Proforma reconciliation of group operating profit to profit after tax – IFRS

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1. Geographical analysis of long-term business IFRS operating profit

6 months
2009
£m
Restated
6 months
2008
£m
full year
2008
£m
With-profit 137 202 289
Non-profit 231 226 462
United Kingdom 368 428 751
France 122 145 275
Italy 37 37 48
Ireland 29 28 61
Netherlands (including Belgium and Germany 148 134 196
Poland 72 76 162
Spain 71 74 155
Other Europe (1) (8) (16)
Europe 478 486 881
North America1 24 30 16
Asia 48 (7) 2
Australia 22 21 44
Asia Pacific 70 14 46
Total 940 958 1,694

1. Following the establishment of Aviva Investors, the fund management portion of the US business has been separately identified and transferred to fund management. This has reduced the half year 2008 life IFRS operating profit by £12 million.

IFRS long-term business operating profit before shareholder tax was £940 million (six months to 30 June 2008: £958 million), a decrease of 2% on the prior period.

United Kingdom
IFRS operating profit was 14% lower at £368 million (six months to 30 June 2008: £428 million) driven by the fall in asset market values which have resulted in a lower shareholders’ share of the with-profit special distribution bonus at £86 million (six months to 30 June 2008: £124 million). This has been compounded by reduced regular and terminal bonus payments.

Despite reduced annual management income, the non-profit result increased by 2% to £231 million (six months to 30 June 2008: £226 million) as we start to see the benefits of our successful operational efficiency initiatives.

Europe
In Europe, operating profit was £478 million (six months to 30 June 2008: £486 million), a 2% decrease on the prior period reflecting reduced management fees earned on unit-linked business and lower expected returns on assets under management. Offsetting these factors we have benefited from foreign exchange strengthening, principally on the euro.

In Italy, an increase in profits from existing business offset the increase in new business strain arising from sales growth of 45% in constant currency. This performance reflects a £2 million contribution from Aviva Assicurazioni Vita (formally UBI Vita) which was acquired in June 2008.

The Netherlands result increased by 10% to £148 million (six months to 30 June 2008: £134 million) reflecting currency strengthening and lower new business strain driven by a decrease in corporate pension sales offset by lower return on opening assets values.

North America
Life operating profit decreased by 20% to £24 million (six months to 30 June 2008: £30 million). The favourable impact of new business and the actions management has taken to improve life and annuity profitability was offset by margin compression, including higher option costs, and the impact of higher lapse experience.

Asia Pacific
Life operating profit increased to £70 million (six months to 30 June 2008: £14 million). The result benefited from a one-off release of reserves in Singapore of £58 million following an actuarial review of risk margins.

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