Monday 7th June 2010 page 1 The future of bancassurance: Rebuilding confidence David Angulo, Aviva...

Monday 7th June 2010 page 1

The future of bancassurance:Rebuilding confidence

David Angulo, Aviva Europe Bancassurance Director


Bancassurance today

MACROECONOMICS

CUSTOMER

REGULATION

BANKS


The environment

BANCASSURANCE

Macroeconomics:

• Public accounts turmoil

• Unemployement

•Volatility of financial markets

Banking industry:

• Capital / P&L constrains

• Restructuring underway

• Potential liquidity issues

Regulation:

• Solvency II

• Basel II & III

• Capital requirements

Customer:

• Demand for protection

• Savings propensity

• Looking for guarantees


Aviva 2009 performance


The European market


Aviva clear strategic delivery


Aviva Q1 2010 highlights

• Q1 2010 16% growth of life business compared to previous quarter

• Aviva Europe Bancassurance grew 48% from the previous quarter up to £2.611m with different performance through out the European markets and 20% growth from Q1 2009

• Group margin in line with full year 2009

• IGD solvency surplus at £4.400m after deducting final dividend (FY:£4.500m)

Strong growth of volumes in life business in Q1 2010 and maintained focus on capital

resources


Macroeconomics & political situation

Unpopular reforms and political actions are being triggered by the current

economic situation and governments should take the lead to promote private

savings

UNCERTAINTYUNCERTAINTYMACROECONOMICSMACROECONOMICS


The banking industry

Banks need additional sources of profit including general insurance business while margins are under

pressure and lending activity is at very low level.

The final outcome of consolidation process is still unknown

UNCERTAINTYUNCERTAINTYBANKSBANKS


The customer

Given the current economic situation customers with increased savings

propensity show a demand for protection a savings business

providing guarantees

UNCERTAINTYUNCERTAINTY CUSTOMERCUSTOMER


Regulation

Uncertainty generated by regulation evolution in banking and insurance industries with potential increased

capital requirements foreseen in the near future

UNCERTAINTYUNCERTAINTY

REGULATIONREGULATION


Foundations for bancassurance remain the same

BANCASSURANCE

SIM

PL

ICIT

Y

EF

ICIE

NC

Y &

E

XC

EL

EN

CE

INT

EG

RA

TIO

N

PR

OF

ITA

BIL

ITY

BACK TO BASICS


The future of bancassurance

Joint venture vs. Distribution agreement

Protection

General insurance

Specific savings

Demand:

• Protection

• Guarantees

BANCASSURANCE


Summary of bancassurance

• Bancassurance can cover some of the shortfall in banking P&L

• Back to basics and focus on capital and results remain in current situation

• Long term savings picking up compared to previous year

• Potential to develop General insurance

• Retention of current portfolios important in a difficult new business market

• Market consolidation will change banking landscape in Europe

• Regulatory changes may affect the participations of banks in insurance business

• Uncertainty is driving customer demands

• Governments should promote long term savings

and pensions in current environmentBancassurance landscape to change in the medium term driven by consolidation

and regulation but will remain as a relevant channel with additional potential

to develop GI


“Often the difference between a successful person and a failure is not one has better abilities or ideas, but the courage that one has to bet on one's ideas, to take a calculated risk - and to act.”

Andre Malraux (French historian, novelist and statesman 1901-1976)

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