Insurance Excellence in UKGI

Focus on Profit
Igal Mayer, 3rd June 2009
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.
Overview
An increasingly global company

£60
billion FY 2008 sales
£51.4bn (1)

Asia Pacific 7% 22%

10%General
North America 14% Insurance
UK GI 11%

£30 UK Life 26%

billion 78%
Long
3%
5%
Term
Savings
24%
Europe 42%
34% 40%

34%

(1)
FY 2000 FY 2008
2008 total long-term savings new business sales and G.I. and health net written premiums
 Manage the composite portfolio
Diversity, cash flow, resilient product range

Long Term savings

General Insurance

Composite
 Increase customer reach
Access to customers through preferred channels

Multi-distribution

Direct Sales

Bancassurance

Independent Agents
 Key financials - FY 2008 / Q1 2009

• Strong Full year 2008 operating results

• Life & pensions sales up 11% to £36,283m
• General insurance result improved and combined operating ratio on target at 98%
• Operating profits: IFRS up 4% to £2,297 million and MCEV up 10% to £3,358 million
• Total profits impacted by adverse investment variances
• Full year 2008 dividend maintained at 33.0p

• Resilient Q1 2009 trading

• Q1 2009 life and pension sales up 11%, with margins maintained
• Group COR in line with 98% “meet or beat” target

• Strong balance sheet

• Strengthened reserves and provisions, with immaterial actual losses to date
• IGD surplus of £2.5 billion at 31 March 2009, with increased equity hedging – 40% fall reduces surplus
by £200m, 40% rise increases surplus by £800m
• Net asset value per share at 31 December 2008: IFRS 416p and MCEV 486p

• Consistent strategy, with focus on capital management

The right strategy

Purpose • Focus on target to double IFRS EPS

Prosperity &
peace of mind by 2012
Vision
• Increasing emphasis on capital
One Aviva,
twice the value efficiency
Strategic
priorities
Targets • Decreasing emphasis on sales
• Manage composite • 98% meet or beat COR targets
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
Asset Management • Increase third party business
• Globally integrated business • Transform the investment model

UK Europe N. America Asia Pacific

Market leadership Scale, growth, capital ● Optimise business Scale, growth
● Address legacy ● Seize unique growth mix, growth & margin
● Prioritised portfolio
● Transform business opportunities ● Generate net capital
● Regional operating
model ● Leverage scale returns
model
● Exploit UK synergies ● Generate capital ● Contribute to doubling
● Investment required
● Generate capital IFRS EPS by 2012
Strong presence in our home market

2008 IFRS
Competitive strength from market leadership
£m
operating profit in the UK
by region
3000 • Half of IFRS regional operating profits derived
from UK businesses

UK Life
2000
UK Life & GI
• Highest ever sales in 2008
• UK Life market share jumped 3% to 14% in Q4
2008
Europe North
1000 • 6 May investor day
America, Asia
Pacific & Aviva
Investors UK GI
0 • Transformational change progressing
Central charges • Visible signs of rate hardening
• Voted General Insurer of the year for sixth
-1000
year running
UK General Insurance
 UK General insurance

Current position 2008 Performance (UKGI only)

• Operates in the mature UK market • General insurance operating profit of £566m

• Aviva UKGI enjoys a 14% market share - the largest UK
P&C insurer
• Top one or two position in all our major classes
• Focus on insurance excellence
• Generation of capital and cashflow for Aviva
• General insurance COR of 99% (2007: 106%)
• General insurance net written premiums (NWP) of
£4,981m (2007: £5,440m), down 8%
• Expense ratio improved to 12.1% (2007: 13.9%), reflecting
benefits from cost saving initiatives

Diversified portfolio Strategy

Diversified portfolio of products
and distribution channels • There are 7 strategic priorities:

• Win the Customer

Commercial - Broker
Commercial - Other
Personal - Broker
Personal - Partnership
Personal - Direct
RAC income stream
• Win the Broker
• Building Core Insurance Capability
• Claims Inflation Busting
• Delivering the Promise of Scale
• Lean Manufacturing
• Win our People
Unparalleled customer reach

DIRECT BROKERS PARTNERS

3,000
brokers

Powerful brands #1 in the SME market

… over 100 others
RAC - Best roadside Insurer of the year
assistance provider 2006 to 2003 to 2008
2008
UKGI’s 7 strategic priorities

