Aviva announces new growth ambitions for its international business

Aviva plc (“Aviva” or “the group”) today announces new growth ambitions for its international business with plans to achieve average annual organic sales growth¹ of at least 10% a year across its international life operations over the next five years, while growing new business profit² at least as quickly as sales.

In addition, Aviva plans further international life growth from new joint ventures and other distribution deals, funded by internally generated capital. It will also continue to grow its international general insurance businesses, in a manner consistent with the group-wide target of meeting or beating a combined operating ratio of 98%.

These objectives are in line with Aviva’s strategy of managing its business for value to deliver profitable growth.

At a presentation for investors and analysts on its international business at 1pm (BST) today Philip Scott, group executive director, Aviva International, will outline the group’s strategy for continued growth across its international businesses. The key points of Aviva’s international strategy are:

• Developing the most effective business models and adapting these to each of Aviva’s chosen markets;
• Continuing to grow Aviva’s existing strong positions in developed markets, notably France, Netherlands, Italy, Ireland, Spain and Canada;
• Building leadership positions in selected emerging markets, notably Central and Eastern Europe, Russia, India and China; and
• Continued delivery of results by Aviva’s strong management teams in each country.

At the presentation Aviva will also outline the successful financial track record of its international portfolio of businesses. In the first quarter of 2006 Aviva delivered a 15% increase in life and pensions sales³ (to £3,674m) from its strong and established positions in the wealthy economies, but under-penetrated life markets, of continental Europe. This was on top of life and pensions sales growth of 13% (to £11,933m) and a 22% increase in new business profit⁴ (to £494m) from Aviva’s continental European businesses in 2005.

The group’s first quarter 2006 performance also included a 56% increase in sales from its North American life business (to £152m) and growth of 39% in Aviva’s newer life operations in the developing economies of Asia (to £129m), where there is longer-term profit potential.

Aviva will also highlight its strong multi-distribution capability which focuses on the most effective distribution to reach customers in each market. In 2005 26% of life new business sales (net of minorities) were made through bancassurance, 40% through tied agents and direct channels and 34% through independent agents and brokers.

Philip Scott commented: “Our focus remains on delivering profitable growth. This commitment to growing both sales and profit from our international life operations demonstrates our belief in our ability to achieve our growth ambitions over the next five years.

“The growth of our life portfolio will come from building on our strong businesses in continental Europe, our growing business in North America and from the excellent positions we are taking in the developing Asian markets. We have a competitive advantage in having secured an early and strong franchise in continental Europe, a market that would now be difficult to enter and which has strong growth prospects. Our North American and Asian businesses are growing fast and we are developing leadership positions for the future in Asia as these economies become wealthier and people develop the savings habit.

“We continue to focus on organic growth with a watchful eye on value-creating acquisition and joint-venture opportunities.”

-ends-

¹ The growth ambition is a compound annual growth rate, post minorities, before acquisitions, and assuming no major changes in conditions.
² New business contribution after cost of capital, tax and minorities.
³ Life and pensions on a PVNBP basis at constant exchange rates
⁴ New business contribution: pre-tax and before the effect of required capital, gross of minorities.

Enquiries:

Analysts
Charles Barrows, investor relations director +44 (0)20 7662 8115
Jessie Burrows, head of investor relations +44 (0)20 7662 2111
Nicole Marques, investor relations manager +44 (0)20 7662 8302

Media
Hayley Stimpson, director of external affairs +44 (0)20 7662 7544
Sue Winston, head of group media relations +44 (0)20 7662 8221
Vanessa Booth, group media relations manager +44 (0)20 7662 2482
Rob Bailhache, Financial Dynamics +44 (0)20 7269 7200

Notes to editors:

• Analysts: The Aviva International seminar for investors and analysts takes place in Amsterdam at 1pm (BST). The presentation slides will be available on the group’s website, www.aviva.com, from 1pm (BST). The presentation is also being filmed for webcast and can be viewed live on the group’s website or by clicking here: www.aviva.com/seminars
• Newswires: There will be a conference call today for wire services at 8:30am (BST) on +44 (0)20 7162 0025. Quote: Aviva, Philip Scott.
• Aviva is the world’s sixth largest insurance group based on gross worldwide premiums and market capitalisation (at 31 December 2004), and is one of the leading providers of life and pensions to Europe, with substantial positions in other markets around the world.
• Aviva’s principal business activities are long-term savings, fund management and general insurance, with worldwide total sales of Ł35 billion and assets under management of £317 billion at 31 December 2005.
• The Aviva media centre at www.aviva.com/media includes images, company and product information and a news release archive.