aviva uk: insurance excellence in uk gi

8/7/2019 Aviva UK: Insurance Excellence in UK GI

1/98

1

Insurance Excellence in UK GI

Focus on Profit


2/98

Disclaimer

This presentation may include oral and written forward-looking statements with respect to certain of

Avivas plans and its current goals and expectations relating to its future financial condition, performance

and results. These forward-looking statements sometimes use words such as anticipate, target, expect,

estimate, intend, plan, goal, believe or other words of similar meaning. By their nature, all forward-

looking statements involve risk and uncertainty because they relate to future events and circumstanceswhich may be beyond Avivas control, including, among other things, UK domestic and global economic

and business conditions, market-related risks such as fluctuations in interest rates and exchange rates, the

policies and actions of regulatory authorities, the impact of competition, the possible effects of inflation or

deflation, the timing impact and other uncertainties relating to acquisitions by the Aviva Group and relating

to other future acquisitions or combinations within relevant industries, the impact of tax and other

legislation and regulations in the jurisdictions in which Aviva and its affiliates operate, as well as the otherrisks and uncertainties set forth in our 2007 Annual Report to Shareholders. As a result, Avivas actual

future financial condition, performance and results may differ materially from the plans, goals and

expectations set forth in Avivas forward-looking statements, and persons receiving this presentation

should not place undue reliance on forward-looking statements.

Aviva undertakes no obligation to update the forward-looking statements made in this presentation or any

other forward-looking statements we may make. Forward-looking statements made in this presentation are

current only as of the date on which such statements are made.


3/98

MarketLeadership

Address legacy

Transform

business

model

Exploit UK

synergies

Generate capital

UK General Insurance delivering transformational

change

Aviva is the largest GI insurer in the UK with a market shareof 14.4%

Generated 25% of Avivas H1 2008 IFRS operating profit

Changing the business model to maintain our market leading

position and win in a fast-changing competitive landscape

Igal Mayer appointed CEO, UK General Insurance in July2007

Igal and the team are executing a transformational plan to

maximise the value of this major business in Aviva

33


4/98

4

Insurance Excellence in UK GI: 'Focus on Profit'

Our agenda today

1. Insurance excellence Igal Mayer

2. Personal lines John Kitson

Transforming pricing Dan Pickens

3. Commercial lines Janice Deakin

Transforming underwriting Larry Harrington

4. Operations David McMillan

5. Summary Igal Mayer

Questions & Answers


5/98

5

Purpose

Regional / BU strategies

Vision

Group strategy and targets

Purpose

Prosperity &peace of mind

Strategicpriorities

Manage composite

portfolio

Build global Asset

Management

Allocate capital

rigorously

Increase customerreach

Boost productivity

Targets

Vision

One Aviva,twice the value

98% meet or beat COR

Long Term Savings

growth targets

500m cost savings by

2010

Double IFRS EPS by

2012 at the latest 1.5 2 x dividend cover

12.5% ROCE

UK

Market leadership

Address legacyTransform business

model

Exploit UK synergies

Generate capital

N. America

Double scale

Focus: top 5 inchosen segments

Integrate '07

Expand products,

distribution 08+

Europe

Scale, growth, capital

Seize unique growthopportunities

Leverage scale

Generate capital

Asia Pacific

Scale, growth

Prioritised portfolio Regional operating

model

Investment required

Asset ManagementAsset ManagementAviva Investors

Globally integrated business Transform the investment model Increase third party business