Win the Customer Win the Broker

• NUD fightback • War for distribution
• RAC membership
• Partnerships moments of truth

Building Core Insurance Capability Claims Inflation Busting

• Sophisticated pricing • Sustainable benefits year on year
• Rating leadership
• Price & product optimisation

Delivering the Promise of Scale Lean Manufacturing

• Sub 11% expense ratio • Mass customisation
• Halve IT costs • Service & process centre reengineering
• Exploit UK synergies

Win our People

• No1 for employees
• Build core insurance skills
• Pride & passion for insurance
UKGI’s 7 strategic priorities

RESHAPING THE BOOK

BUILDING CORE INSURANCE CAPABILITY

DELIVERING THE PROMISE OF SCALE

Win our People

• No1 for employees
• Build core insurance skills
• Pride & passion for insurance
 Reshaping the book

Direct Fightback Moments of Truth • Profitable & growing • Profitable & growing
medium sized brokers smaller brokers
• Unique package • Unique package
• Increase market • Increase market
• Direct is direct share share
• Sophisticated pricing

PERSONAL LINES COMMERCIAL LINES
Panel ¾ Multi channel approach ¾ Grow small/medium  Products
¾ Direct means direct independent brokers Pubs restaurants RAC
Self employed RESCUE
¾ RAC Panel for  ¾ Reduce commission 
Financial strength & Manufacturing
aggregators significantly Property
& wholesaling
• 11 panel insurers reassurance
owners
• 30-40% share ¾ Re‐grow with brokers Truly global peer group ¾ Raise rates significantly Office 
¾ Price competitive  Leveraged marketing ¾ Retain Insurer of the  Shop & salon
surgery
sophisticated pricing Year – for 7th year

Brokers e-platform Common ‘Fast Trade’

Personal Lines: A Crystal-Clear Strategy
With Mass Customisation we can point everyone to the same engine and each "partner"

Pricing/Products • e-broking portal

will get the correct product and price.

Direct is ‘Direct’ Partners: Moments of Truth

Partner
Webs

• Straight thro
Call
Centre
Screens
Aviva Partner
Web NB Quote Integration
All web applications Policy

Platinum3 Cover
Gold Cover Value Cover
Buildings Single Product
Web Administration Real-time
are built on the Store QTE
Application Pricing
“NUD in a Box”

Integrated
standard

All partner integration

Broker
Webs
MI
Price
Risk
Data
Feeds
& 3Hi 33 33
processing
33
rdrd Party Data
Party Data
Partner is provided using
gh
Blanket Hig
Blanket Blanket
Platform
RAC Panel
Application “NUD in a Pipe”

Broker
Integration
MTA
Sums
Contents er her Low
Inne
Specified Inner Inne
Insured Inn r
Limits 3er 3r
Limi Limi
3
Frozen Food Single Process t
3 £4003tLimit £200 Limit
• Fast referrals
Li
Unlimited
Small Brokers & National Accounts Leverage Membership Panels
/ Aggregators

Loss of
mit
3 Limit
£12,000 £6,0003 Limit
2
rent and aOneUnlimited Price
3 List
£1,000 2
£1,000 2 2

Sustainable growth and sustainable distribution cost

 Reshaping the book
Summary

By 2011 our UKGI book will have changed…

• Direct grows
• Brokers grow
• Partnerships fall
• RAC steady in Rescue but doubles in size for insurance

• Motor grows
• Home falls
• Creditor falls
• Commercial lines grow

Right balance of volume and profit

 Building core insurance capability

Personal Lines – transforming pricing

Credit Make/Model Mass Customisation 3rd Party Data Price Optimisation
21% 120%
3rd
PTY DAMAGE
19% 110%

17% Vogue 3rd PTYTotal

INJURY
15%
100%

Vogue SE Total Total

ACC DAMAGE
Loss Ratio

Premium
Frequency

90%
13%
HST Premium Total
Premium
CUE
80%
11%

Total

9
70%
HSE
Premium

9 9
9%

60%
7%
HST SC
5%
1 2 3 4 5 6 7 8 9 10
50%
HSE SC Combined peril Premium
ARI Segment
Loss Ratio - Retro Sep 08 Written Frequency

