Aviva 2009 Annual Report Download - page 21

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Performance review
Aviva plc
Corporate responsibility
Governance
Information on the company
Annual Report and Accounts 2009
History and development of Aviva
General
We are a public limited company incorporated under the laws
of England and Wales. We are one of the world’s leading global
insurance groups. We are the fifth largest insurance group in
the world, based on gross written premiums for the 2008 year.
We are one of the top five providers of long-term insurance and
savings products in the UK, Ireland, the Netherlands, Poland and
Spain and one of the top 10 providers of long-term insurance
and savings products in France, Italy, Hungary and Romania for
2008. More detail is provided within the operating segment
review later in this section. Our main activities are the provision
of products and services in relation to long-term insurance and
savings, general insurance and fund management.
Our history
The Group was formed by the merger of CGU plc and Norwich
Union plc on 30 May 2000. CGU plc was renamed CGNU plc on
completion of the merger, and subsequently renamed Aviva plc
on 1 July 2002.
CGU plc and Norwich Union plc were both major UK-based
insurers operating in the long-term insurance business and
general insurance markets. Both companies had long corporate
histories. CGU plc was formed in 1998 from the merger of
Commercial Union plc and General Accident plc. Hand in Hand,
which was incorporated in 1696, was acquired by Commercial
Union in 1905, which itself was incorporated in 1861. General
Accident plc was incorporated in 1865. Norwich Union plc was
founded as a mutual society in 1797 and operated as such until
1997, when Norwich Union plc demutualised and became an
English public limited company.
Between 2000 and 2002 we actively withdrew from lines
of business and markets that did not offer the potential for
market-leading positions or superior returns, or did not otherwise
meet our strategic objectives, principally through the disposal
of property and casualty businesses in the UK London Market,
the US, Australia, New Zealand and certain European countries.
Since 2002, we have grown in part through carefully
selected acquisitions, in particular the acquisitions of RAC
in 2005 and AmerUs in 2006.
During 2009, we disposed of our long-term and savings
and wealth management in Australia and through an IPO we
sold approximately 42% of our Dutch business, Delta Lloyd.
As at 1 January 2010, we have integrated our life, general
insurance and health businesses in the UK under one CEO.
On 5 January 2010, we announced the acquisition of River
Road Asset Management, a US equity manager, to support
the expansion of Aviva Investors business.
Further details of recent acquisitions and disposals can
be found in the section “Financial statements IFRS – Note 3 –
Subsidiaries”.
Business overview
Our aims and strategy
In support of our purpose and our ‘One Aviva, Twice the Value’
vision, Aviva provides a composite portfolio of life and pensions,
general insurance, health insurance and asset management
products through a multi-channel distribution approach.
Working together across regions under one Aviva brand
provides greater financial stability and flexibility through
diversification and a reduced reliance on any one channel,
product, country or customer group. In summary our five
strategic priorities are:
Shareholder information
Financial statements IFRS
Financial statements MCEV
Other information
— To manage the composite portfolio of life, general
insurance and fund management
We are fully committed to maintaining the composite
nature of the group. We firmly believe in the benefits of
life insurance, general insurance and fund management as
complementary parts of an overall business model that seeks
to balance cash flow, returns and long-term value creation.
— To build a global asset management business that will
foster investment performance and create solutions
We have significant asset management functions across
the group. These businesses have historically been managed
separately and we are now bringing them together in a
global asset management business, Aviva Investors, in order
to capitalise on existing strengths around the world and
leverage those strengths in key product and specialist areas.
Our goal is that Aviva Investors will foster investment
performance and create solutions under a single brand
across the world, with an increased focus on obtaining
new external clients.
— To allocate capital rigorously to provide the highest
sustainable returns for our shareholders
Capital management will continue to be a key focus for
us going forward. We treat capital as a scarce resource,
and strive to allocate capital to provide the highest
sustainable returns for shareholders. We continuously
seek improvements in capital structure and efficiency.
— To increase our customer reach through better
understanding customer needs
We sell our products in 28 countries in the way that our
customers choose to buy them. We will continue looking
for the right distribution in the right markets. We believe
we can get closer to our customers through better
understanding their needs, which would further our goal to
generate profitable sales, by providing products and services
that customers want at a fair price.
— To boost productivity to increase our competitiveness,
improve our services and deliver higher value to
our customers
We constantly look for ways to boost our productivity,
to support our sustainable growth, increase our
competitiveness, improve our services and deliver higher
value to our customers. Working together as ’One Aviva‘, we
deliver operational excellence through shared services, shared
knowledge, rationalised systems and effective outsourcing.
Our business
Overview
Our principal activity is the provision of financial products and
services, focused on the following lines of business: long-term
insurance and savings business, fund management and general
insurance and health.
Our business is managed on a geographic basis through
a regional management structure based on four regions, UK,
Europe, North America and Asia Pacific. The four regions
function as six operating segments as both the UK and Europe
regions are split into two operating segments. Due to the size
of the UK region it is split into the UK Life and UK General
Insurance segments, which undertake long-term insurance and
savings business and general insurance respectively. In Europe,
Delta Lloyd is managed separately from the other European
businesses; therefore the region is split into Aviva Europe and
Delta Lloyd operating segments.
Aviva Investors, our fund management business and sixth
operating segment, operates across all four regions providing
Performance review