Summary review

These statements are aimed at giving shareholders a summary of the progress being made by Aviva. They do not however, contain all the information to allow as complete an understanding of the Group as would be provided by the full audited Annual Report and Accounts. A copy of the full Annual Report and Accounts, which contains an unqualified auditors’ opinion, is available on the Aviva internet site at www.aviva.com or free of charge from Lloyds TSB Registrars, at the address on the back cover of this document.

2004 accounts

The summary financial statements have been prepared on the basis of accounting policies set out in the Group’s 2004 Annual Report and Accounts. The consolidated profit and loss account has been presented on both the European Embedded Value (EEV) and the modified statutory solvency (MSSB) basis. The EEV Principles were launched in May 2004 by the CFO Forum, a group of 19 insurers, and implementation is required by no later than 31 December 2005. The Group has chosen to adopt early the EEV principles as the directors consider that the methodology is a refinement to the achieved profits basis previously adopted by the Group and in their opinion, provides a more accurate reflection of the performance of the Group’s life and related operations year on year than results presented under the MSSB basis. Results of an insurance business in any particular year can be affected by significant movements in investment values, which influence the reported return before tax. Therefore, to measure the underlying business performance, operating return before tax based on longer term rates of investment return is used which eliminates the volatility caused by movements in investment values. As a result, managers are encouraged to focus on operational performance and aspects of the business which are under their control.

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