Aviva 2014 Annual Report Download - page 234
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Aviva plc Annual report and accounts 2014
Notes to the consolidated financial statements continued
230
58 – Risk management continued
Long-term business
Sensitivities as at 31 December 2014
2014 Impact on profit before tax (£m)
Interest
rates
+1%
Interest
rates
-1%
Credit
spreads
+0.5%
Equity/
property
+10%
Equity/
property
-10%
Expenses
+10%
Assurance
mortality
+5%
Annuitant
mortality
-5%
Insurance participating (10) (60) (20) (175) 70 (25) (5) (45)
Insurance non-participating (155) 130 (425) 40 (40) (80) (50) (590)
Investment participating (15)
—
(10)
—
— (5)
—
—
Investment non-participating (40) 30 (10) 55 (60) (35)
—
—
Assets backing life shareholders' funds (75) 45 (60) 20 (20) —
—
—
Total (295) 145 (525) (60) (50) (145) (55) (635)
2014 Impact on shareholders' equity before tax (£m)
Interest
rates
+1%
Interest
rates
-1%
Credit
spreads
+0.5%
Equity/
property
+10%
Equity/
property
-10%
Expenses
+10%
Assurance
mortality
+5%
Annuitant
mortality
-5%
Insurance participating (10) (60) (20) (175) 70 (25) (5) (45)
Insurance non-participating (155) 130 (425) 40 (40) (80) (50) (590)
Investment participating (15)
—
(10)
—
— (5)
—
—
Investment non-participating (40) 30 (10) 55 (60) (35)
—
—
Assets backing life shareholders' funds (115) 80 (65) 20 (20) —
—
—
Total (335) 180 (530) (60) (50) (145) (55) (635)
Sensitivities as at 31 December 2013
2013 Impact on profit before tax (£m)
Interest
rates
+1%
Interest
rates
-1%
Credit
spreads
+0.5%
Equity/
property
+10%
Equity/
property
-10%
Expenses
+10%
Assurance
mortality
+5%
Annuitant
mortality
-5%
Insurance participating (45)
—
(60) (10) (20) (30) (5) (40)
Insurance non-participating (145) 140 (415) (5) 10 (80) (60) (450)
Investment participating (10) 5 (5) 5 (5) (10)
—
—
Investment non-participating (20) 20 (5) 5 (5) (15)
—
—
Assets backing life shareholders' funds (35) 55 (25) 40 (45) —
—
—
Total (255) 220 (510) 35 (65) (135) (65) (490)
2013 Impact on shareholders' equity before tax (£m)
Interest
rates
+1%
Interest
rates
-1%
Credit
spreads
+0.5%
Equity/
property
+10%
Equity/
property
-10%
Expenses
+10%
Assurance
mortality
+5%
Annuitant
mortality
-5%
Insurance participating (45)
—
(60) (10) (20) (30) (5) (40)
Insurance non-participating (145) 140 (415) (5) 10 (80) (60) (450)
Investment participating (10) 5 (5) 5 (5) (10)
—
—
Investment non-participating (20) 20 (5) 5 (5) (15)
—
—
Assets backing life shareholders' funds (75) 100 (35) 45 (45) —
—
—
Total (295) 265 (520) 40 (65) (135) (65) (490)
Changes in sensitivities between 2014 and 2013 reflect movements in market interest rates, portfolio growth, changes to asset mix
and the relative durations of assets and liabilities and asset liability management actions. The sensitivities to economic movements
relate mainly to business in the UK. In general, a fall in market interest rates has a beneficial impact on non-participating business,
due to the increase in market value of fixed interest securities and the relative durations of assets and liabilities. Similarly a rise in
interest rates has a negative impact. Mortality and expense sensitivities also relate primarily to the UK.
General insurance and health business sensitivities as at 31 December 2014
2014 Impact on profit before tax (£m)
Interest
rates
+1%
Interest
rates
-1%
Credit
spreads
+0.5%
Equity/
property
+10%
Equity/
property
-10%
Expenses
+10%
Gross loss
ratios
+5%
Gross of reinsurance (260) 250 (130) 55 (55) (105) (280)
Net of reinsurance (305) 295 (130) 55 (55) (105) (270)
2014 Impact on shareholders' equity before tax (£m)
Interest
rates
+1%
Interest
rates
-1%
Credit
spreads
+0.5%
Equity/
property
+10%
Equity/
property
-10%
Expenses
+10%
Gross loss
ratios
+5%
Gross of reinsurance (260) 250 (130) 60 (60) (20) (280)
Net of reinsurance (305) 295 (130) 60 (60) (20) (270)
230 | Aviva plc Annual report and accounts 2014