Aviva Europe: Analyst Day Part 2

Aviva Europe
Making a Quantum Leap

Disclaimer
This presentation is for information purposes only. It should be read in conjunction with the documents filed by Aviva plc (the “Company” or
“Aviva”) with the United States Securities and Exchange Commission (“SEC”).
This presentation contains certain “forward-looking statements” with respect to certain of Aviva’s plans and current goals and expectations
relating to future financial condition, performance, results, strategic initiatives and objectives. Statements containing the words “believes”,
“intends”, “expects”, “plans”, “seeks”, “aims”, “may”, “could”, “outlook”, “estimates” and “anticipates”, and words of similar meaning, are forward-
looking. By their nature, all forward-looking statements involve risk and uncertainty. Accordingly, there are or will be important factors that could
cause actual results to differ materially from those indicated in these statements. Aviva believes these factors include, but are not limited to: the
impact of difficult conditions in the global capital markets and the economy generally; the impact of new government initiatives related to the
financial crisis; defaults in our bond, mortgage and structured credit portfolios; the impact of volatility in the equity, capital and credit markets on
our profitability and ability to access capital and credit; changes in general economic conditions, including foreign currency exchange rates,
interest rates and other factors that could affect our profitability; risks associated with arrangements with third parties, including joint ventures;
inability of reinsurers to meet obligations or inavailability of reinsurance coverage; a decline in our ratings with Standard & Poor’s, Moody’s, Fitch
and A.M. Best; increased competition in the U.K. and in other countries where we have significant operations; changes in assumptions in pricing
and reserving for insurance business (particularly with regard to mortality and morbidity trends, lapse rates and policy renewal rates), longevity
and endowments; a cyclical downturn of the insurance industry; changes in local political, regulatory and economic conditions, business risks
and challenges which may impact demand for our products, our investment portfolio and credit quality of counterparties; the impact of actual
experience differing from estimates on amortisation of deferred acquisition costs and acquired value of in-force business; the impact of
recognising an impairment of our goodwill or intangibles with indefinite lives; changes in valuation methodologies, estimates and assumptions
used in the valuation of investment securities; the effect of various legal proceedings and regulatory investigations; the impact of operational
risks; the loss of key personnel; the impact of catastrophic events on our results; changes in government regulations or tax laws in jurisdictions
where we conduct business; funding risks associated with our pension schemes; the effect of undisclosed liabilities, integration issues and other
risks associated with our acquisitions; and the timing impact and other uncertainties relating to acquisitions and disposals and relating to other
future acquisitions, combinations or disposals within relevant industries.
For a more detailed description of these risks, uncertainties and other factors, please see Item 3, “Risk Factors”, and Item 5, “Operating and
Financial Review and Prospects” in Aviva’s registration statement on Form 20-F as filed with the SEC on 7 October 2009. Aviva undertakes no
obligation to update the forward-looking statements in this presentation or any other forward-looking statements we may make. Forward-looking
statements in this presentation are current only as of the date on which such statements are made.
Aviva Europe – Making a Quantum Leap 2
22 October 2009 Page 2
Andrea Moneta
Aviva Europe CEO
Aviva Europe – Making a Quantum Leap 3

Recap
Our Quantum Leap is transforming our business by bold, clear and high value strategies
Grow at marginal cost, improve mix, increase

Exploit Leading
penetration by leveraging compelling business
Bancassurance Position model
Grasp Retail franchise Increase sales force profitability, improve mix

through targeted sales campaigns, focus on
opportunity retention and reduce network costs
Simplify & Innovate to Twelve head offices transformed to one,

centralised procurement and change
integrate Shared Services
management, claims cost management
Establish state of the art Tax and capital efficient structure, pan European
Products and Governance risk and capital management, centralised product
development and customer centric catalogue
Our Our Making money Conclusions

Aviva Europe – Making a Quantum Leap Focus
opportunity in Quantum and creating and
22 October 2009 sessions Page 4
Europe Leap value Q&A
Our Making money Conclusions
Our opportunity Focus
Quantum and creating and
in Europe sessions
Leap value Q&A
Aviva Europe – Making a Quantum Leap

