Company

UK's largest and the world’s fifth largest insurance Group, Aviva is one of the leading providers of life and pensions products to Europe and has substantial businesses elsewhere around the world. With a history dating back to 1696, Aviva has a 35 million-customer base worldwide. It has more than US$ 485.4 billion of assets under management.

In India, Aviva has a long history dating back to 1834. At the time of nationalisation it was the largest foreign insurer in India in terms of the compensation paid by the Government of India. Aviva was also the first foreign insurance company in India to set up its representative office in 1995. With a strong sales force of over 16,000 Financial Planning Advisers (FPAs), Aviva has initiated an innovative and differentiated sales approach to the business. Through the 'Financial Health Check' (FHC) Aviva’s sales force has been able to establish its credibility in the market. The FHC is a free service administered by the FPAs for a need-based analysis of the customer’s long-term savings and insurance needs. Depending on the life stage and earnings of the customer, the FHC assesses and recommends the right insurance product for them.

Partners

Open to picking up equity stakes in Indian banks for cementing its bancassurance arrangements, Aviva India is a 74:26 per cent joint venture between the Dabur group and Aviva Life Plc of the UK. In January 2007, Aviva also tied up with IndusInd Bank, one of the leading new-generation private-sector banks in India. Now, Aviva has extended its leadership position in the Bancassurance channel with 30 tie-ups, the largest number of Bank partnerships by any private insurer in India, and increased its presence to 497 locations in the country.

Currently about 70 per cent of Aviva's premium contributions came through bancassurance channels. Aviva was beefing up its direct reach and increased the number of offices to 197 up from 93 in 2006, and raising its direct sales force to 31,000 from the current level of 14,000, with a view to sustain its growth momentum.

Products

When Aviva entered the market, most companies were offering traditional life products. Aviva started by offering the more modern Unit Linked and Unitised With Profit products to the customers, creating a unique differentiation. Aviva’s products have been designed in a manner to provide customers flexibility, transparency and value for money. It has been among the first companies to introduce the more modern Unit Linked products in the market. Its products include: whole life (LifeLong), endowment (LifeSaver, EasyLife Plus), child policy (Young Achiever) single premium (LifeBond and LifeBond Plus), Pension (PensionPlus), Term (LifeShield), fixed term protection plan (Freedom LifePlan) and a tax efficient investment plan with limited premium payment term (LifeBond5). Aviva products are modern and contemporary unitised products that offer unique customer benefits like flexibility to choose cover levels, indexation and partial withdrawals.

Aviva pioneered the concept of Bancassurance in India, and has leveraged its global expertise in Bancassurance successfully in India. Currently, Aviva has Bancassurance tie-ups with ABN Amro Bank, American Express Bank, Canara Bank, Centurion Bank of Punjab, The Lakshmi Vilas Bank Ltd. and Punjab & Sind Bank, 20 Co-operative Banks in Gujarat, Rajasthan, Jammu & Kashmir, Bihar, West Bengal, Andhra Pradesh and Maharashtra and two regional Banks.

Performance

To fuel future growth Aviva announced an increase in its capital base by US$ 46.3 million in Janury 2007, taking the total paid-up capital to US$ 176.6 million. Aviva has a long-term commitment to India and the current capital infusion of US$ 46.3 million will allow it to expand operations and launch new products.

Aviva's Fund management operation is one of its key differentiators. Operating from Mumbai, Aviva has an experienced team of fund managers and the range of fund options include Unitised With-Profits Fund and four Unit Linked funds: Secure Fund, Balanced Fund, Growth Fund and Protector Fund. The flagship fund of the Company, Balanced Fund, has performed very well with a Compounded Annualised Growth Rate (CAGR) of 27.05 per cent (December 2006) since inception (June 2002). The Growth Fund has recorded a CAGR of 39.35 per cent (December 2006) since inception (January 2004). The company recorded healthy growth in both Direct Sales Force and Bancassurance channels.

Aviva's annual premium accretions have grown by close to 83 per cent. Till February 2007, its new premium's accretion amounted to US$ 139.8 million, up from US$ 76.4 million last year. Close to 90 per cent of this growth was from unit-linked insurance plans (ULIP). After the addition of US$ 46.3 million in January 2007, Aviva's capital has increased to US$ 176.6 million. Capital infusions have been planned up to 2010.