UK Life, Driving value through excellence Investor and Analyst Event, - PowerPoint PPT Presentation

UK Life, Driving value through excellence Investor and Analyst Event, Wednesday 6 th May 2009 Andrew Moss NUL18.11.08

Disclaimer This presentation may include oral and written “forward-looking statements” with respect to certain of Aviva’s plans and its current goals and expectations relating to its future financial condition, performance and results. These forward-looking statements sometimes use words such as ‘anticipate’, ‘target’, ‘expect’, ‘estimate’, ‘intend’, ‘plan’, ‘goal’, ‘believe’ or other words of similar meaning. By their nature, all forward-looking statements involve risk and uncertainty because they relate to future events and circumstances which may be beyond Aviva’s control, including, among other things, UK domestic and global economic and business conditions, market-related risks such as fluctuations in interest rates and exchange rates, the policies and actions of regulatory authorities, the impact of competition, the possible effects of inflation or deflation, the timing impact and other uncertainties relating to acquisitions by the Aviva Group and relating to other future acquisitions or combinations within relevant industries, the impact of tax and other legislation and regulations in the jurisdictions in which Aviva and its affiliates operate, as well as the other risks and uncertainties set forth in our 2008 Annual Report to Shareholders. As a result, Aviva’s actual future financial condition, performance and results may differ materially from the plans, goals and expectations set forth in Aviva’s forward-looking statements, and persons receiving this presentation should not place undue reliance on forward-looking statements. Aviva undertakes no obligation to update the forward-looking statements made in this presentation or any other forward-looking statements we may make. Forward-looking statements made in this presentation are current only as of the date on which such statements are made. Andrew Moss NUL18.11.08

Agenda • UK Life in excellent shape Mark Hodges, Chief Executive Officer • Driving up profitability & generating capital John Lister, Finance Director • Delivering operational excellence Toby Strauss, Chief Operating Officer • Break and innovation demonstrations UK Life Management Team • Strategic outlook Mark Hodges, Chief Executive Officer • Strategic focus David Barral, Marketing Director Questions & answers Lunch 3

UK Life: an evolving distinctive position 2001 – product positioning Pension 100% Savings 0% Risk 0% NU Risk 100% Savings 100% Pension 0% Consistent strategy & ruthless execution has delivered a distinctive position 4

UK Life: an evolving distinctive position 2008 – product positioning Pension 100% Savings 0% Risk 0% NU Risk 100% Savings 100% Pension 0% Consistent strategy & ruthless execution has delivered a distinctive position 5

Context for strategy: factors shaping the mid term Forces for change Industry past Threats & opportunities Recession • Growth funded by • Capital conservation capital • Margin squeeze RDR & TCF • Single premium driving • Smaller IFA shop volume window Distributor • IFA channel pre- • IFA channel orphans consolidation dominant • Growing role of • A Day boom in DB / DC workplace in retirement personal pensions NPSS • Acceleration in at- • Steady growth in retirement provision retirement needs Demographics The next 3 - 5 years presents a mixture of opportunity and challenge 6

Our strategy will drive consistent outcomes Successful outcomes • Driving in-force value Choices on future • Improved capital efficiency direction and focus • Cash generation • Profitable growth We are now in a position to make choices for the next 3 – 5 years 7

Five key strengths Scale of Aviva customer A large and distinctive customer base base opportunity Unrivalled data and Risk capability capability All-round proposition Momentum in Corporate strength Distribution reach and Distribution strength and depth flexibility Brand Global re-brand These advantages will form the basis of our strategic priorities 8

Agenda • UK Life in excellent shape Mark Hodges, Chief Executive Officer • Driving up profitability & generating capital John Lister, Finance Director • Delivering operational excellence Toby Strauss, Chief Operating Officer • Break and innovation demonstrations UK Life Management Team • Strategic outlook Mark Hodges, Chief Executive Officer • Strategic focus David Barral, Marketing Director Questions & answers Lunch 9

