Aviva 2014 Annual Report Download - page 28

Not
Everywhere
We will focus on a select number of
markets where we have scale and
protability or a distinct competitive
advantage – where we can win
Why it’s important?
All insurance companies need
diversication, for example in products or
geography, in order to pool risks. That is
the whole premise behind insurance. But,
we must still strike a balance between
diversication and complexity.
Over the past two years we have
reduced the number of businesses from
28 to 16, so that we can concentrate our
efforts in our key markets. We are also a
British champion and this is our home
base – being the largest player in the UK
is critical to our performance and the
safety and reassurance this provides works
well across many of our target markets.
Not Everywhere is more than just
geography. It is a mindset of excellence.
We need to focus our resources where we
can be most competitive, underpinned by
our core strengths such as underwriting,
risk management, asset & liability
management, and understanding Big Data
and analytics. We will not provide every
product to every customer and we will be
selective about the risks that we take on.
What’s next
We will continue to reshape our
portfolio to drive returns higher:
• Only operate in markets where we have
scale and dened competitive advantage
• Reallocate capital between business lines
and countries
• A preference for composite where
margins and regulation are supportive.
We’re not trying to be all things to all people.
We will continue to deploy capital selectively and
focus on the things we’re good at.
—
Jason Windsor, Chief Capital Ofcer
United Kingdom
Ireland
France
Italy
Spain
Poland
Turkey
Lithuania
Canada
Singapore
China
India
Indonesia
Hong Kong
Taiwan
Vietnam
How we’ve progressed
January
Aviva signed a joint venture in Indonesia
with PT Astra International Tbk (Astra),
Indonesia’s largest publicly listed company,
to create life insurer Astra Aviva Life. Mark
Wilson, Group CEO, said: “Astra is ahugely
respected household name in Indonesia and
the ideal partner for Aviva in one of the
world’s fastest growing insurance markets.
This joint venture creates a compelling
growth opportunity, underlines our
commitment to Asia and supports our
investment thesis of cash ow plus growth.”
March
As part of Aviva’s strategy to focus on
businesses where we have a leadership
position and can generate attractive returns,
we announced the sale of our Turkish
general insurance business Aviva Sigorta
A.S., to a private equity consortium led by
EMF Capital Partners.
April
We announced the sale of our entire 47%
stake in South Korean business Woori Aviva
Life Insurance to NongHyup Financial Group.
September
We announced the sale of our holding
inone of our Spanish joint ventures CxG
Aviva to Novacaixagalicia Banco (NCG
Banco), for €280 million (£221 million)
in cash. The transaction resulted from
a decision by the Arbitration Tribunal in
Madrid, following the merger of
CaixaGalicia and Caixa Nova into
Novacaixagalicia in December 2010,
and the bank’s subsequent restructuring
in 2011.
November
We completed the Initial Public Offering
(IPO) of a minority stake in our Turkish
Life JV with Sabancı Group, AvivaSA,
valuing the company at TL1.68 billion
(£469 million). Separately, AvivaSA and
Akbank agreed to extend their exclusive
bancassurance agreement for another
seven years.
December
We announced our intention to acquire
Friends Life in the UK. Our focus on the
UK is incredibly important to us. This
transaction will create the UK’s leading
insurance, savings and asset management
business with 16 million customers1.
These customers stand to benet from
being part of a stronger, more diversied
and resilient group with a wide range of
products. We are an iconic British
business and this proposed acquisition will
increase our scale in attractive segments
of our home market.
1 Based on customer numbers as at 31 December 2013 and prior to the deduction of overlapping customers.
24 | Aviva plc Annual report and accounts 2014
Our strategic anchor continued