Making money and creating value
“The insurance business is complicated”. NO, it is not ! Though it can be explained better
As per every business …
• Value comes from profit, growth and VIF

PVFP
return on capital
MCEV
CNHR
• Never forget the basics VNB TVOG

- Balance sheet PVNBP
- Cash flow
- P&L
• Understand and pull the right value drivers

Value components: Life
Shareholders’
funds
MCEV
NPV of in
force
business
EEV
NPV of
Appraisal future
investment
value spreads
NPV of new
business in
future years

The value of the “Life in force business”
Generating cash on a
sustainable basis
Expected free surplus generation from life in-force book*
Over 40% of MCEV profit and

required capital released to free
surplus in first 5 years
1,200
1,000
800
€m
600
400
200
0
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027+
* From business in-force at 1.1.08 at current exchange rates
* Comprises expected interest on net worth, expected current year investment returns on PVIF, emergence of MCEV profits and release of required capital on in-force book
Source: Aviva Life in force book

run off profile
sustainable basis
Self-funding new
Free surplus generated by life in-force book, full year 2008
business 2,500
112
2,000 252
522
1,500 1,075
€m 229
1,000
1,162
500 979
-
Opening free
Opening Expected free
free Expected Operating
free Operating Economic Investment in
Economic Investment Net capital
Net capital Closing free
Closing free
surplus surplus variances
surplus surplus variances movements & newinbusiness
movements new returns
returns surplus
surplus
generation & FX business
generation FX

run off profile
sustainable basis
Self-funding new
Free surplus generated by life in-force book, full year 2008
business 2,500
112
252
Transferring significant 2,000
value to shareholders 522

1,500 1,075
€m 229
1,000
1,162
500 979
-
Opening free
Opening Expected free
free Expected Operating
free Operating Economic Investment in
Economic Investment Net capital
Net capital Closing free
Closing free
surplus surplus variances
surplus surplus variances movements & newinbusiness
movements new returns
returns surplus
surplus
generation & FX business
generation FX

run off profile
Making money in insurance
A straightforward P&L ... … with clear profit sources
Profits from
Profits from investments
investments Investment margin
Investment margin
Profits
Profitsfrom
from taking risk
taking risk Underwriting margin
Underwriting margin
Investment
Investment to grow
grow Newbusiness
New business acquisition
acquisition
Costs
Coststo
torun
run our
our business
business Overheads
Overheads
Tax
Taxtotoauthorities,
Authorities, minorities
minorities Taxation,minority
Taxation, minority interests
interests

How we make money
For both life and general insurance

1,000
Underwriting
800 margin
Investment
margin
600
1H 09 €m IFRS Profit
Profit after tax and

400
minorities
GI
200
Life
0
Other
(200)
Taxation and
minority interests
(400) Life GI Overheads
New business
(600) acquisition

Our Quantum Leap is all about value and money
Transforming the business …
… by executing strategies with high impact on all key value drivers

Sustainable profit growth
Increase assets under management and profitability

1,000
Underwriting Bancassurance
margin
800 • sales at minimal marginal cost
Investment
margin
600
Retail
• increase sales force productivity and retention
Profit after tax
400 • portfolio rebalancing and minorities
Improve customer experience and retention

200
Capital efficient growth through new legal structure

0
Increase investment
Minority interests
return
Other
(200) • centralised
Taxation investment management
New business Key focus areas: Opening AUM Net sales Product mix Performance
(600) acquisition
Risk selection and pricing

1,000
Underwriting Underwriting best practice

margin
800
Investment Customer segmentation
margin
600
Higher penetration of protection business
Profit after tax
400 Effective claims management
and minorities
Fraud reduction
200
Lower unit costs

0
• Supplier management
Other
Minority interests
• Procurement
(200) Taxation
Cost effective claims handling
New business Key focus areas: Earned premiums Claims and handling costs
(600) acquisition
Reduce average acquisition costs

