Leveraging NUI’s scale advantageBridget McIntyre

Four case studies to demonstrate:

• Strength of our competences- evolution of the NUI underwriting box

creates value for commercial insurance

• Scale advantage which cannot be copied- distribution- innovation in motor and household

Case Study 1: Commercial - Focussing on the fundamentals

COLL-ECTIVE

FLEET PROPERTYOWNERS

MOTORTRADECONST

SERVICESOTHERSLIABILITY

CAUTIONThis business will normally be outside the Underwriting Box Refer to relevant Commercial Segment

NONCONV

BUS

PROPERTY

Entry criteria

PremPer

Insured

£150k

£75k

NUI’s Underwriting Box

Focussing on the fundamentals –Continuous improvement

• Major UK Market losses 2001/2002

- Wood Group- Edinburgh City Centre- Corus- Center Parcs- Triumph Motorcycles

• Total cost circa £500m

• NUI exposure around £8m

• 1.6% when our commercial market share is 17%

Sector specialism -Delivering profitable growth

Commercial Segments

£800

£850

£900

£950

£1,000

£1,050

£1,100

£1,150

2001/12 2002/01 2002/02 2002/03 2002/04 2002/05 2002/06 2002/07 2002/08 2002/09 2002/10 2002/11 2002/1240.0%

45.0%

50.0%

55.0%

60.0%

65.0%

70.0%

GWP (£M) ECR (%)

£m ECR %

Case study 2: Distribution - proactive or reactive?

• NUI’s current capability

- Fully integrated multi distribution insurance company (FIMDIC)

• part of the NUI formula for success• broad mix to deliver customer choice

• creates ability to take account of emerging market

trends• manage across the portfolio to deliver consistency

through the cycle

Distribution - emerging trends

• Consolidation

• Growth of power brand

• Fast response direct players

• Ageing broker population

• Impact of regulation

NUI’s platform for change

CUSTOMERS

Corporate Partners Intermediaries

Corporate Partner IB

Product Development & Pricing

Retail Capability

Customer Servicing

Claims Management

NUI’s platform for change

CUSTOMERS

Corporate Partners Intermediaries

Corporate Partner IB

Product Development & Pricing

Retail Capability

Customer Servicing

Claims Management

On SiteU/W

SelfServe

TailoredProps

FoundationPartners

Acquiringbusiness

Semi Direct

Value Partners

Case study 3: Household pricing

• Generating value from our personal lines data

- improved risk selection- improved pricing- consistent rules

• Implemented in motor, now expanded to cover household

© Aviva plc

Flooding - backgroundFlooding - background

Flood Modelling: Shrewsbury

SY3 7

Properties that DO flood

28% of properties within this postcode area flood.

SY3 7

Properties that DO flood

28% of properties within this postcode area flood.

Properties that don’t flood

A Comparison of Environment Agency and

Norwich Union Flood Outlines for Eastern

Shrewsbury

EA outline

NUI outline

Case Study 4: Mobility Solutions

Roadside Assistance

• NU Rescue launched January 2003

• Individual pricing linked to likelihood of use

• Range of services

• 60,000 customers in four months

- 20% more than forecast- premium income circa £3.1 million to

end Q1 - plan to write 126,000 policies this year

Car provision

• Partnership with Lex and Oneswoop to launch yourNUcar.com

- competitive pricing

- finance deals

- free NU rescue

• Exploring car provision following write offs

• NUI building a ‘virtual forecourt’

PAYD insurance

• Piloting August 2003 using telematics technology

• Technology here to stay

• Exclusive patent

• Fairer prices and monthly premiums based on use

• Monthly billing

TM

Rate of fatal and serious accidents

0

20

40

60

80

100

120

140

A roads:Built-up

Other roads:Built-up

Other roads:Non-built-up

A roads:Non-built-up

Motorways

Pay As You Drive In

Steve RileyYour “Pay As You Drive”insurance statementJanuary 2003

Your Policy Number MOT123456789

Your monthly insurance premium you pay by direct debit is

Your “Pay As You Drive” insurance this month is

There is no need to change your direct debit.

Year to date your credit is

Summary of usage

Total mileage this month 845 Total mileage since commencement of policy (August to January inclusive)

.

5,732

How we have calculated your monthly usage bill for this monthMiles covered Pence per Mile Premium charged

Motorway 213.8 1.5 p £3.21Dual Carriageway 223.0 2.1 p £4.68Built up areas 91.3 9.7 p £8.86Non built up areas 316.9 8.2 p £25.99Mileage based cost summary £42.74

Your discountsEarly riser -£2.74Off Peak -£4.92Weekend -£2.45Commuter route -£11.25Total discounts earned this month - £21.38

High risk charges No. of days Charge per day Premium chargedRainy days 2 £1.00 £2.00Ice/Snow days 1 £8.00 £8.00Total high risk charges this month £10.00

Static risk Premium £10.00

Total Monthly Usage Premium £41.38Insurance Premium Tax (IPT) @5.00% £2.07Total insurance Premium £43.45

Tip of the Month

You will see that your bill includes £8.00 for use in the snow, which occurred on 14 January. Our research shows that the risk ofcollision when snow is lying on the ground is approximately 5 times as high as on a dry day.

If you have to drive in the snow then we recommend:• signal all manoeuvres much earlier than normally• keep speed extremely low• reme mber that pedestrians may slip and fall at any time• treat cyclist as accidents waiting to happen

Pay As You Drive insurance

Norwich Union Insurance Limited Registered in England No 99122 Registered office 8 Surrey Street Norwich NR1 3NG Member of the Aviva groupRegistered In England No Registered Office St Helen’s 1 UndershaftLondon EC3P 3DQ Members of the General Insurance Standards Council

£50.00

£43.45

£18.82

PAYDmonthly billing

MOBILITY SOLUTIONS – ROLLOUT

TODAY 2H20031H2003 2004 2005 Beyond 2005

COREINSURANCE

NU RESCUE

CARS FOR CUSTOMERS

‘PAY AS YOU DRIVE’ PILOT‘PAY AS

YOU DRIVE’PRODUCT

MOBILITYINFORMATION

SERVICES

MOT/SERVICEPRODUCT

YOUNG DRIVERS(START OF DRIVING

CAREER) PROPOSITION

DRIVINGSCHOOL

OVER 45’SPROPOSITION

MOBILITY

SOLUTIONS

Car Provision

Car Management

Travel and Alternatives to Car

Driver Training

Excellent IncidentService

NUI as MotoringServices Aggregator

REHABILITATION(PHYSIOFAST)

‘END OF DRIVING CAREER’

PROPOSITION

Overall summary and conclusions

• NUI in a unique position

• Being good at core insurance

• Scale creates efficiency and capacity for innovation

- telematics/digital mapping cannot be copied

• New propositions make NUI strategy visible and tangible