Restatement for EEV Part 3
Aviva PLC
13 January 2005
PART 3 OF 3
Statistical supplement:
First time adoption
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PAGE 36
Financial impact of adopting EEV methodology on 2003 achieved profits basis comparatives
The Group is replacing the Achieved Profits basis with the EEV basis of reporting as its main measure of performance
for life and related businesses. The basis of preparation and methodology adopted in compiling restated Group results
and balance sheet for 2003 and the six months to 30 June 2004 is given on pages 14 to 16 of this announcement. A
bridging analysis of embedded value, operating return and new business contribution on the Achieved Profits and EEV
bases is shown below.
Reconciliation of embedded value on the achieved profits basis to the EEV basis
30 June 31 December 31 December
2004 2003 2002
£m £m £m
Achieved profits basis 11,941 12,155 10,148
Impact of changes in economic assumptions 431 531 497
Impact of changes in the cost of required capital (319) (308) (274)
Time value of options and guarantees (222) (232) (204)
Impact of changes in expenses (including service and holding companies) (371) (382) (380)
Other changes (15) (13) (3)
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Impact of methodology changes (496) (404) (364)
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11,445 11,751 9,784
Impact of reclassifying NUER into life segment 28 - 1
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European embedded value basis 11,473 11,751 9,785
===================================================================================================================
Reconciliation of total shareholders funds on the achieved profits basis to the EEV basis
30 June 31 December 31 December
2004 2003 2002
£m £m £m
Shareholders' funds (under achieved profits basis) 11,054 11,165 9,668
Impact of changes in embedded value (496) (404) (364)
Impact of changes in minority interests (14) (9) -
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Shareholders' funds (under European embedded value basis) 10,544 10,752 9,304
===================================================================================================================
Reconciliation of operating return on the achieved profits basis to the EEV basis
6 months Full year
2004 2003
£m £m
Achieved profits basis 800 1,555
Impact of changes in economic assumptions 14 15
Impact of changes in the cost of required capital (6) (24)
Time value of options and guarantees (11) (12)
Impact of changes in expenses (including service and holding companies) (14) (57)
Other changes 16 19
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European embedded value basis 799 1,496
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PAGE 37
Reconciliation of new business contribution pre cost of capital on the achieved profits basis to the EEV basis
6 months Full year
2004 2003
£m £m
Achieved profits basis 324 621
Impact of changes in economic assumptions 27 35
Impact of changes in the cost of required capital - -
Time value of options and guarantees (10) (19)
Impact of changes in expenses (including service and holding companies) (4) (12)
Other changes 1 21
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European embedded value basis 338 646
====================================================================================================================
Reconciliation of new business contribution post cost of capital on the achieved profits basis to the EEV basis
6 months Full year
2004 2003
£m £m
Achieved profits basis 246 472
Impact of changes in economic assumptions 37 55
Impact of changes in the cost of required capital (20) (44)
Time value of options and guarantees (10) (19)
Impact of changes in expenses (including service and holding companies) (4) (12)
Other changes 2 22
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European embedded value basis 251 474
====================================================================================================================
The results shown under 'Impact of changes in the cost of required capital' above do not equal the total difference
in cost of capital under the Achieved Profits and EEV bases. This is because the cost of capital figures above
exclude the impact of other economic assumption changes, which are included in the line 'Impact of changes in
economic assumptions'.
