Aviva 2007 Annual Report Download - page 39
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Please find page 39 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.Aviva Europe continued to deliver profitable long term
savings (including investment sales) growth, with sales
volumes 19% higher at £16,486 million (2006:
£13,731 million) and EEV life operating profit 30%
higher at £1,543 million (2006: £1,171 million).
This performance reflects the benefits of our portfolio
of businesses at different stages of development.
Our general and health insurance businesses
performed strongly in markets where competition is
intensifying. Net written premiums decreased by 2% to
£3,233 million (2006: £3,287 million). Profitability remains
strong across the region, with a general insurance
combined operating ratio of 89% (2006: 90%) and
operating profit of £442 million (2006: £417 million).
We continue to innovate and are making good progress
in developing our online proposition in Ireland.
Our fund management operations in Europe are
continuing to deliver strong investment performance
for our customers and good operating results.
Operating profits were lower than last year at £31 million
(2006: £46 million), reflecting reduced performance fees
in the Netherlands.
France
Life
Aviva France is one of the top-ten long-term savings
businesses in France with a market share of 5%.
Our business focuses on the higher-margin unit-linked
segment in which our market share is 7%. We offer
a comprehensive range of life and savings products,
primarily for private clients. This includes our partnership
with AFER, the largest retirement savings association in
France. Our distribution is multi-channel, including a direct
sales force, brokers, the UFF network of financial advisers,
a direct distribution channel, Aviva Assurances, tied agents
and our bancassurance partnership with Crédit du Nord.
Our business partnership with AFER has progressed
with a successful update of the core product and the
addition of a multi-manager fund. This initiative was
accompanied by marketing campaigns raising public
awareness of the product’s competitiveness, which
boosted sales volumes in the second half of the year.
The other networks have implemented successful
product developments supported by marketing
campaigns, to encourage volumes, in what has been
a difficult period for the market. We continue to be
committed to ensuring that our customers receive best
advice throughout their lifetimes.
Volatility in the financial markets and uncertainty
in the run-up to the May presidential elections led to a
decline in overall market premiums. Even so, Aviva France
out-performed the market, achieving a 2% growth in
sales to £3,662 million (2006: £3,552 million). This strong
sales performance, combined with a continued focus on
profitability, resulted in a higher new business contribution
of £169 million (2006: £153 million), with an increased
margin of 4.6% (2006: 4.3%). The operating profit on
an EEV basis of £537 million (2006: £402 million) was
boosted by the recognition of benefits from the increased
proportion of unit-linked assets within managed funds,
efficiency gains and product development and continued
positive experience variances on lapses and mortality.
The outlook for 2008 is for stable market conditions,
although competition from rival banking products and
equity market uncertainty will affect the life market.
Fund management
Aviva Gestion d’Actifs (AGA) continues to be widely
recognised in the French market as a leading asset
manager, with 89% of our funds ranked in the top half
for performance over a five year period. AGA continues
to earn industry awards; for the fourth consecutive year
Aviva’s multi-fund life policies received a Gold Award
at the 2007 Life Insurance Trophies, held by the leading
financial weekly Le Revenu. IFRS operating profit was
stable at £33 million (2006: £33 million).
Aviva plc
Annual Report and
Accounts 2007
35
Business
review
5000
0
20,000
10,000
5,000
15,000
2004 2005 2006 2007
(£m)
Total sales
General insurance
Investment sales
Life and Pensions
IFRS operating profit
EEV operating profit 0
500
2,000
1,000
1,500
2004 2005 2006 2007
(£m)
Operating profit