Multi peril
Sep ’08 Motor Sep ’08 Mar ’09
Dec ’08 Home Multi Peril

Commercial Lines – transforming underwriting

Rating Cleanse the Book Monitor, Mentor Hawkeye
10.0%

8.0%

6.0%
Commercial Rates to Apr ‘09
6.3%
1,800
1,600
160.0%

140.0%
3-Year Core Claims Ratio
Measure
1,400 120.0%
4.0%
5.7% CHC CHC CCI CTC CPO CMT AGR CME OSP/PRP etc

1,200
General Commercial
Large Property Construction Commercial Property
TOTAL IB Complex Schemes General Combined Motor Trade Agriculture Combined (legacy Package Products

100.0%
Owners Combined Owners
GWP (£M)

2.0%
3.0% 2 Yr Core 2 Yr Core 2 Yr Core 2 Yr Core 2 Yr Core 2 Yr Core 2 Yr Core 2 Yr Core 2 Yr Core
Bonus)

1,000 Region 2 Yr GWP NECR 2 Yr GWP NECR 2 Yr GWP NECR 2 Yr GWP NECR 2 Yr GWP NECR 2 Yr GWP NECR 2 Yr GWP NECR 2 Yr GWP NECR 2 Yr GWP NECR

9
South £71.9 28.7% £8.8 52.7% £64.6 28.3% £24.5 46.1% £29.2 28.2% £39.7 56.2% £0.8 39.7% £10.6 29.5% £41.0 51.0%

0.0% 80.0% West & South Wales

London City
£8.7
£72.5
30.0%
30.1%
£9.9
£41.9
60.6%
40.0%
£62.9
£41.0
39.5%
28.0%
£29.8
£10.2
59.8%
46.3%
£27.9
£32.7
33.9%
24.2%
£41.2
£14.9
58.3%
69.9%
£4.3
£9.4
55.3%
68.8%
£8.7
£3.0
32.8%
44.4%
£38.8
£19.0
41.5%
46.2%

800 London NB
Midlands
£112.3
£11.0
23.3%
29.3%
£8.5
£6.5
66.7%
50.6%
£61.2
£50.7
33.8%
42.3%
£5.5
£24.0
28.1%
51.5%
£43.1
£26.7
19.6%
27.7%
£5.8
£33.6
84.4%
63.1%
£1.7
£1.4
55.4%
39.7%
£12.3
£6.4
31.0%
37.4%
£8.5
£20.2
34.7%
46.3%

60.0% Scotland & NI £11.6 £16.4 35.3% £50.1 38.0% £23.0 £37.2 32.5% £28.0 51.0% £11.7 49.8% £11.3 41.7% £36.6
40.1% 60.0% 47.4%
-2.0% North East £25.8 44.1% £12.3 51.1% £55.6 42.2% £16.3 57.9% £16.8 27.0% £29.0 60.2% £1.7 43.3% £11.7 30.7% £21.4 44.2%

600 North West

East
£35.1
£20.0
36.1%
65.3%
£3.6
£24.1
19.6%
46.0%
£47.7
£42.1
36.4%
28.5%
£20.4
£19.3
57.9%
33.1%
£15.4
£31.3
18.9%
55.7%
£32.6
£22.0
54.6%
49.2%
£3.3
£7.4
46.4%
76.5%
£4.1
£1.3
30.4%
50.1%
£16.0
£15.9
48.9%
45.4%
National Accounts £2.0 38.5% £115.1 33.1% £9.9 43.2% £3.0 51.6% £8.9 13.0% £6.5 75.3% £12.7 67.4% £2.1 36.3% £5.0 45.7%

40.0%

9
-4.0% Leicester NB £4.5 37.9% £0.0 0.0% £23.8 47.1% £7.0 106.6% £10.8 48.0% £13.5 67.1% £0.6 96.4% £12.0 30.2% £10.2 30.5%