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PAGE 38
Reconciliation of segmental analysis of embedded value - achieved profits basis to EEV basis
Impact of
Impact of changes in
Impact of changes in Time value expenses
Achieved changes in the cost of of options (inc service
Embedded value profits economic required and & holding Other EEV
30 June 2004 basis assumptions capital guarantees companies) changes basis
Continuing operations £m £m £m £m £m £m £m
Life and related businesses
United Kingdom 5,513 59 (132) (35) (378) 9 5,036
France 1,500 186 (29) (66) 27 2 1,620
Ireland 536 30 (6) (6) 6 (5) 555
Italy 428 6 (5) (11) - 9 427
Netherlands (including Belgium
and Luxembourg) 2,353 49 (94) (72) - (2) 2,234
Poland 347 65 (9) (4) 5 (2) 402
Spain 478 19 (6) (10) (5) (4) 472
Other Europe 204 7 (11) (10) - (1) 189
International 582 10 (27) (8) (26) 7 538
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11,941 431 (319) (222) (371) 13 11,473
====================================================================================================================
Impact of
Impact of changes in
Impact of changes in Time value expenses
Achieved changes in the cost of of options (inc service
Embedded value profits economic required and & holding Other EEV
31 December 2003 basis assumptions capital guarantees companies) changes basis
Continuing operations £m £m £m £m £m £m £m
Life and related businesses
United Kingdom 5,673 75 (121) (36) (388) (3) 5,200
France 1,449 190 (30) (71) 27 (6) 1,559
Ireland 554 35 (6) (6) 6 (6) 577
Italy 442 5 (5) (10) - 3 435
Netherlands (including Belgium
and Luxembourg) 2,398 125 (96) (76) - 3 2,354
Poland 396 71 (9) (4) 3 (3) 454
Spain 455 17 (5) (10) (6) (5) 446
Other Europe 200 5 (11) (10) - - 184
International 588 8 (25) (9) (24) 4 542
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12,155 531 (308) (232) (382) (13) 11,751
====================================================================================================================
Impact of
Impact of changes in
Impact of changes in Time value expenses
Achieved changes in the cost of of options (inc service
Embedded value profits economic required and & holding Other EEV
31 December 2002 basis assumptions capital guarantees companies) changes basis
Continuing operations £m £m £m £m £m £m £m
Life and related businesses
United Kingdom 5,012 97 (111) (26) (372) 4 4,604
France 1,220 171 (26) (58) 22 (3) 1,326
Ireland 472 27 (5) (3) 6 (4) 493
Italy 349 - (4) (11) - - 334
Netherlands (including Belgium
and Luxembourg) 1,805 96 (77) (70) - 1 1,755
Poland 353 61 (13) (3) 2 (2) 398
Spain 350 10 (3) (9) (8) (1) 339
Other Europe 177 4 (8) (10) - 1 164
International 410 31 (27) (14) (30) 2 372
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10,148 497 (274) (204) (380) (2) 9,785
====================================================================================================================
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PAGE 39
Reconciliation of segmental analysis of Group operating return - achieved profits basis to EEV basis
Impact of
Impact of changes in
Impact of changes in Time value expenses
Achieved changes in the cost of of options (inc service
Group operating return profits economic required and & holding Other EEV
6 months 2004 basis assumptions capital guarantees companies) changes(1) basis
Continuing operations £m £m £m £m £m £m £m
Life and related businesses
United Kingdom 356 - (2) (2) (20) 13 345
France 114 10 (3) (14) 5 - 112
Ireland 18 (1) (1) - 1 (1) 16
Italy 34 1 - 1 - - 36
Netherlands (including Belgium and
Luxembourg) 129 1 2 1 (3) 2 132
Poland 33 - - - 1 1 35
Spain 78 6 (2) (1) 2 (2) 81
Other Europe 7 2 - 4 - 1 14
International 31 (5) - - - 2 28
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800 14 (6) (11) (14) 16 799
====================================================================================================================
Health
United Kingdom 3 - - - - - 3
France 2 - - - - - 2
Netherlands 28 - - - - - 28
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33 - - - - - 33
====================================================================================================================
Fund Management
United Kingdom 3 - - - (3) - -
France 8 - - - (3) - 5
Netherlands - - - - - - -
Other Europe 3 - - - (1) - 2
Australia 3 - - - - - 3
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17 - - - (7) - 10
====================================================================================================================
General insurance
United Kingdom 408 - - - - - 408
France 13 - - - - - 13
Ireland 68 - - - - - 68
Netherlands 23 - - - - - 23
Other Europe 18 - - - - - 18
Canada 59 - - - - - 59
Other 24 - - - - - 24
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613 - - - - - 613
====================================================================================================================
Non-insurance operations (15) - - - 16 7 8
Corporate costs (94) - - - - - (94)
Unallocated interest charges
- external (124) - - - - - (124)
- intra-group (100) - - - - - (100)
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Group operating return before tax 1,130 14 (6) (11) (5) 23 1,145
====================================================================================================================
(1) United Kingdom includes an addition of a profit of £21 million under life and related businesses and removal of
a loss of £7 million under non-insurance operations in respect of NUER.
