13th Jan 2005 07:00
Aviva PLC13 January 2005 PART 3 OF 3 Statistical supplement: First time adoption -------------------------------------------------------------------------------------------------------------------- PAGE 36 Financial impact of adopting EEV methodology on 2003 achieved profits basis comparatives The Group is replacing the Achieved Profits basis with the EEV basis of reporting as its main measure of performance for life and related businesses. The basis of preparation and methodology adopted in compiling restated Group results and balance sheet for 2003 and the six months to 30 June 2004 is given on pages 14 to 16 of this announcement. A bridging analysis of embedded value, operating return and new business contribution on the Achieved Profits and EEVbases is shown below. Reconciliation of embedded value on the achieved profits basis to the EEV basis 30 June 31 December 31 December 2004 2003 2002 £m £m £m Achieved profits basis 11,941 12,155 10,148 Impact of changes in economic assumptions 431 531 497Impact of changes in the cost of required capital (319) (308) (274)Time value of options and guarantees (222) (232) (204)Impact of changes in expenses (including service and holding companies) (371) (382) (380)Other changes (15) (13) (3)-------------------------------------------------------------------------------------------------------------------Impact of methodology changes (496) (404) (364) ------------------------------------------------------------------------------------------------------------------- 11,445 11,751 9,784Impact of reclassifying NUER into life segment 28 - 1-------------------------------------------------------------------------------------------------------------------European embedded value basis 11,473 11,751 9,785=================================================================================================================== Reconciliation of total shareholders funds on the achieved profits basis to the EEV basis 30 June 31 December 31 December 2004 2003 2002 £m £m £m Shareholders' funds (under achieved profits basis) 11,054 11,165 9,668Impact of changes in embedded value (496) (404) (364)Impact of changes in minority interests (14) (9) --------------------------------------------------------------------------------------------------------------------Shareholders' funds (under European embedded value basis) 10,544 10,752 9,304=================================================================================================================== Reconciliation of operating return on the achieved profits basis to the EEV basis 6 months Full year 2004 2003 £m £m Achieved profits basis 800 1,555Impact of changes in economic assumptions 14 15Impact of changes in the cost of required capital (6) (24)Time value of options and guarantees (11) (12)Impact of changes in expenses (including service and holding companies) (14) (57)Other changes 16 19--------------------------------------------------------------------------------------------------------------------European embedded value basis 799 1,496==================================================================================================================== -------------------------------------------------------------------------------------------------------------------- PAGE 37 Reconciliation of new business contribution pre cost of capital on the achieved profits basis to the EEV basis 6 months Full year 2004 2003 £m £m Achieved profits basis 324 621Impact of changes in economic assumptions 27 35Impact of changes in the cost of required capital - -Time value of options and guarantees (10) (19)Impact of changes in expenses (including service and holding companies) (4) (12)Other changes 1 21--------------------------------------------------------------------------------------------------------------------European embedded value basis 338 646==================================================================================================================== Reconciliation of new business contribution post cost of capital on the achieved profits basis to the EEV basis 6 months Full year 2004 2003 £m £m Achieved profits basis 246 472Impact of changes in economic assumptions 37 55Impact of changes in the cost of required capital (20) (44)Time value of options and guarantees (10) (19)Impact of changes in expenses (including service and holding companies) (4) (12)Other changes 2 22--------------------------------------------------------------------------------------------------------------------European embedded value basis 251 474==================================================================================================================== The results shown under "Impact of changes in the cost of required capital" above do not equal the total difference in cost of capital