Aviva 2013 Annual Report Download - page 219

Strategic report Governance IFRS Financial statements Other information
Aviva plc
Annual report and accounts 2013
217
Notes to the consolidated financial statements continued
57 – Capital statement
This statement sets out the financial strength of our Group entities and provides an analysis of the disposition and constraints over
the availability of capital to meet risks and regulatory requirements. The capital statement also provides a reconciliation of
shareholders’ funds to regulatory capital.
The analysis below sets out the Group’s available capital resources, which includes available capital resources of subsidiaries
classified as held for sale in the Group IFRS statement of financial position still included in the Group’s available capital resources at
31 December 2013.
Available capital resources
Old
with-
profit
sub-fund
£m
New
with-profit
sub-fund
£m
With-
profit
sub-fund5
£m
Total U
K
life with-
profit
funds
£m
Other
UK life
operations
£m
Total
UK life
operations
£m
Overseas
life
operations
£m
Total life
operations
£m
Other
operations6
£m
2013
Total
£m
2012
Total
£m
Total shareholders' funds 3 (19) 35 19 5,198 5,217 5,876 11,093 (76) 11,017 11,360
Other sources of capital1 — — — — 200 200 43 243 4,170 4,413 4,380
Unallocated divisible surplus2 323 — 1,397 1,720 26 1,746 4,963 6,709 — 6,709 6,986
Ad
j
ustments onto a regulatory basis:
Shareholders' share of accrued bonus (27) 128 (190) (89) — (89) — (89) — (89) (304)
Goodwill and other intangibles3 — — — — (146) (146) (1,017) (1,163) (1,445) (2,608) (3,410)
Regulatory valuation and admissibility
restrictions4 64 1,189 268 1,521 (2,485) (964) 867 (97) (789) (886) 23
Total available capital resources 363 1,298 1,510 3,171 2,793 5,964 10,732 16,696 1,860 18,556 19,035
Analysis of liabilities:
Participating insurance liabilities 1,746 12,723 9,803 24,272 100 24,372 20,726 45,098 — 45,098 49,473
Unit-linked liabilities — — — — 3,639 3,639 5,075 8,714 — 8,714 9,936
Other non-participating life insurance 352 2,618 476 3,446 33,410 36,856 5,591 42,447 — 42,447 73,123
Amounts classified as held for sale — — — — — — (106) (106) — (106) (34,446)
Total insurance liabilities 2,098 15,341 10,279 27,718 37,149 64,867 31,286 96,153 — 96,153 98,086
Participating investment liabilities 667 3,057 6,098 9,822 2,606 12,428 58,200 70,628 — 70,628 66,849
Non-participating investment liabilities (3) (19) — (22) 38,429 38,407 9,733 48,140 — 48,140 47,699
Amounts classified as held for sale — — — — — — (2,710) (2,710) — (2,710) (4,054)
Total investment liabilities 664 3,038 6,098 9,800 41,035 50,835 65,223 116,058 — 116,058 110,494
Total liabilities 2,762 18,379 16,377 37,518 78,184 115,702 96,509 212,211 — 212,211 208,580
1 Other sources of capital include subordinated debt of £4,370 million issued by Aviva and £43 million of other qualifying capital issued by Italian and Spanish subsidiary and associate undertakings.
2 Unallocated divisible surplus for overseas life operations is included gross of minority interest and amounts disclosed include balances classified as held for sale.
3 Goodwill and other intangibles includes goodwill of £60 million in joint ventures and associates, and amounts disclosed include balances classified as held for sale.
4 Includes an adjustment for minorities (except for other sources of capital that are reflected net of minority interest).
5 Includes the Provident Mutual with-profit fund.
6 Other operations include general insurance and fund management business.
Analysis of movements in capital of long-term businesses
For the year ended 31 December 2013
Old
with-profit
sub-fund
£m
New
with-profit
sub-fund
£m
With-profit
sub-fund
£m
Total U
K
life with-
profit
funds
£m
Other
UK life
operations
£m
Total
UK life
operations
£m
Overseas
life
operations
£m
Total life
operations
£m
Available capital resources at 1 January 291 907 1,836 3,034 2,688 5,722 12,360 18,082
Effect of new business 3 (191) (4) (192) 158 (34) (102) (136)
Expected change in available capital resources 5 134 164 303 261 564 627 1,191
Variance between actual and expected experience 38 75 (220) (107) (119) (226) (348) (574)
Effect of operating assumption changes (3) 2 (24) (25) 86 61 143 204
Effect of economic assumption changes 26 80 363 469 — 469 165 634
Effect of changes in management policy 1 260 (597) (336) 119 (217) (3) (220)
Transfers, acquisitions and disposals — — — — — — (2,082) (2,082)
Foreign exchange movements — — — — — — 216 216
Other movements 2 31 (8) 25 (400) (375) (244) (619)
Available capital resources at 31 December 363 1,298 1,510 3,171 2,793 5,964 10,732 16,696
Further analysis of the movement in the liabilities of the long-term business can be found in notes 41 and 42.
The analysis of movements in capital provides an explanation of the movement in available capital of the Group’s life business
for the year. This analysis is intended to give an understanding of the underlying causes of changes in the available capital of the
Group’s life business, and provides a distinction between some of the key factors affecting the available capital.
The negative shareholders’ funds balance within NWPSF arises as a result of regulatory valuation and admissibility differences
in the reattributed estate which is valued on a realistic regulatory basis compared to the disclosure on an IFRS basis.
NWPSF is fully supported by the reattributed estate of £1,105 million (this is known as RIEESA) at 31 December 2013
(31 December 2012: £748 million) held within NPSF1 (a non-profit fund within UKLAP included within other UK life operations) in
the form of a capital support arrangement. This support arrangement will provide capital to NWPSF to ensure that the value of
assets of NWPSF are at least equal to the value of liabilities calculated on a realistic regulatory basis, therefore it forms part of the
NWPSF available capital resources.