9
400 Birmingham NB
ManchesterNB
£5.6
£1.0
37.4%
32.7%
£5.8
£0.1
24.3%
1.2%
£24.7
£19.6
42.9%
39.0%
£1.8
£1.8
52.9%
26.3%
£4.4
£1.1
32.4%
23.7%
£5.2
£2.7
72.0%
64.2%
£0.1
£0.0
12.5%
0.0%
£4.2
£3.3
32.5%
17.2%
£2.0
£2.5
27.1%
20.7%
Glasgow NB £0.0 5.3% £0.0 0.0% £14.9 47.2% £1.2 26.6% £10.3 31.4% £2.8 52.0% £1.3 18.6% £5.2 22.7% £0.9 16.0%

20.0%
Unallocated £3.4 8.3% £0.0 0.0% £3.7 22.3% £1.5 20.9% £1.5 4.3% £2.7 59.3% £0.8 65.7% £0.0 0.0% £0.1 408.3%
-6.0%
200 Belfast NB
Total
£0.2
£386.4
40.8%
31.9%
£0.0
£252.9
0.0%
39.8%
£5.1
£577.8
31.0%
36.4%
£2.9
£192.2
110.9%
53.4%
£3.1
£300.5
15.4%
30.0%
£1.4
£281.8
48.3%
59.2%
£0.1
£57.5
98.8%
59.7%
£1.5
£97.9
24.0%
32.7%
£2.1
£240.2
33.9%
44.8%

2009 Plan Core NECR 32.0% 37.8% 38.0% 42.5% 32.2% 46.0% 47.3% 37.9% 38.7%
-8.0%
0 0.0% Key :
NECR worse than Target by 5% points

CTB Other
t - 07

t - 08

8
r - 07

r - 08

l - 08

r - 09
r - 07

l -0 7

r - 08

r - 09

NECR within +/- 5% points of Target

7

9
y - 07

y - 08

9
7

8
v -0

v -0
g -0

g -0
c -0

n -0

c -0
b -0

n -0

p -0

b -0

p -0

b -0
n -0

n -0

n -0

NECR better than Target by 5% points

Oc

Ju
Ju

Oc

Ap
Ap

Ap
Ma

Ma

Ma
No

No
De

De
Fe

Ju

Au

Fe

Ju

Au

Fe
Se

Se
Ja

Ma

Ja

Ma

Ja

Red Rate Target £69.6 10.1% £70.1 6.6% £48.7 10.3% £128.1 10.2% £42.0 12.6% £230.4 7.7% £37.1 6.1% £4.3 6.3% £175.3 4.8%
Amber Rate Target £200.1 6.9% £173.3 6.4% £372.5 6.2% £34.8 9.2% £135.8 6.9% £51.4 7.7% £16.7 6.0% £19.8 6.3% £49.4 4.8%

PROPERTY LIABILITY (Incl PI) MOTOR (Fleet/Minifleet) ZERO GWP 3-Year Core ECR Green Rate Target £115.7 5.0% £9.5 5.0% £156.6 5.0% £29.3 5.0% £122.7 5.0% £0.0 7.7% £3.7 5.0% £73.7 6.3% £15.6 4.8%

Overall Rate Target £385.4 6.9% £252.9 6.4% £577.8 6.2% £192.2 9.2% £300.5 6.9% £281.8 7.7% £57.5 6.0% £97.8 6.3% £240.2 4.8%

¾ 5pts improvement in 2008 ¾ Exit 60% & carry 30% rate ¾ Case level management ¾ Investment in underwriting
¾ Trend positive so far Q1 ‘09 uplift on rest ¾ Insight on geographical risk
Building core insurance capability
Aviva Risk Index

Expected loss ratio vs actual frequency

21% 120%

19% 110%

17%
100%
15%

Loss Ratio
Frequency

90%
13%
80%
11%
70%
9%

7% 60%

5% 50%
1 2 3 4 5 6 7 8 9 10
ARI Segment
ARI Segment
Loss Ratio - Retro Sep 08 Written Frequency

• Expected loss ratio based on 2005 / 06 sample used as to assess ARI benefit
• Actual Written frequency of policies written in September 08
Building core insurance capability
Aviva Risk Index

Retention & cancellations

35% 75%

30%
70%
25%
Cancellation Rate

Retention Rate
20% 65%

15% 60%
10%
55%
5%

0% 50%
1 2 3 4 5 6 7 8 9 10
Ritz
ARI S e gm e nt
Segment
NB Canc ellation Rate (Oc t 08) Retention Rate (Feb - A pr 09)

