One Aviva, twice the value

Value and Growth

Andrew Moss
Group Chief Executive

“Accelerating
transformational change
to deliver a unified and
more profitable company”

Sanford C. Bernstein Strategic Decisions Conference 2008

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 Disclaimer

This presentation may include oral and written “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. These forward-looking statements sometimes use words such as ‘anticipate’, ‘target’, ‘expect’,
‘estimate’, ‘intend’, ‘plan’, ‘goal’, ‘believe’ or other words of similar meaning. By their nature, all forward-
looking statements involve risk and uncertainty because they relate to future events and circumstances
which may be beyond Aviva’s control, including, among other things, UK domestic and global economic
and 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, the possible effects of inflation or
deflation, the timing impact and other uncertainties relating to acquisitions by the Aviva Group and relating
to other future acquisitions or combinations within relevant industries, the impact of tax and other
legislation and regulations in the jurisdictions in which Aviva and its affiliates operate, as well as the other
risks and uncertainties set forth in our 2007 Annual Report to Shareholders. 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, and persons receiving this presentation
should not place undue reliance on forward-looking statements.

Aviva undertakes no obligation to update the forward-looking statements made in this presentation or any
other forward-looking statements we may make. Forward-looking statements made in this presentation are
current only as of the date on which such statements are made.

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Aviva is a strong company with great potential

• Aviva remains focussed on achieving its targets and plans

• The hygiene factors

– Aviva has a diversified and strong asset base
– Confident position with regard to capital and cash flow
– Exposure to Lehmans, AIG, other higher risk companies is well within our risk
appetite
– UK and Europe now in recession, but
• Majority of our profits and capital is derived from our in force book and GI earnings
• A significant part of Aviva’s portfolio has strong growth characteristics

• The current environment might offer up opportunities

– Organic growth opportunities where other companies are in turmoil
– Selective opportunities where assets are valued at distressed prices

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Aviva is undergoing transformational change

• One Aviva, twice the value – an agenda for change

– Range of senior management appointments
– Uniting under one brand
– Dealing with underperformance

• Growing operating profits and a sound capital position

– EEV operating profit up 12% to £1,719m
– IFRS operating profit up 7% to £1,233m
– Interim dividend up 10% to 13.09p
– 2008 HY IGD surplus of £1.8bn with increased downside protection

• Achieving a balance between value and growth

– Capitalising on our market leading positions
– Investing in growth markets

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 Sound capital position - IGD Solvency surplus

Equity 30 June 2008 5 Sept 2008

movement £bn £bn

• H108 IGD surplus of £1.8 billion -10% (0.4) (0.4)

-20% (0.7) (0.6)
• Downside protection further increased -30% (1.0) (0.7)
-40% (1.3) (0.9)

• Additional £200m hybrid raised in August

• £115m due from WNS for sale of Aviva’s Indian offshoring operation

• Income expected from sale of the ABN Amro bancassurance JV

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Aviva’s balance sheet is strong and of a high quality

Equities are principally held to back policyholder liabilities

• The largest single asset class is Debt Securities, of which 94% are investment
grade (with 1% below investment grade, and 5% not rated).
• The Group continues to have very limited exposure to Subprime MBS/ABS, Alt-A,
Wrapped Credit, CDOs and CLOs

Fair Values at 30 June 08

Policyholder Participating Shareholder % of Asset
£m Total
Assets Fund Assets Assets Base
Sub-prime 33 14 79 126 0.04%
Alt-A 0 4 185 189 0.06%
CDO/CLOs 48 11 466 525 0.16%
Wrapped Credit 36 141 492 669 0.20%
Total 117 170 1,222 1,509 0.46%

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A strong asset base with a diversified portfolio

• Aviva has a diversified and strong asset base

– HY08 IFRS net assets of £15.4 billion

• Lehman Brothers debt face value of £270m, exposure estimated at less

than 1% of HY IFRS net assets

• No loss anticipated on Dawnay Day

– £642m loans across 210 properties with 350 tenants, average LTV of c91%
– Income more than covers interest rate costs

