Aviva update on RAC

Aviva PLC
11 October 2005




News release


11 October 2005

                              AVIVA UPDATE ON RAC INTEGRATION



Lex Vehicle Leasing

Aviva plc ('Aviva') announces that HBOS plc ('HBOS'), its 50:50 joint venture
partner in Lex Vehicle Leasing Limited ('LVL'), has exercised an option under
the JV agreement which will lead to Aviva's disposal of its stake in LVL.



Aviva acquired the 50% stake in LVL as part of its acquisition of RAC earlier
this year, and was aware of HBOS's rights at the time the acquisition was made.
This change of control triggered HBOS's option.



Aviva and HBOS will now enter into discussions to agree a fair market value for
LVL that may or may not lead to the sale of Aviva's interest in the JV to HBOS.



Aviva's sale of its stake in the LVL joint venture will have no impact on the
cost savings Aviva stated it would achieve as a result of integrating the RAC
business into Norwich Union.



Cost savings target to be exceeded

Aviva confirms that it will exceed the cost savings target of £80 million per
annum forecast at the time of the acquisition and now expects to achieve savings
of £100 million per annum in 2006.



Aviva will present full details and further news of developments in its general
insurance business in a seminar for investors and analysts on 18 October at Park
Royal, London.  Speakers will include Patrick Snowball, executive director of
Aviva with responsibility for the group's general insurance portfolio, Andrew
Moss, group finance director of Aviva, Mark Hodges, managing director of Norwich
Union General Insurance and Simon Machell, managing director of RAC.

                                    - ends -

Enquiries:



Media
Rob Bailhache, Financial Dynamics                          [phone]



Analysts
Charles Barrows, investor relations director               [phone]
Nicole Marques, investor relations manager                 [phone]





Notes to editors:



•          LVL is a 50:50 joint venture between RAC and HBOS.  LVL provides
vehicle leasing, supply, management, maintenance and incident support for
companies who outsource the day-to-day operations of their fleets.  In 2004 LVL
contributed £23 million of RAC's pre-tax earnings* of £102 million (*EBITA
before group overheads and exceptional items).



•         Details of the Aviva general insurance seminar for investors and
analysts are as follow:

Date:         Tuesday, 18 October 2005
Start:        0800 hrs for 0900 hrs (UK time)
End:         1200 hrs (UK time) followed by lunch
Venue:       Solus House, Park Royal, London
Contact:     [e-mail] or call [phone]





•         Aviva is the world's sixth-largest insurance group based on gross
world-wide premiums and market capitalisation (at 31 December 2004); it is one
of the leading providers of life and pensions in Europe and has substantial
businesses in other markets around the world.



•         Aviva's main activities are long-term savings, fund management and
general insurance, with world-wide total income of £40 billion and assets under
management of £280 billion at 31 December 2004.



•         The Aviva media centre at www.aviva.com/media includes images, company
and product information and a news release archive.


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