It takes
Aviva
Aviva plc
Annual Report and
Accounts 2024
Making it click for
our customers
This report forms part of our
2024 reporting suite.
Make the most out of life, plan for the future.
Have the confidence that if things go wrong,
we’ll be there to help put them right.
It takes Aviva.
How to navigate this report
Throughout the Strategic report we use
the following icons for our four strategic
pillars: Growth, Customer, Efficiency and
Sustainability:
Throughout the Strategic report
we use a colour coding system for
the three areas of our business:
Insurance, Wealth and Retirement:
Growth
Accelerating growth in capital-light
Wealth and Insurance - disciplined
in Retirement
Customer
Growing our customer base, serving
more needs and transforming
experience
Efficiency
Driving operating leverage with
technology and artificial intelligence
at the core
Sustainability
Committed to climate and social
action, and being a sustainable
business
Conserve paper
Help us reduce our environmental impact
by viewing shareholder documents, including
the Annual Report and Accounts, on the
Aviva website.
You may change your election at any
time by notifying Aviva’s Registrar,
Computershare.
https://www.aviva.com/investors/
investor-relations-contacts/
Results Presentation
2024
Presentation of our
full year results.
Results
Announcement
2024
Includes our news
release and analysis
of the financial results.
Climate-related Financial
Disclosure 2024
Our report in compliance with
the Taskforce on Climate-
related Financial Disclosure
(TCFD).
Sustainability
Datasheet 2024
All sustainability metrics are
included in our Datasheet.
Transition Plan
Reporting Criteria
2024
Sets out the principles and
definitions used to report the
Group’s key sustainability
performance indicators and
selected data points.
Our Transition Plan
Aviva’s ambition is to be a Net Zero company by
2040. The second iteration of our Transition Plan
details the strategy and approach to achieving
this ambition across our business and the
progress we have made to date.
Insurance
Wealth
Retirement
Aviva plc
Annual Report and Accounts 2024
Strategic
Report
Governance
Report
IFRS Financial
Statements
Other
Information
Strategic Report
2
Aviva on a page
3
2024 highlights
4
Delivering for customers
and shareholders
9
Aviva’s compelling
investment case
10
Chair’s statement
11
Group Chief Executive
Officer’s report
13
Proposed acquisition of
Direct Line Group plc
14
Group Chief Financial
Officer’s report
17
Our business model
19
Our external environment
21
Our strategy
26
Our key performance indicators
29
Our business review
41
Capital management
48
Our stakeholders
52
Section 172(1) statement
53
Our people and culture
56
Our sustainability ambition
67
Our tax contribution
69
Non-financial and sustainability
information statement
74
Our risks and risk management
83
Going concern and longer-term
viability statement
Governance Report
85
Chair’s introduction to
governance
86
Our compliance with the Code
87
Our approach to governance
91
Our Board of Directors
96
Our Board’s activities
99
Nomination and Governance
Committee report
103
Audit Committee report
108
Risk Committee report
110
Customer and Sustainability
Committee report
112
Remuneration Committee
report
116
Remuneration at a glance
118
Annual report on remuneration
136
Directors’ Remuneration Policy
145
Directors’ report
149
Statement of directors’
responsibilities
IFRS Financial Statements
153
Independent auditors’ report
164
Accounting policies
181
Consolidated financial
statements
187
Notes to the consolidated
financial statements
301
Company financial statements
305
Notes to the company
financial statements
Other Information
312
Alternative Performance
Measures (APMs)
327
Shareholder services
328
Cautionary statement
Foreword
The Strategic report, Governance report,
IFRS Financial Statements and Other
information altogether comprise the Aviva
plc Annual Report and Accounts 2024.
The Strategic report contains information
about Aviva, how we run our business
and how we create value. It includes
our strategy, our business model, key
performance indicators, overview of our
businesses, our approach to risk and
our responsibility to our people, our
communities and the planet. The Annual
Report and Accounts 2024, were
approved by the Board on 26 February
2025 and signed on its behalf by Amanda
Blanc, Group Chief Executive Officer.
The Directors’ report required under
the Companies Act 2006 comprises the
Governance report in the Annual Report
and Accounts 2024.
The Strategic report should be read
in conjunction with the Cautionary
statement, included within the Other
information section.
As a reminder
Reporting currency: We use £ sterling.
Unless otherwise stated, all figures in this
report relate to Group.
In the UK the final Prudential Regulation
Authority (PRA) rules for Solvency UK
became effective from 31 December
2024. Solvency UK has been referred to
in this document except for where
referring to our Alternative Performance
Measures, where we refer to Solvency II
in line with the current PRA guidance and
consistent with the name of the prudential
regime in PRA policy manual.
On 17 February 2025, AIG Life UK Limited
rebranded to Aviva Protection UK Limited,
following Aviva's acquisition of the
business in 2024. This report refers to the
business as 'AIG's UK Protection
business'.
Alternative Performance Measures:
Throughout the Annual Report and
Accounts we use a range of financial
metrics to measure our performance and
financial strength. These metrics include
Alternative Performance Measures
(APMs), which are non-Generally
Accepted Accounting Principles (GAAP)
measures that are not bound by the
requirements of IFRS or Solvency II.
A complete list of the APMs used by the
Group, and further guidance in respect
of their use, can be found in the Other
information section of the Annual Report
and Accounts.
This guidance includes definitions
and, where possible, reconciliations to
relevant line items or sub-totals in the
financial statements.
Explanations of key terms used in this
report are available on:
www.aviva.com/glossary
The Company’s registered office:
80 Fenchurch Street London, EC3M 4AE
More information about Aviva can be
found at
www.aviva.com
Contents
1
Aviva plc
Annual Report and Accounts 2024
Strategic
Report
Governance
Report
IFRS Financial
Statements
Other
Information
Aviva is the UK’s leading diversified insurer across Insurance, Wealth
and Retirement, with 20.5 million customers in the UK, Ireland and Canada.
We’re there to protect the things
that matter most to our customers:
their homes and belongings, their
health and wealth, their future and
their families.
We are driven by our purpose:
With you today, for a better tomorrow.
To achieve our ambition:
To be the leading UK provider and go-to
customer brand for all Insurance, Wealth
and Retirement solutions, with major
businesses in Canada and Ireland.
We have a clear strategy and
plan to achieve this vision:
Growth
Accelerating growth in capital-light
Wealth and Insurance - disciplined
in Retirement
Customer
Growing our customer base,
serving more needs and
transforming experience
Efficiency
Driving operating leverage
with technology and artificial
intelligence at the core
Sustainability
Committed to climate and social
action, and being a sustainable
business
Read more on
Our strategy: page 21
We are guided by
our values:
Care
We care deeply about the
positive difference we can
make in our customers’ lives
Commitment
We understand the impact we have
on the world and take the responsibility
that comes with it seriously
Community
We recognise the strength that
comes from working as one team,
built on trust and respect
Confidence
We believe the best is yet
to come for our customers,
our people, and society
Read more on
Our people and culture: page 53
Offering customers a range of
products and services across:
Read more on
Our business review: page 29
Supported by good governance
and effective risk management
Read more on
Our risks and risk management: page 74
Read more on
Our Board's activities: page 96
Aviva on a page
2
Aviva plc
Annual Report and Accounts 2024
Strategic
Report
Governance
Report
IFRS Financial
Statements
Other
Information
Outstanding year of delivery for Aviva, with much more to come. Our position as the UK’s leading
diversified insurer, with major businesses in Canada and Ireland, continues to deliver at pace.
Gross written premiums (GWP)‡1
Wealth net flows‡
Retirement (PVNBP)‡1
£12.2bn
£10.3bn
£9,408m
(2023: £10.9bn)
(2023: £8.3bn)
(2023: £7,088m)
Group adjusted operating profit‡
Solvency II operating own
funds generation‡
Cash remittances‡
£1,767m
£1,655m
£1,992m
(2023: £1,467m)
(2023: £1,729m)
(2023: £1,892m)
IFRS Profit for the year2
IFRS RoE‡
Solvency II RoE‡
£705m
15.6%
13.6%
(2023: £1,106m)
(2023: 12.7%)
(2023: 14.7%)
Multi-product holding customers
Transactional Net Promoter Score (TNPS)
Employee engagement
5.4m
47.8
91%
(2023: 4.8m)
(2023: 42.7)3
(2023: 88%)
2024 highlights
3
Strategic pillars
Growth
Customer
Efficiency
Sustainability
Aviva plc
Annual Report and Accounts 2024
Strategic
Report
Governance
Report
IFRS Financial
Statements
Other
Information
Read more on
Our key performance indicators: page 26
Our sustainability ambition: page 56
‡ Denotes Alternative Performance Measures (APMs)
and further information can be found in the ‘Other
information’ section
1. Reference to sales represents Present Value of New
Business Premiums (PVNBP) for Annuities and Equity
Release and Gross Written Premiums (GWP) for General
Insurance. PVNBP and GWP are APMs and further
information can be found in ‘Other Information’ section.
2. IFRS Profit for the year represents IFRS profit for the
year after tax
3. The 2023 TNPS comparative has been re-presented to
reflect updates to product weightings used to calculate
the metric to better align to Aviva's strategic priorities
Customers are at the very
heart of Aviva. We want to
be there for our customers,
wherever and however they
need us.
More and more people are choosing Aviva.
We’re serving more customer needs, and
we’re transforming experience. But there
is still so much to do. We’re working hard
to make sure we keep delivering for our
customers and live up to their expectations,
today and long into the future. That’s the
reason we exist after all, to be with you
today, for a better tomorrow.
Read more on
Our customer strategy: page 23
4
Aviva plc
Annual Report and Accounts 2024
Strategic
Report
Governance
Report
IFRS Financial
Statements
Other
Information
Delivering for our
customers
With over 17 million UK
customers, we have the
largest customer base of any
UK insurer and it’s growing.
From their first junior ISA, workplace
pension and home insurance, right through
to helping them prepare for, and transition
into, retirement, our diverse range of
products means we are there to meet
customers' lifetime needs.
As a result, more people will continue to
choose Aviva and stay with us for longer,
enabling us to grow sustainably and profitably,
whatever market challenges we face.
Making it click
At those moments that matter in
life, we’re uniquely placed with an
extensive range of products and
services our customers can rely on.
Read more on
Our business review: page 29
5
Aviva plc
Annual Report and Accounts 2024
Strategic
Report
Governance
Report
IFRS Financial
Statements
Other
Information
The UK’s leading
diversified
insurer
Make the most
of retirement
Annuities
Equity release
Congratulations, it’s a girl
Junior ISA
Passed first time,
now she’s going places
Car insurance
Put something away
for a rainy day
Financial advice
Set-up her own start-up
SME cyber cover
Ouch! Need some physio, fast
Employee private medical cover
Step on to that career ladder
Workplace pension
New home, new responsibilities
Life insurance
Home insurance
Insurance
Wealth
Retirement
We’ve had another excellent
year. We are growing right
across Aviva. In General
Insurance, premiums are
up 14%1. In Wealth, we had
over £10bn of net flows.
And in Retirement, sales
are up 33%.
Growing organically and
accelerating through
acquisitions
There's no shortage of growth
opportunities in all our markets.
For example, there's £1.8 trillion of
assets in the UK Wealth market which
is growing at double digits. And, in
General Insurance, an increasingly
complex risk landscape is fuelling
growth in the £200 billion Global
Corporate & Specialty market. We are
seizing on these opportunities both
organically, for example through our
integrated Wealth business, and through
selected M&A such as the acquisition
of Probitas, which gives Aviva access
to the Lloyd’s market and opens up
new opportunities to accelerate growth
in our capital-light General Insurance
business.
41%
of all new UK sales to existing
customers
Enhanced returns
Our portfolio is already majority capital-
light2 today, and we will be approaching
70% through our current plans. This
change to our earning mix brings stronger
growth and customer acquisition, higher
returns and cash generation, lower cost
of equity, and enhanced capacity for
shareholder distributions.
Capital-light business
l
Capital-
light
56 %
l
Capital-
intensive
44 %
Customer focus
Our customer franchise is also a huge
part of our growth story. With 17 million
UK customers, we already have the
largest customer base of any UK insurer.
The importance of this scale cannot
be overstated, it’s a key source of growth
which we’re already tapping into. Today,
we have 5.4 million individual customers
in the UK with two or more policies, and
41% of our new sales are to existing
customers. These multi-policy holders
have lower acquisition costs, stay with us
longer and buy more from us. They are
also better protected and more engaged,
which we know leads to better outcomes.
So, it’s a real win-win for Aviva and for our
customers.
1. On a constant currency basis
2. Capital-light refers to Aviva’s General Insurance,
Wealth, Protection and Health and Aviva Investors
businesses. Percentage based on 2024 Group
adjusted operating profit.
6
Aviva plc
Annual Report and Accounts 2024
Strategic
Report
Governance
Report
IFRS Financial
Statements
Other
Information
Strong
growth
Our consistent performance
gives us the confidence
to invest in our customers,
our business and our
communities.
Improving customer
experience
When it comes to customer experience,
we’re never complacent. So, we’re
always focused on continuous
improvement. For example, we’ve
rolled out our next-generation MyAviva
app, providing an even more personalised
and engaging experience as our
single front door to everything Aviva
does. We’ve also introduced Find and
Combine, an award-winning feature that
helps customers locate and consolidate
their old pensions. And in Canada, we're
protecting customers from increasing
car thefts with free installation of anti-
theft recovery devices for high-risk
vehicles, helping recover stolen cars
and minimising impact to customers’ lives.
Investing in the UK
We have a rich history of investing
in the UK with over £40 billion of
our annuity portfolio invested in UK
assets. We are also one of the largest
investors in UK infrastructure with
£18 billion invested, helping to build
schools and health centres, developing
sustainable energy and preparing the
UK for the opportunities and challenges
it faces as a nation.
£407bn
Total Assets Under
Management
Innovating solutions
Aviva Capital Partners, which develops
and invests in UK real estate and
infrastructure assets to generate
returns for our retirement customers,
partnered in April 2024 with the National
Wealth Fund and Rock Rail to invest
£100 million to fund up to 250 zero
emission buses. Aviva Ventures, our
corporate venture capital fund, invested
in nature restoration company Nattergal,
supporting their work to mitigate
climate change, protect food security
and tackle water scarcity through the
restoration of nature in the UK.
Aviva is also investing in projects
which provide long-term benefits for
local communities. Aviva Investors
provided financing towards the
development of the new Velindre
Cancer Centre in Cardiff, and also
provided funding towards 100
new homes in Cambridge, the ninth
investment made into UK single-family
housing by Aviva Investors.
Read more on
Our sustainability ambition: page 56
7
Aviva plc
Annual Report and Accounts 2024
Strategic
Report
Governance
Report
IFRS Financial
Statements
Other
Information
Investing
for the
future
We have transformed
the performance of Aviva
over the last four and a
half years. And that means
we're delivering for our
shareholders.
We've grown year-on-year and by
operating more efficiently, we are turning
that into improvements in profitability. And
through dividend growth and regular capital
returns, we are sustainably delivering
superior returns to our investors, totalling
£10 billion since 2020.
Our momentum and continued investment
in the business, gives us real confidence in
our ability to accelerate performance and
enhance shareholder distributions.
Read more on
Aviva's compelling investment case:
page 9
35.7p
2024 total dividend per share
£5.7bn
Cash remittances 2022-2024
£10bn
Total capital and dividend returned
to shareholders since 2020
8
Aviva plc
Annual Report and Accounts 2024
Strategic
Report
Governance
Report
IFRS Financial
Statements
Other
Information
Delivering
for our
shareholders
The UK’s leading
diversified insurer
Majority capital-light, with
material international earnings
Consistent
strategy
With investment for
the future
Strong organic
growth
Accelerated through
targeted M&A
Track record
of delivery
With strong performance
momentum
Superior returns for
shareholders
With growing dividends and
regular capital returns
Our Group targets
We have confidence in medium-term financial targets
£2.0bn
£1.8bn
>£5.8 bn
Group adjusted operating profit
by 2026
Solvency II OFG
by 2026
Cumulative cash
remittances 2024-26
9
Aviva plc
Annual Report and Accounts 2024
Strategic
Report
Governance
Report
IFRS Financial
Statements
Other
Information
Aviva’s
compelling
investment
case
Read more on
Our business model: page 17
Read more on
Our strategy: page 21
Read more on
Our business review: page 29
Read more on
Capital management: page 41
Read more on
Our KPIs: page 26
“We want to be there for
more people, for longer,
looking after more of
their needs, living up to
our purpose to be with
you today, for a better
tomorrow.”
George Culmer
Chair
2024 was an outstanding
year for Aviva and there's
much more still to come.
Accelerating momentum
It is one thing for a business to devise
a new, compelling strategy and quickly
deliver against it. It is quite another to
maintain that pace, even build on that
momentum in the years that follow.
Amanda Blanc and her team have done
just that.
From strategic acquisitions like AIG's UK
Protection business and Probitas and the
proposed acquisition of Direct Line
Insurance Group plc (Direct Line), to new
products and services like Aviva Zero or
our pension-tracing Find & Combine
service, this year saw continued forward
movement right across the business.
Whether it is tangible improvements
internally in our culture and systems or big
strides externally, like fresh investments
made or new business won, our results
demonstrate what a truly committed group
of colleagues can achieve together in a
common cause. I’d like to thank the whole
Aviva team for their dedication and
professionalism. Thanks to them, we’re
now really hitting our stride to unlock the
enormous promise of the business.
35.7p
total dividend per share 2024
Start with our customers
Our customers are at the heart of that
potential. We’re already the go-to brand
for over 20 million people worldwide
who depend on us at those vital moments
in their lives, yet our ambition is to go
much further. We want to be there for more
people, for longer, looking after more of
their needs, living up to our purpose to
be with you today, for a better tomorrow.
