Mike BiggsMike BiggsGroup Finance DirectorGroup Finance DirectorAvivaAviva plcplc

“Strategies for growth in a challenging environment”“Strategies for growth in a challenging environment”

BNP BNP ParibasParibas ConferenceConferenceParisParis03 June 200303 June 2003

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DisclaimerDisclaimer

This presentation may contain certain “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’scontrol including among 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 regulatoryauthorities, 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.

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AvivaAviva overviewoverview

The leading panThe leading pan--European life insurerEuropean life insurer

Focused General Insurance businessFocused General Insurance business

72%Life**

28%GI

2002 premium sales* (£28bn)

Cont.Europe

Life 32%**

UK Life35%**

UK GI

17%

ContEurope GI 6%

Intl. GI 5%

Intl. Life 5%**

* Net written premiums from continuing operations. ** Life includes retail inv sales and health.

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AgendaAgenda

Insurers reInsurers re--structuringstructuringShortShort--termterm

LongerLonger--term

Cash, costs, capitalCash, costs, capital

Growth will returnGrowth will returnterm

Increased organic and Increased organic and inorganic opportunitiesinorganic opportunities

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ShortShort--term: term: Market forces reMarket forces re--structuring industrystructuring industry

ShakeShake--outout

Tough life sales Tough life sales environmentenvironment

Weak players Weak players capitulatingcapitulating

Insurers reInsurers re--capitalisingcapitalising

OpportunitiesOpportunities

Reduced capital Reduced capital sustaining GI pricingsustaining GI pricing

Organic consolidation Organic consolidation benefiting stronger benefiting stronger companiescompanies

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AvivaAviva 2003 priorities2003 priorities

Deliver from recent Deliver from recent bancassurancebancassurance expansionexpansion

Drive GI earningsDrive GI earnings

Size costs to revenuesSize costs to revenues

Raise hurdle rates and pricingRaise hurdle rates and pricing

Capital efficiencyCapital efficiency

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Q1 2003 life salesQ1 2003 life sales

UK 263UK 263 (22%)(22%) 22.022.0 23.623.6France 61 (3%)France 61 (3%) 31.031.0 30.930.9Ireland 21 (41%)Ireland 21 (41%) 28.328.3 28.228.2Italy 61 +97%Italy 61 +97% 22.822.8 24.924.9Netherlands 45 +18%Netherlands 45 +18% 17.917.9 13.313.3Spain 69 +94%Spain 69 +94% 40.840.8 45.945.9Other countries 81 +11%Other countries 81 +11% 11.211.2 13.913.9

Group 601 (2%)Group 601 (2%) 23.623.6 24.424.4

MarginMargin%%

APE APE Growth*Growth*£m£m

Q1 2003Q1 2003MarginMargin

%

20022002

%

*Local currency

8

Consistent profitability from personal Consistent profitability from personal and small commercial lines GIand small commercial lines GI

CombinedOperating

Ratio2002 2001

UK 101% 102%France 102% 104%Ireland 100% 101%Netherlands 105% 104%Canada 102% 107%Group 102% 103%

Withdraw whereno scale– Spain– Germany– Belgium– South Africa– Pakistan– Brazil

Exited long-tail business– US P&C– London Markets– French broker

commercial

2002 GI operating profit £959m**continuing and discontinued operations*continuing and discontinued operations

9

AvivaAviva: Scale advantages in UK GI: Scale advantages in UK GI

10

15

20

25

1997 1998 1999 2000 2001

Credit Suisse

Norwich Union

AXA

AllianzRSA

Zurich

%UK GI expense ratios

Source: FSA returns

10

Leveraging cost advantage out of Leveraging cost advantage out of Aviva’sAviva’sgrowing expertise in Indiagrowing expertise in India

Call centre / claims processes supports UK GI Call centre / claims processes supports UK GI capacity and efficiencycapacity and efficiency

Consider other applicationsConsider other applications

Virtual callcentre/claims

processes

1,000employeesend 2003

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AvivaAviva cash generation in 2002cash generation in 2002

Large inLarge in--force statutory life profits of £1.4 force statutory life profits of £1.4 bnbn net net

Strong statutory GI profits of £0.6 Strong statutory GI profits of £0.6 bn bn net net

Dividend cut saved £350mDividend cut saved £350m

Operating statutory profitOperating statutory profit(1)(1)

(1) Key business areas. Continuing operations in 2002.

