Aviva 2009 Annual Report Download - page 48

46
Aviva plc Financial and operating performance continued
Annual Report and Accounts 2009
The table below presents adjusted operating profit and profit
before tax attributable to shareholders’ profits under IFRS from
our operations in Europe for the years ended 31 December
2009, 2008 and 2007.
2009 2008 2007
£m £m £m
Adjusted operating profit
Long-term insurance
and savings business
France 272 275 243
Ireland 50 61 73
Italy 128 48 78
Poland (including Lithuania) 152 162 110
Spain 160 155 119
Other Europe (1) (16) (27)
Aviva Europe 761 685 596
Delta Lloyd 277 196 181
Total long-term insurance
and savings business 1,038 881 777
General insurance and health
France 97 107 70
Ireland 57 68 162
Other Europe (22) 45 41
Aviva Europe 132 220 279
Delta Lloyd 143 177 169
Total general insurance and health 275 397 442
Fund management 31 14 27
Non-insurance (148) (151) (49)
Total operating profit 1,196 1,141 1,197
Profit before tax attributable to
shareholders’ profits 941 48 1,322
Year ended 31 December 2009
Europe sales in 2009 were in line with the prior year at
£21,750 million (
2008: £21,806 million ). A 6% increase in
long-term insurance and savings sales to £18,704 million (
2008:
£17,716 million
) offset a 26% decrease in general insurance
and health net written premiums to £3,046 million (
2008:
£4,090 million
).
Net written premiums in 2009 increased by £1,730 million
or 12% to £16,796 million (
2008: £15,066 million ).
Adjusted operating profit in 2009 was £1,196 million,
an increase of 5%, or £55 million, from £1,141 million.
Europe’s profit before tax attributable to shareholders’
profits was £941 million in 2009, an increase of £893 million
from £48 million in 2008. The increase is mainly attributable
to favourable investment returns.
As a result of the IPO, the strategic management of our
investment in Delta Lloyd is now managed independently from
our other operations. Accordingly, commentary on Europe’s
performance is presented as two separate segments for 2009.
Aviva Europe
Aviva Europe reported an increase in long-term insurance and
savings sales of £1,060 million, or 8%, to £14,375 million
(
2008: £13,315 million ) largely due to the strengthening of
the euro against sterling. Life and pension sales contributed
£668 million to the increase in long-term insurance and savings
sales with £392 million from investment sales. Both France and
Italy reported increases in life and pension sales of 26% and
55%, respectively, with all other markets reporting a decrease
in sales. Poland sales were 41% down reflecting the impact of
pension legislation changes and special promotions in 2008.
General insurance and health sales increased by 4% to
£1,883 million (
2008: £1,812 million ) primarily due to increased
sales in France and other European markets, offset by an 8%
fall in sales in Ireland.
Net written premiums in long-term insurance and savings
businesses were £10,572 million, an increase of £3,201 million,
or 43% (
2008: £7,371 million ) driven by France and Italy. Sales
in France have increased through AFER and Italy reported an
increase in sales of profit sharing single premium products.
Aviva Europe’s long-term insurance and savings business
adjusted operating profit was £761 million, an increase of
£76 million, or 11%, from £685 million in 2008, reflecting
increased profits from existing business in France and Italy due
to favourable experience in claims, lapses and surrenders.
Aviva Europe’s adjusted operating profit of our general
insurance and health businesses was £132 million in 2009, a
decrease of £88 million, or 40%, over £220 million in 2008,
primarily due to extreme weather in Ireland and France during
the year.
Delta Lloyd
Delta Lloyd reported long-term and savings sales of
£4,329 million, a decrease of £72 million, or 2%, on 2008
(
2008: £4,401 million ). Life and pension sales decreased by
11% to £3,665 million with investment sales reported at
£664 million, an increase of 118% on 2008.
General insurance and health sales were £1,163 million
(
2008: £2,278 million ), a decrease of £1,115 million, or 49%,
as a result of the sale of their health business on 1 January
2009. Adjusting for the impact of the sale, Delta Lloyd general
insurance sales were 13% higher on 2008
(2008: £1,028
million)
benefiting from the strengthening of the euro and the
inclusion of a full year’s contribution from Swiss Life Belgium.
Delta Lloyd reported net written premiums of £4,341
million, a decrease of £1,542 million, or 26%, on 2008 (
2008:
£5,883 million
) primarily due to lower group pension contracts
and the sale of the health business.
Adjusted operating profit was £399 million, an increase
of £89 million on £310 million in 2008. Improved profits in
the long-term and savings business resulted from lower new
business strain, driven by a decrease in corporate pension
sales, expense savings, and strengthening of the euro.
Year ended 31 December 2008
Total Europe sales in 2008 increased by £1,356 million or 6% to
£21,806 million (
2007: £20,488 million ), with increases in both
long-term insurance and savings business and general insurance
largely due to the strength of the euro against sterling.
Long-term insurance and savings business in 2008
increased by £498 million or 3% to £17,716 million (
2007:
£17,256 million
). Within this, life and pensions sales increased
to £16,952 million from £15,684 million in 2007 as a result of
significant sales of the individual regular premium product
launched in late 2007 and short-term endowment policies sold
through Deutsche Bank in Poland.
Delta Lloyd’s increased sales were due to a significant
increase in corporate pension sales with five contracts
contributing a total of £1,106 million, which was partly offset
by lower annuity sales as a result of increased competition
from the banking sector. Sales in Other Europe increased due
to a one-off payment of £545 million in Romania from the
introduction of compulsory pensions. These improvements were
offset by decreased sales in Italy and Ireland predominantly as
a result of the worsening economic environment.
Investment sales in Europe in 2008 decreased by
£808 million or 51% to £764 million (
2007: £1,572 million )
due to reduced sales across all countries as a result of the
volatile investment markets.
Europe’s general insurance and health net written
premiums were £4,090 million in 2008, an increase of
£858 million, or 27%, from £3,232 million in 2007. The
increase in the sales result was driven by the strengthening of
the euro, as well as competitively priced health products sold
through our Dutch business and strong sales in Italy through our