Aviva 2013 Annual Report Download - page 274

Aviva plc
Annual report and accounts 2013
272
Analysis of investments continued
As the table indicates 23.4% of total investments can be directly attributed to shareholders. The apportionment of our shareholder
assets is predominantly weighted towards debt securities and loans. In comparison, policyholder and participating funds contain a
greater proportion of equities and other investments (e.g. unit trusts), reflecting the underlying investment mandates.
We carry investments on our statement of financial position at either fair value or amortised cost. At 31 December 2013,
approximately 98% of the Group’s investment property, loans and financial investments were carried at fair value on the statement
of financial position.
Financial investment balances included in the remainder of these disclosures include financial investments of operations
classified as held for sale. For more information about financial investments analysed according to their accounting classification
and valuation approach, as well as the cost, unrealised gains and losses, impairments, fair value and other information concerning
financial investments, see ‘IFRS Financial statements – note 27 – Financial investments’.
Debt securities
Participating fund asset and shareholder debt securities analysed by credit rating and sector
Participating fund asset and shareholder debt securities analysed by credit rating and product type as at 31 December 2013 are set
out in the table below. Government and corporate debt securities are further analysed by type of issuer.
Ratin
g
s
2013 – Participatin
g
fund assets
AAA
£m
AA
£m
A
£m
BBB
£m
Less than
BBB
£m
Non-rated
£m
Total
£m
Government
UK Government — 9,523 — — — 9 9,532
Non-UK Government 6,255 12,459 1,505 10,993 351 131 31,694
Corporate
Public utilities — 59 1,567 2,320 79 200 4,225
Convertibles and bonds with warrants — — — 300 — 8 308
Other corporate bonds 2,972 5,374 9,399 8,676 1,119 2,748 30,288
Certificate of deposits — 37 75 2 — — 114
Structured 578 64 75 57 28 1 803
Wrapped credit — 13 42 20 — — 75
Other 431 267 1,070 921 844 38 3,571
Total 10,236 27,796 13,733 23,289 2,421 3,135 80,610
Total % 12.7% 34.5% 17.0% 28.9% 3.0% 3.9% 100.0%
2012 Restated1 21,974 17,135 16,104 22,019 3,822 2,522 83,576
2012 Restated1 % 26.3% 20.5% 19.3% 26.3% 4.6% 3.0% 100.0%
1 The 2012 figures have been restated following the adoption of IFRS 10 ‘Consolidated Financial Statements’ – see ‘IFRS Financial Statements – note 1’ for details.
Ratin
g
s
2013 – Shareholder assets
AAA
£m
AA
£m
A
£m
BBB
£m
Less than
BBB
£m
Non-rated
£m
Total
£m
Government
UK Government — 4,362 45 — — 200 4,607
Non-UK Government 4,287 3,441 871 1,583 18 2 10,202
Corporate
Public utilities 6 36 2,310 976 — 215 3,543
Convertibles and bonds with warrants — — — 3 — 77 80
Other corporate bonds 982 1,335 5,129 3,348 291 2,219 13,304
Certificate of deposits 3 65 56 — — — 124
Structured 239 367 103 30 61 25 825
Wrapped credit — 5 243 60 34 46 388
Other 34 22 85 74 68 4 287
Total 5,551 9,633 8,842 6,074 472 2,788 33,360
Total % 16.6% 28.9% 26.5% 18.2% 1.4% 8.4% 100.0%
2012 Restated1 12,288 8,877 17,780 15,424 1,924 5,414 61,707
2012 Restated1 % 19.9% 14.4% 28.8% 25.0% 3.1% 8.8% 100.0%
1 The 2012 figures have been restated following the adoption of IFRS 10 ‘Consolidated Financial Statements’ – see ‘IFRS Financial Statements – note 1’ for details.
We grade debt securities according to external credit ratings issued at the balance sheet date. The credit rating used for each
individual security is the median rating of the available ratings from the major credit rating agencies. If a credit rating is available
from only one of these rating agencies then this rating is used. If an individual security has not been given a credit rating by any of
the major rating agencies, the security is classified as ‘non-rated’.
For the table above we have expressed our rating using a rating scale whereby investment grade debt securities are classified
within the range of AAA (extremely strong) to BBB (good) ratings, with AAA being the highest possible rating. Debt securities
which fall outside this range are classified as less than BBB. This rating scale is analogous with that used by major rating agencies.
At 31 December 2013, the proportion of our shareholder debt securities that are investment grade increased to 90.2%
(2012: 88.1%). The remaining 9.8% of shareholder debt securities that do not have an external rating of BBB or higher can be split
as follows:
 1.4% are debt securities that are rated as below investment grade; and
 8.4% are not rated by the major rating agencies.