Aviva 2009 Annual Report Download - page 259

257
Performance review
Aviva plc Notes to the consolidated financial statements continued
Corporate responsibility
Annual Report and Accounts 2009
Governance
Shareholder information
Financial statements IFRS
Financial statements MCEV
Other information
56 – Risk management continued
— Additional committee and credit risk function oversight is provided on all credit risk related matters. This includes regular
consideration and review of our key counterparties, monitoring and addressing key credit themes and news that emerge
in the markets. The Group Credit Approvals Committee provides an effective forum to ensure that all key recommendations
are considered, and decisions implemented throughout the Group. The regional and Group credit divisions ensure that all
qualitative aspects of risk management are considered and evaluated to provide further oversight and balance to the
quantitative aspects.
— The employment of risk mitigation techniques where and when deemed appropriate. These are utilised where possible to
remove residual unwanted risks, as well as bring limits within appetite, and include methods such as collateralisation, purchase
of credit protection and diversification strategies.
A detailed breakdown of Aviva’s current credit exposure by credit quality is shown below.
Financial exposures by credit ratings
Financial assets are graded according to current external credit ratings issued. AAA is the highest possible rating. Investment grade
financial assets are classified within the range of AAA to BBB ratings. Financial assets which fall outside this range are classified as
speculative grade. The following table provides information regarding the aggregated credit risk exposure, for financial assets with
external credit ratings, of the Group. Not rated assets capture assets not rated by external ratings agencies.
Credit rating
Carrying
value
in the
statement
of financial
Speculative position
At 31 December 2009 AAA AA A BBB grade Not rated £m
Debt securities 39.1% 17.8% 24.6% 12.6% 2.3% 3.6% 160,510
Reinsurance assets 10.5% 52.1% 26.7% 0.4% 0.2% 10.1% 7,572
Other investments 0.2% 3.1% 1.8% 1.1% — 93.8% 34,826
Loans 6.2% 7.7% 0.9% 0.5% 1.0% 83.7% 41,079
Credit rating
Carrying
value in the
statement
of financial
Speculative position
At 31 December 2008 AAA AA A BBB grade Not rated £m
Debt securities 44.0% 16.2% 26.1% 8.4% 1.5% 3.8% 150,734
Reinsurance assets 12.9% 70.0% 8.1% 0.4% 0.2% 8.4% 7,894
Other investments 0.6% 2.7% 6.0% 0.8% — 89.9% 36,116
Loans 6.1% 5.3% 5.2% 0.3% 1.0% 82.1% 42,237
Credit rating
Carrying
value in the
statement
of financial
Speculative position
At 31 December 2007 AAA AA A BBB grade Not rated £m
Debt securities 45.6% 19.7% 20.4% 9.0% 1.1% 4.2% 121,312
Reinsurance assets 14.7% 67.8% 7.4% 0.4% 1.2% 8.5% 8,054
Other investments 1.7% 2.3% 2.3% 2.3% — 91.4% 36,269
Loans 3.4% 17.6% 1.0% 0.7% 1.3% 76.0% 36,193
The carrying amount of assets included in the statement of financial position represents the maximum credit exposure.
Financial statements IFRS