Chairman’s statement

Operationally Aviva is doing extremely well; the executive team and our people across the Group have done a remarkable job in supporting our customers and delivering profits of £2.55 billion for the year.

I thought 2010 would not be an easy year for the financial markets and in some respects it was not. We have had to cope with volatility in the marketplace and increasing regulation. In spite of this, we have made very good progress over the last twelve months. The longer-term economic prospects are looking brighter and our single strong brand enhances Aviva’s resilience.

Corporate responsibility

Aviva has continued to lead the way in helping to shape better futures for people around the world. For example, we have driven the debate about creating a cultural change in how people think about saving by convening the Future Prosperity Panel in conjunction with the Economist Intelligence Unit.

We have also worked hard to promote our corporate responsibility principles across the business and they have become part of everyday life at Aviva. This year we have continued to support Save the Children and Child Rights and You, through our inspiring Street to School initiative. We are carbon neutral worldwide and have been so since 2006 and have a corporate sustainability programme which is industry-leading. You can read more about these and our other commitments in our Corporate Responsibility report online.

Dividend for 2010

I am happy to report that the final dividend for 2010 will be 16 pence, bringing the total dividend to 25.50 pence, an increase of 6% over 2009. We continue to retain the dividend at a sustainable level for business growth.

Changes to the Board

In January 2011, we announced that Andrea Moneta, chief executive of Aviva Europe, Middle East and Africa, would be leaving the Group. We welcomed Igal Mayer, formerly chief executive of Aviva North America, as the new CEO, Aviva Europe, who has been appointed to the Board.

Leadership and effectiveness of the Board

I am pleased to confirm that the Board is compliant with the principles of the new UK Corporate Governance Code relating to the leadership and effectiveness of the Board. These principles are closely aligned to the corresponding principles of the Combined Code on Corporate Governance (Combined Code) which are still applicable for the financial year ending 31 December 2010.

In applying these principles, the Board has ensured that there is a clear distinction between the leadership of the Board and the executive leadership of the Company by the Group chief executive officer. The Board has also adopted detailed terms of reference for the Board and its committees, as well as a rigorous and transparent procedure for the appointment of new directors. The continued effectiveness of the Board is assessed annually through a formal evaluation process. For further details of how we have applied the principles of the Combined Code, please see our Corporate Governance Report here.

Looking forward to 2011

Predicting the future of the financial markets is never easy and the likelihood is that the situation will remain uncertain, perhaps for another 18 months. However, against this backdrop, we are in good shape and have a clear way forward.

On behalf of the Board and the executive, I would like to publicly thank all of our people for the great job they continue to do every day in delivering our brand promise to recognise our customers and help provide them with prosperity and peace of mind.

Lord Sharman of Redlynch OBE
Chairman

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