under the Achieved Profits and EEV bases. This is because the cost of capital figures above exclude the impact of other economic assumption changes, which are included in the line "Impact of changes in economic assumptions". -------------------------------------------------------------------------------------------------------------------- PAGE 38 Reconciliation of segmental analysis of embedded value - achieved profits basis to EEV basis Impact of Impact of changes in Impact of changes in Time value expenses Achieved changes in the cost of of options (inc serviceEmbedded value profits economic required and & holding Other EEV30 June 2004 basis assumptions capital guarantees companies) changes basisContinuing operations £m £m £m £m £m £m £m Life and related businessesUnited Kingdom 5,513 59 (132) (35) (378) 9 5,036France 1,500 186 (29) (66) 27 2 1,620Ireland 536 30 (6) (6) 6 (5) 555Italy 428 6 (5) (11) - 9 427Netherlands (including Belgium and Luxembourg) 2,353 49 (94) (72) - (2) 2,234Poland 347 65 (9) (4) 5 (2) 402Spain 478 19 (6) (10) (5) (4) 472Other Europe 204 7 (11) (10) - (1) 189International 582 10 (27) (8) (26) 7 538-------------------------------------------------------------------------------------------------------------------- 11,941 431 (319) (222) (371) 13 11,473==================================================================================================================== Impact of Impact of changes in Impact of changes in Time value expenses Achieved changes in the cost of of options (inc serviceEmbedded value profits economic required and & holding Other EEV31 December 2003 basis assumptions capital guarantees companies) changes basisContinuing operations £m £m £m £m £m £m £m Life and related businessesUnited Kingdom 5,673 75 (121) (36) (388) (3) 5,200France 1,449 190 (30) (71) 27 (6) 1,559Ireland 554 35 (6) (6) 6 (6) 577Italy 442 5 (5) (10) - 3 435Netherlands (including Belgium and Luxembourg) 2,398 125 (96) (76) - 3 2,354Poland 396 71 (9) (4) 3 (3) 454Spain 455 17 (5) (10) (6) (5) 446Other Europe 200 5 (11) (10) - - 184International 588 8 (25) (9) (24) 4 542-------------------------------------------------------------------------------------------------------------------- 12,155 531 (308) (232) (382) (13) 11,751==================================================================================================================== Impact of Impact of changes in Impact of changes in Time value expenses Achieved changes in the cost of of options (inc serviceEmbedded value profits economic required and & holding Other EEV31 December 2002 basis assumptions capital guarantees companies) changes basisContinuing operations £m £m £m £m £m £m £m Life and related businessesUnited Kingdom 5,012 97 (111) (26) (372) 4 4,604France 1,220 171 (26) (58) 22 (3) 1,326Ireland 472 27 (5) (3) 6 (4) 493Italy 349 - (4) (11) - - 334Netherlands (including Belgium and Luxembourg) 1,805 96 (77) (70) - 1 1,755Poland 353 61 (13) (3) 2 (2) 398Spain 350 10 (3) (9) (8) (1) 339Other Europe 177 4 (8) (10) - 1 164International 410 31 (27) (14) (30) 2 372-------------------------------------------------------------------------------------------------------------------- 10,148 497 (274) (204) (380) (2) 9,785==================================================================================================================== -------------------------------------------------------------------------------------------------------------------- PAGE 39 Reconciliation of segmental analysis of Group operating return - achieved profits basis to EEV basis Impact of Impact of changes in Impact of changes in Time value expenses Achieved changes in the cost of of options (inc serviceGroup operating return profits economic required and & holding Other EEV6 months 2004 basis assumptions capital guarantees companies) changes(1) basisContinuing operations £m £m £m £m £m £m £m Life and related businesses United Kingdom 356 - (2) (2) (20) 13 345France 114 10 (3) (14) 5 - 112Ireland 18 (1) (1) - 1 (1) 16Italy 34 1 - 1 - - 36Netherlands (including Belgium and Luxembourg) 129 1 2 1 (3) 2 132Poland 33 - - - 1 1 35Spain 78 6 (2) (1) 2 (2) 81Other Europe 7 2 - 4 - 1 14International 31 (5) - - - 2 28-------------------------------------------------------------------------------------------------------------------- 800 14 (6) (11) (14) 16 799====================================================================================================================HealthUnited Kingdom 3 - - - - - 3France 2 - - - - - 2Netherlands 28 - - - - - 28-------------------------------------------------------------------------------------------------------------------- 33 - - - - - 33====================================================================================================================Fund ManagementUnited