And we have the capabilities to do just
that, with a unique breadth of products
from junior ISAs all the way through to
retirement advice. By serving our customers,
in multiple different ways, while transforming
the experience we can offer them, the
opportunities for growth abound.
Consistent, strong performance
Our recent performance shows how we
are already seizing those opportunities.
We continue to charge forward with an
impressive track record and by meeting
customer needs we’ve seen that growth in
almost every line of business. We continue
to grow our capital-light business, further
improving the balance of the Group. And
there are many significant growth
opportunities for us to seize both in our
home market and also in Ireland
and Canada.
This doesn’t mean everything is perfect.
There will, inevitably, be times when we
fail to hit the high standards we set for
ourselves - moments for us to learn from
and rectify. But we’re constantly hungry
for more and always ambitious for further
improvement.
More still to come
In a world of political, social and economic
uncertainty what we can offer customers
matters. Our scale, our diversity and our
financial strength means we can be resilient
in the face of turbulence, and be a bastion
for those customers come what may.
This, in turn, means we can offer ongoing
value to our shareholders too.
2024 has been a very good year for Aviva.
And we’ve got the people, the products,
the brand and the strategy to do even
better. Our ambition is huge, our capabilities
unique. I believe the best years are yet
to come.
George Culmer
Chair
26 February 2025
Read more on
Our strategy: page 21
Our people and culture: page 53
Our business review: page 29
Chair’s statement
10
Aviva plc
Annual Report and Accounts 2024
Strategic
Report
Governance
Report
IFRS Financial
Statements
Other
Information
“2024 was an excellent
year, right across Aviva.
We made clear strategic
progress and delivered
another set of very good
numbers, with higher
sales, higher operating
profit and a higher
dividend.”
Amanda Blanc DBE
Group Chief Executive Officer
2024 was another year when
we delivered what we said
we would - strong growth,
higher operating profit and an
increased dividend. We are in
an excellent position to take
advantage of the significant
opportunities in every part of
our business and to deliver
more growth and greater
profitability in the years to
come. Aviva still has so much
untapped potential, and I have
real confidence in our ability to
unlock it and deliver the next
phase of growth.
A year of growing momentum
Our 2024 results demonstrate strong and
growing momentum at Aviva. Over the last
four and a half years Aviva has been
completely transformed, evidenced by our
consistent year-on-year growth and strong
and reliable earnings. We are delivering on
our promises to our customers, our people
and of course, to our shareholders,
returning £10 billion of capital since 2020.
This track record has established Aviva as
the UK’s leading ‘go-to’ diversified insurer
across Insurance, Wealth and Retirement.
This consistent performance is only
possible because our teams – across the
UK, Canada and Ireland – believe in what
we are doing, and they can see the impact
we have on millions of customers. Their
dedication to always doing the right thing
for customers is the driving force behind
our continued success, so I would like to
extend a very big thank you to the whole
Aviva team.
Continued strong growth, right
across Aviva
There has been strong growth across our
business in 2024 and clear progress toward
all of our 2026 targets. Both operating profit
and underlying OFG have improved by
double-digits, and cash remittances remain
strong.
The UK & Ireland General Insurance
business has delivered 16% growth, with
strong momentum in Personal Lines and
several new large client wins in Global
Corporate & Specialty (GCS) and
Commercial Lines.
The proposed acquisition of Direct Line will
accelerate our capital-light growth, bringing
the best of Aviva to millions more
customers. The financial strength and scale
of the combined Group means customers
will benefit from competitive pricing, an
enhanced claims experience and even
better service. The financial rationale is
very attractive, with £125 million in cost
synergies, over and above Direct Line’s
existing commitment, and material capital
benefits. This will enable us to enhance
shareholder distributions even further.
Our Canadian business also delivered
double-digit growth driven by strong
growth across both personal and
commercial lines, including in GCS which
grew 10%.
The Wealth business extended its number
one market position with nearly £200 billion
of assets, with our Adviser platform hitting
£50 billion of assets.
In Health, the business is growing strongly
and profitably, and in Protection we are
progressing with the integration of AIG’s UK
Protection business at pace, with new
business being written on Aviva’s platform.
The Retirement business also had a very
strong year delivering record BPA volumes
with continued support from Aviva
Investors, fulfilling our ambition for
£15-20 billion of sales over three years.
Clear strategic progress
There are five key reasons why we believe
Aviva is a compelling investment case.
First, Aviva is the UK’s only insurer with
truly diversified product lines with
material earnings through our businesses
in Ireland and Canada. We remain focused
on these markets where we have leading
positions and excellent, profitable
operations. And due to the breadth of our
product offering, we are uniquely able to
look after customers’ needs throughout
their lives.
Second, we are delivering on our
customer centred strategy. Our customer
base and their loyalty give Aviva a huge
competitive advantage. We already have
the largest customer franchise of any UK
insurer with 17 million customers. We
estimate this will grow to over 20 million
customers - creating a leading franchise in
UK financial services - with the proposed
acquisition of Direct Line. The importance
of this cannot be overstated – our
customers are a key source of growth for
us. Today, more than 40% of new sales are
to existing customers.
Group Chief Executive Officer’s report
11
Aviva plc
Annual Report and Accounts 2024
Strategic
Report
Governance
Report
IFRS Financial
Statements
Other
Information
Multi-policy holders have lower acquisition
costs, stay with Aviva for longer, and buy
more. They are also better protected and
more engaged, leading to better outcomes.
The story is just as powerful for larger
corporates, where over one third of our
customers have products across multiple
Aviva business lines.
Excellent progress against our customer
priorities continues. Our customer base has
grown, as we welcomed 1.3 million net new
customers in the last 12 months alone. We
are serving more of their needs with a
record 5.4 million individual UK customers
holding two or more policies with Aviva.
And there is an even more engaging mobile
experience within MyAviva, which now has
seven million registered users.
GenAI has the potential to deliver huge
efficiency gains across financial services,
and we want to make the most of this
technology for the benefit of our
customers. For example, in claims
summarisation, instead of putting
customers on hold, our agents can now
immediately view relevant information and
suggest appropriate next steps. This is
already used by over 400 motor claims
agents, reducing call-handling time and
improving customer experience.
Third, we are driving strong organic
growth, accelerated by targeted M&A.
Our earnings mix is increasingly capital-
light, allowing us to deliver higher profits
with less capital, which is highly attractive
to shareholders. There is excellent
progress here and our portfolio is majority
capital-light today and will be approaching
70% in 2026 with our current plans. With
the acquisition of Direct Line, we will be
able to go further than this.
There is no shortage of growth opportunities
across our markets and Aviva is benefitting
from structural drivers in major business
segments including Wealth, Health and
General Insurance. In UK GI, we have
agreed a new partnership with Nationwide
for home insurance. And in Canada we have
launched new products and are targeting
underweight sectors in Commercial Lines to
capture a greater addressable market.
In GCS, the acquisition of Probitas gave us
access to the Lloyd’s market. Since
acquisition, Probitas has launched seven
new lines of business and secured several
large client wins, while we are also better
able to tap into the £200 billion Global GCS
market. In our Wealth business we are
connecting our propositions across
Workplace, Platform and Advice. We are
now capturing c.65% of Workplace flows
into Aviva Investors, while over £1 billion of
Heritage outflows are now being
recaptured into IWR.
Fourth, we are extending our track record
of delivery. Over the last four and a half
years, Aviva has grown consistently, and by
operating more efficiently, we have
secured greater profitability.
Finally, and as a result, we have delivered
superior returns to our shareholders
through dividend growth and regular capital
returns. Our momentum is accelerating by
investing in the business, focusing on the
customer, and unlocking opportunities with
strategic acquisitions – including Direct
Line. All of which gives me real confidence
in our ability to accelerate performance
further, enhance shareholder distributions,
and be in a position to uplift our targets in
due course.
Next phase of growth
Aviva is a very different business today to
the one I inherited. We are now in the unique
position as the UK’s ‘go-to’ diversified
insurer with fantastic businesses in Canada
and Ireland.
We have achieved a significant amount, but
are far from finished. There is so much more
to accomplish and I remain completely
focused on accelerating capital-light growth,
unlocking our customer advantage, and
delivering on our promises to shareholders.
Amanda Blanc DBE
Group Chief Executive Officer
26 February 2025
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Powering Aviva’s strategy with complementary businesses
£3.7bn
£125m
~10%
Material capital
benefits
over time
Total consideration1
Annual incremental
cost synergies
Run-rate EPS accretion2
Compelling strategic and financial rationale
Creating a strong leader
in UK Personal Lines
Accelerating
capital-light growth
Material cost synergies
and capital benefits
Enhancing shareholder
distributions
Delivering better
customer outcomes
Consistent with
capital management
Indicative timeline – expect to complete in mid-20253
1. Based on Aviva plc closing share price of 489.3 pence as at 27 November 2024
2. Expected EPS accretion of ~10% once pre-tax cost synergies of £125 million are fully realised, with underlying EPS
accretion expected from the first full year post-completion
3. Subject to Direct Line shareholder vote and regulatory approvals
Proposed acquisition of
Direct Line Insurance Group plc
13
23 December 2024
Recommended
offer
27 February 2025
Aviva FY24
Results
10 March 2025
Direct Line
shareholder vote
10 February 2025
Scheme document
published
4 March 2025
Direct Line
FY24 Results
Mid-2025
Expected
completion
Find out more on Our 2.7 Announcement on aviva.com
Read more on the Direct Line acquisition in Our Board's activities: page 98
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“Excellent performance
continued in 2024 as we
extended our track
record with another year
of consistent delivery.
Our strategic and
operational momentum
continues with Group
adjusted operating profit
up 20%.We have
a confident outlook and
are excited about what
the future holds.”
Charlotte Jones
Group Chief Financial Officer
Overview
In 2024 we delivered another year
of excellent performance and growing
momentum.
There is clear evidence from our results
that we are delivering sustainable growth
in operating profit and cash remittances.
This growth, combined with our balance
sheet strength, gives us the firepower to
execute across the rest of our capital
framework:
• Growing the regular dividend;
• Investing in the business, both
organically and through M&A; and
• Returning capital to shareholders.
We have announced a total dividend per
share for 2024 of 35.7p, an increase of 7%.
This follows growth in cash cost of the
dividend of 5% and the completion of
a £300 million share buyback earlier
in the year.
Our consistent performance and the strength
of our balance sheet have allowed us to
do compelling M&A at attractive returns.
The integrations of AIG's UK Protection
business and Probitas are progressing
at pace, while the proposed acquisition
of Direct Line is expected to close in the
middle of 2025. It will deliver material capital
synergies and c.£125 million of incremental
run-rate cost savings. It allows us to further
enhance shareholder distributions in
the future.
With strong performances across the
Group in 2024, I'm looking forward to
continuing this momentum into 2025 and
beyond as we continue to deliver for our
customers, our people, and our
shareholders.
Operating results
Cash remittances
Cash remittances were up 5% to
£1,992 million (2023: £1,892 million).
Performance
Group adjusted operating profit1
increased by 20% to £1,767 million
(2023: £1,467 million) driven primarily by
growth in UK and Ireland General
Insurance, IWR, Aviva Investors and lower
costs in Corporate centre & other, partly
offset by the impact of elevated severe
weather events in Canada. Operating EPS
increased 19% to 48.0p (2023: 40.3p).
Adjusted operating profit1 in UK and Ireland
General Insurance increased by 57% to
£708 million (2023: £452 million) reflecting
strong underwriting performance and
higher investment income. Canada General
Insurance was 28% lower in constant
currency, primarily reflecting elevated
severe weather events in Q3.
IWR adjusted operating profit1 was up 8%
to £1,071 million (2023: £994 million).
Aviva Investors adjusted operating profit1
of £40 million (2023: £21 million) reflects
higher revenues from increased AUM.
Group centre and other operations
benefitted from reduced spend on IFRS 17
and strategic initiatives.
IFRS profit for the year2 was £705 million
(2023: £1,106 million) with the reduction
primarily driven by investment variances as
a result of higher interest rates in the year.
Basic EPS was 23.6p (2023: 37.7p).
Solvency II operating own funds
generation (Solvency II OFG)
Solvency II OFG decreased by 4% to
£1,655 million (2023: £1,729 million).
Underlying Solvency II OFG was up 18%
to £1,503 million (2023: £1,278 million).
Solvency II operating capital
generation (Solvency II OCG)
Solvency II OCG increased by 1% to
£1,468 million (2023: £1,455 million).
Underlying Solvency II OCG was up 17%
to £1,244 million (2023: £1,063 million).
Solvency II return on equity
(Solvency II RoE)
Solvency II RoE decreased by 1.1pp to
13.6% (2023: 14.7%) primarily due to higher
opening own funds and lower SII OFG.
Excluding the impact of Management
actions and Other Solvency II return on
equity has increased by 1.7% to 12.3%
(2023: 10.6%).
Read more on:
Our key performance indicators: page 26
Group Chief Financial Officer’s report
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Group adjusted
operating profit‡1
IFRS profit for
the year2
£1,767m
£705m
2024
2024
2023
2023
Solvency II operating
own funds generation‡
Solvency II operating capital
generation‡
£1,655m
£1,468m
2024
2024
2023
2023
Cash
remittances‡
Estimated Solvency II
shareholder cover ratio‡
£1,992m
203%
2024
2024
2023
2023
‡ This is an Alternative Performance Measure (APM) which provides useful information to enhance the understanding
of financial performance. Further information on APMs, including a reconciliation to the financial statements
(where possible), can be found in the 'Other Information' section. Throughout this report we use a range of financial
metrics to measure our performance and financial strength. These metrics include APMs, which are non-Generally
Accepted Accounting Principles (GAAP) measures that are not bound by the requirements of IFRS or Solvency II.
A complete list of the APMs used by the Group, and further guidance in respect of their use, can be found in the 'Other
Information' section in the Annual Report and Accounts.
Business performance
Insurance, Wealth and
Retirement (IWR)
Protection annual premium equivalent (APE)
increased by 42% to £375 million (2023:
£264 million), reflecting completion of AIG's
UK Protection business acquisition on 8 April
2024. Health in-force premiums increased
by double digits reflecting strong new
business and pricing actions. Health APE
was 8% lower at £138 million (2023: £151
million), as expected, as a result of a strong
performance in the prior period following
the exit of another provider in the market.
Wealth net flows continue to impress with
£10.3 billion (2023: £8.3 billion) in the year,
up 23%, driven by strong growth in Platform
partly offset by Workplace, which saw a
short-term increase in outflows in the lead
up to the budget.
In Retirement, BPA volumes were £7.8
billion (2023: £5.5 billion), our highest year
on record, and where the pipeline in 2025
remains strong. Total Retirement present
value of new business premiums were
£9.4 billion (2023: £7.1 billion).
IWR’s cost asset ratio increased to 43.3bps
(2023: 41.4bps) as we continue to maintain
focus on operational efficiency and
leverage to grow assets under
management. The increase was driven by
the addition of AIG's UK Protection
business, which increased controllable
costs with limited impact to assets.
Excluding AIG's UK Protection business,
IWR’s cost asset ratio improved to 41.1bps.
IWR adjusted operating profit1 was up 8%
to £1,071 million (2023: £994 million).
Wealth operating profit1 of £129 million
(2023: £100 million) was 29% higher as
growing revenue in Workplace and Platform
more than offset higher investment in our
Direct Wealth proposition.
Retirement operating profit1 improved 14%
to £746 million (2023: £655 million), mainly
reflecting higher releases from the
Contractual Service Margin (CSM) as the
portfolio grows, and an improved
investment result.
Insurance adjusted operating profit1 was
13% higher driven by higher releases from
the stock of future profit as the portfolio
grows the CSM and improved mortality
experience. Heritage adjusted operating
profit1 was 7% lower at £238 million
(2023: £254 million) reflecting the expected
run-off of the portfolio.
Solvency II OFG of £1,029 million
(2023: £1,297 million) was 21% lower as
growth in underlying was more than offset
by the non-recurrence of positive impacts
from assumption changes, including
longevity, and the extension of two key
partnerships in the prior year. Underlying
Solvency II OFG increased 3% primarily
driven by new business growth.
Cash remittances were £1,272 million
(2023: £1,369 million).
35.7p
2024 total dividend
per share
UK & Ireland General Insurance
Gross written premiums (GWP) increased
16%, on a constant currency basis, to
£7,699 million (2023: £6,640 million) with
double-digit growth across all lines.
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£1,992m
£1,892m
£1,468m
£1,455m
£1,655m
£1,729m
£1,767m
£1,467m
203%
207%
£705m
£1,106m
UK personal lines GWP grew 22% to
£3,600 million (2023: £2,956 million) with
growth in higher margin retail business
supported by a 13% increase in policies-in-
force and higher average premiums. We
continue to achieve strong growth in UK
commercial lines, up 12%, as GWP reached
£3,604 million (2023: £3,231 million)
supported by strong new business and
pricing actions and the addition of Probitas.
UK & Ireland General Insurance adjusted
operating profit1 was 57% higher at
£708 million (2023: £452 million) reflecting
improved underwriting profits and improved
investment returns.
UK & Ireland undiscounted combined
operating ratio (COR) was 94.9%
(2023: 96.8%), as we benefit from the earn
through of the strong rate actions taken
and continued growth in retail business.
Discounted COR was 90.9% (2023: 93.6%).
Solvency II OFG was 82% higher at
£572 million (2023: £315 million) reflecting
a better underwriting result and improved
investment returns. Cash remittances
increased to £571 million
(2023: £326 million).
