Aviva PLC AV. Q3'12 IMS

  Aviva PLC (AV.) - Q3'12 IMS

RNS Number : 6091Q
Aviva PLC
08 November 2012






START



News Release
Aviva plc

Interim management statement for the nine months to 30 September 2012

8 November 2012





Dear shareholders,



Aviva plc  today  announced its  Q3  Interim Management  Statement  where  the 
operating profit trend is broadly in line with the half year.



More importantly,  I  am  pleased  to  report that  we  have  taken,  and  are 
continuing to take,  firm and  decisive actions  to transform  Aviva. The  key 
priorities remain:



n To appoint a high quality CEO



n To build  the company's capital  and financial strength,  reducing also  the 
risk and volatility of the balance sheetand income statement



n To narrow focus on attractive  core businesses and dispose intelligently  of 
non-core segments



n To improve earnings performance and return on equity with the aim of broadly
replacing, by  2014, the  earnings lost  as  a result  of disposals  with  new 
earnings streams



Reporting on  each of  these  in turn,  the CEO  search  process is  now  well 
advanced and  in  line with  the  original timetable  set  out by  the  Board. 
Shortlisted  candidates  are   in  the   process  of   being  interviewed   by 
non-executive directors, and on completion,we will then seek FSA approval for
the Board's preferred candidate.



I am also pleased that we are getting good traction on building our  financial 
strength. Economic capital surplus^* as at the end of October 2012 was  around 
£5.3 billion, up by £0.8 billion from  the half year and by £1.7 billion  from 
the beginning of the year - in ratio terms we are currently around 146% versus
our target range of 160-175%.  IGD capital surplus at  the end of October  was 
£3.7 billion, up £0.6 billion from the half year and with a ratio of 167%.  In 
the quarter we also sold down part of our Italian sovereign bond holdings.



In the quarter we reduced our Delta  Lloyd holdings and announced the sale  of 
our business in Sri  Lanka. While we are  not yet in a  position to make  firm 
announcements on  further non-core  disposals, the  progress is  in line  with 
planned timelines.



We can  now confirm  that we  are in  discussions with  external parties  with 
respect to our  US life and  annuities business and  these are being  actively 
pursued.While not agreed, any such sale would come at a substantial  discount 
to IFRS book value, but  would generate significant economic capital  surplus. 
We believe any such sale  would be in the best  interests of the Group and  we 
are hopeful of a satisfactory resolution reasonably soon.



Beyond this, there are eight smaller disposals which are now more likely to be
in 2013, and  we expect all  to be done  without a significant  impact on  the 
Group's IFRS book value.



The transformation and  earnings enhancement  process continues  apace. A  key 
initiative is the turnaround of our 27 "amber" business cells. In the  quarter 
we assigned our most talented high-potential executives to each cell and  they 
produced a plan for each. The analysis tended to show that within the cells we
had  a  mix  of  performing  as  well  as  uneconomic  or  poorly   performing 
sub-segments   or    products.    The    required    actions    ranged    from 
revenue-enhancement, cost or loss reduction, capital withdrawal, or leveraging
technology or the  online space. We  are now  in the process  of refining  and 
implementing these  plans and  building the  results into  our 2013  and  2014 
plans, and will be  able to provide  a more comprehensive  update at the  2012 
full-year results.



Unsurprisingly, getting traction on the change initiatives at Aviva has  taken 
time.



On the one hand we are blessed  with a terrific brand and really  professional 
front-line staff who have the customer's interest fully at heart. For example,
visiting the  regional  UK and  international  centres reveals  an  incredibly 
dynamic environment  and  a strong  marketing  ethic. The  "systems  thinking" 
initiatives are now well embedded in the culture of the UK business.



* The economic capital surplus represents an estimated position. The capital
requirement is based on Aviva's own internal assessment and capital management
policies. The term 'economic capital' does not imply capital as required by
regulators or other third parties. Pension scheme risk is allowed for through
five years of stressed contributions.



Chairman's review continued





On the  other  hand,  culturally  the  organisation  has  been  more  used  to 
collective decision  making  and has  moved  more  slowly as  a  result.  This 
initially inhibited progress on some of the programmes possibly exacerbated by
an unwieldy  centre and  support infrastructure,  with more  bureaucracy  than 
desirable. Although it will take  time to change this,  the pace of change  is 
accelerating and we are beginning to make real progress.



There are nine specific transformation programmes and I'll cover each in turn:



Backing Winners  - This  aims  to develop  new  revenue opportunities  in  the 
developed markets, and involves  a team of external  professionals as well  as 
the transformation team. In addition there is a separate initiative to  invest 
new  capital  and  expense  resources  in   a  few  high  growth  and   return 
opportunities. These are relatively new initiatives, and we will have  further 
clarity on their potential by year end.



Cost and Capital Efficiency - As previously announced, we are seeking at least
£400 million  of cost  savings as  well as  the reallocation  of capital  from 
suboptimal segments. We have already removed four levels of middle  management 
in the UK and  the programme is being  extended internationally. We have  also 
removed the regional  layer of our  business. In addition  the review of  head 
office, support activities and non-staff costs is well advanced. By the end of
the year we will have locked-in a run rate cost reduction of £250 million  and 
have specific 2012 and 2013 plans in place on the balance. We are also in  the 
process of producing a more efficient 2013 capital plan.