Kingdom 3 - - - (3) - -France 8 - - - (3) - 5Netherlands - - - - - - -Other Europe 3 - - - (1) - 2Australia 3 - - - - - 3-------------------------------------------------------------------------------------------------------------------- 17 - - - (7) - 10====================================================================================================================General insuranceUnited Kingdom 408 - - - - - 408France 13 - - - - - 13Ireland 68 - - - - - 68Netherlands 23 - - - - - 23Other Europe 18 - - - - - 18Canada 59 - - - - - 59Other 24 - - - - - 24-------------------------------------------------------------------------------------------------------------------- 613 - - - - - 613====================================================================================================================Non-insurance operations (15) - - - 16 7 8Corporate costs (94) - - - - - (94)Unallocated interest charges - external (124) - - - - - (124) - intra-group (100) - - - - - (100)-------------------------------------------------------------------------------------------------------------------- Group operating return before tax 1,130 14 (6) (11) (5) 23 1,145====================================================================================================================(1) United Kingdom includes an addition of a profit of £21 million under life and related businesses and removal of a loss of £7 million under non-insurance operations in respect of NUER. -------------------------------------------------------------------------------------------------------------------- PAGE 40 Reconciliation of segmental analysis of Group operating return - achieved profits basis to EEV basis Impact of Impact of changes in Impact of changes in Time value expenses Achieved changes in the cost of of options (inc serviceGroup operating return profits economic required and & holding Other EEVFull year 2003 basis assumptions capital guarantees companies) changes(1) basisContinuing operations £m £m £m £m £m £m £m Life and related businesses United Kingdom 659 - (8) (2) (72) 20 597France 220 17 (6) (12) 6 3 228Ireland 65 - - (9) 1 - 57Italy 70 - - 2 - (2) 70Netherlands (including Belgium and Luxembourg) 189 17 1 1 (5) (5) 198Poland 104 (6) (1) - 2 - 99Spain 158 9 (2) (2) 3 (1) 165Other Europe 9 (2) (3) 11 - 3 18International 81 (20) (5) (1) 8 1 64-------------------------------------------------------------------------------------------------------------------- 1,555 15 (24) (12) (57) 19 1,496====================================================================================================================HealthUnited Kingdom 13 - - - - - 13France 9 - - - - - 9Netherlands 39 - - - - - 39-------------------------------------------------------------------------------------------------------------------- 61 - - - - - 61====================================================================================================================Fund ManagementUnited Kingdom (6) - - - (5) - (11)France 13 - - - (8) - 5Netherlands - - - - (1) - (1)Other Europe 3 - - - - - 3Australia (1) - - - - - (1)International 1 - - - - - 1-------------------------------------------------------------------------------------------------------------------- 10 - - - (14) - (4)====================================================================================================================General insuranceUnited Kingdom 676 - - - - - 676France 35 - - - - - 35Ireland 91 - - - - - 91Netherlands 35 - - - - - 35Other Europe 32 - - - - - 32Canada 12 - - - - - 12Other 30 - - - - - 30-------------------------------------------------------------------------------------------------------------------- 911 - - - - - 911==================================================================================================================== Non-insurance operations (64) - - - 56 16 8Corporate costs (160) - - - - - (160)Unallocated interest charges - external (210) - - - - - (210) - intra-group (196) - - - - - (196)--------------------------------------------------------------------------------------------------------------------Group operating return before tax 1,907 15 (24) (12) (15) 35 1,906====================================================================================================================(1) United Kingdom includes an addition of a profit of £31 million under life and related businesses and removal of a loss of £16 million under non-insurance operations in respect of NUER. -------------------------------------------------------------------------------------------------------------------- PAGE 41 Reconciliation of segmental analysis of new business contribution before the effect of required capital - achieved profits basis to EEV basis Impact of changes in Impact of Time value expenses Achieved changes in of options (inc serviceNew business contribution profits economic and & holding Other EEV6 months 2004 basis assumptions guarantees companies) changes(1) basisContinuing operations £m £m £m £m £m £m Life and related businessesUnited Kingdom 126 - - (2) 3 127France 44 6 (7) 4 (1) 46Ireland 10 2 - 1 - 13Italy 21 1 - - - 22Netherlands (including Belgium and Luxembourg) 38 6 (2) (2) - 40Poland 3 2 - - - 5Spain 66 3 (1) - - 68Other Europe (1) 2 - - - 1International 17 5 - (5) (1) 16------------------------------------------------------------------------------------------------------------------- 324 27 (10) (4) 1 338=================================================================================================================== (1) United Kingdom includes £5 million in respect of NUER. Impact of changes in Impact of Time value expenses Achieved changes in of options (inc serviceNew business contribution profits economic and & holding Other EEVFull year 2003 basis assumptions guarantees companies) changes(1) basisContinuing operations £m £m £m £m £m £m Life and related businessesUnited Kingdom 241 - - (8) 17 250France 70 10 (12) 4 - 72Ireland 23 5 - 1 (1) 28Italy 45 (1) (1) - 2 45Netherlands (including Belgium and Luxembourg) 62 11 (4) (5) 5 69Poland 3 2 - - - 5Spain 134 5 (1) 1 2 141Other Europe (3) 2 - - - (1)International 46 1 (1) (5) (4) 37-------------------------------------------------------------------------------------------------------------------- 621 35 (19) (12) 21 646====================================================================================================================(1) United Kingdom includes £19 million in respect of NUER. --------------------------------------------------------------------------------------------------------------------PAGE 42 Statistical supplement:Life new business information -------------------------------------------------------------------------------------------------------------------- PAGE 43 Life new business premiums Under the EEV principles, new business margins are required to be disclosed as a percentage of the present value ofnew business premiums (PVNBP). The present value of new business premiums is derived from the single premiums and regular premiums of the products sold during the financial period and is expressed at the point of sale. The PVNBP calculation is equal to total single premium sales received in the year plus the discounted value of regularpremiums expected to be received over the term of the new contracts. The premium volumes and projection assumptionsused to calculate the present value of regular premiums for each product are the same as those used to calculate newbusiness contribution, so the components of the new business margin are on a consistent basis. The discounted value of regular premiums is also expressed as annualised regular premiums multiplied by a Weighted Average Capitalisation Factor (WACF). The WACF will vary over time depending on the mix of new products sold, the average outstanding term of the new contracts and the projection assumptions. The table below sets out the factors required to derive the present value of regular premiums by business units, and combined with single premium salesderives the present value of future new business premiums. 6 months ended 30 June 2004 ------------------------------------------------------------------- Weighted Present Present average value of value of new Regular capitalisation regular Single business premiums factor premiums premiums(1) premiums £m £m £m £mUnited KingdomIndividual pensions 136 5.0 678 800 1,478Group pensions 49 5.2 255 303 558Annuities - - - 568 568Bonds - - - 964 964Protection 88 4.9 428 303 731-------------------------------------------------------------------------------------------------------------------Total life and pensions 273 5.0 1,361 2,938 4,299 FranceAFER (excluding unit-linked) - - - 700 700Other savings 16 5.5 88 462 550Protection business 11 6.0 66 21 87-------------------------------------------------------------------------------------------------------------------Total life and pensions 27 5.7 154 1,183 1,337 Ireland Life and savings 9 5.7 51 20 71Pensions 26 5.0 131 65 196-------------------------------------------------------------------------------------------------------------------Total life and pensions 35 5.2 182 85 267 ItalyLife and savings 20 5.9 117 694 811------------------------------------------------------------------------------------------------------------------- Netherlands (including Belgium and LuxembourgLife 41 6.7 275 221 496Pensions 24 6.8 164 321 485------------------------------------------------------------------------------------------------------------------Total life and pensions 65 6.8 439 542 981 PolandLife and savings 7 4.6 32 20 52Pensions 8 7.0 56 13 