Canada General Insurance
GWP of £4,505 million (2023: £4,248 million)
were up 11% on a constant currency basis.
Personal lines was up 13% in constant
currency reflecting pricing increases and
new business growth across motor and
property. Commercial lines was up 7% in
constant currency mostly driven by rate and
indexation in Property, along with growth in
the Large Corporate book.
Canada General Insurance adjusted
operating profit1 was 25% lower, on a
constant currency basis, at £288 million
(2023: £399 million) primarily driven by the
elevated severe weather events
experienced in the third quarter of 2024.
The undiscounted COR was 98.5%
(2023: 95.3%) and the discounted COR
was 94.4% (2023: 91.4%).
For similar reasons, Solvency II OFG was
32% lower, on a constant currency basis,
at £223 million (2023: £339 million).
Cash remittances were lower at £135 million
(2023: £158 million).
Aviva Investors
AUM increased by £11.2 billion driven by
positive market movements of £9.1 billion
and net flows into liquidity funds of
£4.4 billion which helped offset the impact
from net outflows of £2.3 billion (2023 net
outflows: £5.4 billion). Average AUM was
£8 billion or 3% higher year-on-year at
£233 billion (2023: £225 billion).
The cost income ratio improved by 5pp
to 89% (2023: 94%) driven by increased
revenues.
Aviva Investors adjusted operating profit1
improved to £40 million (2023: £21 million)
reflecting higher revenues, up 8% to
£374 million (2023: £346 million).
Solvency II OFG was £29 million
(2023: £19 million).
International investments
(India, China and Singapore)
Present value of new business premiums
were 26% lower at £1,507 million (2023:
£2,048 million) as the prior year included
a full year of contribution from Singapore,
which was disposed of on 18 March 2024.
Adjusted operating profit1 was 24% lower at
£48 million (2023: £63 million) and Solvency
II OFG was £117 million (2023: £156 million).
Read more on
Our business review: page 29
Capital and cash
Solvency II capital
At 31 December 2024, Group Solvency II
shareholder surplus was £7.9 billion and
estimated Solvency II shareholder cover
ratio was 203% (2023: £8.8 billion and
207% respectively).
The reduction in surplus since 31 December
2023 is mainly due to the Tier 2 notes
redemption, final dividend and £300 million
share buyback and non-operating generation,
partly offset by operating capital generated.
The solvency capital requirement of
£7.7 billion includes a £2.5 billion benefit
from Group diversification.
Centre liquidity
At end January 2025, centre liquidity was
£1.7 billion (end February 2024: £1.9 billion)
reflecting dividends, interest, share buyback
programme, debt redemption and capital
paid to subsidiaries ahead of corporate
acquisitions. This is partly offset by cash
remittances received from the business
units and net M&A proceeds.
Solvency II debt leverage
Solvency II debt leverage ratio is 28.9%
(2023: 30.7%). The decrease is due to the
€700 million subordinated debt redemption
in July 2024, partly offset by dividends, the
2024 share buyback and M&A activity.
Read more on
Capital management: page 41
Dividend
We have announced a final dividend of 23.8
pence per share (2023: 22.3 pence), an
increase of 7%. Together with an interim
dividend of 11.9 pence (2023: 11.1 pence) this
brings total dividends for the year to 35.7
pence (2023: 33.4 pence). Our dividend
guidance remains that we expect mid-single
digit3 growth in the cash cost of the dividend.
As outlined in December 2024 when the
proposed acquisition of Direct Line was
announced, there is expected to be an
additional mid-single digit3 percentage uplift in
the dividend per share following completion.
Shareholder asset portfolio
Aviva’s high quality shareholder asset
portfolio of £83.1 billion as 31 December
2024 (2023: £81.3 billion) continues to
perform well and is defensively positioned.
Corporate bonds represent £22.5 billion of
the portfolio. Of this, 80% is externally
rated investment grade and 20% internally
rated. Aviva has a long history in private
debt, with a robust internal rating model,
and these internally rated assets have an
average rating of ‘single A’ quality.
The corporate bond portfolio continued to
perform well, with less than c.£15 million of
net downgrades to a lower letter during
2024. This included c.£390 million upgraded
to a higher rating letter offset by c.£405
million of downgrades to a lower rating
letter in the portfolio.
Our commercial mortgage portfolio of
£5.4 billion comprises largely long-duration
fixed rate contracts with low average
loan-to-value (LTV) ratios of 48.1% using
the nominal value of the loan.
Our securitised mortgage loans and equity
release portfolio of £9.1 billion is mostly
internally securitised with a low average
LTV of 26.9%.
Charlotte Jones
Chief Financial Officer
26 February 2025
1.
Group adjusted operating profit is an APM which is used by the
Group to supplement the required disclosures under IFRS. See
the ‘Other Information’ section for further information.
2. IFRS profit for the year represents IFRS profit after tax
3. Estimated dividends are for guidance and are subject to
change. The Board has not approved or made any decision
to pay any dividend in respect of any future period.
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The UK’s leading
diversified insurer,
with unique strengths
Customer advantage
20.5m
Customers in UK, Ireland and Canada
(2023: 19.2m)
Serving lifetime customer needs with a
leading UK customer franchise, and strong
businesses in Canada and Ireland.
Scale efficiency
£407bn
Group assets under management
(2023: £376bn)
Driving operating leverage from scale
economies, synergies with our in-house
asset manager, and shared services.
Diversification benefit
£2.5bn
Capital diversification benefit1
(2023: £2.2bn)
Benefitting from the diversified nature of
our model - driving resilient performance
in different market conditions.
Leading market positions2
across Insurance, Wealth
and Retirement
1. The Group diversification between markets is the
diversified Solvency Capital Requirement (SCR) arising
from the sum of the SCR for each business unit (e.g. IWR,
UK & Ireland GI, Canada GI, Aviva Investors, International
investments (India and China)) being higher than the SCR
at Group
2. Aviva’s analysis using latest information available including
company reporting, ABI, Boring Money, Corporate Adviser,
Fundscape, Insurance Ireland, Millman, MSA, UK Finance
3. Originated in support of our annuities businesses
Our business model
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Meeting all our customers’ Insurance, Wealth and Retirement needs
Protecting our customers
against risks
How we create revenue
Customers pay us a premium to insure against a specific
risk. Our scale enables us to pool risks so that we can pay
customers’ claims, which could far exceed the premium.
How we serve customers
We meet the full breadth of customer needs with our
products. For example, Aviva Zero car insurance for
customers who want the opportunity to purchase offsets
for their car’s emissions, or our Essentials range for those
who want only essential coverage, at the right price.
Helping our customers
to save for the future
How we create revenue
We manage and administer investments for a fee,
offering guidance and financial advice for customers
who require support or have more complex needs.
How we serve customers
Customers save with us to generate a return on their
investments. We cater to their lifetime wealth needs
with a complete proposition across our four component
businesses - Workplace, Adviser Platform, Advice with
Succession Wealth, and Direct Wealth.
Helping our customers
to manage their retirement
How we create revenue
Customers pay us a lump-sum, which we invest to
provide them with life-long income throughout their
retirement, providing both security and flexibility.
How we serve customers
We are developing a full suite of options to support
customers and their personal needs in retirement.
This ranges from advised and non-advised pathways
with flexible drawdown products, to annuities for
regular payments and equity release.
Delivering for all our stakeholders
Our customers
Providing a trusted financial
services offering that is easy to
engage with and delivers great
customer outcomes across all
their needs
Our people
Enabling our people to thrive as
individuals while delivering great
outcomes for our customers
Our shareholders
Delivering consistent
performance, an attractive and
growing dividend and regular
capital returns
Our communities
Committed to social action,
climate action and being a
sustainable business
Our suppliers
Supporting our small business
partners1 in our operations and
by committing to the Prompt
Payment Code
£29.3bn
paid out in benefits and claims to
our customers in 2024
91%
employee engagement
score in 2024
~£952m
2024 interim and final dividend
cash cost
107,810
hours volunteered by our
colleagues to support local
communities in 2024
96%
of small business invoices
are paid within 30 days
1. < 50 employees
Read more on
Our stakeholders: page 48
Our business model
Our business areas
Insurance
Wealth
Retirement
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Growth opportunities in all our markets across
Insurance, Wealth and Retirement
Insurance
Wealth
Retirement
Protecting against new
and more complex risks
Navigating pension reforms,
and addressing the advice gap
De-risking DB pension schemes,
and broadening retirement solutions
c.£315bn GWP
UK, Canada & Ireland GI, and GCS markets p.a.
£1.8tn assets
UK Wealth market, growing at 10-15% p.a.
c.£250bn volumes
UK BPA market over the next five years
In the UK, general insurance remains a highly
competitive yet attractive market, characterised by a
fragmented landscape and increasing scale of price
comparison websites. Brand, customer experience,
technical underwriting and pricing capabilities, and
scale are all important factors for success.
In Canada, sheer geographic scale means that
insurance - and what it takes to succeed - differs
across provinces. Variables include severe weather
events, the regulatory landscape, demographics and
more.
In Global Corporate & Specialty (GCS), the emergence
of new risks and evolving existing risks are expanding
the scope of insurance. For example, the transition
towards renewable energy is creating needs such as
coverage for offshore wind farms.
To support customers, insurers will need to enhance
capabilities and broaden products and services.
Source: Aviva estimate
The global wealth market continues to grow at pace.
In the UK, pension reforms have been a unique
structural growth driver.
From the introduction of auto-enrolment in 2012 and
subsequent shift from defined benefit to defined
contribution, to the potential creation of “megafunds”
and boost for investment in the UK.
The growing “advice gap” is a particular concern, with
fewer than 10% of people paying for financial advice.
Today, with almost 4 in 10 under-saving for
retirement, there is clear indication that the spectrum
of advice and guidance needs to be widened. With a
supportive regulator, the creation of scalable
guidance solutions can play a critical role here.
As customer needs and behaviours change, wealth
providers will need to evolve their offerings,
leveraging the use of digital and artificial intelligence
technologies.
Source: Aviva estimate, The Lang Cat, DWP
With the rise of global interest rates since 2022, the
landscape for defined benefit (DB) pensions is very
different. In 2023, the number of UK DB schemes in
surplus grew by over 40%, and the total deficit more
than halved. This prompted companies to de-risk,
and that same year saw £49bn of annual BPA
volumes, compared to less than £30bn in each of the
previous two years. Demand is set to remain
elevated over the coming decade.
The nature of retirement for individuals is also
changing, with people living longer. Flexible
retirement products and services with the ability to
guide customers through their options will become
increasingly important.
As a result, providers need to find ways to build these
kinds of solutions into their corporate propositions,
with employers increasingly aiming to provide
employees with broader benefits offerings.
Source: LCP, The Pensions Regulator
Our response
Expanding our insurance offerings
Enhancing capabilities and expanding products across
GI and GCS, now with access to the Lloyd's market.
Our response
Connecting our wealth propositions
Bringing together our Workplace, Advice and Direct
Wealth offerings to cater to lifetime wealth needs.
Our response
Providing broader retirement solutions
Supporting customers with guidance and support,
flexible drawdown, annuities and equity release.
Our external environment
Our business areas
Insurance
Wealth
Retirement
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Responding to external trends
Trend: Investment
in UK economy
Trend: Customer
preference for mobile-first
Trend: Advancing AI and
Generative AI (GenAI)
Trend: Impacts of
climate change
£1.4tn
73%
>$600bn
$2tn
Public and private investment
in the UK, 2023
UK bank account holders are
using mobile banking
Projected annual global spend
on AI and GenAI by 2028
Economic cost from extreme
weather events, 2014-23
There are many reasons to be
confident in the future of the UK.
Significant wealth, population growth,
leading financial services hub, greater
political certainty and economic
stability.
All this translates into clear structural
growth opportunities. However,
investment in the UK economy will be
critical to realise these opportunities.
The new government is clearly
focused on this. At the Autumn Budget,
£100bn of capital spend was
announced over the next five years –
from housing and cladding, to clean
energy and transport. The recent
Mansion House speech also re-
iterated their commitment to unlock
investment in UK companies and
infrastructure.
With digital adoption near-universal,
customer preferences are increasingly
shifting towards mobile-first
experience. This is true not only for
online searches, but also more broadly
such as online purchases and
checking bank account balances.
Smartphone usage is particularly
prevalent with younger generations,
spending up to nine hours per day on
their screens. As a result, expectations
are rising, and frictionless experiences
are now becoming the standard.
With the development in technology,
there is also an opportunity to re-
imagine how digital engagement feels
for customers. Deep personalisation,
relevant benefits, and GenAI are some
notable trends in focus across the
financial services industry.
Since the launch of ChatGPT in late
2022, timelines and predictions on the
potential of GenAI have been rising.
Adoption is on the rise, too – in the UK,
more than one in three adults aged
16-75 have used the technology.
We have already witnessed huge leaps
forward in the quality of underlying
training models. Their ability to
understand more complex language
has improved, along with clear
advances in text-to-image and text-
to-video capabilities.
Companies are also recognising the
potential. Almost 70% of large
corporates in the UK are already
leveraging AI technology to better
meet customer needs, drive efficiency
in their business and productivity of
their employees.
The impacts of climate change are
resulting in extreme weather events
across the globe. In fact, 2024 was
confirmed as the warmest year on
record, breaking the previous high set
just one year earlier.
In the UK, the 2023-24 storm season
saw the greatest number of named
storms since 2015. In Canada, record-
high industry losses in 2024 of over
CAD$8bn were driven by four natural
disasters over the summer.
The World Meteorological Organisation
(WMO) highlighted at COP29 that we are
not on track to meet the Paris
Agreement goals. Urgent,
transformative action is required to cut
greenhouse gas emissions to reduce
the likelihood of extreme weather
becoming more frequent and severe.
Source: Investment Association, HM Treasury
Source: Statista, Common Sense Media
Source: IDC, Deloitte, Forbes
Source: Oxera, WMO, The Met Office, CatIQ
Our response
Boosting investment in the UK
Supporting growth by investing
in UK assets across IWR and
Aviva Investors.
Our response
Delivering for our customers
Creating a more personalised and
engaging mobile experience with
our next-generation MyAviva app.
Our response
Putting technology at our core
Investing behind AI and GenAI
capabilities and use cases to deliver
benefits for our customers and Aviva.
Our response
Committing to climate action
Continuing to advocate on key topics to
deliver a more secure and stable future
for customers and shareholders.
Our external environment
Strategic Pillars
Growth
Customer
Efficiency
Sustainability
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Growth
Highlights
Accelerating
growth in capital-
light Wealth and
Insurance -
disciplined in
Retirement
+14%
General Insurance gross
written premiums1
+23%
Wealth net flows
1. Change in constant currency
Read more on
Our business review: page 29
Customer
Highlights
Growing our
customer
base, serving
more needs and
transforming
experience
20.5m
Customers globally
(2023: 19.2m)
5.4m
UK multi-product holding
customers (2023: 4.8m)
Read more on
Our business review: page 29
Efficiency
Highlights
Driving operating
leverage with
technology
and artificial
intelligence at
the core
~50%
Reduction in UK IT
applications since 20181
65%
UK IT applications
are cloud-based
1. Includes impact of baseline adjustments
made in 2020 and 2023 to better reflect our
UK IT estate
Read more on
Our efficiency strategy: page 24
Sustainability
Highlights
Committed to
climate and
social action,
and being a
sustainable
business
51%
Aviva's operational Scope 1 and
Scope 2 emissions reduction1
64%
Reduction in carbon intensity of our
investments2
1. From a 2019 baseline
2. Scope 1 and Scope 2 weighted average carbon
intensity by revenue for listed equities and
corporate bonds held in shareholder and with-
profit funds from a 2019 baseline
Read more on
Our sustainability ambition: page 56
Our strategy
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Growth
Accelerating growth in capital-
light Wealth and Insurance and
disciplined in Retirement.
2024 progress
Our complementary portfolio is a real
advantage, providing resilience and the
ability to grow in different market conditions.
Today, 56% of operating profit is from capital-
light businesses, and we are investing to
accelerate growth here.
In December, we announced the potential
acquisition of Direct Line.
Insurance
In UK&I General Insurance, we have driven
strong double-digit growth. We continue
to accelerate in UK Personal Lines Retail,
growing by 31%, driven by performance
on price comparison websites. We also
completed the acquisition of Probitas,
giving us access to the Lloyd's market.
In Canada, we grew premiums by 11% on
a constant currency basis, while navigating
elevated severe weather with discipline.
We’re also seeing benefits in distribution
from our acquisition of Optiom.
In Protection, we completed the acquisition
of AIG’s UK Protection business in April
2024. In Health, in-force premiums grew by
10%, supported by our wellbeing-led
proposition and guided pathways.
Wealth
Scaling and connecting our Wealth offering
remains a key priority as the leading UK
wealth player, now with £198 billion AUM.
In Workplace, we delivered £6.7 billion net
flows, winning over 470 new corporate
pension schemes. In Adviser Platform, net
flows are up an impressive 69%, and AUM
grew to £54 billion.
We generated over seven thousand
referrals from Aviva into Succession
Wealth, creating £2.5 billion in opportunity
for our planners. In Direct Wealth, net flows
were up over 280%, albeit on a smaller
base, having re-launched a new digital
wealth experience.
Retirement
Our BPA business delivered record
volumes of £7.8 billion in 2024, while
remaining disciplined on margins. That
means we've written almost £18 billion
BPAs over the last three years, delivering
on our ambition for £15-20 billion, which
we set out at our In Focus session in
June 2022.
In Individual Annuities, we have seen
continued demand with another year of
double-digit growth in sales, and we
continue to support our customers in
retirement through Equity Release.