One Aviva, twice the value

1. Insurance Excellence Igal Mayer


6/98

6

Market leadership

Address legacy

Transform business

model


Generate capital

UK


A clear role in Aviva


Purpose

Prosperity &

peace of mind

Strategic

priorities

Manage composite

portfolio

Build global Asset

Management

Allocate capital

rigorously Increase customer

reach

Boost productivity

Targets

Vision

One Aviva,

twice the value

98% meet or beat COR

Long Term Savings growth

targets

500m cost savings by

2010

Double IFRS EPS by 2012at the latest

1.5 2 x dividend cover

12.5% ROCE

UK

Market leadership

Address legacy

Transform businessmodel


Generate capital

N. America

Double scale

Focus: top 5 in

chosen segments Integrate '07

Expand products,

distribution 08+

Europe

Scale, growth, capital

Seize unique growth

opportunities Leverage scale

Generate capital

Asia Pacific

Scale, growth

Prioritised portfolio

Regional operating

model

Investment required

Asset ManagementAsset ManagementAviva Investors

Globally integrated business Transform the investment model Increase third party business


7/98

7


The UK market leader

Consolidated market top 6 insurers

have over 50% market share

Aviva is the largest GI insurer in UK

Top 1 or 2 position in all our major

classes

Consistently delivering performance

- 98% or better COR since 20041

- 3.9bn operating profit over last 5 years

Aviva14.4%

RSA8.5%

AXA

6.5%

Zurich5.6%

AIG5.2%

Allianz4.0%

BUPA3.4%

HBOS2.5%

Rest of Market

37.6%

RBSI(including

Direct Line)

12.3%

Source: Datamonitor 2007 (1) Excludes impact of 2007 summer floods



8/98

8


DIRECT BROKERS PARTNERS

#1 in the SME market

Insurer of the year2003 to 2007

over 100 others

Banking AffinityRetail

Powerful brands

3,000

brokers


Unparalleled customer reach


9/98

9


DIRECT BROKERS PARTNERS

#1 in the SME market

Insurer of the year2003 to 2007

over 100 others

Banking AffinityRetail

Powerful brands

3,000

brokers


Unparalleled customer reach

Aviva brand - June 1st 2009

Customer insightsCustomer insights

Combination of NUheritage, trust,safety non-toxic + Avivasglobal, confident

brand

DirectDirect

Re-launch awayfrom expensive,traditionalHappy providesthe bridge

EmployeesEmployees

Build Aviva fromthe inside out

Reposition whatwe stand forglobally

Brokers & partnersBrokers & partners

Global player, notjust parochial SME


10/98

10

Delivering the Promise of Scale

Sub 11% expense ratio Halve IT costs Exploit UK synergies

Lean Manufacturing

Mass customisation Service & process centre reengineering

Win the Customer

NUD relaunch

RAC membership Partnerships moments of truth

Win the Broker

War for distribution

Building Core Insurance Capability

Sophisticated pricing Rating leadership Price & product optimisation

Claims Inflation Busting

Sustainable benefits year on year

Win our People

No1 for employees Build core insurance skills Pride & passion for insurance



NUIs 7 strategic priorities


11/98

11

Win our People


Sen Egan

Chief Information Officer

Igal Mayer

Chief Executive

John Kitson

Sales & Marketing Director

Janice Deakin

Corporate Sales Director

Dan Pickens

Personal Lines Director

Larry Harrington

Commercial Lines Director

Valerie Markham

HR Director

David McMillan

Chief Operating Officer


Our people


12/98

12


Revenue5.4bn NWP

Profit855m Operating Profit*

Commercial 49%

Commercial 36%

Personal 51%

Personal 64%

Personal Lines

Marketplace

- Aggregators have grown significantly- Panel operators becoming potential adversaries

- On-line growing

We have a clear strategy

- Relaunch of Direct and RAC

- Partnerships where the partner has a unique moment of truth

- Independent brokers still an important route to market

- Executing pricing sophistication

Commercial Lines

Marketplace- Consolidators have grown but lost momentum

- After lengthy period of soft conditions, positive signs of hardening

We have a clear strategy

- Independent brokers are our distribution, leveraging UK u/w footprint

- War for distribution

- Executing underwriting and pricing excellence


Summary our business

* 2007operating profit excl weather


13/98

13


Our agenda today








Questions & Answers


14/98

14

2. Personal Lines John Kitson

Sales & marketing context

Market snapshot

Crystal clear strategy

Direct

Partners

Brokers

RAC insurance

Summary


Personal lines


15/98

15


Broker

Direct

RAC

Broker

Direct

RAC

Partners

Working across all classes

Personal

Broker

Commercial

Bringing all the distribution channels together into one

front facing sales and marketing team has put a different lens on how we truly

optimise the multi distribution nature of our business

Marketing


One portfolio

Partners

2 P l Li J h Ki


16/98

16

NUD, 45%

Partnerships, 23%

IB, 18%

RAC, 14%

The personal market is 64% of NUIs turnover and c 51% of operating profit

Partners dominate turnover and in particular household, but for 2008 Direct isthe majority of the personal profits


