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Aviva has come through a third year of adverse economic conditions. Some of our competitors have suffered severely. Others have undertaken massive capital raisings. We reduced dividends early to a sustainable level, and further increased our capital strength by raising subordinated debt in 2001 and 2003 totalling £2.8 billion. We have run and developed our business with undisturbed continuity and maintained a Standard & Poor’s AA range of ratings for the group.
Our two main operational aims – to be the insurance industry’s low-cost producer and provider of choice – are being reached gradually. We benchmark our performance continually to measure our progress.
In the UK, our long-term savings business is showing resilience in a slow market. We are making steady progress in France, and performed strongly in Spain and Italy. Our recent bancassurance agreement with ABN AMRO in the Netherlands is off to a promising start. In the United States we are growing profitably. Our start-up operations in India and China are growing well, above plan.
Our UK general insurance operation is turning in excellent results and good free cashflow. Worldwide, our general insurance business is improving steadily, and Canada is promising after a setback earlier in the year.
Our fund management results are more robust than in the previous year.
We continue to look for promising strategic opportunities, and will expand our business where we see the chance to be a market leader and grow the business profitably.
We propose a final dividend for 2003 of 15.15 pence net per share, which brings the total for the year to 24.15 pence, an increase of 5%. This will be payable on 17 May 2004 to shareholders on the register on 26 March 2004. Our policy remains that of growing the dividend by about 5% a year.
Aviva is a firm supporter of sensible corporate governance disciplines, and we already follow what has become regarded as best boardroom practice. From the 2004 financial year we shall be required to report the board’s compliance with the revised Combined Code on Corporate Governance, which incorporates recommendations from the Higgs review of the role of non-executive directors and the Smith report on audit committees. We are ahead of the game reporting this year as if the Code had been in effect for 2003.
Two non-executive directors, Carole Piwnica and Anna Catalano, joined our board during the year, and are already making significant contributions. Sir Michael Partridge, a non-executive director, retired in May 2003. Executive director Tony Wyand retired in November, and Philip Twyman retires in March. I would like to thank all three for their invaluable contributions.
Group finance director Mike Biggs left at the end of December, and I thank him for what he accomplished. I am pleased that his successor, Andrew Moss, will join us from Lloyd’s of London later in the year.
In the area of corporate social responsibility, Aviva has high ambitions and is making good progress. I feel that all business operations in our group now understand our mission and are eager to do their best.
Our staff have been under pressure through several years of adversity. Ambitious efforts are needed to encourage our dedicated employees. Management has done well under demanding circumstances and will continue to address these issues.
I believe that Aviva has emerged from tough times in good shape. We are strongly positioned as a leading European-based financial services group. That should benefit you as our shareholders.
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