Focus for 2025
We remain focused on accelerating
growth in our capital-light Wealth
and Insurance businesses, while
delivering disciplined growth in our
Retirement and Heritage businesses,
which will continue to play a key
role in future cash generation.
Aviva Zero is our carbon-conscious
car insurance product, available on
price comparison websites. This gives
customers the opportunity to purchase
offsets for their car's emissions.
Built in-house on a leading technology
stack and underpinned by strong pricing
sophistication and agility, this next-
generation proposition was launched to
customers three years ago.
Since then, we've already sold over
one million policies, including more
than 300,000 policies bought by existing
Aviva customers. It's a key driver of
growth for UK Personal Lines Retail.
It's also a key driver of our General
Insurance customer base, along with
our Aviva Online brand. Since 2022, our
Motor customers on price comparison
websites have increased by 50%.
Our strategy
Strategic pillars
Growth
Customer
Efficiency
Sustainability
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Growing in UK Personal Lines with Aviva Zero
Customer
Growing our customer base,
serving more needs and
transforming experience.
2024 progress
Customers are at the heart of Aviva’s
strategy. We want more of them to stay
with us for longer, so that we can look after
more of their needs through key life moments.
We’re always here to support our
customers, wherever and however they
need us, helping them to navigate the
challenges of today’s world.
Growing our customer base
With over 20 million customers globally,
we have a franchise that sets us apart with
a real competitive advantage.
In the UK, we have the largest customer base
of any insurer with 17.1 million customers,
right up there with the major UK banks.
In 2024 alone, this number increased by
1.2 million. Underpinning this is strong growth
in UK General Insurance and our Workplace
pensions business, and we also welcomed
c.760,000 new-to-Aviva customers from our
acquisition of AIG’s UK Protection business.
Serving more customer needs
Customers with multiple products stay with
us longer and buy more from us. They’re
also better protected and more engaged,
which we know leads to better outcomes.
We have 5.4 million UK customers with
more than one Aviva policy, which is an
increase of more than 500,000 in 2024,
including the impact of AIG's UK Protection
business.
We’re continuing to deepen customer
relationships, both for individuals and
corporates. Today, 41% of new sales are
to existing individual customers, and more
than a third of UK large corporate clients
have two or more Aviva business lines.
Transforming customer experience
and engagement
This year, our Transactional Net Promoter
Score (TNPS) is up 5 points1, testament to our
resolute focus on continuous improvement.
In UK General Insurance, for example, we’ve
enhanced our Virtual Assistant to cover more
queries more effectively, and transformed
our claims journey through in-house repair
capabilities with Solus.
We’re also evolving how customers
interact with us. We re-launched our
MyAviva app to deliver more engaging
mobile experience. We're also finding new
ways to engage, such as promoting safer
driving with telematics on MyDrive or
supporting "Money" and "Health" needs
with our Aviva Score tool.
1. The 2023 TNPS comparative has been re-presented to
reflect updates to product weightings used to calculate the
metric to better align to Aviva's strategic priorities
Focus for 2025
We will continue to deliver for our
customers, focused on the three
priorities we set out at Customer
In Focus in October 2024: growing
our customer base, serving more
customer needs, transforming
experience and engagement.
We've been investing in our digital
experience for over a decade now.
But customer needs are changing
more rapidly than ever, with an
increasing preference for mobile-first.
So, in June 2024, we rolled out our
next-generation MyAviva app.
Built on native app technology, it will
enable us to deliver an even more
personalised experience as our single
front-door to everything Aviva.
Now using a more popular codebase,
our technology teams have a broader
pool of engineering talent for further
app development. It will also be far
quicker and easier for us to integrate
third-party tools and services.
With over 10 million log-ins already,
we're receiving very positive
feedback, with Online Experience
Score at over 70%, up 15 percentage
points when compared to the old app.
Our strategy
Strategic pillars
Growth
Customer
Efficiency
Sustainability
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Re-launching our next-generation MyAviva app
Efficiency
Driving operating leverage
with technology and artificial
intelligence at the core.
2024 progress
We remain focused on improving efficiency
across the Group to drive economies of
scale as we grow. This is a key underpin not
only for profitability, but also delivering value
for our customers.
Putting technology at the core of our model
and leveraging our capabilities across
artificial intelligence plays a big role here.
Driving operating leverage
We continue to simplify our IT estate,
delivering more than a 10% reduction in UK
IT applications in 2024 alone. Since 2018,
the total reduction we’ve delivered is
c.50%. We're also focused on moving these
applications to the cloud, delivering greater
scalability, flexibility and security.
We’re digitising journeys to enable more
customers to self-serve. Today, we have
91% self-serve availability across our most
popular journeys1. This drives better
customer outcomes, who can get what they
need from Aviva, when they need it. It also
drives efficiency gains for Aviva. So, it's a
real win-win for customers and for Aviva.
In January 2024, we announced a 15-year
extension to our strategic partnerships with
Diligenta and FNZ. This has been enabling
us to simplify our IT estate even further,
to enhance customer journeys and to
improve customer experience across our
businesses in IWR.
Building enterprise capabilities
We’re developing enterprise IT capabilities
with key strategic partners. For example,
Salesforce for customer relationship
management, Snowflake for cloud-based
data analytics, or Amazon Web Services
for faster development on the cloud.
We’re also modernising data management
to create a single view of UK customers, so
that we can better understand their needs.
Leveraging benefits of GenAI
While GenAI is relatively new, AI is not new
for Aviva, which we have been deploying
for almost a decade. Our aim is to leverage
GenAI to deliver benefits for customers.
We will, however, proceed in a controlled
way, protecting our customers and data.
We have already identified over 150 GenAI
use cases. These are focused on process
enhancements and workforce productivity.
For example, all Aviva colleagues have
Microsoft 365 Copilot Chat, and we're
rolling out GitHub Copilot to all developers.
1. Based on 15 key journeys across the UK: IWR, GI and
Shared (core platforms)
Focus for 2025
We will continue to transform
operations and drive scale
efficiencies, leveraging the power
of Aviva's diversified model.
Putting technology at the core
and leveraging the benefits of
GenAI will remain priorities.
We know GenAI presents a huge
opportunity, and we're already driving
benefits at scale from early use cases.
One great example is our award-
winning claims summarisation tool.
Instead of putting customers on hold
and going through their records, our
agents can now immediately view
relevant information and suggest
appropriate next steps.
This tool is already being used by 40% of
our claims handlers in our UK motor
business. We've seen early signs that it
can reduce call-handling time and
improve customer experience.
Using GenAI is a key part of our
transformation in claims, which has
already delivered an increase in Claims
TNPS of over 40 points since 2022.
Our strategy
Strategic pillars
Growth
Customer
Efficiency
Sustainability
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Leveraging GenAI for claims summarisation tool
Sustainability
Committed to climate and
social action, and being a
sustainable business.
2024 progress
We continue to aim to make a difference
through Aviva's sustainability practices.
This includes enabling positive change
in our society by investing in local
communities, supporting a transition
to a low-carbon, climate-resilient, nature-
positive future, and more.
Social action
We are taking a place-based approach to
social action, striving to support financial
resilience, housing and infrastructure,
and employability prospects. In 2024, we
contributed £32.9 million to communities,
and one million people in the UK, Canada
and Ireland are estimated to have
benefitted.
For example, we've supported over 100,000
people this year through our Citizens Advice
partnership, and in December 2024, Aviva
pledged a further £4 million of funding. We
also helped to fund the new Velindre Cancer
Centre in Cardiff, replacing the current
facility, which serves over 1.7 million people.
Beyond this, we've invested in student
housing, zero-emission buses and more.
Climate action
We're making progress on decarbonising
our business. This includes reducing
Aviva's own operational carbon emissions,
influencing our supply chain, and reducing
the carbon intensity of our investments.
We published the second iteration of our
Transition Plan. This details our strategy
and approach to achieve our 2030 interim
ambitions, and decarbonisation levers to
support the transition.
As a major insurer, we know that we have
an important role in insuring and investing
in the energy transition. Since 2019, we've
invested £8.7 billion in sustainable assets,
from low-carbon homes to windfarms.
We're also supporting climate adaptation
and protecting nature. For example, our
£25 million partnership with the Wildfowl
and Wetlands Trust aims to restore the
UK's shrinking saltmarshes.
Read more on The scope of our
ambitions: page 60
Sustainable business
We remain focused on advancing our
sustainable business practices across our
propositions, workplace, human rights
activity, governance and advocacy.
For example, we have been recognised
again for gender equality practices, and
we are one of the signatories for the
Race at Work Charter.
Focus for 2025
As part of our Transition Plan, we will
progress towards our interim 2030
ambitions to decarbonise Aviva's own
operations. We will invest in communities
to drive social action and prioritise
sustainable business practices.
This year's plan builds on our first
iteration in 2022 by translating our
ambitions into tangible actions.
In addition, we have integrated other
elements such as nature, adaptation
and social considerations.
Our ambition is to be a Net Zero
company by 2040, by mitigating
investment exposure to climate-
related risks, insuring the transition,
and decarbonising our operations.
Achieving Net Zero requires a
collaborative and adaptive strategy
that considers the unique circumstances
of each segment of our footprint.
Based on what we understand today,
and the low degrees of influence we
have over emissions footprints of our
investments and underwriting, we do
not currently see a route to Net Zero
for these emissions. Nevertheless, we
remain committed to using our best
endeavours to address them.
We have also set out interim 2030
ambitions, including a 90% reduction
in Scope 1 and 2 emissions from Aviva’s
own operations and a 60% reduction
in economic carbon intensity of our
investments, versus 2019 baselines.
Download the Aviva Transition Plan
Our strategy
Strategic pillars
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Customer
Efficiency
Sustainability
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Setting a path to Net Zero with our Transition Plan
We use certain metrics to
assess how we generate
value for our shareholders,
how we serve our customers,
the engagement of our
employees and how we
are performing against our
sustainability ambition.
These financial and non-financial metrics
enable us to measure our performance
against our strategic priorities and
our purpose.
The financial KPIs include Alternative
Performance Measures (APMs). APMs
are non-GAAP measures, which are not
bound by the requirements of IFRS or
Solvency II.
A complete list of the APMs used by the
Group, and further guidance in respect
of their use, can be found in the Other
Information section. This guidance includes
definitions and, where possible, reconciliations
to relevant line items or sub-totals in the
financial statements.
These KPIs show our medium-term financial targets
alongside IFRS profit for the year.
Medium-term Group financial targets
Group adjusted operating
profit
Solvency II operating
own funds generation
Cash
remittances
IFRS profit
for the year
Measures the Group's operating
performance over time by excluding
non-operating items.
Measures the amount of Solvency II
own funds the Group generates from
operating activities, a key indicator
of cash generation.
Measures cash remitted in dividends
and loan interest from our operating
businesses to the Group.
Measures the Group's profit after
tax, attributable to shareholders
in accordance with IFRS.
£1,767m
£1,655m
£1,992m
£705m
(2023: £1,467m)
(2023: £1,729m)
(2023: £1,892m)
(2023: £1,106m)
Up 20% driven by strong performance
from our IWR and UK&I GI businesses.
Profitable growth in UK&I GI and lower
Corporate Centre spend offset by a
one-time benefit from partnership
extensions and assumption changes
in the prior year, net 4% down.
Up 5%, reflecting strong growth
in remittances across the Group.
Down 36% due to unfavourable
investment variances from rising
interest rates, partially offset by
profit on disposal of our investment
in Singapore.
Financial KPIs
Our key performance
indicators
Strategic pillars
Growth
Customer
Efficiency
Sustainability
Linked to
Remuneration
Alternative
performance
measure
Data subject
to independent
reasonable
assurance
by EY1
Data subject
to independent
limited
assurance
by EY1
Definition
in Aviva plc
Reporting
Criteria 2024
26
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Combined
operating ratio
Value of new business on an
adjusted Solvency II basis
Solvency II
return on equity (RoE)
A measure of general insurance profitability.
A COR below 100% indicates profitable
underwriting. COR shown below is on an
undiscounted basis to align to the way
in which the business is managed.
Measures growth and is a key source of
future cash flows in our IWR business.
Shows how efficiently we are using our
financial resources to generate a return
for shareholders on a Solvency II basis.
Solvency II RoE excludes any adjustment
for excess capital.
96.3%
£890m
13.6%
(2023: 96.2%)
(2023: £874m)
(2023: 14.7%)
In-line with 2023, despite extreme
weather events in Canada, reflecting
strong underlying performance.
Up 2% due to volume growth in bulk
purchase annuities offset by lower new
business from international investments.
A decrease of 1.1pp due to 2023 benefitting
from Solvency UK reforms to the risk
margin and a lower level of management
actions in IWR in 2024.
Solvency II debt
leverage ratio
IFRS return on
equity (RoE)
Estimated Solvency II
Shareholder cover ratio
A measure of financial strength.
Our preference is to be below 30%
over time.
Shows how efficiently we are using our
financial resources to generate a return
for shareholders on an IFRS basis.
Provides an indicator of the Group's balance
sheet strength.
28.9%
15.6%
203%
(2023: 30.7%)
(2023: 12.7%)
(2023: 207%)
Decreased by 1.8pp, due to debt
redemptions and decrease in value of
debt being partially offset by dividends,
share buy-back and acquisitions.
Up 2.9pp reflecting strong underlying
performance, particularly in our General
Insurance business.
A 4pp decrease, due to dividend
payments, the £300 million share buy-
back, loan redemptions, and acquisitions.
Financial KPIs continued
Our key performance indicators
Strategic pillars
Growth
Customer
Efficiency
Sustainability
Linked to
Remuneration
Alternative
performance
measure
Data subject
to independent
reasonable
assurance
by EY1
Data subject
to independent
limited
assurance
by EY1
Definition
in Aviva plc
Reporting
Criteria 2024
27
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Other
Information
Number of
customers
Multi product
holding customers
Operational carbon
emissions reduction
Employee
engagement
Measures total number of policy-holding
Aviva customers in the Group's businesses
in the UK, Ireland and Canada with at least
one active product.
Measures number of UK customers
who hold more than one policy with
Aviva or a single policy meeting multiple
separate needs.
Measures the percentage reduction in
Aviva's absolute Scope 1 and 2 (market-
based) emissions from 2019 baseline.
Measures how engaged our employees
feel and their perceptions of Aviva.
20.5m
5.4m
51%
91%
(2023: 19.2m)
(2023: 4.8m)
(2023: 50% )
(2023: 88% )
A strong year of growth towards our
ambition of >21m customers by 2026,
achieved through strong sales in our
online products and the acquisition of
AIG's UK Protection business.
Deeper customer relationships have
driven an increase in MPH, including
the impact of the AIG's UK Protection
business acquisition.
Continued focus on reducing operational
emissions, including improved energy
efficiency following our move to our new
London Headquarters.
Our annual Voice of Aviva survey showed
exceptional levels of engagement
increasing by 3pp. Driven by high scores
in strategy, inclusion and leadership.
Women in senior
leadership roles
Ethnic diversity in senior
leadership roles
Cumulative amount invested in UK
infrastructure and real estate
Measures the percentage of women
in senior leadership roles in UK, Ireland
and Canada.
Measures the percentage of ethnically
diverse employees in senior leadership
roles in the UK, Ireland and Canada.
Measures the cumulative amount
invested in UK infrastructure and
real estate since 2020.
40.9%
13.0%
£11.4bn
1. For non-financial measures only. This indicates that
the data was subject to external independent limited/
reasonable assurance by Ernst & Young LLP ('EY').
For the results of that assurance, see Aviva plc
Climate-related Financial Disclosure 2024 Independent
Assurance section and Aviva plc 2024 Reporting
Criteria Independent Assurance section.
(2023: 40.6%)
(2023: 12.8%)
(2023: 9.5bn)
Gender balance is supported through our
policies including equal parental leave
and accessible hiring processes.
Aviva is actively involved in supporting
increased diversity in our business
including being a founder member
of the Change the Race Ratio.
Aviva continues to deliver substantial
investment in the UK supporting a wide
variety of projects including financing
for electric buses and hospitals.
Non-financial KPIs
Our key performance indicators
Strategic pillars
Growth
Customer
Efficiency
Sustainability
Linked to
Remuneration
Alternative
performance
measure
Data subject
to independent
reasonable
assurance
by EY1
Data subject
to independent
limited
assurance
by EY1
Definition
in Aviva plc
Reporting
Criteria 2024
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Other
Information
We operate through businesses
in the UK, Ireland and Canada:
• Insurance, Wealth & Retirement (IWR):
offering Insurance (Protection and
Health), Wealth and Retirement (Annuities
& Equity Release) products, in the UK and
Ireland.
• UK & Ireland General Insurance:
protecting homes, cars, holidays
and businesses, across personal and
commercial lines.
• Canada General Insurance: protecting
homes, cars, lifestyles and businesses,
across personal and commercial lines.
• Aviva Investors: global asset manager
with expertise in real assets,
multi-assets, equities and credit.
We also have international investments
in India and China, and until 18 March 2024
we had an investment in Singapore.
Our business review
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“2024 was another year
of robust performance
for the Insurance,
Wealth & Retirement
business. We maintained
discipline and demonstrated
the value of our portfolio
model. We continue to
transform our business
to deliver good customer
outcomes and be the go-
to financial partner for
our customers.”
Doug Brown
CEO of Insurance,
Wealth & Retirement
Overview
Business strategy overview
Aviva is the largest life insurer in the UK1,
holding a 24% share2 of the UK market and
leading the market in Workplace Pension,
Wealth and Protection. Our unique position
in the market enables us to deliver on our
vision to become the UK & Ireland’s go-to
life-time partner for financial wellbeing by
supporting over 12 million customers with
products spanning Insurance, Wealth and
Retirement (IWR).
