Aviva Plc 6 Mths Rslts - Pt.2

Aviva PLC 1 August 2002 PART 2 OF 2 -------------------------------------------------------------------- Statistical supplement -------------------------------------------------------------------- Page 33 Segmental analysis of Group operating profit* at constant currency - achieved profit basis 6 months 2001 at 2002 6 months exchange 6 months 2002 rates 2001 Continuing operations Â£m Â£m Â£m Life achieved operating profit** United Kingdom 424 465 465 France 111 110 110 Ireland 37 37 37 Italy 30 24 24 Netherlands (including Belgium and Luxembourg) 87 93 93 Poland life and pensions 47 43 44 Spain 38 31 31 Other Europe - 28 28 International 22 17 17 ------ ------ ------ 796 848 849 ====== ====== ====== Health United Kingdom 2 4 4 France 4 4 4 Netherlands 26 24 24 ------ ------ ------ 32 32 32 ====== ====== ====== Fund management United Kingdom (8) 5 5 France 6 6 6 Netherlands 5 4 4 Other Europe 1 1 1 Australia and New Zealand (1) 5 5 International - 3 3 ------ ------ ------ 3 24 24 ====== ====== ====== General insurance United Kingdom 303 254 254 France 25 34 34 Ireland 21 17 17 Netherlands 11 5 5 Other Europe 28 13 15 Australia and New Zealand 24 27 26 Canada 39 49 50 Other 29 26 26 ------ ------ ------ 480 425 427 ====== ====== ====== Non-insurance operations** (7) 1 1 Corporate costs (96) (81) (81) Unallocated interest charges - external (104) (90) (90) - intra-group (104) (125) (125) Wealth management (21) (60) (60) ------ ------ ------ Group operating profit before tax* - continuing operations 979 974 977 ====== ====== ====== * Group operating profit before tax from continuing operations, before amortisation of goodwill and exceptional items. ** Reclassification of other life and savings business from 'Life' to 'Non-insurance operations'. Restating 2001 modified statutory life profits to account for the impact of exchange rate movements in 2002 would result in modified statutory life profits decreasing from Â£600 million to Â£599 million for the 6 months to 30 June 2001. -------------------------------------------------------------------- Page 34 Supplementary analyses (a) New business contribution - including effect of solvency margin 6 months 6 months 2002 2001 Â£m Â£m United Kingdom 157 158 Europe (excluding UK) France 17 20 Ireland 17 14 Italy 13 11 Netherlands (including Belgium and Luxembourg) 1 1 Poland - Life 4 2 - Pensions - 1 Spain 28 19 Other (7) 2 International 7 (1) ------ ------ 237 227 ====== ====== (b) Non-insurance operations - operating result 6 months 6 months Full year 2002 2001 2001 Â£m Â£m Â£m United Kingdom Hill House Hammond 5 5 4 Norwich Union Equity Release and other personal finance subsidiaries - (5) (3) Your Move (5) (10) (17) Norwich Union Life Services (6) 8 9 Other - 2 3 Europe (excluding UK) (1) 1 11 ------ ------ ------ (7) 1 7 ====== ====== ====== The operating result of the equity release business sold in the UK is included within the non-insurance results on a statutory basis. On an achieved profit methodology new business contribution was Â£7 million before tax (31 December 2001: Â£12 million) and operating profit before tax was Â£11 million (31 December 2001: Â£15 million), which is excluded from our results. (c) Corporate costs 6 months 6 months Full year 2002 2001 2001 Â£m Â£m Â£m Groupwide staff profit share and other incentive plans (39) (32) (78) Other corporate costs (57) (49) (109) ------ ------ ------ (96) (81) (187) ====== ====== ====== (d) Wealth management - operating result 6 months 6 months Full year 2002 2001 2001 Â£m Â£m Â£m United Kingdom assertahome (4) (10) (18) Other wealth management (17) (50) (81) ------ ------ ------ (21) (60) (99) ====== ====== ====== -------------------------------------------------------------------- Page 35 Supplementary analyses (continued) (e) General business - investment return information Actual investment return Longer-term investment return 6 months 6 months Full year 6 months 6 months Full year 2002 2001 2001 2002 2001 2001 Â£m Â£m Â£m Â£m Â£m Â£m United Kingdom 281 255 512 338 323 671 Europe (excluding UK) France 23 35 62 30 49 91 Ireland 25 24 49 28 27 55 Netherlands 17 16 34 18 17 33 Other 25 32 50 31 35 66 International Australia and New Zealand 26 30 55 35 34 70 Canada 47 54 105 57 66 128 Other 17 23 48 21 28 55 ------ ------ ------ ------ ------ ------ Total longer-term investment return - continuing operations 558 579 1,169 Total actual investment income 461 469 915 Realised gains 106 43 300 Unrealised (losses) (473) (345) (904) ------ ------ ------ Total actual investment return - continuing operations 94 167 311 Discontinued operations - 165 165 - 152 152 ------ ------ ------ ------ ------ ------ 94 332 476 558 731 1,321 ====== ====== ====== ====== ====== ====== Reconciliation between general business investment return information and short-term fluctuation in investment return incorporated in the summarised consolidated profit and loss account - modified statutory basis. For the six months to 30 June 2002 Short-term Actual Longer-term fluctuation investment investment in investment return return return Â£m Â£m Â£m General business 94 558 (464) Health business 4 39 (35) ------ ------ ------ 98 597 (499) ------ ------ Life business (26) ------ Total short-term fluctuation in investment return (525) ====== -------------------------------------------------------------------- Page 36 Supplementary analyses (continued) (f) General business information on continuing operations - adverse weather/catastrophe claims costs 6 months 6 months Full year 2002 2001 2001 Â£m Â£m Â£m United Kingdom* - - - Europe (excluding UK) France - 4 4 Ireland - - - International Australia and New Zealand 4 3 7 Canada 6 5 6 Other - - - ------ ------ ------ 10 12 17 ====== ====== ====== * Adverse weather/catastrophe claims costs are the costs above the 10-year average weather pattern. (g) Pension schemes FRS17 'Retirement benefits' was issued in November 2000 but will not be mandatory for the Group and the Company until the year ended 31 December 2003. Prior to this, phased transitional disclosures are introduced and the table below is an extract from these disclosures. FRS17 differs from the existing accounting standard for pension costs (SSAP24) in a number of ways, principally the choice of assumptions, and that the difference between the market value of assets and the liabilities is immediately recognised in the balance sheet under FRS17, whereas changes in assets and liabilities are recognised on a smoothed basis under SSAP24. The effect on the Group net assets and retained profit of substituting the FRS17 figures for the corresponding SSAP24 balance sheet would be as follows: Restated* 30 June 31 December 2002 2001 Net assets Net assets Â£m Â£m Total included in the Group accounts 12,140 12,403 Less: pension asset on a SSAP24 basis (143) (143) ------ ------ Total excluding pension asset/liability 11,997 12,260 Add: pension (liability)/asset on FRS17 basis (330) 233 ------ ------ Total including pension asset/liability 11,667 12,493 ====== ====== * Restated for the effect of Financial Reporting Standard 19. -------------------------------------------------------------------- Page 37 General insurance - geographical ratio analysis Combined Claims ratio Expense ratio operating ratio 6 months 6 months 6 months 6 months 6 months 6 months 2002 2001 2002 2001 2002 2001 % % % % % % United Kingdom 71.0% 71.5% 10.4% 10.6% 101% 103% France 69.9% 72.1% 12.6% 11.8% 100% 103% Ireland 81.0% 85.0% 9.5% 8.3% 100% 104% Netherlands 64.3% 64.6% 17.2% 18.4% 102% 104% Australia and New Zealand 73.2% 73.9% 13.2% 13.9% 102% 103% Canada 74.1% 74.7% 12.0% 13.3% 103% 104% ------ ------ ------ ------ ------ ------ Group - continuing operations 71.4% 71.8% 11.3% 11.9% 101% 103% ====== ====== ====== ====== ====== ====== Ratios are measured in local currency. The total Group ratios are based on average exchange rates applying to the respective periods. Definitions: Claims ratio - Incurred claims expressed as a percentage of net earned premiums. Expense ratio - Written expenses excluding commissions expressed as a percentage of net written premiums. Commission - Written commissions expressed as a percentage of net ratio written premiums. Combined - Aggregate of claims ratio, expense ratio and commission operating ratio. ratio -------------------------------------------------------------------- Page 38 General insurance - class of business analyses (a) United Kingdom - continuing operations Net written Underwriting Combined premiums result operating ratio 6 months 6 months 6 months 6 months 6 months 6 months 2002 2001 2002 2001 2002 2001 Â£m Â£m Â£m Â£m % % Personal Motor 645 750 (22) (29) 103% 104% Homeowner 495 531 22 29 95% 95% Creditor 227 288 6 14 100% 98% Other 42 49 1 - 100% 95% ------ ------ ------ ------ ------ ------ 1,409 1,618 7 14 99% 100% ------ ------ ------ ------ ------ ------ Commercial Motor 365 354 (10) (34) 103% 107% Property 341 297 (10) (19) 103% 106% Liability 132 117 (26) (33) 121% 128% Other 129 68 4 3 91% 96% ------ ------ ------ ------ ------ ------ 967 836 (42) (83) 104% 109% ------ ------ ------ ------ ------ ------ Â£m 2,376 2,454 (35) (69) 101% 103% ====== ====== ====== ====== ====== ====== During the six months to 30 June 2002, annualised rating increases for commercial motor have been 10%, with 7% for personal motor and 29% for commercial liability, while homeowners and commercial property have seen increases of 7% and 16% respectively. (b) France Net written Underwriting Combined premiums result operating ratio 6 months 6 months 6 months 6 months 6 months 6 months 2002 2001 2002 2001 2002 2001 Em Em Em Em % % Motor 196 232 (5) (31) 100% 114% Property and other 248 395 (3) 7 100% 95% ------ ------ ------ ------ ------ ------ Em 444 627 (8) (24) 100% 103% ------ ------ ------ ------ ------ ------ Â£m 275 389 (5) (15) 100% 103% ====== ====== ====== ====== ====== ====== The figures for 2001 include the results for CGU Courtage which was disposed in May 2002. In 2002, the figures exclude CGU Courtage reflecting the structure of the sale whereby the Group had no economic interest in the operating result after 31 December 2001. -------------------------------------------------------------------- Page 39 General insurance - class of business analyses (continued) (c) Netherlands Net written Underwriting Combined premiums result operating ratio 6 months 6 months 6 months 6 months 6 months 6 months 2002 2001 2002 2001 2002 2001 Em Em Em Em % % Property 163 145 9 5 91% 93% Motor 133 139 (19) (21) 114% 115% Liability 32 35 (5) (6) 118% 123% Other 61 47 3 3 92% 90% ------ ------ ------ ------ ------ ------ Em 389 366 (12) (19) 102% 104% ------ ------ ------ ------ ------ ------ Â£m 241 227 (7) (12) 102% 104% ====== ====== ====== ====== ====== ====== (d) Canada Net written Underwriting Combined premiums result operating ratio 6 months 6 months 6 months 6 months 6 months 6 months 2002 2001 2002 2001 2002 2001 C$m C$m C$m C$m % % Automobile 736 594 (22) (1) 103% 99% Property 339 282 (14) (31) 104% 113% Liability 90 70 (10) (13) 111% 118% Other 15 14 4 10 73% 66% ------ ------ ------ ------ ------ ------ C$m 1,180 960 (42) (35) 103% 104% ------ ------ ------ ------ ------ ------ Â£m 509 436 (18) (16) 103% 104% ====== ====== ====== ====== ====== ====== -------------------------------------------------------------------- Page 40 Assets under management General Long-term business Restated* business and other Group Group 30 June 30 June 30 June 31 December 2002 2002 2002 2001 Â£m Â£m Â£m Â£m Financial investments Shares, other variable yield securities and units in unit trusts 31,154 2,764 33,918 37,738 Strategic investments 2,651 1,071 3,722 3,849 Debt and fixed income securities at market value 20,620 8,302 28,922 29,641 Debt and fixed income securities at amortised cost 37,248 - 37,248 34,129 Loans secured by mortgages and other loans, net of non-recourse funding 11,727 1,208 12,935 12,527 Deposits with credit institutions 1,565 910 2,475 2,149 ------ ------ ------ ------ Total financial investments 104,965 14,255 119,220 120,033 Investments in Group undertakings and participating interests 798 304 1,102 1,077 Land and buildings 8,446 836 9,282 9,041 ------ ------ ------ ------ Total investments 114,209 15,395 129,604 130,151 Assets held to cover linked liabilities 29,932 - 29,932 28,704 Other assets included in the balance sheet 11,400 20,340 31,740 29,469 ------ ------ ------ ------ Total assets included in the balance sheet 155,541 35,735 191,276 188,324 ====== ====== ====== ====== Third party funds under management: Securitised mortgages (gross of non-recourse funding) 1,892 1,149 Unit trusts, Oeics, Peps and Isas 5,372 4,677 Segregated funds 15,106 14,849 ------ ------ Total assets under management 213,646 208,999 ====== ====== * Restated for the effect of Financial Reporting Standard 19. Strategic investments include the market value of the Group's shareholding in Societe Generale, Munchener Ruckversicherungs-Gesellschaft and The Royal Bank of Scotland Group. General insurance and other investments mix Total United Continental 30 June Kingdom Europe International 2002 Â£m Â£m Â£m Â£m Shares, other variable yield securities and units in unit trusts and strategic investments 1,996 1,194 645 3,835 Debt and fixed income securities at market value 3,789 2,442 2,071 8,302 Land and buildings 299 494 43 836 Other 1,495 496 431 2,422 ------ ------ ------ ------ Total investments 7,579 4,626 3,190 15,395 ====== ====== ====== ====== -------------------------------------------------------------------- Page 41 Group capital structure The Group maintains an efficient structure from a combination of equity shareholders' funds, preference