.3 6.3% £175.3 4.8%Amber Rate Target £200.1 6.9% £173.3 6.4% £372.5 6.2% £34.8 9.2% £135.8 6.9% £51.4 7.7% £16.7 6.0% £19.8 6.3% £49.4 4.8%Green Rate Target £115.7 5.0% £9.5 5.0% £156.6 5.0% £29.3 5.0% £122.7 5.0% £0.0 7.7% £3.7 5.0% £73.7 6.3% £15.6 4.8%
Overall Rate Target £385.4 6.9% £252.9 6.4% £577.8 6.2% £192.2 9.2% £300.5 6.9% £281.8 7.7% £57.5 6.0% £97.8 6.3% £240.2 4.8%
CHC
Large Property Owners General Combined
OSP/PRP etcCMT CMEAGRCCI CTC
Construction Combined
Commercial Property OwnersComplex Schemes
CHC CPO
Motor Trade AgricultureGeneral Commercial
Combined (legacy Bonus)
Package Products
-
ARI Segment
5%
7%
9%
11%
13%
15%
17%
19%
21%
1 2 3 4 5 6 7 8 9 10
Freq
uenc
y
50%
60%
70%
80%
90%
100%
110%
120%
Loss
Rat
io
Loss Ratio - Retro
• Expected loss ratio based on 2005 / 06 sample used as to assess ARI benefit• Actual Written frequency of policies written in September 08
Building core insurance capabilityAviva Risk Index
Expected loss ratio vs actual frequency
Sep 08 Written Frequency
ARI Segment
-
• Retention rate is overall retention between February and April 2009• Cancellation rate for new business written in October
Retention & cancellations
Building core insurance capabilityAviva Risk Index
0%
5%
10%
15%
20%
25%
30%
35%
1 2 3 4 5 6 7 8 9 10Ritz Se gm e nt
Canc
ella
tion
Rat
e
50%
55%
60%
65%
70%
75%
Ret
entio
n Ra
te
NB Cancellation Rate (Oct 08) Retention Rate (Feb - Apr 09)
ARI Segment
-
Demonstrating leadership in the market
Signs of hardening but market remains tough
Building core insurance capabilityRating
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
Jan-0
7Fe
b-07
Mar-0
7Ap
r-07
May-0
7Ju
n-07
Jul-0
7Au
g-07
Sep-0
7Oc
t-07
Nov-0
7De
c-07
Jan-0
8Fe
b-08
Mar-0
8Ap
r-08
May-0
8Ju
n-08
Jul-0
8Au
g-08
Sep-0
8Oc
t-08
Nov-0
8De
c-08
Jan-0
9Fe
b-09
Mar-0
9Ap
r-09
PROPERTY LIABILITY (Incl PI) MOTOR (Fleet/Minifleet) ZERO
Commercial Rates to Apr ‘096.3%
5.7%3.0%
-
Delivering the promise of scale
c900 Applications
-
Delivering the promise of scaleTwo major programmes
Operations2010
IT2010
Perth
StretfordManchester
NorwichCheadle
BishopbriggsPerth
Stretford
Norwich
Bishopbriggs
Pune
Bangalore
Personal
Commercial
Mixed
Southend
Manchester
Leicester
Perth
StretfordManchester
NorwichCheadle
BishopbriggsPerth
Stretford
Norwich
Bishopbriggs
Pune
Bangalore
Personal
Commercial
Mixed
SouthendSouthend
ManchesterManchester
LeicesterLeicester
NoidaNoida
Migration to Centres of Excellence on schedule – 60% in place10 major processes redesigned & in implementation, e.g. motor claims, with Q1 technology release completedContinuous improvement capability implemented to support new processesAnnualised savings tracking to plan with costs also on targetService levels maintained or improved through transition
Professional Broking Sentiment Survey no1, May ’09Direct/RAC customer satisfaction ahead of 2008 for Q1 ‘09
2007 2008 2009 2010 2011
£355m £258m £210m £180m £
-
Inflation
C&E £38m
One-offs
09 & 10 Inflation
One-offs
Phase 2
Cost
£150m
Phase1 Cost
Reduction
2007 20102008 FY
-
“ Building Aviva from the inside out “
… and as we became Aviva in the UK
• >80% awareness in 4 months
• 16,000 pieces of literature reviewed & >40% made obselete
GENERAL
• 3,000 managers attended ‘This is Our Story’ cinema presentations
• All staff involved in ‘This is Us’ team sessions
EMPLOYEES
“Get me”
“Get the plot”
“Get it done”
• GI - 3,000 brokers contacted• Life - 30k distributors contacted
BROKERS/IFAs
• Communicated to 9m GI / 7m Life customers
• New aviva.com/.co.uk
• >40 websites rebranded
CUSTOMERS
-
Summary
2011
37.2%
25.1%
12.1%
2008
39.8%
25.9%
13.9%
2007
Commission
Total Distn
Expenses
10 point improvement
…”sub 11%”…
…” targeted commission action”…
30% world
Loss Ratio 66.0% 62.1% … “sophisticated pricing”…
… “disciplined underwriting”…
Focus on Profit
-
Investor PresentationMay 2009