Aviva Italy Presentation 2004

Aviva Italy Italy’s pre-eminent bancassurer Cesare Brugola

©Avivaplc Agenda

• Growth market and Aviva’s positioning • Bancassurance partnerships • Products • Shareholder value • Future opportunities

High Growth of almost 20% Per Annum Over Last 6 Years – twice as fast as any other European market

Premium Income 1998 - 2004 * 80000 * 70000* 70000 62780 60000 55298 50000 46328 €m 39784 40000 35597 30000 26483 20000 10000 0 1998 1999 2000 2001 2002 2003 2004

Generali Group 13,916,720

Allianz Group 8,945,350

San Paolo - 7,181,340 Fideuram Group

Unipol Group 5,061,150 Aviva top five by end 2005 ? Poste Vita 4,489,480

Cattolica Group 2,819,920

Aviva Group 2,469,878

Monte Dei Paschi Di 2,389,900 Siena Group

2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000

© Aviva plc Slide 80 Broadening and Building Partnerships New bancassurance partnership 2000 2001 with Banca Popolare Commercio e 2004 BPU agreement New bancassurance partnership Industria (now Banche Popolari extended to include with Banca delle Marche Unite) BPB branches New New Extended distribution bancassurance bancassurance through former ING partnership with 2000 partnership with 2002 2004 Bank distributors UniCredito Banca Popolare di 300 Lodi

250 279.5m

Annual Growth 243.5m 200 Rate: 43% 202.9m 150

100 95.1m A.P.E. EURO Millions 50

2000 2001 2002 2003 © Aviva plc Source: Aviva plc Slide 81 A Network of Networks…

AVIVA Italia Holding SpA 100%

Commercial Union Commercial Union Commercial Union Commercial Union FINOA Srl Commercial Union Assicurazioni SpA Life SpA Insurance SpA Vita SpA 50% Italia SpA 50% 50% 100% 50% (Bipielle Investimenti SpA 100% (Banca delle Marche 50%) (Banca delle Marche 50%) (UniCredit Banca 49%) 50%)

AVIVA Vita Spa Commercial Union Eurovita Spa Commercial Union 50% Previdenza SpA 80.96% Vita SpA (BPU S.c.r.l. 50%) 100% (other Banks 19.04%) 1%

UNICREDITO Valle d’Aosta UniCredit Banca Retail UNICREDITO Piemonte UniCredit Private Bank CU Vita UNICREDITO Liguria UniCredit Banca d’Impresa

BPL GROUP Banca Popolare di Lodi Bipielle Adriatico CU Previdenza Banco di Chiavari Cassa di Risparmio di Trento Banca Popolare di Mantova

Cassa di Risparmio di Asti Cassa di Risparmio di Bolzano Banca del Fucino Banco di Romagna Banca Popolare di Puglia e Basilicata Cassa di Risparmio di Carpi Eurovita Cassa di Risparmio di Cento Cassa di Risparmio di Cesena Cassa di Risparmio di Rimini Tercas Banca di Ciociaria

BPU GROUP Banca Popolare Commercio e Industria Aviva Vita Banca Popolare di Bergamo CARIME

Banca Delle Marche GROUP Banca Delle Marche CU Life CARILO © Aviva plc Slide 83 … and also Distribution Agreements

Banca Popolare del Cassinate CU Vita

Credito Valtellinese CU Vita

BCC di Bene Vagienna – CN CU Vita BCC di Pianfei e Rocca De Baldi – CN BCC del Chianti Fiorentino – FI Banca del Mugello Fiorenzuola – FI BCC di Casalgrasso e Sant’Albano Stura – CN BCC di Caraglio e della Riviera dei Fiori – CN Cassa Rurale di Folgaria –TN BCC dell’Alto Garda – TN BCC di Manzano – UD BCC di Civitanova Marche –MC Banca della Ciociaria – FR BCC di San Marzano di San Giuseppe – TA BCC Don Rizzo Alcamo – TP Cassa Rurale di Tenno - Val di Non – Cles – TN

* BCC = Banca di Credito Cooperativo

11% BDM 253

BPCI 241 7% BPU CARIME 326 BPB 380 N/A BCC (*) 167

12% Other 336

100% TOTAL 3,420 2,467

(*) former Nad.Ned. distributors Further opportunities with less

developed bank networks... © Aviva plc Slide 85 Opportunity to Increase Customer Penetration

