Aviva 2009 Annual Report Download - page 51

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Performance review
Aviva plc Financial and operating performance continued
Corporate responsibility
Annual Report and Accounts 2009
was mainly due to the decline in investment markets and the
integration and restructuring costs of setting up Aviva Investors.
Aviva Investors’ funds under management were £236 billion in
2008, an increase of £1 billion, or less than 1%, from
£235 billion in 2007. The increase was mainly due to exchange
gains as sterling declined against other major currencies towards
the end of the year, increasing the value of our non-sterling
investments, offset by market factors where the fall in equity
and property capital values and outflows from some open-
ended property funds.
Corporate centre and group debt costs and other interest
2009 2008 2007
£m £m £m
Corporate centre (108) (141) (157)
Group debt costs and other interest (636) (379) (363)
Year ended 31 December 2009
Corporate centre costs were £108 million, a decrease of
£33 million, or 23%, on £141 million in 2008. The decrease
reflects lower central spend. Staff incentive costs were in line
with 2008 and projects spending decreased by £23 million
reflecting lower costs following the completion of the brand
migration, financial controls and MCEV projects initiated
in 2008.
The group debt costs and other interest increased to
£636 million, an increase of £257 million on 2008 of £379
million. External interest costs increased to £335 million (
2008:
£286 million
) reflecting higher interest on subordinated debt,
due to hybrid debt being issued in 2008 and 2009, which was
offset by lower commercial paper interest as proceeds from
the issue were used to repay some commercial paper. Internal
interest costs increased to £227 million (
2008: £197 million )
driven by changes to our internal loan balances.
The net pension charge of £74 million (
2008: £104 million
income
) represents the difference between the expected return
on pension scheme assets and the interest charged on pension
scheme liabilities. The increase is primarily due to lower rates
of return on asset values offset by higher discount rates
on liabilities.
Governance
Shareholder information
Financial statements IFRS
Financial statements MCEV
Other information
Year ended 31 December 2008
The corporate centre costs for 2008 decreased to £141 million
(
2007: £157 million ) due to lower central spend and staff
incentive costs. Within this total are project spend costs
totalling £34 million
(2007: £26 million) . The increase in
project spend was driven by the corporate centre’s share of
the ongoing implementation of the global finance strategy.
The decrease in corporate centre spend is partly explained
by increased costs being borne by the operating segments,
as certain corporate centre activities and costs have either
been transferred or recharged to regional offices.
In 2008 group debt costs and other interest totalled
£379 million
(2007: £363 million) . External interest costs
increased to £286 million
(2007: £259 million) reflecting higher
interest in subordinated debt, due to our hybrid debt issues in
May and August 2008, offset by lower commercial paper
interest as proceeds from the issue were used to repay some
commercial paper. Internal interest costs increased to
£197 million
(2007: £179 million) driven by changes to our
internal loan balances. Net pension income increased to
£104 million
(2007: £75 million) reflecting higher expected rates
of return on assets offset by higher discount rates on liabilities.
Performance review