Q1 2006 Life New Business
Aviva PLC
27 April 2006
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27 April 2006
Aviva plc
Worldwide long-term savings new business
Three months to 31 March 2006
• Excellent worldwide total sales* growth of 26%** (£7.9 billion; 2005 £6.3 billion)
• UK total sales growth of 34% (£3.2 billion; 2005 £2.4 billion)
• International total sales growth of 21% (£4.7 billion; 2005 £3.9 billion)
• Life and pension sales up 20% (£6.8 billion; 2005 £5.7 billion)
• New business contribution growth of 20% (£235 million; 2005 £197 million)
• Investment sales up 72% (£1.1 billion; 2005 £0.7 billion)
Richard Harvey, group chief executive, commented:
'I am delighted with our performance in the first quarter of 2006. Aviva has accelerated sales growth across its
worldwide long-term savings businesses and profits are growing in line with sales.
'Geographical diversity is one of our great strengths, and in the first quarter almost 60% of long-term savings new
business comes from Aviva International. In the UK, our sales momentum is highly encouraging and new business profit is
increasingly strongly.
'Aviva is in excellent shape and our balanced portfolio means we are better positioned than ever to seize profitable
market opportunities.'
Financial highlights 3 months to 3 months to Local
31 March 31 March currency
2006 2005 growth
Aviva International
Life and pensions new business sales £4,025m £3,476m 16%
Investment sales £685m £444m 53%
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Total long-term savings new business sales £4,710m £3,920m 21%
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New business contribution before required capital £158m £129m 24%
New business margin before required capital 3.9% 3.7%
Aviva UK
Life and pensions new business sales £2,763m £2,183m 27%
Investment sales £444m £209m 112%
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Total long-term savings new business sales £3,207m £2,392m 34%
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New business contribution before required capital £77m £68m 13%
New business margin before required capital 2.8% 3.1%
Aviva Group
Life and pensions new business sales £6,788m £5,659m 20%
Investment sales £1,129m £653m 72%
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Total long-term savings new business sales £7,917m £6,312m 26%
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New business contribution before required capital £235m £197m 20%
New business margin before required capital 3.5% 3.5%
* All references to sales in this announcement refer to the present value of new business premiums unless otherwise
stated. Present value of new business premiums (PVNBP) is the present value of new regular premiums plus 100% of
single premiums, calculated using assumptions consistent with those used to determine new business contribution.
** All growth rates quoted are at constant rates of exchange.
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Enquiries:
Analysts/Investors: Philip Scott, group executive director, Aviva +44 (0)20 7662 2264
Patrick Snowball, group executive director, Aviva +44 (0)20 7662 7574
Charles Barrows, investor relations director, Aviva +44 (0)20 7662 8115
Media: Sue Winston, head of group media relations +44 (0)20 7662 8221
Vanessa Booth, media relations manager +44 (0)20 7662 2482
Robert Bailhache, Financial Dynamics +44 (0)20 7269 7200
There will be a conference call today for wire services at 7:45am (UK time) on +44 (0)20 7162 0025. This conference
call will be hosted by Philip Scott, group executive director and attended by Andrew Moss, group finance director and
Patrick Snowball, group executive director.
There will be a conference call today for analysts and investors at 9:30am (UK time) on +44 (0)20 7162 0025. This
conference call will be hosted by Philip Scott, group executive director and attended by Andrew Moss, group finance
director and Patrick Snowball, group executive director.
Replay will be available for two weeks until 12 May 2006. The dial in number for replay is +44 (0)20 7031 4064 and the
pass code is 700519.
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Present value of new New business New business
business premiums* contribution*** margin^
--------------------------------- --------------------------------- -----------------------
3 months to 3 months to 3 months to 3 months to 3 months to 3 months to
31 March 31 March Local 31 March 31 March Local 31 March 31 March
2006 2005 currency 2006 2005 currency 2006 2005
£m £m growth** £m £m growth** £m £m
Life and pensions business
France 1,134 1,020 12% 45 36 28% 4.0% 3.5%
Ireland 258 185 41% 5 6 (13%) 1.9% 3.2%
Italy 845 601 43% 21 16 36% 2.5% 2.7%
Netherlands (including Germany,
Belgium and Luxembourg) 722 833 (12%) 19 18 8% 2.6% 2.2%
Poland 160 67 129% 8 3 147% 5.0% 4.5%
Spain 495 461 9% 46 39 19% 9.3% 8.5%
Other Europe 60 60^^ (5%)^^ (1) 2^^ (183%) (1.7%) 3.3%
Continental
Europe 3,674 3,227 15% 143 120 22% 3.9% 3.7%
Asia 129 85 39% 8 5 28% 6.2% 5.9%
Australia 70 74 (8%) 4 2 81% 5.7% 2.7%
United States 152 90 56% 3 2 57% 2.0% 2.2%
Rest of the World 351 249 32% 15 9 45% 4.3% 3.6%
International 4,025 3,476 16% 158 129 24% 3.9% 3.7%
United Kingdom 2,763 2,183 27% 77 68 13% 2.8% 3.1%
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Total life and pensions 6,788 5,659 20% 235 197 20% 3.5% 3.5%
-======================================================================================================================
Investment sales^^^
Netherlands 134 92 48%
Poland 28 17 58%
Other Europe 168 110 55%
Continental Europe 330 219 52%
Australia 309 213 41%
Singapore 46 12 251%
Rest of the World 355 225 53%
International 685 444 53%
United Kingdom 444 209 112%
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Total investment sales 1,129 653 72%
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Total long-term savings 7,917 6,312 26%
============================================================
Navigator sales 310 178 69%
(included above)
* All references to sales in this announcement refer to the present value of new business premiums (PVNBP) unless
otherwise stated. PVNBP is the present value of new regular premiums plus 100% of single premiums, calculated
using assumptions consistent with those used to determine new business contribution.
** Growth rates are calculated based on constant rates of exchange.
*** Stated before the effect of required capital
^ New business margin represents the ratio of new business contribution before the effect of required capital to
present value of new business premiums, expressed as a percentage.
^^ 2005 figures include new business sales of £13 million and new business contribution of £1 million from the
Portuguese business, which was disposed in October 2005. Excluding Portugal, Other Europe sales growth would have
been 20%.
^^^ Investment sales are calculated as new single premium plus annualised value of new regular premiums.
Overview
Aviva achieved excellent growth in worldwide total long-term savings new business sales, up 26% to £7,917 million
(2005: £6,312 million), representing the highest level of quarterly sales since the group was formed. This includes
growth in life and pensions sales of 20% to £6,788 million (2005: £5,659 million) and growth in investment sales of
72% to £1,129 million (2005: £653 million). New business contribution was £235 million (2005: £197 million), with
growth of 20% reflecting the higher sales. New business contribution after required capital grew even faster than
sales up by 29% to £178 million (2005: £138 million), reflecting the success of our value and volume strategy.
Strong total sales performances were achieved by Aviva International and Aviva UK with growth of 21% to £4,710 million
(2005: £3,920 million) and 34% to £3,207 million (2005: £2,392 million), respectively. Sales through the bancassurance
channel achieved 41% growth to £2,161 million, benefiting from additional access to branches in the UniCredit Group in
Italy and the new partnership with Allied Irish Banks (AIB) in Ireland. An impressive sales growth of 92% was also
achieved through the bancassurance partnership with the Royal Bank of Scotland Group (RBSG).
