Aviva plc: Adoption of Aviva Market Consistent Embedded Value (MCEV) methodology and impact on results
Segmentation of summarised consolidated balance sheet
| Reviewed 30 June 2008 | Audited 31 December 2007 | ||||||
|---|---|---|---|---|---|---|---|
| Life and related businesses £m |
General business and other £m |
Group £m |
Life and related businesses £m |
General business and other £m |
Group £m |
||
| Total assets before acquired value of in-force long-term business | 282,765 | 43,155 | 325,920 | 278,128 | 41,500 | 319,628 | |
| Acquired additional value of in-force long-term business | 1,806 | – | 1,806 | 1,698 | – | 1,698 | |
| Total assets included in the IFRS balance sheet | 284,571 | 43,155 | 327,726 | 279,826 | 41,500 | 321,326 | |
| Liabilities of the long-term business | (270,179) | – | (270,179) | (265,187) | – | (265,187) | |
| Liabilities of the general insurance and other businesses | – | (42,873) | (42,873) | – | (40,208) | (40,208) | |
| Net assets on a statutory IFRS basis | 14,392 | 282 | 14,674 | 14,639 | 1,292 | 15,931 | |
| Additional value of in-force long-term business1 | 6,542 | – | 6,542 | 7,758 | – | 7,758 | |
| Net assets on an MCEV basis2 | 20,934 | 282 | 21,216 | 22,397 | 1,292 | 23,689 | |
| Equity capital, capital reserves, shares held by employee trusts and other reserves | 6,771 | 6,318 | |||||
| IFRS basis retained earnings | 5,244 | 6,338 | |||||
| Additional MCEV basis retained earnings | 5,374 | 7,342 | |||||
| Equity attributable to ordinary shareholders of Aviva plc on an MCEV basis | 17,389 | 19,998 | |||||
| Preference share capital and direct capital instruments | 1,190 | 1,190 | |||||
| Minority interests | 2,637 | 2,501 | |||||
| MCEV basis total equity | 21,216 | 23,689 | |||||
| Audited 31 December 2006 | |||
|---|---|---|---|
| Life and related businesses £m |
General business and other £m |
Group £m |
|
| Total assets before acquired value of in-force long-term business | 255,113 | 37,871 | 292,984 |
| Acquired additional value of in-force long-term business | 1,806 | – | 1,806 |
| Total assets included in the IFRS balance sheet | 256,919 | 37,871 | 294,790 |
| Liabilities of the long-term business | (244,021) | – | (244,021) |
| Liabilities of the general insurance and other businesses | – | (37,024) | (37,024) |
| Net assets on a statutory IFRS basis | 12,898 | 847 | 13,745 |
| Additional value of in-force long-term business1 | 6,698 | – | 6,698 |
| Net assets on an MCEV basis2 | 19,596 | 847 | 20,443 |
| Equity capital, capital reserves, shares held by employee trusts and other reserves | 5,631 | ||
| IFRS basis retained earnings | 5,195 | ||
| Additional MCEV basis retained earnings | 6,610 | ||
| Equity attributable to ordinary shareholders of Aviva plc on an MCEV basis | 17,436 | ||
| Preference share capital and direct capital instruments | 1,190 | ||
| Minority interests | 1,817 | ||
| MCEV basis total equity | 20,443 | ||
- The analysis between the group’s and minority interests’ share of the additional value of in-force long-term business is as follows:
Reviewed
30 June 2008Audited
31 December 2007Audited
31 December 2006Group’s share included in shareholders’ funds 5,374 7,342 6,610 Minority interests’ share 778 706 550 Movements in AFS securities 390 (290) (462) Per balance at 30 June/31 December 6,542 7,758 6,698 - Analysis of net assets on an MCEV basis is made up as follows:
Reviewed
30 June 2008Audited
31 December 2007Audited
31 December 2006Embedded value 16,577 18,248 16,506 RBSG goodwill 217 217 217 Goodwill and intangible assets allocated to long-term business 2,278 2,142 1,554 Notional allocation of IAS19 pension fund deficit to long-term business3,4 (140) (58) (179) Minority interests 2,002 1,848 1,498 Long-term business net assets on an MCEV basis 20,934 22,397 19,596 - The value of the Aviva Staff Pension Schemes deficit has been notionally allocated between segments, based on current funding and the life proportion has been included within the long-term business net assets on an MCEV basis.
- The pensions fund deficit notionally allocated to long-term business is net of the proportion of funding borne by the UK with-profit funds.
