Summary review

General insurance

Business strategy

Our general insurance businesses are focused on disciplined underwriting, product innovation, excellent customer service and strict cost control. Our aim is to deliver a strong and sustainable operating result from our chosen markets of personal insurance and small and medium-sized commercial business.

Providing choice is a key factor in meeting our customers’ changing needs, along with high standards of service and a range of innovative products.

Market position

Aviva is the leading general insurer in the UK and Ireland. We are the second-largest insurer in Canada, among the top five in the Netherlands, and have a significant business in France.

Multi-distribution capability

We offer our customers choice in the way they do business with us. We use, where possible, a range of sales channels in each market and aim to make buying our products as straightforward as possible.

Norwich Union has a multi-distribution approach, with strong positions in the broker, corporate partner and direct markets. We are focused on growing sales through our direct business. In 2004 we closed our Hill House Hammond high street broking operation and are on track to deliver more than 500,000 policies into our direct operation.

In France, we sell through a network of 840 tied agents and our direct business Eurofil, which includes a bancassurance partnership with Crédit du Nord. Distribution in the Netherlands is through intermediaries, bancassurance and direct. In Ireland, Hibernian’s multi-channel model is an important strength. Aviva Canada sells through a network of independent brokers and a corporate partnership with Loblaws, Canada’s largest supermarket chain.

Customer offering

We believe that high standards of customer service and satisfaction are crucial. In a Professional Broking magazine survey, Norwich Union was voted the best insurer for service. We were also Insurance Times’ general insurer of the year for the second year running.

Norwich Union’s digital flood maps enable us to offer household insurance to 600,000 more properties in high-risk areas. We have recruited more than 5,000 customers for the UK pilot of Pay As You Drive™ motor insurance. In August 2004, we bought HPI Group, the vehicle information and checking service.

A key achievement in France was completing the rollout of a dedicated web portal to our network of agents. In Canada, our claims team has earned much complimentary feedback from policyholders.

In Ireland, Hibernian extended its Ignition inexperienced driver scheme to selected provisional licence holders, and increased discounts for drivers without penalty points on their licences.

Performance

Our general insurance operations had another strong year in 2004, despite market conditions becoming increasingly competitive.

Operating profit of £1,326 million (2003: £911 million) was an excellent result, reflecting our disciplined underwriting and the action we have taken to reduce costs and improve operational efficiency. Worldwide net premiums written increased to £8.8 billion (2003: £8.5 billion). Our COR of 97% (2003: 100%) beat our group target.

Outlook

We continue to focus on product and distribution innovation within our core insurance businesses, as well as extending our product offerings to non-insurance products where clear benefits are identified.

This innovative approach, along with our scale and the strength of our brand, means we are confident of achieving our long-term goal of delivering consistent performance and sustainable results.

*	Combined operating ratio (COR) broadly expresses the total of claims costs, commission and expenses as a percentage of premiums, and is one of our key performance measures.

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