Aviva Plc · LSE:AV.
Aviva — Investor Day (November 2017)
32 slides from Aviva's investor day presentation, November 2017
Slide 1: Cash flow plus growth…Upgraded – Capital Markets Day 2017
Aviva plc Cash flow plus growth…Upgraded Capital Markets Day 2017
Slide 2: Disclaimer
Disclaimer Cautionary statements: This should be read in conjunction with the documents distributed by Aviva plc (the “Company” or “Aviva”) through The Regulatory News Service (RNS). This presentation contains, and we may make other verbal or written “forward-looking statements” with respect to cert
Slide 3: Adam Uszpolewicz, CEO Poland
Adam Uszpolewicz Chief Executive Officer, Poland
Slide 4: 2017: strong economic fundamentals
2017: strong economic fundamentals Economy Global wealth Unemployment Demographics Index** rate 4.7% 18% 38m 6.8% #8 economy in EU* YoY increase, #6 in EU*, 25-40 #1 in CEE Lowest since 1991 years old dominant top result 40 *Eurostat **Global Wealth report 2017, Credit Suisse Research Institute
Slide 5: Attractive insurance market
Attractive insurance market Insurance premium penetration vs GDP per capita 45,000 Austria 40,000 United Kingdom Germany GDP per capita (USD thousands) 35,000 France 30,000 Italy 25,000 Czech Republic Spain ROE 20,000 15,000 Hungary Poland 10,000 5,000 0 0 1 2 Poland 1991 3 4 5 6 7 8 9 10 11 14%* In
Slide 6: Aviva Poland doubled share of market profit
Aviva Poland doubled share of market profit HY17 adjusted net income* Aviva profit pool market share (Life + GI) 19% 9% 57% 15% 15% 12% 7% PZU Aviva Talanx Other FY07 FY12 HY17 ‘Other’ comprise insurers with less than 3% share 42 *Data in accordance with Polish GAAP representing net result corrected
Slide 7: Aviva Poland track record with strong credentials
Aviva Poland 25 year track record with strong credentials Aviva Poland with balanced profit source Further growth initiatives Expander GI (2015) (1992) Investment platform #2 #14 BZ WBK- Life Allsurance Aviva (Combined life and P&C) (1992) (2008) Pension #1 #2 (1998) New bancassurance deals #2 Aviva
Slide 8: Diversified distribution
Diversified distribution Distribution mix Leading position in each channel by premium income 4% Agency Bancassurance Direct Expander 8% 1% • One of the BZ WBK • 105 people in • #2 IFA market 20% largest direct salesforce player • #3 largest bank networks on the in Poland • 270 agents market • >700 b
Slide 9: Aviva Poland becoming a digital leader
Aviva Poland becoming a digital leader • Simple sales path • One portal for all products, first on • E-proposals & auto underwriting the market • Information on transactions and • Possibility of simple rider upsell policies • Self service • Client relationship history • Real time contact 45
Slide 10: Strong and stable financial performance
Strong and stable financial performance Operating profit Cash remittances PLNm Regulatory impact PLNm 1,009 761 923 778 617 257 815 555 120 471 423 450 804 752 833 483 (55) (33) FY13 FY14 FY15 FY16 HY17 FY13 FY14 FY15 FY16 HY17 Life value of new business GI COR PLNm 378 335 345 95.2% 96.0% 96.1% 94.
Slide 11: Patrick Dixneuf, CEO France
Patrick Dixneuf Chief Executive Officer, France
Slide 12: France strengthening its attractiveness
France strengthening its attractiveness Macron’s pro Economy Digital Demographics business agenda in Europe Labor law High internet #2 #5 in the world* 86% penetration rate* 67m Population* Tax overhaul purchased online birth rate AA credit rating** Big shift in confidence 66% within last 12 mths *
Slide 13: Insurance market with positive long term drivers
Insurance market with positive long term drivers #2 insurance market in Europe*: c€210bn premiums** (FY16) Growth drivers GI, Health & Protection growing** Upgraded growth outlook 3% 5% + Positive economic outlook 25% 31% 71% 64% Protection GI & Health +2.2% +2.7% +3.0% + High savings rate Savings -
Slide 14: Private sector incumbents driving digital transformation
Private sector incumbents driving digital transformation Only bancassureurs & insurers captured Digital at heart of market transformation market growth in 2015 2014-15 premium growth by insurance providers* • ‘Hybrid’ market: intermediated & digital 5.9% 4.5% 4.2% • Digital: 3% in Life, 2.5% Motor,
Slide 15: Aviva France: where are we today?