21%21%Cont Europe & Intl lifeCont Europe & Intl life

33% UK life33% UK life

46%46%Worldwide GIWorldwide GI

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Capital: resilient positionCapital: resilient position

Resilient CGUII structure Resilient CGUII structure (holds major overseas subs)(holds major overseas subs)

can withstand significant equity market fallscan withstand significant equity market fallsS&P AAS&P AA-- (stable outlook)(stable outlook)

Strong UK life withStrong UK life with--profit “profit “realisticrealistic” capital” capitalorphan estate £4.3bnorphan estate £4.3bn(after >£4bn for guarantees, (after >£4bn for guarantees, glidepath glidepath etc…)etc…)manage bonuses / manage bonuses / MVAsMVAs / asset mix / asset mix (35% equities)(35% equities)

S&P AA (stable outlook)S&P AA (stable outlook)

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AvivaAviva in strong operational shape to meet in strong operational shape to meet current market challengescurrent market challenges

Good Good cashflowcashflow from strong GI earningsfrom strong GI earnings

Dividend Dividend rebasedrebased (1.5x covered)(1.5x covered)

Sizing costs to revenuesSizing costs to revenues

Resilient capital positionResilient capital position

Diversified business and strong market positionsDiversified business and strong market positions

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LongerLonger--termterm

15

LongerLonger--term savings growth prospects term savings growth prospects remain strongremain strong

0

50

100

150

200

250

300

350

400

1984

1986

1988

1990

1992

1994

1996

1998

2000

Global life premiumsGlobal life premiums

Global GDPGlobal GDP

Demographics driving longDemographics driving long--term savings term savings growth > GDPgrowth > GDP

Source: Swiss Re/HSBC

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UK Life market UK Life market -- Europe’s largestEurope’s largest

Attractive demographicsAttractive demographics

Government “withdrawing” from retirement provisionGovernment “withdrawing” from retirement provision

Growth of UK life & pensions market

0

2000

4000

6000

8000

10000

12000

1997 1998 1999 2000 2001 2002Source: ABI

£m APE

IFAs

Banks / tied / direct

17

UK Life UK Life -- market concentratingmarket concentrating

Norwich Union outperforming marketNorwich Union outperforming market

Competitive advantage through capital strength, Competitive advantage through capital strength, brand, market leading product rangebrand, market leading product range

Market share %

10

0

2

4

6

8

NU Post MergerCGUNU

5.2%

11.4%

12

1996 1997 1998 1999 2000 2001 2002

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UK Life marketUK Life market

0

1000

2000

3000

4000

5000

6000

1997 1998 1999 2000 2001 2002Source: ABI

£m APE

Investment bonds

Pensions

Annuities/ income drawdown

Endowments

Protection

Product trends

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Investing into lower penetrated markets Investing into lower penetrated markets and structural and structural bancassurancebancassurance growthgrowth

Spain: created top 3 LTS business Singapore &

HK: bancassurancewith DBS

UK: bancassurance JV

with RBSG

France: bancassurancefrom 2004 China:

JV life business 2003Italy: created top

6 LTS business

Netherlands:bancassurance JV with ABN Amro 2003

EnteredLithuania life from Poland

India: bancassurance 2002

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Aviva bancassuranceAviva bancassurance opportunityopportunity

Banks have good or improving CRMBanks have good or improving CRM

AvivaAviva has access to over 30m “warm” bank has access to over 30m “warm” bank customers in Europecustomers in Europe

Low insurance penetrationLow insurance penetration

Resilient sales channel in current marketsResilient sales channel in current markets

Opportunity to harvest deposits as equity markets Opportunity to harvest deposits as equity markets recoverrecover

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Attractive margins from Attractive margins from bancassurancebancassurance

AvivaAviva2002 2002 bancassurancebancassurance

new business marginsnew business margins

UK (RBSG)UK (RBSG) 21.5%21.5%

Spain Spain 51.3%51.3%

ItalyItaly 24.9%24.9%

Singapore Singapore 29.4%29.4%

35.1%35.1%

Group total marginGroup total margin 24.4%24.4%

22In Spain In Spain AvivaAviva has established a has established a major business with its partnersmajor business with its partners

Life insurance ranking 2002(Premiums)

Market growth€ bn

Aviva 12.5

17.2

23.422.5

27.012.3

8.3

7.1

6.6

5.798 99 00 01 02

10

20

3021%

CAGR

11.810.0

8.38.7

5.34.9

979695949392

Market Market share %share %

La Caixa

Mapfre

SCH

BBVA

Source: ICEA, UNESPA

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AvivaAviva Spain: an under penetrated Spain: an under penetrated bank client basebank client base

Life insurance & pension reserves as % of total customer funds 2001

15.3%

12.3%12.2%12.1%

10.6%8.9%

7.7%7.5%

6.0%5.7%

5.3%4.1%

0.80%2.3%

3.3%3.7%

14.3%La Caixa

Banco Sabadell

Caixa Catalunya

BBVA ex-America

Caja Madrid

Bankinter

Banco Pastor

Bancaja

Ibercaja

CAM

Banco Popular

SCH ex-America

Banco Atlántico

Caixa Galicia

Caja EspañaUnicaja

Caja Granada

Customers

2.4m

2.3m 2.0m 1.3m 0.9m

Pensions penetrationLife insurance penetration

Source: ICEA, Inverco, Annual reports Source: ICEA, Inverco, Annual reports

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An example of expected returns in An example of expected returns in Spanish Spanish bancassurancebancassurance dealsdeals

