Half-year Report - Part 4 of 4 - Capital

RNS Number : 3224I

Aviva PLC

08 August 2019

 

START PART 4 of 4

Page 88

Analysis of assets

In this section		Page
C   Analysis of assets
C1	Summary of total assets by fund	89
C2	Summary of valuation bases for total shareholders assets	90
C3	Analysis of financial investments by fund	91
C4	Analysis of shareholder debt securities	92
C5	Analysis of loans	93
C6	Analysis of shareholder equity securities	95
C7	Analysis of shareholder investment property	95
C8	Analysis of shareholder other financial investments	95
C9	Summary of exposure to peripheral European countries	96

Page 89

As an insurance business, the Group holds a variety of assets to match the characteristics and duration of its insurance liabilities. Appropriate and effective asset liability matching (on an economic basis) is the principal way in which Aviva manages its investments. To support this, we use a variety of hedging and other risk management strategies to mitigate any residual mismatch risk that is outside of our risk appetite.

This section provides an analysis of the Group's assets with a focus on financial investments backing liabilities held by the shareholder fund.

C1 - Summary of total assets by fund

30 June 2019	Policyholder assets £m	Participating fund assets £m	Shareholder assets £m	Total assets analysed £m	Less assets of operations classified as held for sale £m	Balance sheet total £m
Goodwill and acquired value of in-force business and intangible assets	-	-	5,471	5,471	(576)	4,895
Interests in joint ventures and associates	-	994	543	1,537	-	1,537
Property and equipment	-	206	771	977	(5)	972
Investment property	7,044	3,669	758	11,471	-	11,471
Loans	2,602	6,559	30,291	39,452	-	39,452
Financial investments
Debt securities	39,779	108,406	56,538	204,723	(416)	204,307
Equity securities	79,088	14,268	1,600	94,956	(213)	94,743
Other investments	39,203	8,559	3,326	51,088	(6,280)	44,808
Reinsurance assets	4,281	502	7,684	12,467	(53)	12,414
Deferred tax assets	-	-	171	171	-	171
Current tax assets	-	-	81	81	-	81
Receivables and other financial assets	674	2,774	6,399	9,847	(80)	9,767
Deferred acquisition costs and other assets	51	613	6,271	6,935	(198)	6,737
Prepayments and accrued income	360	1,379	1,316	3,055	(5)	3,050
Cash and cash equivalents	6,557	3,237	6,200	15,994	(698)	15,296
Assets of operations classified as held for sale	-	-	-	-	8,524	8,524
Total	179,639	151,166	127,420	458,225	-	458,225
Total %	39.2%	33.0%	27.8%	100.0%	-	100.0%
FY18 Total1	164,858	142,609	122,054	429,521	-	429,521
FY18 Total %1	38.4%	33.2%	28.4%	100.0%	-	100.0%

1   Following a review of the Group's presentation of consolidated investment funds, comparative amounts have been restated from those previously reported. The restatement has had no impact on the profit for the period or equity. See note B2 for further information.

Page 90

C2 - Summary of valuation bases for total shareholders assets

30 June 2019	Fair value £m	Amortised cost £m	Equity accounted/ tax assets1 £m	Total £m
Goodwill and acquired value of in-force business and intangible assets	-	5,471	-	5,471
Interests in joint ventures and associates	-	-	543	543
Property and equipment	252	519	-	771
Investment property	758	-	-	758
Loans	27,236	3,055	-	30,291
Financial Investments
Debt securities	56,538	-	-	56,538
Equity securities	1,600	-	-	1,600
Other investments	3,326	-	-	3,326
Reinsurance assets	10	7,674	-	7,684
Deferred tax assets	-	-	171	171
Current tax assets	-	-	81	81
Receivables and other financial assets	-	6,399	-	6,399
Deferred acquisition costs and other assets	-	6,271	-	6,271
Prepayments and accrued income	-	1,316	-	1,316
Cash and cash equivalents	6,200	-	-	6,200
Total	95,920	30,705	795	127,420
Total %	75.3%	24.1%	0.6%	100.0%
Assets of operations classified as held for sale	201	827	-	1,028
Total (excluding assets held for sale)	95,719	29,878	795	126,392
Total % (excluding assets held for sale)	75.8%	23.6%	0.6%	100.0%
FY18 Total2	91,421	29,853	780	122,054
FY18 Total %2	74.9%	24.5%	0.6%	100.0%

1   Within the Group's statement of financial position, assets are recognised for deferred tax and current tax. The valuation basis of these does not directly fall within any of the categories outlined above. As such, these assets have been reported together with equity accounted items within the analysis of the Group's assets.

2   Following a review of the Group's presentation of consolidated investment funds, comparative amounts have been restated from those previously reported. The restatement has had no impact on the profit for the period or equity. See note B2 for further information.

Page 91

C3 - Analysis of financial investments by fund

The asset allocation as at 30 June 2019 across the Group, split according to the type of the liability the assets are backing, is shown in the table below.

	Shareholder business assets				Participating fund assets
Carrying value in the statement of financial position	General insurance & health & other1 £m	Annuity and non-profit £m	Total shareholder assets £m	Policyholder (unit-linked assets) £m	UK style with-profits £m	Continental European-style £m	Total assets analysed £m	Less assets of operations classified as held for sale £m	Carrying value in the statement of financial position £m
Debt securities (note C4)
Government bonds	6,565	18,043	24,608	16,479	15,392	33,466	89,945	(20)	89,925
Corporate bonds	5,533	24,137	29,670	16,360	16,349	29,898	92,277	(396)	91,881
Other	287	1,973	2,260	6,940	700	12,601	22,501	-	22,501
	12,385	44,153	56,538	39,779	32,441	75,965	204,723	(416)	204,307
Loans (note C5)
Mortgage loans	-	20,772	20,772	-	42	-	20,814	-	20,814
Other loans	1,346	8,173	9,519	2,602	5,366	1,151	18,638	-	18,638
	1,346	28,945	30,291	2,602	5,408	1,151	39,452	-	39,452
Equity securities (note C6)	1,142	458	1,600	79,088	10,672	3,596	94,956	(213)	94,743
Investment property (note C7)	581	177	758	7,044	2,032	1,637	11,471	-	11,471
Other investments (note C8)	1,100	2,226	3,326	39,203	6,241	2,318	51,088	(6,280)	44,808
Total as at 30 June 2019	16,554	75,959	92,513	167,716	56,794	84,667	401,690	(6,909)	394,781
FY18 Total2	16,673	72,556	89,229	152,158	54,549	78,806	374,742	(7,251)	367,491

1   Of the £16.6 billion of assets 24% relates to other shareholder business assets.

2   Following a review of the Group's presentation of consolidated investment funds, comparative amounts have been restated from those previously reported. The restatement has had no impact on the profit for the period or equity. See note B2 for further information.