Our strategy remains focused on delivering
consistently strong trading performance
whilst continuously evolving to address the
changing needs of our customers, partners,
brokers, and business clients.
We have delivered a breadth of efficiencies
through our significant transformation
agenda and have a clear roadmap to connect
and scale our businesses to continue to
help our customers protect themselves and
invest in their future. We have made good
progress, during 2024, c.44%3 of IWR sales
were made to existing customers.
We are well capitalised and the diversified
nature of the IWR business and wider Aviva
Group gives us a significant advantage.
1. Aviva analysis of half year 2024 company reporting
2. Association of British Insurers (ABI) - 9 months to
30 September 2024
3. Calculated by dividing the number of policies sold to
existing customers by the total number of policies sold.
The measure includes sales in Direct, Corporate Partner
and Intermediary sales channels.
Insurance (Protection and Health)
APE
Retirement (Annuities & Equity Release)
PVNBP
£513m
£9.4bn
2024
2024
2023
2023
2022
2022
Wealth net flows
Value of new business (VNB)
£10.3bn
£839m
2024
2024
2023
2023
2022
2022
Other key financial indicators
2024
2023
Adjusted operating profit
£1,071m
£994m
Solvency II operating own funds generation
£1,029m
£1,297m
Cash remittances to the Group
£1,272m
£1,369m
Cost asset ratio
43.3 bps
41.4 bps
Highlights
Insurance, Wealth & Retirement
Our business areas
Insurance
Wealth
Retirement
30
£513m
£415m
£359m
£9.4bn
£7.1bn
£6.2bn
£10.3bn
£8.3bn
£9.1bn
£839m
£781m
£750m
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Operational highlights
Throughout 2024, we have successfully
delivered numerous initiatives to improve
the experience for our customers and
optimise the efficiency of our operations:
• At the beginning of 2024, IWR announced
a 15-year extension to our key strategic
partnerships with Diligenta and FNZ to
simplify our operations and support our
growth ambitions, with further changes
improving how we serve our customers.
Strong progress on this agenda was
made throughout 2024 with Capita
outsourced services transitioned to
Diligenta on time.
• As part of the Group-wide re-launch of
our MyAviva app, we have delivered key
enhancements, such as a single view of
wealth for our pensions, savings, and
investment customers, and the award-
winning Find & Combine feature to help
customers locate and consolidate their
pensions.
• In line with our strong commercial
performance combined with increased
product usage, 2024 saw operational
demands increase 10% compared to
2023. We were able to service this
demand with a corresponding 8%
increase in operational resources -
highlighting improved efficiency rates on
the back of continued investment into
digitising and automating key processes.
• Despite the increased operational demand,
our key customer experience indicators
also improved throughout the year. Our
Transactional Net Promoter Score (TNPS)
was up 4.3 points on 20231, at +49.9
points following strong focus on key
customer journeys to reduce pain points.
• Our Online Experience Score (OES)
was above target at 68.8% in response
to upgrades and improvements across
key IWR customer journeys.
Sustainability is one of our four
key strategic priorities. We are making
progress in this area, contributing to the
Aviva Sustainability Ambition:
• As an asset holder, IWR invests across
the economy and our investment decision-
making prioritises investment outcomes
for customers and shareholders. Where
possible, we aim simultaneously to
decarbonise our portfolios and increase
portfolio alignment to the goals of the
Paris agreement.
• Where UK IWR has investment decision-
making control for our shareholder
assets and policyholder assets, we are
embedding our stewardship and climate
ambitions into the investment strategy
and day-to-day investment management.
• We also exceeded our ambition for 2024
by achieving 30,079 volunteering hours.
£10.8bn
Investment in sustainable assets2
Products and customers
Insurance
We are the largest combined provider of
Individual and Group Protection in the UK,
insuring over 9 million lives.
The acquisition of AIG's UK Protection
business strengthened our position in the
market and has complimented the breadth
of offerings we can offer our corporate and
individual customers. The integration has
progressed on plan. We moved to an
integrated product offering from August
2024 and recently announced a new 5-year
partnership with NatWest Group, building
on the current partnership between
NatWest and AIG's UK Protection business.
In April, we won the ‘Keeping People
Protected’ category at the LifeSearch
Protection Awards followed by the ‘Best
Diversity & Inclusion Strategy’ award at the
Health and Protection awards in October,
demonstrating our commitment to our
customers and colleagues.
In Individual Protection, we led the market
and continued to deliver for our customers
in the moments that matter, as evidenced
by our customers giving us a TNPS of +82
across our claims journeys.
With the acquisition of AIG's UK Protection
business, our Group Protection portfolio is
now over £875 million which represents an
increase of 47%3 versus 2023, making
Aviva the largest provider of Group
Protection in the UK.
Through collaboration with our corporate
clients and partners, we accelerated the
ways in which our customers can access
our suite of key wellbeing services, seeing
registrations for our Digicare+ and Aviva
Digital GP services across our Protection
and Health customers increase from 269,000
to 305,000, with usage increasing by 60%
versus 2023.
In our Health business, we set out our
ambition for £100 million operating profit
by 2026 through focused growth across
key customer segments and delivery of
a market leading combined operating
ratio (COR).
During 2024 we saw double-digit growth in
Health in-force premiums in a structurally
attractive market. In line with our continued
investment in digital channels and strong
broker engagement, new business annual
premium income in our SME and Consumer
business increased 14%.
Strong cost discipline and excellent agility
in our pricing has allowed us to continue
delivering profitable growth, with a full year
COR and expense ratio achieving low 90s
and early teens respectively.
We have also continued to optimise the
way we work with our supply chain
partners, successfully renewing our major
Hip and Knee agreement and exiting our
Healthcare purchasing Joint Venture with
Vitality, giving us greater control over our
supply chain and improved flexibility in
developing services for our customers.
Wealth
We’re no.1 in Wealth4, with Intermediated
& Retail net flows up 85% year-on-year
and record gross inflows to our Adviser
Platform. We saw strong growth in Direct
Wealth, with net flows up 287% year-on-
year, and in Workplace we won over 470
new schemes in 2024.
1. The 2023 TNPS comparative has been re-presented to
reflect updates to product weightings used to calculate
the metric to better align to Aviva's strategic priorities
2. Cumulative investment
3. As measured by in-force annual premium
4. Aviva analysis of HY 2024 company reporting
Insurance, Wealth & Retirement
Our business areas
Insurance
Wealth
Retirement
31
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Aviva is the largest workplace provider
in the market1. We won 477 new corporate
pension schemes in 2024, continuing our
strong performance in our workplace
offering. This has led to numerous awards
such as 'Best Buy Pension' (Boring Money),
'Best Group Pensions Provider' (Corporate
Adviser) and 'Best Decumulation
Proposition' (Corporate Adviser).
Benefits Guru awarded us six Gold awards
in the 2024 Workplace Pensions and Auto-
Enrolment ratings, demonstrating our
impressive performance in workplace
pension solutions.
We work closely with Aviva Investors, with
over 60% of workplace net flows going into
Aviva Investors solutions.
Our Adviser Platform attracted the second
highest net flows in the market2, driving
assets under administration growth of
more than 20% versus last year, whilst
our Pension Portfolio offering was the
most advisor recommended SIPP in 2024,
according to Defaqto research. We won
'Best Default ESG Strategy' at the Corporate
Advisers 2024 Awards.
Succession Wealth, our advice business,
continued to drive value from the wider
Aviva ecosystem, increasing the value
of assets secured via referrals from Aviva
customers by over 84% compared to 2023.
Succession Wealth was also awarded the
'Wealth Management Firm of the Year'
in the Wealth & Asset Management
Awards 2024.
We launched our first Junior ISA,
encouraging our customers to adopt
positive saving and investment habits from
the first stages of life, as well as Asset
Transition functionality on our Platform.
While Direct Wealth is still at an early-
stage, the business is continuing to grow
customers fund flows positively, and we
are delivering rapidly against our
proposition road map and digital
transformation plans. In 2024 flagship
launches included the new ‘Find and
Combine’ pension consolidation service,
a first national advertising campaign for
our Aviva Wealth brand, and the redesign
of our most critical customer journeys
for ISA and Pension customers.
Retirement
Our Retirement business consists of bulk
purchase annuities (BPA), individual
annuities and equity release.
The BPA business saw a record trading
year in 2024, with £7.8 billion transacted
across 61 deals, including National Grid
(£1.7 billion, our largest to date), Michelin
(£1.5 billion) and RAC (£1.3 billion).
We have achieved our three-year ambition
of £15-£20 billion BPA volumes across
2022-2024, with volumes of £17.7 billion.
Our small scheme proposition, Aviva Clarity,
has been exceptionally well received and
positions Aviva well in supporting smaller
schemes with their de-risking ambitions.
We are the largest provider of UK individual
annuities based on portfolio size. In 2024,
we saw sustained customer demand for
individual annuities, with our external sales
up 27% year-on-year, with our focus on
optimising our operational processes and
investing in recruitment and training helping
to service the demand from customers
and advisers.
In our Equity Release business, we have
evolved our market leading proposition and
won ‘Best Equity Release Lender’ and ‘Best
Equity Release Lender Customer Service’
at the 2024 What Mortgage Awards.
Ireland
In Ireland, we are number four3 in the
market. We offer a wide range of products
across protection, savings, pensions and
annuities and are committed to making it
easier for intermediaries to do business
with Aviva.
PVNBP grew by 35% due to strong growth
in our wealth business and we have gained
2pp4 market share.
Group IQ, a first to market initiative, was
released to the broker market in June,
transforming the new business quotation
process for a key segment of the Group
Protection and Workplace Pensions market.
2024 saw Aviva re-enter the Health
insurance market in Ireland through a joint
venture called Level Health. This saw our
General Insurance (GI) and Life businesses
join up to develop a proposition that
leveraged the strength of both for the
benefit of our customers. Eligible Level
Health customers get discounted home
insurance via our GI business, free
accidental death coverage and discounted
Mortgage Protection from our Life
business.
In November, Aviva picked up both
the Marketing Campaign of the Year
and Property Fund Manager of the Year
at the Irish Pensions Awards.
1. Corporate Adviser (Master Trust & GPP Defaults report,
April 2024)
2. Fundscape Q3 2024 press release
3. Aviva calculation derived from the Milliman Life and
Pensions New Business 2024 HY Report
4. Milliman report Oct 2024
Insurance, Wealth & Retirement
Our business areas
Insurance
Wealth
Retirement
32
Key priorities for 2025
We are committed to being the UK &
Ireland’s go-to life-time partner for
financial wellbeing. As we continue
our progress towards a capital-light
business through our well-balanced
portfolio, our key priorities give clear
direction for how we will deliver for
our customers and colleagues, and
are as follows:
• Complete the integration of AIG's UK
Protection business, including Part
VII transfer.
• Within Health, accelerate in Direct
Consumer & Intermediated SME
whilst maintaining strong position
across Large Corporates.
• Deliver efficiency improvements
through automation and digitisation
and progress towards our vision of
the ‘Workforce of the future’.
• Leverage our 'One Aviva' advantage
to drive growth in multi-product
holdings across our customer
franchise.
• Deliver Connected Wealth – our
seamless Wealth and Advice
proposition set.
• Continue modernisation of our IT
estate, particularly across Health
and Annuities.
• Continued strong focus on risk
management and resilience across
our business.
• Continue to support Aviva's
sustainability ambitions.
Aviva plc
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“In 2024 we continued to
deliver strong financial
performance across our
General Insurance business.
We executed on key
strategic initiatives, including
entering the Lloyd's market
and improved our TNPS
scores through targeted
improvements in customer
service. Looking ahead,
we have significant
transformation planned
to develop our business
further in order to become
the clear UK market leader.”
Jason Storah
CEO of UK & Ireland
General Insurance
Overview
Business strategy overview
Aviva is a leading insurer in both the UK
and Ireland market, providing insurance
solutions to over seven million customers,
having maintained its position as number
one in the UK1 and number three in Ireland2.
We grew both top and bottom line in 2024
through a disciplined trading across our
portfolio management.
We have expanded our UK distribution
footprint through the acquisition of
Probitas, a Lloyd's syndicate operating in
the London Market, and entered new
markets with the launch of Level Health,
a healthcare business in Ireland.
The market for general insurance (GI) in
2024 continued to see first-hand the impact
of severe weather with 13 named storms
throughout the year. These events placed
constraints on supply chain, with further
impacts remaining in the global macro-
economic environment. Despite this,
we continue to invest in our customer
propositions and we’ve seen a 9.5 point
improvement in our UK transactional net
promoter scores (TNPS) throughout 2024.
Our strategy remains investing for
profitable, diversified growth, and to deliver
on our ambition to be the clear market
leader, outperforming over the cycle.
We are pursuing this by delivering across
four priorities:
• Becoming a diversified growth engine;
• Being a trusted customer champion;
• Forging first class operational
foundations to drive efficiency; and
• Progressing on climate and social action.
1.
Source: ABI General Insurance Company Rankings 2023, by GWP
2. Source: Insurance Ireland Non-life Members ranking 2023, by GWP
Total GWP
Personal lines GWP
£7,699m
£3,823m
2024
2024
2023
2023
2022
2022
Commercial lines GWP
Undiscounted COR
£3,876m
94.9%
2024
(2023: 96.8%)
2023
2022
Other key financial indicators
2024
2023
Adjusted operating profit
£708m
£452m
Solvency II operating own funds generation
£572m
£315m
Cash remittances to the Group
£571m
£326m
Distribution ratio
31.2%
32.6%
Highlights
UK & Ireland General Insurance
Insurance
33
£3,823m
£3,155m
£2,578m
£3,876m
£3,485m
£3,162m
£7,699m
£6,640m
£5,740m
Aviva plc
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Operational highlights
• Completed acquisition of Probitas, a fully
integrated Lloyd’s platform that includes
Syndicate 1492, a top performer in
growth and profitability. Entering Lloyd’s
will increase the territories in which we
can underwrite business and provide the
opportunity to further scale our already
strong distribution relationships.
• Launched our travel insurance
partnership with Nationwide Building
Society, providing cover for over
800,000 customers.
• Quotemehappy (QMH) Motor Essentials,
launched in 2022, has helped over
175,000 customers access insurance
through the cost-of-living crisis by
providing quality cover that gives
customers choice and our QMH Connect
proposition enables customers to save
money by driving more safely.
£708m (+57%)
Adjusted operating profit
• We continue to grow our renewables
insurance book, having expanded our
proposition to include offshore wind
capability and rounded out our green
tech appetite to include hydrogen,
hydroelectricity, geothermal, and
biomass.
• Our Aviva Risk Management Solutions
(ARMS) team provided prevention advice
and risk management assistance to our
commercial lines customers virtually
and on-site, with over 53,000 client
engagements in 2024. This advice is
critical in helping our customers prevent
potential loss events in the future.
• Refined our global service proposition,
including establishing dedicated hubs for
Multinational and Delegated Underwriting
business, ensuring capability is in place
to achieve in these growth priority
segments.
• UK GI has achieved +167,000 net new
multi-product holding (MPH) customers.
This has been driven across Motor,
Home and Intermediated Travel,
underpinned by investment in the
MyAviva app which improved customers'
ability to access additional insurance
from Aviva in a convenient manner.
• We have continued to strengthen capability
and capacity in our Commercial Lines
business with over 600 underwriting
licence upgrades, by scaling intelligent
underwriting automation and launching
the market-first Broker Tracker, enhancing
broker visibility of live quote status.
• Strengthened our regional branch network
in Commercial Lines by opening two new
branches in Chelmsford and Southampton
and extending our existing presence in
Glasgow, Newcastle and Belfast.
• Our Aviva Zero motor proposition,
offering customers the opportunity
to offset car emissions, uses next
generation pricing models and has
sold over one million policies since
its launch in 2022.
• We expanded our wholly owned
subsidiary garage network, Solus, with
three new sites in 2024, including the first
completely electric site in Dunstable.
This expanded footprint increases our
proximity to more customers across the
UK to speed up the repair process and
shorten duration of motor claims.
• Positive sentiment recognised in the
insurance market with Aviva winning
'General Insurer of the decade' and
'General Insurer of the year' at the British
Insurance Awards and Insurance Times
Awards. Aviva also secured 5* rating in
the Insurance Times E-Trade survey.
• Claims notes summarisation tool is now
live, where we use GenAI to summarise
notes on Guidewire for our handlers.
This product has won two industry
awards for 2024 and has now benefitted.
• We continue to invest heavily in
technology to support our Irish business,
with our Direct Digitisation initiative
off to a great start on personal lines;
resulting in increased new business,
quote conversion and end to end
online journey fulfilment, reflecting
the enhanced customer experience.
• Level Health, the start-up health
insurance joint venture launched in
November. Entering the Healthcare
market completes our composite retail
offering in the region, now offering
general insurance, life and health
products to the Irish retail market, and
through close work with our IWR
business, customers are offered
incentives to increase their policy
holdings with us.
Products and customers
Personal lines
In personal lines we offer motor, home,
travel and gadget insurance. Our multi-
channel distribution includes selling directly
to customers through MyAviva and price
comparison websites, as well as reaching our
customers through intermediary relationships
with brokers, affinity partners, ‘fintechs’ and
several of the UK’s leading banks.
Our strategy is to focus on growing our
Retail business and attractive, profitable
segments within our market leading
business-to-business (B2B) distribution.
>1 million
Aviva Zero policies sold since
launch in 2022
Our business review: UK & Ireland General Insurance
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We have a clear brand and proposition
portfolio that provides a broad range of
products and services most relevant to
customers' needs. Our UK Personal Lines
business grew 22% in 2024 as we
continued to balance growth with the
maintenance of pricing and underwriting
discipline.