Back Books - We are aiming strategically and tactically to reduce the drag  on 
economic return and  concentration risk from  capital-hungry, sub-optimal,  or 
non-current legacy portfolios. Favourable economic  outcomes in this area  are 
inherently difficult,  but several  modest  tangible opportunities  have  been 
identified, and these are being worked through.



Life Excellence -  It is  critical that we  leverage best-in-group  capability 
across all  life segments.  Specific  initiatives include  launching  existing 
products  into  new   markets,  product   re-pricing,  improved   underwriting 
standards,  reallocation  of  capital,  improved  loss  mitigation  and   cost 
reduction. The organisational team is now in place and key positions assigned.



GI Excellence - Given our largest  general insurance businesses are in the  UK 
and Canada, it is important that we implement best-in-class techniques  across 
both as  well as  across  the smaller  GI segments  internationally.  Specific 
initiatives include  fully  deploying  existing  risk-based  pricing  systems, 
improved claims efficiency and the deployment of sophisticated fraud reduction
systems. This involves  additional responsibility  for existing  professionals 
from the UK and Canada.



Assets/Aviva Investors - We have initiated  a programme to review the  overall 
asset portfolio of the group and the  appropriate mix for a low interest  rate 
environment. As part of  this review, we will  be undertaking additional  work 
with Aviva Investors to develop a more compelling external  proposition.While 
Aviva Investors continues to serve the group well, it has fallen short of  our 
aspirations to expand the business externally.



Product Tails - As  with most firms  we have a natural  80/20 to our  business 
with a significant tail of products and segments that make little contribution
to our success and in many cases erode value. This programme aims to eliminate
these tails.  This is  a relatively  recent initiative  and while  an  initial 
analysis has been conducted, it requires further analysis and solutions.



IT and Operations -  This essentially involves a  complete reappraisal of  our 
technology strategy and architecture,  and also reviews  our current IT  spend 
level of over £800 million per annum.  The review has now been completed,  has 
been formally approved, and will be  implemented in three phases. As a  result 
we will eliminate over 800 applications from our current legacy estate,  adopt 
a more modern digital architecture, improve service standards and  reliability 
and reduce  IT revenue  and capital  expense  costs. In  addition there  is  a 
separate programme  to  optimise  spend  on  the  various  operational  change 
initiatives  across   the  Group   which  will   result  in   more   effective 
implementation, the elimination of waste and reduced costs.



Chairman's review continued





Performance Ethic - Aviva  requires a more  effective performance culture.  As 
such we are  seeking significant change  in the areas  of culture and  values, 
performance  targeting  and   measurement,  communication,  and   remuneration 
practices across the Group. This work is well advanced. Additionally, the 2012
engagement and  values  surveys  have  been completed  by  staff.  All  senior 
management have  been  categorised in  a  nine-box performance  and  potential 
matrix, and force-ranked on a 20/70/10  basis, and systems have been  designed 
to  differentiate  remuneration  according  to  ranking,  subject  to  further 
Remuneration Committee discussion and approval.



Trading conditions though remain difficult and results have been mixed  across 
the Group. We nevertheless have strong positions in the UK, Canada, France and
Singapore and our  performance has  been good in  these markets.  In our  life 
business in Spain and Italy markets are tough, driven by the external economic
environment, with new business volumes considerably reduced. In Ireland, while
a number of good actions are underway to improve performance, the results  are 
not yet acceptable.



Although   conditions   will   remain    challenging,   the   strategic    and 
transformational  programmes  should  enable  us  to  improve  our   financial 
performance and value significantly,  making Aviva a  better business for  our 
customers,  our  people,  our  partners  and  a  better  investment  for   our 
shareholders.





John McFarlane

Chairman









Key financial highlights





Capital position



                                    30 September  30 June
                                            2012     2012
IFRS net asset value per share              397p     395p
MCEV net asset value per share              446p     421p
Estimated IGD solvency surplus            £3.6bn   £3.1bn
Estimated economic capital surplus*       £5.1bn   £4.5bn
                                        9 months 9 months
                                            2012     2011
Operating capital generated               £1.3bn   £1.1bn



Total worldwide sales (excluding Delta Lloyd and RAC)



                                                                         Local
                                       9 months 9 months
                                                         Sterling % currency %
                                           2012     2011  change on  change on

                                             £m       £m       9M11       9M11
United Kingdom                            8,002    8,018          -          -
Ireland                                     469      757      (38)%      (34)%
United Kingdom & Ireland                  8,471    8,775       (3)%       (3)%
France                                    2,671    3,224      (17)%      (11)%
United States                             3,071    2,796        10%         8%
Spain                                       934    1,425      (34)%      (30)%
Italy                                     1,603    2,517      (36)%      (32)%
Other Developed                             146      228      (36)%      (30)%
Poland                                      274      403      (32)%      (24)%
Singapore                                   496      412        20%        19%
Other Higher Growth markets               1,148    1,168       (2)%          -
Total life and pensions                  18,814   20,948      (10)%       (8)%
Investment sales                          3,400    2,682        27%        30%
Total long-term savings sales            22,214   23,630       (6)%       (4)%
General insurance and health net          6,735    6,706          -         2%
written premiums
Total worldwide sales                    28,949   30,336       (5)%       (2)%



