Aviva 2007 Annual Report Download - page 30
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Aviva plc
Annual Report and
Accounts 2007
Business review continued:
UK – General insurance, health and related services
26
Business
review
UK – General insurance, health and related services
IFRS IFRS Combined
profit operating operating Net written Underwriting
before tax profit ratio* premium result
£m £m % £m £m
2007 241 433 106 5,896 (214)
2006 1,130 1,118 95 6,000 394
* General insurance business only.
Dear Shareholder,
Our UK general insurance business has
had a difficult year. We saw the worst
floods for 60 years, affecting 45,000 of our
home insurance customers and 6,000 small
business customers. Our priority has been
to provide first class service to them during
these difficult times and I am pleased
to report that we have provided industry-
leading service in returning customers
to their homes and property.
To realise the potential in “one Aviva,
twice the value”, we are transforming our
UK general insurance business to improve
the underlying performance of the portfolio
and to be cost leaders in order to deliver
benefits of scale consistent with our market
leading position. Our strategy is to focus on
insurance fundamentals to maximise returns
through the insurance cycle. This means
disciplined underwriting and pricing,
controlling the impact of claims inflation
and providing excellent customer service.
Looking to the future, I believe that we
have a strategy that will allow us to maintain
our market leading position through
simplifying our structure, maximising the
benefits of scale by rigorously managing
our expense base and re-engineering our
operations to provide efficient and effective
service to customers. To achieve these aims,
we have already taken market-leading
rating action across many segments of
our business, and have announced several
measures to bring our expense base in line
with the industry ‘best of breed’ within the
United Kingdom.
Igal Mayer
Chief executive, Norwich Union Insurance
88
90
92
94
96
100
102
104
98
2004 2005 2006 2007
106
0
200
400
600
800
1,000
COR (%)
£m
IFRS operating profit
Operating profit
Combined
operating ratio (%)*
1
2
5
6
4
3
%
Split of net written premium by class of business
(general insurance only)
1 Personal motor 26
2 Homeowner 22
3 Personal other 15
4 Commercial motor 12
5 Commercial property 15
6 Commercial other 10
Total 100
0
1,000
2,000
3,000
4,000
5,000
6,000
2004 2005 2006 2007
(£m)
Net written premium sales of UK general insurance