Aviva 2009 Annual Report Download - page 8

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Aviva plc Group strategy Our purpose is to deliver prosperity and
peace of mind to our customers. We will do
this by realising our vision: ’One Aviva, Twice
the Value’.
Annual Report and Accounts 2009
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.
Progress on our current strategic priorities is set out below.
Our strategic priorities
Manage composite portfolio
We are fully committed to maintaining the composite nature
of the group. We firmly believe in the benefits of life
insurance, general insurance and asset management as
complementary parts of an overall business model that
balances cashflow, returns and long-term value creation, and
delivers prosperity and peace of mind to customers.
Build global asset management
Launched in September 2008, Aviva Investors is a clear example
of the ‘One Aviva, Twice the Value’ strategy in action. Integrating
our global asset management businesses under one umbrella,
Aviva Investors is now a leading asset manager, with offices in 15
countries and £250 billion of funds under management. We plan
to continue to grow Aviva Investors and significantly increase its
contribution to group profits.
Progress 2009
Active management of our composite model provided us with strength in a
challenging environment, specifically:
— Focused on profitability above sales volume by exercising price discipline and
leadership in general insurance and by increasing margins and driving long-term
value creation in life and pensions
— Robust performance in Europe benefiting from our strong bancassurance
relationships despite the challenging environment with excellent sales
performance in Italy (55%) and France (26%)
— Strengthened our position in Asia through strong growth in China (15%) and
Korea (93%). Withdrew capital intensive products in Hong Kong and Taiwan
— Brought UK life and general insurance businesses together under a single
management team
— Grew Aviva Investors worldwide (see below)
— Achieved robust investment performance across all key markets around the globe
— Experienced positive net flows of £2.4 billion from third party clients in difficult
market conditions
— Enhanced our global distribution and manufacturing capability
— Made significant progress in building a truly global business development
capability and achieved a strong sales pipeline across a range of asset classes
and markets
— Achieved top quartile ranking in the most recent UK Greenwich Quality Index
measuring client service and investment performance
Allocate capital rigorously
Capital management will continue to be a key focus. Capital
is treated as a scarce resource, and is allocated to provide the
highest sustainable returns for shareholders. We continuously
seek improvements in capital structure and efficiency.
Strengthened our capital position through a combination of successful strategic
initiatives and disciplined capital and balance sheet management including:
— Robust underlying earnings rebuilding our capital base
— IPO of Delta Lloyd in the Netherlands
— Sale of Australian business
— Reattribution of inherited estate in UK
Multi-channel customer reach
We sell our products in 28 countries in ways that our
customers choose to buy them. We will get closer to our
customers through better understanding of their needs and
by providing products and services that customers want.
We will continue looking for the right distribution in the
right markets.
Boost productivity
We constantly look for ways to boost our productivity, to
support 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.
— Implemented initiatives to improve the customer experience and support the
Aviva brand overall (such as introducing the Aviva Customer Cup to promote
customer focused projects)
— Expanded our distribution reach through renewal of DBS bancassurance
agreement which now extends to markets such as China and India
— Successfully carried out our major rebrand campaign in the UK creating a
significant increase in spontaneous awareness among consumers
— Invested in our e-commerce capability in the UK with the launch of Aviva for
Advisers website and made our online pension tracker proposition available to
over 1 million customers
— Created further value from our leading and unique bancassurance franchise in
Aviva Europe with sales growth of 14% in 2009
— 50% of all business units participating in our annual benchmarked relationship
survey were ranked upper quartile by customers when compared to local
market averages
— Achieved £510 million of cost savings against £500 million target including
reducing total headcount from 54,000 in 2008 to 46,000 in 2009
— Developed a leaner ‘One Aviva’ operating model through:
– Increased use of regional shared services in all regions
– Implementation of centres of excellence in technology
– Outsourced part of the UK Life book to Swiss Re, outsourced IT data centres
in UK and Canada and transferred UK Life Lifetime and Collectives
administration to Scottish Friendly and IFDS, respectively