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We are delighted with the first quarter sales performance of Norwich Union in the UK where we have posted a fourth
consecutive quarter of growth. The benefit of the pricing and commission strategy adopted in the second half of 2005,
together with the broad product offering, resulted in strong sales growth across most of the product range. The new
business margin of 2.8% was ahead of the margin achieved in the second half of 2005 of 2.7%.
Sales in Continental Europe grew by 17% to £4,004 million (2005: £3,446 million) and included growth in Ireland of 41%
and Italy of 43% driven by the increased access to bank networks discussed above. Favourable market conditions
in France, Spain and Poland supported strong growth of 12%, 9% and 115% respectively. In the Netherlands, market
developments and exceptional annuity sales in the first quarter of 2005 resulted in lower comparative sales. The
overall new business margin for Continental Europe was higher at 3.9% (2005: 3.7%), reflecting the more favourable
mix of business in France, Spain and the Netherlands.
Within Rest of the World, sales in the United States grew by 56% and in Asia by 65%, including a strong contribution
from Aviva's rapidly developing operations in India and China.
This performance represents a very strong start to the year and growth is expected to continue for the remainder of
2006, albeit at a lower level as stronger comparatives come through.
Aviva International
Aviva International's total long-term savings new business sales grew strongly by 21% to £4,710 million (2005: £3,920
million), while life and pensions new business sales were 16% higher at £4,025 million (2005: £3,476 million). These
figures reflect sales growth in most of our key markets, particularly France and Italy, and include two months sales
through our new partnership with Allied Irish Banks (AIB), Ireland's largest retail bank. Investment sales grew by
53% to £685 million (2005: £444 million), reflecting increased sales through the Navigator platforms together with
the benefit from stronger investment performance.
Continental Europe
France:
Aviva France's sales increased by 12% to £1,134 million (2005: £1,020 million), with strong operational performance
supported by favourable equity market performance and a change to the tax treatment of the Plan d'Epargne Logement
(PEL) bank product.
Tax benefits attached to PEL banking products were restricted with effect from 1 January 2006, prompting significant
transfers from these accounts into insurance products. Consequently, the overall market growth* of 29% in the three
months to March 2006 has mostly benefited bancassurers (with growth of 39% compared with 11% amongst the traditional
insurers). Transfers from PEL products are expected to decrease over the coming months.
Excluding Credit du Nord, Aviva has performed in line with the average for traditional insurers, with 11% growth.
Credit du Nord new business sales grew by 18%.
Aviva's total unit-linked sales were 23% higher at £501 million (2005: £411 million), representing 46% of overall
savings sales. In particular, unit-linked sales in AFER were 53% higher at £165 million (2005: £109 million). Growth in
Euro fund sales was 6%, with sales of £586 million (2005: £562 million) reflecting Aviva's continuing strategic focus
on unit-linked business.
Since late in 2005, Aviva's distribution networks have been encouraging policyholders to transfer existing 100% Euro
funds into more balanced Euro and unit-linked portfolios, as allowed by the 'Fourgous' amendment, while ensuring
that policyholders are receiving best advice. Experience to date has been encouraging, with £700 million of existing
funds transferred into unit-linked funds. While these transfers are not included in our new business figures, this
initiative brings benefits both through increasing the proportion of existing investment in less capital-intensive
unit-linked funds and enabling a greater proportion of future new business from existing customers to be unit-linked.
Although a slow down in the rate of growth is expected following this exceptional first quarter, Aviva expects strong
growth in unit-linked business to continue for the remainder of 2006, with the timing of campaigns in the bancassurance
channel and equity performance resulting in some volatility in quarterly sales levels.
New business margin increased to 4.0% (2005: 3.5%) with a resulting increase in new business contribution of 28% to
£45 million (2005: £36 million). The increased margin reflects the higher mix of unit-linked sales.
Ireland:
In Ireland, Aviva's new business sales increased by 41% to £258 million (2005: £185 million), including sales of
£93 million through the new bancassurance partnership with AIB, Ireland's largest retail bank, since it began at the
end of January. While in its early stages, progress on the integration of the Hibernian Life & Pensions and AIB
operations is proceeding well. On a combined basis, Aviva and AIB have a market share of 16%**, making them the third
largest life and pension provider.
* Based on gross written premium.
** Based on annual premium equivalent.
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February and March sales through AIB of £93 million comprised £63 million of life sales, consisting primarily of
single-premium bonds, and £30 million of pensions sales. Both life and pensions showed positive sales development
compared with AIB's sales for the same period in 2005.
Life sales through the existing Hibernian broker channel were 21% higher at £64 million (2005: £53 million), with
strong sales of regular premium unit-linked business. This performance reflected the continued success of the
guaranteed fund and favourable equity markets.
Pension sales through the existing broker channel were £101 million (2005: £132 million), with the decrease reflecting
an exceptional level of investment only pension contracts in the first quarter of 2005. Single premium pension sales
tend to fluctuate from quarter to quarter due to the timing and size of these contracts.
Further growth is expected in 2006 from the development of the product range on offer through AIB's branch network
and through the reinvestment of Special Savings Incentive Accounts (SSIA) that will mature between May 2006 and April
2007, in which AIB has a significant market share.
New business contribution was £5 million (2005: £6 million) with a margin of 1.9% (2005: 3.2%). The reduction in the
margin reflects continuing competitive pressures from the year end and the impact of business mix.
Italy:
Aviva Italy recorded total sales growth of 43% to £845 million (2005: £601 million, which included one-off direct
business of £53 million). This compares favourably with the Italian market, where total sales*** in the first two
months of 2006 fell by 11% due to lower bancassurance activity. UniCredit Group undertook a marketing initiative in
the first quarter of 2006, while all of Aviva's other bancassurance partners are expected to run marketing campaigns
later in the year.
UniCredit Group achieved strong growth with sales up 147% to £528 million (2005: £217 million), although this
exceptional rate of growth is not expected to continue for the rest of the year. Sales were boosted following access to
additional branches in the UniCredit Group network, together with successful marketing campaigns. Regular premium
business sales were up by 168% to £124 million (2005: £47 million).
Banche Popolari Unite achieved sales growth of 27% to £196 million (2005: £156 million) driven by strong sales of
regular premium profit-sharing business. Further new products are planned for later in the year to widen the product
range.
Sales through the Banca Popolare Italiana Group network were £100 million (2005: £140 million). The 2005 figures
include sales of limited offer structured investment bonds, which received less marketing focus during the first
quarter of this year.
Sales through Banca delle Marche were lower at £14 million (2005: £33 million), reflecting a change in the timing of
marketing campaigns with new product launches planned for later in the year.
The long-term growth potential remains strong in the Italian market and Aviva's increased bancassurance distribution
with UniCredit Group further strengthens Aviva's market position. As in previous years, the timing of marketing
campaigns and new product launches varies throughout the year, resulting in some sales volatility each quarter.
New business contribution increased to £21 million (2005: £16 million), reflecting the strong growth in sales, with a
margin of 2.5% (2005: 2.7%).
Netherlands (including Germany, Belgium and Luxembourg):
Delta Lloyd's total sales, including investment sales, were £856 million (2005: £925 million). The Dutch life
insurance market was adversely affected in the first quarter by regulatory changes resulting in individuals needing
to revise their healthcare insurance arrangements, and by fiscal changes removing some of the tax advantages of
pre-retirement products.