IRR



                                  9 months 9 months

                                      2012     2011
Group IRR (excluding Delta Lloyd)    13.8%    13.8%
United Kingdom                         16%      15%
Ireland                                 2%       7%
United Kingdom & Ireland               14%      13%
France                                 11%      10%
United States                          14%      14%
Spain                                  16%      22%
Italy                                  12%      12%
Poland                                 19%      20%
Singapore                              29%      31%
Other Higher Growth markets            14%      14%



General insurance combined operating ratio (excluding Delta Lloyd and RAC)



                         9 months 9 months

                             2012     2011
Group                         97%      97%
United Kingdom                97%      97%
Ireland                      105%      97%
United Kingdom & Ireland      98%      97%
France                        95%      95%
Canada                        93%      96%







* The economic capital surplus represents an estimated position. The capital
requirement is based on Aviva's own internal assessment and capital management
policies. The term 'economic capital' does not imply capital as required by
regulators or other third parties. Pension scheme risk is allowed for through
five years of stressed contributions.







Chief financial officer's review





n Operating profit trends broadly in line with the half year

n £1.3 billion operating capital generated

n Capital ratios improved:

- Estimated economic  capital surplus^1 increased  by £0.8billion to  £5.3 
billion, ratio c.146% at 31 October

- Estimated IGD solvency surplus increased by £0.6 billionto £3.7 billion,
ratio c.167% at 31 October

n Transformation agenda making good progress

Overview

We are on track with our plan to make Aviva financially stronger, more focused
and higher-performing. Operating  profit trends  in the third  quarter are  in 
line with the first half.

Life insurance

In life insurance our priority is the disciplined allocation of capital,  with 
an emphasis on less capital-intensive products. The life new business IRR  was 
13.8% and total long term savings sales were £22.2 billion, down 6%.



In the United Kingdom total life and pension sales were flat at £8.0  billion. 
Excluding bulk  purchase  annuities,  sales  were up  3%  and  we  have  grown 
protection sales significantly, up by 23%, individual annuities were up by 11%
and group personal pension sales were up by 15%. Overall new business IRR  was 
up at 16% (3Q11: 15%)  as we made further  progress in improving returns  from 
our individual  annuity, protection  and  workplace savings  propositions.  We 
continue to allocate  capital to  those products achieving  the best  returns, 
leading to our decision to withdraw from the large scale bulk purchase annuity
market earlier this year.



Trading conditions remain subdued across  continental Europe. In France  sales 
are lower  mainly  because of  continued  unfavourable market  conditions.  In 
Spain, although the economic environment has impacted sales, we have grown the
proportion of  less  capital  intensive protection  sales  modestly,  and  the 
profitability of this  product area  remains strong.  In Italy  we have  taken 
action to reduce the risks  in this business: we  have increased our share  of 
unit-linked business and reduced our with-profit sales by 38%, to manage  down 
our exposure to this  sector. In Poland a  combination of regulatory  changes, 
adverse foreign exchange movements and the impact of the economic  environment 
led to a decline in sales. Even  so, our profitability in this market  remains 
very good.



In the United States life new business profitability was level. In response to
the low interest  rate environment  we have taken  pricing action,  re-pricing 
equity indexed annuities three times this  year. Annuity sales declined by  5% 
in 3Q12 compared with  2Q12 and we  expect a further reduction  in sales as  a 
result of the actions we have taken.



In our Higher Growth markets profitability was in line with the half year  and 
life and pension sales increased against prior year with a strong  performance 
in Singapore partially offsetting a decline in sales in China and India.

General insurance

Our general insurance business delivered a combined operating ratio of 97%  in 
line with prior year (excluding RAC). General insurance and health net written
premiums were  £6.7 billion,  down 3%  on prior  year, but  flat when  RAC  is 
excluded.



In the UK we delivered a combined operating ratio in line with 2011 (excluding
RAC) of 97% as we continue  our focus on disciplined underwriting, claims  and 
cost management. We have taken  action to reduce our  exposure in a number  of 
commercial lines  including blue-water  hull  marine, agriculture  and  scheme 
business.



Net written  premiums in  the UK  were level  at £3.1  billion reflecting  our 
discipline  to  maintain  profitability  over  volume  in  challenging  market 
conditions, particularly in SME commercial. Whilst we have contracted in  some 
very competitive  areas such  as SME  commercial, we  have continued  to  grow 
profitably in UK  personal motor  with net  written premiums  8% higher.  Over 
250,000 net new customers chose to  take out their personal motor policy  with 
Aviva since  the start  of 2012.  This growth  has been  achieved across  all 
channels and  has been  driven by  new initiatives  such as  Quotemehappy  and 
MultiCar.



In France, general insurance performed  well, with a combined operating  ratio 
of 95%, an improvement against the same period last year.



In Canada, our second largest general insurance market, our combined operating
ratio was 93%. Sales were 5% higher at £1.6 billion primarily in our  personal 
lines business due to improvements in retention, rate increases and underlying
growth in our customer base. We have taken pricing and underwriting actions on
some historically unprofitable commercial lines, such as hospitality and  real 
estate, to improve returns.

Asset managment

Aviva Investors secured net funded external sales (excluding liquidity  funds) 
of £2.0 billion  in the  first nine  months (3Q11:  £2.8 billion^2)  including 
redemptions relating to the refocusing of our distribution offices in  Europe. 
New  mandates  were  won  from  institutional  clients  and  global  financial 
institutions in the UK, Middle East and the Americas over the quarter.  Assets 
under Management were £274 billion (3Q11: £263 billion).

