Mark Dearsley Finance Director, Aviva International€¦ · • Europe - Transformed Spain from...
Transcript of Mark Dearsley Finance Director, Aviva International€¦ · • Europe - Transformed Spain from...
© Aviva plc
Aviva International – a track record of delivery
Mark DearsleyFinance Director, Aviva International
© Aviva plc
Aviva International transformation
1 Includes non-participating investment contracts2 Includes US, Australia & New Zealand, Belgium, Germany, Asia, Spain and CGU Courtage (France)
2000
2005
Health £724m
Health £483m
Life NWP£6,300m
GI NWP £2,512m
Discontinued GI2£4,562m
Life NWP1
£11,920mGI NWP £3,460m
© Aviva plc
What we set out to do
• Build strong Life and Pensions businesses
• Diversify distribution
• Prioritise major European markets- Large markets- Attractive growth rates- Limited ‘window’ to seize opportunities
• Build capability in other selected growth markets
• Focus on profitable General Insurance businesses in personal lines / SME
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What we did
• Europe- Transformed Spain from subscale composite to a Life market leader- Extended and diversified distribution in Italy - Added important bank partnerships in Netherlands, France & Ireland- Maintained strong positions in Poland and Turkey - Further potential in Czech Rep, Hungary, Romania, Lithuania, Russia
• Asia-Pacific and USA- Launched exciting Life businesses in China, India, Singapore, HK- Growth initiatives in US and Australia
• Exited from US P&C and other subscale / non-core General Insurance units
Built pre-eminent European Life platform
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Disciplined approach in turbulent markets
• Strong financial disciplines (including expense reduction)
• Excellence in operational and M&A execution
• Investment in infrastructure: finance and risk management
• Focus on business as usual
Whilst:
• Navigating substantial uncertainty and difficult markets post 9/11
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What we have achieved – top line Life sales growth
CAGR 10%
PVNBP increased by over 60%Note: CAGR calculated using constant currency, net of minorities and excludes exceptional Polish pension sales in 2000
PVNBP Growth 2000-2005
0
2000
4000
6000
8000
10000
12000
2000 2001 2002 2003 2004 2005
£m
AsiaUS & AustraliaOther EuropeWestern Europe
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What we have achieved – diversified distribution
AI Life & Pensions distribution by channel 2000
AI Life & Pensions distribution by channel 2005
Broad access to customersNet of minorities
Basis 2000 APE Basis 2005 PVNBP
38%
7%
55%
34%26%
40%
Independent Agents/BrokersTied Agents/DirectBancassurance
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What we have achieved – bottom line out-performance
NBC Net/Net/Net
Profits (Life and pensions only)CAGR 10%
NB Margin
• 250% increase in new business contribution from £54m to £192m
• 117% improvement in new business margin from 0.9% to 1.9%
• Profit growth of 81% from £386m to £697m
LifeOperating
Profit*£m
NBC £m
CAGR1 28%
Growth in challenging market conditions
1. NBC CAGR excludes exceptional Polish pension sales in 20002. Post tax, post-minorities, 2000-02 AP basis, 2003-05 EEV basis
0100200300400500600700800
2000 2001 2002 2003 2004 2005
0
50
100
150
200
250
0
0.5
1
1.5
2
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What we have achieved – a significant bancassurance presence…
…and growth at a reasonable price
Goodwill* 2000-2005
£715m
2005 NBCNet/Net/Net
£83m
P/E
8.6x
*Relates to Aviva International businesses only and includes unpaid earn outs.
© Aviva plc
0
10
20
30
40
50
60
70
80
What we have achieved – real progress with partners
0
20
40
60
80
100
120
0102030
405060
708090
2000 2001 2002 2003 2004 2005
Crédit du Nord Embedded Value Build Up
£m
£m
0
20
40
60
80
100
120
140
160
ABN Amro Embedded Value Build Up
Aseval Embedded Value Build Up
£m
£m
Singapore Embedded Value Build Up
Note: Figures are net of minorities. 2000-02 AP basis, 2003-05 EEV basis.
2000 2001 2002 2003 2004 2005
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What we have achieved – focused GI
2005 GI NWP by country£3,460m
Excludes health
2000 GI NWP by country£7,074m
• Over 30 country operations• Exposure to heavy commercial lines• AI COR of 111% excl. US
• 4 major GI businesses• Other businesses support LTS offer• Focus on personal lines and SME• AI COR of 94%
16%
14%
21%
39%
10%8%5%
5%
11%
35%
36% FranceIrelandNetherlandsCanadaUSRest of world
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Total General Insurance – growing profitably in competitive markets
Acquired operations
Discontinued operations*
Continuing operations
* Discontinued operations include businesses sold with the exception of the US
AI NWP 2000-2005
0500
10001500200025003000350040004500
2000 2001 2002 2003 2004 2005
£m
AI Operating Profit/COR 2000-2005
-100
0
100
200
300
400
500
600
£m
85
90
95
100
105
110
115
COR %
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Aviva International has generated growth in sales and profits…
…whilst generating operational capital
486
72
(497)
562
161
(121)
538Retained to fund growth
96Capital injections
(273)Dividends paid to Centre
911
460
626
(175)
£m2003
522
228
493
(199)
£m2005
715Operational Capital Generation
352Operating return – Non Life
546Life In-Force profits
(183)New business strain
£m2004
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Aviva International: a strong track record of profitable growth