Aviva is the first European life insurer to fully implement the EEV principles, and will use this basis for reporting its 2004 preliminary results on 9 March 2005, in place of the previous Achieved Profits basis.
- Aviva is the first European life insurer to fully implement the EEV principles, and will use this basis for reporting its 2004 preliminary results on 9 March 2005, in place of the previous Achieved Profits basis.
- In adopting the EEV principles there has been no material change to the Group operating profit for the periods to 30 June 2004 and 31 December 2003.
- The adoption of the EEV principles provides enhanced disclosures on life business capital requirements, the cost of options and guarantees and key economic and operating assumption sensitivities.
- The restated embedded value (EV) includes a deduction of Ł132 million at 30 June 2004 for the cost of funding the life element of pension fund deficit.
- The overall impact on the embedded value is a reduction of less than 5% at each reporting date of 30 June 2004, 31 December 2003 and 31 December 2002.
- Analyst meeting and teleconference at 9:30am (GMT) today. Details in notes to editors.
Andrew Moss, Aviva’s group finance director, said:
“We believe embedded value methodology remains the best way to value life businesses and the early adoption of the European Embedded Value principles aligns our reported results to the sophisticated techniques and management practices employed to run our life business. Investment markets already include allowances for many of the factors taken into account in these EEV numbers.
“There is no change to the reporting basis for our statutory results, the regulatory capital position or our dividend paying capacity.”
“As the EEV principles are adopted across the European insurance sector there will be greater transparency and comparability for investors, which we welcome.”
| Restatement of key performance indicators | 30 June 2004 | 31 December 2003 | |||
|---|---|---|---|---|---|
| Restated Embedded Value | Achieved Profits Basis | Restated Embedded Value | Achieved Profits Basis | ||
| New business contribution* - before the effect of required capital | Ł338m | Ł324m | Ł646m | Ł621m | |
| New business contribution* - after the effect of required capital | Ł251m | Ł246m | Ł474m | Ł472m | |
| Operating profit** | Ł1,145m | Ł1,130m | Ł1,906m | Ł1,907m | |
| Total shareholders’ funds | Ł10,544m | Ł11,054m | Ł10,752m | Ł11,165m | |
| Net asset value per share*** | 474p | 496p | 484p | 502p | |
| All operating profit is from continuing operations. | |||||
| * | Before tax and minorities. | ||||
| ** | Including life EEV operating return, before amortisation of goodwill and exceptional items. | ||||
| *** | Measured on an embedded value basis. | ||||
Enquiries:
| Analysts: | ||
| Steve Riley | Investor relations director | Telephone +44 (0)20 7662 8115 |
| James Matthews | Head of investor relations | Telephone +44 (0)20 7662 2137 |
| Media: | ||
| Hayley Stimpson | Director of external affairs | Telephone +44 (0)20 7662 7544 |
| Sue Winston | Head of group media relations | Telephone +44 (0)20 7662 8221 |
| Rob Bailhache | Financial Dynamics | Telephone +44 (0)20 7269 7200 |
Notes to editors
- ANALYSTS: A presentation to investors and analysts will take place at 9:30am (GMT) at the London Underwriting Centre, 3 Minster Court, Mincing Lane, London, EC3R 7DD. There will also be a live teleconference link to the meeting on +44 (0)20 7019 9509. A replay facility will be available for two weeks on +44 (0)20 7984 7578 and enter passcode 922702# for the entire presentation including Q&A’s or passcode 311192# to listen to the Q&A’s only.
The presentation slides will be available in the Investor centre of this website from 9:00am (GMT).
Photographs are available from the Aviva media centre. - Embedded Value is a method of reporting the economic value of life insurance business. This information helps investors to value life insurance companies. Until now, the basis for preparation for this supplementary information has varied by country and in some cases by company within a country. This has made it difficult for investors and analysts to compare relative performance.
- The CFO Forum www.cfoforum.nl is a high-level group formed by the Chief Financial Officers of 19 major European listed and non-listed insurance companies. Its aim is to discuss issues relating to proposed new accounting regulations for their businesses and how they can create greater transparency for investors. The Forum was created in 2002 and launched a set of embedded value principles in May 2004 (“European Embedded Value”) that its members across Europe have agreed to adopt for their 2005 published accounts, with early adoption encouraged.
- Aviva is one of the leading providers of life and pensions to Europe with substantial positions in other markets around the world, making it the world’s fifth-largest insurance group, based on reported worldwide gross written premiums, at 31 December 2003.
- Aviva’s principal business activities are long-term savings, fund management and general insurance, with worldwide premium income and retail investment sales from continuing operations of Ł30 billion and assets under management of around Ł240 billion.
- Overseas currency results are translated at average exchange rates.
- All growth rates are quoted in local currency.
- This announcement may contain “forward looking statements” with respect to certain of Aviva’s plans and its current goals and expectations relating to its future financial condition, performance and results. By their nature, all forward looking statements involve risk and uncertainty because they relate to future events and circumstances which are beyond Aviva’s control, including amongst other things, UK domestic and global economic business conditions, market-related risks such as fluctuations in interest rates and exchange rates, the policies and actions of regulatory authorities, the impact of competition, inflation, deflation, the timing impact and other uncertainties of future acquisitions or combinations within relevant industries, as well as the impact of tax and other legislation and other regulations in the jurisdictions in which Aviva and its affiliates operate. As a result, Aviva’s actual future financial condition, performance and results may differ materially from the plans, goals and expectations set forth in Aviva’s forward-looking statements.
Aviva undertakes no obligation to update the forward-looking statements contained in this presentation or any other forward-looking statements we may make.