Aviva Plc · LSE:AV.
Aviva — Debt Investor Presentation (March 2016)
25 slides from Aviva's debt investor presentation, Mar 21, 2016
Slide 1: Credit Investor Webex, 21 March 2016
21 March 2016 Credit Investor Webex 1
Slide 2: Disclaimer
Disclaimer AVIVA Cautionary statements: This 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, and we may make other verbal or written “forward-looking statemen
Slide 3: Getting into shape
Getting into shape Aviva financial results Source: Eastern Daily Press, 2016 Aviva has gone from being a couch potato to being able to run a10k race in quite a quick time, but we are some way off from completing a marathon. Mark Wilson, Aviva group chief executive families rehoused after floods in t
Slide 4: Continuing a track record of delivery
Continuing a track record of delivery al AVIVA Value of new business! Combined operating ratio 1300 1192 98% 70% 973% 1100 1,009 97% 96% 95.7% 900 95% Z 700 oO 94% 500 93% FY12 FY13 FY15 FY14 LK Solvency surplus intercompany loan fn 180% fon 7.9 9.7 60 9 Siz 5.0 7 130% 4.0 5 Mec 30 3 2.0 15 1 10 a F
Slide 5: a (leer
a (leer a Liil asia
Slide 6: Our core values
Our core values AVIVA Create Kill Complexity
Slide 7: 2015 results — key milestones
2015 results — key milestones AVIVA Capital management Friends Life integration Well ahead of schedule, with Ba Solvency Il ratio 180%" rat £168m of run-rate savings Surplus £9.7bn secured m2 Resilient to a wide range of market stresses a SII Capital surplus generation £2.7bn Internal loan reduction
Slide 8: Economic capital and Solvency II
: £bn EC¹ SII² • • • 1. Economic capital represents an estimated position. The economic capital requirement is based on Aviva’s own internal assessment and capital management policies. The term ‘economic capital’ does not imply capital as required by regulators or other third parties. 2. The estimat
Slide 9: Solvency II sensitivity to stress scenarios
Corporate Equities movement Interest bond 2011 2008 (decrease) rates¹ spreads GI Longevity financial financial -10% -25% -25bps +100bps shock² shock3 crisis4 crisis4 180% 177% 176% 177% 178% 172% 169% 141% • • • 1 For interest rate stresses, the transitional is assumed to be reset 2 5% increase in g
Slide 10: Limited interest rate sensitivity
Limited interest rate sensitivity¹ 183% 185% 176% • • • • 1 For interest rate stresses, the transitional is assumed to be reset 10
Slide 11: Limited spread sensitivity
Limited spread sensitivity Corporate bond spreads Sovereign bond spreads 183% 181% -50bps +50bps 179% 177% 177% • • 11
Slide 12: Limited equity sensitivity
Limited equity sensitivity • 181% • 180% 177% • • • 12
Slide 13: Group debt – a balanced and flexible profile
Group debt – a balanced and flexible profile Debt profile at 31 December 2015 – hybrids shown at first call dates £1,400m Asia/US retail hybrid Lower Tier 2 hybrid £1,200m Upper Tier 2 hybrid 450 £1,000m Tier 1 hybrid £800m Upper Tier 2 preference shares Retai l perpetual £600m preference 390 162 sh
Slide 14: Friends Life integration — year ahead of schedule
Friends Life integration — 1 year ahead of schedule al AVIVA Progress towards £225m synergy target 2015 benefits included in the P&L £16m - £26m | £ ; (429m a UK Life Asset Plo Run-rate UK Life Asset Plo/ Realised Management Other Management Other Key integration deliverables Integration update (APR
Slide 15: Capital roadmap - capital & cash benefits of FL acquisition
Capital Roadmap - capital & cash benefits of FL acquisition a A Cost reduction £0.2bn * Maintenance expense reduction expected Capital optimisation * Optimisation of Friends Life annuities & hedging * £0.4bn of group diversification recognised in FY15 SII ratio * Diversification benefit expected in
Slide 16: Growth
Growth Life: Value of new business Gl: Underwriting profit £1,192m £1,005m_ 7 FY14? FY15 * Group VNB up 24%! * 12 consecutive quarters of growth * Protection 39% of VNB * Italy VNB up 40%, Ireland VNB up 97%! £352m £321m 0% ae FY14 FY15 Underwriting profit up 10% RBC Insurance acquisition in core Ca
Slide 17: Operating profit
Operating profit AVIVA Operating Life General Insurance Fund Management Other operations Life, Gl, fund management & other operations Corporate costs Group debt & other interest costs Integration & restructuring Operating profit after integration & restructuring fit (£m) | FY141 | FY15 2,019 2,419 8
Slide 18: £m (30) (117) 2665 2,665 (58) 2469 2,213 2,008 18
£m 45 151 358 (30) (117) 103 2665 2,665 (58) 103 2469 2,213 2,008 18
Slide 19: 12bps 13bps
51.1%¹ 50.0% 29.7%¹ 32.2% 14.8% 13.9% 13bps 15.7% 14.5% 12bps • • • 19
Slide 20: Cash and capital generation
Cash and capital generation An 1 1 ilnvestment 1 ' variances | eth What happened in 2015? funding * Estimated SIl capital generation of £2.7bn primarily from management actions and operating activities partly offset by investment variances Remittances * £2.7bn is before dividends paid, centre costs,
Slide 21: Continued development of excess centre cash flow
Continued development of excess centre cash flow An fbn 2-4 1.84 £1.8bn 164 £1.4bn 144 £1.3b on £150m dividend 124 paid by Friends £(0.6)bn prior to 14 £0.9bn ee 0.8 4 CAD — 0.6 4 retained in Canada 0.4 4 0.2 4 0 2012 2013 2014 2015 Central costs Debt & other Pro-forma excess FY15 Dividend centre ca
Slide 22: Investment Thesis — Cash flow plus growth
Investment Thesis — “Cash flow plus growth” Lal AVIVA Our strategic anchor True Customer Composite Digital First Not Everywhere Serving all customer needs across Life, Gl, Health and Asset Management enn isi @ Customer experience driven by digital Only in markets where we can win Sustainable and pro
Slide 23: Capital allocation remains a competitive sport
Capital Allocation remains a competitive sport Bl Exclusive GI Indonesia JV providers for launched launched — Singapore Capital will be prioritised to markets with superior return and growth prospects 23
Slide 24: Why Composite counts for Aviva and the customer
. . i Why Composite counts for Aviva and the customer AVIVA 31% of people prefer their products with one provider, 47% when given a reason to consolidate Economics of composite Composite delivery model Impact on net margin (% premium)* Better retention = Improved Composite Customer data cu sto mer b
Slide 25: Investment Thesis — so what's next?
oo , > i Investment Thesis — so what's next? AVIVA * Capital prioritised to markets with superior Additional £1bn of remittances from UK Life return and growth * Refine geographic footprint * Further expense efficiencies * Rebalance earnings to Asset Management, Gl and Accident & Health * True Custo