Aviva 2013 Annual Report Download - page 266

Aviva plc
Annual report and accounts 2013
264
Information on the Company
History and development of Aviva
General
Aviva, a public limited company incorporated under the laws of
England and Wales, provides customers with long-term
insurance and savings, general and health insurance, and fund
management products and services.
Our purpose is to free people from fear of uncertainty,
allowing them to get on with their lives.
Our history
The Group was formed by the merger of CGU plc and Norwich
Union plc on 30 May 2000. CGU plc was renamed CGNU plc on
completion of the merger, and subsequently renamed Aviva plc
on 1 July 2002. CGU plc and Norwich Union plc were both
major UK-based insurers operating in the long-term insurance
business and general insurance markets. Both companies had
long corporate histories.
CGU plc was formed in 1998 from the merger of
Commercial Union plc and General Accident plc. General
Accident plc was incorporated in 1865. Commercial Union was
incorporated in 1861 and in 1905 acquired Hand in Hand,
which was incorporated in 1696.
Norwich Union plc was founded as a mutual society in 1797,
and had expanded as a global business by the 20th century.
In 1997 it demutualised and became an English public
limited company.
During 2013, the Group has undertaken and announced a
number of disposals. Further details of these can be found in
the sections ‘IFRS Financial statements – note 4 – Subsidiaries’
and ‘IFRS Financial statements – note 19 – Interests in, and loans
to, joint ventures’.
Business overview
Our aims and strategy
Our long-term strategic framework is based on four theses –
investment, distribution, customer and people.
 Investment thesis
Our aim is to be a diversified insurer with sustainable and
progressive cash flows underpinned by good potential for
growth. The thesis sets out why investors should choose us,
enabling investors to make an informed decision about
our business.
 Distribution thesis
Our aim is to increase the share of business generated in our
own channels, introduce new technology for distributors
and customers, and maintain a diversified distribution mix in
each market, to ensure that we provide a range of channels
through which our customers want to purchase products
from us.
 Customer thesis
Our aim is to meet our customers’ needs better than our
competitors, so that we become the insurer of choice in our
chosen markets.
 People thesis
Our aim is to support our people to achieve their potential,
so they can best serve our customers.
We will allocate resource to three areas of focus:
– Digital – our aim is to increase our share of the direct
digital channel and develop more effective use of data and
new technology.
– Predictive analytics – we will focus on enhancing our
analytics capabilities, increasing the use of internal and
external data to drive improved performance across the
business, including underwriting, pricing and claims.
– Automation – we aim to reduce manual interventions in
processes, reducing overheads and improving efficiency to
benefit our customers.
Our business
Overview
During the year, the Group’s operating segments were changed
to align them with the revised management reporting structure.
The operating segments are: UK & Ireland; France; Poland; Italy,
Spain and Other; Canada; Asia; and Aviva Investors. In October
the Group completed the sale of its United States life, savings
and related internal fund management business, which is
classified as a discontinued operation for the purposes of
reporting financial performance.
Due to the size of the UK & Ireland segment, it has been
split into separate Life and General Insurance segments, which
undertake long-term insurance and savings business and
general insurance and health business, respectively. Aviva
Investors, our fund management business, operates across most
markets providing fund management services to third-party
investors and to our long-term insurance businesses and general
insurance operations.
Our business operates across three main market sectors –
life insurance and savings; general and health insurance; and
fund management.
Life insurance and savings business
Long-term insurance and savings business from continuing
operations accounted for approximately 74% of our total
business based on worldwide total sales from continuing
operations for the year ended 31 December 2013. We reported
total long-term insurance and savings new business sales from
continuing operations of £20.5 billion and investment sales of
£4.9 billion for the year ended 31 December 2013. Our focus is
to remain financially strong so that we can pay claims and
deliver on the promises we have made to our customers,
shareholders and business partners.
Market position
In the UK we have a market share of 8% based on annual
premium equivalent (APE)2 according to the Association of
British Insurers (ABI) data as at 30 September 2013. We also
have life insurance businesses in Ireland, France, Italy, Spain,
Poland, Turkey and Asia. Further details of our position in each
market are set out in the market sections below.
Brands and products
We have operated under the Aviva brand globally since 2010.
Our long-term insurance and savings businesses offer a
broad range of life insurance and savings products. Our
products are split into the following categories:
 Pensions – is a means of providing income in retirement for
an individual and possibly his or her dependants. Our
pension products include personal and group pensions,
stakeholder pensions and income drawdown.
 Annuities – is a type of policy that pays out regular amounts
of benefit, either immediately and for the remainder of a
person’s lifetime, or deferred to commence from a future
date. Immediate annuities may be purchased for an
individual and his or her dependants or on a bulk purchase
basis for groups of people. Deferred annuities are asset
accumulation contracts, which may be used to provide
benefits in retirement, and may be guaranteed, unit-linked
or index-linked.
 Protection – is an insurance contract that protects the
policyholder or his or her dependants against financial loss
on death or ill-health. Our product ranges include term
2 APE is a recognised sales measure in the UK and is the total of new regular premiums plus 10% of
single premiums.