Pension and annuity sales fell by 3% to £423 million (2005: £444 million). Delta Lloyd's pension sales tend to
fluctuate from quarter to quarter due to the timing and size of contracts; the first quarter of 2006 includes a
premium from the Delta Lloyd pension scheme amounting to £125 million. Volumes of annuity sales were lower at
£88 million (2005: £172 million), reflecting high volumes in the first quarter of 2005 from limited period special
offers in ABN AMRO and the direct channel.
Life and savings sales were £299 million (2005: £389 million), with the reduction mainly due to lower sales in Germany
and Belgium. In Germany, sales in the first quarter last year included a late influx of endowment sales following
a change in tax law at the end of 2004. In Belgium, sales were lower following the introduction of a 1.1% insurance
tax levy on life insurance premiums from 1 January 2006.
Investment sales increased by 48% to £134 million (2005: £92 million), benefiting from Delta Lloyd's broad
distribution network (including ABM AMRO and Rabobank), an attractive fund offering and buoyant equity markets. Sales
momentum generated during 2005 was continued into the first quarter.
New business contribution was £19 million (2005: £18 million) with margins of 2.6% (2005: 2.2%). The 2005 margin was
depressed by the low margin annuity sales in the first quarter last year which were not repeated in 2006. The 2006
margin incorporates the adverse impact of the 40 basis point decrease in the bond yield within the European Embedded
Value assumptions at the end of 2005.
***Market sales growth is calculated using the volume measure, single plus annualised regular premiums
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The Dutch market currently faces uncertainty due to the large amount of regulatory and fiscal change taking place.
Delta Lloyd continues to focus on profitable growth for 2006.
Poland (including Lithuania):
Aviva's life and pension operations in Poland and Lithuania are leading providers in their respective markets. Total
sales, including investments, were £188 million (2005: £84 million).
Life sales continued to grow strongly increasing by 151% to £89 million (2005: £34 million), including a one-off group
scheme of £14 million. This performance reflects mainly strong sales of single premium unit-linked business, driven
by a combination of a buoyant equity market and positive results from continued development of the direct sales force.
Aviva's bancassurance partnership with Deutsche Bank also contributed to the growth in sales.
Pension sales increased by 106% to £71 million (2005: £33 million), reflecting increased pensions transfers from other
providers and higher receipts of contributions from the State pension agency.
Investment sales were £28 million (2005: £17 million) reflecting a strong equity market and the impact of new
distribution agreements with leading broking houses.
Total new business contribution from life and pension sales was £8 million (2005: £3 million). The new business margin
was 5.0% (2005: 4.5%).
The growth potential of the Polish market continues to be strong, helped by favourable equity market performance.
Spain:
Aviva is a leading bancassurer in the Spanish life market and was ranked third in the market overall^ at the end of
2005. Total sales were £495 million (2005: £461 million, including one-off sales of £25 million).
Sales through bancassurance partnerships were £443 million (2005: £389 million), representing an increase over the
same period in 2005 of 16%. Growth in sales of protection products continued to be strong in a buoyant housing market.
Aviva's partnerships with Unicaja, Bancaja, Caja Espana and Caja de Granada achieved double digit growth primarily
through savings product sales as a result of marketing initiatives.
Sales in Aviva Vida y Pensiones, which distributes through its direct sales force and intermediaries, were £52 million
(2005: £72 million, including one off sales of £25 million). Growth, excluding one-off sales, was 12% reflecting
increased sales of unit-linked business in the favourable market conditions.
Aviva is well-placed for future growth through its bancassurance partnerships and Aviva Vida y Pensiones. However, as
in previous years, quarterly sales will continue to be variable due to the timing of marketing campaigns with banking
partners, and the concentration of sales of pension business in the last quarter of the year.
New business contribution increased by 19% to £46 million (2005: £39 million) and the new business margin grew to 9.3%
(2005: 8.5%) due to the higher margin achieved on protection sales.
Other Europe:
Life and pension sales in Aviva's other Continental European businesses in the Czech Republic, Hungary, Romania and
Turkey amounted to £60 million (2005: £60 million, including £13 million of sales in the Portuguese business which was
sold in 2005). Strong growth of 20% was achieved in continuing businesses, principally from an increase in sales
through the broker channel in Hungary.
In Turkey, where Aviva is a top-five life and pensions provider, total sales were £31 million (2005 : £39 million)
reflecting reduced activity in transfers from existing life to pension policies ahead of the regulatory deadline^^ and
increased competition to recruit sales advisers by newer companies entering the market.
Sales in Luxembourg have risen by 55% to £168 million (2005: £110 million), continuing a strong performance during
2005. Included in this total is £53 million (2005: £80 million) of sales through the Italian representative office.
In March, Aviva was granted a licence by the Federal Service of Insurance Supervision in Russia allowing it to offer
a range of long-term savings and protection products in the Russian market. Aviva is developing its entry strategy,
with sales expected to start later this year.
^ Based on gross written premiums
^^ Turkish legislation for pension business, which came into effect from August 2004, allows for transfers from
existing life policies to new pension policies with the same life company until October 2006. Pensions business has
advantages in terms of the range of investment funds and a lower tax charge on benefits at maturity/retirement.
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Rest of the World
Asian businesses:
In line with its longer-term strategic ambitions for the region, Aviva continues to achieve a strong rate of growth
in new business sales. Total sales from operations in Asia were up 65% to £175 million (2005: £97 million).
Singapore: Total sales increased by 27% to £93 million (2005: £67 million), driven primarily by significantly higher
investment sales through Navigator, the investment fund administration business. Life and pension sales were £47
million (2005: £55 million) reflecting a slow quarter, although bancassurance sales through DBS showed a strong
increase in March. Aviva remains the market leader in the developing broker market as well as the employee benefits
and healthcare segment.
Sales through Navigator increased significantly to £46 million (2005: £12 million), reflecting strong distribution
relationships with key brokers, a comprehensive range of funds offered and a buoyant equity market.
Hong Kong: Sales increased significantly to £40 million (2005: £18 million), due to strong IFA sales together with
good performance from the partnership with DBS in Hong Kong. Aviva's growing IFA channel now accounts for 45% of
total sales.
India: Total sales from our joint venture with the Dabur Group increased strongly in the first quarter of 2006 to
£105 million (2005: £35 million), ranking Aviva seventh amongst private insurers. Our 26% share of new business sales
was £27 million (2005: £9 million). Aviva is the leader in the bancassurance market in India with 22 distribution
agreements. The direct sales force now numbers more than 9,300 agents, with an additional 3,500 in training.
Sri Lanka: On 1 February 2006, Aviva acquired a 51% stake in Eagle Insurance Company Limited (Eagle), the
third-largest insurer in Sri Lanka. At the same time, Eagle entered into a bancassurance agreement with National
Development Bank Limited, Sri Lanka's biggest development bank and Eagle's other major shareholder. Total life sales
since acquisition were £4 million.
China: Sales through the joint venture life business, Aviva COFCO, continue to grow rapidly. Total sales were £22
million (2005: £6 million), of which Aviva's 50% share was £11 million (2005: £3 million). Aviva recently received
approval to open a branch in Jinan, the capital city of Shandong province and sales offices in Xiamen (Fujian province)
and Shenzhen (Guangdong province). This brings the total number of major cities where Aviva is licensed to five, with
sales offices in a further seven cities.
