Aviva 2013 Annual Report Download - page 270

Aviva plc
Annual report and accounts 2013
268
Information on the Company continued
Distribution
Our products are distributed through bancassurance
partnerships with UniCredit Group, Banco Popolare Group and
Unione di Banche Italiane (UBI). These partnerships give us
access to more than 3,600 branches. In addition, we also have
approximately 4,000 sales advisers, and 600 insurance (multi-
mandate) agents and brokers as of 30 June 2013.
Spain
Business overview and strategy
Aviva Spain is the country’s sixth largest long-term insurer by
gross written premiums with a market share of 4% in the third
quarter of 201310. Aviva Spain sells protection, long-term
savings and pensions, health and accident insurance through a
bancassurance network based on joint ventures with five banks.
We also sell through Aviva Vida y Pensiones, the wholly-owned
Aviva branded long-term insurance company and through our
Spanish mutual insurance company Pelayo.
In April 2013, Aviva completed the transfer of its entire
holding in Aseval11 to Bankia S.A.
Our strategy is to maintain the franchise value in Spain
with no further investment until market conditions improve,
and to develop further our retail operations with new
distribution agreements. The ongoing focus in on less capital
intensive products.
Market
The Spanish market is significantly affected by the current
economic climate and the financial sector continues to be under
pressure as a result of the ongoing restructuring process and
mergers taking place. Any opportunities arising from these will
be considered by Aviva on their merits. In relation to distribution
agreements with bancassurance partners, Aviva is protected
financially within our contracts with Spain’s savings banks (the
cajas) from any detrimental effect arising from these mergers.
The top positions in the long-term life insurance market are
dominated by bank-owned or bank-insurer joint ventures, with
the overall bancassurance channel accounting for more than
72% of gross written premiums at the end of 201210 in the
Spanish life insurance market.
Customers in Spain are accustomed to receiving advice
through banking channels, and we continue to use our
relationship with our partners to capitalise on this whilst
developing our retail agents and broker distribution network.
Products
We offer a wide range of bonds, savings, and protection
products. Investment products include both unit linked and
traditional plans, where profit sharing is regularly used to
increase the policy return. Our traditional plans include savings
schemes and income products. Pension savings products have
valuable tax advantages. We offer a flexible range of individual
and group pension plans with alternative investment choices.
We also offer protection products; covering both mortgages
and credit loans typically providing cover for the family.
Distribution
Through bancassurance partnerships we have established
subsidiaries to distribute our products with each of the banks
as set out below:
 Unicorp Vida – in conjunction with Unicaja since 2001
 CxG – in conjunction with Caixa Galicia since 2001
 Caja España Vida – in conjunction with Caja España
since 2001
 Caja Granada Vida – in conjunction with Caja Granada
since 2002
 Cajamurcia Vida – in conjunction with Cajamurcia
since 2007
10 Investigación Co-operativa entre Entidades Asegurados y Fordos de Pensionies (ICEA).
11 Aseval: “Aseguradora Valenciana, Sociedad Anónima de Seguros y Reaseguros”.
Aviva Vida y Pensiones distributes our products through
professional intermediaries (financial advisers, agents and
brokers), supported by a branch office network and call centres,
and through Pelayo´s network.
Other
The Italy, Spain and Other segment also includes our businesses
in Turkey where we sell life and savings products including unit
linked pensions through our life joint venture. Our Turkish
general insurance operation sells personal motor, household,
commercial property, small and medium size enterprises,
personal accident, marine and travel insurance, and is classified
as held for sale.
Canada
Business overview and strategy
Aviva Canada is the country’s second largest12general insurer.
Through its distribution partners it provides a range of personal
and commercial lines insurance products to nearly three million
policyholders. It has an 8%12 market share and a top five
position12 in all major provinces. Aviva Canada employs
approximately 3,600 people and operates from a head office in
Toronto, with other offices located throughout Canada.
We believe that we are well placed for continued growth
and that our success is underpinned by our two strategic
priorities of building strong broker relationships and maintaining
sophisticated pricing and underwriting. We believe the
transformation of our personal lines business over the last few
years has ensured the business is highly competitive. We expect
that continued refinement to our models will allow us to
leverage this position to positively react to market opportunities.
We will continue to address increasing customer demand for
choice, simplicity and self-service by working with our broker
partners on processes and technology solutions in order to help
them compete with other channels.
Market
Canada is the eighth largest13 non-life market in the world and
is established and stable. The four largest provinces generate
around 88% of total premiums with Ontario, the largest,
representing 47% of total Canadian premiums12.
The Canadian general insurance industry is highly
fragmented with many small players and no dominant
consumer brand. Steady consolidation has resulted in the top
five companies representing 40% of the market and the top
two companies, Intact Financial and Aviva, controlling close to
23% of the market12.The rest of the industry includes several
national carriers as well as smaller, provincially based or niche
companies.
Whilst direct and affinity channels are gradually increasing in
market share, the traditional broker channel accounts for 65%
of distribution14. In addition to the growth of direct and affinity
channels, insurance carriers are increasingly supporting and
controlling distribution through investment in brokers.
Products
The general insurance products that we provide through our
Canadian companies are:
 Personal, home and motor insurance;
 Small and medium-size enterprise commercial insurance,
including motor, property, liability, boiler and machinery,
and surety; and
 Niche personal insurance products including holiday and
park model trailers, hobby farms, boats as well as antique,
classic and custom cars.
12 MSA Research Inc., 2012 online database.
13 Swiss Re Sigma Study (World insurance 2012).
14 Axco Insurance Report for Canada.