Page 92

C4 -Analysis of shareholder debt securities

Fair value hierarchy

To provide further information on the valuation techniques we use to measure assets carried at fair value, we have categorised the measurement basis for assets carried at fair value into a 'fair value hierarchy' described as follows, based on the lowest level input that is significant to the valuation as a whole:

· Inputs to Level 1 fair values are quoted prices (unadjusted) in active markets for identical assets

· Inputs to Level 2 fair values are inputs other than quoted prices included within Level 1 that are observable for the asset, either directly or indirectly. If the asset has a specified (contractual) term, a Level 2 input must be observable for substantially the full term of the asset

· Inputs to Level 3 fair values are unobservable inputs for the asset. Unobservable inputs may have been used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset at the measurement date. However, the fair value measurement objective remains the same, i.e. an exit price at the measurement date from the perspective of a market participant that holds the asset. Unobservable inputs reflect the assumptions the business unit considers that market participants would use in pricing the asset. Examples are investment property and commercial and equity release mortgage loans.

	Fair value hierarchy
30 June 2019	Level 1 £m	Level 2 £m	Level 3 £m	Total £m
UK Government	9,501	1,382	464	11,347
Non-UK government	3,066	7,981	2,214	13,261
Europe	2,942	3,384	1,643	7,969
North America	79	3,825	272	4,176
Asia Pacific & Other	45	772	299	1,116
Corporate bonds - Public utilities	95	4,207	1,586	5,888
Other corporate bonds	781	19,929	3,072	23,782
Other	77	1,775	408	2,260
Total	13,520	35,274	7,744	56,538
Total %	23.9%	62.4%	13.7%	100.0%
Assets of operations classified as held for sale	19	-	-	19
Total (excluding assets held for sale)	13,501	35,274	7,744	56,519
Total % (excluding assets held for sale)	23.9%	62.4%	13.7%	100.0%
FY18 Total1	13,207	35,721	6,805	55,733
FY18 Total %1	23.7%	64.1%	12.2%	100.0%

1   Following a review of the Group's presentation of consolidated investment funds, comparative amounts have been restated from those previously reported. The restatement has had no impact on the profit for the period or equity. See note B2 for further information.

External ratings

	External ratings
30 June 2019	AAA £m	AA £m	A £m	BBB £m	Less than BBB £m	Non-rated £m	Total £m
Government
UK Government	-	10,783	191	-	-	183	11,157
UK local authorities	-	135	-	-	-	55	190
Non-UK Government	5,744	4,549	1,213	917	49	789	13,261
	5,744	15,467	1,404	917	49	1,027	24,608
Corporate
Public utilities	-	108	2,025	2,642	8	1,105	5,888
Other corporate bonds	2,485	5,212	8,886	5,010	155	2,034	23,782
	2,485	5,320	10,911	7,652	163	3,139	29,670
Certificates of deposits	-	-	-	-	-	31	31
Structured
Residential Mortgage Backed Security non-agency prime	1	-	2	5	1	8	17
Commercial Mortgage Backed Security	252	41	80	56	-	16	445
Asset Backed Security	-	356	255	55	29	-	695
	253	397	337	116	30	24	1,157
Wrapped credit	-	14	466	70	5	38	593
Other	11	38	62	207	161	-	479
Total	8,493	21,236	13,180	8,962	408	4,259	56,538
Total %	15.0%	37.6%	23.3%	15.9%	0.7%	7.5%	100.0%
Assets of operations classified as held for sale	10	8	-	1	-	-	19
Total (excluding assets held for sale)	8,483	21,228	13,180	8,961	408	4,259	56,519
Total % (excluding assets held for sale)	15.0%	37.6%	23.3%	15.9%	0.7%	7.5%	100.0%
FY18 Total1	8,190	21,781	12,269	8,680	495	4,318	55,733
FY18 Total %1	14.7%	39.1%	22.0%	15.6%	0.9%	7.7%	100.0%

1   Following a review of the Group's presentation of consolidated investment funds, comparative amounts have been restated from those previously reported. The restatement has had no impact on the profit for the period or equity. See note B2 for further information.

Page 93

C5 - Analysis of loans

(a) Overview

The Group's loan portfolio of £39.5 billion (2018 restated: £36.2 billion) is principally made up of the following:

· Policy loans of £0.7 billion (2018: £0.8 billion), which are generally collateralised by a lien or charge over the underlying policy;

· Loans and advances to banks of £10.8 billion (2018 restated: £9.3 billion), which primarily relate to loans of cash collateral received in stock lending transactions and are therefore fully collateralised by other securities. Following a review of the Group's presentation of consolidated investment funds, comparative amounts have been amended from those previously reported to reclassify certain stock lending transactions from cash and cash equivalents to loans and advances to bank. The restatement has had no impact on the profit for the period or equity. See note B2 for further information;

· Mortgage loans collateralised by property assets of £20.8 billion (2018: £19.9 billion); and

· Healthcare, infrastructure and private financial initiative (PFI) loans of £6.2 billion (2018: £5.4 billion).

Loans with fixed maturities, including policy loans and loans and advances to banks, are recognised when cash is advanced to borrowers. These loans are carried at their unpaid principal balances and adjusted for amortisation of premium or discount, non-refundable loan fees and related direct costs. These amounts are deferred and amortised over the life of the loan using the effective interest rate method.

For certain mortgage loans, the Group has taken advantage of the fair value option under IAS 39 Financial Instruments: Recognition Measurement to present the mortgages, associated borrowings, other liabilities and derivative financial instruments at fair value, since they are managed together on a fair value basis. These mortgage loans are not traded in active markets and are classified within Level 3 of the fair value hierarchy as the significant valuation assumptions and inputs are not deemed to be market observable. Of the Group's total loan portfolio, 53% (2018 restated: 55%) is invested in mortgage loans. The shareholder risk relating to these loans is discussed further below.

Primary healthcare, infrastructure and PFI loans included within shareholder assets are £6.2 billion (2018: £5.4 billion). These loans are secured against the income from healthcare and education premises and as such are not considered further in this section.

(b) Analysis of shareholder mortgage loans

Mortgage loans included within shareholder assets are £20.8 billion (2018: £19.8 billion) and are almost entirely held in the UK. The narrative below focuses on explaining the risks arising as a result of these exposures.