Share of business

NUD, 16%

Partnerships, 51%

IB, 21%

RAC, 12%

Personal GWP by channel Personal operating profit* by channel


Brokers, 21%

Partners, 51%

Direct, 16%

Direct, 45%

Partners, 23%

Brokers, 18%

RAC, 12%RAC, 14%

2 P l Li J h Kit


17/98

17

Money Supermarket

Confused.com

Google Trends = numbers of people searching on these two terms

Aggregator grip on private car market has

tightened from 8% of total direct market in

2004 to 30% by 2007

Influx of new aggregators

Customers using aggregators to createshopping list

Which criticisms

Panels - giving away commission / net

pricing / claims farming

Spend isnt sustainable



Personal market trends

2 Personal Lines John Kitson


18/98

18


Crystal clear strategy


Direct is direct

LeverageMembership Panels

Partners:

Moments of truth

Small brokers

Largeaggressive

panels



19/98

19

Personal Motor Competitiveness Index - Motor - Comp cover - 779 risks

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

M

ar05

April05

M

ay05

Jun05

Jul05

Aug05

Sep05

Oct05

Nov05

Dec05

Jan06

Feb06

M

ar06

Apr06

M

ay06

Jun06

Jul06

Aug06

Sep06

Oct06

Nov06

Dec06

Jan07

Feb07

M

ar07

Apr07

M

ay07

Jun07

Jul07

Aug07

Sep07

Oct07

Nov07

Dec07

Competitiveness-cheapestorwithin10%

Budget Direct Line NUD Privilege RAC

price perception and position average

increasing cost to acquire

aggregator growth continues

Direct has not been on the shopping list0%5%

10 %

15 %

20 %

25 %

30 %

35 %

40 %

45 %

50 %

Church

ill

AAInsu

ranc

e

DirectL

ine

Adm

iral

MoreTha

n

Norw

ichUn

ion

Esure

Bud

get

Tesco

PF

RAC

Eleph

ant

Hastings

Dia

mon

d

PostOf

fice

Q1 07 Q2 07 Q3 07 Q3 Ave Q2 Ave Q1 Ave

MOTOR

Percentage of

shoppersgetting a quotefrom eachcompany



Direct



20/98

20

Position in the portfolio

Direct is our core offering into the personal market - underpins ourpricing and systems approach

Competitiveness

highly competitive and no other channel will have a better coreprice

Direct

is a direct offering which means it is not on aggregators

Were so confident about our price well show you

our competitors, even if they are cheaper



Direct strategic principles



21/98

21

TickerTicker Someone like youSomeone like you FullFull like for likelike for like

Web home page

Price comparison examples

Web car landing page

In call centre

During quote stage

Price comparison based on

similar customer profile

New concept

Web price, inbound - facts

Option after NUD price

delivered

Web and phone

Increasing confidence in NUs priceIncreasing confidence in NUs price



Direct price check



22/98

22



Direct advertising



23/98

23


Direct - Aviva brand

Clear plans in placeSeamless migration

already started

Aviva brand TV

starting 26 Dec



24/98

24

Inbound Motor Quotes & Sales

0

10000

20000

30000

40000

50000

Jul Aug Sep (Forecast)

