Aviva plc: Worldwide long-term savings new business – 12 months to 31 December 2006
Aviva International
Continental Europe
France:
Aviva France’s sales increased by 1% to £3,552 million (2005: £3,530 million). A strong sales contribution from the partnership with Crédit du Nord of £838 million (2005: £728 million) was offset by reduced Euro fund sales in the non-bank channels.
One of Aviva France’s key areas of focus in 2006 was the encouragement of Fourgous1 transfers, an area in which it has excelled as the most successful company in the market. As unit-linked funds are more capital-efficient, Aviva France focused on these transfers enabling a higher proportion of future sales from existing customers to be invested in higher margin funds and providing policyholders with the opportunity to enjoy a greater flexibility in managing their funds. In total, Aviva France has achieved over 80,000 policy conversions amounting to £4.2 billion of transferred funds, which are not included in new business sales. Of this total, 33% have been transferred to unit-linked funds. The majority of transfers have been generated through AFER, the largest savings association in France. To date, as a result of combined efforts with AFER, Aviva France has generated approximately 30% 2 of all Fourgous transfers in the market, an excellent performance in the context of our market share.
Overall market growth for the year to December was 18%3, including the effect of the reinvestment of ‘Plan d’Epargne Logement’ (PEL) banking products, which has mostly benefited pure bancassurers. Growth amongst traditional insurers was 10% and was inflated by the inclusion of Fourgous transfers by some competitors. Had Aviva France included such transfers, new business sales would have grown by over 80%. Taking Fourgous conversions into account, Aviva France’s operational achievements in 2006 were excellent.
Aviva France’s ongoing strategy to promote the growth of unit-linked funds has taken precedence over a focus purely on the growth of new business sales. In 2006, this strategy has resulted in an increase in the proportion of unit-linked new business sales to 46% (2005: 42%) of savings sales, representing growth of 10% to £1,556 million (2005: £1,423 million). This growth was boosted by a strong performance from Aviva’s fund management business, Aviva Gestion d’Actifs, combined with a dedicated business approach to ensure that policyholders receive best advice.
Membership of AFER reached 658,000 members (2005: 638,000 members) and AFER remains an important source of new business. AFER sales were £1,652 million (2005: £1,685 million) within which unit-linked sales grew by 32% to £482 million (2005: £367 million).
New business sales, excluding sales through AFER and the partnership with Crédit du Nord, were £1,062 million (2005: £1,117 million), affected by a reduced demand for Euro fund sales with the proportion of unit-linked saving sales having increased to 73% (2005: 71%).
Market growth is expected to slow down in 2007, as the benefits of PEL activity will not be repeated. Aviva France’s diversified distribution capability, efficient bancassurance partnership with Crédit du Nord, market-leading AFER product and award-winning fund management expertise4 mean that the business is well placed to compete successfully in 2007.
- The Fourgous amendment of 2005 enabled the tax-efficient transfer of existing 100% Euro funds into more balanced Euro and unit-linked portfolios.
- Based on the value of funds converted.
- Based on gross written premium.
- In September 2006, ‘Mieux Vivre Votre Argent’ (a weekly magazine) ranked Aviva Gestion d’Actifs the best fund manager over the last 5 years.