0.0%

2.5%

5.0%

7.5%

10.0%

12.5%

15.0%

17.5%

-75% -45% -15% 15% 45% 75%

IRR

�� IncentivisationIncentivisation

−− earnearn--outs outs �� ProtectionProtection

−− 1010--year business year business planplan

−− capped future capped future paymentspayments

−− earnearn--insins

−− conservative conservative projectionsprojections

Key features

Minimumprice

Earn-inpayments

Earn-outpayments

Maximum price

Aviva IRR against 10 year business plan

Performance against 10 year business planPerformance against 10 year business plan

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25

AvivaAviva Spain Spain –– efficiency key to efficiency key to bancassurancebancassurance marginmargin

Acquisition and administration costsAcquisition and administration costs(% of premium, H102)(% of premium, H102)5

4

(%)

3

2

1

0Aseval(Aviva)

Largest Spanish Total Spanish lifebancassurers market

Source: ICEA, data regarding H102

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Aviva FranceGrowth faster than the marketGrowth faster than the market

Base 100 in 1998

+31% Market+38% Aviva

+22% TraditionalNetworks

100

120

140

160

1998 1999 2000 2001 2002

Source : Fédération Française des Sociétés d’AssuranceSource : Fédération Française des Sociétés d’Assurance

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Aviva France

N°1 in savings association business with Afer

N°1 in direct sales of individual protection

Ranked 4th amongst traditional life insurers

Aviva Gestion d’Actifs best performing fund manager over 1 and 3 years (La Tribune-Standard & Poor’s)

Leading market positions

Unit-linked vs euros

Individual vs Group business

Withdrawal from segments where

critical mass cannot be reached

(Group Protection business )

Focus on profitable segments

Diversifying distribution - Médéric & Crédit du Nord

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AvivaAviva well positioned for current tough well positioned for current tough trading conditionstrading conditions

Strong brandStrong brand

Distribution access to customersDistribution access to customers

Low costLow cost

Organic consolidationOrganic consolidation

Focussed and disciplined M&A approach Focussed and disciplined M&A approach

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In the longerIn the longer--term term AvivaAviva will……..will……..

Benefit from the longBenefit from the long--term savings opportunities in term savings opportunities in EuropeEurope

harvest harvest bancassurance bancassurance opportunitiesopportunities

continue to expand distributioncontinue to expand distribution

EU accessionEU accession

Develop positions in selected markets outside Develop positions in selected markets outside EuropeEurope

Drive GI earningsDrive GI earnings

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AppendixAppendix

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Strong and valuable market positionsStrong and valuable market positionsRankLife

2104364–233

Top 10

Market shareLife (est.)

11%4%

10%*7%5%

11%–

18%11%13%4%

RankP&C

1Top 15

4–

n/a12–2––

Market shareP&C (est.)

16%2.5%9%*

–<1%24%9%–

9%––

UKFranceNetherlandsSpainItalyIrelandCanadaPolandSingaporeTurkeyAustralia

* Pro forma ABN Amro JV

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AvivaAviva in Eastern Europein Eastern EuropeEU accession brings economic benefitsEU accession brings economic benefits

Poland• 1992 £5m greenfield investment• In 2002:

•No 1 private pensions (29% of market)•18% of total life market•40% of individual life•Over 3m customers

Poland• 1992 £5m greenfield investment• In 2002:

•No 1 private pensions (29% of market)•18% of total life market•40% of individual life•Over 3m customers

Turkey• Life launch 1996• 13% market share, No. 3Czech Republic• Launched 1997Romania• Launched 2000, top 5Hungary• Acquisition of Top-6 life assurer 2001Lithuania• Launched 2001• 11% market share, No. 4

Turkey• Life launch 1996• 13% market share, No. 3Czech Republic• Launched 1997Romania• Launched 2000, top 5Hungary• Acquisition of Top-6 life assurer 2001Lithuania• Launched 2001• 11% market share, No. 4

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India & China new venturesIndia & China new ventures

IndiaIndiaJV partnership (26%) with JV partnership (26%) with DaburDabur Group in 2002Group in 2002Distribution agreements with:Distribution agreements with:

––CanaraCanara Bank Bank (ranked 2nd, 2,400 branches)(ranked 2nd, 2,400 branches)

––LakshmiLakshmi Vilas Bank Vilas Bank (regional bank, 208 branches)(regional bank, 208 branches)

––ABN ABN AmroAmro

––American ExpressAmerican Express

ChinaChinaAvivaAviva--COFCO Life Insurance launched 1 Jan 2003COFCO Life Insurance launched 1 Jan 2003Initially operating in GuangzhouInitially operating in Guangzhou