Quotes

0

2000

4000

6000

8000

10000

12000

14000

Sales Quotes

Sales


Online Motor Non Agg Quotes & Sales

0

20000

40000

60000

80000

100000

120000

140000

160000

Jul Aug Sep

Quotes

0

2000

4000

6000

8000

10000

12000

Sales Quotes

Sales


New business sales volumes up 18% year on year

Shopping List

Pre Happy: 7th or 8th

Aim: Top 3

Competitive Position

Aim: Within 10% of the cheapest

22% of the time


Direct aiming points & progress

Sep



25/98

25


0

10000

20000

30000

40000

50000

Jul Aug Sep (Forecast)

Quotes

0

2000

4000

6000

8000

10000

12000

14000

Sales Quotes

Sales



0

20000

40000

60000

80000

100000

120000

140000

160000

Jul Aug Sep

Quotes

0

2000

4000

6000

8000

10000

12000

Sales Quotes

Sales


New business sales volumes up 18% year on year

Shopping List

Pre Happy: 7th or 8th

Aim: Top 3

Competitive Position

Aim: Within 10% of the cheapest

22% of the time


Direct aiming points & progress

Sep



26/98

26

A significant part of the portfolio

Provided significant scale in the personal portfolio; 100 partners Dominated distribution in this channel

History shows profit performance with room for improvement

Distribution ratio is the largest

Some accounts have not been profitable over their life of contract

Motor very hard

Sustainable financials

Clarity on what are acceptable terms

Account managed to deliver them

Retain, renegotiate or exit

Challenge is to make portfolio more profitable


Partnerships current position



27/98

27

We will focus on Partners who offer a clearmoment of truth:

Customers we cant win on our own


Partnerships strategic principles

Home Motor SME Creditor

Banks / BSs

Yes

Motor Mans / DealersNo No No

YesNo No

Yes

Travel Rescue

Barclays

HSBC

Abbey

No

No

No

No

Retailers

No No NoNoASDA No

Yes

No

Post Office Yes? No NoYes No



28/98

28


Partnerships actions to date

No moments of truth

Unacceptable returns

Exit to broking partner

Some Moments of truth

But driven by Aggregators

JV with broking partner

Keep only what we want

Moment of truth

Renegotiate until 2010 with requiredreturn

A&L and B&B present opportunities

No Moment of truth

Broking solution only?

Exit

Long term relationship

Exit all lines during 2009

All about execution

one by one

return by return

Major deals renegotiations completed


29/98



30/98

30


Brokers

700m personal lines revenue

Take core NUD & offer to brokers through different technology routes

Pull out of aggressive panels

Commercially connected / HNW attractive

Now in execution



31/98

31

Trusted and admired by the motorist

Achieved so far Great integrated Rescue business

with 2.3m members

Synergies

Partnerships grown by 2m

customers & 40m revenue

JD Power no1 Rescue company

How do we leverage RAC into consumer insurance brand?...


RAC



32/98

32

3 years on

260,000 insurance customers Honed distribution strategy

RAC relaunched as membership &

retail panel player Signed 5 year deal with Budget

Sales & service all RAC staff

Signing up insurers... Launch Q1

Scale via cross sell / aggregators

NU take 30% / 40% of panel premium

All parties not to claim farm


RAC insurance



33/98

33

3 years on

260,000 insurance customers Honed distribution strategy

RAC relaunched as membership &

retail panel player Signed 5 year deal with Budget

Sales & service all RAC staff

Signing up insurers... Launch Q1

Scale via cross sell / aggregators

NU take 30% / 40% of panel premium

All parties not to claim farm


RAC insurance



34/98

34

By 2011 our personal lines book will have changed

Direct grows

Brokers grow

Partnerships fall

RAC steady in Rescue but doubles in size for insurance

Motor grows

Home grows

Creditor falls


Reshaping the book



35/98

35


Summary of reshaping

Crystal clear clarity on strategy

Direct

Partnerships

Brokers

RAC

Value choices made

Well into execution


36/98

36


Our agenda today








Questions & Answers

2. PL Transforming Pricing Dan Pickens


37/98

37


Transforming personal lines pricing

Product complexity and mass customisation

Risk segmentation a pricing function!

