Professional Documents
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This presentation contains certain “forward-looking statements” with respect to certain of Aviva’s plans and current goals and expectations
relating to future financial condition, performance, results, strategic initiatives and objectives. Statements containing the words “believes”,
“intends”, “expects”, “plans”, “seeks”, “aims”, “may”, “could”, “outlook”, “estimates” and “anticipates”, and words of similar meaning, are forward-
looking. By their nature, all forward-looking statements involve risk and uncertainty. Accordingly, there are or will be important factors that could
cause actual results to differ materially from those indicated in these statements. Aviva believes these factors include, but are not limited to: the
impact of difficult conditions in the global capital markets and the economy generally; the impact of new government initiatives related to the
financial crisis; defaults in our bond, mortgage and structured credit portfolios; the impact of volatility in the equity, capital and credit markets on
our profitability and ability to access capital and credit; changes in general economic conditions, including foreign currency exchange rates,
interest rates and other factors that could affect our profitability; risks associated with arrangements with third parties, including joint ventures;
inability of reinsurers to meet obligations or inavailability of reinsurance coverage; a decline in our ratings with Standard & Poor’s, Moody’s, Fitch
and A.M. Best; increased competition in the U.K. and in other countries where we have significant operations; changes in assumptions in pricing
and reserving for insurance business (particularly with regard to mortality and morbidity trends, lapse rates and policy renewal rates), longevity
and endowments; a cyclical downturn of the insurance industry; changes in local political, regulatory and economic conditions, business risks
and challenges which may impact demand for our products, our investment portfolio and credit quality of counterparties; the impact of actual
experience differing from estimates on amortisation of deferred acquisition costs and acquired value of in-force business; the impact of
recognising an impairment of our goodwill or intangibles with indefinite lives; changes in valuation methodologies, estimates and assumptions
used in the valuation of investment securities; the effect of various legal proceedings and regulatory investigations; the impact of operational
risks; the loss of key personnel; the impact of catastrophic events on our results; changes in government regulations or tax laws in jurisdictions
where we conduct business; funding risks associated with our pension schemes; the effect of undisclosed liabilities, integration issues and other
risks associated with our acquisitions; and the timing impact and other uncertainties relating to acquisitions and disposals and relating to other
future acquisitions, combinations or disposals within relevant industries.
For a more detailed description of these risks, uncertainties and other factors, please see Item 3, “Risk Factors”, and Item 5, “Operating and
Financial Review and Prospects” in Aviva’s registration statement on Form 20-F as filed with the SEC on 7 October 2009. Aviva undertakes no
obligation to update the forward-looking statements in this presentation or any other forward-looking statements we may make. Forward-looking
statements in this presentation are current only as of the date on which such statements are made.
Aviva Europe – Making a Quantum Leap 2
22 October 2009 Page 2
Andrea Moneta
Aviva Europe CEO
Our Quantum Leap is transforming our business by bold, clear and high value strategies
Establish state of the art Tax and capital efficient structure, pan European
Products and Governance risk and capital management, centralised product
development and customer centric catalogue
“The insurance business is complicated”. NO, it is not ! Though it can be explained better
Shareholders’
funds
MCEV
NPV of in
force
business
EEV
NPV of
Appraisal future
investment
value spreads
NPV of new
business in
future years
Generating cash on a
sustainable basis
Expected free surplus generation from life in-force book*
1,200
1,000
800
€m
600
400
200
0
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027+
* From business in-force at 1.1.08 at current exchange rates
* Comprises expected interest on net worth, expected current year investment returns on PVIF, emergence of MCEV profits and release of required capital on in-force book
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 Operating Economic Investment in
Economic Investment Net capital
Net capital Closing free
Closing free
surplus surplus variances
surplus surplus variances movements & newinbusiness
movements new returns
returns surplus
surplus
generation & FX business
generation FX
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
€m 229
1,000
1,162
500 979
-
Opening free
Opening Expected free
free Expected Operating
free Operating Economic Investment in
Economic Investment Net capital
Net capital Closing free
Closing free
surplus surplus variances
surplus surplus variances movements & newinbusiness
movements new returns
returns surplus
surplus
generation & FX business
generation FX
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 Newbusiness
New business acquisition
acquisition
Costs
Coststo
torun
run our
our business
business Overheads
Overheads
Tax
Taxtotoauthorities,
Authorities, minorities
minorities Taxation,minority
Taxation, minority interests
interests
Underwriting
800 margin
Investment
margin
600
1H 09 €m IFRS Profit
GI
200
Life
0
Other
(200)
Taxation and
minority interests
New business
(600) acquisition
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
(200) • centralised
Taxation investment management
New business Key focus areas: Opening AUM Net sales Product mix Performance
(600) acquisition
Our Our Making money Conclusions
Aviva Europe – Making a Quantum Leap Focus
opportunity in Quantum and creating and
22 October 2009 sessions Page 14
Europe Leap value Q&A
Sustainable profit growth
Fraud reduction
200
New business Key focus areas: Earned premiums Claims and handling costs
(600) acquisition
Our Our Making money Conclusions
Aviva Europe – Making a Quantum Leap Focus
opportunity in Quantum and creating and
22 October 2009 sessions Page 15
Europe Leap value Q&A
Sustainable profit growth
(200) Taxation
200
0
Other
Minority interests
(200) Taxation
Poland France
0 19% 34%
Other
Minority interests Italy
(200) Taxation
32%
Ireland
12.5%
(400) Life GI Overheads
Sustainable
1,000 profit growth
Underwriting
800 Investment margin
margin
600
400
200
GI
Life
0
Other
Minority interests
(200) Taxation
New business
(600) acquisition
Underwriting
800 margin
Investment
600
margin
Doubling
400
2007 IFRS
GI
200
(200)
2012 Taxation
Minority interests
Other
New business
(600) acquisition