Aviva 2013 Annual Report Download - page 275

Strategic report Governance IFRS Financial statements Other information
Aviva plc
Annual report and accounts 2013
273
Analysis of investments continued
Of the securities not rated by an external agency most are allocated an internal rating using a methodology largely consistent with
that adopted by an external rating agency, and are considered to be of investment grade credit quality; these include £2.4 billion
of debt securities held in our UK Life business, predominantly made up of private placements and other corporate bonds, which
have been internally rated as investment grade.
Total wrapped credit
In respect of the wrapped credit investments, the table below shows the credit rating of the securities as they are officially rated,
and an estimate of their rating without the guarantee. As rating agencies do not provide credit ratings for individual wrapped
credit securities without consideration of the insurance guarantee, the credit ratings disclosed in the table below are based on
internal best estimates.
2013 2012
Rating with
insurance
g
uarantee
Rating without
insurance
g
uarantee
Rating with
insurance guarantee
Rating without
insurance guarantee
Fair value
£m % of total
Fair value
£m % of total
Fair value
£m % of total
Fair value
£m % of total
Wrapped credit
AAA — 0.0% — 0.0% 1 0.2% — 0.0%
AA 18 3.8% 18 3.8% 269 48.3% 29 5.2%
A 293 61.8% 184 38.8% 94 16.8% 124 22.3%
BBB 83 17.5% 107 22.6% 104 18.7% 160 28.7%
Less than BBB 34 7.2% 33 7.0% 42 7.6% 43 7.7%
Non-rated 46 9.7% 132 27.8% 47 8.4% 186 33.4%
Not available without insurance guarantee — 0.0% — 0.0% — 0.0% 15 2.7%
474 100.0% 474 100.0% 557 100.0% 557 100.0%
RMBS agency
AAA — — — — 907 100.0% 907 100.0%
Exposures to peripheral European countries
Included in our debt securities and other financial assets are exposures to peripheral European countries. All of these assets are
valued on a mark to market basis under IAS 39, and therefore our statement of financial position and income statement already
reflect any reduction in value between the date of purchase and the balance sheet date. 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.
Net of non-controlling interests, our direct shareholder and participating fund asset exposure to the government (and local
authorities and agencies) of Italy is £4.9 billion (2012: £4.9 billion). Gross of non-controlling interests, 96% of our shareholder
asset exposure to Italy arises from investment exposure of our Italian business.
Direct sovereign exposures to Greece, Ireland, Portugal, Italy and Spain (net of non-controlling interests, excluding policyholder assets)
Participatin
g
Shareholder Total
2013
£bn
2012
£bn
2013
£bn
2012
£bn
2013
£bn
2012
£bn
Greece — — — — — —
Ireland 0.4 0.4 — — 0.4 0.4
Portugal 0.2 0.3 — — 0.2 0.3
Italy 4.5 4.5 0.4 0.4 4.9 4.9
Spain 0.9 0.9 0.5 0.5 1.4 1.4
Total Greece, Ireland, Portugal, Italy and Spain 6.0 6.1 0.9 0.9 6.9 7.0
Direct sovereign exposures to Greece, Ireland, Portugal, Italy and Spain (gross of non-controlling interests, excluding policyholder assets)
Participatin
g
Shareholder Total
2013
£bn
2012
£bn
2013
£bn
2012
£bn
2013
£bn
2012
£bn
Greece — — — — — —
Ireland 0.4 0.4 — — 0.4 0.4
Portugal 0.2 0.3 — — 0.2 0.3
Italy 8.5 8.5 0.6 0.6 9.1 9.1
Spain 1.4 1.3 0.9 0.9 2.3 2.2
Total Greece, Ireland, Portugal, Italy and Spain 10.5 10.5 1.5 1.5 12.0 12.0