Aviva 2005 Annual Report Download - page 113

Financial statements
Aviva plc 2005
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3 – Subsidiaries continued
(d) Exceptional costs for termination of operations
In February 2004, the Group announced the closure of its UK national broker subsidiary, Hill House Hammond (HHH) together with the
sale of its commercial business. The associated pre-tax costs of the closure of HHH were £40 million and relate to termination activities,
including redundancy costs and closure provisions.
(e) Other information
Principal subsidiaries at 31 December 2005 are listed on page 222.
One of the Group’s wholly-owned subsidiaries, Delta Lloyd NV, is subject to the provisions of Dutch corporate law and particularly the
Dutch “structure company” regime. Under this regime, Delta Lloyd operates under a Supervisory Board which has a duty to have regard
to the interests of a wide variety of stakeholders. The Supervisory Board includes two Aviva Group representatives and is responsible
for advising and supervising Delta Lloyd’s Executive Board. The shareholder is one of the most important stakeholders to whom the
Supervisory Board has a duty.
4 – Segmental information
(a) Primary reporting format – business segments
(i) Reporting segments
The principal activity of the Group is financial services, which is managed using the following reportable segments: long-term business,
fund management, general insurance and health.
Long-term business
Our long-term business comprises life insurance, long-term health and accident insurance, savings, pensions and annuity business written
by our life insurance subsidiaries, including managed pension fund business and our share of the other life and related business written in
our associates and joint ventures, as well as the equity release business written in the United Kingdom.
Fund management activities
Our fund management business invests policyholders’ and shareholders’ funds, provides investment management services for institutional
pension fund mandates and manages a range of retail investment products, including investment funds, unit trusts, OEICs and ISAs.
Clients include Aviva Group businesses and third-party financial institutions, pension funds, public sector organisations, investment
professionals and private investors.
General insurance and health
Our general insurance and health business provides insurance cover to individuals and to small and medium-sized businesses, for
risks associated mainly with motor vehicles, property and liability, such as employers’ liability and professional indemnity liability, and
medical expenses.
Other
Other activities not related to the core business segments or which are not reportable segments due to their immateriality, such as
the RAC non-insurance operations, our banking businesses and service companies, are included as “Other”, in the following tables.
Head office expenses, such as Group treasury and finance functions are also reported as “Other”, together with eliminations and other
reconciling items. Certain financing costs and taxes are not allocated among the segments.
The accounting policies of the segments are the same as those for the Group as a whole. Any transactions between the business
segments are on normal commercial terms and market conditions.
Segment assets and liabilities comprise operating assets and liabilities, being the majority of the balance sheet but excluding items such
as tax and borrowings.