30%

CU VITA UNICREDITO 23% *EUR 2.25M

20% PENETRATION CU PREVIDENZA EUROVITA BPL CU LIFE 4,4% AVIVA VITA B.D. MARCHE *EUR 0.3m BPCI/CARIME 2% 2% ** EUR 0.3m *EUR 0.4m

BANK RETAIL CUSTOMERS 2003 500,000 1,000,000 1,500,000 2,000,000 NB* PREMIUM PER BRANCH

2.5

1.5

0.5 € m. – New Business

0 SanPaolo IMI Unicredit MPS Banca Intesa CRF Market Aviva CU Vita Lombarda Average Companies

40% Insurance Reserves vs Total Assets Under Management

35%

1,836 30% MPS

438 25% CR Firenze 3,359 3,168 Unicredit SanPaolo IMI 20% 770 Banca Lombarda

15% 3,087 Intesa

10%

Number 5% of branches % Insurance Reserves / Total AUM %

0% 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 € m. Insurance Reserves per branch Source : Estimates based on bank annual reports 2003 © Aviva plc Slide 88 Aviva Italy Bancassurance Model Investment X% Bank Group

Dividends

n t v D

e n s i 100% 50% tm e v i

d e m n t e

t s

Bank Branches Return on Dividends capital Life employed Subsidiary for Italy Life in 2003: 12% (post tax)

• Aviva usually takes an equity stake in the partner bank, in return for access to distribution • The total shareholder’s strategic investment in partner banks is €694m as at 31 March 2004 The amount in listed securities is €352m • Future agreed shareholder investments in partner banks but not yet arranged amount to €179m • Investments purchased at market value (independent review of value for non-listed investments) • For non-listed strategic investments, we include a protection clause in the partnership agreement relating to the realisation value of our investment in the bank

What Aviva offers Benefits for our partners

Reputation for local bancassurance No learning curve, high sales productivity expertise; coupled with Aviva’s world- potential wide experience

Developed administration platform, web Proven, efficient platform, no enabled for fast, cost effective processing implementation risks, low expense base at bank branch

Short time to market for new products; Highly responsive to market opportunities. reputation for innovation Full range of competitive products offered

Strong, stable management team with an Experienced team with high motivation to entrepreneurial approach ensure success

Strategic investment in Bank and share of Long term shareholder in bank and JV company growing share of profits in JV company Proven corporate governance model

Higher proportion of Unit Linked and Index Linked products, without in-house guarantees and lower capital (solvency margin) requirement.

The Market in 2003 Aviva in 2003

Traditional Traditional Unit-Index 38% 47% Linked 53% Unit-Index Linked 62%

Source: ANIA -Individual Life total sales 2003 © Aviva plc AVIVA - New Business in 2003 Slide 93 Overview of Aviva product mix/characteristics

Unit Linked Minimum underlying returns on SP policies purchased 50% from Investment Banks, with counterparties rated Aa3/AA- or above. No guarantees on RP policies. (Aviva market leader with UCI)

Index Linked Structures purchased from counterparties rated Aa3/AA- or above, exactly matching product benefits 12%

Capitalisation Minimum returns between 0% and 2.5% (2.5% on single premium policies only). Normally a fixed profit margin to 27% Aviva, rather than a percentage of investment return which is variable

Traditional, including Term Assurance Similar to capitalisation policies but with a higher level of 11% death benefit. Growing term assurance portfolio of annual premium policies covering mortgages and bank loans

First insurer to launch Unit Linked products on the Product Innovation: market

Experienced development team, with acknowledged product leadership in market place. Close working with Anticipation of market needs partner throughout development process ensures and resistant design: success

Automated systems and processes – able to deliver product from specification to launch in 2 weeks. In Short speed to market: 2003, a total of 25 new products were introduced through the various distribution channels

Products supplied by innovative workflow and service Operational Excellence: delivery

Worldwide product experience: World class expertise available from Aviva Group

New Business Premium - APE New Business Contribution (1)

250 50 45m 200 194m 40 38m 153m 150 30 28m £m 126m £m 100 20 12m 49m 50 10

0 0 2001 2002 2003 2004 – 1st 2001 2002 2003 2004 – 1st quarter quarter

(1) Pre tax, pre cost of capital

24.9 24.3 22.2 23.2

2001 2002 2003 2004 1st quarter

• Diversification of bank partners • Economies of scale (e.g. one system platform) • Low expense base • Product pricing disciplines • Management of product mix • Mutual benefit through the JV Life Company

Modified Statutory Profit (1) Life Achieved Operating Profit(2)

