Aviva 2002 Annual Report Download - page 22

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Operating review: Long-term savings
08 Aviva plc
Annual report + accounts 2002
Overview
Conditions in savings and investment markets continue to be
challenging as a result of the uncertain economic environment and
nervous stock markets. Sales slowed during the year as our
customers took a more conservative approach to equity-backed
products. In the short term, we are addressing this loss of
confidence by promoting savings products that offer an element of
protection for capital or income. Even so, we expect the tough
sales environment to continue in 2003.
Looking further ahead, we are strongly positioned as the largest
life and pensions provider to Europe. We have well-established
businesses in the UK, France, the Netherlands and Ireland and,
over the past few years, have built major operations in Italy and
Spain. Part of our strength also lies in our diverse mix of products
sold through a variety of distribution channels. We have built what
we believe to be one of the insurance industry’s premier
distribution models. Our business will benefit as the increasing
pressure of ageing populations on state welfare schemes leads to
pension reforms, with the onus on the individual to increase
private provision for their future well-being. We are also investing
in the developing markets of South East Asia, India and China,
which have great potential for future growth.
Our comparative success in the face of continuing market
turbulence is reflected in worldwide life and pensions new business
sales being maintained at £13.6 billion (2001: £13.5 billion).
This included a further increase in continental European business
to £5.8 billion (2001: £5.5 billion), which now accounts for
43% of our total life and pensions sales and 49% of life achieved
operating profit.
These figures are a good achievement at a time when encouraging
people to invest for the future has been difficult. We benefited
from our developing bancassurance agreements, notably in the
UK, Spain and Italy, with worldwide total bancassurance sales up
50% at £3.0 billion (2001: £2.0 billion).
We delivered a robust life achieved operating profit of
£1,524 million (2001: £1,665 million) after strengthening our
annuity reserves in the UK.
Growing
our long-term
savings business
aggressively and
profitably.
£1,524m
life achieved operating profit before tax