We continue to be the largest provider
in the UK home insurance market and
are a leading high net worth (HNW) insurer.
We are a leading provider of travel
insurance, launching our new partnership
with Nationwide Building Society in 2024
and providing cover for more than 800,000
customers. In 2025, we will grow this
partnership further becoming the sole
underwriter of home insurance in the UK
for Nationwide Building Society members,
adding over 600,000 new home insurance
customers.
In 2024, we have made over 300 distinct
improvements to our products and services
in our Retail business alone, resulting in
strong retention rates and a 9.5 point TNPS
improvement year-on-year. These
customer focused changes include
augmented digital journeys, additional
customer-facing colleagues supporting our
telephony based services, as well as
improving our agility and ability to compete
in a highly price-competitive.
As a result of our claims re-engineering
programme, motor claims TNPS has
continued to improve, reaching +55
in 2024.
Commercial lines
We offer commercial lines insurance
to a wide array of businesses, from
the micro segment up to large UK and
global corporates.
Our strategy is to use our broad distribution
network and leading broker sentiment to
accelerate profitable growth and we
continually review our underwriting
appetite to create new growth
opportunities.
We have invested in enhancing our broker
responsiveness and customer outcomes
through increasing the technical capability
and authority limits of our underwriters,
allowing more decisions to be taken by our
broker facing staff. We've also invested in
automation and artificial intelligence to turn
around quotes to our brokers in less time.
98% of mid-market renewals are now
supported by artificial intelligence and
we have decommissioned legacy IT
platforms to improve efficiency for our
people, freeing up time to underwrite
and tailor service to customer needs.
We continue to build our analytical
and catastrophe modelling capabilities
to allow us to better support our customers
where there is exposure to natural perils
or catastrophes.
In 2024, we have grown our SME business
by 11%, enabled by process efficiencies
and improvements across our Mid-Market
business, disciplined trading and
acceleration of underwriting, digital,
automation and data capability with a
focus on delivering excellent customer
and broker outcomes.
Our Global Corporate and Specialty
business (GCS) has grown 12%, largely
driven by corporate property, the
favourable property market conditions,
and growth in specialty following the
expansion of our proposition.
Our organic growth in GCS was bolstered
by the acquisition of Probitas. Probitas is a
top performer for growth and profitability in
the Lloyd's market. This acquisition gives
Aviva access to dual stamp capability, new
international licences, and opportunity to
further scale our distribution relationships.
In 2024, we introduced seven new lines
within GCS, with five new lines of business
from the Aviva product suite to the Probitas
Lloyd’s syndicate platform. We also
launched new lines of business through our
existing GCS business, introducing
Offshore Wind and Political Violence &
Terrorism, as well as expanding our
appetite for Ports & Terminals.
We have invested in our Commercial Lines
Underwriting and Pricing capability with a
newly expanded Chief Underwriting Officer
leading the delivery of new pricing models
to support the launch of new product lines
in GCS and Lloyd's, incorporating new
technologies to accelerate underwriting
deployments to respond to market
conditions and maintained disciplined
portfolio management sooner.
Key priorities for 2025
• Support the Group's capital-light
strategy by continuing to grow in
Retail personal lines and launching
new partnership deals. We will
solidify our strong commercial lines
position by leveraging our
intermediated distribution
relationships and capitalising our
expanded GCS capability following
the acquisition of Probitas.
• Complete the proposed acquisition
of Direct Line, creating a market
leading personal lines business.
• Continuing our ambition of being
a trusted customer champion,
by delivering great customer
outcomes and tangible
improvements to customer
experience.
• Remained focused on simplifying
our business and improving
customer experience by scaling
the use of artificial intelligence
to improve and simplify our
processes.
• Maintain focus on ensuring our
insurance products support the
transition to a lower-carbon
economy.
Our business review: UK & Ireland General Insurance
Insurance
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Aviva plc
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“Aviva Canada delivered
strong underlying
results in 2024 despite
a challenging year
marked by record-setting
adverse weather events,
challenging regulatory
environment, and
heightened commercial
lines trading competition.
Looking ahead, our focus
remains on maintaining
pricing and underwriting
discipline, whilst executing
on our strategy to drive
profitable growth.”
Tracy Garrad
CEO of Canada General Insurance
Overview
Business strategy overview
Canada ranks among the top ten largest
insurance markets globally1 where Aviva
Canada is the second largest property &
casualty insurer with a c.8% market share2.
In 2024, we continued to make significant
strides towards becoming the leading
insurer in Canada and solidifying our
position as the preferred choice for
customers, brokers and our people. We are
doing this by focusing our key strategic
priorities as follows:
• Growing profitably through strengthening
our partnerships, geographic diversification
in personal lines and further broadening
our commercial lines offerings.
• Delivering industry leading customer
experience, including focused investment
on system modernisation for better
customer interactions.
• Investing in capabilities and technology
programs to boost efficiency, accelerate
performance, and deliver superior
customer outcomes.
• Embedding sustainability practices
across our business through programs
to support our suppliers on their road
to net-zero, creating sustainability-
focused products, and partnering with
organisations and communities to
address climate change.
1. Canadian insurance market position source: swissre.com
2. Canadian market share source: FY2023 MSA Research
Results. Includes: Lloyds, excludes: ICBC, SAF, SGI
and Genworth.
Total GWP
Personal lines GWP
£4,505m
£2,788m
2024
2024
2023
2023
2022
2022
Commercial lines GWP
Undiscounted COR
£1,717m
98.5%
(2023: 95.3%)
2024
2023
2022
Other key financial indicators
2024
2023
Adjusted operating profit
£288m
£399m
Solvency II operating own funds generation
£223m
£339m
Cash remittances to the Group
£135m
£158m
Distribution ratio
31.8%
31.5%
Highlights
Canada General Insurance
Insurance
36
£4,505m
£4,248m
£4,009m
£2,788m
£2,574m
£2,466m
£1,717m
£1,674m
£1,543m
Aviva plc
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Operational highlights
• Strong growth in personal lines, driven
by Personal Auto in Ontario and Quebec.
Focus remains on rate adequacy and
improved segmentation using industry
leading analytics & pricing models.
• Our continued growth in key commercial
lines, driven by strong results in
Commercial Property and Mid-Market
opportunities in Aviva Business (ABI),
and large corporate and non-traditional
opportunities in Global Corporate &
Specialty (GCS). Our focus remains on
strict underwriting discipline to remain
profitable as price competition continues
to increase.
• We accelerated supply chain in sourcing
by partnering with four more auto body
shops, creating better customer
outcomes, indemnity savings and cycle
times. We now have a total of nine body
shops in operation with fully-dedicated
capacity secured.
• Continued investment in system
modernisation to drive operational
efficiency and enhance ease of doing
business with our end customers and
broker partners.
Our response
The series of catastrophic weather events
experienced this summer made for the
most destructive year in Canadian history,
with over $8 billion in industry insured
losses1. Aviva Canada focused on delivering
for customers, mobilising all parts of the
business to support the claims functions.
With the increasing frequency and severity
of these events, prioritising resilience and
implementing mitigation measures is
essential. Throughout the year, weather
awareness campaigns were launched
to provide customers and brokers with
educational materials on weather-related
risk mitigation.
Theft and regulatory pressures in Alberta
continue to be a challenge for all insurers.
Though theft counts have begun to slow in
Ontario, they are still higher than historical
average. We remain committed in the battle
against theft and fraud through diligent
monitoring, proactive investigation, and
persistent efforts in calling for stronger
preventative measures. In Alberta Auto,
we have implemented a series of underwriting
and pricing actions as a start to navigating
the challenging regulatory environment,
though there is more action required to
return to profitability. This includes lobbying
for a much-needed auto insurance reform
that focuses on rate adequacy and
discourages unnecessary litigation.
As the industry increasingly prioritises
ease of doing business, we remain
committed to enhancing our interactions
with customers and brokers to ensure a
seamless experience as well as optimising
our operations.
Products and customers
Personal lines
Our Personal Lines portfolio, which
constitutes 62% of our book, is primarily
composed of mass-market propositions.
Our book is concentrated in the highly
populated province of Ontario, with a
significant proportion in Personal Auto
insurance.
With high growth experienced in 2024,
the focus remains on preserving
profitability. This will be accomplished
through disciplined rate management,
particularly in the highly regulated Personal
Auto markets, and diligent exposure
management in property, to ensure we are
not over-exposed in high-peril regions or
provinces with unfavourable regulatory
environments.
We expect market conditions to continue
given the lack of profitability in the industry,
driven by unfavourable claims experience
in Auto and heightened catastrophic events
in Property.
Our specialty portfolio (Group, High Net
Worth, and Lifestyle) remains a key driver
of profitable growth and we are committed
to further leveraging our product range,
expertise, and best-in-class claims service
to expand market presence.
In 2024, we successfully implemented
a modernised pricing platform, enabling
live rating capabilities and an enhanced
analytical environment. This has enhanced
our speed to market and enabled
implementation of above-market rates in
Personal Auto. Building on this success,
we will accelerate the deployment and
rollout of these capabilities across our
entire product suite and across all regions.
c.19,000
Severe weather claims processed
when our customers needed us
the most
1. CatIQ insured damage estimate in 2024: www.catiq.com
Our business review: Canada General Insurance
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Commercial lines
We consistently deliver profitable growth
in our Commercial lines segments, split
between ABI (18% of the book) and GCS
(20% of the book). As price competition
continues to increase in the Commercial
market, product diversification, deepening
underwriting expertise, and strengthening
technical capabilities will be key to
maintaining profitable growth.
In ABI, growth focus is placed on the
profitable medium and mid-market
segments, particularly in Commercial
Auto segment. We continue to make
progress in optimising our operations,
implementing pricing sophistication and
automating tools to streamline our
underwriting processes.
For GCS, product diversification is key
to accelerating growth. This year, we
broadened our GCS offerings by
launching new Directors & Officers and
vehicle replacement warranty insurance
products. We are actively looking to grow
in attractive segments of the GCS market,
diversifying through the expansion of our
Casualty Specialty products and other
niches, and launching new offerings in
high growth energy transition sectors.
Following the successful acquisition of
Optiom, we have seamlessly integrated
their operations, enhancing our capabilities
and offerings. We will continue to maximise
opportunities through Optiom to diversify
earnings by expanding distribution through
Aviva’s existing broker network and
growing its product suites.
Customers
Aviva Canada continues to deliver
exceptional service to our customers,
especially through this year’s unprecedented
claims volume due to record-setting
catastrophic weather events. As the
frequency of these events increase, helping
our customers build resilience is of utmost
importance. Our partnership with Wildfire
Defense Systems helps safeguard our
customers’ properties in Alberta and British
Columbia from potential wildfire damage.
We remain committed to offering our
customers sustainable options through
our product range. By launching an
improved solar product into our standard
product offerings, we make the adoption of
renewable energy solutions more accessible
and cost effective for all customers.
Claims vertical integration remains a focus
across our portfolio. In 2024, we added
four more partnered body shops with a
total of nine shops in operation with fully
dedicated capacity. Extending a similar
approach to the Home Restoration space,
we are focused on establishing a network
of partnered vendors.
We are committed to innovating and
enhancing the customer experience as
their needs evolve, especially as demand
for digital services and capabilities
remain strong. Building on our existing
partnerships, we have expanded our Buy
Online proposition for our Royal Bank of
Canada (RBC) customers. As we look to
expand our strategic partnerships, we have
also launched a platform that offers chat
capabilities with Online Quote, Buy Online &
Self-serve options, to further complement
our broad distribution channels. This platform
will enhance our readiness for future
customer needs within the partnership
channel and provide our customers
with flexibility in how they meet their
insurance needs.
Distribution channels
In Canada, we have a strong, long-standing
relationship with our network of over 640
independent brokers and a partnership with
RBC, the largest bank and most valuable
brand in Canada1.
Our commercial lines business remains
intermediated by our broker network and
via Managing General Agents, whose
expertise enables us to create specialised
products for targeted customer segments.
In 2025, we will continue to invest in
platform modernisation and enhancing our
digital capabilities to ensure continued ease
of doing business with our partners,
brokers, and customers.
1. PC insurance survey of Canadian consumers. RBC market
position based on brand rank source: Kantar
Key priorities for 2025
• Maintain focus on pricing and
underwriting fundamentals and
diligent exposure management to
ensure profitability across all lines
of business.
• Grow sustainably through our RBC
brand with focus on profitability.
• Broaden our product offerings in
Commercial Lines and use Aviva’s
broker network to grow Optiom.
• Continue our business
transformation through strategic
investments in technology and
capability.
• Improve efficiency and customer
outcomes through continued
expansion of our Claims value chain
insourcing in Auto and Property.
• Continue delivery on our
sustainability, diversity, equity and
inclusion goals to ensure a future-
ready workforce.
Our business review: Canada General Insurance
Insurance
38
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“Aviva Investors had a
solid year with assets
under management,
revenue and operating
profit growing. Our multi-
year outsourcing projects
continue to progress and
a strategic review gave
us clarity and focus to
deliver further growth
in the future."
Mark Versey
CEO of Aviva Investors
Overview
Business strategy overview
Aviva Investors is a global asset manager
with expertise in connecting the right
investment capabilities with individual client
needs combining the breadth of our multi-
asset, private and public market capabilities
to deliver for clients evolving needs. Aviva
Investors manages £238 billion
(2023: £227 billion) of assets, with
£199 billion (2023: £189 billion) managed
on behalf of Aviva Group. Through our
skills and expertise in asset allocation,
portfolio construction and risk
management, we provide a range of asset
management solutions to Aviva and our
institutional, insurance and wealth clients.
Our focus on sustainability continues to be
demonstrated by our investment strategy
and actions in 2024.
Operational highlights
Our goal is to be the best asset manager for
Aviva while also leveraging our investment
expertise for the benefit of external clients.
The key drivers of our strategy are:
• Growth: Continue to support Aviva IWR
growth in annuities, workplace pensions
and wealth, and our external business,
through our multi-asset solutions,
active specialisms and sustainable
product offering.
• Customer: deliver an exceptional client
experience through strong investment
returns, rigorous risk and control culture,
underpinned by sustainability
considerations.
• Efficiency: Reduce the number of
suppliers and enhance the use of data
and technology whilst maintaining
strong cost controls to drive operational
efficiency and better customer outcomes.
Assets under Management
External net flows
£238bn
£0.2bn
2024
2024
2023
2023
2022
2022
Cumulative amount invested in UK
infrastructure and real estate since
2020
Internal Wealth flows
£11.4bn
£4.2bn
2024
2024
2023
2023
2022
2022
Other key financial indicators
2024
2023
Aviva Investors revenue
£374m
£346m
Adjusted operating profit
£40m
£21m
Cost income ratio1
89 %
94 %
Cost asset ratio
14.4 bps
14.5 bps
1. The 2023 comparative amounts for the cost income ratio have been re-presented to calculate the ratio using total
Controllable costs. See the 'Other Information' section for further details.
Highlights
Aviva Investors
Wealth
39
£238bn
£227bn
£223bn
£0.2bn
£0.7bn
£1.3bn
£11.4bn
£9.5bn
£6.9bn
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£4.2bn
£4.0bn
£3.4bn
• Sustainability: underpin the execution
of our business strategy by understanding
and delivering on investors' unique
sustainability preferences.
We have a highly diversified range of
capabilities, with active specialisms across
private and public markets including real
estate, infrastructure, private credit, listed
equities and a range of fixed income
offerings.
Key operational highlights in 2024 are:
• Transformed our external distribution
function under new leadership, with a
higher proportion of staff client facing,
a laser focus on delivering the sales
strategy, and targeting key markets
and product lines.
• Strategic review of our global footprint
resulting in a more focused investment
business. This includes repatriation of US
fund management to central head office
in London.
• Launch of several new funds expanding
our customer propositions.
• Launched our second and third Long
Term Asset Funds (LTAFs) in 2024, with
AUM of £2.2 billion as at FY24 making us
one of the largest providers of LTAFs in
the UK.
• Our liquidity business went from strength
to strength in 2024, with strong investment
performance underpinning above-market
asset growth.
£4.4bn
Net flows into liquidity funds
and cash
Market overview
2024 was a good year for equity investors
as global growth remained resilient despite
higher than anticipated inflation. Although
overall returns were strong in the MSCI All
Country World Index, only eight stocks
contributed to half of the returns, presenting
a challenging environment for active
investors.
In fixed income, High Yield bonds were
the top performing sector, while global
government bond returns were negative
over the year. Central banks cut interest
rates in the second half of the year,
however they are increasingly cautious
on the pace of further rate cuts in 2025.
The year ahead is likely to see a continued
de-coupling of central bank paths as
disinflation progress stays uneven. The
higher-for-longer sentiment helped drive
£4 billion of new flows into our liquidity
strategies, which included flows from over
70 new clients.
Private markets saw equity-based assets
continue to reprice in early 2024, followed
by stabilisation. Real estate performance
diverged, with living and logistics
outperforming while the office sector
remained under pressure. Infrastructure
also showed signs of stabilisation, with
elevated discount rates now a feature and
continued investor interest driven by
energy transition and technology sectors.
European infrastructure debt deals hit a
decade-high of £131 billion whilst real estate
debt activity also increased with more
availability and favourable terms, despite
high borrowing costs. Overall positive
external market growth was a significant
contributor to growth in Assets Under
Management in 2024.
Investment Performance
Consistent delivery of investment
performance is key to meeting our clients’
investment needs and remains a key
priority. Our investment performance
relative to benchmark in 2024 improved
over both one and three year time horizons.