70m 35 70 30m 30 60 55m 26m 52m 25 24m 50 21m £m 20 £m 40 29m 15 30 10 20 5 10 0 0 2000 2001 2002 2003 2000 2001 2002 2003

(1) UK GAAP Basis, Gross of Tax (2) Gross of Tax

Total Premium per Employee 2002 Expense Ratios (Life) (Life & Non Life)

2.16% € 5.2 m

Expense as Proportion of 0.97% premium € 2.3 m income

Consolidated Aviva Life Top 15 Life Companies Aviva Companies Premium per Italian Market Companies Staff

Source: ANIA © Aviva plc Slide 100 • Italian market and Aviva’s positioning • Bancassurance partnerships • Products • Shareholder value • Future opportunities

Traditional State pension Privately funded retirement Ageing costs as a % of pension assets promise as a % ratio/pensions GDP as % of GDP of final salary

100% 100 <65 14 75% >65 80 67% 60 50% 12 40 25% 10 20 2,8 9 0 0% % of GDP 2004 2021 2050 8 Italy France UK Europe Over 65s will 15.4% in 2002 the Total reserves in 2003 67.3% one of the increase from 22% highest in Europe (EU € 37.4 bn of which highest in Europe today to 31% in 2021 average 12.2%) € 1.3 bn Individual policies and 49% in 2050 2.1m PF members and By 2050, overall 0.5m individual policies population reduced at end 2003 from 58 m to 51 m

Replacement ratio (% final salary) (Employee, age 60, 35 years contribution) Forecasted importance 2000 2010 2020 2030 2040 2050 of private pension

State pension 67.3 67.1 56.0 49.6 48.5 48.1

Private pension 0.0 4.7 9.4 14.5 16.7 16.7

TOTAL 67.3 71.8 65.4 64.1 65.2 64.8

• Gradual postponement of retirement age towards 40 years working service • Reduce the possibility of early retirement on a full pension and introduce incentives in order to convince employees to postpone retirement • TFR: new rules allowing transfer to the Private sector • Reduction in pension contributions for new employees • Enhanced fiscal incentives (reduction of capital gain tax during the accumulation period) • Increase in contribution ceiling for tax relief

Opportunities • € 13 bn contribution from employers each year to TFR • TFR re-evaluation rate: 3.4% actual performance in 2003 versus 5.7% average for Pension Funds Our plans • Insurers of “open” pension funds • Providers of annuities to members retiring from service with pension fund benefits • Insurers of risk benefits • And naturally distribution of own individual products (PIP) through bank branches • Distribution of own individual product (PIP) through financial advisors

Aviva is Strongly Positioned for Pension Developments

• Italy’s pre-eminent bancassurer • Expanding its distribution network • With a cost competitive advantage • Innovative • With a fast & proven development capability • In one of the most exciting growth markets

1 HSBC 143.1 16 Dexia 17.6 31 BCP 6.6 2RBS 76.7 17 Intesa 17.5 32 MPS 6.3 3UBS 70.0 18 Nordea Bank 16.6 33 BPVN 5.2 4 Barclays 48.1 19 Std. Chartered 16.5 34 Capitalia 5.2 5 BNP Paribas 45.8 20 S. Paolo IMI 14.9 35 Northern Rock 4.9 6 BSCH 44.1 21 Danske Bank 13.6 36 BNL 4.6 7HBOS 42.5 22 Banco Popular 11.0 37 BPU 4.6 8DB 41.1 23 AIB 10.4 38 BES 4.3 9 BBVA 37.6 24 Bank of Ireland 10.3 39 Banca Lombarda 3.4 10 LTSB 37.4 25 Abbey National 10.3 40 Bankinter 2.5 11 Credit Suisse 34.6 26 Svenska 9.8 41 BPM 2.0 12 SocGen 31.0 27 Commerzbank 9.3 13 ABN AMRO 39.9 28 HVB 9.2 BPL 2.2 14 CA-CL 29.8 29 SEB 8.1 BPL Investimenti 1.6 15 UCI 26.6 30 Banesto 7.0 Reti Bancarie 1.4

% of Single Premium

Year 1 Years 2 - 6

Initial Charge (after commission to bank) : 2.0% Nil

Annual Charge (after commission to bank) : 0.5% 0.5%

Life Company Expenses : 0.9% 0.3%

Life Company Profit : 1.6% 0.2%

Margin (Discounted Profit Flow over 6 years) = 2.5% of single premium 25% of APE