Transformation agenda

In July we  set out our  strategic plan  to transform the  company with  three 
priorities: build financial  strength, to narrow  focus and improve  financial 
performance.

Build financial strength

We remain focused  on building  Aviva's financial strength  and our  estimated 
economic capital  surplus has  increased  to £5.3  billion  as of  31  October 
(ratio: 146%). The  IGD solvency surplus  has improved to  £3.7 billion at  31 
October with  a coverage  ratio of  c.167% (HY12:  £3.1 billion  and  c.150%). 
Since FY11, IGD solvency surplus has increased by £1.5 billion.



Our capital position has improved  through a combination of favourable  market 
movements and actions we  have taken to manage  risks across the Group.  These 
include disposals and measures we have  taken in the pension scheme to  reduce 
equity exposure, and increase interest rate and inflation hedges.





1. The economic capital surplus represents an estimated position. The  capital 
requirement is based on Aviva's own internal assessment and capital management
policies. The term 'economic  capital' does not imply  capital as required  by 
regulators or other third parties. Pension scheme risk is allowed for  through 
five years of stressed contributions.



2. 3Q11  Net  funded  external  sales were  £3.3  billion  before  exceptional 
withdrawals of  £0.5  billion  related  to the  disposal  of  Aviva  Investors 
Australia.







Chief financial officer's review continued





We have also taken a number of  steps to reduce the volatility of our  capital 
position including the sell down  of our holding in  Delta Lloyd in July,  and 
lowering our exposure  to Italian sovereign  debt, with a  gross sell down  of 
nearly €3.0 billion this year from our shareholder and participating  funds^3. 
After taking into account market movements and new business, the value of  our 
net direct shareholder  and participating fund  holdings in Italian  sovereign 
debt is  now £5.2  billion^4 (FY11:  £6.4  billion) of  which our  net  direct 
shareholder exposure  is  £0.5  billion.  We also  took  advantage  of  market 
conditions towards the end  of the quarter to  rebalance our equity hedges  so 
that our protection against equity falls now starts sooner and lasts longer.



In the first  nine months of  2012 Aviva generated  £1.3 billion of  operating 
capital. This has improved by over £100 million compared with last year and is
over £200 million higher after adjusting  for the disposal of Delta Lloyd  and 
the RAC.  The majority  of the  improvement  has come  from a  combination  of 
continued lower capital usage,  better capital allocation  across most of  our 
life businesses and higher in-force capital generation.



Our IFRS NAV per share is 397p on  30 September 2012 compared with 395p on  30 
June 2012, with  a reduction  in the  pension surplus  of 12  pence per  share 
offsetting profits and positive market movements.

Narrow focus

We have made  progress exiting or  taking action in  the 16 business  segments 
that we identified as non-core. We reduced our shareholding in Delta Lloyd  to 
below 20%  in July  and  agreed the  sale  of our  business  in Sri  Lanka  in 
September. In addition we are in discussion with external parties with respect
to the  sale  of  our  US  business, which,  if  delivered  would  generate  a 
significant  economic  capital  surplus  but  could  only  be  executed  at  a 
substantial discount  to IFRS  book  value. In  eight  of the  other  non-core 
segments we have appointed investment banks to work on exit strategies.



We have decided to stop writing new business in large bulk purchase  annuities 
and in the remaining four segments we are taking further radical action.

Improve financial performance

We are  improving Aviva's  financial performance  through a  reduction in  the 
Group's expenses,  more disciplined  capital allocation,  lowering losses  and 
growing revenues over time.



By the  end of  2012 we  will  have delivered  a £250  million run  rate  cost 
reduction and we are on track to meet our £400 million cost reduction  target. 
We have  achieved our  cost  savings through  a  number of  actions  including 
reducing the number of  management levels in the  UK business between the  CEO 
and operational staff from  nine to five, removing  the regional layer of  our 
business and integrating our UK and Ireland businesses.



We have made  further improvements  to the  allocation of  capital across  the 
Group which  has supported  our  operating capital  generation levels.  In  UK 
individual annuities, for  example, we  have increased prices  to improve  the 
required capital  return. We  have improved  the European  bancassurance  mix, 
developing products with  lower guarantees, which  are less capital  intensive 
and provide higher returns.  In Italy we have  reduced product guarantees  and 
have launched three new life products  all with improved economic returns  and 
reduced capital consumption. In  France we have  introduced new, less  capital 
intensive, unit-linked products through Credit du Nord and AFER.



We have  also  taken  further  action to  terminate  or  improve  historically 
unprofitable products and distribution agreements. In France, for example,  we 
are exiting  a number  of car  partnerships in  our direct  general  insurance 
business. In the  UK we have  refocused our life  insurance distribution  away 
from less-profitable building society partnerships.



We have selectively  increased rates  in our general  insurance business,  and 
have also taken rating actions on a  number of unprofitable lines such as  the 
leisure segment in Ireland and exited  others, such as two health products  in 
Singapore.



We are  seeking  opportunities for  new  revenue growth  particularly  in  the 
developed markets. For example we are  examining how we can create  additional 
revenue streams from our existing  strengths in bancassurance, protection  and 
general insurance personal and corporate speciality lines.

Outlook

Although trading  conditions in  many  of our  markets  are likely  to  remain 
subdued, we expect  performance trends to  be broadly in  line with half  year 
2012.