• No loss anticipated on AIG

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A transformational agenda

Purpose
Prosperity &
peace of mind
Purpose
Vision

One Aviva,
twice the value
Vision
Strategic Targets
priorities

• Manage composite • 98% meet or beat COR

portfolio • Long Term Savings
• Build global Asset growth targets
Management • £500m cost savings by
• Allocate capital 2010 Group strategy and targets
rigorously • Double IFRS EPS by
• Increase customer 2012 at the latest
reach • 1.5 – 2 x dividend cover
• Boost productivity • 12.5% ROCE

Aviva Investors
Asset Management • Increase third party business
• Globally integrated business • Transform the investment model

UK Europe N. America Asia Pacific

Market leadership Scale, growth, capital Double scale Scale, growth
● Address legacy
● Transform business
● Seize unique growth
opportunities
● Focus: top 5 in
chosen segments
● Prioritised portfolio Regional / BU strategies
● Regional operating
model ● Leverage scale ● Expand products, model
● Exploit UK synergies ● Generate capital distribution ’08+
● Investment required
● Generate capital
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 Allocate capital rigorously to drive growth

Capital utilisation for dividends and profitable growth

Dividends
Net capital generation

UK Europe N.America Asia Aviva

Pacific Investors

• More mature Aviva markets are UK, Holland, France and Ireland

• The other 23 countries, and Aviva Investors have a strong growth profile

• Growth countries account for 39% of life & pension sales (2006: 27%)

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One Aviva, twice the value
The growth opportunity

Sanford C. Bernstein Strategic Decisions Conference 2008

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The growth portfolio - Europe

Rank PVNBP £m
Life HY 2008 HY 2007

Spain 3rd 1,259 1,114

Italy 6th 1,275 1,818

Poland 2nd (Life), 1st (Pen) 739 379

Turkey 3rd (Life), 1st (Pen) 123 82

Russia 20th 21 3
Hungary 3rd 83 71

Romania 5th 269 9

Czech Republic 13th 14 10

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 The growth portfolio – USA, Asia & Aviva Investors

Rank PVNBP £m
Life HY 2008 HY 2007
USA 1st 2,205 1,716

China 2nd (foreign insurer) 126 48

India 10th 95 57

Singapore 4th 149 138

Hong Kong 16th 138 162

Malaysia Entered market Jul 07 26 -

Taiwan Commenced Jan 08 38 -

Sri Lanka 3rd 7 9

• Aviva Investors - £316bn AUM across 15 countries, very limited external FUM

USA: In sales of indexed life and indexed annuities India: Among private providers
China: In terms of total premium income Singapore: Includes wrap platform sales 12
 Europe – a market leading position

NBC growth post cost of capital EEV operating profit growth

HY1 CAGR 13% HY1 CAGR 19%

500
Scale, growth, 400 1500
capital £ million
1250
300
1000

£ million
200 750
• Seize unique
500
growth 100
250
opportunities 0 0
2005 2006 2007 2008 2005 2006 2007 2008

• Leverage scale HY 2008 update

• Maintaining momentum in a tough economic environment
• Generate • Diversified distribution reduces dependence on one channel
capital • New deals position the region for further growth
• Scope for transformational operational change
• Outlook: challenging economic conditions will continue to have
an impact in the short term

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 North America - USA on track to double scale

Pro-Forma PVNBP growth EEV operating profit growth

8000
1000
HY1 CAGR 28% HY1 CAGR 52%
Double scale 6000
750

US$ million
US$ million
4000
• Focus: top 5 in 500

chosen 2000
250
segments
0 0
2005 2006 2007 H1 08
2006 2007 2008
• Expand
products, HY 2008 update
distribution
’08+ • 95% pro forma life sales growth over the past two years
• We are now the market leader in Indexed Annuities
• And are developing plans to increase the product range
• Plans in place for SEC registration of Indexed Annuities
• Outlook: continuing growth, careful watch on credit exposure

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 Asia Pacific – a growing presence

