Aviva 2001 Annual Report Download - page 15

In August 2001 we agreed a partnership with DBS, one of the largest
banks in south-east Asia and the leading bank in Singapore. The 10-
year agreement gives CGNU exclusive access to about four million
DBS customers in Singapore for the distribution of life and general
insurance products. We also acquired The Insurance Corporation of
Singapore, the life and general insurance subsidiary of DBS, as part of
the transaction.The partnership made an encouraging start, with total
sales of £63 million in the first four months. Our presence in this
highly attractive long-term savings market will be further enhanced
during 2002 by the introduction of Navigator, our successful master
trust investment service from Australia, and changes to the regulatory
framework that will favour low-cost providers over traditional
higher-cost tied agents.
In February 2002 we agreed a second bancassurance partnership with
DBS, giving CGNU exclusive access to one million DBS customers
in Hong Kong, a market where bancassurance accounts for some
30% of sales.
New business sales from our partnership with The Royal Bank of
Scotland Group in the UK began to build momentum during 2001,
following the introduction of new products based on the Norwich
Union portfolio.Total sales, of which we have a 50% share, were
£480 million. Further product development is planned in 2002.
In addition to these major distribution partnerships, we continue
to use technology to help customers who choose to deal directly
with us.
Our new UK online wealth management service at
www.norwichunion.com offers a range of free interactive financial
planning tools and impartial guides to help people manage their
money. It also offers an online fund supermarket Isa and share
dealing service. A range of banking products will be introduced
during 2002. Since its launch in May 2001, the service has attracted
nearly one million unique site visitors and more than 90,000 customer
registrations, of whom about 70% are new to the group. It also earned
two online finance awards from Investor’s Week for innovation of the
year and online provider of the year. During 2002 we will continue to
develop the service as part of the core UK long-term savings business.
During 2001 we also launched the world’s first fully transactional
insurance and investment service on interactive digital television
(iDTV).The new service enables UK customers to buy savings and
insurance products via satellite and cable TV. Our presence on
Sky Active and Telewest enables us to reach an audience of 19 million
people in more than eight million UK households.
Customer service Our UK business has been accredited with the
prestigious Raising Standards accolade, the new symbol of quality,
clarity and service for the UK life insurance industry. Raising
Standards is designed to instill greater consumer confidence in the
industry and ensure people have a clearer understanding of the
products they are buying, investment performance and charges.
Our customer service standards in the UK were put under significant
pressure during 2001, partly because of strong sales arising from
demand for stakeholder pension products. In Financial Adviser’s
annual IFA service awards in November 2001, Norwich Union
received a three-star rating for life and pensions business, compared
with a five-star rating the previous year. We were disappointed, but
have already taken action to restore the high standards that our
customers expect.
In the UK, Norwich Union achieved a 3.3% share, up from 2.4%
in 2000, and a top-10 ranking in the retail investment market.
This increase in our market share reflects brand strength, breadth of
distribution and performance in European equities, fixed income and
property investment, plus our position as a leading provider of
individual savings accounts (Isas). During 2001, we held top-five
positions for gross Isa sales, Isa funds under management, corporate
bond Isa sales and for Cat-standard Isa business.
In Ireland, where we have an 11% retail investment market share,
Hibernian launched a new unit-linked product in June 2001, with
access to more than 80 funds and 15 international fund management
groups. This launch benefited from shared expertise with the group’s
Dublin-based offshore investment specialists, Norwich Union
International. Hibernian also benefited from £14 million of sales
following the introduction of the government’s tax-advantaged
special savings investment account (SSIA) in May.
Unit trust sales in Australia were 18% higher at £347 million (2000:
£295 million) following strong inflows during the fourth quarter.
Multi-distribution capability Pursuit of our aggressive growth
targets requires that we maximise our use of a range of distribution
methods, tailored to suit individual markets. Total sales of new
business are 51% through financial advisers, 35% direct and tied
agents, and 14% via bancassurance, where our newer partnerships
are set to deliver growth in 2002.
Advice channels remain very important to CGNU, particularly in
mature markets where an array of complex choices can face the
customer. Some of the key benefits we provide for financial advisers
include a broad, high-quality product range, strong brand recognition,
financial strength, and effective use of technology. In the UK,
where Norwich Union receives around 75% of its business from
independent financial advisers, we welcome proposed changes in the
regulatory system and support the underlying intention to create
greater customer access to financial services. Advisers also produce
significant business for Hibernian in Ireland, Delta Lloyd in the
Netherlands and Abeille vie in France.
Bancassurance is an increasingly important mechanism for profitable
growth. Perhaps our most significant move in 2001 was in Spain,
where we formed new bancassurance partnerships with Unicaja,
Caixa Galicia and Caja España to further enhance our strong market
position. The group’s existing arrangement with Bancaja had already
helped to make CGNU the fourth-largest bank distribution network
in the Spanish market, where bancassurance is the dominant
form of distribution, generating over 80% of life new business.
These agreements together provide access to eight million
potential customers through more than 3,000 branches.
A new partnership with UniCredito Italiano, together with increased
distribution through Banca Popolare di Lodi and an existing
arrangement with Banca delle Marche, extended our bancassurance
reach in Italy through more than 2,000 branches. Bancassurance
accounts for over 70% of new business sales in Italy.
70%
long-term savings
proportion
of group
13 CGNU plc