Aviva 2009 Annual Report Download - page 33

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Performance review
Aviva plc Information on the company continued
Corporate responsibility
Annual Report and Accounts 2009
Governance
Shareholder information
Financial statements IFRS
Financial statements MCEV
Other information
Performance review
In 2007, Aviva formed a long-term insurance joint venture,
First-Aviva, with First Financial Holdings Company (FFHC)
in Taiwan. First-Aviva, in which we have a 49% shareholding,
started operations in early 2008 and distributes long-term
insurance and savings products through a bancassurance
agreement with FFHC’s flagship subsidiary, First Commercial
Bank, which is Taiwan’s second largest bank network in terms
of number of branches according to the Financial Supervisory
Commission. By leveraging over five million bank customers,
we aim to become the most profitable insurance company in
the bancassurance channel.
In April 2008, we entered the South Korean long-term
insurance market by acquiring a stake in LIG Insurance
Company Ltd through a partnership formed with Woori Finance
Holdings Company Ltd Woori Bank is the second largest
commercial bank in South Korea by market value. We aim to
be a top 10 life insurer by end 2012 by new business premiums.
Market
We believe that the fundamentals of the Asian markets remain
attractive. The low insurance penetration in most countries and
relatively higher GDP growth indicate that prospects for
continued growth in the long-term insurance and savings
industry are good. The economic forecasts from Asia
Development Bank predict GDP growth for the region of 4.3%
in 2009 and 6.6% in 2010 (Asian Development Outlook 2009
Update, 22 September 2009).
In our view, the strong outlook for the region is attracting
a growing number of new insurers and some existing local
insurers are developing wider regional ambitions, resulting
in greater competitive pressure throughout the region.
Products
Our Asian businesses generally offer a range of protection,
bonds and savings and pension products including universal
life, participating life, unit-linked single and regular premium
life insurance, other savings and pensions products and a range
of accident and health insurance products.
In Singapore and Hong Kong, we offer access to a wide
range of mutual funds through Navigator, a wrap
administration platform which allows investors to plan, choose,
manage and track their investments easily and more effectively.
We are looking at opportunities to roll out our Navigator
platform to other attractive markets.
Distribution
We operate a multi-distribution strategy in Asia, with particular
strength in bancassurance, and aim to continue to harness the
benefits of multi-distribution in all of our markets as we expect
the regionally dominant agency sales force model to decline in
the region over coming years as markets mature.
Aviva Singapore has a multi-channel distribution strategy
building on the core bancassurance relationship with DBS Bank
and an expanding network of IFAs. We believe that our UK and
Australia expertise have helped grow this network.
In Hong Kong, we distribute the majority of our products
through bancassurance and IFAs.
In China, India, Malaysia, Taiwan and South Korea
bancassurance is the main distribution method. However, direct
sales force is growing in importance for our business in India.
Australia
For details on the sale of our Australian business, which
completed on 1 October 2009, see “Financial statements
IFRS – Note 3 – Subsidiaries”.
Aviva Australia (prior to the sale on 1 October 2009)
provided investment and compulsory pensions (superannuation)
products through our Navigator platform and protection
insurance business.
In Australia, Aviva provided protection products including
life insurance, total and permanent disability insurance, and
critical illness insurance products.
We distributed protection insurance in Australia through
all major channels with a focus on the IFA channel.
Aviva Investors
Business overview and strategy
Aviva Investors was set up in 2008 to combine major fund
management components of the Aviva group into a single
global fund management business. We have £250 billion in
assets under management as at 31 December 2009 and offer
a broad range of expert investment skills and experience
around the world. We manage internal funds for our long-term
insurance and savings, and general insurance operations as well
as a range of external retail and institutional funds. We provide
these services across most of our geographic operating
segments, with services in 15 countries around the world,
including the UK, the US, Canada, France, Poland, China
and Australia.
Aviva Investors provides investment management services
to a broad range of client types. Our largest client group are
the long-term insurance and savings, and general insurance
businesses of Aviva plc. For these clients we provide bespoke
asset management services, across a broad spectrum of asset
classes. We work extremely closely with these clients to develop
tailored solutions to their policyholder needs.
Our distribution model to external clients is a business-to-
business model, and this is consistent across all regions. We
provide both bespoke segregated solutions for larger clients
or offer access to a variety of fund ranges. Our target clients
for the larger segregated solutions tend to be large pension
schemes and large financial institutions such as insurance
companies and banks.
Our strategy is to rapidly grow our external business
through offering client centric solutions to our customers
across an expanding global footprint. This will be achieved in
conjunction with the establishment of a globally integrated
organisation, supported by a high performance culture and
global core processes.