We have realigned our investment team
resource to focus areas and powered up
our fixed income capability, hiring in a
new head of fixed income and head of
fixed income research and by expanding
our credit portfolio manager and credit
analyst teams.
Distribution
Our Aviva client distribution channels
mainly comprise:
• Wealth, where we develop multi asset
propositions to meet the long term
savings needs of Aviva's investment,
wealth and retirement customers; and
• Aviva shareholder, where we develop
investment solutions to support Aviva’s
growth ambitions, primarily in the UK
annuity market.
Our external client distribution
channels include:
• Institutional: Large asset owners, such as
pension funds, endowments, foundations
and their investment consultants; and
• Wealth: Financial institutions (Such as
large private banks), independent financial
advisors and wealth mangers; and
• Insurance companies: where we
externalise our deep expertise and
heritage in servicing insurance clients
Overall net outflows reduced in 2024 to
£(2.3) billion from £(5.4) billion in 2023.
This reduction mainly resulted from
a reduction in transfers out from entities
previously part of the Aviva Group.
External net inflows of £0.2 billion
(2023: £0.7 billion) were net positive for the
sixth straight year in a row, as an increase
in private market redemptions was offset
by strong inflows into our public market
funds.
Internal net outflows reduced to
£(1.1) billion (2023: £(1.6) billion) driven by
higher inflows from annuities offsetting an
higher heritage outflows as asset values
increased.
Key priorities for 2025
• Continued improvement in
investment performance.
• Capitalising on growth opportunities
through our strengths in multi-
assets solutions, our active
specialisms and sustainable
investing.
• Innovate in private markets
including the launch of our Venture
Capital fund and expanding our
market leading workplace pension
proposition.
• Ongoing focus on simplifying our
business to deliver efficiency
benefits.
• Understand and deliver on investors’
sustainability preferences in
partnership with our clients,
including through the sustainability
characteristics of our core products
as well as through the sustainability
products and solutions.
Our business review: Aviva Investors
Wealth
40
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Solvency II capital
Our Solvency II alternative performance measures
Surplus capital
(Invest in the business, M&A,
return to shareholders)
180%
Working range
160%
Action to restore
capital strength
Solvency II performance
• Solvency II OFG and Solvency
II return on capital / equity is
used by the Group to assess
performance and growth.
• Solvency II OFG growth is a key
driver of increased Solvency II
OCG in future periods.
Solvency II capital generation
• Solvency II OCG provides a
foundation for sustainable cash
remittances from our businesses.
• Solvency II future surplus
emergence: provides an indication of
our Solvency II OCG from expected
life business in future periods.
Cash remittance and
centre liquidity
• Driven by our capital and
liquidity risk appetite.
1. The Board has not approved or made a decision to pay a dividend in respect of any future period
Optimal deployment of capital is a key driver
in our strategic decision making, including
product mix, pricing, hedging, reinsurance,
investments, transformation programmes,
acquisitions and disposals. Capital and liquidity
management is embedded in our businesses
and supported by Group-wide policies.
Capital management framework
At the core of our Group capital management
framework is financial strength and efficient
deployment of capital. Key elements of our
framework are as follows:
• Solvency II shareholder cover ratio
working range of 160%-180%, with
opportunities for the deployment of any
excess capital considered as part of the
framework (see below).
• Centre liquid assets of at least £1 billion.
• Solvency II debt leverage ratio below 30%
(other than for temporary periods).
• To maintain our AA credit rating metrics.
The Group seeks to retain financial flexibility
by maintaining strong liquidity, access to a
range of capital markets and significant
unutilised committed credit lines.
The Group operates within solvency and
liquidity risk appetites which are reviewed
annually by the Board. Our businesses are
capitalised based on buffers above their
regulatory minimum levels, which are
specific to each entity. Subsidiary capital
and liquidity risk appetites are reviewed
regularly by subsidiary boards.
The Group and subsidiaries regularly stress-
test their capital and liquidity positions to
ensure they remain resilient to a wide range
of possible risk events.
Dividend policy
Our policy is to deliver a sustainable dividend
at a level that is resilient in times of stress
and is covered by capital and cash generated
from our businesses. We expect to grow the
cash cost of the dividend by a mid-single digit
percentage each year. We also expect to
make regular and sustainable returns of capital
which will further uplift the dividend per share
above the mid-single digit cash cost growth.
Subject to the successful completion of the
acquisition of Direct Line, we currently expect
to declare an additional mid-single
digit percentage uplift in the dividend per
share. Therefore, combined with our existing
dividend policy, two mid-single digit uplifts
in our dividend per share can be expected
in the 12 months following completion1.
Excess capital
In addition to regular capital returns any
excess capital is available for deploying in:
• Additional investment in the business
to support our customer, efficiency
and sustainability objectives.
• M&A where this delivers attractive risk
adjusted returns and the opportunity
is in line with our strategy.
• Thereafter, additional distributions
to shareholders will be considered.
Impact of proposed acquisition
of Direct Line
The proposed acquisition of Direct Line
(see page 13) will enable us to raise dividends
per share and increase future buybacks,
supported by increased cash and capital
generation as well as material capital
synergies to be realised over time.
We currently expect to declare a mid-single
digit percentage uplift in the dividend per
Aviva Share following completion. This uplift
will apply to the enlarged share capital of
Aviva post-completion. We intend to
maintain the current guidance of mid-single
digit growth in the cash cost of the dividend
from this rebased level. We also intend to
maintain our guidance of regular and
sustainable share buybacks from 2026
onwards, and the initial expectation is that
the size of future buybacks will increase to
reflect the increase in share capital, subject
to PRA approval.
Our Solvency II debt leverage ratio is
expected to increase at completion and is
expected to return to below 30% over time.
The acquisition is not expected to impact
our credit ratings. We expect centre liquidity
to remain above £1 billion post-completion.
Capital management
41
Read more on Solvency II
performance: page 43
Read more on Solvency II capital
generation: page 44
Read more on Cash and liquidity:
page 42
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Cash and liquidity
Cash remittances
Cash remittances increased by 5%
to £1,992 million (2023: £1,892 million).
We are on track to achieve our cash
remittance target of >£5.8 billion
cumulative 2024-26 and have exceeded
our previous target of >£5.4 billion
cumulative 2022-24.
Cash remittances
£1,992m
Cumulative cash remittances
were £5.7bn for 2022-2024
Centre liquidity
Centre liquidity comprises cash and liquid
assets. Excess centre cash flow represents
cash remitted by our businesses to the
Group centre less central operating
expenses and debt financing costs. It is
an important measure of the cash that is
available to pay dividends, reduce debt
or invest into our businesses. The table
shows the movement in centre liquidity
over the period.
Excess centre cash inflow was
£1,210 million, which after payment of
ordinary dividends, the share buyback, net
debt repayments, non-operating cash flows
over the year and receipt of proceeds from
the disposal of Singapore, resulted in central
liquidity of £1,695 million as at the end of
January 2025 (February 2024: £1,891 million).
Centre liquidity
£1,695m
Cash remittances from business units
2024
£m
2023
£m
Insurance, Wealth & Retirement (IWR)1
1,272
1,369
UK & Ireland General Insurance1
571
326
Canada General Insurance1
135
158
Aviva Investors
14
25
International investments (India, China and Singapore)2
—
14
Total cash remittances
1,992
1,892
1. We use a wholly-owned, UK domiciled reinsurance subsidiary for internal capital and cash management purposes.
Some remittances attributable to the operating businesses arise from this internal reinsurance vehicle.
2. In February 2025, £11 million of dividends were received from China in respect of 2024
Centre liquidity
20241
£m
20231
£m
Cash remittances
1,992
1,892
External interest paid
(312)
(304)
Internal interest paid
(49)
(48)
Central spend
(417)
(433)
Other operating cash flows2
(4)
136
Excess centre cash inflow
1,210
1,243
Ordinary dividends
(921)
(878)
Net reduction in external borrowings
(599)
(122)
Share buyback
(300)
(300)
External disposal proceeds3
937
—
Other non-operating cash flows4
(522)
(272)
Movement in centre liquidity
(195)
(329)
Centre liquidity as at end of January 2025 and
February 2024 respectively
1,695
1,891
1. Centre liquidity is presented as at the end of the month immediately preceding results publication. Accordingly
cashflows in 2024 reflect those in the 11 month period from March to January of the subsequent year.
Cashflows in 2023 reflect those in the 12 month period from March to February of the subsequent year.
2. Other operating cash flows include group tax relief net receipts in 2023, and group tax relief net payments in 2024
3. External disposal proceeds relate to total proceeds on disposal of Singapore Life Holdings Pte Ltd
4. In 2024 other non-operating cash flows includes capital paid to subsidiaries of £730 million (2023: £194 million)
primarily to fund the acquisitions of AIG's UK Protection business and Probitas, net of an additional remittance of
£200 million from our wholly-owned UK domiciled reinsurance subsidiary. 2023 includes a £92 million fee to the
noteholders of the Group’s £600 million Tier 2 Fixed to Floating Rate Notes due 2058 (paid in July 2023).
Capital management
42
£1,695m
£1,891m
£1,992m
£1,892m
Jan 2025
Feb 2024
2024
2023
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Solvency II performance
Solvency II operating own funds
generation
Group Solvency II OFG has decreased by
£74 million to £1,655 million (2023:
£1,729 million) due to a lower benefit from
IWR management actions. Underlying
Solvency II OFG has increased by £225
million to £1,503 million (2023: £1,278 million)
IWR Solvency II OFG has decreased by
£268 million to £1,029 million
(2023: £1,297 million). Underlying Solvency
II OFG has increased by £22 million due to
higher BPA volumes and AIG's UK
Protection business following our
acquisition in April. IWR management
actions and other OFG has decreased
by £290 million to £158 million
(2023: £448 million) primarily as 2023
included a £208 million one-time benefit
from the extension of two key strategic
partnerships and benefits from assumption
changes.
UK & Ireland General Insurance Solvency
II OFG has increased by £257 million
to £572 million (2023: £315 million)
driven by strong trading, continued
focus on underwriting discipline resulting
in profitable growth and improvements
in efficiency.
Canada General Insurance Solvency II
OFG has decreased by £116 million to
£223 million (2023: £339 million) due to
elevated weather-related catastrophe
losses in the third quarter.
Group Solvency II OFG has benefitted from
a reduction in corporate centre costs and
other to £(136) million (2023: £(219) million)
primarily as a result of lower project spend.
Solvency II return on equity
Solvency II RoE measures return generated
on shareholder capital and is used by the
Group to assess performance and growth,
as we look to deliver long-term value for
our shareholders. Solvency II RoE is
calculated as:
• Operating own funds generation less
preference dividends, equity RT1 note
coupons, adjusted to replace the run-off
of transitional measures on technical
provisions (TMTP) with the economic
cost of holding TMTP (calculated as
Group Weighted Average Cost of Capital
plus 1-yr swap rate, multiplied by the
opening TMTP on a shareholder basis),
divided by:
• Opening unrestricted tier 1 shareholder
Solvency II own funds.
Solvency II return on equity has decreased
by 1.1pp to 13.6% (2023: 14.7%) reflecting the
decrease in Solvency II operating own
funds generation over the year and higher
2024 opening own funds.
Solvency II operating own funds generation 2024:
£1,655 m
Solvency II operating own funds generation
2024
£m
2023
£m
Insurance, Wealth & Retirement (IWR)
1,029
1,297
UK & Ireland General Insurance
572
315
Canada General Insurance
223
339
Aviva Investors
29
19
International investments (India, China and Singapore)
117
156
Business unit Solvency II OFG
1,970
2,126
Corporate centre costs and Other
(136)
(219)
Group external debt costs
(179)
(178)
Group Solvency II OFG
1,655
1,729
of which:
Underlying
1,503
1,278
Management actions and Other
152
451
Solvency II return on equity 2024:
13.6%
Solvency II return on capital/equity
2024
%
20231
%
Insurance, Wealth & Retirement (IWR)
9.4%
11.7%
UK & Ireland General Insurance
24.0%
13.0%
Canada General Insurance
13.6%
21.3%
Aviva Investors
7.4%
4.9%
International investments (India, China and Singapore)
10.8%
13.1%
Group Solvency II return on equity
13.6%
14.7%
1. The 2023 comparatives for opening shareholder own funds and Solvency II return on capital have been re-
presented for IWR, Canada General Insurance and Ireland General Insurance as a result of a revised approach to
allocate capital in our internal reinsurance vehicle. This better reflects the capital supporting IWR, Canada General
Insurance and Ireland General Insurance performance. There is no impact on Group opening own funds or Group
return on equity.
Capital management
43
£1,655m
£1,729m
13.6%
14.7%
2024
2023
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2024
2023
Solvency II capital generation
Solvency II operating capital
generation (Solvency II OCG)
Solvency II OCG measures the amount
of Solvency II capital the Group generates
from operating activities. Capital generated
enhances Solvency II surplus which can
be used to support sustainable cash
remittances from our businesses, which
in turn supports the Group’s dividend as
well as funding investment to generate
sustainable growth. Solvency II OCG by
business is summarised in the table below.
Group Solvency II OCG has increased by
£13 million to £1,468 million
(2023: £1,455 million) despite a lower level
of IWR management actions. Underlying
Solvency II OCG has increased by
£181 million to £1,244 million
(2023: £1,063 million).
Solvency II operating capital
generation 2024:
£1,468 m
IWR underlying Solvency II OCG increased
by £49 million to £768 million (2023: £719
million) primarily due to higher existing
business SCR run-off.
UK & Ireland General Insurance Solvency II
OCG has increased by £46 million, where
growth in Solvency II OFG is partially
offset by the higher capital requirement
due to strong business growth. This capital
requirement is before the benefits of Group
diversification included within Corporate
centre costs and Other.
Solvency II OCG from Corporate centre
costs and Other has increased by
£166 million to £72 million (2023: £(94)
million) due to lower centre costs and
higher Group diversification benefits.
Solvency II future surplus emergence
The chart shows the expected future
emergence of Solvency II surplus from
our existing long-term in-force IWR
business (excluding Health). The projection
does not include future new business or the
potential impact of active management of
the business (for example hedging, risk
transfer and expense management).
Years 1 - 7 include the run-off of
Transitional Measures on Technical
Provisions (TMTP) hence there is an
uplift from year eight onwards.
Solvency II future surplus emergence
on our in-force IWR business together
with capital generation on our future
life new business, Health, Aviva Investors,
International investments and General
Insurance business will provide Solvency
II OCG in future periods.
Solvency II operating capital generation
2024
£m
2023
%
Insurance, Wealth & Retirement (IWR)
1,001
1,102
UK & Ireland General Insurance
337
291
Canada General Insurance
228
311
Aviva Investors
68
—
International investments (India, China and Singapore)
(59)
23
Business unit Solvency II OCG
1,575
1,727
Corporate centre costs and Other
72
(94)
Group external debt costs
(179)
(178)
Group Solvency II OCG
1,468
1,455
of which:
Underlying
1,244
1,063
Management actions and Other
224
392
Solvency II Future surplus emergence – Insurance,
Wealth & Retirement (IWR) (undiscounted) (£bn)
Capital management
44
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
0.0
0.9
£1,468m
£1,455m
2024
2023
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Solvency II capital position
The Group is required to measure and
monitor its capital resources on a regulatory
basis and to comply with capital
requirements of regulators in each territory
in which we operate. At a Group level, we
have to comply with the Solvency II
requirements regulated by the PRA. The
Group Solvency II capital requirements are
calculated using a Partial Internal Model
(PIM) approved by the PRA.
Group capital is represented by Solvency II
own funds. Solvency II own funds are
Cover ratio
NAV per share
Surplus
£m
31 December
2023
Operating
capital
generation
Non-operating
generation
Dividends1
Net debt
redemption
Share
buyback
Acquisitions
and disposals
31 December
2024
Own funds
17,019
1,655
(785)
(959)
(599)
(300)
(392)
15,639
SCR
(8,206)
(187)
674
—
—
—
1
(7,718)
Surplus
8,813
1,468
(111)
(959)
(599)
(300)
(391)
7,921
1. Dividends includes £17 million (2023: £17 million) of Aviva plc preference dividends and £21 million (2023: £21 million) of General Accident plc preference dividends
comprised of a combination of shareholders’
funds, preference share capital, subordinated
debt, and deferred tax assets measured on
a Solvency II basis.
Solvency II surplus at the Group level
represents the excess of eligible Solvency II
own funds over the Group’s solvency capital
requirements calculated in accordance with
Solvency II requirements.
The final PRA rules for Solvency UK reform
became effective from 31 December 2024
completing the review of Solvency II and
replacing assimilated law inherited from the
European Union. As part of this review
changes to risk margin were enacted at 31
December 2023 and Aviva reflected changes
to the matching adjustment requirements at
30 June 2024. As a result, the matching
adjustment cap on sub-investment grade
assets has been removed; the fundamental
spread is now applied by notched credit rating
(rather than whole-letter ratings); and Aviva
has chosen to increase the fundamental
spread on a small number of assets in the
matching adjustment portfolio to reflect
risks that we deem are not fully reflected
in the credit rating. Overall, these changes
have increased the Group Solvency II
shareholder ratio by c.4 percentage points
in addition to the 6 percentage point benefit
of Solvency UK reform recognised at
31 December 2023.
Solvency UK reform also simplifies the
TMTP calculation and whilst this has no
impact on solvency at 31 December 2024
the change will impact how TMTP runs-off
from 2025 to 2031, making it more linear
(i.e. faster run-off). Under the previous
Solvency II rules, the run-off was slower
in the earlier years resulting in a large
residual TMTP to run-off in 2031.
