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Aviva plc Annual report and accounts 2014

Notes to the consolidated financial statements continued

144

5 – Segmental information continued

(a) (ii) Segmental income statement for the year ended 31 December 2013

United Kingdom &

Ireland Europe

Life

£m

France

£m

Poland

£m

Italy,

Spain and

Other

£m

Canada

£m

Asia

£m

Aviva

Investors2

£m

Other

Group

activities3

£m

Continuing

operations

£m

Discontinued

operations4

£m

Total

£m

Gross written premiums 4,971 4,664 5,634 484 3,277 2,318 678

—

9 22,035 1,589 23,624

Premiums ceded to reinsurers (743) (455) (63) (6) (79) (60) (146)

—

6 (1,546) (100) (1,646)

Internal reinsurance revenue — (9) (6) (3) (5) (8)

—

31 —

—

Premiums written net of reinsurance 4,228 4,200 5,565 475 3,193 2,250 532

—

46 20,489 1,489 21,978

Net change in provision for unearned

premiums (9) 185 (25) (2) 31 (54) 8 — — 134 — 134

Net earned premiums 4,219 4,385 5,540 473 3,224 2,196 540

—

46 20,623 1,489 22,112

Fee and commission income 424 198 190 60 115 40 14 238 — 1,279 28 1,307

4,643 4,583 5,730 533 3,339 2,236 554 238 46 21,902 1,517 23,419

Net investment income/(expense) 6,898 293 3,332 180 1,628 17 40 148 (27) 12,509 2,340 14,849

Inter-segment revenue — —

—

143 — 143 49 192

Share of (loss)/profit of joint ventures

and associates 88 — 8 3 6

—

— 120

—

120

(Loss)/profit on the disposal and

remeasurement of subsidiaries, joint

ventures and associates 87 — — (4) 13 — 19 — — 115 808 923

Segmental income1 11,716 4,876 9,070 712 4,986 2,253 628 529 19 34,789 4,714 39,503

Claims and benefits paid, net of

recoveries from reinsurers (8,960) (2,818) (4,858) (363) (3,222) (1,342) (489)

—

(41) (22,093) (2,037) (24,130)

Change in insurance liabilities, net of

reinsurance 4,102 119 (1,618) (103) (2) (42) 92

—

(55) 2,493 (312) 2,181

Change in investment contract

provisions (4,829) — (1,725) 34 (386)

—

(144) — (7,050) (31) (7,081)

Change in unallocated divisible surplus 199 — 426 16 (363)

—

— 280

—

280

Fee and commission expense (598) (1,479) (554) (60) (286) (620) (61) (23) (294) (3,975) (438) (4,413)

Other expenses (370) (301) (280) (51) (214) (136) (73) (446) (349) (2,220) (293) (2,513)

Inter-segment expenses (129) (4)

—

(7)

—

(3)

—

— (143) (49) (192)

Finance costs (224) (6) (4)

—

(4) (6)

—

(5) (360) (609) (16) (625)

Segmental expenses (10,809) (4,489) (8,613) (534) (4,477) (2,149) (529) (618) (1,099) (33,317) (3,176) (36,493)

Profit/(loss) before tax 907 387 457 178 509 104 99 (89) (1,080) 1,472 1,538 3,010

Tax attributable to policyholders' returns (190) —

—

(1)

—

— (191)

—

(191)

Profit/(loss) before tax attributable

to shareholders' profits 717 387 457 178 509 104 98 (89) (1,080) 1,281 1,538 2,819

Adjusted for non-operating items:

Reclassification of corporate costs and

unallocated interest — 7 21

—

(28) —

—

Investment return variances and

economic assumption changes on

long-term business 414 — (70) 1 (267)

—

(29)

—

— 49 (452) (403)

Short-term fluctuation in return on

investments on non-long-term

business — 74 15

—

12 122

—

113 336

—

336

Economic assumption changes on

general insurance and health business — (28)

—

(4)

—

(1) (33)

—

(33)

Impairment of goodwill, joint ventures

and associates and other amounts

expensed — —

—

— 77

—

Amortisation and impairment of

intangibles 21 1

—

17 15 1 22 14 91 9 100

(Profit)/loss on the disposal and

remeasurement of subsidiaries, joint

ventures and associates (87) —

—

4 (13)

—

(19)

—

— (115) (808) (923)

Integration and restructuring costs 59 24 25 1 8 9 7 41 189 363 3 366

Operating profit/(loss) before tax

attributable to shareholders 1,124 465 448 184 314 246 87 (26) (793) 2,049 290 2,339

1 Total reported income, excluding inter-segment revenue, includes £15,862 million from the United Kingdom (Aviva plc’s country of domicile). Income is attributed on the basis of geographical origin which does not differ materially

from revenue by geographical destination, as most risks are located in the countries where the contracts were written.

2 Aviva Investors operating profit includes £2 million profit relating to Aviva Investors Pooled Pensions business.

3 Other Group activities include Group Reinsurance.

4 Discontinued operations represent the results of the US life and related internal asset management businesses (US Life) until the date of disposal (2 October 2013). For further details see note 4.

144 | Aviva plc Annual report and accounts 2014