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PAGE 40
Reconciliation of segmental analysis of Group operating return - achieved profits basis to EEV basis
Impact of
Impact of changes in
Impact of changes in Time value expenses
Achieved changes in the cost of of options (inc service
Group operating return profits economic required and & holding Other EEV
Full year 2003 basis assumptions capital guarantees companies) changes(1) basis
Continuing operations £m £m £m £m £m £m £m
Life and related businesses
United Kingdom 659 - (8) (2) (72) 20 597
France 220 17 (6) (12) 6 3 228
Ireland 65 - - (9) 1 - 57
Italy 70 - - 2 - (2) 70
Netherlands (including Belgium and
Luxembourg) 189 17 1 1 (5) (5) 198
Poland 104 (6) (1) - 2 - 99
Spain 158 9 (2) (2) 3 (1) 165
Other Europe 9 (2) (3) 11 - 3 18
International 81 (20) (5) (1) 8 1 64
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1,555 15 (24) (12) (57) 19 1,496
====================================================================================================================
Health
United Kingdom 13 - - - - - 13
France 9 - - - - - 9
Netherlands 39 - - - - - 39
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61 - - - - - 61
====================================================================================================================
Fund Management
United Kingdom (6) - - - (5) - (11)
France 13 - - - (8) - 5
Netherlands - - - - (1) - (1)
Other Europe 3 - - - - - 3
Australia (1) - - - - - (1)
International 1 - - - - - 1
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10 - - - (14) - (4)
====================================================================================================================
General insurance
United Kingdom 676 - - - - - 676
France 35 - - - - - 35
Ireland 91 - - - - - 91
Netherlands 35 - - - - - 35
Other Europe 32 - - - - - 32
Canada 12 - - - - - 12
Other 30 - - - - - 30
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911 - - - - - 911
====================================================================================================================
Non-insurance operations (64) - - - 56 16 8
Corporate costs (160) - - - - - (160)
Unallocated interest charges
- external (210) - - - - - (210)
- intra-group (196) - - - - - (196)
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Group operating return
before tax 1,907 15 (24) (12) (15) 35 1,906
====================================================================================================================
(1) United Kingdom includes an addition of a profit of £31 million under life and related businesses and removal of
a loss of £16 million under non-insurance operations in respect of NUER.
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PAGE 41
Reconciliation of segmental analysis of new business contribution before the effect of required capital - achieved
profits basis to EEV basis
Impact of
changes in
Impact of Time value expenses
Achieved changes in of options (inc service
New business contribution profits economic and & holding Other EEV
6 months 2004 basis assumptions guarantees companies) changes(1) basis
Continuing operations £m £m £m £m £m £m
Life and related businesses
United Kingdom 126 - - (2) 3 127
France 44 6 (7) 4 (1) 46
Ireland 10 2 - 1 - 13
Italy 21 1 - - - 22
Netherlands (including Belgium and Luxembourg) 38 6 (2) (2) - 40
Poland 3 2 - - - 5
Spain 66 3 (1) - - 68
Other Europe (1) 2 - - - 1
International 17 5 - (5) (1) 16
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324 27 (10) (4) 1 338
===================================================================================================================
(1) United Kingdom includes £5 million in respect of NUER.
Impact of
changes in
Impact of Time value expenses
Achieved changes in of options (inc service
New business contribution profits economic and & holding Other EEV
Full year 2003 basis assumptions guarantees companies) changes(1) basis
Continuing operations £m £m £m £m £m £m
Life and related businesses
United Kingdom 241 - - (8) 17 250
France 70 10 (12) 4 - 72
Ireland 23 5 - 1 (1) 28
Italy 45 (1) (1) - 2 45
Netherlands (including Belgium and Luxembourg) 62 11 (4) (5) 5 69
Poland 3 2 - - - 5
Spain 134 5 (1) 1 2 141
Other Europe (3) 2 - - - (1)
International 46 1 (1) (5) (4) 37
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621 35 (19) (12) 21 646
====================================================================================================================
(1) United Kingdom includes £19 million in respect of NUER.
