© Aviva plc

Aviva Spain

Bancassurance partner for life

Gerardo Arostegui

10 November 2003

© Aviva plc

Disclaimer

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 regulatory authorities, 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’sactual 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.

© Aviva plc

• Market potential

• Aviva’s market position and model

• Products

• Shareholder Value

2

© Aviva plc

Strong medium-term growth drivers

Dependency ratios are increasing...

…Spanish PPS (i) one of the most generous…

…underdeveloped private savings market

010203040506070

1995

2000

2010

2020

2030

2050

(Dep

ende

ncy

ratio

%)

UK EU Spain

0

25

50

75

100

UKFra

nce

Germ

any

Italy

Spain

(Rep

lace

men

t rat

io %

)

0

20

40

60

80

100

Spain

Germ

any

EU UK

(Inve

stm

ents

/GD

P %

)Source: European Commission, CEA

3(i) PPS = Public pension schemes

© Aviva plc

• Market potential

• Aviva’s market position and model

• Products

• Shareholder Value

4

© Aviva plc

Aviva is the market leader in H1 2003 ……...from top 30 in 2000

Life insurance ranking 1H 2003

AvivaMapfre + C MadridLa CaixaBBVAGeneraliC CatalunyaIbercajaB SabadellCAMAllianzSCH

1,071846762615609411380358251234208

70-14

-1-10593841

-27-38

-51

129.48.56.96.84.64.24.02.82.62.3

Premiums (€m)

Growth(%)

Market Share(%)

Source: ICEA5

© Aviva plc

Spanish bancassurance partnerships at a glance

Business Aviva’s EV Number ofcommenced consideration(1) acquired customers Region

Bancaja Aug 2000 £217m £47m 2.4 m Valencia

Unicaja Oct 2001 £95m £14m 2.0 m Andalusia

Caixa Galicia Oct 2001 £93m £6m 2.3 m Galicia

Caja España Jan 2002 £88m £12m 1.3 m Castilla y Leon

Caja de Granada May 2003 £12m 0 0.9 m Andalusia

£79m£505m

(1) Future consideration subject to performance.Source: Aviva

6

© Aviva plc

Aviva’s bancassurance network has leading market shares in territories that account for c.70% of Spanish GDP

Caixa Galicia

5%

Caja España

6%

Bancaja

17%

4%

2%

10%2%

- Strong multi-regional presence in fastest growing regions in Spain

- Growing presence in attractive areas outside home regions (Madrid, Catalunya)

- 9 million customers, 3,672 branches

- 4th largest bank network

Unicaja

13%

2%

4%CajaGranada

2% 6%2%

1%

3%19%

Key: %s show proportion of GDP

Source: INE 7

© Aviva plc

An under penetrated bank client base

Life insurance & pension reserves as % of total customer funds 2002

18.0%

14.9%13.5%

13.3%12.6%

12.0%10.0%

7.1%6.9%5.7%5.6%

4.8%

2.9%3.6%

4.2%

16.0%La Caixa

Bancaja

Ibercaja

Caixa Catalunya

Banco Popular

Banco Atlántico

Banco Pastor

Pensions penetration

Life insurance penetration

Mapfre - Caja Madrid

Banco Sabadell

CAM

BBVA ex-America

SCH ex-America

Caja España

UnicajaCaixa Galicia

Bankinter

Caja Granada(1) 1.7%

8(1) Company data. Includes funds currently at CASER and other providers Source: ICEA, Inverco, Annual reports

© Aviva plc

Agents, specialised life sales force and brokers

Bancassurance

(1) 50% + management control(2) In the case of Agencia Caja Granada 50% stake is owned by Unicorp Vida. Aviva has, therefore, 25% economic exposure

Exclusive and perpetual distribution agreementsThird party agreements

Aviva Spain

• Management control• Exclusive and perpetual

distribution agreements• One “factory”, 87 people• Economic alignment through

50/50 JV

Key features

50%(1)100% 50%(1)

50%

50%

Aviva VidaUnicorp VidaBia Galicia

C. España VidaAg. C. Granada(2)

UnicajaCaixa GaliciaCaja EspañaCaja Granada

Bancaja

Aseval

TPA

One factory business model

9

© Aviva plc

A proven and successful bancassurance process

Prompt alert

Client comes into

branch

Physical presence activated

Explanatory phase

Product simulation

Customer acceptance

/ data completion

Health issue

No health issue

Issue proposal to insurer

Not accepted

Accepted Issue policy by insurer

Issue policy in branch

Analyse Bank client database

Selection of target customer (CRM)

