Aviva 2007 Annual Report Download - page 47
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Please find page 47 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’s presence in the North America Region is
underpinned by two highly successful and diverse
businesses, the Aviva USA life business and the Aviva
Canada general insurance business. The Aviva USA
operation ranks first and second in the indexed life and
indexed annuity markets respectively, having achieved
significant growth and market penetration during the
year. Aviva Canada continues to perform strongly through
the insurance cycle and has maintained its number two
position in the Canadian market and remains the leading
insurer in Canada’s largest province, Ontario.
The outlook for the region is strong and we operate
in some of the largest and richest economies in the world.
We will continue the rapid and profitable growth in our
life business and deliver sustainable profitable growth
in our general insurance business. We will achieve our
ambitions by leveraging the strengths of our existing
businesses, exploiting cross-border opportunities and
through developing the Aviva brand across the region.
In the fourth quarter of the year we opened
our regional head office in Chicago. This was an
important step, providing a focal point for our businesses
across the North American region and a central hub
from which business development opportunities across
the Americas can be pursued.
North American life new business and general
insurance premiums grew to £5,014 million (2006:
£2,273 million) and regional EEV operating profit for
North America was up 131% to £408 million (2006:
£183 million) accounting for 11% of the Aviva group.
USA
Aviva USA has had a record year with sales of
£3,602 million (pro forma 2006: £2,821 million) up
39% on a pro forma basis following the acquisition
of the former AmerUs Group completed in late 2006.
This excellent performance was achieved through
the introduction of new products and our expanding
distribution network. We are on track to double
the size of the business within three years following
the acquisition.
Our annuity sales increased 47% on a pro forma basis
to £2,600 million (pro forma 2006: £1,921 million) which
is a terrific result. This performance has been achieved
against a backdrop of an annuity market which has been
unsettled by equity volatility and a low yield environment.
The outlook remains compelling particularly as the
“baby boomer” generation reach and enter retirement
over the coming years.
Other sales grew by 21% on a pro forma basis
to £1,002 million (pro forma 2006: £900 million),
including funding agreement sales of £429 million
(pro forma 2006: £330 million) which are large corporate
transactions. The US life market has grown by 8%
in the year, fuelled by increasing consumer demand
for guaranteed benefits.
Innovation in product design has been a key part
of our success. We launched the second generation
of the Guaranteed Lifetime Withdrawal Benefit rider,
improving a product already recognised as market leading,
and introduced a new suite of products to our proprietary
distribution network.
In addition we are now offering a variety of wellness
products and services through an exclusive relationship
with Mayo Clinic Health Solutions. These services are core
to our new “Wellness for Life” programme, an innovative
industry leading product expected to differentiate and
enhance the Aviva brand in the United States.
We successfully launched a new national marketing
campaign to build Aviva brand awareness across the
United States through television, print media and trade
magazines. Continuing to raise customer awareness
of Aviva in the eyes of both our existing and prospective
customers is an important part of our plans for 2008.
Rating upgrades were announced in October and
November 2007, with AM Best increasing our rating
to A+ “superior”, and Standard & Poors and Fitch
to AA-. These upgrades recognise Aviva USA as being
core to the Aviva group and reflect the strength of
our business in indexed markets, strong earnings
performance and strong capitalisation. The upgrades
are very important to our customers and agents and
will help us continue to grow by being more competitive
in existing distribution channels as well as through
accessing a broader product and distribution platform.
Aviva plc
Annual Report and
Accounts 2007
43
Business
review
%
USA – Product split of total long-term savings sales
1
3
2
1 Life 16
2 Annuities 72
3 Funding agreements 12
Total 100