Aviva 2014 Annual Report Download - page 45

Operational highlights
In 2014 we:
• Made signicant progress in
transforming our business
• Simplied our holding company
structure to improve cash ow and
increase dividends
• Completed the sale of our stake in
Eurovita to JC Flowers
• Simplied our life joint ventures and
extended our bancassurance agreements
with UBI Banca and UniCredit,
prioritising protection and zero per cent
guarantee products
• Invested in digital apps and portals for
our customers and agents.
Market context and challenges
The Italian insurance market is expected to
show signs of recovery.
The recent trend of general insurers
adopting a more technical approach to
pricing and focusing on operational
efciencies in Italy is expected to continue.
We have taken pricing action in general
insurance, deepened our use of analytics
and made product changes to improve
protability.
In life insurance, customer demand for
with-prot products will continue but the
market is now becoming accustomed to
lower/zero percent guarantee products.
From July 2014 all new policies distributed
are zero percent products. The protection
market is expected to grow as the
economy starts to recover.
Priorities
In 2015 we will:
• Deliver improved value from our
extended life bancassurance agreements,
focusing on the protection market
• Accelerate growth in our general
insurance business, by building our retail
distribution and enhancing our technical
capabilities
• Invest in digital and position ourselves
to make the most of opportunities in
this space.
Spain
Overview
We provide life and pensions products
through our bancassurance partners and
our retail business and have around
1.1million customers. We are sixth11 in
life premiums and fth11 in individual
protection by market share.
In Spain we have strong bancassurance
relationships, and operate a small but
growing retail business. The business has
shown resilience and we continue to make
progress with our turnaround and are well
positioned to take advantage of improving
economic conditions.
Financial performance
The Spanish economy continues to present
challenges to the business. Despite this,
our key metrics demonstrate the progress
we have made in our turnaround and that
we are well positioned to take advantage
of improving economic conditions.
During the year we have signicantly
improved cash remittances to the Group,
which were up 33% to £68 million which
includes a one-off dividend of £19 million.
VNB12 has grown 20% to £30 million
due to expense reductions and improved
margins on with-prots business following
management actions to reduce
guarantees. Excluding Aseval and CxG,
which were sold in April 2013 and
December 2014 respectively, operating
prot was broadly stable at £101 million
(2013: £102 million) but up 5% in constant
currency.
Operational highlights
In 2014 we:
• Successfully completed the sale of our
stake in CxG to NCG Banco for £221
million, following a favourable award
by the Spanish arbitration court
• Introduced new products, offering
cover against specic conditions, such
as breast or prostate cancer.
Market context and challenges
The restructuring of the banking sector is
expected to complete in 2015, which will
bring stability to the bancassurance sector.
Lending conditions are expected to remain
challenging, which will impact upon
credit-linked insurance products.
Priorities
In 2015 we will:
• Consolidate our bancassurance franchise
with key partners as the restructuring of
the banking sector in Spain completes
• Continue to grow our retail business
protably and invest in digitising our
operations and services
• Further improve customer retention rates
to generate additional value from the
back book
• Continue to promote debate on
sustainable savings and help people
understand their nancial decisions,
through the pioneering work of the
Aviva Savings and Pensions Institute.
Supporting our deaf and
hearing-impaired customers
There are around half a million deaf or hearing impaired people in France. Aviva Sourds is
tailored for them. In 2014 we expanded this service, building on the pilot we set up in 2012.
Now there’s a dedicated team of agents, uent in French sign language, who also provide
information on our products through Skype, Elision (a web-based simultaneous interpreting
service), email, SMS, video-calls and fax and, if customers are in the Paris area, face-to-face
meetings. It’s another example of Aviva serving customers how they want and when they want.
Find out more about our wider impact at
www.aviva.com/corporate-responsibility/
11 ICEA - Investigación Cooperativa entre Entidades Aseguaradoras y Fondos de Pensiones, Q3 2013.
12 Excludes Aseval and CxG.
Strategic report
Aviva plc Annual report and accounts 2014 |41