Operating Profit Definition

Aviva PLC
22 November 2007


22 November 2007

AVIVA SETS OUT THE CHANGES TO ITS DEFINITION OF

GROUP OPERATING PROFIT ON AN IFRS BASIS

As previously announced, Aviva plc ('Aviva') is to change its definition of group operating profit on an International 
Financial Reporting Standards ('IFRS') basis. The change is in keeping with Aviva's commitment to providing greater 
clarity and insight into the factors driving the group's results and takes account of feedback from investors. The new 
definition will take effect from 31 December 2007.

Group operating profit on an IFRS basis is one of the key performance indicators for Aviva. Under the new definition, 
the company will use 'expected rates of investment return' to report the operating profit of its long-term savings 
business to bring this business into line with the way Aviva reports its general insurance and health operating profit.

The change in definition does not affect the underlying performance, the economics of Aviva's business, the profit 
before tax attributable to shareholders or the profit for the period or year being restated.  It also does not alter 
Aviva's dividend policy and the group's commitment to a progressive dividend policy for its shareholders.  It only 
changes the allocation of profit between operating and non-operating.

The new definition will also bring the methodology used for the IFRS basis into closer alignment with that used for the 
European Embedded Value (EEV) basis, which is the industry's alternative performance measure.

The key changes to the group operating profit definition on an IFRS basis are as follows:

   • Operating profit will be based on the investment returns that the group expects to make on the financial 
     investments that back the shareholder and policyholder funds of its long-term business over the reporting period,
     rather than actual returns. The difference between the expected return and the actual return on investments and 
     corresponding impact on liabilities will be shown below the operating profit line.
   • The amortisation of acquired value of in-force business (AVIF) on both insurance and investment contracts will be 
     included within operating profit. This change matches the emergence of benefit from the acquired book with the
     associated amortisation expense.                                                                                 
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Page 2

   • The criteria for treating an item as exceptional, outside operating profit, have been refined to limit these to 
     significant items only. Therefore, the Financial Services Compensation Scheme and other levies for the periods 
     under the restatement will be included in operating profit.
   • Norwich Union Life Services will be treated as life business instead of non-insurance. This matches its treatment 
     under EEV.


Although Generally Accepted Accounting Principles (GAAP) do not require companies to disclose operating profit on an 
IFRS basis, Aviva believes that this non-GAAP disclosure is helpful to investors because it gives them greater insight
into where profits are generated in the business.

The new definition of group operating profit on an IFRS basis will be used for Aviva's full year results for the year 
ended 31 December 2007. These results will be released on 28 February 2008.

IFRS profits for the six months to 30 June 2007 and for the year to 31 December 2006, under both the original and the 
revised definitions, are set out below, along with an opinion from Ernst & Young, Aviva's auditors, on the restated
results for the year ended 31 December 2006.

                                    - ends -

Enquiries:

Analysts:
Charles Barrows, Investor relations director [phone]
Susie Yeoh, Investor relations manager [phone]

Media:
Sue Winston, head of group media relations [phone]
Vanessa Rhodes, group media relations manager [phone]
James Murgatroyd/Ed Simpkins, Finsbury [phone]

Notes to editors

   • Aviva is the world's fifth-largest insurance group based on gross worldwide premium and one of the leading 
     providers of life and pension products in Europe and is actively growing its long-term businesses in North
     America and Asia Pacific
   • Aviva's principal business activities are long-term savings, fund management and general insurance, with worldwide
     total sales of £41.5 billion and assets under management of £364 billion at 31 December 2006
   • The Aviva media centre at www.aviva.com/media includes images, company and product information and a news release 
     archive                                                                                                           

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  • Acquired value of in-force business (AVIF) represents the present value of future profits on an acquired portfolio
    of long-term business. The business can be acquired either directly or through the purchase of a subsidiary 
    company. AVIF is then amortised over the useful lifetime of the related contracts in the portfolio of acquired 
    business on a systematic basis. The rate of amortisation is chosen by considering the profile of the acquired 
    portfolio and the expected depletion in its value.

The table below sets out the effect of the changes to operating profit - IFRS basis as at 30 June 2007:

PRO FORMA RECONCILIATION OF GROUP OPERATING PROFIT TO PROFIT BEFORE TAX FOR THE SIX MONTHS ENDING 
30 JUNE 2007 - IFRS BASIS - UNAUDITED
                                                                                                                       
