News

France: Annual results to 31 December 2009

04 March, 2010

• Growth considerably higher than the market in life assurance 
• Developments in operational profit reflecting changes in savers' behaviour during the financial crisis 
• A combined operation ratio (COR) which has taken a hit from the climate conditions, but still at a solid level of performance 
• A net result on the up, due to a prudent long-term management philosophy in phase with the volatile developments on the financial markets 
• A business which has been restructured and oriented towards the future in order to go even further in its performance within an increasingly European framework 
• A business resolutely committed to a sustainable development approach.

Results 2009

• Total gross consolidated up 13% to €6.7 billion at 31 December 2009 (2008: €6.0 billion)
• Pre-tax IFRS-base operational profit down 11% to €394 million at 31 December 2009 (2008: €442 million)
• Strong cost management with operating costs down 10% (not including commercial fees)
• Net IFRS result of €390 million at 31 December 2009 (2008: €130 million), up sharply due to favourable developments of conditions on the financial markets.

Life assurance: +19% on an individual market which grew by 13%

• 19% increase in new life, savings and pensions business, in gross premiums written, to €4.9 billion at 31 December 2009 (2008: €4.2 billion) on a market which grew by 13%. This was due mainly to the exceptional growth of AFER of +30% and excellent growth of 15% of Antarius (Aviva/Crédit du Nord joint venture)
• A cash flow² of €1,997 million, up 275% at 31 December 2009 (2008: €533 million), which demonstrates the considerable increase in AFER and Antarius revenue and the effects of customer loyalty activities.

Non-life and health insurance: drop in combined ratio against a difficult backdrop, nonetheless showing robust performance levels

• Gross turnover down 3% to €1.1 billion at 31 December 2009 (2008: €1.2 billion) in a context in which Aviva has maintained its positions on individual risks
• One of the best net productions of recent years, due to the effectiveness of the anti-cancellation measures and continued growth in health insurance
• Increase in the combined ratio, rising from 95.6% at 31 December 2008 to 96.9% at end December 2009, as a result of an increase in the claim rate in France and the effects of Storms Klaus and Quinten.

Asset management: performance over the duration of the funds managed

• Confirmation of the regularity and quality of the ongoing management of Aviva Investors France. Over 10 years, 88% of the funds managed by Aviva Investors France came out in the top half of all funds in their category (over three years, this figure was 97%)
• The asset manager was awarded two trophies by Le Revenu magazine, 2 Lipper Fund Awards and a Victory award by La Tribune/Morningstar
• Total amount of assets under management was €77.4 billion at 31 December 2009 (2008: €69.6 billion).

Notable details from 2009

Strategy
As part of the "One Aviva, twice the value" strategy, 2009 saw the public presentation of the transformation programme Quantum Leap, targeting the pan-European activities (outside the United Kingdom) of the Aviva group, and a reorganisation of Aviva France, together with a major renewal of the management teams, in order to attain new levels of performance.

The main axes of the Quantum programme were presented on 22 October last year and aim to promote a strategy of leadership in Europe on the markets and segments targeted by Aviva Europe from its base of nine million clients, 18,000 advisers and commercial partners and 46 agreements with the banking networks. More than 100 French executives will be asked for their views as part of the studies and projects of this pan-European initiative, in which their multi-dimensional knowledge will serve as accelerators for growth and change. Bois-Colombes is one of the beating hearts of this programme, playing host to more and more executives carrying out European activities on a full-time basis.

In the framework of this pan-European construction and its aim to attain new levels of performance and development, Aviva France implemented an internal reorganisation last June, based around a new, improved and extended executive committee and selective recruitment activities within the roles requiring support, in order to:

• Increase the coherence and dynamism of its multi-distribution model
• Bolster the development of its partnerships
• Further increase marketing capacity within a reinforced client vision, a well-developed Aviva brand and a stronger presence in activities carried out both directly and over the internet, where Aviva already has 900,000 clients
• Strengthen its innovation capacity in life, pensions and non-life products
• Reinforce the industrial efficiency of the business, which already falls within the higher standards of the market, by increasing the exchange of best practice and synergies.

In this context, Aviva France attained major milestones in 2009 by studying, setting or helping to set the course in the areas of development and efficiency:

• Active accompaniment of AFER in its numerous reflections on developing and adapting to the needs of its members
• Strong support to UFF’s "Ambition patrimoine" plan and setting in place of processes aiming to extend the industrial content of their existing partnership, as recently announced by UFF
• Renewal of work on the internet further to improve the organisation of the various distribution channels, particularly partnership with the general agents. The first step in this process was the launch of a new www.aviva.fr last February
• Increasing its capacity to act for self-employed workers, with continuing internal organisation of work and increased external visibility, thanks to the signature of a partnership with the Union des auto-entrepreneurs (Union of Small Entrepreneurs)
• Further upturn in effectiveness of internal efficiency processes
• Success in SOX certification, together with the Aviva Group's quotation on the NYSE and additional reinforcement of risk function ahead of Solvency II
• Initial procedures to approach all potential partners systematically and to clarify partnerships without industrial content (Sogessur)
• Added visibility for the Aviva brand, particularly through our sponsorship of Dee Caffari, the first woman to sail around the world in both directions, and the new deployment phase of the Aviva brand, which has seen La Paix, now Aviva Protection Juridique, become its first point of application.

