Aviva 2006 Annual Report Download - page 48

Aviva plc
Annual Report and Accounts 2006 44
International and Morley continued
Rest of the w orld – Long-term savings
2006
IFRS
profit IFRS EEV New New
before operating operating business business
tax profit profit PVNBP* contribution* * margin* *
£m £m £m £m £m %
Asia 9 10 37 685 26 3.8
Australia 59 44 49 297 17 5.7
USA 17 71 32 884 20 2.3
Rest of
the w orld 85 125 118 1,866 63 3.4
2005
IFRS
profit IFRS EEV New New
before operating operating business business
tax profit profit PVNBP* contribution* * margin* *
£m £m £m £m £m %
Asia (37) (30) 30 396 20 5.1
Australia 49 32 44 337 16 4.7
USA (4) (4) 25 527 13 2.5
Rest of
the w orld 8 (2) 99 1,260 49 3.9
*Excludes investment sales. Investment sales totalled £1,564 million
(2005: £1,151 million) giving overall new business sales of £3,430 million
(2005: £2,411 million).
* * Stated before the effect of required capital.
Business review continued
Asia
Aviva has a broad range of operations throughout Asia with
businesses based in Hong Kong, Singapore, India, Sri Lanka and
China. The product ranges, distribution channels and strategies
of each operation vary according to local market conditions.
Aviva Singapore and Hong Kong employ a multi-channel distribution
strategy including a strong partnership with Development Bank of
Singapore (DBS), South East Asia’s largest banking group. In 2006,
we are ranked fourth in Singapore and 14th in Hong Kong.
Our business in Singapore remains the market leader in the
developing IFA segment and in the employee benefits and
healthcare segment, with our employee benefits business covering
one-in-three working Singaporeans. Our strategy is to broaden and
deepen business opportunities with DBS while developing the IFA
and international financial solutions market.
In Hong Kong, our business has progressed significantly over the
last year with a strong increase in sales both through the development
of our IFAchannel, which now represents more than half of our sales,
and through DBS. The overall insurance market is expected to continue
to grow strongly, mainly by the bancassurance and IFA segments.
We expect continued growth in 2007 in the more mature markets
of Singapore and Hong Kong.
Aviva India is our joint venture with the Dabur Group in which we
have a 26% shareholding, the maximum stake currently allowed
by law.Aviva India is ranked seventh overall among private insurance
companies and we are a leader in the bancassurance market, where
we have over 30 (2005: 17) bancassurance agreements in place. The
most significant new agreement in 2006 was announced in January
and is with the Centurion Bank of Punjab. On 16 January 2007, we
announced a further major bancassurance agreement with IndusInd
Bank, one of India’s fastest-growing private sector banks with 1.4
million customers and 148 branches, thereby extending our
leadership in the bancassurance market. The Indian long-term
savings market has significant growth potential. We are continuing
to increase our distribution relationships with banks, and have more
than doubled our direct sales force to over 14,000 (2005: 6,700),
with more than 6,000 in training.
On 1 February 2006, we acquired a 51% interest in Eagle Insurance
Company Limited (Eagle), the third-largest insurer in Sri Lanka, for
acash sum of £15 million. At the same time, Eagle entered into
abancassurance agreement with National Development Bank
Limited, Sri Lanka’s biggest development bank and Eagle’s other
major shareholder. Eagle has now entered its second bancassurance
agreement, with Standard Chartered Bank, and sales commenced
in September 2006.
In China, our joint venture, Aviva-COFCO, operates a multi-channel,
multi-product strategy. We distribute individual products through our
direct sales force, agencies and brokers and banks. We also sell group
business both directly and through intermediaries. As our business
grows in China, we seek to obtain “ first mover” advantage in new
cities. In 2006, Aviva-COFCO increased its presence to six provinces,
with a total of 15 city branches. We are looking forward to the rapid
development of this new market. As at November 2006, Aviva-
COFCO was the fifth-largest foreign joint venture (out of a total
of 25), based on first year premiums.
iAviva-COFCO wins
consumers’ award
Aviva-COFCO received an award for the “ most reliable
foreign life insurance company” in a poll co-ordinated
by Hexun.com, China’s leading financial website among
Chinese consumers in middle to higher income groups.
The poll had approximately 700,000 respondents, who
voted for sectors such as insurance, banking, futures
and fund management. The key measurements used
for the insurance sector were product design and
innovation, sales force quality and customer service.
Compared with other foreign life insurance players,
Aviva-COFCO was recognised for its professionalism,
integrity,and the Aviva parentage.
UFor more information on Aviva-COFCO visit
www.aviva-cofco.com.cn