We are focused  on transforming  Aviva into  a financially  stronger and  more 
focused company which is well positioned in difficult economic times to  serve 
our customers effectively. We remain confident of success.



Patrick Regan

Chief financial officer



3. Gross of purchases, maturities, and as part of the sell-down programme.

4. Net of minority interests









Notes to editors

All comparators are for the nine months to 30 September 2011 unless  otherwise 
stated.



Income and expenses  of foreign  entities are translated  at average  exchange 
rates while their assets and liabilities  are translated at the closing  rates 
on 30 September 2012.  The average rates employed  in this announcement are  1 
euro = £0.81 (9 months to 30 September 2011: 1 euro = £0.87) and US$1 =  £0.63 
(9 months to 30 September 2011: US$1 = £0.62).



Growth rates in the press release have been provided in sterling terms  unless 
stated otherwise. The supplements following present this information on both a
sterling and local currency basis.

Cautionary statements:

This 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  announcement  contains,  and  we  may  make  verbal 
statements containing, "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", 
"will,"  "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 factors that  could cause  actual results to  differ materially  from 
those indicated in forward-looking statements in the presentation include, but
are not limited to: the impact  of ongoing difficult conditions in the  global 
financial markets  and the  economy  generally; the  impact of  various  local 
political,  regulatory  and  economic  conditions;  market  developments   and 
government actions regarding the sovereign  debt crisis in Europe; the  effect 
of credit spread  volatility on  the net  unrealised value  of the  investment 
portfolio; the effect of losses  due to defaults by counterparties,  including 
potential sovereign  debt defaults  or  restructurings, on  the value  of  our 
investments; changes  in  interest  rates  that  may  cause  policyholders  to 
surrender their contracts, reduce  the value of our  portfolio and impact  our 
asset and liability  matching; the  impact of  changes in  equity or  property 
prices on our investment portfolio;  fluctuations in currency exchange  rates; 
the effect  of market  fluctuations on  the value  of options  and  guarantees 
embedded in some of our  life insurance products and  the value of the  assets 
backing their reserves; the amount of allowances and impairments taken on  our 
investments; the effect of adverse capital and credit market conditions on our
ability to meet 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;  the impact of  catastrophic 
events on our business activities and results of operations; the inability  of 
reinsurers to  meet obligations  or  unavailability of  reinsurance  coverage; 
increased competition  in  the  UK  and  in  other  countries  where  we  have 
significant operations; the effect of the European Union's "Solvency II" rules
on our  regulatory  capital  requirements; the  impact  of  actual  experience 
differing from estimates used in  valuing and amortising deferred  acquisition 
costs ("DAC") and acquired value of in-force business ("AVIF"); 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 legal proceedings  and 
regulatory  investigations;  the  impact   of  operational  risks,   including 
inadequate or failed internal and external processes, systems and human  error 
or from  external  events;  risks  associated  with  arrangements  with  third 
parties,  including  joint  ventures;   funding  risks  associated  with   our 
participation in defined benefit staff pension schemes; the failure to attract
or retain  the  necessary key  personnel;  the  effect of  systems  errors  or 
regulatory changes on the calculation of  unit prices or deduction of  charges 
for our unit-linked  products that may  require retrospective compensation  to 
our customers;  the effect  of  a decline  in any  of  our ratings  by  rating 
agencies on our standing among customers, broker-dealers, agents,  wholesalers 
and other distributors of our products and services; changes to our brand  and 
reputation; changes in  government regulations  or tax  laws in  jurisdictions 
where we conduct business; the inability to protect our intellectual property;
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 3d,  "Risk Factors",  and Item  5, "Operating  and  Financial 
Review and Prospects" in Aviva's Annual Report Form 20-F as filed with the SEC
on 21 March 2012. Aviva undertakes no obligation to update the forward looking
statements in this announcement 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 plc is a company registered in England No. 2468686.

Registered office

St Helen's

1 Undershaft

London

EC3P 3DQ







Contacts



Investor contacts   Media contacts      Timings
Pat Regan           Nigel Prideaux      Real time media conference call: 0730
                                        hrs
+44 (0)20 7662 2228 +44 (0)20 7662 0215
                                        
                   
                                        Analyst conference call: 0930 hrs
Charles Barrows     Andrew Reid
                                        Tel: +44 (0)20 7136 2051
+44 (0)20 7662 8115 +44 (0)20 7662 3131
                                        Conference ID: 3528346
                   
                                        
David Elliot        Sue Winston
+44 (0)207 662 8048
                    +44 (0)20 7662 8221

                    

--------------------------------------------------------------------------------------------------------------

