Aviva 2007 Annual Report Download - page 27
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Please find page 27 of the 2007 Aviva annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.Norwich Union is a market leader in the long-term savings
market with an unparalleled combination of strong
brand, financial flexibility, product breadth and distribution
reach. We are based in York, with significant operations
in Norwich, Eastleigh and Sheffield in the UK and overseas
in India and Sri Lanka.
Our ambition is to create value for our customers and
to protect what is important to them. We aim to be easy
to do business with and to keep the promises we make
to both our customers and shareholders. Our goal is to
be the clear market leader.
In 2007 we took 1.3 million calls from customers,
2 million calls from distributors, received 7 million pieces
of post, made 750,000 outbound calls, paid £1 billion
to bond customers, £500 million to pension customers,
paid 11,000 protection claims and raised £3 million
for charity, all supported by the commitment of our
11,000 people.
Our business is becoming increasingly profitable.
This year, we successfully grew our new business margin
and improved the profitability of our existing business.
We also made significant progress in our contribution
to the “one Aviva, twice the value” strategic priorities
of simplifying our legacy systems issues, transforming
our business model, continuing to exploit UK synergies
and generating capital for the Aviva group.
Returns to customers also improved and holders
of with profits products saw the value of their policies
increase between 5.4% and 5.8%, while holders of
unit-linked funds and collective investments benefited
from improved returns with 60% of funds in the first
and second quartile.
We help and support our customers’ changing
needs through the provision of an extensive product
range, accessible through a choice of distribution
channels. We hold top-three positions in each of
our key markets of savings, protection, annuities and
pensions, and leverage our scale and breadth to
manage our portfolio for long-term value creation.
We continue to diversify our distribution
footprint to provide ease of access to our customers
and maximise our ability to capitalise on emerging
market opportunities. We are a leading provider in
the financial adviser market, have a successful joint
venture with The Royal Bank of Scotland Group (RBSG),
strong relationships with a number of building societies,
a strategic alliance with the Co-operative Insurance
Society and growing corporate and direct channels.
We continue to expand our distribution model and
in August launched a partnership with the Post Office,
the largest retail and financial services chain in the UK.
Our Lifetime platform has continued to perform strongly;
over 8,000 advisers have signed terms of business
and funds under management reached £737 million
(2006: £341 million) at the end of 2007.
We are a market leading brand. Our “we just make
it easier” advertising campaign with our general insurance
business has helped to underpin existing high levels of
brand awareness.
To support our “one Aviva, twice the value” strategic
objective of simplifying our legacy we are targeting a
position where 80% of our business by value is on five
core contract systems by the end of 2009. In March 2007,
we announced a partnership with Swiss Re to outsource
the administration of almost three million policies, which
will enable us to reduce our 550 product systems to 220.
To support this we successfully transferred 1,000
employees to Swiss Re in October. Policy migration is
now underway with the first phase due for completion
in March 2008, and all policies migrated by early
2009. This initiative combined with other simplification
activity has already enabled us to decommission over
100 systems.
Our people have continued to perform
with dedication throughout this period of change.
The percentage of our people who are proud to work
for NU Life has risen to 69%, whilst those who are
personally committed to achieving our organisational
goals has increased to 86%. The percentage of individuals
who are satisfied with leadership within the company
has also improved to 83%.
We have made significant service improvements
during the year, with service now supporting our ambition
to make it easier for customers. We now offer service
promises across our full life and pension product range.
87% of customers believe that Norwich Union is easy
to do business with, an increase of 7% since 2006.
The number of customers who believe that Norwich Union
cares about them and treats them fairly has also improved
over the year, with customer service complaints falling
by 30%. Maintaining service levels on our Lifetime
platform has proved challenging. We temporarily restricted
access to the platform for new advisers to enable us to
carry out the required rectification work to invest in the
underlying wrap platform.
In December we were fined £1.26 million by
the FSA following the investigation into a series of frauds
committed during 2006. Due to some weakness in
internal controls, 74 policies were fraudulently surrendered
and 558 other customers’ policies were placed at risk.
We are sorry that this situation arose and apologised
to the affected customers when it happened. We have
extensive procedures in place to protect our customers
but in this instance weaknesses were exploited and we
were the target of organised fraud. Our customers can
be assured that we have taken this matter extremely
seriously and have thoroughly reviewed our systems and
controls as a result. All of our seven million customers
are protected by our promise that they will be fully
reimbursed and will get help and support if they are
innocent victims of fraud.
Aviva plc
Annual Report and
Accounts 2007
23
Business
review