Aviva 2002 Annual Report Download - page 27

13 Aviva plc
Annual report + accounts 2002
Spain
We have rapidly achieved a top-three ranking in the Spanish life
market, compared with 26th in 1999. This reflects the expansion
of our bancassurance business, which now represents the fourth-
largest banking network in the country. This is in a market where
bancassurance accounts for around 70% of sales. Underpinning
our business is a low-cost, efficient and innovative operation with
one of the lowest expense ratios in the Spanish market.
During 2002 our business continued to grow strongly. Total
new business rose by 39% to £1,309 million (2001: £932 million),
of which 95% came through our bancassurance partnerships.
Operating profit was £83 million (2001: £80 million).
In September 2002 we agreed a new bancassurance joint venture
with savings bank Caja de Granada and our existing partner,
Unicaja, to take effect from 2003. This means our bancassurance
network, which also includes Bancaja, Caixa Galicia and Caja
España, will comprise 3,500 branches with access to about
nine million customers.
We are also investing in complementary distribution channels,
including financial advisers, brokers and agents. Aviva Vida, our
broker and agency company, continues to develop a specialist sales
force. Pension reforms, tax incentives and increasing public
awareness of the need to save offer considerable potential for
further growth in this developing market.
Other Europe
In Germany we achieved good growth as sales of group and
private pensions boosted total new business premiums by 30%
to £154 million (2001: £117 million).
Total new business sales from our other operations in Central and
Eastern Europe amounted to £317 million (2001: £447 million),
reflecting tough economic conditions in the region. Opportunities
will grow with the expansion of the European Union in 2004.
In anticipation, we are strengthening our direct sales force
networks in these countries.
In Poland we remain the leading provider of individual life and
private pensions products and are restructuring our business to
benefit from the next stage of economic development. In Turkey
we are one of the first five companies invited to obtain a licence
to sell pension products.
International
Life and pensions new business outside Europe grew by 42%
to £952 million (2001: £689 million).
Our US operation, which is a niche player in the world’s largest
life market, reported total life and pension sales up 66% to
£587 million (2001: £371 million). We sell life products and
annuities through a network of 7,000 independent agents and
brokers, supported by market-leading web technology. We also
have distribution agreements with several leading banks.
We are a top-10 player in the Australian market, selling a range
of retail investment, insurance and superannuation products
through independent agents, brokers and financial planners.
Total life and pension sales were maintained at £239 million
(2001: £244 million).
Our new bancassurance arrangements in South East Asia are
developing well. Our partnership with DBS, one of the leading
banks in the region, has given us exclusive access to about four
million customers in Singapore since the second half of 2001.
In 2002 we reached a second agreement with DBS, giving us
access to another one million customers in Hong Kong. Total
new business sales from these arrangements were £121 million
(2001: £63 million). Our focus in 2003 will be developing these
operations towards their full potential.
In June 2002 we launched a life business in India with Dabur
Group as a joint venture in which we have a 26% share. We are
developing a high-quality direct sales force, complemented by
bancassurance partnerships with ABN AMRO, American Express,
Lakshmi Vilas Bank and Canara Bank.
China is also a market with enormous long-term potential.
We obtained a licence towards the end of 2002 to write life
insurance in China, and in January 2003 started our new joint
venture operation in Guangzhou with a major state-owned
company, China National Cereals, Oils & Foodstuffs Import &
Export Corporation (COFCO). We have completed our first sales
through Aviva COFCO and will look to establish further branch
offices as the business grows.
2002 – Worldwide new business sales by distribution channels
1 – IFA
2 – Partnerships
3 – Direct
4 – Bancassurance
Total
1
2
3
4
£7,092m
£799m
£3,725m
£3,030m
£14,646m
2001 – Worldwide new business sales by distribution channels
1 – IFA
2 – Partnerships
3 – Direct
4 – Bancassurance
Total
1
2
3
4
£7,600m
£977m
£4,265m
£2,112m
£14,954m