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PAGE 42
Statistical supplement:
Life new business information
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PAGE 43
Life new business premiums
Under the EEV principles, new business margins are required to be disclosed as a percentage of the present value of
new business premiums (PVNBP). The present value of new business premiums is derived from the single premiums and
regular premiums of the products sold during the financial period and is expressed at the point of sale.
The PVNBP calculation is equal to total single premium sales received in the year plus the discounted value of regular
premiums expected to be received over the term of the new contracts. The premium volumes and projection assumptions
used to calculate the present value of regular premiums for each product are the same as those used to calculate new
business contribution, so the components of the new business margin are on a consistent basis.
The discounted value of regular premiums is also expressed as annualised regular premiums multiplied by a Weighted
Average Capitalisation Factor (WACF). The WACF will vary over time depending on the mix of new products sold, the
average outstanding term of the new contracts and the projection assumptions. The table below sets out the factors
required to derive the present value of regular premiums by business units, and combined with single premium sales
derives the present value of future new business premiums.
6 months ended 30 June 2004
-------------------------------------------------------------------
Weighted Present Present
average value of value of new
Regular capitalisation regular Single business
premiums factor premiums premiums(1) premiums
£m £m £m £m
United Kingdom
Individual pensions 136 5.0 678 800 1,478
Group pensions 49 5.2 255 303 558
Annuities - - - 568 568
Bonds - - - 964 964
Protection 88 4.9 428 303 731
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Total life and pensions 273 5.0 1,361 2,938 4,299
France
AFER (excluding unit-linked) - - - 700 700
Other savings 16 5.5 88 462 550
Protection business 11 6.0 66 21 87
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Total life and pensions 27 5.7 154 1,183 1,337
Ireland
Life and savings 9 5.7 51 20 71
Pensions 26 5.0 131 65 196
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Total life and pensions 35 5.2 182 85 267
Italy
Life and savings 20 5.9 117 694 811
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Netherlands (including Belgium and Luxembourg
Life 41 6.7 275 221 496
Pensions 24 6.8 164 321 485
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Total life and pensions 65 6.8 439 542 981
Poland
Life and savings 7 4.6 32 20 52
Pensions 8 7.0 56 13 69
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Total life and pensions 15 5.9 88 33 121
Spain
Life and savings 27 6.1 165 626 791
Pensions 15 5.5 82 249 331
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Total life and pensions 42 5.9 247 875 1,122
Other Europe Life and pensions 41 5.4 221 167 388
International
Life and pensions 51 4.0 202 225 427
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Total 569 5.3 3,011 6,742 9,753
===================================================================================================================
(1) United Kingdom includes single premiums of £197 million in respect of NUER under Protection business.
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PAGE 44
Full year ended 31 December 2003
--------------------------------------------------------------------
Weighted Present Present
average value of value of new
Regular capitalisation regular Single business
premiums factor premiums premiums(1) premiums
£m £m £m £m
United Kingdom
Individual pensions 248 5.3 1,324 1,479 2,803
Group pensions 102 5.4 550 727 1,277
Annuities - - - 1,091 1,091
Bonds - - - 1,866 1,866
Protection 184 4.4 806 673 1,479
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Total life and pensions 534 5.0 2,680 5,836 8,516
France
AFER (excluding unit-linked) - - - 1,157 1,157
Other savings 27 5.7 154 752 906
Protection business 19 6.3 120 41 161
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Total life and pensions 46 6.0 274 1,950 2,224
Ireland
Life and savings 16 5.2 83 51 134
Pensions 46 5.6 258 137 395
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Total life and pensions 62 5.5 341 188 529
Italy
Life and savings 54 6.5 353 1,399 1,752
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Netherlands (including Belgium & Luxembourg)
Life 63 6.9 432 506 938
Pensions 76 7.1 539 344 883
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Total life and pensions 139 7.0 971 850 1,821
Poland
Life and savings 17 4.6 78 24 102
Pensions 15 7.7 116 8 124
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Total life and pensions 32 6.1 194 32 226
Spain
Life and savings 55 6.0 329 1,022 1,351
Pensions 56 5.0 282 331 613
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Total life and pensions 111 5.5 611 1,353 1,964
Other Europe
Life and pensions 73 4.2 307 280 587
International
Life and pensions 113 4.0 450 740 1,190
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Total 1,164 5.3 6,181 12,628 18,809
===================================================================================================================
(1) United Kingdom includes single premiums of £500 million in respect of NUER under Protection business.