New business contribution increased by 28% to £8 million (2005: £5 million) with a new business margin of 6.2%
(2005: 5.9%), reflecting the growing importance of operations in Asia.
Rapid growth is expected to continue from the developing markets in India and China with significant growth continuing
in the more mature markets in Hong Kong and Singapore.
Australia:
Total sales increased by 28% to £379 million (2005: £287 million), driven primarily by significantly higher investment
sales through Navigator, the master trust fund administration business.
Life and pension sales decreased marginally to £70 million (2005: £74 million). Strong growth from protection products
has continued following product enhancements. Corporate pension sales have declined as a result of market uncertainty
following changes in legislation in July 2005^^^. These changes have resulted in a shift of business for Aviva towards
Navigator retirement funds, with this trend expected to continue. Changes in tax legislation, implemented towards the
end of 2005, are expected to have a beneficial impact on growth in corporate pensions over the medium-term.
Sales through Navigator increased by 55% to £264 million (2005: £166 million) as a result of ongoing improvements in
product offerings, an increase in retirement fund business, sustained customer service levels and our strategic
stakes; in Professional Investment Holdings and Financial Technology Securities. Other investment sales were
£45 million (2005: £47 million).
Future growth is expected to result from these strategic stakes and pension reform, primarily benefiting the
Navigator business. In addition, further growth in protection business is expected.
New business contribution from life and pension sales was £4 million (2005: £2 million). The new business margin
increased to 5.7% (2005: 2.7%), reflecting the strong protection sales.
United States:
Life and pension sales increased by 56% to £152 million (2005: £90 million). This was driven by the A.M. Best rating
upgrade to A+ achieved in November 2005. This rating upgrade contributed to a strong performance in structured
settlements sales. Aviva also benefited from new products launched during 2005, including a deferred annuity tailored
for the bank channel and a fixed-indexed annuity. Aviva remains focused on broadening its distribution with good growth
expected during 2006.
New business contribution was £3 million (2005: £2 million). New business margin was 2.0% (2005: 2.2%).
^^^ From 1 July 2005, for the first time, individuals were entitled to choose where superannuation contributions made
on their behalf by their employer were directed. Previously the employer would choose the plan.
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Aviva United Kingdom
United Kingdom:
Norwich Union made an excellent start to 2006 with total sales, including investments, up by 34% to £3,207 million
(2005: £2,392 million). This result is the fourth successive quarter of growth, and the highest quarterly results on
record. The new business margin of 2.8% is ahead of the margin achieved in the second half of 2005 at 2.7% as focus on
managing margin, volume and business mix has continued.
Norwich Union's bancassurance partnership with the Royal Bank of Scotland Group (RBSG) delivered a very strong
performance with total sales of £414 million, 92% ahead of the first quarter of 2005 (2005: £216 million). Norwich
Union's share was £297 million, 118% ahead of last year (2005: £136 million). This excellent performance further
demonstrates the potential of the strategic partnership, and the commitment of Norwich Union and RBSG to growing this
important distribution channel.
Individual pension sales, which include group personal pensions, were exceptionally strong, up 65% to £1,001 million
(2005: £607 million). This performance, primarily through the IFA channel, follows the re-alignment of commission in
the second half of 2005 and an increase in transfer business in the run up to A-Day. Corporate pension sales were up
21% to £271 million (2005: £224 million), reflecting strong performance in group money purchase products, benefitting
from consolidation in the sector, and good sales of group life policies. This excellent result reflects Norwich Union's
successful preparation for A-Day and its strong pension product range, recently extended with the launch of its new
SIPP.
Bond sales in the first quarter increased significantly by 27% to £787 million (2005: £620 million). This strong
performance included sales of unit-linked products of £593 million, 30% ahead of the first quarter of 2005, benefiting
from the continuing improvement in equity markets and investor confidence; and sales of with-profit products at
£138 million, up 12% for the quarter (2005: £123 million), with strong interest in the new with-profit guarantee
launched in February 2006. During the first quarter, property and guaranteed investment funds continued to be popular.
Norwich Union's continued focus on collective investments, together with strong equity markets, resulted in an
exceptional start to the year, with sales more than doubling to £444 million (2005: £209 million). Norwich Union has
strengthened significantly its collective investment portfolio. The company has recently launched a property ISA, to
take advantage of regulatory changes, and announced two new equity based funds.
Protection sales were 15% higher at £272 million (2005: £236 million). Norwich Union has competitively priced its
products throughout the quarter to maintain a strong presence in this important volume-driven sector.
Total annuity sales of £347 million were lower by 16% (2005: £413 million) as the company priced for value and
customers delayed their purchase of annuities ahead of A-Day. Norwich Union has begun quoting for bulk purchase annuity
business, following confirmation earlier this year of its intention to enter the market in 2006 and expects volumes to
grow progressively through 2006 and 2007. However, Norwich Union's overall risk appetite for annuities has not changed
and these sales will complement the existing individual annuity portfolio.
During the quarter, equity release sales were £85 million (2005: £83 million) as the equity release market remained
relatively subdued. Norwich Union is confident that the market will grow over the medium term. The company is
supportive of the Government's proposed regulation of home reversion plans, which it expects will further increase
confidence in the market and raise standards across all providers.
The first quarter saw strong performance across all of Norwich Union's distribution channels. Distribution reach has
been strengthened further by the successful launch of a bond under an exclusive distribution agreement with
Co-operative Insurance Society (CIS) giving Norwich Union access to its 1,500 advisors.
Norwich Union confidently expects year on year growth to continue in 2006. This reflects an improvement in investor
confidence and continued market activity in the early weeks following A-Day. Norwich Union is well prepared for these
opportunities having successfully implemented its A-Day strategy and broadened its product offering to include bulk
purchase annuities, guaranteed whole of life protection and pension term assurance. The company will also continue its
focus on collectives and on opportunities within the bond market.
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Notes to Editors
1. Aviva is one of the leading providers of life and pensions to Europe with substantial positions in other markets
around the world, making it the world's sixth largest insurance group based on gross worldwide premiums and market
capitalisation at 31 December 2004.
Aviva's principal business activities are long-term savings, fund management and general insurance, with worldwide
total sales* of £35 billion and assets under management of £317 billion at 31 December 2005.
*Based on life and pensions PVNBP, total investment sales and general insurance and health net written premiums
including share of associates' premiums.
The Aviva media centre at www.aviva.com/media includes images, company and product information and a news
release archive.
2. All figures have been translated at average exchange rates applying for the period. The average rates employed in
this announcement are 1 euro = £0.68 (three months to 31 March 2005: 1 euro = £0.69).
3. All growth rates are quoted in local currency.
4. Definition:
Present value of new business premiums (PVNBP) is the present value of new regular premiums plus 100% of single
premiums, calculated using assumptions consistent with those used to determine new business contribution.
5. Subsequent to previous reporting periods, the analysis of financial results by country has been amended and
certain small businesses have been reclassified to align the financial reporting of those businesses with
management responsibilities. The specific businesses affected are:
• Norwich Union International Life has moved to Aviva UK from Other Europe
• Germany has moved to Netherlands from Other Europe
• Lithuania has moved to Poland from Other Europe
The reclassifications noted above do not affect total sales, new business contribution or new business margin.
