Aviva 2009 Annual Report Download - page 22

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Aviva plc Information on the company continued
Annual Report and Accounts 2009
fund management services to third-party investors and to our
long-term insurance business and general insurance operations.
Our geographic operating segments offer the following lines
of business to a greater or lesser extent:
Long-term insurance and savings business
Long-term insurance and savings business accounted for over
80% of our total business based on sales for the year ended
31 December 2009. We reported total long-term insurance and
savings new business sales of £32.0 billion and investment sales
of £3.9 billion for the year ended 31 December 2009. Our focus
remains on growing our business profitably and improving our
operational efficiency so that we can fully benefit as our major
markets return to economic growth.
Market position
In the UK we have a market share of 10% based on annual
premium equivalent (APE) according to the Association of British
Insurers (ABI) 2009 data. APE is a recognised sales measure in
the UK and is the total of new annual premiums plus 10% of
single premiums. Long-term insurance and savings products in
the UK represented 22% of our worldwide sales for the year
ended 31 December 2009.
Long-term insurance products from our European
businesses (excluding the UK) represented 42% of total group
worldwide sales for the year ended 31 December 2009.
In North America the purchase of AmerUs in the United
States was completed on 15 November 2006 for consideration
of £1.7 billion. This operation has been rebranded to trade as
Aviva USA and is ranked first in both fixed indexed life and
fixed indexed annuity products in 2008, according to LIMRA
and AnnuitySpecs.
In the Asia Pacific region we operate in eight countries
with businesses at different stages of development.
Brands and products
In the UK we operated under the Norwich Union brand until
June 2009, when Norwich Union became Aviva. Following the
rebrand of Hibernian Aviva in Ireland to Aviva on 11 January
2010, we operate under the brand name Aviva throughout
Europe and the rest of the world, except in Poland and the
Netherlands, where we operate under the names Aviva
Commercial Union and Delta Lloyd, respectively. The business
in Poland will fully adopt the Aviva name in June 2010. The
brand in the Netherlands, Delta Lloyd, will remain unchanged.
Our long-term insurance and savings businesses offer a
broad range of life insurance and asset accumulation products.
Our products are split into the following categories:
— Pensions – a means of providing income in retirement for an
individual and possibly his or her dependants. Our pension
products include personal and group pensions, stakeholder
pensions and income drawdown.
— Annuities – a type of policy that pays out regular amounts
of benefit, either immediately and for the remainder of a
person’s lifetime, or deferred to commence from a future
date. Immediate annuities may be purchased for an
individual and his or her dependents or on a bulk purchase
basis for groups of people. Deferred annuities are asset
accumulation contracts, which may be used to provide
benefits in retirement, and may be guaranteed, unit-linked
or index-linked.
— Protection – an insurance contract that protects the
policyholder or his or her dependants against financial loss
on death or ill-health. Our product ranges include term
assurance, mortgage life insurance, flexible whole life and
critical illness cover.
— Bonds and savings – accumulation products with single or
regular premiums and unit-linked or guaranteed investment
returns. Our product ranges include single premium
investment bonds, regular premium savings plans, mortgage
endowment products and funding agreements.
— Other, which includes equity release and structured settlements.
— Investment sales comprise of retail sales of mutual fund type
products such as unit trusts, individual savings accounts
(ISAs) and Open Ended Investment Companies (OEICs).
Some of our insurance and investment contracts contain a
discretionary participating feature, which is a contractual right
to receive additional benefits as a supplement to guaranteed
benefits. These are referred to as participating contacts.
General insurance and health
General insurance and health insurance together accounted for
20% of our total sales for the year ended 31 December 2009.
In the year ended 31 December 2009, we reported general
and health insurance net written premiums of £9.2 billion.
Market position
We are the leading general insurer in the UK and Ireland based
on gross written premiums for the year ended 31 December
2008 and we are one of the top five general insurers in Canada
and the Netherlands, as based on gross written premiums for
the year ended 31 December 2008. The group has other
European general insurance operations in France, Italy, Poland
and Turkey, and in Asia Pacific we sell general insurance and
health products in Malaysia, Singapore and Sri Lanka.
In the year ended 31 December 2009, 47% of our total
general insurance and health business was written in the UK.
Brands and Products
Our general insurance business currently operates under
different brand names, with Aviva and the RAC in the UK, Delta
Lloyd in the Netherlands and Commercial Union Aviva in Poland.
Our other general insurance operations in Europe, Canada and
Asia Pacific operate under the Aviva brand. During 2010, the
business in Poland will complete its transition across to the Aviva
brand as part of a global branding exercise. RAC in the UK and
Delta Lloyd in the Netherlands will remain unchanged.
Our general insurance business concentrates on personal
lines and commercial lines insurance through the provision of
motor, household, travel, creditor, commercial liability and
commercial property coverage. Our health insurance business
concentrates on private health insurance, income protection
and personal accident insurance, as well as a range of corporate
healthcare products.
Distribution
We have various distribution agreements with bancassurance
partners and joint ventures across many markets in which we
operate. The agreements contain similar terms and depending
on our line of business in that market offer long-term insurance
products, general insurance and health products, asset
management services or a combination thereof. The agreements
have a defined contract term, frequently with the option to
extend. In return for offering our products to their customers,
the bank or joint venture partners receive a commission as a
percentage of sales and in some cases achieve extra commission
if agreed target levels of sales are met. Certain agreements have
a profit sharing element based on a predetermined percentage.
The success of the agreement is regularly monitored against
certain performance indicators which are those typically used
by the management of the business. In some cases, if the
agreed targets are not met, the terms of the contract can be
renegotiated, typically with respect to the level of commission