Aviva 2001 Annual Report Download - page 97

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95 CGNU plc
Embedded value of life business
2001 2000
£m £m
Embedded value at the beginning of the year 11,234 10,518
Total life achieved profit after tax*18 813
Exchange rate movements (97) 81
Embedded value from business (disposed)/acquired** 84 437
Amounts injected into life operations 175 167
Amounts released from life operations (351) (782)
Embedded value at the end of the year*** 11,063 11,234
*Excluding profits from other life and savings activities after tax.
** Embedded value from businesses disposed of in 2001 comprises NU Vita (Italy) (£16 million), Greece Life (£3 million) and Canada (£117 million). Embedded
value for businesses acquired in 2001 comprises Risparmio and Eurovita in Italy (£120 million), Unicaja, Caixa Galicia and Caja España in Spain (£64 million),
Hungary (£11 million) and The Insurance Corporation of Singapore (£25 million).
Embedded value from businesses acquired in 2000 comprises Hibernian Group in Ireland (£57 million), Aseval in Spain (£94 million), and the Group’s share
of the associated partnership in RBS Life Investments Limited (£343 million). Embedded value from business disposed of comprises the Norwich Union
Poland life and pensions operations (£57 million).
*** Embedded value at the end of the year includes minority interests in 2001 of £347 million (2000: £208 million). This comprises minority interests in France of
£34 million (2000: £34 million),Italy £149 million (2000: £70 million),Poland £55 million (2000: £42 million),Spain £107 million (2000: £57 million) and Other
Europe £2 million (2000: £5 million).
Segmental analysis of embedded value of life business
Net worth Valuation of in-force Embedded value
at 31 December* at 31 December** at 31 December
2001 2000 2001 2000 2001 2000
£m £m £m £m £m £m
United Kingdom 2,032 1,809 3,998 4,450 6,030 6,259
Europe (excluding UK)
France 836 805 407 397 1,243 1,202
Ireland 191 211 276 274 467 485
Italy 163 99 115 73 278 172
Netherlands (including Belgium and Luxembourg) 1,032 1,319 834 767 1,866 2,086
Poland 119 74 252 210 371 284
Spain 107 59 202 147 309 206
Other 58 59 49 47 107 106
International 289 351 103 83 392 434
4,827 4,786 6,236 6,448 11,063 11,234
*The shareholders’net worth comprises the market value of the shareholders’funds and the shareholders’interest in the surplus held in the non-profit
component of the long-term business funds determined on a statutory solvency basis and adjusted to add back any non-admissible assets.
**The net worth includes £2,200 million (31 December 2000: £2,100 million) in respect of minimum statutory solvency margin requirements that are supported
by shareholders’capital.The effect of holding the minimum statutory solvency margin and allowing for projected future releases was £700 million
(31 December 2000: £700 million).
Minority interest in life achieved profit
Shareholders’ Minority
interest interest Group Group
2001 2001 2001 2000
£m £m £m £m
New business contribution before effect of solvency margin 540 51 591 483
Effect of solvency margin (99) (13) (112) (91)
New business contribution including effect of solvency margin 441 38 479 392
Life achieved operating profit 1,581 84 1,665 1,533
Other life and savings activities 9–936
Life achieved operating profit before tax and exceptional items 1,590 84 1,674 1,569
Total life achieved profit before tax (30) 61 31 1,151
Attributed tax 6(21) (15) (375)
Total life achieved profit after tax (24) 40 16 776
Closing life embedded value 10,716 347 11,063 11,234