All comparative data has been restated to take account of the reclassifications. Details of the reclassifications,
including restated 2005 quarterly PVNBP and new business contribution before the effect of required capital, are
set out below.
Originally reported Cumulative (£ million)
---------------------------------------------------------------------------------------
Q1 2005 Q2 2005 Q3 2005 Q4 2005
------------------ ------------------- -------------------- -------------------
Life and pensions New business New business New business New business
PVNBP contribution PVNBP contribution PVNBP contribution PVNBP contribution
Netherlands 718 18 1,241 39 1,742 55 2,407 88
Poland 61 3 112 5 196 9 285 14
Other Europe 224 3 364 3 574 7 739 7
United Kingdom 2,140 67 4,244 135 6,586 198 9,053 265
----------------------------------------------------------------------------------------------------------------------
3,143 91 5,961 182 9,098 269 12,484 374
======================================================================================================================
After reclassification Cumulative (£ million)
---------------------------------------------------------------------------------------
Q1 2005 Q2 2005 Q3 2005 Q4 2005
------------------ ------------------- -------------------- -------------------
Life and pensions New business New business New business New business
PVNBP contribution PVNBP contribution PVNBP contribution PVNBP contribution
Netherlands 833 18 1,383 39 2,008 56 2,739 90
Poland 67 3 137 7 222 11 320 16
Other Europe 60 2 129 - 182 1 240 (1)
United Kingdom 2,183 68 4,312 136 6,686 201 9,185 269
----------------------------------------------------------------------------------------------------------------------
3,143 91 5,961 182 9,098 269 12,484 374
======================================================================================================================
In addition to the reclassifications noted above, sales through the Navigator platform that were previously
excluded from investment sales figures and were reported separately have now been included. This change increases
the total investment sales figure by £310 million for the first quarter of 2006 (2005: £178 million). If sales
through the Navigator platform had not been included in investment sales, the total long-term savings growth for
the first quarter of 2006 would be 24%.
Cumulative (£ million)
-----------------------------------------------------------------------------
Q1 2005 Q2 2005 Q3 2005 Q4 2005
Originally reported PVBNP PVNBP PVNBP PVNBP
Investment sales (excl. Navigator) 475 1,062 1,673 2,399
Rest of the World (excl. Navigator) 47 106 176 213
Navigator 178 432 668 938
----------------------------------------------------------------------------------------------------------------------
Q1 2005 Q2 2005 Q3 2005 Q4 2005
After reclassification PVBNP PVNBP PVNBP PVNBP
Investment sales (incl. Navigator) 653 1,494 2,341 3,337
Rest of the World (incl. Navigator) 225 538 844 1,151
----------------------------------------------------------------------------------------------------------------------
6. Cautionary statements:
This preliminary announcement may contain '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. By their
nature, all forward-looking statements involve risk and uncertainty because they relate to future events and
circumstances which are beyond Aviva's control, including amongst other things, UK domestic and global economic
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, inflation, deflation, the timing impact and other
uncertainties of future acquisitions or combinations within relevant industries, as well as the impact of tax and
other legislation and other regulations in the jurisdictions in which Aviva and its affiliates operate. 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.
Aviva undertakes no obligation to update the forward-looking statements contained in this presentation or any other
forward-looking statements we may make.
Aviva plc is a company registered in England No. 2468686.
Registered office St Helen's 1 Undershaft London EC3P 3DQ.
-----------------------------------------------------------------------------------------------------------------------
Statistical Supplement
CONTENTS
Analyses
1. Present value of new business premiums
2. Analysis of sales via bancassurance channels
3. Detailed analysis of new business contribution
4. Detailed worldwide long-term savings new business analysis
5. Analysis of UK long-term savings by distribution channel
6. Analysis of France long-term savings by fund
7. Principal economic assumptions
-----------------------------------------------------------------------------------------------------------------------
Page 10
Supplement 1
Present value of life new business premiums
The present value of new business premiums (PVNBP) is derived from the single premiums and regular premiums of the
products sold during the financial period and is expressed at the point of sale.
The PVNBP calculation is equal to total single premium sales received in the year plus the discounted value of
regular premiums expected to be received over the term of the new contracts. The premium volumes and projection
assumptions used to calculate the present value of regular premiums for each product are the same as those used to
calculate new business contribution, so the components of the new business margin are on a consistent basis.
The discounted value of regular premiums is also expressed as annualised regular premiums multiplied by a Weighted
Average Capitalisation Factor (WACF). The WACF will vary over time depending on the mix of new products sold, the
average outstanding term of the new contracts and the projection assumptions. The table below sets out the factors
required to derive the present value of regular premiums by business units, and combined with single premium sales
derives the present value of future new business premiums.
31 March 2006 31 March 2005
-------------------------------------------------------------------- -------------
Weighted Present value Present value
average Present value of new of new
Regular capitalisation of regular Single business business
premiums factor premiums premiums premiums premiums
£m £m £m £m £m
France
Euro funds* 4 5.3 21 565 586 562
Unit-linked funds 12 6.2 74 427 501 411
Protection business 7 6.6 46 1 47 47
---------------------------------------------------------------------------------------------------------------------
Total life and pensions 23 6.1 141 993 1,134 1,020
Ireland
Life and savings 7 5.0 35 92 127 53
Pensions 15 4.7 70 61 131 132
---------------------------------------------------------------------------------------------------------------------
Total life and pensions 22 4.8 105 153 258 185
Italy
Life and savings 30 6.2 187 658 845 601
---------------------------------------------------------------------------------------------------------------------
Total life and pensions 30 6.2 187 658 845 601
Netherlands
(including Belgium and Luxembourg)
Life 26 6.8 176 123 299 389
Pensions 17 8.6 147 276 423 444
---------------------------------------------------------------------------------------------------------------------
Total life and pensions 43 7.5 323 399 722 833
Poland
Life and savings 8 5.0 40 49 89 34
Pensions 6 7.5 45 26 71 33
---------------------------------------------------------------------------------------------------------------------
Total life and pensions 14 6.1 85 75 160 67
Spain
Life and savings 19 5.9 112 270 382 354
Pensions 9 5.8 52 61 113 107
---------------------------------------------------------------------------------------------------------------------
Total life and pensions 28 5.9 164 331 495 461
Other Europe
Life and pensions 12 3.8 45 15 60 60
---------------------------------------------------------------------------------------------------------------------
Total life and pensions 12 3.8 45 15 60 60
Rest of the World
Asia 19 4.5 86 43 129 85
Australia 9 3.3 30 40 70 74
United States 2 4.0 8 144 152 90
---------------------------------------------------------------------------------------------------------------------
Life and pensions 30 4.1 124 227 351 249
International total life and pensions 202 5.8 1,174 2,851 4,025 3,476
United Kingdom
Individual pensions 87 5.3 461 540 1,001 607
Group pensions 26 5.6 146 125 271 224
Annuities - - - 347 347 413
Bonds - - - 787 787 620
Protection 42 5.1 215 57 272 236
Equity release - - - 85 85 83
---------------------------------------------------------------------------------------------------------------------
United Kingdom total life and pensions 155 5.3 822 1,941 2,763 2,183
---------------------------------------------------------------------------------------------------------------------
Total 357 5.6 1,996 4,792 6,788 5,659
---------------------------------------------------------------------------------------------------------------------
1 Euro funds are savings that receive an annual bonus declaration, based on the investment performance of the
underlying funds.
