Aviva 2007 Annual Report Download - page 28
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Please find page 28 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.We remain committed to providing a broad product
offering to meet the needs of a wide range of customers.
During the year, we continued to focus on simpler
products, making two direct to consumer protection
offerings, an over 50s life cover and our innovative
simplified life insurance product, available through our
new partnership agreement with the Post Office. Within
the financial adviser market, we refreshed our enhanced
annuity product, which offers preferential rates to
customers who are expected to have a shorter than
average life. In anticipation of the decline in appetite for
UK commercial property, we extended and diversified our
fund offering and focused on improving the performance
of our UK equity funds. In the corporate market, we used
our unique ability to combine life, general insurance and
healthcare products to provide a comprehensive package
of products directly into customers’ workplaces,
developing a foothold in this growth area.
We have improved our Financial Adviser Service
Awards rating for the second year running, receiving a
three star rating in the Life & Pension and the Investment
Provider categories. We also won the Best Investment
Service award from Moneyfacts and were voted the best
pension provider by Bankhall, one of the largest financial
adviser networks. Independent research shows that over
the year the percentage of advisers who rate our service
as excellent or good has increased from 52% to 66%.
Adviser service complaints are down 33%, to their lowest
level for four years.
In 2007, despite the market becoming progressively
tougher with rises in interest rates, a slowdown in the
housing market and stock market volatility, Norwich Union
delivered record sales for the second year in a row.
Total sales, including investment sales, were up 6% to
£14,406 million (2006: £13,601 million), driven by significant
increases in sales of individual annuities, bonds and
collective investments. Our bancassurance joint venture
with RBSG also delivered a second consecutive year of
record results with sales in 2007 double those in 2005.
Our new business contribution rose 10% to
£360 million (2006: £327 million), the result of sales
growth and an improvement in margin to 3.1% (2006:
2.9%). This was driven by a combination of the savings
from our ongoing efficiency review and our commitment
to maximising shareholder value through balancing
price, volume and mix.
On a post cost of capital basis, our new business
contribution was 16% higher at £305 million (2006:
£263 million) with a margin of 2.6% (2006: 2.4%).
Life EEV operating return increased strongly by 15%
to £864 million (2006: £744 million) benefiting from higher
new business profitability and operational improvements in
the management of existing business supported by lower
costs and improved retention. In 2006 we committed to cutting
costs at the same time as improving service. We successfully
completed the efficiency review announced in 2006 and
have delivered the promised £125 million of annualised
savings, £108 million of which contributed to 2007 financial
performance. A further £100 million annualised savings
are targeted by the end of 2009 which will eliminate our
existing business expense overrun. Improved customer
retention has been driven through a wide programme of
initiatives including the creation of a dedicated advice team,
improved customer communications and more active
management of distributor commission terms. For similar
reasons, our IFRS life operating profit has increased by
15% to £723 million (2006 restated: £629 million).
Aviva plc
Annual Report and
Accounts 2007
Business review continued:
UK – Long-term savings continued
24
Business
review
Norwich Union launches
“Paying for It”
We have utilised our core
expertise in finance to develop an
educational programme to improve
the financial literacy of 14-19 year
olds. The nationwide programme,
launched with the Citizenship
Foundation, includes in-school
pupil mentoring with over 300 staff
volunteers working with small groups
of young people on economic
citizenship topics such as money,
environment and public spending.
The programme is also supported
by a website drawing on the
characteristics of social networking
sites and providing the opportunity
to use Lifescan, a unique tool
which lets you measure the impact
your financial decisions have on
society as a whole.
For more information visit
PayingForIt.org.uk