Storage in database accessible in branches

Client data

Product offer

Selling arguments

Source: Aseval 10

© Aviva plc

An attractive proposal for our partners…

What Aviva offers Benefits for our partners

• Broad-based partnership

• Worldwide bancassurance experience and local product expertise

• Developed platform, Aseval

• World class best practices

• Upfront and earn-out payments and means to increase income from life and pensions business

• Earn-in components to protect Aviva

• Broader financial services

• No learning curve, full range of competitive products today

• Access to proven, efficient platform, no implementation risks

• Implementation of value creation measures in life and pensions business

• Main effects• - strengthen capital base for further

growth• - focus on high margin products• - further motivates organisation to push

life and pension sales while reducing the risk assumed by Aviva

11

© Aviva plc

• Market potential

• Aviva’s market position and model

• Products

• Shareholder Value

12

© Aviva plc

Overview of Aviva product mix / characteristics

Risk• 41% of our risk premiums bundled with bank loans.• Client less sensitive to policy pricing, leading to high margins.

• Pension plans focus on fixed income ( 79% of our AUM).• Attractive tax treatment which increases with duration. This leads to

high margins and duration, which leads to strong NBV margins.

Pensions

Unit-linked • Unit-linked products are similar to other markets.

• Make up majority of life savings products.• Offer guaranteed rates over first 3 or 6 months of plan. Aviva

continuously re-prices guarantees as market conditions change, securing a stable financial margin.

Capitalisation

13

© Aviva plc

Flexing the product mix

New business sales (APE) in Aviva Spain

Discrete Q3 20032002 Full Year

Source: Aviva 14

Life & Savings64%

Life Risk9%

Pension27%

Life & Savings66%

Pension15%

Life Risk19%

© Aviva plc

• Market potential

• Aviva’s market position and model

• Products

• Shareholder Value

15

© Aviva plc

Transforming Aviva’s position in the Spanish market

020406080

100120140160180200

1997 1998 1999 2000 2001 2002 9m2003

£m A

PE

New business sales (APE)

First bancassurance deal

16

© Aviva plc

Strong growth in profitability

Bancassurance: new business contribution pre-tax and cost of capital

Bancassurance: Life achieved pre-tax operating profit

0

10

20

30

40

50

60

70

80

90

2000 2001 2002 6m 2003

( £ m

)

0102030405060708090

100

2000 2001 2002 9m 2003

( £ m

)

17

© Aviva plc

Strong margins supported by pricing, low expenses and scale advantages

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

Q4 2000

Q22001

Q42001

Q22002

Q42002

Q22003

Bancassurance Quarterly Margins

Average margin54%

29% Post COC & tax

18Source: Annual reports

© Aviva plc

Spanish protection products are inherently more profitable than UK products...

1 2 3 4 5 6 7 8 9 10

• Pricing: less competitive pressure

• Loyal client base

• Low expenses in Spanish bancassurance

1 2 3 4 5 6 7 8 9 10

UK protection product cashflow

Spanish protection product cashflow

19

years

years

...which leads to lower strain and significantly higher margins

© Aviva plc

Low costs underpin attractive margins

• One factory efficiency benefits whole network

Acquisition and administration costs (% of premium, H1 2003)

Source: ICEA

0

1

2

3

4

5

6

Aseval (Aviva) Other largebancassurers

Total Spanish lifemarket

(%)

1.35%1.95%

5.65%

20

© Aviva plc

Profitable “cash-flow” from early stages of growth business

0

5

10

15

20

25

30

35

00 01 02 6m 03

Bancassurance pre-tax MSSB evolution

Source: Annual reports

£m

7

16

29

23FY

HY

FY

FY

HY

HY

21

© Aviva plc

Growing Embedded Value

• £505m (£448m goodwill(i)) invested in Spanish bancassurance• Aviva’s 50% share: NBC Post COC, Post Tax £26.5m for 9m 2003• Current implied multiple of 12x NBC to goodwill

Bancassurance EV evolution (Aviva 50% share)

(i) Includes estimated value of deferred consideration

0

50

100

150

200

2000 2001 2002 6m 2003

( £m

)