• Retention rate is overall retention between February and April 2009

• Cancellation rate for new business written in October
 Building core insurance capability
Rating

10.0%

8.0% Commercial Rates to Apr ‘09

6.3%
6.0%

4.0%
5.7%
2.0%
3.0%
0.0%

-2.0%

-4.0%

-6.0%

-8.0%
7
7

8
07

08
07

08

09
7

8
7

9
07

08

09
07

08
07

08
07

08

09
-0
-0

-0

-0

-0
l-0

-0

l-0
-0

-0
-0

-0

-0
g-
r-

r-

g-

r-
b-

b-

b-
n-

n-
p-

p-
n-

n-

n-
ov

ov
ct
ct

ec

ec
ar

ar
ar

ay

ay
Ju

Ju
Ap

Ap

Ap
Au

Au
Fe

Fe

Fe
Ju

Ju
Se

Se
Ja

Ja

Ja
O
O

M
M

N
D

D
M

M
PROPERTY LIABILITY (Incl PI) MOTOR (Fleet/Minifleet) ZERO

Signs of hardening but market remains tough

Demonstrating leadership in the market

Delivering the promise of scale

Self Service Operational & IT Centres of

excellence to deliver sub Excellence
11% expense ratio
2007 2010

c900 Applications <300 Applications

Mass Customisation
& Lean Manufacturing IT Roadmap

Sustainable service excellence & benefit of scale

 Delivering the promise of scale
Two major programmes

Operations2010
¾ Migration to Centres of Excellence on schedule – 60% in place
Personal
Mixed
¾ 10 major processes redesigned & in implementation, e.g. motor
Commercial
claims, with Q1 technology release completed
Perth Noida

Continuous improvement capability implemented to support new

Bishopbriggs
¾
processes
Pune

Cheadle
Manchester
Manchester
Stretford
Leicester
¾ Annualised savings tracking to plan with costs also on target
Norwich

Southend Bangalore
¾ Service levels maintained or improved through transition
¾ Professional Broking Sentiment Survey no1, May ’09

¾ Direct/RAC customer satisfaction ahead of 2008 for Q1 ‘09

IT2010
Flightpath to 2010

2007 2008 2009 2010 2011

¾ Front loaded cost efficiencies achieved for
Delivered Benefit 2008 & on track to deliver full benefits by 2010
IT2010 benefits
IT2010 benefits
‘End•-game
¾ Datacentre outsource deal completed with EDS
’
benefits

£355m £258m £210m £180m £<180m

Delivering the promise of scale
Progress on expenses

• Progress ahead of what was promised in October 2008

Phase 1 Target : £200m
One- C&E • Sales & Marketing
offs £38m • IT
• Support Services
Inflation
• Change
Phase
1 Cost
Reduction Phase 2 Target: £150m

• Operations
One- • IT
offs
Phase Phas
1 Cost e2
Phase
Reduction 09 & 10 2Cost
Cost
Inflation
Reduction
£150m
Expense £150
Ratio m

2007 2008 HY 2008 FY 2010

13.9% 12.8% 12.1% <11%

• Full year 2008 ratio of 12.1% achieved

• Remaining phase 2 savings on track
… and as we became Aviva in the UK

GENERAL
• >80% awareness
in 4 months
• 16,000 pieces of
literature reviewed
& >40% made
CUSTOMERS obselete EMPLOYEES
• 3,000 managers
• Communicated to 9m “Get me” attended ‘This is
GI / 7m Life customers “Get the plot” Our Story’ cinema
• New aviva.com/.co.uk “Get it done” presentations

• >40 websites • All staff involved

rebranded in ‘This is Us’
BROKERS/IFAs team sessions

• GI - 3,000 brokers
contacted
• Life - 30k distributors
contacted

“ Building Aviva from the inside out “

Summary

2007 2008 2011

Expenses 13.9% 12.1% …”sub 11%”…

Commission 25.9% 25.1% …” targeted commission action”…

Total Distn 39.8% 37.2% 30% world

10 point improvement

Loss Ratio 66.0% 62.1% … “sophisticated pricing”…

… “disciplined underwriting”… 9
Focus on Profit
Investor Presentation
May 2009