30 June 2019	Total £m
Non-securitised mortgage loans
- Residential (Equity release)	8,047
- Commercial	7,363
- Healthcare, Infrastructure and PFI mortgage loans	2,894
	18,304
Securitised mortgage loans	2,468
Total	20,772
Assets of operations classified as held for sale	-
Total (excluding assets held for sale)	20,772
FY18 Total	19,813

Non-securitised mortgage loans

Residential

The UK non-securitised residential mortgage portfolio has a total value as at 30 June 2019 of £8.0 billion (2018: £7.3 billion). The movement in the period is due to £0.3 billion of new lending and an increase in the fair value of £0.4 billion. Additional accrued interest in the period offsets with the value of redemptions. These mortgages are all in the form of equity release, whereby homeowners mortgage their property to release cash equity. Due to the structure of equity release mortgages, whereby interest amounts due are not paid in cash but instead rolled into the amount outstanding, they predominantly have a current Loan to Value (LTV) of below 70%. The average LTV across the portfolio is 26.4% (2018: 26.8%).

Commercial

Gross exposure by loan to value and arrears of UK non-securitised commercial mortgages is shown in the table below.

30 June 2019	>120% £m	115-120% £m	110-115% £m	105-110% £m	100-105% £m	95-100% £m	90-95% £m	80-90% £m	70-80% £m	<70% £m	Total £m
Not in arrears	-	-	-	-	-	355	10	171	555	6,272	7,363
Total	-	-	-	-	-	355	10	171	555	6,272	7,363

Of the £7.4 billion (2018: £7.2 billion) of mortgage loans in the shareholder fund, £6.6 billion are used to back annuity liabilities and are stated on a fair value basis. The UK loan exposures are calculated on a discounted cash flow basis, and include a risk adjustment through the use of a Credit Risk Adjusted Value (CRAV).

For commercial mortgages, loan service collection ratios, a key indicator of mortgage portfolio performance, reduced to 2.41x (2018: 2.43x). Loan Interest Cover (LIC), which is defined as the annual net rental income (including rental deposits less ground rent) divided by the annual loan interest service, remained the same at 2.75x (2018: 2.75x). Average mortgage LTV increased by 1pp, from 55% in 2018 to 56%. There are no loans in arrears (2018: nil).

Commercial mortgages and Healthcare, Infrastructure and PFI loans are held at fair value on the asset side of the statement of financial position. The related insurance liabilities are valued using a discount rate derived from the gross yield on assets, with adjustments to allow for risk. £15.4 billion of shareholder loan assets are backing annuity liabilities and comprise of commercial mortgage loans (£6.6 billion), Healthcare, Infrastructure and PFI mortgage loans (£2.9 billion) and Primary Healthcare, Infrastructure and PFI other loans (£5.9 billion).

Page 94

C5 - Analysis of loans continued

(b) Analysis of shareholder mortgage loans continued

Non-securitised mortgage loans continued

Commercial continued

The Group carries a valuation allowance within insurance liabilities against the risk of default of commercial mortgages of £0.5 billion which equates to 38 bps at 30 June 2019 (2018: 41 bps). The total valuation allowance held on business transferred in from Aviva Annuity UK Limited in respect of corporate bonds and mortgages is £1.2 billion (2018: £1.3 billion) over the remaining term of the UK corporate bond and mortgage portfolio.

The UK portfolio remains well diversified in terms of property type, location and tenants as well as the spread of loans written over time. The risks in commercial mortgages are addressed through several layers of protection with the mortgage risk profile being primarily driven by the ability of the underlying tenant rental in income to cover loan interest and amortisation. Should any single tenant default on their rental payment, rental from other tenants backing the same loan often ensures the loan interest cover does not fall below 1.0x. Where there are multiple loans to a single borrower further protection may be achieved through cross-charging (or pooling) such that any single loan is also supported by rents received within other pool loans. Additionally, there may be support provided by the borrower of the loan itself and further loss mitigation from any general floating charge held over assets within the borrower companies.

If the LIC falls below 1.0x and the borrower defaults then Aviva retains the option of selling the security or restructuring the loans and benefiting from the protection of the collateral. A combination of these benefits and the high recovery levels afforded by property collateral (compared to corporate debt or other uncollateralised credit exposures) results in the economic exposure being significantly lower than the gross exposure reported above. We will continue to actively manage this position.

Healthcare, Infrastructure and PFI

Primary Healthcare, Infrastructure and PFI mortgage loans included within shareholder assets of £2.9 billion (2018: £2.8 billion) are secured against primary health care premises (including General Practitioner surgeries), education, social housing and emergency services related premises. For all such loans, Government support is provided through either direct funding or reimbursement of rental payments to the tenants to meet income service and provide for the debt to be reduced substantially over the term of the loan. Although the loan principal is not Government guaranteed, the nature of these businesses provides considerable comfort of an ongoing business model and low risk of default.

On a market value basis, we estimate the average LTV of these mortgages to be 71% (2018: 72%), although this is not considered to be a key risk indicator due to the Government support noted above and the social need for these premises. We therefore consider these loans to be lower risk relative to other mortgage loans.

Securitised mortgage loans

As at 30 June 2019, the Group has £2.5 billion (2018: £2.4 billion) of securitised mortgage loans held within shareholder assets. Funding for the securitised residential mortgage assets was obtained by issuing loan note securities. Of these loan notes approximately £235 million (2018: £239 million) are held by Group companies. The remainder is held by third parties external to Aviva. As any cash shortfall arising once all mortgages have been redeemed is borne by the loan note holders, the majority of the credit risk of these mortgages is borne by third parties rather than by shareholders. The average LTV across the securitised mortgage loans is 44.8% (2018: 45.2%).

Page 95

C6 - Analysis of shareholder equity securities

				30 June 2019		Restated1 31 December 2018
	Fair value hierarchy				Fair value hierarchy
	Level 1 £m	Level 2 £m	Level 3 £m	Total £m	Level 1 £m	Level 2 £m	Level 3 £m	Total £m
Public utilities	11	-	-	11	14	-	-	14
Banks, trusts and insurance companies	123	-	110	233	149	-	101	250
Industrial miscellaneous and all other	1,148	-	5	1,153	1,068	-	7	1,075
Non-redeemable preferred shares	203	-	-	203	177	-	-	177
Total	1,485	-	115	1,600	1,408	-	108	1,516
Total %	92.8%	-	7.2%	100.0%	92.9%	-	7.1%	100.0%
Assets of operations classified as held for sale	-	-	-	-	-	-	1	1
Total (excluding assets held for sale)	1,485	-	115	1,600	1,408	-	107	1,515
Total % (excluding assets held for sale)	92.8%	-	7.2%	100.0%	92.9%	-	7.1%	100.0%

1   Following a review of the Group's presentation of consolidated investment funds, comparative amounts have been restated from those previously reported. The restatement has had no impact on the profit for the period or equity. See note B2 for further information.