69-------------------------------------------------------------------------------------------------------------------Total life and pensions 15 5.9 88 33 121 SpainLife and savings 27 6.1 165 626 791Pensions 15 5.5 82 249 331-------------------------------------------------------------------------------------------------------------------Total life and pensions 42 5.9 247 875 1,122 Other Europe Life and pensions 41 5.4 221 167 388 International Life and pensions 51 4.0 202 225 427-------------------------------------------------------------------------------------------------------------------Total 569 5.3 3,011 6,742 9,753===================================================================================================================(1) United Kingdom includes single premiums of £197 million in respect of NUER under Protection business. -------------------------------------------------------------------------------------------------------------------- PAGE 44 Full year ended 31 December 2003 -------------------------------------------------------------------- Weighted Present Present average value of value of new Regular capitalisation regular Single business premiums factor premiums premiums(1) premiums £m £m £m £mUnited KingdomIndividual pensions 248 5.3 1,324 1,479 2,803Group pensions 102 5.4 550 727 1,277Annuities - - - 1,091 1,091Bonds - - - 1,866 1,866Protection 184 4.4 806 673 1,479-------------------------------------------------------------------------------------------------------------------Total life and pensions 534 5.0 2,680 5,836 8,516 FranceAFER (excluding unit-linked) - - - 1,157 1,157Other savings 27 5.7 154 752 906Protection business 19 6.3 120 41 161-------------------------------------------------------------------------------------------------------------------Total life and pensions 46 6.0 274 1,950 2,224 IrelandLife and savings 16 5.2 83 51 134Pensions 46 5.6 258 137 395-------------------------------------------------------------------------------------------------------------------Total life and pensions 62 5.5 341 188 529 ItalyLife and savings 54 6.5 353 1,399 1,752------------------------------------------------------------------------------------------------------------------- Netherlands (including Belgium & Luxembourg)Life 63 6.9 432 506 938Pensions 76 7.1 539 344 883-------------------------------------------------------------------------------------------------------------------Total life and pensions 139 7.0 971 850 1,821 PolandLife and savings 17 4.6 78 24 102Pensions 15 7.7 116 8 124-------------------------------------------------------------------------------------------------------------------Total life and pensions 32 6.1 194 32 226 SpainLife and savings 55 6.0 329 1,022 1,351Pensions 56 5.0 282 331 613-------------------------------------------------------------------------------------------------------------------Total life and pensions 111 5.5 611 1,353 1,964 Other EuropeLife and pensions 73 4.2 307 280 587 InternationalLife and pensions 113 4.0 450 740 1,190-------------------------------------------------------------------------------------------------------------------Total 1,164 5.3 6,181 12,628 18,809===================================================================================================================(1) United Kingdom includes single premiums of £500 million in respect of NUER under Protection business. -------------------------------------------------------------------------------------------------------------------- PAGE 45 EEV basis - new business contribution before and after the effect of required capital New business New business contribution before contribution after the Annual premium Present value of new the effect of required effect of required equivalent(1) business premiums capital capital3 months to 31 March 2004 £m £m £m £m United Kingdom 275 2,123 61 51 France 77 717 24 13Ireland 22 137 7 6Italy 49 443 12 8Netherlands (including Belgium and Luxembourg) 63 505 20 12Poland 13 79 3 2Spain 57 466 31 27Other Europe 26 139 - --------------------------------------------------------------------------------------------------------------------Continental Europe 307 2,486 97 68 International 34 186 8 5-------------------------------------------------------------------------------------------------------------------Total 616 4,795 166 124=================================================================================================================== 6 months to 30 June 2004 £m £m £m £m United Kingdom 567 4,299 127 106 France 145 1,337 46 27Ireland 44 267 13 11Italy 89 811 22 14Netherlands (including Belgium and Luxembourg) 119 981 40 25Poland 18 121 5 4Spain 130 1,122 68 55Other Europe 58 388 1 (2)------------------------------------------------------------------------------------------------------------------- Continental