Aviva 2006 Annual Report Download - page 40

Aviva plc
Annual Report and Accounts 2006 36
Europe continued
Italy
Aviva Italy is the country’s seventh-largest life insurer, with a market
share of 7% at November 2006. Our distribution is principally
through bancassurance and we have significant partnership
relationships with UniCredit Group, Banca delle M arche, Banche
Popolari Unite (BPU) and Banca Popolare Italiana (BPI).
Our main goal is to develop the business through profitable growth.
To achieve our goal, we continue to work with our bancassurance
partners to increase customer penetration and improve value for
customers through product innovation. At the same time, we
continue to focus on maintaining a cost-efficient operation. In all,
we introduced or improved 32 products during the year and
through access to additional branches in the UniCredit Group
we have achieved strong sales growth in 2006. During the year,
our bancassurance partners BPI and BPU both announced corporate
mergers; our existing partnership agreements remain in force
until 31 December 2009 and 31 December 2010, respectively.
We continue to work on expanding our distribution and we
expect approval in 2007 for the transaction involving BPI’s
financial adviser network, bipielle.net.
Our life EEV operating return increased to £110 million
(2005: £96 million) due to a higher new business contribution.
We achieved strong sales growth in 2006 up 22% to
£2,768 million (2005: £2,294 million) benefiting from the launch
of new and improved products and access to additional branches
in the UniCredit Group. New business contribution increased to
£70 million (2005: £59 million) due to significantly higher sales,
representing a new business margin of 2.5% (2005: 2.6%).
The Italian long-term savings market has significant medium-term
growth potential and Aviva’s prospects for continued growth in
2007 are good.
Netherlands
Delta Lloyd Group is a top-five financial services group based in
the Netherlands, with operations in Belgium and Germany.We sell
acomprehensive range of life and pension products in both the
group and individual markets through our principal distribution
channels: our bancassurance joint venturewith ABN AM RO Bank;
directly to customers under our OHRA brand; and via independent
financial advisers under our Delta Lloyd brand.
Our vision is to be the most trusted financial services provider by
excelling in customer service, innovation, efficiency and financial
strength through a combination of effective back-offices and strong
financial disciplines.
During 2006, changing pension laws in the Netherlands, fiscal
changes on life products in the Netherlands and Belgium and the
impact of a reduction in the difference between short-term and
long-term interest rates across the euro zone have adversely
affected our results. Sales of our new “ lifecycle” product in
the Netherlands have not reached the levels of our previous
pre-retirement products and, at the same time, increasing
interest rates across the eurozone have reduced the demand for
mortgages while making competing bank deposit-type products
moreattractive.
Business review continued
iIreland: Hibernian
publishes new report
into pension crisis
In April 2006, Hibernian published a report called
“ The Global Pensions Puzzle” , which examined the
Irish pensions industry in an international context.
It compared the situation in Ireland with conditions in
France, the USA and the UK, and reviewed initiatives
under way in countries such as New Zealand, Sweden,
Chile and Australia.
The purpose of the report was to add to the debate
around financial planning for retirement. The challenges
that Ireland faces are not unique, nor are they as
extensive as in some other developed economies.
Webelieve that solutions from other countries such as
those examined in the report deserve to be investigated
further, as they could be adapted for use in many
European countries.
UFor more information on Hibernian’s pension products
please visit w ww.hibernian.ie