C7 - Analysis of shareholder investment property

				30 June 2019		31 December 2018
	Fair value hierarchy				Fair value hierarchy
	Level 1 £m	Level 2 £m	Level 3 £m	Total £m	Level 1 £m	Level 2 £m	Level 3 £m	Total £m
Leased to third parties under operating leases	-	-	758	758	-	-	730	730
Vacant investment property/held for capital appreciation	-	-	-	-	-	-	-	-
Total	-	-	758	758	-	-	730	730
Total %	-	-	100.0%	100.0%	-	-	100.0%	100.0%
Assets of operations classified as held for sale	-	-	-	-	-	-	-	-
Total (excluding assets held for sale)	-	-	758	758	-	-	730	730
Total % (excluding assets held for sale)	-	-	100.0%	100.0%	-	-	100.0%	100.0%

C8 - Analysis of shareholder other financial investments

				30 June 2019		Restated1 31 December 2018
	Fair value hierarchy				Fair value hierarchy
	Level 1 £m	Level 2 £m	Level 3 £m	Total £m	Level 1 £m	Level 2 £m	Level 3 £m	Total £m
Unit trusts and other investment vehicles	507	2	70	579	532	1	66	599
Derivative financial instruments	8	1,997	484	2,489	156	1,447	461	2,064
Deposits with credit institutions	10	-	-	10	13	-	-	13
Minority holdings in property management undertakings	-	33	215	248	-	28	211	239
Other	-	-	-	-	16	-	-	16
Total	525	2,032	769	3,326	717	1,476	738	2,931
Total %	15.8%	61.1%	23.1%	100.0%	24.5%	50.3%	25.2%	100.0%
Assets of operations classified as held for sale	2	-	-	2	16	-	-	16
Total (excluding assets held for sale)	523	2,032	769	3,324	701	1,476	738	2,915
Total % (excluding assets held for sale)	15.7%	61.2%	23.1%	100.0%	24.0%	50.7%	25.3%	100.0%

1   Following a review of the Group's presentation of consolidated investment funds, comparative amounts have been restated from those previously reported. The restatement has had no impact on the profit for the period or equity. See note B2 for further information.

Page 96

C9 - Summary of exposure to peripheral European countries

The Group's direct sovereign exposures to Greece, Ireland, Portugal, Italy and Spain (net of non-controlling interests, excluding policyholder assets) is summarised below:

		Participating		Shareholder		Total
	30 June 2019 £bn	31 December 2018 £bn	30 June 2019 £bn	31 December 2018 £bn	30 June 2019 £bn	31 December 2018 £bn
Greece	-	-	-	-	-	-
Ireland	0.9	0.8	0.3	0.2	1.2	1.0
Portugal1	0.1	0.1	-	-	0.1	0.1
Italy1	8.0	6.8	0.7	0.6	8.7	7.4
Spain1	0.7	0.6	0.1	0.1	0.8	0.7
Total Greece, Ireland, Portugal, Italy and Spain	9.7	8.3	1.1	0.9	10.8	9.2

1   Following a review of the Group's presentation of consolidated investment funds, comparative amounts have been restated from those previously reported. The restatement has had no impact on the profit for the period or equity. See note B2 for further information.

Included in our debt securities and other financial assets are exposures to peripheral European countries. All of these assets are valued on a mark-to-market basis under IAS 39, and therefore our statement of financial position and income statement already reflect any reduction in value between the date of purchase and the balance sheet date. The significant majority of these holdings are within our participating funds where the risk to our shareholders is governed by the nature and extent of our participation within those funds.

Page 97

Other information

In this section	Page
Alternative performance measures	98
Shareholder services	104

Page 98

Alternative performance measures

In order to fully explain the performance of our business, we discuss and analyse our results in terms of financial measures which include a number of alternative performance measures (APMs). APMs are non-GAAP measures which are reported to the Chief Decision Maker and are used to supplement the disclosures prepared in accordance with other regulations such as International Financial Reporting Standards (IFRS) and Solvency II. We believe these measures provide important information to enhance the understanding of our financial performance. However, APMs should be viewed as complementary to, rather than as a substitute for, the figures determined according to other regulations.

The APMs utilised by Aviva may not be the same as those used by other insurers and may change over time. These metrics are reviewed annually and updated as appropriate to ensure they remain an effective measurement that underpins the objectives for the Group.

This section includes a definition of each APM and additional information, including a reconciliation to the relevant amounts in the IFRS Financial Statements, and where appropriate, commentary on the material reconciling items.

There are no new APMs or changes to existing APMs in 2019.

Annual premium equivalent (APE)

Annual premium equivalent is a measure of sales in our life insurance businesses. APE is calculated as the sum of new regular premiums plus 10% of new single premiums written in the period. While not a key performance metric of the Group, the APE measure provides useful information on sales and new business when considered alongside other measures such as the present value of new business premiums (PVNBP) or value of new business on an adjusted Solvency II basis (VNB).

Assets under management (AUM) and assets under administration (AUA)

Assets under management (AUM) represent all assets managed or administered by or on behalf of the Group, including those assets managed by third parties. AUM include managed assets that are reported within the Group's statement of financial position and those assets belonging to external clients outside the Aviva Group which are therefore not included in the Group's statement of financial position.

Consistent with previous years, assets under administration (AUA) comprise AUM plus assets managed by third parties on platforms administered by Aviva Investors.

Both AUM and AUA are monitored as they reflect the potential earnings arising from investment returns and fee and commission income and measure the size and scale of the Group's fund management business.

A reconciliation of AUM to amounts appearing in the Group's statement of financial position is shown below.

	30 June 2019 £bn	Restated1 30 June 2018 £bn	Restated1 Full year 2018 £bn
AUM managed on behalf of Group companies
Assets included in statement of financial position2
Financial investments	351	336	327
Investment properties	11	11	11
Loans	39	36	36
Cash and cash equivalents	16	18	17
Other	2	1	1
	419	402	392
Less: third party funds included above	(18)	(18)	(17)
	401	384	375
AUM managed on behalf of third parties3
Aviva Investors	65	71	64
UK Platform4	26	23	23
Other	9	10	9
	100	104	96
Total AUM	501	488	471

1   Following a review of the Group's presentation of consolidated investment funds, comparative amounts have been restated from those previously reported. The restatement has had no impact on the profit for the period or equity. See note B2 for further information.