capital, subordinated debt and borrowings, consistent with the Group's risk profile and the regulatory and market requirements of its business. The Group's capital, from all funding sources, has been allocated such that the capital employed by trading operations is greater than the capital provided by its shareholders and its subordinated debtholders. As a result, the Group is able to enhance the returns earned on its equity capital. Capital employed by segment Restated* 6 months Full year 2002 2001 Â£m Â£m Long-term savings 11,024 11,307 General insurance and health 4,613 4,780 Other business 316 324 Corporate 2,119 2,947 ------ ------ 18,072 19,358 Disposed business - CGU Courtage - 137 ------ ------ Total capital employed 18,072 19,495 ====== ====== Financed by Internal debt 2,504 3,284 External debt 2,243 2,651 Subordinated debt 1,185 1,157 Shareholders' funds and minority interests 12,140 12,403 ------ ------ 18,072 19,495 ====== ====== * Restated for the effect of Financial Reporting Standard 19. At 30 June 2002 capital employed in our operations was lower at Â£18.1 billion (31 December 2001: Â£19.5 billion, restated), primarily reflecting Â£293 million reduction in shareholders' funds and the use of Â£1,188 million of assets employed in the business to reduce internal and external debt. In addition to its external funding sources, the Group has a number of internal debt arrangements in place. These have allowed the assets supporting technical liabilities to be invested into the pool of central capital for use across the Group. They have also enabled the shareholders to deploy cash from some parts of the business to others in order to fund growth. Although intra-group loans in nature, they are counted as part of the capital base for the purpose of capital management. All internal loans have been negotiated at market rates and are appropriately serviced. The ratio of the Group's external debt to shareholders' funds was 17% (2001 restated: 20%). Interest cover, which measures the extent to which external interest costs are covered by achieved operating profit, was 14 times (2001: 12 times). Standard and Poor's have recently reaffirmed the financial strength rating of AA (very strong security) in respect of the Group's principal operations. -------------------------------------------------------------------- Page 42 Group capital structure (continued) Deployment of equity shareholders' funds 6 months 2002 Fixed Other income Other net Equities securities investments assets Total Â£m Â£m Â£m Â£m Â£m Assets Long-term savings 891 2,372 1,135 786 5,184 General insurance, health, corporate and other business 3,835 2,113 745 (780) 5,913 ------ ------ ------ ------ ------ 4,726 4,485 1,880 6 11,097 Goodwill 1,372 Additional value of in-force long-term business 5,603 ------ Assets backing continuing operations 18,072 External debt (2,243) Internal debt (2,504) Subordinated debt (1,185) ------- 12,140 Minority interests (681) Preference capital (200) ------ Total continuing operations 11,259 Disposed business - CGU Courtage - ------ Equity shareholders' funds 11,259 ====== Deployment of equity shareholders' funds (continued) Restated* Full year 2001 Total Â£m Assets Long-term savings 5,115 General insurance, health, corporate and other business 6,910 ------ 12,025 Goodwill 1,385 Additional value of in-force long-term business 5,948 ------ Assets backing continuing operations 19,358 External debt (2,651) Internal debt (3,284) Subordinated debt (1,157) ------ 12,266 Minority interests (651) Preference capital (200) ------ Total continuing operations 11,415 Disposed business - CGU Courtage 137 ------ Equity shareholders' funds 11,552 ====== * Restated for the effect of Financial Reporting Standard 19. Return on capital employed Full year 6 months 2002 2001 Normalised Opening Return after-tax equity Return on on return capital capital capital restated* (annualised) restated* Â£m Â£m % % Long-term savings 555 11,307 10.1% 10.0% General insurance and health 295 4,780 12.7% 11.9% Other business (18) 324 (11.4%) (27.0%) Corporate (13) 2,947 (0.9%) (3.2%) ------ ------ ------ ------ 819 19,358 8.6% 8.8% Borrowings (145) (7,092) 4.1% 4.4% ------ ------ ------ ------ 674 12,266 11.3% 11.2% Minority interests (48) (651) 15.3% 15.9% Preference capital (9) (200) 8.5% 8.5% ------ ------ ------ ------ 617 11,415 11.1% 11.0% Disposed business - CGU Courtage - 137 - 15.3% Discontinued operations - - - - ------ ------ ------ ------ Equity shareholders' funds 617 11,552 11.0% 9.7% ====== ====== ====== ====== * Restated for the effect of Financial