Page 1





Statistical Supplement







Contents

Analyses



1. Geographical analysis of life, pensions and investment sales



2. Product analysis of life and pensions sales



3. Trend analysis of PVNBP - cumulative



4. Trend analysis of PVNBP - discrete



5. Geographical analysis of regular and single premiums - life and pensions
sales



6. Geographical analysis of regular and single premiums - investment sales



7. Trend analysis of general insurance and health net written premiums -
cumulative



8. Trend analysis of general insurance and health net written premiums -
discrete



9. Sovereign exposures



10. Exposure to worldwide bank debt securities





Page 2





1 - Geographical analysis of life, pensions and investment sales

                                      Present value of new business premiums^1
                                                                      % Growth
                                       9 months  9 months
                                            2012      2011               Local
                                              £m        £m Sterling currency^2
Life and pensions business
United Kingdom                             8,002     8,018        -          -
Ireland                                      469       757    (38)%      (34)%
United Kingdom and Ireland                 8,471     8,775     (3)%       (3)%
France                                     2,671     3,224    (17)%      (11)%
United States                              3,071     2,796      10%         8%
Spain                                        934     1,425    (34)%      (30)%
Italy                                      1,603     2,517    (36)%      (32)%
Other                                        146       228    (36)%      (30)%
Developed markets                         16,896    18,965    (11)%       (9)%
Poland                                       274       403    (32)%      (24)%
China                                        226       282    (20)%      (24)%
Hong Kong                                    103       110     (6)%       (9)%
India                                         70        76     (8)%         6%
Singapore                                    496       412      20%        19%
South Korea                                  351       356     (1)%          -
Other                                        398       344      16%        23%
Higher Growth markets                      1,918     1,983     (3)%          -
Total life and pensions - continuing
operations                                18,814    20,948    (10)%       (8)%
Total life and pensions -
discontinued operations^3                      -     1,085   (100)%     (100)%
Total life and pensions                   18,814    22,033    (15)%      (12)%
Investment sales^4
United Kingdom and Ireland                 1,269     1,323     (4)%       (4)%
Aviva Investors                            2,038     1,202      70%        79%
Higher Growth markets                         93       157    (41)%      (42)%
Total investment sales - continuing
operations                                 3,400     2,682      27%        30%
Total investment sales - discontinued
operations^3                                   -       170   (100)%     (100)%
Total investment sales                     3,400     2,852      19%        22%
Total long-term savings sales -
continuing operations                     22,214    23,630     (6)%       (4)%
Total long-term savings sales -
discontinued operations^3                      -     1,255   (100)%     (100)%
Total long-term savings sales             22,214    24,885    (11)%       (8)%

1. 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 the value of new business.

2. Growth rates are calculated based on constant rates of exchange.

3. Prior period discontinued operations represent the results of Delta Lloyd
up to 6 May 2011 only.

4. Investment sales are calculated as new single premiums plus the annualised
value of new regular premiums.



Page 3



2 - Product analysis of life and pensions sales

                                      Present value of new business premiums^1
                                                                      % Growth
                                       9 months  9 months
                                            2012      2011               Local
                                              £m        £m Sterling currency^2
Life and pensions business
Pensions                                   3,963     3,963        -          -
Annuities                                  2,459     2,434       1%         1%
Bonds                                        322       638    (50)%      (50)%
Protection                                   920       749      23%        23%
Equity release                               338       234      44%        44%
United Kingdom                             8,002     8,018        -          -
Ireland                                      469       757    (38)%      (34)%
United Kingdom and Ireland                 8,471     8,775     (3)%       (3)%
Savings                                    2,541     3,101    (18)%      (12)%
Protection                                   130       123       6%        13%
France                                     2,671     3,224    (17)%      (11)%
Life                                         937       741      26%        24%
Annuities                                  2,134     2,055       4%         2%
United States                              3,071     2,796      10%         8%
Pensions                                     250       367    (32)%      (27)%
Savings                                    2,146     3,350    (36)%      (31)%
Annuities                                     25        31    (19)%      (14)%
Protection                                   262       422    (38)%      (34)%
Italy, Spain and Other                     2,683     4,170    (36)%      (31)%
Developed markets                         16,896    18,965    (11)%       (9)%
Higher Growth markets                      1,918     1,983     (3)%          -
Total life and pensions sales -
continuing operations                     18,814    20,948    (10)%       (8)%
Total life and pensions sales -
discontinued operations^3                      -     1,085   (100)%     (100)%
Total life and pensions sales             18,814    22,033    (15)%      (12)%

1. 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 the value of new business.

2. Growth rates are calculated based on constant rates of exchange.

3. Prior period discontinued operations represent the results of Delta Lloyd
up to 6 May 2011 only.



Page 4



3 - Trend analysis of PVNBP - cumulative

                        1Q11   2Q11   3Q11   4Q11  1Q12   2Q12   3Q12 % Growth
                         YTD    YTD    YTD    YTD   YTD    YTD    YTD       on
                          £m     £m     £m     £m    £m     £m     £m     3Q11
Life and pensions
business - Present
value of new business
premiums^1
Pensions               1,105  2,708  3,963  5,279 1,251  2,762  3,963        -
Annuities                785  1,610  2,434  3,832   662  1,555  2,459       1%
Bonds                    271    466    638    801   128    253    322    (50)%
Protection               250    490    749  1,025   300    608    920      23%
Equity release            83    160    234    317    89    209    338      44%
United Kingdom         2,494  5,434  8,018 11,254 2,430  5,387  8,002        -
Ireland                  280    553    757    917   199    342    469    (38)%
United Kingdom and
Ireland                2,774  5,987  8,775 12,171 2,629  5,729  8,471     (3)%
France                 1,271  2,345  3,224  4,047 1,092  1,944  2,671    (17)%
United States            786  1,658  2,796  3,932 1,034  2,073  3,071      10%
Spain                    524  1,015  1,425  1,926   402    705    934    (34)%
Italy                    874  1,778  2,517  2,993   673  1,259  1,603    (36)%
Other                     79    155    228    262    50     98    146    (36)%
Developed markets      6,308 12,938 18,965 25,331 5,880 11,808 16,896    (11)%
Poland                   149    305    403    487   107    201    274    (32)%
Asia                     426    902  1,343  1,782   442    913  1,367       2%
Other                     91    172    237    320    87    181    277      17%
Higher Growth markets    666  1,379  1,983  2,589   636  1,295  1,918     (3)%
Total life and
pensions               6,974 14,317 20,948 27,920 6,516 13,103 18,814    (10)%
Investment sales^2       869  1,830  2,682  3,473   949  1,934  3,400      27%
Total long-term saving
sales - continuing
operations             7,843 16,147 23,630 31,393 7,465 15,037 22,214     (6)%
Total long-term saving
sales - discontinued
operations^3             921  1,255  1,255  1,255     -      -      -   (100)%
Total long-term saving
sales                  8,764 17,402 24,885 32,648 7,465 15,037 22,214    (11)%

1. 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 the value of new business.