Use of credit

Mass customised pricing

Flight path of initiatives


38/98



39/98

39


Mass customised product future state

Platinum Cover Gold Cover Value CoverBuildings & Contents

Sums Insured

Specified Inner Limits

Frozen Food

Blanket

Higher Inner Limit

Unlimited

Blanket

Blanket

Higher Inner Limit

Low Inner Limit

400 Limit

200 Limit

Loss of rent and alternativeaccommodation

12,000 Limit

6,000 Limit

Visitors Personal Effect Unlimited

1,000

Sport Equipment 1,000

Single Product Platform

Single Process

One Price List



40/98

40

Insurance Excellence in UK GI: 'Focus on Profit

Risk segmentation

Risk segmentation has been a marketing function!



41/98

41


Risk segmentation

Defined as ability to quantify and price risk:

Number of pricing cells Rate dispersion

Risk segmentation is a pricing function!

I E ll i UK GI 'F P fi '



42/98

42

Defined as ability to quantify and price risk:

Number of pricing cells


Risk segmentation



43/98

I E ll i UK GI 'F P fit'



44/98

44

Approaches

Statistical techniques


Risk segmentation

f(x,y,z) dxyz





45/98

45

Approaches

Statistical techniques Multi-peril pricing model


Risk segmentation

Yi = B(1+xi)(1+yi)(1+zi)

Yi1 = B(1+xi1)(1+yi1)(1+zi1)

Yi3 = B(1+xi3)(1+yi3)(1+zi3)

Yik

Yi2 = B(1+xi2)(1+yi2)(1+zi2)





46/98

46

Approaches

Statistical techniques Multi-peril pricing model

Use of third-party data

Insurance Excellence in UK GI: Focus on Profit

Risk segmentation

- CUE

CREDIT!





47/98

47

Old RatingMakeSegment (i.e. SUV)