Reporting Standard 19. The return on capital is calculated as the after-tax return on opening equity capital, based on operating profit from continuing operations, including life achieved profit, before amortisation of goodwill and exceptional items. --------------------------------------------------------------------- Page 43 Group capital structure (continued) Capital management In managing its capital, the Group aims to: i. match the profile of its assets and liabilities, taking account of the risks inherent in each business. In the case of the Group's life operations, which have long-term liabilities, the majority of capital is held in fixed income securities. A significant proportion of the capital supporting the Group's general insurance and health operations is held in equities, reflecting the relatively low risk profile of these businesses; ii. maintain financial strength to support new business growth and satisfy the requirements of its policyholders, regulators and rating agencies; iii. retain financial flexibility by maintaining strong liquidity, including significant unutilised committed credit lines, and access to a range of capital markets; and iv. allocate capital efficiently to support growth and repatriate excess capital where appropriate. An important aspect of the Group's overall capital management process is the setting of target risk-adjusted rates of return for individual business units, which are aligned to performance objectives and ensure that the Group is focused on the creation of value for shareholders. Risk based capital The Group uses risk based capital as one of several measures to assess its capital requirements for its general insurance businesses. Financial modelling techniques enhance our practice of active capital management, ensuring sufficient capital is available to protect against unforeseen events and adverse scenarios and risk management. Reinsurance is actively used to limit risk and capital requirements in the inherently volatile general insurance business. Through reinsurance, exposure to loss is limited to Â£100 million for any extra aggregation of events. Our aim continues to be the optimal usage of capital through appropriate allocation to our businesses. Our risk based capital model is part of a longer term development programme for more complex risk monitoring techniques in part to meet future industry standards. Within a few years we expect to agree capital requirements with the regulator on the basis of our risk based capital models. This represents the level of capital necessary to enable the general insurance business to meet the statutory minimum solvency margin over a 5 year period with 99% probability of not requiring further capital. Our current risk based capital methodology for general insurance business assesses insurance, market and credit risks and makes prudent allowance for diversification benefits. We consider risks over a 5 year period allowing for planned levels of business growth. Following the disposal of our US, London Market and Courtage businesses, our risk based capital requirement may be expressed as 36% of net written premiums. Capital employed in our general insurance business after goodwill and adding back the claims equalisation reserve was Â£4.6 billion at 30 June 2002 and required capital on a risk basis was Â£3.3 billion, giving a surplus capital position of Â£1.3 billion. Sensitivity analysis The sensitivity of the Group's shareholders' funds at 30 June 2002 to a 10% fall in the global equity markets or a rise of 1% in global interest rates is as follows: 31 December 30 June Equities Interest rates 2001 2002 down 10% up 1% Â£bn Â£bn Â£bn Â£bn Additional value of 5.9 in-force* 5.6 5.3 5.8 13.6 Other net assets 12.4 12.0 12.0 (7.1) Borrowings** (5.9) (5.9) (5.9) ------ ------ ------ ------ 12.4 Shareholders' funds 12.1 11.4 11.9 ====== ====== ====== ====== * Assumes achieved profit assumptions adjusted to reflect revised bond yields ** Comprising internal, external and subordinated debt Post-tax internal rate of return on life and pensions new business The total internal rate of return on life and pensions new business for the Group was 16% (31 December 2001: 16%). The return is the discount rate at which the present value of the post-tax cash flows expected to be earned over the lifetime of the business written is equal to the initial capital required to support the writing of the business. The capital includes the statutory minimum solvency margin and amounts to Â£400 million (31 December 2001: Â£800 million). This includes Â£100 