2   Includes assets classified as held for sale.

3   AUM managed on behalf of third parties cannot be directly reconciled to the financial statements.

4   UK Platform relates to the assets under management in the UK long-term savings business.

Cash remittances^‡#

Cash paid by our operating businesses to the Group, comprised of dividends and interest on internal loans. Dividend payments by operating businesses may be subject to insurance regulations that restrict the amount that can be paid. The business monitors total cash remittances at a Group level and in each of its markets.

Cash remittances eliminate on consolidation and hence are not directly reconcilable to the Group's IFRS consolidated statement of cash flows.

‡ denotes APMs which are key performance indicators. There have been no changes to the APMs used by the Group during the period under review.

# denotes key financial performance indicators used as a base to determine or modify remuneration.

Page 99

Combined operating ratio (COR)^‡

A financial measure of general insurance underwriting profitability calculated as total underwriting costs in our insurance entities expressed as a percentage of net earned premiums. A COR below 100% indicates profitable underwriting.

The COR does not include the impact of any changes in the discount rate used for estimating lump sum payments in settlement of bodily injury claims.

The Group reported COR is shown below.

	6 months 2019 £m	6 months 2018 £m	Full year 2018 £m
Incurred claims - GI & Health (as per B6)1	(3,334)	(3,250)	(6,400)
Adjusted for the following:
Incurred claims - Health	326	322	633
Change in discount rate assumptions	73	(34)	-
Impact of change in the discount rate used in settlement of bodily injury claims	45	-	(190)
Total Incurred claims (included in COR)	(2,890)	(2,962)	(5,957)
Total commission and expenses (included in COR)2	(1,452)	(1,390)	(2,765)
Total underwriting costs	(4,342)	(4,352)	(8,722)
Net earned premiums - GI & Health (as per B6)	4,973	4,890	9,887
Adjusted for:
Net earned premiums - Health	(441)	(424)	(857)
Net earned premiums (included in COR)	4,532	4,466	9,030
Combined operating ratio	95.9%	97.4%	96.6%

1   Corresponds to the sum of claims and benefits paid, net of recoveries from reinsurers and the change in insurance liabilities, net of reinsurance as per note B6.

2   Commission and expenses consists of fee and commission income, fee and commission expense and other operating expenses included within the general insurance & health segmental income statement (per note B6) adjusted to an earned basis and to remove the health business.

The normalised accident year combined operating ratio is derived from the COR (as defined in this section) with adjustments made to exclude the impact of prior year reserve development and weather claims variations versus expectations on claims, gross of the impact of profit sharing arrangements. These adjustments are made so that the underlying performance of the Group can be assessed excluding factors that might distort the trend in the claims ratio on a year-on-year basis.

Claims ratio

A financial measure of the performance of our general insurance business which is calculated as incurred claims expressed as a percentage of net earned premiums, which can be derived from the previous COR table.

Commission and expense ratio

A financial measure of the performance of our general insurance business which is derived from the sum of earned commissions and expenses expressed as a percentage of net earned premiums from the previous COR table.

Group adjusted operating profit^‡#

Group adjusted operating profit is a non-GAAP APM determined for the purpose of decision making and internal performance management of the Group's operating segments and should be viewed as complementary to IFRS GAAP measures. It is important to consider Group adjusted operating profit and profit before tax together to understand the performance of the business in the period.

The various items excluded from Group adjusted operating profit, but included in IFRS profit before tax, are:

Investment variances, economic assumptions changes and short-term fluctuation in return on investments

Group adjusted operating profit incorporates an expected return on investments supporting the life and non-life insurance businesses but excludes short-term investment variances to reflect the long-term nature of much of our business. The Group adjusted operating profit which is used in managing the performance of our operating segments excludes the impact of economic factors, to provide a comparable measure year-on-year.

Group adjusted operating profit for the life insurance business is based on expected investment returns on financial investments backing shareholder and policyholder funds over the reporting period, with allowance for the corresponding expected movements in liabilities. The expected rate of return is determined using consistent assumptions between operations, having regard to local economic and market forecasts of investment return and asset classification. For fixed interest securities classified as fair value through profit or loss, the expected investment returns are based on average prospective yields for the actual assets held less an adjustment for credit risks. Where such securities are classified as available for sale the expected return comprises interest or dividend payments and amortisation of the premium or discount at purchase. The expected return on equities and properties is calculated by reference to the opening 10-year swap rate in the relevant currency plus an appropriate risk margin.

Group adjusted operating profit includes the effect of variances in experience for non-economic items, such as mortality, persistency and expenses, and the effect of changes in non-economic assumptions. This would include movements in liabilities due to changes in discount rate arising from discretionary management decisions that impact on product profitability over the lifetime of products. Changes due to economic items, such as market value movement and interest rate changes, which give rise to variances between actual and expected investment returns, and the impact of changes in economic assumptions on liabilities, are disclosed separately outside Group adjusted operating profit.

Group adjusted operating profit for the non-life insurance business is based on expected investment returns on financial investments backing shareholder funds over the period. Expected investment returns are calculated for equities and properties by multiplying the opening market value of the investments, adjusted for sales and purchases during the year, by the long-term rate of return. This rate of return is the same as that applied for the long-term business expected returns. The long-term return for other investments is the actual income receivable for the period.

Changes due to market value movements and interest rate changes, which give rise to variances between actual and expected investment returns, are disclosed separately outside Group adjusted operating profit. The impact of changes in the discount rate applied to claims provisions is also disclosed outside Group adjusted operating profit.

Impairment, amortisation and profit or loss on disposal

Group adjusted operating profit also excludes impairment of goodwill, associates and joint ventures; amortisation and impairment of other intangibles; amortisation and impairment of acquired value of in-force business; and the profit or loss on disposal and remeasurement of subsidiaries, joint ventures and associates. These items principally relate to merger and acquisition activity which we view as strategic in nature, hence they are excluded from the Group adjusted operating profit APM as this is principally used to manage the performance of our operating segments when reporting to the Group chief operating decision maker.

Page 100

Other items

These items are, in the Directors' view, required to be separately disclosed by virtue of their nature or incidence to enable a full understanding of the Group's financial performance. Other items are disclosed in section A11.

The table below presents a reconciliation between our consolidated Group adjusted operating profit and profit before tax attributable to shareholders' profits.

