Aviva 2013 Annual Report Download - page 269

Strategic report Governance IFRS Financial statements Other information
Aviva plc
Annual report and accounts 2013
267
Information on the Company continued
potential due to the ageing population and the growing need
for private pensions.
The general insurance market in France is mature and highly
competitive. For several years, price competition was high as
insurers sought market share, particularly in the personal lines
market. We believe that during the last couple of years, the
market has entered a phase of price increases that currently
makes up the majority of its marginal growth.
Products
Aviva France provides a wide range of insurance solutions:
life and long-term savings, general insurance and asset
management through Aviva Investors France. The products sold
through our life channel are long-term savings, pensions and
regular premium products, with a focus on the unit-linked
market and a broad range of protection products, primarily
for individuals.
We have a longstanding relationship with the Association
Française d’Epargne et de Retraite (AFER) which is the largest
retirement savings association in France with 714,000 members
as at 31 December 2013, to manufacture and distribute the
AFER savings product.
In the general insurance market our product range includes
household, motor, health and legal protection products and also
a range of insurance products for small to medium sized
entities, farms, craftsmen and tradesmen, and specific products
for building firms and motor fleets.
Distribution
Aviva France has developed a multi-distribution model
combining retail, direct and bancassurance networks through
owned distribution channels, independent networks and
partnerships. Our retail network sell through 900 tied agents, a
direct sales force made up of more than 700 Union Financière
de France (UFF) consultants and 260 direct advisors transferred
to UFF in January 2014 (Aviva France also holds a majority stake
in UFF), and through brokers in the life, health and construction
markets. Direct distribution is managed through the Eurofil
brand for personal general insurance, the Aviva Direct brand for
protection and Epargne Actuelle for the AFER product. We
operate in the bancassurance market through our partnership
with Crédit du Nord, a subsidiary of Société Générale,
selling life, savings and protection products. This partnership
gives Aviva access to over 1.9 million customers, as at
December 2012.
Poland
Business overview and strategy
At 30 September 2013, our Polish life operation is the fourth
largest life insurer in Poland, with a market share of 7% based
on gross written premium, according to the Polish Financial
Supervision Authority (KNF). Our general insurance business is
the eighth largest with a market share of 2.0% on the same
basis. Our focus in Poland is to grow the value of new business.
Market
The Polish market for protection products has seen significant
growth since 1999, although penetration rates remain relatively
low according to KNF statistics. We expect the insurance market
in Poland to continue to grow as its economy matures.
In December 2013, the Polish parliament passed a new
Pension Act following the government review of the Pillar II
Pensions System. The Act will give the state-run pension
system a prominent role in managing the country’s pension
funds and will have important implications for the private
pension providers.
Products
Our life business in Poland provides a broad range of unit-
linked, annuities, bonds and savings products and health
insurance. For institutions we offer group life insurance and
employee pension programmes, which are both unit-linked
products. We offer a standard product as part of our privately
managed Pillar II pensions business. We offer general insurance
products to both commercial entities and to individuals. For
institutions we offer selected commercial lines risks. For
individuals we offer home, accident and travel insurance, which
are primarily sold by tied agents, as well as motor insurance,
which is sold primarily through our direct operation.
Distribution
The direct sales force and bancassurance are the main
distribution channels for most of the Polish group and is made
up of over 2,000 tied insurance agents. Our biggest relationship
is with Bank Zachodni WBK (a subsidiary of Banco Santander)
that sells both life and general insurance products through the
bank’s network of over 946 branches. We also co-operate with
independent insurance agencies and brokers. Our mutual funds
are also sold in brokerage houses and our individual products
are supported by call centre and website sales.
Italy, Spain and Other
Italy
Business overview and strategy
Aviva Italy is the country’s eighth largest life insurer, with a
market share of 3.33% based on 2012 premiums9 (excluding
Eurovita) and is the 13th largest general insurance company
with a market share of 1.22%. We have approximately 2.5
million customers across both the Life and General Insurance
businesses.
During 2013 Aviva Italy continued with its transformation
plan, as set out in 2012, in order to:
 Transform the operating model;
 Improve the product pricing and mix; and
 Rationalise the group structure and capital employed
A review of the business has resulted in the rationalisation of
our business partnerships, with a number of loss making
partnerships closed. In November 2013, Aviva announced a
conditional agreement to sell its entire 39% stake in Eurovita
Assicurazioni S.p.A (Eurovita) to JC Flowers. The sale is subject
to approval by IVASS, the Italian insurance regulator.
Market
The Italian life market is dominated by the top 10 providers
which represented around 84% of the total market share in
20129. The life insurance industry in Italy reported a decline
in volumes as of 31 December 2012, with gross written
premiums down by 4.1% compared to the same period in
2011. The general insurance segment decreased by 1.5% in
the same period9.
Products
Our long-term insurance and savings business offers a wide
range of products covering protection, bonds and savings
and pensions.
In 2013 we focussed on less capital intensive products, such
as our zero minimum guarantee rate products. We have reviewed
our unit linked product range, and further developed what we
believe is our market leading protection offering.
Our general insurance business in Italy mainly provides motor
and home insurance products to individuals, as well as
commercial risk insurance to small businesses. In 2013 we have
further developed our partnership with Banco Popolare for the
distribution of motor insurance through their branches.
9 Associazione Nazionale fra le Imprese Assicuratrici (ANIA).