Number of DoorsEngine (Size and Fuel)TransmissionAgeABI Group


Make / model adjustments

Vehicle Old Factor New Factor

Vogue 1.00 1.00

Vogue SE 1.00 1.05HST 1.00 1.10

HSE 1.00 1.12

HST SC 1.00 1.15

HSE SC 1.00 1.18




48/98


Impact of credit new rating variable

60%

70%

80%

90%

100%

110%

120%

1-575 576-605 606-626 627-642 643-656 657-669 670-681 682-693 694-707 708+

Credit Score

ClaimRatio

Implemented in June for Motorand September for Household

Personal Motor Results

Worse Better

Worse

Better

11 22 99 1010


49/98




50/98


Motor credit early results

Combined Inbound and Web Results

First Two Weeks Most Recent Two Weeks

30.4%38520.3%47.7%43.0%30.8%51218.3%34.5%34.4%Summary 6-10

62.4%77416.7%52.3%57.0%57.6%74518.2%65.5%65.6%Summary 1-5

21.7%28421.2%9.8%8.4%17.8%35918.8%6.2%6.1%708+10

27.3%33021.1%10.0%8.6%25.4%45318.2%6.5%6.5%694-7079

28.3%38920.0%9.4%8.6%34.3%56617.4%6.2%6.6%682-6938

35.3%42020.6%9.2%8.2%34.5%58319.2%7.5%7.1%670-6817

40.2%49418.7%9.3%9.1%39.0%56618.0%8.0%8.1%657-6696

47.6%58218.7%8.7%8.5%38.8%55417.7%9.1%9.4%643-6565

52.6%64017.6%9.9%10.3%46.0%61917.9%12.2%12.4%627-6424

57.4%72116.0%10.5%12.1%54.7%72717.6%14.0%14.5%606-6263

65.2%94215.0%11.4%13.9%63.5%88517.9%15.6%15.9%576-6052

83.2%88017.5%11.8%12.3%75.7%85119.9%14.6%13.3%1-5751

%Monthly

QuotedAvg

PremCR% SoldQuoteDistn

%Monthly

QuotedAvg

PremCR% SoldQuoteDistnSegment

WORST

BEST


51/98


52/98




53/98

53

Credit - Motor

Credit - Home

ABI, Make/Model, NCDValidation, and Post Code

Mass CustomisedProduct Architecture

Mass Customised Pricing

Price Optimisation

Q2 2008 Q3 2008 Q2 2009 Q4 2009

DVLA / CUE

Q1 2009

Progress



54/98

54

Our agenda today








Questions & Answers

3. Commercial Lines Janice Deakin



55/98

55

The jewel in the crown

The market

Distribution strategy

Consolidation

Commission

Winning the crowd




56/98

56

Source: 2007 FSA returns with overseas business removed

Estimated market size based on 2006 data

Includes Healthcare, excludes Marine, Aviation & Transport

Aviva13.4%

AIG

9.8%

RSA

7.7%

Zurich

7.2%

AXA

6.9%

NFU3.4%

Allianz

3.1%

QBE

3.0%

Rest of Market32.0%

RBSI(including

Direct Line)

10.5%

ACE

3.0%

No 1 commercial insurer in the

UK

36% of NU premium, 49% of

operating profit

SME our heartland 18% share

Even after years of consolidation,distribution dominated by brokers

providing local advice





57/98

57

*2007 includes the impact of the summer floods

Data taken from FSA returns may differ from result announcementsData is for commercial Motor, Property and Liability

Aviva v. Market - Commercial lines COR 05-07*

No1 through successful

focus on SME via brokers

Commercial lines are

profitable

This is a priority for Aviva

in the UK


105

75

95

85

2005 2006 2007

Aviva AvivaAvivaMarket MarketMarket




58/98

58

What we believe

Local independent advice is key for commercial customers

Support the independent broker and win the crowd

No to commercial direct

Brokers will continue to dominate with sustainable distribution ratios

Consolidations have peaked 85% of brokers expect to stay

independent

Historically our actions have fuelled consolidation actions today are

reversing this trend

No to buying brokers


59/98


60/98



W f di t ib ti


61/98

61

Protectand

Grow

Consolidators

Reduce premium

Sustainable commission

Strong relationships

Limited delegated underwriting

Brokers Join Networks

Strong relationships with selected networks

but best deal from NU directly

Independent Organic Growth

Differentiated offer to 3000 small brokers

Grow share of business

Self serve for SME

Independent Brokers

Differentiate through 110 broker club

Succession planning

Long term support

Ensuring brokers survive and thrive

Growth through independent and smaller brokers

Less reliance on consolidators = lower commissions

Our strategies to reshape our book

War for distribution


62/98


63/98


64/98


65/98


66/98



Winning the crowd


67/98

We can only do this by winning the crowd

Voted Insurer of the year 5 years running

Strongest underwriting footprint in UK, 1200underwriters, 400 sitting in our brokers offices

Consistently provides brokers best service.Improving year on year

"It was the first time in many years that I have left a conference

believing that the directors of an insurer were actually going to do

what they said and that they would also be acting in our best

interests.

"From a brokerperspective it is

brilliant to see thatAviva haverecognised the

need to focus

resource on theindependents and I

truly look forward

to going forwardwith you guys over

the coming years.

"I think if you can

deliver on what

was outlined onFriday and re-

enforced over the

weekend you will

certainly steal a

march on the

competition.

"After speaking with a number of delegates, we all believe there is thecommitment - the "can do" will result in the "will do" - and we verymuch wish to be part of this.

