Geographic focus
To maximise value to our shareholders we will focus on 12 markets where we have strength and scale. In determining our focus we will judge markets on their potential to generate both $100 million of IFRS operating profits and a 12% return on capital employed, or $1 billion of franchise value for younger businesses.
The markets where we are increasing focus and depth are:
The UK and Europe represents the largest life and pensions market in the world, offering the greatest absolute growth over the next five years.
We will focus on eight markets, namely: UK, France, Spain, Italy, Poland, Ireland, Turkey and Russia. We intend to take full advantage of the demographic opportunity in these markets by leveraging our scale, market leading positions and local expertise.
In the UK we have competitive scale advantage from:
- Benefits of scale;
- Broad product range;
- Wide customer base;
- Multi-channel delivery;
- Diversity of risk and earnings;
- Single brand.
In Europe, we have competitive distribution advantage from:
- Market leading bancassurance franchise;
- Well established positions in chosen markets;
- Pan-European approach under Quantum Leap.
We are successfully improving the profitability of our North American region, which will be a net capital contributor to the group. We will focus on growing profits organically in Canada and the US. In Canada we will focus on being a great underwriting company. In the US we will diversify the business mix by organically growing our life protection business to achieve a top 10 position whilst continuing to build our core annuity business. We will execute this strategy with no acquisitions.
In Asia Pacific, we will continue to pursue franchise growth through organic investment, focusing on the high priority markets of China and India, and exiting low return markets, such as Taiwan. Over the next few years, we will consider how best to maximise the franchise value.
At Aviva Investors, we will continue to focus on growth in third party assets under management.