Total acquired

EV

EV value generation

47

161

79

134

106

57

7979

22

© Aviva plc

0,0%

2,5%

5,0%

7,5%

10,0%

12,5%

15,0%

17,5%

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

IRR

Outperformance of 10 year business plan

Shareholder returns linked to value creation vs 10 year business plans

• Incentivisation− earn-outs

• Protection− capped future

payments

− earn-ins

− conservative

projections

− exit penalties at

market value

Key features

Minimumprice

Earn-inpayments

Earn-outpayments

Maximum price

23

Example bancassurance business case

Source: Aviva

© Aviva plc

Aviva Spain summary

• Spain’s leading life business in 3 years

- Strong growth prospects

- Attractive product pricing

- Expense advantage

- Strong margins

• Shareholder value visible at early stages of business development

24

© Aviva plc

Appendix

25

© Aviva plc

Main features of Aviva’s bancassuranceproducts

Risk (linked) Coverage Main features• Linked to

personal loans/mortgages

• “SeguroFinanciación”

• “SeguroPréstamos”

• Death • Financial entity beneficiary for outstanding debt on personal loans/mortgages. Excess of sum assured over outstanding debt paid to beneficiaries appointed by insured

• Optional single /regular premium or annual renewable for mortgages

Risk (non-linked) • Death• Total disability• x2 sum assured on accident• Overdraft settlement• Critical illness (only for Vida Oro)• x3 sum assured on car accidents

(optional Vida Oro)• 2nd medical opinion on critical

illness

• Annual renewable insurance maturing when beneficiary turns actuarial age of 70 (complementary coverage concludes at 65)

• Sum assured grows automatically by 5% every year

• Overdraft settlement up to a maximum limit of Eur 3,000

Product Description

26

© Aviva plc

Main features of Aviva’s bancassuranceproducts (continued)

Product Description

Savings Coverage Main features• Survivorship: Payment of

accumulated savings at settlement of plan

• Death: technical reserve of survivorship +extra 10%

• Survivorship: payment of immediate annuity

• Death: Payment of initial premium + extra 5%

• Minimum guaranteed variable yield• Quarterly yield higher than minimum

established by DGS• Surrender penalty in first 2 years• Minimum duration of plan: three years + 1

month• Optional single/regular premium

• Guaranteed annuity with underlying investment over 30 years

• Only eligible above actuarial age of 55• Ability to withdraw (without penalty), at

any time, at market value of underlying investment

Annuities

Savings products reprice quarterly, minimising interest rate risk for Aviva

27

© Aviva plc

Main features of Aviva’s bancassuranceproducts (continued)

Product Description

Unit-linked Coverage Main features• Survivorship: payment of

market value of

participation at settlement

or withdrawal

• Death: payment of market value on death + 10% of

contributions

• Investment risk is borne by policyholder• Flexible asset mixed based on policyholder

risk/return preference

• Ability to switch funds within basket of investment funds without penalty

• Optional single/regular premium• Ability to withdraw without penalty• PPA • Retirement

• Death• Disability

• Half-year guaranteed variable yield higher than minimum established by DGS (Spanish regulator)

• Favourable tax treatment• Exceptionally cash granted in event of

unemployment or critical disease

28

© Aviva plc

Main features of Aviva’s bancassuranceproducts (continued)

Product Description

• Pensions • Retirement• Death• Disability• In the three events lump

sum equals to market

value of pension assets

• Investment risk is borne by pension-holder• Exceptionally cash granted in event of

unemployment or critical disease

• Favourable tax treatment similar to that of the pensions plan

• Payment is lump sum, income or combination of both

• Ability to switch without penalty and at market value accumulated pension

assets between plans of different

pension managers

29

DisclaimerAviva is the market leader in H1 2003 ……...from top 30 in 2000Spanish bancassurance partnerships at a glanceAviva’s bancassurance network has leading market shares in territories that account for c.70% of Spanish GDPAn under penetrated bank client baseFlexing the product mixTransforming Aviva’s position in the Spanish marketStrong growth in profitabilityStrong margins supported by pricing, low expenses and scale advantagesSpanish protection products are inherently more profitable than UK products...Low costs underpin attractive marginsProfitable “cash-flow” from early stages of growth businessGrowing Embedded ValueAppendixMain features of Aviva’s bancassurance productsMain features of Aviva’s bancassurance products (continued)Main features of Aviva’s bancassurance products (continued)