Winning the crowd


68/98


How far weve come



69/98

How far we ve come

2007

Unprecedented pace of broker

consolidations Ever increasing trend on commission

Rates going backwards for 4 years

NU-consolidator business growingrapidly fuelling increased commission

NU premium through independentbroker shrinking

NUI No1 for brokers 4

years running

Now

85% of brokers say they are

staying independent

Actions in place to reducecommission significantly

Rate increases of 3% across the

book, plans in place for Q4 and2009

Consolidators business hasshrunk by 4% in 2008

NU premium through independentbrokers up 5% year on year

NUI No1 for brokers 5

years running


Our agenda today


70/98

70

Our agenda today








Questions & Answers


71/98


72/98


73/98


74/98


Sustainable profit through the cycle

3. CL Transforming underwriting Larry Harrington


75/98

75

p g y

Philosophy of excellence in execution at transaction level

Delivered through 1,200 UK-wide underwriters

More than segmented rating action

Exposure recognition

Influence behaviours of underwriters

Monitoring, mentoring, measuring

This is where our future results are made


76/98


Progress

3. CL Transforming underwriting Larry Harrington


77/98

77

Rating

Cleanse the book

Differentiating ourselves in the SME market

Sustainable profit through the cycle


78/98



Delivering the promise of scale


79/98

79

The vision for Operations

Footprint consolidation

Lean manufacturing

Right-shoring

Self service

Mass customisation

IT architecture






80/98

80

2006

UK best of breed expenseratio

1applied to NUI channel

/ product mix:

(1) Expense ratios exclude CHE and

commission

(2) Based on leading cost performance

in channel, weighted to reflect NUI

mix

Source: FSA Returns (2006)

NUI

Expenses

UK Best of

Breed

Personal Lines

Motor 16.1% 12.3%

Property 11.0% 9.7%

Creditor 1.3% 1.3%

RAC Rescue 27.5% 27.5%

Commercial Lines

Motor 13.8% 8.2%

Property 16.3% 15.2%

Liability 11.6% 11.6%

NUI Total 13.9% 12.0%

Breed Co.2

Best of

Direct Line, Fortis

Direct Line, NU

NU

NU

Brit

Axa

NU

NUI Total2007 13.9% 12.0%

NUI Total Year2008 12.8%

NUI Total Full Year 12.1%Ph1 achieves benchmark..





81/98

81

Inflation

C&E

38m

One-

offs

09 & 10

Inflation

One-

offs

Phase 2

Cost

150m

Phase 1

CostReduction

2007 20102008 FY


82/98

82

Footprint

consolidation

Lean

manufacturing

Right-shoring

Self service

Masscustomisation

IT architecture

SystemsComplexity

ProcessComplexity

ProductComplexity

OrganisationComplexity

Cost Drivers Key Strategies


83/98


84/98


85/98


86/98



Mass customisation


87/98

87

Fewer core products 161* to 3

Fewer pricing algorithms 45 to 3

Fewer operational processes 3600 to 720

Fewer IT applications c900 to


88/98



Operational excellence key metrics


89/98

89

Operations Headcount c10,000 c7,000

IT & Operational Services c2,900 c1,700Headcount

Sites 27 9

Desk Utilisation 73% 107%

Sales Online 35% 60%

Service Online 1% 39%

Core IT Platforms 900 300

IT spend as % of GWP 5.5%


90/98


91/98


92/98



Reshaping the book


93/98

93

We are leveraging our unparalleled access tocustomers and reshaping the front end of our business

Reshapingthe book..

Protectand

Grow

Consolidators

Reduce premium

Sustainable commission

Strong relationships

Limited delegated underwriting

Brokers Join NetworksBrokers Join Networks

Strong relationships with selected networksStrong relationships with selected networks but best dealbut best deal

from NU directlyfrom NU directly

Independent Organic GrowthIndependent Organic Growth

Differentiated offer to 3000 small brokersDifferentiated offer to 3000 small brokers

Grow share of businessGrow share of business

Self serve for SMESelf serve for SME

Independent BrokersIndependent Brokers

Differentiate through 110 broker clubDifferentiate through 110 broker club

Succession planningSuccession planning

Long term supportLong term support

Direct Relaunch Panel PropositionLeverage Membership

Moments of truthWinning route for commercial via

independent brokers

Sustainable growth andsustainable distribution cost


94/98





95/98

95

c900 Applications


96/98


Our agenda today


97/98

97








Questions & Answers


98/98

98

aviva uk: insurance excellence in uk gi

Documents