1,000
Underwriting Grow Bancassurance at marginal cost

margin
800
Investment Improve Retail sales force productivity
margin
600
Increase cross/up sell
Profit after tax
400 Improve quality of leads and minorities
Customer centric and innovative product catalogue

200
Improve automation of sales processes

0
Other
Minority interests
(200) Taxation
New business Key focus areas: Acquisition costs Commissions

(600) acquisition
Pan-European governance, operations & IT

1,000
Underwriting Single head office and streamlined organisation

margin
800
Investment Efficient IT / shared services
margin
600
Single product catalogue
400 Single change portfolio andProfit

centralised
after tax procurement
and minorities
200
0
Other
Minority interests
(200) Taxation
Key focus areas: Front/back office ratio Spans of control

New business
(600) acquisition Expense ratios Property efficiency
Single holding company

1,000
Underwriting EU carrier and branches

margin
800
Investment Central risk and investment management
margin
600
Product factories CEE
16-20%
400 Tax and capital efficiencyProfit after tax
and minorities
Spain
200
30%
Poland France
0 19% 34%
Other
Minority interests Italy
(200) Taxation
32%
Ireland
12.5%
Profit before tax and headline tax rates

New business
(600) acquisition
Sustainable
1,000 profit growth
Underwriting
800 Investment margin
margin
600
400
200
GI
Life
0
Other
Minority interests
(200) Taxation
New business
(600) acquisition

Sustainable profit
growth
1,000
Underwriting
800 margin
Investment
600
margin
Doubling
400
2007 IFRS
GI
200
net profit by Life

0
(200)
2012 Taxation
Minority interests
Other
New business
(600) acquisition

Our Making money Conclusions
Our opportunity Focus
Quantum and creating and
in Europe sessions
Leap value Q&A

Questions & Answers
To conclude
Great franchise in Quantum Leap to ‘One Aviva, twice

the world’s largest become the the value’ delivered
market undisputed leader by 2012

Source: UN (2009), CEA (2009), Aviva PFA Model (2008)

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Aviva Europe

Making a Quantum Leap

Aviva Europe – Making a Quantum Leap 3

Grow at marginal cost, improve mix, increase

Grasp Retail franchise Increase sales force profitability, improve mix

Simplify & Innovate to Twelve head offices transformed to one,

Our Our Making money Conclusions

Aviva Europe – Making a Quantum Leap

As per every business …

• Value comes from profit, growth and VIF

• Never forget the basics VNB TVOG

• Understand and pull the right value drivers

Our Our Making money Conclusions

Our Our Making money Conclusions

Over 40% of MCEV profit and

Source: Aviva Life in force book

Source: Aviva Life in force book

value to shareholders 522

Source: Aviva Life in force book

A straightforward P&L ... … with clear profit sources

Our Our Making money Conclusions

For both life and general insurance

Profit after tax and

(400) Life GI Overheads

Our Our Making money Conclusions

Transforming the business …

… by executing strategies with high impact on all key value drivers

Our Our Making money Conclusions

Increase assets under management and profitability

Improve customer experience and retention

Capital efficient growth through new legal structure

(400) Life GI Overheads

Risk selection and pricing

Underwriting Underwriting best practice

Lower unit costs

Reduce average acquisition costs

Underwriting Grow Bancassurance at marginal cost

Customer centric and innovative product catalogue

Improve automation of sales processes

(400) Life GI Overheads

New business Key focus areas: Acquisition costs  Commissions

Pan-European governance, operations & IT

Underwriting Single head office and streamlined organisation

400 Single change portfolio andProfit

(400) Life GI Overheads

Key focus areas: Front/back office ratio  Spans of control 

Single holding company

Underwriting EU carrier and branches

Profit before tax and headline tax rates

(400) Life GI Overheads

Our Our Making money Conclusions

net profit by Life

(400) Life GI Overheads

Our Our Making money Conclusions

Aviva Europe – Making a Quantum Leap

Great franchise in Quantum Leap to ‘One Aviva, twice

Aviva Europe – Making a Quantum Leap

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New business Key focus areas: Acquisition costs Commissions

Key focus areas: Front/back office ratio Spans of control