Aviva 2009 Annual Report Download - page 26

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Aviva plc Information on the company continued
Annual Report and Accounts 2009
Recent changes in the inheritance tax system have eroded the
long-term insurance tax advantages compared to other asset
accumulation businesses, which has impacted our individual
single premium savings product and undertakings for collective
investment in transferable securities (UCITS).
We believe that the general insurance market in France is
mature, showing signs of saturation and increased competition.
In this market we aim to offer competitive pricing and a wide
range of products and services.
Products
Aviva France long-term insurance and savings business sells
mainly protection and bonds and savings products. These
include protection and unit-linked and with profits savings
products. We are the sole distributor of AFER products,
which includes unit linked and with-profits products.
With profits savings products are traditional savings
products with an agreed duration, a minimum guaranteed
credit rate and a profit sharing mechanism to pass part of the
excess return to policyholders. Unit-linked savings products
return all investment returns earned on policyholder assets
directly back to the policyholder.
Aviva France’s general insurance business sells personal
and small commercial insurance including motor, home,
commercial, agricultural and construction products, as well
as health insurance.
Distribution
Aviva France sells products through a complete range of
distribution channels, including approximately 1,800 branch
staff, 400 insurance advisers, more than 1,000 active partner
brokers, as well as Aviva Assurances’ 875-member network.
It has partnerships with AFER, the Union Financière de
France (UFF) network of financial advisers, Médéric, and a
bancassurance partnership with Crédit du Nord, a subsidiary
of Société Générale, which gives Aviva access to 1.4 million
customers through approximately 780 branches as at
31 December 2009. We also have direct sales to private
customers through the internet and by telephone.
AFER is a market reference savings association, which we
believe has strong customer loyalty. AFER products are sold
through Epargne Actuelle, an Aviva Vie network and other
brokers and makes up approximately 53% of our total French
life sales in 2009.
We also have a joint venture with Crédit du Nord called
Antarius. We have exclusive rights to distribute Antarius-
branded life products, which include protection, and unit-linked
bonds and savings products, through Crédit du Nord bank
branches.
Ireland
Business overview and strategy
Our recently rebranded business in Ireland is one of the
country’s leading multi-line insurers with more than one million
customers. As the initial part of the move to a global Aviva
brand, the business was renamed Hibernian Aviva in early
2009 and from 11 January 2010 has traded as Aviva Ireland.
It provides long-term insurance and savings products, asset
management (which is managed by Aviva Investors), general
insurance and health insurance products. We had a 16.7%
share of the Irish long-term insurance and savings market in
2008 based on gross written premiums according to the Irish
Insurance Federation (IIF), and were the third largest life and
pension provider in Ireland. Our general insurance business is
the largest in Ireland, with a market share of 20% in 2008
according to the IIF.
Our strategy in our life business in Ireland is to maximise market
opportunities through re-energising the broker distribution
channel and pushing forward new initiatives with our
bancassurance partner Allied Irish Banks plc (AIB). This includes
developing products with attractive safety features to meet
customer needs when investment markets are more volatile.
In our general insurance business we aim to take advantage
of opportunities to grow our business through building
innovative products, increasing scale and exploiting
distribution advantages.
In May 2008 we acquired 70% of VIVAS Health (now
renamed Aviva). We believe that this initiative presents
significant growth opportunities in a new market sector and
extends our existing partnership with AIB who own the
remaining 30% of this company.
Market
The life insurance market in Ireland is largely consolidated with
approximately 71% of the market share being held by the top
three providers, including Aviva, according to a report by IFF
based on 2008 gross written premiums. Price competition in
the market continues to increase, with focus increasingly on
market share. We believe that customers have moved away
from traditional life products in Ireland because of volatility in
the stock markets and a slowdown in the housing market in
the last two years.
We believe that the general insurance market in Ireland
continues to be very competitive for both personal and
commercial lines business and there is continued downward
pressure on premium rates.
Products
Our long-term insurance and savings business offers a
comprehensive range of protection, bonds and savings and
pension products. The protection products include single,
dual and joint life insurance, mortgage protection, specified
illness and guaranteed whole life cover products. The pension
range covers retirement and investment products including
government promoted personal retirement savings account
(PRSA) schemes.
Our general insurance and health businesses provide a
wide range of products including property, motor, travel, farm
and business insurance. Our motor business is more focused
on personal lines, while our property business is primarily
commercial lines.
Distribution
Aviva has a wide range of distribution channels in the Irish
market. Customers can purchase our products through
intermediary channels such as brokers, corporate partners and
through retail channels including call centres, a nationwide
branch network and the internet.
Our long-term insurance and savings products are
distributed through a broker network and our bancassurance
partnership with AIB. This partnership gives us access to more
than 280 branches. We also provide branded products for a
number of financial institutions.
The majority of our general insurance business is sold
through brokers, with an increasing proportion offered by
direct and corporate partners.