Aviva France: where are we today? 2nd Contributor to Group* GI & Health (FY16 GWP) : €1.5bn Life PVNBP (FY16) : €4.7bn** Agri Other FY16 VNB: €231m** 2% Motor personal 9% With profit €30m 25% 13% Pro / SME 28% Protection 42% 16% €96m Household 20% 45% Unit Linked Health (pro & part) €105m P&C premiu
Slide 16: 2017-18 Fix & Focus
2017-18 Fix & Focus Capital optimisation Cost Discipline & Not Everywhere Culture change Technical Excellence DVA application in progress Cost control Governance re-design Antarius French supplementary Transformation discipline Space to Lead Health Brokerage pension funds (FRPS*) New funds to boost
Slide 17: Leadership in distribution channels
Leadership in 5 distribution channels Life & GI Direct Agents brokers France Asset Mgt 215 k 435 k 220 k 1,215 k 190 k 465 k Savers’ & customers customers customers customers customers customers association Real Estate Rank #2nd #1st #1st #4th #2nd #1st #7th €104bn AuM % IFRS OP 2% 6% 16% 22% 21% 33
Slide 18: Simplified strategy: Single Brand, Customer, Propositions
Simplified strategy Single 1 Brand 4 Customer Propositions 54
Slide 19: Strategic repositioning to build long term growth
Strategic repositioning to build long term growth For customers For Pros. & For Mass Affluent For Partners valuing looking for simple individuals looking looking for top-class Aviva’s technical Direct digital solutions Proximity for advice Wealth service quality Partners excellence Existing 800,000
Slide 20: A turning point in 2016… & a growth engine to be amped up
A turning point in 2016… & a growth engine to be amped up Operating profit Cash remittances €m SI SII +6% p.a. (5)% SII cover ratio 120% 130% €m +9% p.a. FY16 HY17 25 50 551* 582* 620 586 274 346 377 231 +19% 317 247 FY13* FY14* FY15 FY16 HY16 HY17 FY13 FY14 FY15 FY16 FY17e** Antarius (6mths 2016; 3
Slide 21: Aviva France at a glance
Aviva France at a glance Market with #2 contributor to Transformed boosted appeal Group strategy #2 in Europe +19% HY17 operating profit 1 brand, 4 propositions Positive macro outlook Leadership in 5 distribution channels Digitalisation across all Favourable insurance drivers channels Strong TCC cap
Slide 22: Greg Somerville, President and CEO, Canada
Capital Markets Day Greg Somerville Aviva Canada 30 November 2017 President and CEO, Canada Greg Somerville President and CEO, Canada
Slide 23: Canada: solid economic, political and regulatory environment
Canada: solid economic, political and regulatory environment Political Regulatory Economy Demographics environment landscape Prudential - stable #10 largest economy* 36m Stable population AAA credit rating (S&P) Provincial - regulated for auto * Worldbank data 5959
Slide 24: Canadian P&C Industry: ongoing consolidation
Canadian P&C Industry: ongoing consolidation Market share Consolidation 2012 2016 Vertical Acquirers Acquisitions Integrator 17% 17% 8% 36% 47% 11%* 7% 6% 9% 6% 4% 4% 5% 5% 6% 6% Intact TD Insurance Economical Aviva Wawanesa All others RSA Desjardins 60 * Proforma – includes RBC; Source: MSA, IBC, D
Slide 25: National scale, product breadth, diversified distribution
National scale, product breadth, diversified distribution Product Mix* GWP by Channel** 21% 25% 18% 26% 9% 9% 8% 23% 25% 82% 66% 47% 41% Aviva Industry Aviva Industry Commercial P&C Personal property Direct Agency Brokers Commercial auto Personal auto *GWP by Distribution Channel & Product Mix as of
Slide 26: Growth driven by RBC partnership
Growth driven by RBC partnership Successful integration gathering momentum • Powerful Brand and Network • Product breadth and depth Combined scale and capabilities driving • Strong Sales Force • IT platform investment efficiencies and • Limited Product Offering • Global GI/Partnership expertise prof
Slide 27: High return on capital, stable cash generator
High return on capital, stable cash generator Strong remitter of cash to group 17.3% 16.7% 15.9% 14.8% 486 395 418 347 230 265 241 230 FY13 FY14 FY15 FY16 Operating profit C$ Net cash remittance C$ Return on equity * 63 *Operating profit after tax/average Shareholder funds
Slide 28: Consistently outperformed peer group
Consistently outperformed peer group COR – Aviva vs market 99.4% 99.7% 98.9% 97.7% 98.4% 96.1% 94.6% 93.8% 94.9% 94.6% FY13 FY14 FY15 FY16 HY17 Aviva Canada Industry* Strong relative performance continued in FY 2016 despite multiple CAT events and increased claims frequency 64 *Source: MSA Research
Slide 29: Confidence in improving our performance
Confidence in improving our performance Returning to mid-nineties COR • Higher rate in regulated and unregulated lines • Reform agenda • Disciplined underwriting • Expense efficiency • Broker segmentation • Claims cost management 65
Slide 30: Ontario Auto: strong case for reform
Ontario Auto: strong case for reform • Higher premiums: Ontario Auto premiums 55% higher than Canadian average • Rising claims: Claims costs are increasing while the number of accidents has reduced • Calls for reform: Marshall report published in April 2017 66 Source: GISA, Statistics Canada, values
Slide 31: Opportunities to diversify and grow abound
Opportunities to diversify and grow abound Brokers RBC Affinities D2C Disruptors Maintain growth & Grow profitably & Leverage partners’ Test & learn to Proactively partner Distribution scale & brand to profitability with build Aviva’s brand develop capabilities with digital disruptors Strategy acqui
Slide 32: Aviva Canada: leading franchise, high returns
Aviva Canada: leading franchise, high returns Leading Delivering Diversified High franchise growth distribution returns 2nd largest P&C insurer 7%* premiums growth Brokers, RBC/D2C and Mid-teen return on capital over 4 years affinities 11% market share 68 * Based on gross written premium Compound An