Aviva 2006 Annual Report Download - page 30

Aviva plc
Annual Report and Accounts 2006 26
UK continued
Business review continued
Split of UK PVNBP
by product type
1
1 Individual pensions
2 Group pensions
3 Annuities
4 Bonds
5 Protection
6 Equity release
2
3
4
5
6
Split of UK PVNBP by
distribution channel
1
1 Independent financial advisers
2 Bancassurance partnership with RBSG
3 Other partnerships and direct
2
3
UK Long-term savings
IFRS IFRS EEV New New
profit operating operating business business
before tax profit profit PVNBP* contribution** margin**
£m £m £m £m £m %
2006 970 683 744 11,146 327 2.9
2005 1,208 382 589 9,185 269 2.9
* Excludes investment sales. Investment sales totalled £2,455 million
(2005: £1,160 million) giving overall new business sales of £13,601 million
(2005: £10,345 million).
** Stated before the effect of required capital.
Our UK operation, Norwich Union, is a leader in the life and
pensions market with a scale unparalleled in the UK sector.
We are based in York, with significant operations in Norwich,
Stevenage and Sheffield in the UK and overseas operations in India
and Sri Lanka. We are regulated by the Financial Services Authority.
Our ambition is to create value for our customers and protect
what is important to them. We aim to be easy to do business
with and to keep the promises we make to both our customers
and shareholders.
Our goal is to be a clear leader in our market. We will achieve
this by offering a superior range of products to help our customers
grow their wealth and protect their families. In the long term, we
aim to grow the overall UK market by improving financial literacy
and engaging with current and potential customers who are either
underprovided or underprotected.
Our brand, product range, distribution breadth and financial
strength mean that we areuniquely placed to deliver growth
and returns for customers and shareholders.
Norwich Union is the leading brand in the UK life and
pensions market. We have brand awareness and consideration
that consistently rank above other traditional life and pension
providers, and we are a top-four name within the overall UK
financial services industry.
Weare a leading provider in the financial adviser market with
representation on 21 of 28 multi-tie panels. We are the largest
provider to Sesame, Bankhall, Tenet and Simplybiz, the four largest
financial adviser networks in the UK, providing access to over
20,000 advisers. We have a joint venture with The Royal Bank of
Scotland Group (RBSG), tied relationships with 16 building societies
and a strategic alliance with the Co-operative Insurance Society.
We offer a comprehensive range of investment and insurance
products. We hold top-three positions in each of our key markets
and are a major provider in each of our chosen product lines and
channels. Our portfolio of products is diversified and is close to the
overall market mix. Our scale and breadth means we have the
flexibility to manage our portfolio for long-term value creation,
sacrificing market share, where necessary, to secure profitability.
Our scale provides us with a sound financial base from which
to operate. Our in-force book provides a significant, reliable and
predictable source of profit, from which we can fund new business
growth, business development and dividend payments.
2006 has seen an increase in the proportion of gross domestic
product invested in savings and improving market sentiment,
coupled with advisers’ focus on their customers’ pension
arrangements. Our focus has been on capturing our share of this
increased market as we create value for customers and shareholders
by driving out efficiencies, improving customer service and
continuing to develop our product range.
In September 2006, we announced an efficiency programme that
will deliver £125 million of cost savings from 2008 at a one-off
cost of £125 million by the end of 2007. Through initiatives such
as simpler,faster and more customer-focused processes, stronger
supplier management and further sharing of support services across
our other UK businesses; we remain on track to deliver those
savings. By the end of 2006 we had decommissioned 27 systems,
reduced the number of roles by 194 and had already realised
savings of £12 million.