Aviva 2013 Annual Report Download - page 37

Aviva plc
Annual report and accounts 2013
35
Market focus continued
Strategic report Governance IFRS Financial statements Other information
Businesses
in brief:
France
We distribute
through:
AFER, UFF,
900 tied agents, over
1,200 active brokers,
Eurol (online),
Crédit du Nord
3.2m
Customers
4,100
Employees
through more than 1,200 active brokers and
online through our Eurol brand. We also have
key partnerships with AFER, the largest savers’
association in Europe, and Antarius, our joint
venture with Crédit du Nord.
In addition, we have invested in growing
our direct business. We are currently the
largest direct provider of funeral protection
and the second largest direct general insurer.
In 2013 we made strong progress improving
our life product mix, focusing on capital efcient
products. Unit-linked savings and life protection
VNB increased by 130% and 35% respectively.
In 2014 we are continuing this trend, launching
new unit-linked funds and other innovative
solutions, for example Eurocroissance (a hybrid
with-prot and unit-linked product). We also
plan to launch new protection products and
simplify underwriting procedures.
We are also focused on strengthening our
product range for small businesses with new
dedicated products for health and retirement.
In 2013 we increased health premiums from
small and medium sized businesses by 15%.
We have recently introduced a ‘systems
thinking’ approach, empowering our employees
to meet customer requirements more effectively
through simplifying and improving our processes.
To do this, we are investing in the development
of our customer-facing people, providing them
with the skills and training to have greater
autonomy and discretion when serving
customers. We are importing this approach
from our UK business where it has been highly
successful in improving customer service and
reducing cost.
Our business in France showed strong growth on
most key nancial metrics. Total operating prot
improved by 6% to £448 million (2012: £422
million) and cash remittances grew by 16% to
£235 million (2012: £202 million). In addition,
there was particularly strong growth in VNB,
which increased by 39% to £166 million.
While our reported COR increased in the year
to 97.1% (2012: 94.9%), underlying protability,
excluding adverse weather events and reserve
movements improved.
The market in 2014
France is a stable market with a large,
well-developed insurance sector. We expect
higher growth in the protection, health and
retirement sectors as a result of changes in
customer needs and the role of the government
in the provision of social welfare.
Health market reforms currently underway
will take effect in 2016 and change the market
structure. Our strategy is focused on individuals
and sole traders outside the scope of the reforms.
Poland and Turkey: growth markets
Our strategy and full year performance
Poland and Turkey are markets that offer
exciting growth opportunities. They have
growing economies with relatively young and
under-penetrated insurance markets. According
to Swiss Re, life insurance penetration in 2012
in Poland and Turkey is 1.9% and 0.2% of GDP
compared to the European average of 3.9%.
Our focus in these markets continues to
be growing VNB by strengthening existing
distribution networks and relationships, and
broadening our distribution channels.
Poland
We are the second largest insurer by prot in
Poland with over 3.5 million customers and over
£17 billion assets under management. Our life
business has a 7% market share, whilst our
general insurance business is small but growing.
We also operate a life subsidiary in Lithuania
where we are the second largest life insurer and
third largest pension provider.
We have a direct sales force with 2,300 tied
agents and a key relationship with Bank Zachodni
WBK (part of the Santander group). Our life
business remains centred on unit-linked and life
protection sales. Whilst the protection market has
seen signicant growth in recent years, premium
penetration rates remain low.
In 2013, we extended our bancassurance
relationship with Santander increasing our
network from 500 to 900 branches. We have
also improved our digital and online presence.
Distribution is one of our
key strengths in Europe.
We will build on our
existing relationships and
further invest in digital and
owned distribution.
David McMillan
CEO, Aviva Europe
For more information on nancial
performance see ‘Other Information –
Financial and Operating
Performance’ in our annual report
and accounts