Commercial policy
In 2009, the general agents, salaried advisers of Aviva Epargne et Conseil and of Epargne Actuelle, the distance sales forces of Aviva Direct and of Eurofil and the brokers, with the support of the services of the company, continued to anticipate their clients’ needs in line with their Good Advice approach, and Aviva has accompanied Afer, Crédit du Nord and its automotive distribution partners in a great many commercial successes. 

Additionally, the Aviva general agents, Eurofil and the company have been extremely active on behalf of those of its insurance clients hit by Storms Klaus and Quinten in January 2009, to speed up their claims, resulting in high satisfaction rates.
This commercial policy made it possible for Aviva to perform better than the market in 2009 in its life assurance and long-term savings activities. 

The year 2009 has seen many online initiatives with a commercial policy based around the following three major concepts: 

• Security: Aviva Lisséo Duo offer in January 2010, strong mobilisation of general agents on behalf of Aviva’s insurance clients in the wake of Storms Klaus and Quentin, "Entreprise citoyenne de la route" charter 
• Dynamism: launches of Aviva Rebond, Assistance Plus pack, improved complementary health option Santhia, active recruitment of sales staff, plus the arrival of a new generation of general agents
• Sustainable development: signature of a partnership with Predica to develop the new-generation round Carpe Diem (HQE and Leed Gold) at Paris's La Défense, 10% discount on car insurance for all those taking out a public transport subscription, launches of the Vélocité pack and ISR Aviva Valeurs Responsables fund. 

In 2010, our commercial policy will continue to focus on these three major axes: security, to anticipate life's ups and downs and provide concrete responses against a backdrop of extremely volatile markets, the dynamism of its product range and commercial initiatives, aiming to increase customer multi-retention rates in all of our networks, and sustainable development, confirming Aviva France's ongoing and concrete commitment.

These actions will be continued and scaled up in 2010.

Socially responsible business and sustainable development
The business has experienced a bottom-up transformation with internal reorganisation, the creation of one Aviva France and the Quantum development and performance programme, accompanied by new requirements to share the direction taken by developments.

At the same time, it has ceaselessly built up the foundations of a socially responsible business, in close consultation with the social partners. In total, over the last 15 months the business has made new progress with the signature, with some or all of the social partners, of seven social agreements covering the following: employment management planning, disability, older citizens, union resources, three-year purchasing power guarantee, gender equality and, more recently, 2010 salaries. 

Nor does Aviva hesitate when it comes to new ideas within the context of social dialogue. It has launched a clarification and sharing procedure under the Quantum programme, with the support of Secafi-Alpha within the group committee, and ensures that the social partners are informed about what is at stake for inter-cultural relations and communication. 

Lastly, Aviva France was delighted to celebrate 10 years of the Aviva Foundation. In the years since its creation, the Foundation has supported nearly 250 projects to support children and the elderly, in France and abroad, covering all areas of solidarity.

Going forward, Aviva hopes to take part in social debate on insurance and is proud to have been the first insurance company publicly to take position in support of a collective reflection on obligatory long-term care insurance, with a view to facing the challenges of the ageing population in France. It will continue in its role as a socially responsible company, for example by hosting an Internet forum on issues related to links between the generations, to be launched imminently. 

Jean-Pierre Menanteau, CEO of Aviva France, commented on the results announced for 2009: "In 2009, Aviva France's well-balanced multi-distribution model involving Non-Life and Life has continued to prove its staying power, due mainly to the performances of our general agents and staff partnerships, particularly with AFER and Crédit du Nord. 

"Our extra commitment to our clients through our Good Advice approach remains central to the actions of our distribution networks and 4700 staff members. It results in an increased presence with our clients, against a backdrop of uncertainty on the financial markets and climate events which have been out of the ordinary. 

"At the same time as responding to these day-to-day operational challenges, the business has also found it possible to start a new stage of transformation to go further in its efficiency and development. I would like to pay tribute to the personal commitment of Aviva France staff members in all sites across Europe and France.

"I am confident that 2010 will see our knowledge continuing to be put to good use in all of these studies, projects and achievements based around new progress in our multi-distribution strategy, marketing and product range, industrial efficiency and in guiding performance and controlling risks in an increasingly pan-European framework. 

"The reinforced solidity of the Aviva Group bottom line with, amongst other things, a solvency surplus of £4.5 billion Sterling, also stands guarantor to our ability to accompany our clients in the long term. 

"Although we welcome these results, the priority for the time being is to mobilise the entire business in order to help our clients to deal with the consequences of Storm Xynthia and the floods."

-ends-
 
Press contacts:
Estelle Joubert 
Telephone: 01 76 62 57 86 
E-mail: estelle_joubert@aviva.fr

Valérie Dudoit (HDL Communication) 
Telephone: 01 58 65 20 16 
E-mail: vdudoit@hdlcom.com

¹ In a PVNBP base (Present Value of New Business Premiums)
² Cash flow is defined as the net balance of premiums, services and purchases
³ Ratio cost of claims out of premiums collected + commission and charges out of premiums written