Aviva Plc · LSE:AV.
Aviva — CA Cheuvreux Conference 2009
16 slides from Aviva's conference presentation, Dec 19, 2009
Slide 1: CA Cheuvreux Conference: Shaping the Business Model for the Future
2009 CA Cheuvreux Conference Shaping the Business Model for the Future Mark Hodges Chief Executive Officer, UK & Aviva plc Board Member 1
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: 2 years into our 5 year strategy
2 years into our 5 year strategy Purpose Prosperity & peace of mind Vision One Aviva, twice the value Strategic Targets priorities • Manage composite • 98% meet or beat COR portfolio • £500m cost savings by 2010 • Build global Asset • Double IFRS EPS by 2012 at Management the latest • Allocate capit
Slide 4: An increasingly global company
An increasingly global company £30 billion H1 2009 sales £24.4bn (1) Asia Pacific 6% 20% 10% General North America 17% Insurance UK GI 9% £15 billion UK Life 21% 80% Long 5% 5% Term 24% Savings Europe 47% 32% 40% 34% H1 2000 H1 2009 (1) 4 Total long-term savings new business sales and G.I. and healt
Slide 5: Delivering against a consistent strategy
Delivering against a consistent strategy • A strong balance sheet – £3.7 bn solvency surplus* – Untouched provisions of £1.1 bn • Increasing profitability through operational improvements – Focus on margins and profitability over sales – Strong cost management – UK and Europe opportunities • Realloc
Slide 6: Focus on margins vs sales
Focus on margins vs sales Life and Pensions margins maintained Sales £18.2bn £17.5bn NA/Asia NA/Asia £3.1bn £15 bn £3.9bn Europe Life • 2.1% margin retained at Q309 Europe 36% • 19% local currency reduction in sales at Q309 due to a £7.0bn Europe 33% combination of market conditions and management £
Slide 7: Focus on profitability vs premiums
Focus on profitability vs premiums General Insurance COR maintained NWP £5.1bn £5 bn £4.9bn NA/Asia £0.8bn NA/Asia £0.9bn Europe • 98% COR achieved at Q309 £1.0bn Europe Life Europe • Cost and commission action taken to build sustainable 36% DL £1.1bn profitability £3 bn £ 0.5bn 33% DL • Some rating
Slide 8: 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 9: A clear strategy to exploit the European opportunity
A clear strategy to exploit the European opportunity Quantum Leap – ‘game changing’ for the industry Aviva Europe Delta Lloyd IPO – ‘strategic management’ • Total gross cash proceeds c £1billion for a 41% stake • Significant strategic milestone • Enhances value and liquidity of retained stake in Del
Slide 10: Europe - Aviva is uniquely positioned
Europe - Aviva is uniquely positioned Region Aviva Strengths in 15 markets Share of GDP L&P PVNBP GI NWP H1 09 €m H1 09 €m France 14.5% Top 10 2,733 631 Covering 80% of GDP and premium Ireland 1.4% Top 5 478 Top 5 294 Italy 11.7% Top 10 2,461 190 Lithuania 0.2% Top 5 49 - Poland 2.7% Top 5 572 20 Ru
Slide 11: Aviva Europe's Quantum Leap
Aviva Europe’s Quantum Leap From To Twelve federated businesses One Pan European Business One Head Office Pan European distribution organisation Customer centric product catalogue Multiple, complex products and shorter time to market Multiple systems Shared systems and processes and processes Simpli
Slide 12: UK Life
UK Life Driving profitability and generating capital 2005 2008 +/- • Management action taken on product mix, Life & Pensions sales increased pricing sophistication, reduced £9,185m £11,669m +27% commissions and expenses (PVNBP) (1) • Continuation of simplification programme Life & Pensions 2.9% 3.5%
Slide 13: UK GI
UK GI Transforming the business HY1 08 HY1 09 +/- • Execution of strategy is improving the Net written premium £2,589m £2,049m -21% quality of earnings COR 98% 99% +1pps • Actively exiting poor performing business Current year profit (1) £142m £159m +12% • Rating increases above inflation on all maj
Slide 14: The UK opportunity
The UK opportunity • Uniting the businesses under one brand • Creating a unified and consistent customer and distributor experience • Harnessing our combined scale to optimise relationships with suppliers and partners • Inspiring and developing our people in a united business 14
Slide 15: Delivering against a consistent strategy
Delivering against a consistent strategy • A strong balance sheet – £3.7 bn solvency surplus – Untouched provisions of £1.1 bn • Increasing profitability through operational improvements – Focus on margins and profitability over sales – Strong cost management – UK and Europe opportunities • Realloca
Slide 16: Questions
Questions 16