Our strategy

Clear way forward

Strong platform for profitable growth

We have simplified and streamlined the Group, moving from a federation of independent businesses trading across 40 different brands to a successful business operating under a single strong brand. We have reduced costs significantly, strengthened the balance sheet and improved profitability.

A clear focused strategy

However, there is no doubt that the world has changed significantly. Against a backdrop of changes to the economic, business and regulatory environments, we stepped back in the first half of 2010 and assessed our strategic direction. As a result, in this new economic environment we are now looking ahead to the next phase of Aviva’s growth – there are new challenges and exciting opportunities.

Financial targets for 2011

Our strategy gives us a clear way forward, but we are also focused on delivering strong performance in the near-term, so we have set out a number of clear financial deliverables:



Financial targets for 2011

£1.5bn

of net operational capital generation in 2011

£200m

of cost savings and £200m of cost efficiency gains by the end of 2012

97% COR

or better in general insurance by 2011

12% Life IRR

with payback of ten years or less

1 Increasing geographic focus

We will prioritise our investment in 12 markets where we have strength and scale.

UK and Europe: our key focus

Europe map
  • 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 risk and savings products in UK, France, Spain, Italy, Poland, Ireland, Turkey and Russia

North America: focus on growing profits organically

Europe map
  • We will focus on growing profits 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 growing our life protection business to achieve a top ten position while continuing to build our core annuity business

Asia Pacific: focus on growing franchise value

Europe map
  • In Asia Pacific we will pursue franchise growth through organic investment
  • We will focus on the high priority markets of China and India

2 Benefiting from the combination of life and general insurance


Our life and general insurance operations are excellent businesses in their own right, but in addition to their inherent strengths there are significant advantages to running these businesses under one brand and in one group.

Aviva Investors, our global asset manager, is dedicated to building and providing focused investment solutions for clients and continues to target growth in third-party assets to drive franchise value.


Capital

  • The combination of our businesses provides capital benefits by diversifying risks
  • Aviva can hold 30-40% less capital to write new general insurance business than the general insurance business would need to hold on a standalone basis. It is anticipated that this benefit will be reinforced under Solvency II

Cash flows

  • The diversity of our business drives more resilient cash flows and earnings than single line insurers through the cycle
  • Half of Aviva’s net cash flow is generated from general insurance businesses

Cost and efficiency

  • We gain clear scale benefits and cost synergies from having life, general insurance and asset management in one group, including the operational benefits of shared back-office functions, IT and finance resources
  • We can benefit from the opportunity to transfer key skills and capabilities across the Group

Customer and distribution

  • The power of Aviva’s brand differentiates our life, general insurance and asset management businesses
  • This combination makes Aviva an attractive business partner and has allowed us to develop global leadership in bancassurance
  • We create cross-selling opportunities, with our single, trusted brand which is able to meet our customers’ complete insurance, pension and investment needs

3 Building on our core strengths


We will succeed by building on four core strengths. We already perform well in these areas, but by focusing our efforts and resources, we aim to excel at each of them, and enhance Aviva’s position as a leading insurer and asset manager.


Marketing and distribution expertise

  • Leveraging our multi-channel distribution network will provide access to millions of potential new customers
  • We will further develop our sales effectiveness to deliver a broad range of products and services to new and existing customers
  • We will build on our expertise as one of the leading partners to banks in order to develop new bancassurance relationships
  • We will exploit the strength of our brand, which is one of Aviva’s greatest assets

Technical excellence

  • First class technical skills will enable us to offer our customers excellent products at competitive prices
  • We will continue to develop our disciplined approach to underwriting and pricing
  • We will further develop our approach to understanding and taking measured risks, protected by optimised reinsurance

Operational effectiveness

  • Our focus on meeting customer needs will enhance loyalty, improve retention and enable us to sell more products
  • Continually seeking opportunities to streamline our processes will drive efficiency and improve customer service
  • We will continue to invest in our market-leading claims management expertise

Financial discipline

  • We will allocate capital rigorously to the opportunities that provide the best risk-adjusted returns
  • Managing our portfolio selectively will enable us to invest and deepen our presence in our priority markets
  • We will balance sales growth with profitability of new business
  • We will manage investment risk and gearing effectively

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