-----------------------------------------------------------------------------------------------------------------------
Page 11
Supplement 2
Analysis of sales via principal bancassurance channels
Present value of new business premiums**
----------------------------------------
3 months to
31 March Local
2006 currency
£m growth*
Life and pensions
France
Credit du Nord 273 18%
----------------------------------------------------------------------------------------------------------------------
273 18%
Ireland
Ark 93 -
----------------------------------------------------------------------------------------------------------------------
93 -
Italy
UniCredit Group 528 147%
Banca Popolare Italiana Group 100 (28%)
Banca delle Marche 14 (57%)
Banche Popolari Unite 196 27%
----------------------------------------------------------------------------------------------------------------------
838 56%
Netherlands
ABN AMRO 160 (13%)
----------------------------------------------------------------------------------------------------------------------
160 (13%)
Spain
Bancaja 211 23%
Caixa Galicia 67 (27%)
Unicaja 89 58%
Caja Espana 42 18%
Caja de Granada 34 19%
----------------------------------------------------------------------------------------------------------------------
443 16%
Asia
DBS 57 -
---------------------------------------------------------------------------------------------------------------------
57 -
United Kingdom
Royal Bank of Scotland Group 256 115%
----------------------------------------------------------------------------------------------------------------------
256 115%
----------------------------------------------------------------------------------------------------------------------
Total life and pensions 2,120 40%
Investment sales***
United Kingdom
Royal Bank of Scotland Group 41 141%
----------------------------------------------------------------------------------------------------------------------
41 141%
----------------------------------------------------------------------------------------------------------------------
Total bancassurance sales 2,161 41%
======================================================================================================================
* Growth rates are calculated based on constant rates of exchange.
** Present value of new business premiums (PVNBP) is the present value of new regular premiums plus 100% of single
premiums, calculated using assumptions consistent with those used to determine new business contribution.
*** Investment sales are calculated as new single premium plus annualised value of new regular premiums.
Analysis of total new business sales via the joint venture with Royal Bank of Scotland Group (RBSG)
Total sales through the joint venture with RBSG are provided below on a 100% basis and for Aviva's share. In
reporting the life and pensions results, a 50% share of sales written through the joint venture life company and 100%
of single premium with-profit and unit-linked bond sales written through a Norwich Union fund are included. Investment
sales represent Aviva's 50% share of the collective investment sales.
Total RBSG sales Aviva's share
------------------------- -------------------------
3 months to 3 months to 3 months to 3 months to
31 March 31 March 31 March 31 March
2006 2005 2006 2005
£m £m £m £m
Total life and pension sales 332 182 256 119
Collective investment sales 82 34 41 17
---------------------------------------------------------------------------------------------------------------------
Total RBSG bancassurance sales 414 216 297 136
=====================================================================================================================
-----------------------------------------------------------------------------------------------------------------------
Page 12
Supplement 3
Detailed analysis of new business contribution
(a) Before the effect of required capital - PVNBP basis
Present value of New business
new business premiums* contribution**,^ New business margin^^
------------------------ ------------------ -----------------------------
3 months 3 months 3 months 3 months 3 months 3 months Full year
2006 2005 2006 2005 2006 2005 2005
£m £m £m £m % % %
Life and pensions business
France 1,134 1,020 45 36 4.0% 3.5% 3.8%
Ireland 258 185 5 6 1.9% 3.2% 2.4%
Italy 845 601 21 16 2.5% 2.7% 2.6%
Netherlands
(including Germany, Belgium and Luxembourg) 722 833 19 18 2.6% 2.2% 3.3%
Poland 160 67 8 3 5.0% 4.5% 5.0%
Spain 495 461 46 39 9.3% 8.5% 8.7%
Other Europe 60 60 (1) 2 (1.7%) 3.3% (0.4%)
Continental Europe 3,674 3,227 143 120 3.9% 3.7% 4.2%
Asia 129 85 8 5 6.2% 5.9% 5.1%
Australia 70 74 4 2 5.7% 2.7% 4.7%
USA 152 90 3 2 2.0% 2.2% 2.5%
Rest of the World 351 249 15 9 4.3% 3.6% 3.9%
International 4,025 3,476 158 129 3.9% 3.7% 4.1%
United Kingdom 2,763 2,183 77 68 2.8% 3.1% 2.9%
---------------------------------------------------------------------------------------------------------------------
Total Life and pensions 6,788 5,659 235 197 3.5% 3.5% 3.6%
=====================================================================================================================
* Present value of new business premiums (PVNBP) is the present value of new regular premiums plus 100% of single
premiums, calculated using assumptions consistent with those used to determine new business contribution.
** Before effect of required capital.
^ New business contribution before the effect of required capital includes minority interests in 2006 of £48 million
(three months to 31 March 2005: £36 million). This comprises minority interests in France of £8 million (three
months to 31 March 2005: £6 million), Italy £12 million (three months to 31 March 2005: £9 million), Spain £24
million (three months to 31 March 2005: £18 million), Poland £1 million (three months to 31 March 2005: £1 million)
and Netherlands £3 million (three months to 31 March 2005: £2 million).
^^ New business margin represents the ratio of new business contribution toPVNBP, expressed as a percentage.
-----------------------------------------------------------------------------------------------------------------------
Page 13
Supplement 3
(b) Including the effect of required capital
Present value of New business
new business premiums* contribution**,^ New business margin^^
------------------------ ------------------ -----------------------------
3 months 3 months 3 months 3 months 3 months 3 months Full year
2006 2005 2006 2005 2006 2005 2005
£m £m £m £m % % %
Life and pensions business
France 1,134 1,020 32 23 2.8% 2.3% 2.6%
Ireland 258 185 4 6 1.6% 3.2% 2.0%
Italy 845 601 15 10 1.8% 1.7% 1.6%
Netherlands
(including Germany, Belgium and Luxembourg) 722 833 9 6 1.2% 0.7% 2.1%
Poland 160 67 8 3 5.0% 4.5% 4.7%
Spain 495 461 42 35 8.5% 7.6% 7.7%
Other Europe 60 60 (1) (1) (1.7%) (1.7%) (2.1%)
Continental Europe 3,674 3,227 109 82 3.0% 2.5% 3.1%
Asia 129 85 6 4 4.7% 4.7% 4.1%
Australia 70 74 2 1 2.9% 1.4% 2.7%
USA 152 90 1 1 0.7% 1.1% 1.3%
Rest of the World 351 249 9 6 2.6% 2.4% 2.5%
International 4,025 3,476 118 88 2.9% 2.5% 3.0%
United Kingdom 2,763 2,183 60 50 2.2% 2.3% 2.4%
---------------------------------------------------------------------------------------------------------------------
Total Life and Pensions 6,788 5,659 178 138 2.6% 2.4% 2.8%
=====================================================================================================================
* Present value of new business premiums (PVNBP) is the present value of new regular premiums plus 100% of single
premiums, calculated using assumptions consistent with those used to determine new business contribution.
** New business contribution is after the effect of required capital. The effect of required capital represents the
impact of holding the required capital (expressed as a % of minimum European Union (EU) solvency margin or
equivalent for non-EU operations) and discounting to present value the projected future releases from the
required capital to shareholders.