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PAGE 45
EEV basis - new business contribution before and after the effect of required capital
New business New business
contribution before contribution after the
Annual premium Present value of new the effect of required effect of required
equivalent(1) business premiums capital capital
3 months to 31 March 2004 £m £m £m £m
United Kingdom 275 2,123 61 51
France 77 717 24 13
Ireland 22 137 7 6
Italy 49 443 12 8
Netherlands (including Belgium and
Luxembourg) 63 505 20 12
Poland 13 79 3 2
Spain 57 466 31 27
Other Europe 26 139 - -
-------------------------------------------------------------------------------------------------------------------
Continental Europe 307 2,486 97 68
International 34 186 8 5
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Total 616 4,795 166 124
===================================================================================================================
6 months to 30 June 2004 £m £m £m £m
United Kingdom 567 4,299 127 106
France 145 1,337 46 27
Ireland 44 267 13 11
Italy 89 811 22 14
Netherlands (including Belgium and
Luxembourg) 119 981 40 25
Poland 18 121 5 4
Spain 130 1,122 68 55
Other Europe 58 388 1 (2)
-------------------------------------------------------------------------------------------------------------------
Continental Europe 603 5,027 195 134
International 74 427 16 11
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Total 1,244 9,753 338 251
===================================================================================================================
9 months to 30 September 2004 £m £m £m £m
United Kingdom 882 6,774 198 162
France 209 1,937 64 36
Ireland 63 392 18 15
Italy 133 1,206 35 23
Netherlands (including Belgium and
Luxembourg) 182 1,449 57 35
Poland 27 181 6 7
Spain 182 1,539 97 79
Other Europe 81 482 1 1
------------------------------------------------------------------------------------------------------------------
Continental Europe 877 7,186 278 196
International 121 737 29 22
------------------------------------------------------------------------------------------------------------------
Total 1,880 14,697 505 380
===================================================================================================================
(1) APE has been restated to include NUER volumes
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PAGE 46
New business New business
contribution before contribution after
Annual premium Present value of new the effect of the effect of
3 months to equivalent(1) business premiums required capital required capital
31 March 2003 £m £m £m £m
United Kingdom 276 2,124 60 51
France 61 569 19 10
Ireland 21 143 8 7
Italy 61 530 13 7
Netherlands (including Belgium
and Luxembourg) 45 378 8 1
Poland 14 87 2 1
Spain 69 557 30 24
Other Europe 23 117 (1) 0
--------------------------------------------------------------------------------------------------------------------
Continental Europe 294 2,381 79 50
International 44 298 9 5
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Total 614 4,803 148 106
====================================================================================================================
6 months to
30 June 2003 £m £m £m £m
United Kingdom 556 4,271 121 102
France 120 1,107 36 19
Ireland 39 250 14 13
Italy 117 1,044 27 15
Netherlands (including Belgium
and Luxembourg) 102 853 23 1
Poland 20 126 3 2
Spain 139 1,074 72 63
Other Europe 44 212 (1) (2)
--------------------------------------------------------------------------------------------------------------------
Continental Europe 581 4,666 174 111
International 100 655 19 11
--------------------------------------------------------------------------------------------------------------------
Total 1,237 9,592 314 224
====================================================================================================================
9 months to
30 September 2003 £m £m £m £m
United Kingdom 839 6,455 186 159
France 177 1,639 52 28
Ireland 55 360 20 18
Italy 148 1,322 35 20
Netherlands (including Belgium
and Luxembourg) 146 1,206 36 8
Poland 27 172 4 2
Spain 174 1,391 97 85
Other Europe 68 349 (3) (6)
--------------------------------------------------------------------------------------------------------------------
Continental Europe 795 6,439 241 155
International 148 922 28 16
--------------------------------------------------------------------------------------------------------------------
Total 1,782 13,816 455 330
====================================================================================================================
(1) APE has been restated to include NUER volumes