2. Investment sales are calculated as new single premiums plus the annualised
value of new regular premiums.

3. Prior period discontinued operations represent the results of Delta Lloyd
up to 6 May 2011 only.



4 - Trend analysis of PVNBP - discrete

                                                                                 %
                 1Q11     2Q11     3Q11     4Q11     1Q12     2Q12     3Q12 Growth
             Discrete Discrete Discrete Discrete Discrete Discrete Discrete     on
                   £m       £m       £m       £m       £m       £m       £m   2Q12
Life and
pensions
business -
Present
value of new
business
premiums^1
Pensions        1,105    1,603    1,255    1,316    1,251    1,511    1,201  (21)%
Annuities         785      825      824    1,398      662      893      904     1%
Bonds             271      195      172      163      128      125       69  (45)%
Protection        250      240      259      276      300      308      312     1%
Equity
release            83       77       74       83       89      120      129     8%
United
Kingdom         2,494    2,940    2,584    3,236    2,430    2,957    2,615  (12)%
Ireland           280      273      204      160      199      143      127  (11)%
United
Kingdom and
Ireland         2,774    3,213    2,788    3,396    2,629    3,100    2,742  (12)%
France          1,271    1,074      879      823    1,092      852      727  (15)%
United
States            786      872    1,138    1,136    1,034    1,039      998   (4)%
Spain             524      491      410      501      402      303      229  (24)%
Italy             874      904      739      476      673      586      344  (41)%
Other              79       76       73       34       50       48       48      -
Developed
markets         6,308    6,630    6,027    6,366    5,880    5,928    5,088  (14)%
Poland            149      156       98       84      107       94       73  (22)%
Asia              426      476      441      439      442      471      454   (4)%
Other              91       81       65       83       87       94       96     2%
Higher
Growth
markets           666      713      604      606      636      659      623   (5)%
Total life
and pensions    6,974    7,343    6,631    6,972    6,516    6,587    5,711  (13)%
Investment
sales^2           869      961      852      791      949      985    1,466    49%
Total
long-term
saving sales
- continuing
operations      7,843    8,304    7,483    7,763    7,465    7,572    7,177   (5)%
Total
long-term
saving sales
-
discontinued
operations^3      921      334        -        -        -        -        -      -
Total
long-term
saving sales    8,764    8,638    7,483    7,763    7,465    7,572    7,177   (5)%

1. 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 the value of new business.

2. Investment sales are calculated as new single premiums plus the annualised
value of new regular premiums.

3. Prior period discontinued operations represent the results of Delta Lloyd
up to 6 May 2011 only.



Page 5



5 - Geographical analysis of regular and single premiums - life and pensions
sales

                                           Regular premiums        Single premiums
                 9                            9                  9      9
           months    Local    Present months    Present months months    Local
             2012 currency     value   2011     value   2012   2011 currency
               £m   growth WACF      £m     £m WACF      £m     £m     £m   growth
Pensions        441     (4)%  4.6   2,048    461  4.5   2,087  1,915  1,876       2%
Annuities         -        -    -       -      -    -       -  2,459  2,434       1%
Bonds             -        -    -       -      -    -       -    322    638    (50)%
Protection      131      10%  7.0     920    119  6.3     749      -      -        -
Equity
release           -        -    -       -      -    -       -    338    234      44%
United
Kingdom         572     (1)%  5.2   2,968    580  4.9   2,836  5,034  5,182     (3)%
Ireland          25    (38)%  3.9      98     43  3.9     169    371    588    (33)%
United
Kingdom and
Ireland         597     (4)%  5.1   3,066    623  4.8   3,005  5,405  5,770     (6)%
France           53    (10)%  6.9     367     63  6.5     407  2,304  2,817    (13)%
United
States           88      16% 10.6     937     75  9.8     737  2,134  2,059       2%
Spain            46    (29)%  5.8     266     69  5.6     387    668  1,038    (31)%
Italy            44     (8)%  5.5     244     51  5.4     276  1,359  2,241    (35)%
Other             7    (50)%  8.6      60     15 10.1     152     86     76      19%
Developed
markets         835     (5)%  5.9   4,940    896  5.5   4,964 11,956 14,001    (12)%
Poland           25    (32)%  7.6     189     41  7.3     299     85    104     (9)%
Asia            222        -  5.1   1,134    223  4.7   1,056    233    287    (20)%
Other            53       8%  3.9     209     53  3.4     179     68     58      24%
Higher
Growth
markets         300     (3)%  5.1   1,532    317  4.8   1,534    386    449    (12)%
Total life
and pension
sales -
continuing
operations    1,135     (5)%  5.7   6,472  1,213  5.4   6,498 12,342 14,450    (12)%
Total life
and pension
sales -
discontinued
operations^1      -   (100)%    -       -     73  9.1     663      -    422   (100)%
Total life
and pension
sales         1,135    (10)%  5.7   6,472  1,286  5.6   7,161 12,342 14,872    (15)%