^ New business contribution after the effect of required capital includes minority interests in 2006 of £39 million
(three months to 31 March 2005: £27 million). This comprises minority interests in France of £4 million (three
months to 31 March 2005: £3 million), Italy £9 million (three months to 31 March 2005: £6 million), Spain £22
million (three months to 31 March 2005: £16 million), Poland £1 million (three months to 31 March 2005: £1 million)
and Netherlands £3 million (three months to 31 March 2005: £1 million).
^^ New business margin represents the ratio of new business contribution to PVNBP, expressed as a percentage.
-----------------------------------------------------------------------------------------------------------------------
Page 14
Supplement 3
(c) New business contribution - before minority interest, cost of capital and tax
Present value of New business
new business premiums contribution* New business margin**
------------------------ ------------------ -----------------------------
3 months 3 months 3 months 3 months 3 months 3 months Full year
2006 2005 2006 2005 2006 2005 2005
£m £m £m £m % % %
Analysed between:
- Bancassurance channels 2,120 1,527 97 70 4.6% 4.6% 5.1%
- Other distribution channels 4,668 4,132 138 127 3.0% 3.1% 3.1%
---------------------------------------------------------------------------------------------------------------------
Attributable to equity shareholders 6,788 5,659 235 197 3.5% 3.5% 3.6%
=====================================================================================================================
Analysed:
UK 2,763 2,183 77 68 2.8% 3.1% 2.9%
Continental Europe 3,674 3,227 143 120 3.9% 3.7% 4.2%
Rest of the World 351 249 15 9 4.3% 3.6% 3.9%
International 4,025 3,476 158 129 3.9% 3.7% 4.1%
---------------------------------------------------------------------------------------------------------------------
* Stated before the effect of required capital.
** New business margin represents the ratio of new business contribution before deducting cost of capital, tax and
minority interest to PVNBP before deducting the minority share, expressed as a percentage.
(d) New business contribution - after minority interest, cost of capital and tax
Present value of New business
new business premiums* contribution** New business margin^
------------------------ ------------------ -----------------------------
3 months 3 months 3 months 3 months 3 months 3 months Full year
2006 2005 2006 2005 2006 2005 2005
£m £m £m £m % % %
Analysed between:
- Bancassurance channels 1,179 794 30 19 2.5% 2.4% 2.9%
- Other distribution channels 4,552 4,044 67 58 1.5% 1.4% 1.6%
---------------------------------------------------------------------------------------------------------------------
Attributable to equity shareholders 5,731 4,838 97 77 1.7% 1.6% 1.8%
=====================================================================================================================
Analysed:
UK 2,763 2,183 43 36 1.6% 1.6% 1.7%
Continental Europe 2,618 2,406 47 36 1.8% 1.5% 1.9%
Rest of the World 350 249 7 5 2.0% 2.0% 2.0%
International 2,968 2,655 54 41 1.8% 1.5% 1.9%
---------------------------------------------------------------------------------------------------------------------
* Stated after deducting the minority interest of sales.
** Contribution stated after deducting cost of required capital, tax and minority interest.
^ New business margin represents the ratio of new business contribution after deducting cost of required capital,
tax and minority interest to PVNBP after deducting the minority share, expressed as a percentage.
-----------------------------------------------------------------------------------------------------------------------
Page 15
Supplement 4
Detailed worldwide long-term savings new business analysis
Single Regular PVNBP
---------------------------------- ---------------------------------- -----------
3 months to 3 months to 3 months to 3 months to
31 March 31 March Local 31 March 31 March Local Local
2006 2005 currency 2006 2005 currency currency
£m £m growth* £m £m growth* growth*
France
Euro funds** 565 545 5% 4 3 33% 6%
Unit-linked funds 427 347 25% 12 11 11% 23%
Protection business 1 1 - 7 7 1% 1%
----------------------------------------------------------------------------------------------------------------------
993 893 13% 23 21 11% 12%
Ireland
Life and savings 92 29 222% 7 4 80% 143%
Pensions 61 68 (9%) 15 13 17% 1%
----------------------------------------------------------------------------------------------------------------------
153 97 60% 22 17 31% 41%
Italy
Life and savings 658 512 30% 30 14 117% 43%
---------------------------------------------------------------------------------------------------------------------
658 512 30% 30 14 117% 43%
Netherlands
(including Germany, Belgium & Luxembourg)
Life 123 173 (28%) 26 32 (18%) (22%)
Pensions 276 278 1% 17 19 (9%) (3%)
----------------------------------------------------------------------------------------------------------------------
Total life and pensions 399 451 (10%) 43 51 (15%) (12%)
Unit trusts 134 92 48% - - - 48%
----------------------------------------------------------------------------------------------------------------------
533 543 (1%) 43 51 (15%) (6%)
Poland
Life and savings 49 11 326% 8 5 54% 151%
Pensions 26 5 400% 6 4 43% 106%
-----------------------------------------------------------------------------------------------------------------------
Total life and pensions 75 16 349% 14 9 49% 129%
Mutual funds 27 12 116% 1 5 (81%) 58%
-----------------------------------------------------------------------------------------------------------------------
102 28 249% 15 14 3% 115%
Spain
Life and savings 270 232 18% 19 17 13% 9%
Pensions 61 51 21% 9 9 1% 7%
-----------------------------------------------------------------------------------------------------------------------
331 283 19% 28 26 9% 9%
Other Europe
Life and pensions 15 20 (26%) 12 10 12% (5%)
UCITS 168 110 55% - - - 55%
-----------------------------------------------------------------------------------------------------------------------
183 130 42% 12 10 12% 33%
Rest of the World
Asia 43 23 72% 19 13 36% 39%
Australia 40 47 (17%) 9 9 (3%) (8%)
United States 144 74 79% 2 4 (54%) 56%
Life and pensions 227 144 47% 30 26 8% 32%
Unit trusts 45 47 (7%) - - - (7%)
Navigator 310 178 69% - - - 69%
----------------------------------------------------------------------------------------------------------------------
582 369 51% 30 26 8% 41%
Aviva International
Life and pensions 2,851 2,416 19% 202 174 15% 16%
Total investments 684 439 54% 1 5 (80%) 53%
----------------------------------------------------------------------------------------------------------------------
3,535 2,855 24% 203 179 13% 21%
United Kingdom
Individual pensions 540 298 81% 87 60 45% 65%
Group pensions 125 99 26% 26 23 13% 21%
Annuities 347 413 (16%) - - - (16%)
Bonds 787 620 27% - - - 27%
Protection 57 73 (22%) 42 33 27% 15%
Equity release 85 83 2% - - - 2%
----------------------------------------------------------------------------------------------------------------------
Total life and pensions 1,941 1,586 22% 155 116 34% 27%
Peps/Isas/Unit trusts/Oeics 436 206 112% 8 3 167% 112%
----------------------------------------------------------------------------------------------------------------------
2,377 1,792 33% 163 119 37% 34%
Total long-term savings 5,912 4,647 28% 366 298 22% 26%
======================================================================================================================
Analysed:
Life and pensions 4,792 4,002 20% 357 290 23% 20%
Investment sales 1,120 645 72% 9 8 10% 72%
----------------------------------------------------------------------------------------------------------------------
Total long-term savings 5,912 4,647 28% 366 298 22% 26%
======================================================================================================================
* Growth rates are calculated based on constant rates of exchange.
** Euro funds are savings that receive an annual bonus declaration, based on the investment performance of the
underlying funds.