million (31 December 2001: Â£200 million) of solvency requirements. -------------------------------------------------------------------- Page 44 Group capital structure (continued) Shareholders' funds, including minority interests Normalised return Closing shareholders' funds (note 1) MSSB net Internally assets generated Embedded Before After (note 2) AVIF value tax tax 6 months 2002 Note Â£m Â£m Â£m Â£m Â£m Life assurance United Kingdom 2,372 3,159 5,531 424 297 France 947 361 1,308 111 71 Ireland 279 198 477 37 32 Italy 236 65 301 30 18 Netherlands (including Belgium and Luxembourg) 1,108 816 1,924 87 65 Poland 125 257 382 47 34 Spain 232 101 333 38 25 Other Europe 101 17 118 - - International 372 41 413 22 13 ------ ------ ------ ------ ------ 5,772 5,015 10,787 796 555 Participating interests 3 237 - 237 - - ------ ------ ------ ------ ------ 6,009 5,015 11,024 796 555 ------ ------ ------ ------ ------ General insurance and health 4 United Kingdom 5 2,032 2,032 227 155 France 496 496 29 18 Ireland 206 206 21 17 Netherlands 418 418 37 27 Other Europe 191 191 28 19 Australia and New Zealand 370 370 24 16 Canada 585 585 39 24 Other 315 315 29 19 ------ ------ ------ ------ 4,613 4,613 434 295 ------ ------ ------ ------ Other business 316 316 (25) (18) Corporate 5,6 2,119 2,119 (18) (13) External debt 7 (2,243) (2,243) (68) (48) Internal debt (2,504) (2,504) (104) (72) Subordinated debt (1,185) (1,185) (36) (25) Shareholders' funds, including minority interests 7,125 5,015 12,140 979 674 ====== ====== ====== ====== ====== Comprising Equities 4,726 4,726 Debt and fixed income securities 4,485 4,485 Property 800 800 Deposits and other investments 1,080 1,080 Intangible assets 8 1,960 5,015 6,975 Other net assets 6 6 Borrowings (5,932) (5,932) ------ ------ ------ 7,125 5,015 12,140 ====== ====== ====== -------------------------------------------------------------------- Page 45 Group capital structure (continued) Shareholders' funds, including minority interests (continued) Notes 1. The normalised return is based upon operating profit from continuing operations, including life achieved profit, before amortisation of goodwill and exceptional items. 2. Includes acquired additional value of in-force long-term business of Â£588 million. 3. The net assets represent the Â£237 million of goodwill on the RBSG joint venture. 4. The capital employed in the Group's general insurance operations includes Â£314 million of goodwill. 5. Assets available to shareholders are held by the Group's UK general insurance operations and are available to finance future growth of the Group. Accordingly, for the purposes of preparing this note, these assets together with their associated pre-tax investment return of Â£78 million (post-tax Â£55 million) have been reclassified as Corporate. 6. The return before tax of Â£(18) million comprises investment return Â£78 million and corporate costs Â£(96) million. 7. The external borrowings reported in the summary consolidated balance sheet of Â£2,254 million comprises Â£11 million of general insurance borrowings (reported within the general insurance and health net assets) and Â£2,243 million of borrowings by holding companies of the Group not allocated to operating companies (shown as external debt). 8. Comprises acquired additional value of in-force long-term business (Â£588 million), goodwill arising on acquisitions (Â£1,135 million) and goodwill on the RBSG joint venture (Â£237 million). -------------------------------------------------------------------- Page 46 Group capital structure (continued) Shareholders' funds, including minority interests (continued) Restated closing shareholders' funds* MSSB net Internally assets generated Embedded (note 1) AVIF value 31 December 2001 Note Â£m Â£m Â£m Life assurance United Kingdom 2,586 3,444 6,030 France 889 354 1,243 Ireland 256 211 467 Italy 218 60 278 Netherlands (including Belgium and Luxembourg) 983 883 1,866 Poland 117 254 371 Spain 179 130 309 Other Europe 101 6 107 International 385 7 392 ------ ------ ------ 5,714 5,349 11,063 Participating interests 2 244 - 244 ------ ------ ------ 5,958 5,349 11,307 ------ ------ ------ General insurance and health 3 United Kingdom 4 2,043 2,043 France 482 482 Ireland 200 200 Netherlands 430 430 Other Europe 276 276 Australia and New Zealand 357 357 Canada 590 590 Other 402 402 ------ ------ ------ 4,780 - 4,780 ------ ------ ------ Other business 324 324 Corporate 4,5 2,947 2,947 External debt 6 (2,651) (2,651) Internal debt (3,284) (3,284) Subordinated debt (1,157) (1,157) ------ ------ ------ (3,821) - (3,821) ------ ------ ------ 6,917 5,349 12,266 Disposed business - CGU Courtage 137 - 137 ------ ------ ------ Shareholders' funds, including minority interests 7,054 5,349 12,403 ====== ====== ====== Comprising Equities 4,947 4,947 Debt and fixed income securities 5,063 5,063 Property 825 825 Deposits and other investments 1,417 1,417 Intangible assets 7 1,984 5,349 7,333 Other net assets (90) (90) Borrowings (7,092) (7,092) ------ ------ ------ 7,054 5,349 12,403 ====== ====== ====== * Restated for the effect of Financial Reporting Standard 19. -------------------------------------------------------------------- Page 47 Group capital structure (continued) Shareholders' funds, including minority interests (continued) Notes 1. Includes acquired additional value of in-force long-term business of Â£599 million. 2. The net assets represent the Â£244 million of goodwill on the RBSG joint venture. 3. The capital employed in the Group's general insurance operations includes Â£316 million of goodwill. 4. Assets available to shareholders are held by the Group's UK general insurance operations and are available to finance future growth of the Group. Accordingly, for the purposes of preparing this note, these assets together with their associated pre-tax investment return of Â£107 million (post-tax Â£72 million) have been reclassified as Corporate. 5. The return before tax of Â£80 million comprises investment return (Â£107 million) and corporate costs (Â£187 million). 6. The external borrowings reported in the summary consolidated balance sheet of Â£2,662 million comprises Â£11 million of general insurance borrowings (reported within the general insurance and health net assets) and Â£2,651 million of borrowings by holding companies of the Group not allocated to operating companies (shown as external debt). 7. Comprises acquired additional value of in-force long-term business (Â£599 million), goodwill arising on acquisitions (Â£1,141 million) and goodwill on the RBSG joint venture (Â£244 million). -------------------------------------------------------------------- Page 48 Shareholder information Financial calendar 2002/2003 Ex-dividend date for 2002 interim dividend 25 September 2002 Record date for 2002 interim dividend 27 September 2002 Payment of interim 2002 dividend 15 November 2002 Announcement of long-term savings new business for 9 months to 30 September 24 October 2002 Preliminary announcement of 2002 results 26 February 2003 Dividend reinvestment plan Shareholders are offered the opportunity to participate in the Company's Dividend Reinvestment Plan (the 'Plan') which enables dividends to be reinvested in the Company's shares at reduced dealing costs. Shareholders who have previously elected to join the Plan need take no further action as their cash dividend will automatically be used to purchase Aviva's shares, on or around the dividend payment date, in accordance with the terms of the Plan. Shareholders who have not already joined the Plan and wish to do so should contact the Company's Registrar, at the address below, in order to obtain full details and a mandate form. Completed mandate forms must be returned to the Registrar by no later than 25 October 2002 in order to participate in the Plan for the 2002 interim dividend. The Plan is available to ordinary shareholders, members of the Aviva Share Account and members of the Group's employee profit sharing schemes. Interim report In an effort to minimise waste and eliminate unnecessary cost, the Company has decided not to mail interim reports automatically to all shareholders each year. However, shareholders who would like a copy of the report, now and in future years, should contact the Company's Registrar at the address below. Shareholder enquiries Shareholders who have any administrative enquiries about their shareholding in Aviva plc should contact the Company's Registrar: Lloyds TSB Registrars The Causeway Worthing West Sussex BN99 6DA 0870 600 3952 Internet addresses There are various internet sites within the Group, most of which inter-link to enable quick reference direct to specific sites. Principal UK internet sites are as follows: Aviva www.aviva.com UK long-term savings and general insurance www.norwichunion.co.uk Fund management www.morleyfm.com Buying a home www.your-move.co.uk and www.assertahome.com Aviva plc Registered in England no: 2468686 Registered Office: St Helen's, 1 Undershaft, London EC3P 3DQ This information is provided by RNS The company news service from the London Stock Exchange

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