Aviva 2013 Annual Report Download - page 177

Strategic report Governance IFRS Financial statements Other information
Aviva plc
Annual report and accounts 2013
175
Notes to the consolidated financial statements continued
27 – Financial investments continued
Non-cash collateral received
The Group receives collateral in order to reduce the credit risk of these arrangements. Collateral must be in a readily realisable
form, such as listed securities, and is held in segregated accounts. Transfer of title always occurs for collateral received, although no
market risk or economic benefit is taken. The level of collateral held is monitored regularly, with further collateral obtained where
this is considered necessary to manage the Group’s risk exposure.
In certain markets, the Group or the Group’s appointed stock lending managers obtain legal ownership of the collateral
received and can re-pledge it as collateral elsewhere or sell outright in the absence of default. The carrying amount of financial
assets received in this manner at 31 December 2013 was £16,914 million (2012: £16,943 million). The value of collateral that was
actually sold in the absence of default was £nil (2012: £nil).
Cash collateral received
In addition to the above, the Group has received cash collateral under stock lending arrangements that has been recognised in the
statement of financial position with a corresponding obligation for its return. The latter balance is included in note 51.
(ii) Other arrangements
In carrying on its bulk purchase annuity business, the Group’s UK Life operation is required to place certain investments in trust on
behalf of the policyholders. Amounts become payable from the trust funds to the trustees if the Group were to be in breach of its
payment obligations in respect of policyholder benefits. At 31 December 2013 £1,201 million (2012: £1,208 million) of financial
investments were restricted in this way.
Certain financial investments are also required to be deposited under local laws in various overseas countries as security for the
holders of policies issued in those countries. Other investments are pledged as security collateral for bank letters of credit.
(e) Non UK Government Debt Securities (gross of non-controlling interests)
The following is a summary of non UK government debt by issuer as at 31 December 2013 analysed by policyholder, participating
and shareholder funds.
Polic
y
holder Participatin
g
Shareholder Total
Non UK Government Debt Securities
2013
£m
Restated1
2012
£m
2013
£m
Restated1
2012
£m
2013
£m
2012
£m
2013
£m
Restated1
2012
£m
Austria 9 14 636 634 133 123 778 771
Belgium 29 45 1,475 1,342 154 172 1,658 1,559
France 108 189 9,714 9,073 1,909 1,944 11,731 11,206
Germany 146 217 1,922 2,390 763 957 2,831 3,564
Greece — — 1 — — — 1 —
Ireland 21 35 364 363 28 26 413 424
Italy 255 263 8,458 8,518 628 617 9,341 9,398
Netherlands 43 65 1,222 1,194 399 228 1,664 1,487
Poland 649 673 885 1,015 490 445 2,024 2,133
Portugal — — 187 257 — — 187 257
Spain 101 36 1,355 1,317 930 854 2,386 2,207
European Supranational debt 89 136 2,612 2,928 1,583 1,470 4,284 4,534
Other European countries 91 238 587 646 359 421 1,037 1,305
Europe 1,541 1,911 29,418 29,677 7,376 7,257 38,335 38,845
Canada 7 18 171 195 2,198 2,517 2,376 2,730
United States 112 131 32 40 280 1,665 424 1,836
North America 119 149 203 235 2,478 4,182 2,800 4,566
Singapore 8 7 450 453 288 276 746 736
Sri Lanka 1 1 7 3 — — 8 4
Other 329 625 1,616 1,291 60 393 2,005 2,309
Asia Pacific and other 338 633 2,073 1,747 348 669 2,759 3,049
Total 1,998 2,693 31,694 31,659 10,202 12,108 43,894 46,460
Less: assets of operations classified as held for sale 13 197 1,649 556 201 2,274 1,863 3,027
Total (excluding assets held for sale) 1,985 2,496 30,045 31,103 10,001 9,834 42,031 43,433
1 Restated for the adoption of IFRS10. See note 1 for further details.
At 31 December 2013, the Group’s total non-UK government debt securities stood at £43.9 billion (2012: £46.5 billion), a
decrease of £2.6 billion. The significant majority of these holdings are within our participating funds where the risk to our
shareholders is governed by the nature and extent of our participation within those funds.
Our direct shareholder asset exposure to non-UK government debt securities amounts to £10.2 billion (2012: £12.1 billion).
The primary exposures, relative to total shareholder non-UK government debt exposure, are to Canadian (22%), French (19%),
Spanish (9%), German (7%) and Italian (6%) government debt securities.
The participating funds exposure to non-UK government debt amounts to £31.7 billion (2012: £31.7 billion). The primary
exposures, relative to total non-UK government debt exposures included within our participating funds, are to the government
debt securities of France (31%), Italy (27%), Germany (6%), Belgium (5%), Spain (4%) and Netherlands (4%).