-----------------------------------------------------------------------------------------------------------------------
Page 16
Supplement 5
Analysis of UK long-term savings by distribution channel
Single Regular PVNBP
---------------------------------- ---------------------------------- -----------
3 months to 3 months to 3 months to 3 months to
31 March 31 March Local 31 March 31 March Local Local
2006 2005 currency 2006 2005 currency currency
£m £m growth* £m £m growth* growth*
IFA
- life & pensions products 1,462 1,190 23% 113 92 23% 22%
- investment products 297 108 175% - - - 175%
----------------------------------------------------------------------------------------------------------------------
1,759 1,298 36% 113 92 23% 31%
Bancassurance partnership with RBSG
- life & pensions products 154 102 51% 19 4 375% 115%
- investment products 33 15 120% 8 3 167% 141%
----------------------------------------------------------------------------------------------------------------------
187 117 60% 27 7 286% 118%
Other partnerships/Direct
- life & pensions products 325 294 11% 23 20 15% 18%
- investment products 106 83 28% - - - 28%
----------------------------------------------------------------------------------------------------------------------
431 377 14% 23 20 15% 20%
----------------------------------------------------------------------------------------------------------------------
Total UK long-term savings 2,377 1,792 33% 163 119 37% 34%
======================================================================================================================
* Growth rates are calculated based on constant rates of exchange.
Annual premium equivalent*
Life and pension sales Investment sales Total sales
----------------------- ---------------------- ----------------------
3 months to 3 months to 3 months to
31 March Local 31 March Local 31 March Local
2006 currency 2006 currency 2006 currency
£m growth** £m growth** £m growth**
IFA 259 23% 30 175% 289 30%
Bancassurance partnership with RBSG 34 142% 11 151% 45 144%
Other partnerships/Direct 56 12% 11 28% 67 15%
---------------------------------------------------------------------------------------------------------------------
Total UK long-term savings 349 27% 52 119% 401 34%
=====================================================================================================================
* Annual premium equivalent (APE) is the UK industry's standard measure of new regular premiums and 10% of single
premiums.
** Growth rates are calculated based on constant rates of exchange.
-----------------------------------------------------------------------------------------------------------------------
Page 17
Supplement 6
Analysis of France long-term savings by fund
Single Regular PVNBP
---------------------------------- ---------------------------------- -----------
3 months to 3 months to 3 months to 3 months to
31 March 31 March Local 31 March 31 March Local Local
2006 2005 currency 2006 2005 currency currency
£m £m growth* £m £m growth* growth*
AFER
- Euro funds** 370 365 2% - - - 2%
- Unit-linked funds 165 109 53% - - - 53%
----------------------------------------------------------------------------------------------------------------------
535 474 14% - - - 14%
Bancassurance
partnership with Credit du Nord
- Euro funds 136 118 17% 2 1 103% 18%
- Unit-linked funds 92 82 14% 6 5 22% 16%
- Protection 1 - - - - - (19%)
----------------------------------------------------------------------------------------------------------------------
229 200 16% 8 6 35% 18%
Other
- Euro funds 59 62 (4%) 2 2 1% (5%)
- Unit-linked funds 170 156 10% 6 6 1% 10%
- Protection - 1 (100%) 7 7 1% 6%
----------------------------------------------------------------------------------------------------------------------
229 219 6% 15 15 1% 6%
----------------------------------------------------------------------------------------------------------------------
Total France long-term savings 993 893 13% 23 21 11% 12%
======================================================================================================================
* Growth rates are calculated based on constant rates of exchange.
** Euro funds are savings that receive an annual bonus declaration, based on the investment performance of the
underlying funds.
-----------------------------------------------------------------------------------------------------------------------
Page 18
Supplement 7
Principal economic assumptions - deterministic calculations
Economic assumptions are derived actively, based on market yields on risk-free fixed interest assets at the end of
each reporting period. The same margins are applied on a consistent basis across the Group to gross risk-free yields to
obtain investment return assumptions for ordinary shares and property and to produce risk discount rates. Expense
inflation is derived as a fixed margin above a local measure of long-term price inflation. Risk-free rates and price
inflation have been harmonised across territories within the Euro currency zone, except for expense inflation in
Ireland where significant differences remain. Required capital is shown as a multiple of the EU statutory minimum
solvency margin.
Investment return assumptions are generally derived by major product class, based on hypothecating the assets at the
valuation date. Assumptions about future investment mix are consistent with long-term plans. In most cases, the
investment mix is assumed to continue unchanged throughout the projection period. The changes in assumptions between
reporting dates reflect the actual movements in risk-free yields in the United Kingdom, the Eurozone and other
territories. The principal economic assumptions used are as follows:
United Kingdom France
------------------------ --------------------
2005 2004 2005 2004
Risk discount rate 6.8% 7.3% 6.0% 6.4%
Pre-tax investment returns:
Base government fixed interest 4.1% 4.6% 3.3% 3.7%
Ordinary shares 7.1% 7.6% 6.3% 6.7%
Property 6.1% 6.6% 5.3% 5.7%
Future expense inflation 3.2% 3.3% 2.5% 2.5%
Tax rate 30.0% 30.0% 34.4% 34.9%
Required Capital (% EU minimum) 150%/100% 200%/100% 115% 115%
Ireland Italy
------------------------ --------------------
2005 2004 2005 2004
Risk discount rate 6.0% 6.4% 6.0% 6.4%
Pre-tax investment returns:
Base government fixed interest 3.3% 3.7% 3.3% 3.7%
Ordinary shares 6.3% 6.7% 6.3% 6.7%
Property 5.3% 5.7% 5.3% 5.7%
Future expense inflation 4.0% 4.0% 2.5% 2.5%
Tax rate 12.5% 12.5% 38.3% 38.3%
Required Capital (% EU minimum) 150% 150% 115% 115%
Netherlands Poland
------------------------ --------------------
2005 2004 2005 2004
Risk discount rate 6.0% 6.4% 8.6% 9.7%
Pre-tax investment returns:
Base government fixed interest 3.3% 3.7% 4.9% 6.0%
Ordinary shares 6.3% 6.7% 7.9% 9.0%
Property 5.3% 5.7% n/a n/a
Future expense inflation 2.5% 2.5% 3.3% 3.4%
Tax rate 29.1% 31.5% 19.0% 19.0%
Required Capital (% EU minimum) 150% 150% 150% 150%
Spain
------------------------
2005 2004
Risk discount rate 6.0% 6.4%
Pre-tax investment returns:
Base government fixed interest 3.3% 3.7%
Ordinary shares 6.3% 6.7%
Property 5.3% 5.7%
Future expense inflation 2.5% 2.5%
Tax rate 35.0% 35.0%
Required Capital (% EU minimum) 125%/110% 125%/110%
For service companies, expense inflation relates to the underlying expenses rather than the fees charged to the life
company. Future returns on corporate fixed interest investments are calculated from prospective yields less an
adjustment for credit risk. Required capital in the United Kingdom is 150% EU minimum for Norwich Union Annuity
Limited and 100% for other companies. Required capital in Spain is 125% EU minimum for Aviva Vida y Pensiones and
110% for bancassurance companies.
Aviva plc is a company registered in England No. 2468686.
Registered office St Helen's 1 Undershaft London EC3P 3DQ
A pdf version of this announcement can be found on www.aviva.com
This information is provided by RNS
The company news service from the London Stock Exchange
FVDSFIRFIR