	6 months 2019 £m	6 months 2018 £m	Full year 2018 £m
United Kingdom - Life	737	845	1,909
United Kingdom - General Insurance	172	195	415
Canada	98	(12)	47
Europe	498	508	1,011
Asia	151	118	262
Aviva Investors	62	76	151
Other Group activities	(270)	(292)	(679)
Group adjusted operating profit before tax attributable to shareholders' profit	1,448	1,438	3,116
Adjusted for the following:
Investment return variances and economic assumption changes on long-term business	372	(482)	(197)
Short-term fluctuation in return on investments on non long-term business	145	(206)	(476)
Economic assumption changes on general insurance and health business	(73)	34	1
Impairment of goodwill, associates and joint ventures and other amounts expensed	(11)	-	(13)
Amortisation and impairment of intangibles	(107)	(101)	(209)
Amortisation and impairment of acquired value of in-force business	(191)	(210)	(426)
(Loss)/profit on the disposal and re-measurement of subsidiaries, joint ventures and associates	(13)	31	102
Other	(47)	22	231
Adjusting items before tax	75	(912)	(987)
Profit before tax attributable to shareholders' profits	1,523	526	2,129

Net asset value (NAV) per share

NAV per share is calculated as the equity attributable to shareholders of Aviva plc, less preference share capital (both within the consolidated statement of financial position), divided by the actual number of shares in issue as at the balance sheet date.

NAV per share is used to monitor the value generated by the Company in terms of the equity shareholders' face value per share investment.

Net fund flows

Net fund flows is one of the measures of growth used by management and is a component of the movement in the life and platform business managed assets (excluding UK with-profits) during the period. It is the difference between the inflows (being IFRS net written premiums plus deposits received under investment contracts) and outflows (being IFRS net paid claims plus redemptions and surrenders under investment contracts). It excludes market and other movements.

Operating expenses 

The day-to-day expenses involved in running the business are classified as operating expenses. A reconciliation of operating expenses to the IFRS consolidated income statement is set out below:

	6 months 2019 £m	6 months 2018 £m	Full year 2018 £m
Other expenses (IFRS income statement)	1,552	1,706	3,843
Less: amortisation and impairment	(298)	(311)	(658)
Less: foreign exchange (losses)/gains	(9)	7	(28)
Other acquisition costs	505	414	954
Claims handling costs	170	166	336
Less: other costs	44	(53)	(421)
Operating expenses	1,964	1,929	4,026

Operating expenses exclude impairment of goodwill, associates and joint ventures; amortisation and impairment of other intangible assets; amortisation and impairment of acquired value of in-force business; and the profit or loss on disposal and remeasurement of subsidiaries, joint ventures and associates. These items relate to merger and acquisition activity which we view as strategic in nature, hence they are excluded from the operating expenses APM as this is principally used to manage the performance of our operating segments.

Other acquisition costs and claims handling costs are included as these are considered to be controllable by the operating segments and directly impact their performance.

Operating expenses excludes other costs based on management's assessment of their nature or incidence that are not representative of underlying operating expenses and would distort the year-on-year operating expenses trend. Other costs represent a reallocation based on management's assessment of ongoing maintenance of business units and full year 2018 includes movements in provisions set aside in respect of ongoing regulatory compliance as well as an increase of £175 million product governance provision relating to a historical issue over pension arrangement advised sales by Friends Provident, of which over 90% of cases relate to pre-2002.

Operating expense ratio

The operating expense ratio expresses operating expenses as a percentage of operating income.

Operating income is calculated as Group adjusted operating profit before Group debt costs and operating expenses.

Operating earnings per share (EPS)^‡#

Operating EPS is calculated based on the Group adjusted operating profit attributable to ordinary shareholders net of tax, deducting non-controlling interests, preference dividends and the direct capital instrument (DCI) and tier 1 note coupons divided by the weighted average number of ordinary shares in issue, after deducting treasury shares. Operating EPS is used by management to determine the dividend payout ratio target and hence a useful APM for the users of the financial statements. A reconciliation between Operating EPS and Basic EPS can be found in note B8.

Page 101

Present value of new business premiums (PVNBP)

PVNBP measures the additional value to shareholders of sales in the Group's life insurance businesses. PVNBP is derived from the present value of new regular premiums expected to be received over the term of the new contracts plus 100% of single premiums from new business written in the financial period and is expressed at the point of sale. The discounted value of regular premiums is calculated using the same methodology as for value of new business on an adjusted Solvency II basis (VNB). PVNBP also includes any changes to existing contracts which were not anticipated at the outset of the contract that generate additional shareholder risk and associated premium income of the nature of a new policy.

The table below presents a reconciliation of sales to IFRS net written premiums.

	6 months 2019 £m	6 months 2018 £m	Full year 2018 £m
Present value of new business premiums	21,291	21,509	40,763
Investment sales	1,986	2,708	4,799
General insurance and health net written premiums	5,246	5,189	9,968
Long-term health and collectives business	(1,678)	(2,084)	(3,840)
Total sales	26,845	27,322	51,690
Effect of capitalisation factor on regular premium long-term business1	(7,413)	(6,401)	(12,726)
JVs and associates2	(159)	(160)	(257)
Annualisation impact of regular premium long-term business3	(332)	(129)	(247)
Deposits4	(4,899)	(5,355)	(10,329)
Investment sales5	(1,986)	(2,708)	(4,799)
IFRS gross written premiums from existing long-term business6	2,839	2,351	4,776
Long-term insurance and savings business premiums ceded to reinsurers	(1,126)	(836)	(1,775)
Total IFRS net written premiums	13,769	14,084	26,333
Analysed as:
Long-term insurance and savings net written premiums	8,523	8,895	16,365
General insurance and health net written premiums	5,246	5,189	9,968
	13,769	14,084	26,333

1   Discounted value of regular premiums expected to be received over the term of the new contract, adjusted for expected levels of persistency.

2   Total long-term new business sales include our share of sales from joint ventures and associates. Under IFRS, premiums from these sales are excluded.

3   The impact of annualisation is removed in order to reconcile the non-GAAP new business sales to IFRS premiums.

4   Under IFRS, only the margin earned from non-participating investment contracts are recognised in the IFRS income statement.

5   Investment sales included in total sales represent the cash inflows received from customers investing in mutual fund type products such as unit trusts and OEICs.

6   The non-GAAP measure of sales focuses on new business written in the period under review while the IFRS income statement includes premiums received from all business, both new and existing.

Investment sales

This measure comprises retail sales mutual fund-type products such as unit trusts, individual savings accounts (ISAs) and open ended investment companies (OEICs). We earn fees on the investment and management of these funds which are recorded separately in the IFRS income statement as 'fees and commissions received' and are not included in statutory premiums.

Return on capital employed (ROCE)

ROCE indicates the efficiency with which a company uses its assets to generate profits. Usually calculated as pre-tax profit divided by capital employed (total assets minus current liabilities) and expressed as a percentage.

Return on Equity (RoE)^#

The RoE calculation is based on Group adjusted operating profit after tax attributable to ordinary shareholders expressed as a percentage of weighted average ordinary shareholders' equity (excluding non-controlling interests, preference share capital and direct capital instrument and tier 1 notes) as shown in section 8.iii.

