Life merger in Turkey

Aviva PLC
08 June 2007





News release


8 June 2007



AVIVA AND SABANCI HOLDING ANNOUNCE THE MERGER OF THEIR TURKISH LIFE AND PENSIONS
   BUSINESSES AND THE ESTABLISHMENT OF A BANCASSURANCE AGREEMENT WITH AKBANK


•         Merger creates new leading life and pensions company in Turkey

•         Exclusive long-term bancassurance partnership with Akbank

•         After five years, total annual pension contributions and life premiums
are expected to exceed £500 million* with total assets under management of £2
billion*

•         Combines the largest life direct sales force with a leading
bancassurance position

•         Creates the largest pensions provider with 25% market share

•         Creates the third largest life insurer with 11% market share


Aviva plc ('Aviva') and Aksigorta AS ('Aksigorta'), the insurance company of the
Sabanci Holding Group ('Sabanci') today announce the signing of an agreement to
create a new leading life and pensions company in Turkey.



Under the terms of the agreement Aviva's Turkish life and pensions business,
Aviva Hayat ve Emeklilik A.S. ('Aviva HE') will merge with Ak Emeklilik A.S. ('
Ak E'), Aksigorta's life and pensions business.  The joint venture will enter
into an exclusive long-term bancassurance agreement with Akbank T.A.S. ('Akbank
'), Turkey's second largest privately-owned bank.



The merger will bring together Aviva HE's direct sales force, which is the
largest in Turkey, and Ak E's leading position in bancassurance. The joint
venture will be the largest pensions provider in the market with pensions assets
under management of £290 million** as at 31 March 2007 and a market share of
25%.  It will also be the third largest life insurer with gross written premiums
of £15.5 million** for the three months ended 31 March 2007, representing a
market share of 11%.



The bancassurance agreement draws upon Akbank's leading market position and
Aviva's extensive international bancassurance experience and will provide life
and pension products to Akbank's 5.9 million retail customers through its 687
branches. Akbank is the largest company in Turkey by market capitalisation and
the country's most profitable private bank.



Aviva and Sabanci have high expectations for the further development of the
Turkish life and pensions sector.  The combination of low current insurance
penetration rates and the potential for continued economic development are
expected to create attractive opportunities for profitable growth. The joint
venture will leverage its multi-channel distribution capabilities, utilising the
strengths of the brand of both groups, to maintain its market-leading position
in pensions and to increase its position in life insurance.



Aviva and Sabanci will jointly manage the joint venture through equal
shareholdings.   Meral Ak Egemen, currently general manager of Ak E, will become
chief executive of the merged business while Carl Boehr, currently chief
executive officer of Aviva Turkey, will become executive director, with overall
responsibility for integration.  After five years, total annual pension
contributions and life premiums are expected to exceed £500 million*, with total
assets under management of £2 billion*.



In addition to contributing its Turkish life and pensions business to the joint
venture, Aviva will make a cash payment of US$100 million (£50 million***) to
Aksigorta upon completion of the transaction.



Tidjane Thiam, group executive director, Aviva Europe, said: 'We are creating a
unique business in the Turkish life and pensions market.  It will be a leader in
a rapidly evolving market with outstanding growth potential. The winning
combination of Aviva's strong direct sales team with Akbank's retail strength,
Ak Emeklilik's bancassurance experience and Sabanci's local expertise will be a
powerful springboard from which to grow the business.



'This is an important addition to Aviva's international bancassurance portfolio.
We are now the leading provider of life and pensions products in Europe and have
become a partner of choice for banks across Europe.'



Akin Kozanoglu, president of Sabanci Financial Services Group and deputy
chairman of Akbank, said: 'On March 21st, when we signed the Memorandum of
Understanding, I summarized our view about the potential of this deal as 'two
plus two equals five'. The joint venture, which is built on the complementary
strengths of Ak E and Aviva HE, will be focusing on smart growth. It is our
intention to be the driving force of growth and innovation in this market.'



The transaction is subject to regulatory approval and is expected to complete in
the fourth quarter of 2007.



                                     -ends-



Enquiries:

Media
Hayley Stimpson, director of external affairs [phone]
Sue Winston, head of group media relations [phone]



Analysts
Charles Barrows, investor relations director [phone]
Amanda Wilbraham, investor relations senior manager [phone]



* Converted at 2.64 YTL/GBP
** Converted at 2.70 YTL/GBP
***converted at 1.99 USD/GBP


Notes to editors:



Aviva

-        Aviva is the leading provider of life and pensions products in Europe
with substantial positions in other markets around the world, making it the
world's fifth largest insurance group based on gross worldwide premiums at 31
December 2005.



-        Aviva's principal business activities are long-term savings, fund
management and general insurance, with worldwide total sales of £41.5 billion
and assets under management of £364 billion at 31 December 2006.



-        Aviva's Turkish life and pensions business, Aviva HE, had pension
assets under management of £106 million at 31 December 2006 and life gross
written premiums of £49 million in 2006.



Aksigorta

-        Aksigorta is Turkey's fourth largest non-life insurer by market share
based on premiums of £241 million in 2006.



-        Haci Omer Sabanci Holding AS, one of Turkey's leading financial and
industrial conglomerates, owns approximately 62% of Aksigorta.



-        Aksigorta's life insurance and pensions subsidiary, Ak Emeklilik, had
pension assets under management of £145 million at 31 December 2006 and life
gross written premiums of £23 million in 2006.



Akbank

-        Akbank is Turkey's largest company by market capitalisation and its
most profitable private bank. Akbank offers a wide range of retail, commercial,
corporate and private banking services. Akbank has an extensive distribution
network including 687 branches and alternative delivery channels.



-        Haci Omer Sabanci Holding AS and its subsidiaries own approximately 39%
of Akbank. In January 2007, Citigroup acquired a 20% stake in Akbank for US$3.1
billion.



Other

-        Aviva, Aksigorta and Akbank announced the signing of a memorandum of
understanding on 21 March 2007.



-        This agreement does not include Aviva Sigorta AS, Aviva's non-life
business in Turkey, or Aksigorta's non-life operations.



-        Aviva HE had gross assets of £178 million (audited IFRS, converted at
2.77 YTL/GBP) and Ak E had gross assets of £48 million (unaudited IFRS,
converted at 2.77 YTL/GBP) at 31 December 2006.



-        Pension market position for the new company was based on 2 April 2007
data provided by Pension Monitoring Center of Turkey (assets under management)
and life market position was based on Q1 2007 data published by the Association
of Insurance and Reinsurance Companies of Turkey for life business (gross
written premiums).



-        On a pro-forma basis, for year ending 31 December 2006, total annual
pension contributions and life premiums of the joint venture would have been
£194 million (converted at YTL 2.65/GBP) with total assets under management of
£397 million (converted at 2.77/GBP).








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