Aviva plc: IFRS presentation

Aviva PLC
30 September 2004


News Release


Aviva


Aviva plc ('Aviva') will hold a presentation today for analysts, to explain some
of the key accounting policy changes arising from the introduction of
International Financial Reporting Standards ('IFRS'), incorporating 'Phase I' of
the development of an insurance contracts standard.


The seminar will be hosted by Andrew Moss, Group Finance Director. The
presentation will provide an overview of IFRS technical requirements, update on
the status of external developments and give an indication, based on our current
understanding, of the impact on the Group by reference to the published
consolidated 2003 UK GAAP balance sheet. It will also set out the Group's plans
for future communications on IFRS.


There remains a degree of uncertainty until the final endorsement of key
standards, particularly International Accounting Standard 39 - Financial
Instruments ('IAS 39') and International Financial Reporting Standard 4 -
Insurance Contracts ('IFRS 4'). Aviva strongly supports the full endorsement of
IAS 39 by the European Commission. Aviva is concerned that plans currently being
discussed for partial endorsement of IAS 39 undermine the objective of global
financial reporting standards and fail to give listed companies the certainty
they need for reporting in 2005.


Key points from the presentation are:


•  IFRS is a technical accounting change to the way we report and present
our consolidated Modified Statutory Solvency Basis ('MSSB') results; there is no
underlying change to the economics of Aviva's business.



•  Overall Aviva does not expect there to be a significant impact on the
Group's MSSB shareholders' funds as a result of the transition to IFRS.



•  Aviva does not anticipate that IFRS will have an impact on our
dividend policy.



•  IFRS in itself will have no significant impact on the Group's solvency
calculations which are the subject of separate regulation.



•  The directors consider that embedded value continues to be the best
measure of added value for long term insurance business and support the recent
development of a set of European Embedded Value principles which should improve
comparability and consistency.



•  Key accounting policy changes for Aviva include:



o     Following a detailed review, 86% of life policy reserves on an MSSB
basis at 31 December 2003 have been classified as insurance and participating
investment contracts and will continue to be accounted for under the Group's
existing (UK GAAP) accounting policies. The remaining 14% have been classified
as non-participating insurance contracts and therefore are required to be
accounted for under IAS 39 and IAS 18 - Revenue;

o    Substantially all investments (excluding certain originated mortgages
and loans) will be held at fair value, including those currently held at
amortised cost;

o    Elimination of the equalisation provision;

o    The incorporation of the pension scheme deficit measured under Financial
Reporting Standard 17 - Retirement Benefits, previously disclosed in the Group's
Report &Accounts;

o    Goodwill no longer amortised but subject to annual impairment test;

o    The removal of the discounting of deferred tax balances together with
deferred tax changes of the above;

o    Changes to the timing of dividend recognition.



•  Aviva will present the following IFRS information at the following
reporting announcements:

o    Within our announcement of our 2004 UK GAAP annual results we will
include a reconciliation of UK GAAP shareholders' funds at 1 January 2004 to
shareholders' funds under IFRS.

o    With our first set of published IFRS results, being our 2005 interim
results published in August 2005, we will present profit and loss, balance sheet
and cash-flow comparatives for the six months ended 30 June 2004 and the year
ending 31 December 2004. In addition we will provide appropriate summarised UK
GAAP information.


A presentation to investors and analysts will take place at 16.00 (BST) at St
Helen's, 1 Undershaft, London EC3P 3DQ. There will be a live teleconference link
to the investor and analyst meeting on [phone]. A replay facility
will be available for two weeks on [phone]. The passcode is 920021
for the whole presentation including Question & Answer session or 837929 for
Question & Answer session only. The presentation slides with more detail and
indicative financial disclosure on the impact of IFRS on the Aviva Group's
balance sheet will be available at www.aviva.com/ifrs300904 from 15.30 (BST) on
30 September.


Enquires:

Analysts/Investors:

Nic Nicandrou, group financial control director [phone]

Tim Harris, group financial reporting director [phone]

Steve Riley, investor relations director [phone]


Media:

Hayley Stimpson, director of external affairs [phone]

Sue Winston, head of group media relations [phone]



Notes to editors:

-     Aviva is the UK's largest insurance group, a leading provider of
life and pensions to Europe and has businesses in a number of other markets
around the world. Aviva is the world's fifth-largest insurer based on worldwide
gross written premiums.

-     Aviva's principal business activities are long-term savings, fund
management and general insurance, with worldwide premium income and retail
investment sales of £30 billion, and around £240 billion of assets under
management at 31 December 2003.

-     The Aviva media centre at www.aviva.com/media includes images,
company and product information and a news release archive.

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