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                                                                                      Effect of restating   
                                                                                        the definition of     Restated
                                                                         30 June         operating profit      30 June
                                                                            2007             - IFRS basis         2007
                                                                              £m                       £m           £m
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Operating profit before tax attributable to
 shareholders' profits
Long-term business                                                         1,081                     (247)         834
Fund management                                                               76                        -           76
General insurance and health                                                 560                        -          560
Other:
 Other operations and regional costs                                         (72)                      23          (49)
Corporate centre                                                             (80)                       -          (80)
Group debt costs and other interest                                         (190)                       -         (190)
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Operating profit before adjusting items and tax
 attributable to shareholders' profits                                     1,375                     (224)       1,151 
Adjusted for the following:
 Investment return variances and economic assumption changes on
  long term business                                                           -                      107         107
 Impairment of goodwill                                                       (3)                       -          (3)
 Amortisation and impairment of acquired value of in-force business         (114)                     114           -
 Amortisation and impairment  of intangibles                                 (52)                       3         (49)
 Short-term fluctuation in return on investments backing general insurance   
  and health business                                                         37                        -          37   
 Profit on the disposal of subsidiaries and associates                        (5)                       -          (5)
 Integration and restructuring costs                                         (40)                       -         (40)
 Financial Services Compensation Scheme and other levies                       -                        -           -  
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Profit before tax attributable to shareholders' profits                    1,198                        -       1,198

Tax attributable to shareholders' profits
 Operating profit                                                           (378)                      49        (329)
 Other activities                                                             70                      (49)         21 
                                                                            ------------------------------------------
                                                                            (308)                       -        (308)
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Profit for the period                                                        890                        -         890  
========================================================================================================================

NOTES
1)EEV life operating profit definition is unchanged. Total EEV operating profit is impacted by the 
  reclassification of Financial Services Compensation Scheme and other levies. For 2007 Interim result the impact was 
  £nil.
2)The effect of restating the 2007 Interim result has impacted the operating earnings per share for the period. 
  Restated operating earnings per share are 28.1 pence (published result: 34.7 pence).                                 

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Page 4 

The table below sets out the effect of the changes to operating profit - IFRS basis as at 31 December 2006:
PRO FORMA RECONCILIATION OF GROUP OPERATING PROFIT TO PROFIT BEFORE TAX FOR THE YEAR ENDING 31 DECEMBER 2006 - IFRS 
BASIS - AUDITED

-----------------------------------------------------------------------------------------------------------------------
                                                                                      Effect of restating   
                                                                                        the definition of     Restated
                                                                         30 June         operating profit       31 Dec
                                                                            2006             - IFRS basis         2006
                                                                              £m                       £m           £m
-----------------------------------------------------------------------------------------------------------------------
Operating profit before tax attributable to shareholders' profits 
Long-term business                                                         1,896                     (562)       1,334
Fund management                                                              155                        -          155
General insurance and health                                               1,680                        6        1,686
Other:
 Other operations and regional costs                                         (80)                      55          (25)
 Corporate centre                                                           (160)                       -         (160)
 Group debt costs and other interest                                        (381)                       -         (381)
-----------------------------------------------------------------------------------------------------------------------
Operating profit before adjusting items and tax attributable 
  to shareholders' profits                                                 3,110                     (501)       2,609
Adjusted for the following:
 Investment return variances and economic assumption changes on 
  long term business                                                           -                      401          401
 Impairment of goodwill                                                      (94)                       -          (94)
 Amortisation and impairment of acquired value of in-force business         (100)                     100            -
 Amortisation and impairment of intangibles                                  (70)                       6          (64)
 Short-term fluctuation in return on investments backing general        
  insurance and health business                                              149                        -          149
 Profit on the disposal of subsidiaries and associates                       222                        -          222
 Integration and restructuring costs                                        (246)                       -         (246)
 Financial Services Compensation Scheme and other levies                       6                       (6)           - 
-----------------------------------------------------------------------------------------------------------------------
Profit before tax attributable to shareholders' profits                    2,977                        -        2,977

Tax attributable to shareholders' profits
 Operating profit                                                           (725)                      80         (645)
 Other activities                                                            137                      (80)          57
                                                                            -------------------------------------------
                                                                            (588)                       -         (588)
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Profit for the year                                                        2,389                        -        2,389 
=======================================================================================================================

NOTES
1) EEV life operating profit definition is unchanged. Total EEV operating profit is impacted by the reclassification of 
   Financial Services Compensation Scheme and other levies. For 2006 Full Year results the impact is a credit of £6 
   million.
2) The effect of restating 2006 Full Year operating profit on an IFRS basis has also impacted dividend cover and 
   operating earnings per share for the year. These are 2.26 times (published result: 2.80 times) and 70.1 pence per 
   share (published result: 86.9 pence).
3) The pro forma reconciliation for 2006 has been audited and the opinion of the auditor is set out on page 6.
4) Restated operating profit on an IFRS basis for 2005 and 2004 is £1,997 million (published result: £2,128 million) 
   and £1,455 million (published result: £1,669 million)respectively.
                                                                                                                       
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Page 5 

Geographical analysis of restated operating profit for long term business is
given below:

                                                                          HY 2007     FY 2006     FY 2005     FY 2004
                                                                               £m          £m          £m          £m