UK Life, Driving Value Through Excellence • A distinctive customer heartland UK Life Market leadership • 5 areas of strategic focus & action • Summary of strategic direction Drive up profitability Purpose Generate capital Prosperity & peace of mind Operational excellence Vision One Aviva, twice the Competitive advantage value Strategic Targets priorities • Manage composite • 98% meet or beat COR portfolio • £500m cost savings by • Build global Asset 2010 Management • Double IFRS EPS by • Allocate capital 2012 at the latest rigorously • 1.5 – 2 x dividend cover • Increase customer on IFRS post tax reach operating earnings • Boost productivity Aviva Investors • Globally integrated business • Transform the investment model • Increase third party business UK Europe N. America Asia Pacific Market leadership Scale, growth, capital • Optimise business mix, Scale, growth • Address legacy • Seize unique growth growth & margin • Prioritised portfolio • Transform business opportunities • Generate net capital • Regional operating returns model • Leverage scale model • Contribute to doubling • Exploit UK synergies • Generate capital • Investment required IFRS EPS by 2012 • Generate capital Driving differentiation 10

We have a distinctive customer heartland Customers Main needs Competitors Basis of competition Wealth managers High net worth Performance Complex wealth Banks, insurers £500k + Advice management Distributors Planning Fund managers Mass affluent £100 – £500k Packaged solutions Scale Middle market £30k – £100k Building wealth Insurers Reach Protection Retail banks Product range Retirement income Brand Mass market £0 – £30k Loans Retail banks Reach Short term savings Aviva UK Life customer heartland Targeting the mid market – plays to our strengths and less competitively crowded 11

Positioning based on deep insight Wealth Comfortable Wealthy Super Rich y Achievers B w g o s n Poor L r i e t t n e r G a E � Overweight for UK Retired � Strong growth predicted Life Stage Pre-retired � 8.6m unserved � Higher average value Family Non-Family Our heartland is not only distinctive but also more profitable 12

Opportunity from our existing customer base Existing UK Life Customers (Millions) UK Life customers by source, m Direct, 1.3 � 40% have no active adviser � Scaling back direct acquisition Have IFA, 3.5 � Re-directing advisory resource � Generating leads from existing No current customers advisor, 1.4 � Industrialise to match opportunity Partner customers, 0.7 Capitalise on untapped value from our existing customers 13

Opportunity from our existing customer base Aviva Life ~7m Customers UK GI 9% Customers Protection Investment 9m 33.2% 29.1% • Cross product holdings low 1.9% • Realistic cross holding Healthcare opportunities <1% Customers 1.6% <0.1% 0.4% 2.5m • Via on-sell and up-sell • Aviva UK-wide opportunity Pension 1.1% Annuity 23.1% 7.9% RAC Customers 4% 9m Capitalise on untapped revenue from our existing customers 14

Opportunity from our unique Risk capability Strong positions in key product sectors Market share 2008 Underlying market growth � Annuity Annuities � WP annuity � Life cover - underprovided UK WP Annuities Unrivalled capability � Mortality and morbidity Protection � Asset / liability expertise � Cutting edge risk science PMI � Combined understanding from Life, GI and healthcare 0% 5% 10% 15% 20% Annuities Protection We will drive significant growth in our high margin Risk lines of business 15 Source: ABI.

Opportunity from our momentum in Corporate sector (1) Aviva UK Life PVNBP £m 2,500 Momentum • Proposition innovation 2,000 • Case and tender sizes up • 82 schemes Q1 1,500 • BPA foothold 1,000 • Global brand • Full wind down solutions 500 • Unrivalled combined capability pensions, BPA 0 and healthcare 2005 2006 2007 2008 Corporate pensions BPA Drive profitable growth in the Corporate sector 16 (1) Aviva UK Life PVNBP on an EEV basis

Opportunity from our distribution reach post RDR Advisers Today Advisers 2013 UK Life Strategy High net worth Independents £500k + Commercial focus c. 10,000 Mass affluent IFA £100k – £500k c. 21,000 Provision gap Grow in-house channel Middle market £30k – £100k General Advisors Tied / multi tied Leverage ‘One-to-many’ 10,000 9,000 channels Corporate Bulk acquisition (eg BPA) Mass market RBS JV Banks, direct Banks, direct £0 – £30k Banks / building socs 19,000 15,000 Post Office Other partners We will shape our distribution portfolio for value and low cost of acquisition 17