Solvency II

Available capital resources determined under Solvency II are referred to as 'own funds'. This includes the excess of assets over liabilities in the Solvency II balance sheet, calculated on best estimate, market consistent assumptions and net of transitional measures on technical provisions (TMTP), subordinated liabilities that qualify as capital under Solvency II, and off-balance sheet own funds.

The Solvency II regime requires insurers to hold own funds in excess of the solvency capital requirement (SCR). The SCR is calculated at Group level using a risk based capital model which is calibrated to reflect the cost of mitigating the risk of insolvency to a 99.5% confidence level over a one year time horizon - equivalent to a 1 in 200 year event - against financial and non-financial shocks. As a number of subsidiaries utilise the standard formula rather than a risk based capital model to assess capital requirements, the overall Group SCR is calculated using a partial internal model, and it is shown after the impact of diversification benefit.

The reconciliation from total Group equity on an IFRS basis to Solvency II own funds is presented below.

	30 June 2019 £bn	30 June 2018 £bn	31 December 2018 £bn
Total Group equity on an IFRS basis	18.9	18.3	18.5
Elimination of goodwill and other intangible assets1	(7.9)	(9.1)	(7.8)
Liability valuation differences (net of transitional deductions)2	19.5	21.5	19.2
Inclusion of risk margin (net of transitional deductions)	(3.4)	(3.0)	(3.3)
Net deferred tax3	(1.1)	(1.3)	(1.1)
Revaluation of subordinated liabilities and other accounting differences4	(0.7)	(0.7)	(0.9)
Estimated Solvency II net assets (gross of non-controlling interests)	25.3	25.7	24.6
Difference between Solvency II net assets and own funds5	(0.9)	(2.1)	(1.0)
Estimated Solvency II own funds 6	24.4	23.6	23.6

1   Includes £1.8 billion (HY18: £1.9 billion; 2018: £1.8 billion) of goodwill and £6.1 billion (HY18: £7.2 billion; 2018 £6.0 billion) of other intangible assets comprising acquired value of in-force business of £2.7 billion (HY18: £3.1 billion; 2018: £2.9 billion), deferred acquisition costs (net of deferred income) of £3.1 billion (HY18: £2.9 billion; 2018: £2.8 billion) and other intangibles of £0.3 billion (HY18: £1.2 billion; 2018: £0.3 billion).

2   Includes the adjustments required to reflect market consistent principles under Solvency II whereby non-insurance assets and liabilities are measured using market value and liabilities arising from insurance contracts are valued on a best estimate basis using market-implied assumptions.

3   Net deferred tax includes the tax effect of all other reconciling items in the table above which are shown gross of tax.

4   Includes valuation adjustments and the difference between consolidation methodologies under Solvency II and IFRS.

5   Regulatory adjustments to bridge from Solvency II net assets to own funds include recognition of subordinated debt capital and non-controlling interests, net of adjustments to represent Solvency II own funds on the shareholder view basis.

6   The estimated Solvency II position represents the shareholder view only. See section 8i for more details.

A number of key performance metrics relating to Solvency II are utilised to measure and monitor the Group's performance and financial strength:

· Solvency II shareholder cover ratio^‡

· Value of new business on an adjusted Solvency II basis (VNB)^‡

· Operating Capital Generation (OCG) ^#

Definitions and additional details in respect of each of these metrics is published within this section. 

Page 102

Solvency II shareholder cover ratio^‡

The estimated Solvency II shareholder cover ratio is one of the indicators of the Group's balance sheet strength which is derived from own funds divided by the SCR using a 'shareholder view'. The shareholder view is considered by management to be more representative of the shareholders' risk-exposure and the Group's ability to cover the SCR with eligible own funds, and aligns with management's approach to dynamically manage its capital position. In arriving at the shareholder position, the following adjustments are typically made to the regulatory Solvency II position:

· The contribution to the Group's SCR and own funds of the most material fully ring fenced with-profits funds and staff pension schemes in surplus are excluded. These exclusions have no impact on Solvency II surplus as these funds are self-supporting on a Solvency II capital basis with any surplus capital above SCR not recognised. 

· A notional reset of the transitional measure on technical provisions (TMTP), calculated using the same method as used for formal TMTP resets. This presentation avoids step changes to the Solvency II position that arise only when the formal TMTP reset points are triggered. A formal reset of the TMTP will be required at 31 December 2019. A formal reset is required at least every two years or in the event of a material change in risk profile. The TMTP is amortised on a straight-line basis over 16 years from 1 January 2016 in line with the Solvency II rules.

· Pro forma adjustments are made if the Solvency II shareholder cover ratio does not fully reflect the effect of material transactions or capital actions that are known as at each reporting date. Such adjustments may be required in respect of planned acquisitions and disposals, group reorganisations and adjustments to the Solvency II valuation basis arising from changes to the underlying regulations or updated interpretations provided by EIOPA. These adjustments have been made in order to show a more representative view of the Group's solvency position.

A summary of the Group's Solvency II position and movement in the Group surplus during the period is shown in section 8.i.

Value of new business on an adjusted Solvency II basis (VNB)^‡

VNB measures the additional value to shareholders created through the writing of new life business in the period. It reflects Solvency II assumptions and allowance for risk and is defined as the increase in Solvency II own funds resulting from life business written in the period, including the impact of interactions between in-force and new business, adjusted as shown in section 4.i to:

i)    remove the impact of the contract boundary restrictions under Solvency II;

ii)   include businesses which are not within the scope of Solvency II own funds (e.g. UK and Asia Healthcare, Retail fund management and UK equity release); and

iii)  reflect a gross of tax and non-controlling interests basis and to include the impact of 'look through profits' in service companies (where not included in Solvency II).

Operating assumptions

The operating assumptions used are derived from an analysis of recent operating experience to give a best estimate of future experience. When these assumptions are updated, the year-to-date VNB will capture the impact of the assumption change on all business sold that year.

Economic assumptions

VNB is calculated using economic assumptions as at the point of sale, taken as those appropriate to the start of each quarter. For contracts that are repriced more frequently, weekly or monthly economic assumptions have been used. Dealing with each of the principal economic assumptions in turn:

· The risk-free interest rate curves used to calculate VNB reflect the basic risk-free interest rate curves (including the credit risk adjustment) published by EIOPA on their website.

· The volatility adjustment is intended to reflect temporary distortions in spreads on fixed interest assets based on rates prescribed by EIOPA.