--------------------------------------------------------------------------------------------------------------------
PAGE 47
New business New business
contribution before contribution after
Annual premium Present value of new the effect of the effect of
equivalent(1) business premiums required capital required capital
Full year 2003 £m £m £m £m
United Kingdom 1,118 8,516 250 212
France 241 2,224 72 39
Ireland 81 529 28 26
Italy 194 1,752 45 27
Netherlands (including Belgium
and Luxembourg) 224 1,821 69 29
Poland 35 226 5 3
Spain 246 1,964 141 122
Other Europe 101 587 (1) (6)
--------------------------------------------------------------------------------------------------------------------
Continental Europe 1,122 9,103 359 240
International 187 1,190 37 22
--------------------------------------------------------------------------------------------------------------------
Total 2,427 18,809 646 474
====================================================================================================================
(1) APE has been restated to include NUER volumes
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PAGE 48
Post tax internal rate of return on life and pensions new business
The internal rate of return (IRR) on life and pensions new business for the Group was 11.8% for the six months to 30
June 2004 (31 December 2003: 12.4%).
The internal rate of return is equivalent to the discount rate at which the present value of the post tax cash flows
expected to be earned over the life time of the business written, including allowance for the time value of options
and guarantees, is equal to the total invested capital to support the writing of the business. The capital included
in the calculation of the IRR is the initial capital required to pay acquisition costs and set up statutory reserves
in excess of premiums received, plus required capital at the same level as for the calculation of new business
contribution post cost of capital.
6 months to 30 June 2004
---------------------------------------------------------------
Internal rate Required Total invested
of return Initial capital capital capital
% £m £m £m
United Kingdom 11% 214 78 292
Continental Europe
France 11% 10 40 50
Ireland 11% 22 9 31
Italy 12% 9 15 24
Netherlands (including Belgium and Luxembourg) 10% 24 19 43
Poland 18% 4 1 5
Spain 23% 8 33 41
Other Europe 8% 10 7 17
International 10% 8 12 20
--------------------------------------------------------------------------------------------------------------------
12% 309 214 523
====================================================================================================================
Full Year to 31 December 2003
---------------------------------------------------------------
Internal rate Required Total invested
of return Initial capital capital capital
% £m £m £m
United Kingdom 12% 448 171 619
Continental Europe
France 10% 24 73 97
Ireland 15% 29 16 45
Italy 11% 22 31 53
Netherlands (including Belgium and Luxembourg) 9% 51 39 90
Poland 13% 10 2 12
Spain 25% 22 55 77
Other Europe 9% 17 14 31
International 10% 32 35 67
--------------------------------------------------------------------------------------------------------------------
12% 655 436 1,091
====================================================================================================================
The total initial capital for life and pensions new business for the 6 months to 30 June 2004 of £309 million (2003:
£655 million) shown above is expressed at the point of sale. Hence it is higher than the impact of writing that new
business on net worth of £280 million (2003: £581 million) shown on page 21, because the latter amount includes
expected profits from the point of sale to the end of the reporting period, partly offset by the expected return on
the initial capital.
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PAGE 49
Auditors' reports
Half Year 2004
Independent review report to the directors of Aviva plc on the restated financial information
We have been instructed by the Company to review the restated financial information for the six months ended 30 June
2004 set out on pages 10 to 41 and we have read the other information contained in the Analyst Pack and considered
whether it contains any apparent misstatements or material inconsistencies with the above restated financial
information. The restated financial information on pages 10 to 41 has been restated from the achieved profits basis to
the European Embedded Value basis.
This report is made solely to the company in accordance with guidance contained in Bulletin 1999/4 'Review of interim
financial information' issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the company, for our work, for this report, or for the
conclusions we have formed.
