Aviva 2002 Annual Report Download - page 108

Download and view the complete annual report

Please find page 108 of the 2002 Aviva annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 116

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116

New business contributions have been calculated using the same economic assumptions as those used to determine the embedded
values as at the beginning of each year and operating assumptions used to determine the embedded values as at the end of the year.
The effect of solvency margin represents the impact of holding the minimum European Union (EU) solvency margin (or equivalent for
non-EU operations) and discounting to present value the projected future releases from the solvency margin to shareholders.
Analysis of life achieved operating profit
Life achieved operating profit is calculated on an after-tax basis and then grossed up at the full rate of corporation tax for UK business
and at appropriate rates of tax for other countries.
2002 2001
£m £m
United Kingdom 699 850
Europe (excluding UK)
France 228 227
Ireland 75 79
Italy 52 55
Netherlands (including Belgium and Luxembourg) 200 221
Poland 111 99
Spain 83 80
Other (2) 18
International 78 36
Total life achieved operating profit before tax and exceptional items*1,524 1,665
*Life achieved operating profit includes minority interests in year to 31 December 2002 of £90 million (2001: £84 million). This comprises minority interests in France of
£7 million (2001: £8 million), Italy £26 million (2001: £27 million), Poland £18 million (2001: £15 million) and Spain £39 million (2001: £34 million).
Embedded value of life business
2002 2001
£m £m
Embedded value at the beginning of the year 11,063 11,234
Total life achieved (loss)/profit after tax (960) 18
Exchange rate movements 220 (97)
Embedded value of businesses acquired/(disposed)* 13 84
Amounts injected into life operations 419 175
Amounts released from life operations (607) (351)
Embedded value at the end of the year** 10,148 11,063
*Embedded value from businesses acquired in 2002 represents the life subsidiary of DBS Hong Kong of £13 million. Embedded value from businesses acquired in 2001
comprises Risparmio and Eurovita in Italy (£120 million), the life operations of Unicaja, Caixa Galicia and Caja España in Spain (£64 million), Hungary (£11 million) and
The Insurance Corporation of Singapore (£25 million). Embedded value from business disposed of in 2001 comprises NU Vita (Italy) (£16 million), Greece (£3 million) and
Canada (£117 million).
**Embedded value at the end of the year includes minority interests in 2002 of £410 million (2001: £347 million). This comprises minority interests in France of £42 million
(2001: £34 million), Italy £180 million (2001: £149 million), Poland £51 million (2001: £55 million), Spain £134 million (2001: £107 million) and Other Europe £3 million
(2001: £2 million).
Alternative method of reporting long-term business continued
94 Aviva plc
Annual report + accounts 2002