Growth in Asia Pacific PVNBP EEV operating profit growth

1500 HY1 CAGR 14%

Scale, growth HY1 CAGR 33% 100

75
£ million

1000

£ million
• Prioritised 50
portfolio 500
25

• Regional 0
0
2005 2006 2007 2008 2005 2006 2007 2008
operating model

HY 2008 update
• Investment
required • Proactive response to the Sichuan province earthquake
• India & China: 97% CAGR over 3 years
• Launch of bancassurance in Malaysia, Taiwan and South Korea
• On track with regional sales volume growth targets

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 Aviva Investors – executing the strategy

IFRS operating profit

125

Aviva Investors 100

£million
75

• Globally 50
integrated 25
business 0
2005 2006 2007 2008

• Transform the
investment HY 2008 progress
model • UK investment portfolios restructured
• Launched new funds on SICAV platform with more planned
• Increase third • Brand launch in September
party business
• Initiative under way to share investment expertise globally
• Outlook: challenging economic conditions will continue to have an
impact in the short term

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One Aviva, twice the value
The value opportunity

Sanford C. Bernstein Strategic Decisions Conference 2008

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 UK Life – continuing operational improvement

EEV operating profit growth IFRS operating profit growth

1000 1000
HY1 CAGR 13 % HY1 CAGR 39 %
Market
750 750
Leadership

£ million
£ million

500 500

● Address legacy
250 250

● Transform 0 0
business 2005 2006 2007 2008 2005 2006 2007 2008
model
HY 2008 update
● Exploit UK • Will remain a leading player
synergies • Growth in market share, profits and capital generated
• 2/3 of EEV profits generated from in-force book – up 17% in H1 08
● Generate capital
• On track to achieve zero cost overrun in 2009
• Inherited estate reattribution announced
• Sales outlook: 0 – 5% decline in the market in 2008

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 UK Life – new business profitability

5,000
7% WACC

4,500
Bonds &
4,000 Savings 2007 results:

3,500
• Composite IRR of 13%
3,000 (unleveraged)
PVNBP £m

2,500
Individual • Equity shareholders IRR
2,000
Pensions
Annuities
of 15% (leveraged)

1,500

Group
1,000 Personal
Pensions Protection
Corporate
500
Pensions

0
0.0% 5.0% 10.0% 15.0% 20.0% 25.0%

Internal Rate of Return

Bubble size indicates amount of new business contribution before the cost of capital
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 UK General Insurance – delivering transformational
change

The external environment remains competitive

• Personal lines rates improving
Market • Commercial rate increases averaging 2%
Leadership
• Broker consolidation putting upward pressure on commission rates
● Address legacy
• Short term inflationary pressures

● Transform
business
model A clear action plan – insurance excellence
• Capitalising on unparalleled distribution reach
● Exploit UK • Updating the rating methodology to deliver profit and attract more
synergies customers
• Simplifying the operating model, reducing complexity & increasing
● Generate capital
self service
• Negotiating commission rates
• Keeping claims inflation down
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 UK General Insurance - expense management

Inflation and (38)

one-off
Costs11
(125+)

(200)
Market
Leadership Expense
ratio
13.9%

● Address legacy
Expense
ratio
● Transform 12.4%
Aiming for an
business expense ratio of
model less than 11%
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Starting RAC 2 2006 C&E Prog. 1 2008
point integration savings
● Exploit UK
synergies Delivering results
• Increasing cost savings target to £350m by 2010
● Generate capital
• Reduced senior management team by over 25%
• Marketing campaigns consolidated, IT projects rationalised
• Reducing the number of customer operations sites from 26 to 9
• Reducing the product set from over 70 to under 20
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Outlook in the current economic environment

• Maintaining our focus to deliver Aviva’s objectives and targets

– Continuing to invest in order to achieve the benefits of One Aviva, twice the value
– Keeping a clear focus on delivering against the plans

• Responding to the current economic environment

– Actively managing investments
– Maintaining a strong capital position

• Carefully assessing investment opportunities

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One Aviva, twice the value
Andrew Moss, Group Chief Executive

Questions and Answers

Sanford C. Bernstein Strategic Decisions Conference 2008

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