1. Prior period discontinued operations represent the results of Delta Lloyd
up to 6 May 2011 only.



6 - Geographical analysis of regular and single premiums - investment sales

                                       Regular                 Single    PVNBP
                                                    9      9
                    9 months 9 months    Local months months    Local    Local
                        2012     2011 currency   2012   2011 currency currency
Investment sales          £m       £m   growth     £m     £m   growth   growth
United Kingdom and
Ireland                    6        4      50%  1,263  1,319     (4)%     (4)%
Aviva Investors            4        5        -  2,034  1,197      79%      79%
Higher Growth
markets                    -        -        -     93    157    (42)%    (42)%
Total investment
sales - continuing
operations                10        9      25%  3,390  2,673      30%      30%
Total investment
sales -
discontinued
operations^1               -        -        -      -    170   (100)%   (100)%
Total investment
sales                     10        9      25%  3,390  2,843      22%      22%

1. Prior period discontinued operations represent the results of Delta Lloyd
up to 6 May 2011 only.



Page 6



7 - Trend analysis of general insurance and health net written premiums -
cumulative

                                      Net written premiums
                                                                     Growth on
                                                                          3Q11
                   1Q11  2Q11  3Q11  4Q11  1Q12  2Q12  3Q12              Local
                    YTD  YTD   YTD   YTD   YTD   YTD   YTD Sterling  currency
                     £m    £m    £m    £m    £m    £m    £m        %         %
General insurance
- continuing
operations
United Kingdom    1,013 2,058 3,078 4,110   974 2,087 3,091        -         -
RAC                  79   164   261   261     -     -     -   (100)%    (100)%
Ireland              96   200   288   367    82   174   252    (13)%      (6)%
United Kingdom
and Ireland       1,188 2,422 3,627 4,738 1,056 2,261 3,343     (8)%      (7)%
France              279   456   616   789   285   458   609     (1)%        6%
Canada              426 1,025 1,562 2,083   454 1,081 1,635       5%        5%
Italy and Other^1   136   248   379   484   124   237   311    (18)%     (13)%
Developed markets 2,029 4,151 6,184 8,094 1,919 4,037 5,898     (5)%      (3)%
Higher Growth
markets              41    89   134   181    47    93   132     (1)%        7%
                  2,070 4,240 6,318 8,275 1,966 4,130 6,030     (5)%      (3)%
Health insurance
- continuing
operations
United Kingdom      109   245   342   473   120   255   389      14%       14%
Ireland              37    57    78   104    40    57    76     (3)%        4%
United Kingdom
and Ireland         146   302   420   577   160   312   465      11%       12%
France               80   128   169   227    83   123   161     (5)%        2%
Developed markets   226   430   589   804   243   435   626       6%        9%
Higher Growth
markets              25    38    60    83    27    50    79      32%       34%
                    251   468   649   887   270   485   705       9%       12%
Total -
continuing
operations        2,321 4,708 6,967 9,162 2,236 4,615 6,735     (3)%      (2)%
Total -
discontinued
operations^2        369   557   557   557     -     -     -   (100)%    (100)%
Total             2,690 5,265 7,524 9,719 2,236 4,615 6,735    (10)%      (9)%

1. Other includes Group Reinsurance and agencies in run-off.

2. Prior period discontinued operations represent the results of Delta Lloyd
up to 6 May 2011 only.



8 - Trend analysis of general insurance and health net written premiums -
discrete

                                          Net written premiums
                                                                              Growth   Growth
                                                                                  on       on
                                                                                3Q11     2Q12
                 1Q11     2Q11     3Q11     4Q11     1Q12     2Q12     3Q12
             Discrete Discrete Discrete Discrete Discrete Discrete Discrete Sterling Sterling
                   £m       £m       £m       £m       £m       £m       £m        %        %
General
insurance
-
continuing
operations
United
Kingdom         1,013    1,045    1,020    1,032      974    1,113    1,004     (2)%    (10)%
RAC                79       85       97        -        -        -        -   (100)%        -
Ireland            96      104       88       79       82       92       78    (11)%    (15)%
United
Kingdom
and
Ireland         1,188    1,234    1,205    1,111    1,056    1,205    1,082    (10)%    (10)%
France            279      177      160      173      285      173      151     (6)%    (13)%
Canada            426      599      537      521      454      627      554       3%    (12)%
Italy and
Other^1           136      112      131      105      124      113       74    (44)%    (35)%
Developed
markets         2,029    2,122    2,033    1,910    1,919    2,118    1,861     (8)%    (12)%
Higher
Growth
markets            41       48       45       47       47       46       39    (13)%    (15)%
                2,070    2,170    2,078    1,957    1,966    2,164    1,900     (9)%    (12)%
Health
insurance
-
continuing
operations
United
Kingdom           109      136       97      131      120      135      134      38%     (1)%
Ireland            37       20       21       26       40       17       19    (10)%      12%
United
Kingdom
and
Ireland           146      156      118      157      160      152      153      30%       1%
France             80       48       41       58       83       40       38     (7)%     (5)%
           226

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