· The matching adjustment (MA) is an increase applied to the risk-free rate used to value insurance liabilities where the cash flows are relatively fixed and well matched by assets intended to be held to maturity with relatively fixed cash flows (resulting in additional yield from illiquidity risk).

Matching adjustment (MA)

A MA is applied to certain obligations based on the expected allocation of assets backing new business at each year-end date. This allocation may be different to the MA applied at the portfolio level. Aviva applies a MA to certain obligations in UK Life, using methodology which is set out in the Solvency and Financial Condition Report.

The MA used for UK new business written in the first half of 2019 (where applicable) was 96 bps (HY18: 95 bps, 2018: 105 bps).

New business income

New business income represents the impact on Group adjusted operating profit of new business written in the period. New business income comprises income arising from premiums written during the period less initial reserves, expenses and commission. Expense and commission are shown net of deferred acquisition costs. While not a key performance metric of the Group, new business income provides useful information on sales and new business when considered alongside other measures such as PVNBP or VNB.

New business margin

New business margin is calculated as Value of new business on an adjusted Solvency II basis (VNB) divided by the present value of new business premiums (PVNBP), and expressed as a percentage.

Page 103

Operating capital generation (OCG)^#

OCG is the Solvency II surplus movement in the period due to operating items. The calculation of OCG is consistent with previous years.

For life business, OCG is split into the impact of new business, earnings from existing business and other OCG, where other OCG includes the impact of capital actions and non-economic assumption changes. OCG excludes economic variances and economic assumption changes. The expected investment returns assumed within earnings from existing business are consistent with the returns within Group adjusted operating profit.

An analysis of the components of OCG is presented below:

	6 months 2019 £bn	6 months 2018 £bn	Full year 2018 £bn
Adjusted Solvency II VNB (gross of tax and non-controlling interests)	0.5	0.6	1.2
Solvency II contract boundary restrictions - new business Solvency II contract boundary restrictions - increments/renewals on in-force business	(0.1)	(0.1)	(0.2)
	0.1	0.1	0.2
Differences due to change in business in scope	(0.1)	(0.1)	(0.2)
Tax & Other1	(0.1)	(0.1)	(0.3)
Solvency II Own Funds impact of new business (net of tax and non-controlling interests)	0.3	0.4	0.7
Solvency II SCR impact of new business	(0.4)	(0.5)	(0.9)
Solvency II surplus impact of new business	(0.1)	(0.1)	(0.2)
Life earnings from existing business	0.7	0.8	1.6
Life Other OCG2	0.2	0.2	1.8
Life Solvency II OCG	0.8	0.9	3.2
GI, Health, FM & Other Solvency II OCG	-	-	-
Total Solvency II OCG	0.8	0.9	3.2

1   Other includes the impact of 'look through profits' in service companies (where not included in Solvency II) and the reduction in value when moving to a net of non-controlling interests basis.

2   Other OCG includes the impact of capital actions and non-economic assumption changes.

Underlying operating capital generation (underlying OCG)

Underlying OCG is the operating capital generated from the following items:

· Contribution from new business

· Earnings from existing business

· Contribution from general insurance, fund management and other non-insurance businesses

· Group centre costs and debt interest payments

It excludes items that are typically non-recurring in nature, e.g. non-economic assumption changes and capital actions.

Spread margin

The spread margin represents the return made on the Group's annuity and other non-linked business, based on the expected investment return, less amounts credited to policyholders. While not a key performance metric of the Group, the spread margin is a useful indicator of the expected investment return arising on this business.

Underwriting margin

The underwriting margin represents the release of reserves held to cover claims, surrenders and administrative expenses less the cost of actual claims and surrenders in the period. While not a key performance metric of the Group; the underwriting margin is a useful measure of the financial performance of our life insurance business when considered alongside other financial metrics.

Unit-linked margin

The unit-linked margin represents the annual management charges on unit-linked business. While not a key performance metric of the Group, the unit-linked margin is a useful indicator of the return arising on this business.

Page 104

Shareholder services

2019 financial year calendar

Ordinary interim ex-dividend date	15 August 2019
Interim dividend record date	16 August 2019
Last day for Dividend Reinvestment Plan and currency election	5 September 2019
Interim dividend payment date1	26 September 2019
Full year results announcement2	5 March 2020

1   Please note that the ADR dividend payment date will be 2 October 2019.

2   This date is provisional and subject to change.

Dividend payment options

Shareholders are able to receive their dividends in the following ways:

· Directly into a nominated UK bank account

· Directly into a nominated Eurozone bank account

· The Global Payment Service provided by our Registrar, Computershare Investor Services PLC (Computershare). This enables shareholders living outside of the Single Euro Payment Area to elect to receive their dividends or interest payments in a choice of over 125 international currencies

· The Dividend Reinvestment Plan enables eligible shareholders to reinvest their dividends in additional Aviva ordinary shares

You can find further details regarding these payment options at www.aviva.com/dividends and register your choice by contacting Computershare using the contact details opposite, online at www.aviva.com/online or by returning a dividend mandate form. You must register for one of these payment options to receive dividend payments from Aviva.

Manage your shareholding online

www.aviva.com/shareholders:

General information for shareholders

www.aviva.com/online:

You can access Computershare online services directly using your Computershare details to:

· Change your address

· Change your payment options

· Switch to electronic communications

· View your shareholding

· View any outstanding payments

Annual General Meeting (AGM)

The voting results for the 2019 AGM, including proxy votes and votes withheld, can be viewed on our website at www.aviva.com/agm. There, you'll also find a webcast of the formal business of the meeting and information relating to past general meetings.

Shareholder contacts:

Ordinary and preference shares - Contact:

For any queries regarding your shareholding, please contact Computershare:

· By telephone: [phone]

We're open Monday to Friday, 8.30am to 5.30pm UK time,
excluding public holidays. Please call [phone] if calling from outside the UK.

· By email: [e-mail]

· In writing: Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6ZZ

American Depositary Receipts (ADRs) - Contact:

For any queries regarding Aviva ADRs, please contact Citibank Shareholder Services (Citibank):

· By telephone: [phone] (1 877-CITI-ADR),

We're open Monday to Friday, 8.30am to 5.30pm US Eastern Standard Time, excluding public holidays. Please call [phone] if you are calling from outside the US.

· By email: [e-mail]

· In writing: Citibank Shareholder Services, PO Box 43077, Providence, Rhode Island 02940-3077 USA

Group Company Secretary

Shareholders may contact the Group Company Secretary:

· By email: [e-mail]

· In writing: Kirstine Cooper, Group Company Secretary,
St Helen's, 1 Undershaft, London EC3P 3DQ

· By telephone: [phone]

END PART 4 of 4

 

END

 

 

IR EANPXELNNEFF