Europe 603 5,027 195 134 International 74 427 16 11-------------------------------------------------------------------------------------------------------------------Total 1,244 9,753 338 251=================================================================================================================== 9 months to 30 September 2004 £m £m £m £m United Kingdom 882 6,774 198 162 France 209 1,937 64 36Ireland 63 392 18 15Italy 133 1,206 35 23Netherlands (including Belgium and Luxembourg) 182 1,449 57 35Poland 27 181 6 7Spain 182 1,539 97 79Other Europe 81 482 1 1------------------------------------------------------------------------------------------------------------------Continental Europe 877 7,186 278 196 International 121 737 29 22------------------------------------------------------------------------------------------------------------------Total 1,880 14,697 505 380=================================================================================================================== (1) APE has been restated to include NUER volumes -------------------------------------------------------------------------------------------------------------------- PAGE 46 New business New business contribution before contribution after Annual premium Present value of new the effect of the effect of3 months to equivalent(1) business premiums required capital required capital31 March 2003 £m £m £m £m United Kingdom 276 2,124 60 51 France 61 569 19 10Ireland 21 143 8 7Italy 61 530 13 7Netherlands (including Belgium and Luxembourg) 45 378 8 1Poland 14 87 2 1Spain 69 557 30 24Other Europe 23 117 (1) 0--------------------------------------------------------------------------------------------------------------------Continental Europe 294 2,381 79 50 International 44 298 9 5--------------------------------------------------------------------------------------------------------------------Total 614 4,803 148 106==================================================================================================================== 6 months to30 June 2003 £m £m £m £m United Kingdom 556 4,271 121 102 France 120 1,107 36 19Ireland 39 250 14 13Italy 117 1,044 27 15Netherlands (including Belgium and Luxembourg) 102 853 23 1Poland 20 126 3 2Spain 139 1,074 72 63Other Europe 44 212 (1) (2)--------------------------------------------------------------------------------------------------------------------Continental Europe 581 4,666 174 111 International 100 655 19 11--------------------------------------------------------------------------------------------------------------------Total 1,237 9,592 314 224==================================================================================================================== 9 months to30 September 2003 £m £m £m £m United Kingdom 839 6,455 186 159 France 177 1,639 52 28Ireland 55 360 20 18Italy 148 1,322 35 20Netherlands (including Belgium and Luxembourg) 146 1,206 36 8Poland 27 172 4 2Spain 174 1,391 97 85Other Europe 68 349 (3) (6)--------------------------------------------------------------------------------------------------------------------Continental Europe 795 6,439 241 155 International 148 922 28 16--------------------------------------------------------------------------------------------------------------------Total 1,782 13,816 455 330==================================================================================================================== (1) APE has been restated to include NUER volumes -------------------------------------------------------------------------------------------------------------------- PAGE 47 New business New business contribution before contribution after Annual premium Present value of new the effect of the effect of equivalent(1) business premiums required capital required capitalFull year 2003 £m £m £m £m United Kingdom 1,118 8,516 250 212 France 241 2,224 72 39Ireland 81 529 28 26Italy 194 1,752 45 27Netherlands (including Belgium and Luxembourg) 224 1,821 69 29Poland 35 226 5 3Spain 246 1,964 141 122Other Europe 101 587 (1) (6)--------------------------------------------------------------------------------------------------------------------Continental Europe 1,122 9,103 359 240 International 187 1,190 37 22--------------------------------------------------------------------------------------------------------------------Total 2,427 18,809 646 474==================================================================================================================== (1) APE has been restated to include NUER volumes -------------------------------------------------------------------------------------------------------------------- PAGE 48 Post tax internal rate of return on life and pensions new businessRelated Shares:
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