Directors' responsibilities
The interim restated financial information is the responsibility of, and has been approved by, the directors. The
directors are responsible for preparing the interim restated financial information in accordance with the Listing
Rules of the Financial Services Authority which require that the accounting policies and presentation applied to the
interim figures should be consistent with those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4 'Review of interim financial
information' issued by the Auditing Practices Board for use in the United Kingdom. A review consists principally of
making enquiries of Aviva management and applying analytical procedures to the financial information and underlying
financial data, and based thereon, assessing whether the accounting policies and presentation have been consistently
applied, unless otherwise disclosed. A review excludes audit procedures such as tests of controls and verification of
assets, liabilities and transactions. It is substantially less in scope than an audit performed in accordance with
United Kingdom Auditing Standards and therefore provides a lower level of assurance than an audit. Accordingly we do
not express an audit opinion on the restated financial information for the six months ended 30 June 2004.
Review conclusion
On the basis of our review we are not aware of any material modifications that should be made to the restated
financial information as presented for the six months ended 30 June 2004.
Ernst & Young LLP
London
12 January 2005
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PAGE 50
Year End 2003
Audit report - Independent auditors' report to the directors of Aviva plc on the restated financial information
We have audited the restated financial information on pages 10 to 41 in respect of the year ended 31 December 2003,
which has been restated from the achieved profits basis to the European Embedded Value basis and comprises a European
Embedded Value basis Summarised consolidated profit and loss account, Consolidated statement of total recognised gains
and losses, Reconciliation of movements in consolidated shareholders' funds, Summarised consolidated balance
sheet and the related notes and analyses.
The restated financial information has been prepared in accordance with the CFO Forum Principles as described on, and
using, the methodology and assumptions set out on pages 14 to 16 and 24 to 26.
This report is made solely to the Company's directors, as a body. Our audit work has been undertaken so that we might
state to the Company's directors those matters we are required to state to them in an auditors' report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the
Company and the Company's directors as a body, for our audit work in respect of this report, for this report, or for
the opinions we have formed.
Respective responsibilities of directors and auditors
The directors are responsible for preparing the restated financial information on a European Embedded Value basis.
Our responsibilities, as independent auditors, in relation to the restated financial information are established in
the United Kingdom by the Auditing Practices Board and our profession's ethical guidance. We report to you our
opinion as to whether the restated financial information has been properly prepared in accordance with the European
Embedded Value basis. We also report to you if we have not received all the information and explanations we require
for our audit of the supplementary information.
We also read the other information included in the Analyst Pack and consider the implications for our report if we
become aware of any apparent misstatements or material inconsistencies with the restated financial information. The
other information comprises the Adoption of European embedded value (EEV) principles and impact on results, Glossary,
and Statistical supplement: Life new business information.
Basis of audit opinion
In respect of the restated financial information for the year ended 31 December 2003, we conducted our audit in
accordance with Auditing Standards issued by the Auditing Practices Board. An audit includes examination, on a test
basis, of evidence relevant to the amounts and disclosures in the supplementary information. It also includes an
assessment of the significant estimates and judgements made by the directors in the preparation of the restated
financial information, and of whether the accounting policies are appropriate to the Group's circumstances,
consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary
in order to provide us with sufficient evidence to give reasonable assurance that the restated financial information
stated on the European Embedded Value basis is free from material misstatement, whether caused by fraud or other
irregularity or error. In forming our opinion, we also evaluated the overall adequacy of the presentation of the
restated financial information.
Opinion
In our opinion, the restated financial information for the year ended 31 December 2003 has been properly prepared in
accordance with the European Embedded Value basis, using the methodology and assumptions set out on pages 14 to 16
and 24 to 26.
Ernst & Young LLP
Registered Auditor
London
12 January 2005
Aviva plc
St Helen's, 1 Undershaft, London EC3P 3DQ
Telephone +44 (0)20 7283 2000
Registered in England No. 2468686
END OF PART 3 OF 3
For a PDF version of this announcement please go to www.aviva.com. A full html version will be available from
21 January 2005.
END OF ANNOUNCEMENT
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