United Kingdom                                                                357         629         327         288

France                                                                        136         224         203         175
Ireland                                                                        31          49           2          13
Italy                                                                          38          81          40          13
Netherlands                                                                    94         102         123         202
Poland                                                                         53          95          86          69
Spain                                                                          57         113          78          54
Other Europe                                                                  (14)        (16)         (4)          3
Europe                                                                        395         648         528         529

North America                                                                  58          13          11          (3)

Asia                                                                            3           7         (32)         29
Australia                                                                      21          37          30          30
Asia Pacific                                                                   24          44          (2)         59
                                                                                                                     
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Total                                                                         834       1,334         864         873 
=======================================================================================================================


BASIS OF PREPARATION

Profit for the year is unchanged and has been prepared on the basis of the accounting policies set out in Aviva plc's 
2006 annual report and accounts.

Operating profit for long-term business is based on expected investment returns on financial investments backing 
shareholder and policyholder funds over the period, with consistent allowance for the corresponding expected movements
in liabilities. Operating profit includes the effect of variance in experience for non-economic items, such as 
mortality, persistency and expenses, and the effect of changes in non-economic assumptions. 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 operating profit.

The expected investment returns and corresponding expected movements in long-term business liabilities are calculated 
separately for each principal long-term business unit.

The expected return on investments for both policyholder and shareholder funds is based on opening economic assumptions 
applied to the expected funds under management over the period. Expected funds under management are equal to the 
opening value of funds under management, adjusted for sales and purchases during the period arising from expected 
operating experience. The actual investment return is affected by differences between the actual and expected funds 
under management and changes in asset mix. To the extent that these differences arise from the operating experience of 
the life business, or management decisions to change asset mix, the effect is included in the operating profit. The 
residual difference between actual and expected investment return is included in investment variances.

The movement in liabilities included in operating profit reflects both the change in liabilities due to the expected 
return on investments and the impact of experience variances and assumption changes for non-economic items. The effect 
of differences between actual and expected investment experience on liabilities and changes to economic assumptions 
used to value liabilities are taken outside operating profit. For many types of long-term business, including
unit-linked and with-profits funds, movements in asset values are offset by corresponding changes in liabilities, 
limiting the net impact on profit. For other long-term business the profit impact of economic volatility depends on the
degree of matching of assets and liabilities, and exposure to financial options and guarantees.                        
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Page 6 

INDEPENDENT AUDITOR'S REPORT TO AVIVA PLC ON THE RESTATED PRO FORMA RECONCILIATION OF GROUP OPERATING PROFIT TO PROFIT
BEFORE TAX FOR THE YEAR ENDING 31 DECEMBER 2006

To the Board of Directors of Aviva Plc
We have audited the accompanying pro forma reconciliation of Group operating profit to profit before tax for the year 
ended 31 December 2006 (the 'reconciliation') on page 4.

Our audit work has been undertaken so that we might state to the Company those matters we are required to state to them 
in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility or liability to anyone other than the Company for our audit work, for this report, or for the opinions
we have formed.

Respective Responsibilities of directors and auditors
The Company's directors are responsible for the preparation of the reconciliation in accordance with the basis of 
preparation set out on page 5.

Our responsibility is to audit the reconciliation in accordance with International Standards on Auditing 
(UK and Ireland), and report to you our opinion as to whether the reconciliation has been prepared in accordance with
the basis of preparation set out on page 5.

We read the other information accompanying the reconciliation and consider whether it is consistent with the 
reconciliation. This other information comprises pages 1 and 2, the Pro forma reconciliation and notes for the period
ended 30 June 2007, the notes to the Pro forma reconciliation for the year ended 31 December 2006 and the Geographical 
analysis of restated operating profit for long term business. Our responsibilities do not extend to any other 
information.

Basis of audit opinion
We conducted our audit in accordance with International Standards on Auditing(UK and Ireland) issued by the Auditing 
Practices Board. Those standards require that we comply with ethical requirements and plan and perform the audit to
obtain reasonable assurance whether the financial statements are free of material misstatement.

An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the 
reconciliation. It also includes an assessment of the significant estimates and judgments made by the directors in the 
preparation of the reconciliation.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit 
opinion.

Opinion
In our opinion, the reconciliation for the year ended 31 December 2006 has been prepared, in all material respects, in 
accordance with the basis of preparation set out on page 5.

Restriction on use of the Auditor's Report

The reconciliation has been prepared in accordance with the basis of preparation set out on page 5 for the purposes of 
providing information to explain the changes made to management's definition of operating profit - IFRS basis for the 
year-ending 31 December 2006. The reconciliation may not be suitable for another purpose. Our report is intended solely 
for the Company and should not be used by parties other than Aviva plc.


Ernst & Young LLP
London
21 November 2007                                                                                                       
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