The Group Solvency II position disclosed
is based on 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. It also aligns with
management’s approach to dynamically
manage its capital position. In arriving
at the shareholder position, adjustments
are made to the regulatory Solvency II
position, including removal of own funds
and SCR in respect of with-profit funds
and staff pension schemes in surplus.
Financial strength is key to the Group’s
strategy and the Group’s estimated
Solvency II shareholder cover ratio is 203%
at 31 December 2024 (2023: 207%) and
surplus is £7.9 billion (2023: £8.8 billion).
The decrease in surplus is mainly due to
redemption of subordinated debt and net
impact from the acquisitions of Probitas
and AIG’s UK Protection business and sale
of Singapore. Total capital generation
exceeded dividend payments and share
buyback over the period. The key drivers of
the non-operating capital generation over
the period are an increase in interest rates
and Solvency UK reform changes to
matching adjustment (see above).
Capital management
45
1,468
(111)
(959)
(599)
(300)
(391)
207%
15%
(5)%
415p
8,813
7,921
8%
(11)%
(7)%
203%
404p
(4)%
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Sensitivity analysis
As part of the Group's internal capital
management process, we regularly monitor
the Group's sensitivity to economic and
non-economic scenarios.
The table shows the absolute change in
Solvency II shareholder surplus and cover
ratio under each sensitivity, e.g. a 2pp
positive impact would result in the
Solvency II shareholder cover ratio
increasing from 203% to 205%.
Limitations of sensitivity analysis
The table demonstrates the effect of an
instantaneous change in a key assumption
while other assumptions remain unchanged.
In reality, changes may occur over a period
of time and there is a correlation between
the assumptions and other factors. It should
also be noted that these sensitivities are
non-linear, and larger or smaller impacts
should not be interpolated or extrapolated
from these results.
The sensitivity analysis does not take into
consideration that the Group’s assets and
liabilities are actively managed. Additionally,
the Solvency II position of the Group may
vary at the time that any actual market
movement occurs. For example, the
Group’s financial risk management strategy
aims to manage the exposure to market
fluctuations.
As investment markets move past various
trigger levels, management actions could
include selling investments, changing
investment portfolio allocations and taking
other protective action.
Other limitations in the above sensitivity
analysis include the use of hypothetical
market movements to demonstrate
potential risks that only represent the
Group’s view of possible near-term market
changes that cannot be predicted with any
certainty and the assumption that all
parameters move in an identical fashion.
Specific examples:
• The sensitivity analysis assumes a
parallel shift in interest rates at all terms.
These results should not be used to
calculate the impact of non-parallel
yield movements.
• The sensitivity analysis assumes
equivalent assumption changes across
all markets i.e. UK and non-UK yield
curves move by the same amounts,
equity markets across the world rise
or fall identically.
Additionally, the movements observed by
assets held by Aviva will not be identical
to market indices so caution is required
when applying the sensitivities to observed
index movements.
Stress and scenario testing
In addition to our sensitivity analysis,
stress and scenario testing (including
reverse stress testing) is used to test
the resilience of business plans and to
inform decision-making.
The results of this testing demonstrates
that through the use of key management
actions (e.g. expense and volume
management, hedging, de-risking and debt
raising) the Group can maintain sufficient
liquidity and surplus of Solvency II own
funds over SCR to withstand a variety of
severe scenarios and stresses.
Sensitivities 31 December 20241
Impact on
surplus
Impact on
shareholder
cover ratio
Group Solvency II cover ratio
7.9
203 %
£bn
pp
Changes in economic assumptions
50 bps increase in interest rate
0.1
5 pp
50 bps decrease in interest rate
(0.1)
(6) pp
100 bps increase in interest rate
0.2
9 pp
100 bps decrease in interest rate
(0.3)
(12) pp
50 bps increase in corporate bond spread2
0.1
4 pp
50 bps decrease in corporate bond spread2
(0.2)
(6) pp
100 bps increase in corporate bond spread2
0.2
7 pp
Credit downgrade on annuity portfolio3
(0.3)
(6) pp
10% increase in market value of equity
0.1
— pp
10% decrease in market value of equity
(0.1)
— pp
25% increase in market value of equity
0.2
(2) pp
25% decrease in market value of equity
(0.3)
(2) pp
20% increase in value of commercial property
0.2
4 pp
20% decrease in value of commercial property
(0.3)
(6) pp
20% increase in value of residential property
0.2
4 pp
20% decrease in value of residential property
(0.4)
(6) pp
Changes in non-economic assumptions
10% increase in maintenance and investment expenses
(0.7)
(10) pp
10% increase in lapse rates
(0.3)
(4) pp
2% increase in mortality/morbidity rates – life assurance
(0.1)
(1) pp
2% decrease in mortality rates – annuity business
(0.2)
(3) pp
5% increase in gross loss ratios
(0.3)
(4) pp
1.
The TMTP movements included within these sensitivities reflect prospective changes to TMTP following
simplifications as a result of Solvency UK Reform effective from 31 December 2024
2. The corporate bond spread sensitivity is applied such that even though movements vary by rating and duration
consistent with the approach in the solvency capital requirement, the weighted average spread movement equals
the headline sensitivity. Fundamental spreads remain unchanged.
3. An immediate full letter downgrade (e.g. from AAA to AA, from AA to A) on 20% of the annuity portfolio credit assets,
excluding commercial and lifetime mortgages, which are included in property sensitivities
Capital management
46
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The benefit from Group diversification
is £2.5 billion at 31 December 2024
(2023: £2.2 billion), partly reflecting the
growth in general insurance business over
the period.
Capital required is closely linked to the
Group's risk exposures. Analysis of the
SCR by risk type is a key measure used in
managing risk exposures. The split of SCR
by risks is summarised in the chart below.
Solvency II regulatory own funds
by Tier and Solvency II debt
leverage ratio
One of the objectives of capital
management is to maintain an efficient
capital structure using a combination
of equity shareholders’ funds, preference
share capital, subordinated debt and
borrowings, in a manner consistent with
our risk profile and the regulatory and
market requirements of our business.
Solvency II debt leverage ratio is 28.9%
(2023: 30.7%). During 2024 debt has
reduced due to repayment of €700 million
subordinated debt.
The table provides a summary of the Group’s
regulatory Solvency II own funds by Tier
and Solvency II debt leverage ratio.
SCR by Business (£bn)
5.6
1.6
0.7
0.3
1.5
0.5
(2.5)
7.7
IWR
UK&I GI
Canada
GI
Aviva
Investors
International
Investments
Group
Centre &
Other
Group
Diversification
Total
0.0
5.0
10.0
SCR by Risk (£bn)
2024
2023
Credit
risk
Equity
risk
Interest
rate risk
Other
market
risk
Life
insurance
risk
General
insurance
risk
Operational
risk
Other
risk
(0.2)
2.2
Regulatory view
2024
£m
% of own
funds 2024
2023
£m
% of own
funds 2023
Solvency II regulatory debt1
4,697
5,472
Senior notes
383
401
Commercial paper
50
51
Total debt
5,130
5,924
Unrestricted Tier 1
12,492
72%
13,179
70%
Restricted Tier 1
946
5%
946
5%
Tier 2
3,751
22%
4,526
24%
Tier 32
134
1%
173
1%
Total regulatory own funds
17,323
18,824
Solvency II debt leverage ratio3
28.9%
30.7%
1. Solvency II regulatory debt consists of Restricted Tier 1 and Tier 2 regulatory own funds
2. Tier 3 regulatory own funds at 31 December 2024 consist of £134 million net deferred tax assets (2023: £173
million). There is no subordinated debt included in Tier 3 regulatory own funds (2023: £nil).
3. Solvency II debt leverage is calculated as the total debt as a proportion of total regulatory own funds plus
commercial paper and senior notes
Capital management
Diversified Solvency Capital
Requirement (SCR) analysis
The SCR has decreased by £0.5 billion
to £7.7 billion since 31 December 2023.
The Group diversification between
businesses is the SCR diversification arising
from the sum of the SCR for each market
being higher than the SCR at Group and
arises primarily because of the composite
nature of our business.
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This section provides insight
into how the Board engages
with our stakeholders.
The Board recognises that
stakeholders have diverse
interests and that these
interests need to be heard.
Engaging with our stakeholders is essential
to understand what matters most to them
and the likely impact of any key decisions.
The Board receives updates from the
Executive Directors which detail any
substantial engagement with our
stakeholders. There are also regular
agenda items to ensure that the Board
receives relevant updates on all of our key
stakeholders, such as reports from investor
relations, our people function, customer
service, and our businesses.
The Board held a strategy offsite in June
2024 to consider the long-term strategic
direction of the Group. As part of these
strategic discussions, the Board considered
the industry and market and the potential
impact to stakeholders.
Details of how we engaged with our
different groups of stakeholders during
2024 can be found on the following pages.
The Board regularly reviews its engagement
mechanisms with stakeholders to ensure
they remain effective.
Our Section 172(1) Statement sets out
our approach on how our directors have
performed their statutory duty.
Our Board’s activities section provides
further information on key decisions taken
in 2024, including how stakeholder views
and inputs have been factored into the
Board’s decision making.
Read more on
Our section 172 (1) statement: page 52
Read more on
Our key decisions and how they impact
our stakeholders: page 96
Our stakeholders
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Our people
Our people’s wellbeing and
commitment to serving our
customers are the foundations
of our performance.
How we have engaged
• Our Board attended site visits in
York and Dublin, and our Executive
Directors visited Perth and Bristol,
meeting with a diverse range of
colleagues to hear about what matters
most to our people and to ensure this
is considered when discussing our
strategic priorities. Whilst in Dublin,
the Board held a town hall meeting.
• The Board were invited to join
members of the Aviva Investors team
for an update on activity and to meet
senior leaders from the business.
• Our employee-shareholders were
given the opportunity to meet the
Board and submit questions at our
Annual General Meeting (AGM) in York.
• The Group CEO hosted interactive
sessions with colleagues throughout
the year to give updates on our strategic
priorities, answer questions, and
receive feedback.
• The Board engaged with
representatives of the Aviva
community at the Values in
Action award ceremony.
• The Board, together with the Audit
Committee, reviewed reports on the
whistleblowing service (Speak Up).
• The Chair of the Remuneration
Committee attended a meeting of
the employee representative group
‘Your Forum’.
• The Evolution Council provides a
forum for employee engagement and
feedback to the Chair and Board,
who chairs the Council. Several Non-
Executive Directors and members
of the Group Executive Committee
(ExCo), including the Group CEO and
Group CFO, attended during the year
and discussed their career journeys.
• The Board, and in particular the
Nomination and Governance
Committee, focused on succession
planning, culture, and the talent
pipeline to ensure they were attracting
and retaining the best leaders.
• The Board monitored culture and
engagement through reviewing the
outcome of the Voice of Aviva survey
and the culture diagnostic.
• The Group CEO and ExCo hosted
our 'Leading to One' event bringing
together top senior leaders from
across the organisation.
Outcomes and actions
during the year
• The Board agreed that two members
of the early careers programme
join the Chair's Evolution Council
in January 2024 to provide Gen Z
representation and a voice to the
Board on topical issues.
• The Board updated the Board
Diversity, Equity and Inclusion
Statement to reflect our commitment
to diversity and inclusion initiatives.
• The Voice of Aviva 2024 survey
engagement was the highest it has
ever been at 91.0% (+3 vs 2023).
Our customers
Understanding what’s
important to our 20.5
million customers is key
to our long-term success.
How we have engaged
• The Board and the Customer and
Sustainability Committee received
regular reporting on customer
experience, customer journeys,
customer service levels, and customer
related strategic initiatives, through
improved reporting of our customer
dashboard.
• The Board supported the delivery of
our customer strategy and reviewed
its progress as part of the strategic
delivery updates at the May and
November 2024 Board meetings.
• The Board, together with the Customer
and Sustainability Committee, focused
on the implementation of the FCA's
Consumer Duty and how this impacted
customer experience.
• The Board engaged with customer-
shareholders and answered
questions at our AGM.
• The Board attended showcases in
IWR and visited the customer operations
teams which included call listening
with claims teams during the Board
site visits.
• The Board focused on digital customer
journeys, making it easier and more
convenient for customers to interact
with us through the launch of the new
MyAviva app.
• The Board reviewed reputation
updates with a focus on measuring
Aviva’s reputation with stakeholders
for future reporting.
Outcomes and actions
during the year
• The Risk and Customer and
Sustainability Committee Terms
of Reference were strengthened
in their oversight of Consumer Duty
and it was agreed that a Consumer
Duty dashboard be reviewed on
a regular basis.
• There was an increased focus on
improving the digital roadmap and
experience for customers which
resulted in the new MyAviva app,
leading to increased Overall
Experience Scores. Focus will remain
on further consolidation to improve
the customer journey.
• Launch of the UK’s first ‘Find and
Combine’ pension tracing, checking,
and consolidation service.
• As a result of discussions at the
Customer and Sustainability
Committee around 'Connected
Wellbeing', Aviva added a range of
wellbeing services and benefits to
every Group Personal Accident or
Business Travel product.
Our stakeholders
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Our shareholders
Our retail and institutional
shareholders are the owners
of the Company.
How we have engaged
• The 2024 AGM took place in York, a
place where Aviva has had a presence
since the 1820s, which gave the Board
an opportunity to meet local retail
shareholders.
• Throughout the year, the Chair, Group
CEO, and Group CFO met with
institutional investors as part of our
regular cycle of investor meetings and
the external investor presentation on
the potential acquisition of Direct Line.
• The Board received regular updates on
our interaction with institutional
shareholders.
• A shareholder newsletter was
published on aviva.com every quarter
which provided information on recent
Board changes, financial or strategic
updates, and information about our
Aviva Foundation projects.
• The Board have continued to focus on
meeting all our customers’ Insurance,
Wealth and Retirement needs, to
support long-term delivery of future
shareholder returns through value
appreciation and dividends.
Outcomes and actions
during the year
• As a result of positive feedback from
shareholders regarding hosting the
AGM outside of London, the Board
decided to hold the 2025 AGM in
Bristol, providing another opportunity
to meet local retail shareholders.
• In March 2024, the Company
announced a further buyback of
its ordinary shares for a maximum
aggregate consideration of
£300 million as part of our programme
of regular and sustainable capital
returns, taking the total amount of
capital returns and dividends paid to
shareholders to more than £10 billion
since 2020 and the updated dividend
guidance to grow the cash cost of the
dividend by mid-single digits. The
buyback which commenced on 8
March 2024 was completed on 28 June
2024 with 62,815,617 shares cancelled
under the programme. For further
details see note 31 of the financial
statements.
Our communities
We recognise the
importance of contributing
to our communities through
volunteering, community
investment, and long term
partnerships.
How we have engaged
• The Board received updates on
the Aviva Foundation and Aviva
partnerships with third sector
organisations including Citizens
Advice, the WWF, and our community
programmes including the Aviva
Community Fund where we support
community investment projects
aligned to our values.
• The Customer and Sustainability
Committee received regular updates
on the progress of Aviva’s
Sustainability Ambition throughout
2024 with the Committee Chair
providing an update on matters
discussed at each Board meeting.
• The Board approved the Transition
Plan and Climate-related Financial
Disclosure.
• The Board continued to focus and
monitor progress on initiatives that
it believes will have a positive impact
on the communities in which Aviva
operates. This included various
initiatives with our partnership with
the WWF and our Aviva vulnerable
customer referral line and further
digital work with Citizens Advice.
• Climate and sustainability training was
provided for the Group and subsidiary
Boards and an online sustainability
training site, the 'Sustainability
Academy' was rolled out to support
employees with sustainability learning.
Outcomes and actions
during the year
• Employees across the Group were
offered the opportunity to volunteer
their time to support charities and
organisations, with over 107,810
volunteering hours recorded.
• The latest round of the Aviva
Community Fund focused on projects
which help improve financial resilience,
promoting the vital work that Citizens
Advice and Money Advice Trust offer
in supporting communities.
• Aviva has contributed £9 million over
the last two years, £7 million to
Citizens Advice and £2 million to the
Money Advice Trust, to help build their
capacity to tackle the cost of living
crisis. During 2024, Aviva additionally
pledged over £4 million to Citizens
Advice to continue our partnership
and introduce new and collaborative
initiatives.
• The Aviva Foundation pledged just
under £2.4 million funding to
organisations delivering public benefit
focused on financial resilience.
Our stakeholders
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Our suppliers
We operate in conjunction
with a wide range of suppliers
to deliver services to our
customers. It is important
that we build strong working
relationships with our
intermediaries.
How we have engaged
• The Board delegates engagement
with suppliers and oversight to senior
management.
• All supplier related activity is managed
in line with the Group procurement and
outsourcing business standards. This
ensures that supplier risk is managed
appropriately in relation to customer
outcomes, data security, corporate
responsibility, and financial,
operational and contractual issues.
• The Board, via reporting from the Risk
Committee, was kept updated on the
development of any key supplier risk.
• The annual Club 110 Broker Conference
was held and our Key Partner
Conference was attended by senior
management.
• The Risk Committee and senior
management on behalf of the Board
considered key suppliers
regarding Aviva's
Sustainability Ambition.
• The Customer and Sustainability
Committee reviewed the Business
Ethics Code, which includes all trading
entities such as Solus and receives a
report on any breaches of the Code.
• The Risk Committee on behalf of
the Board reviewed the Group’s
cyber risk and control environment
including the threat posed by the risk
of ransomware attacks on both the
Group and our material third party
suppliers.
• The Board reviewed the Company’s
engagement with its broader supply
chain as part of its annual approval
of the Modern Slavery Act Statement.
Outcomes and actions
during the year
• Improved reporting on supplier risk
was presented to the Board, as part
of the Board's continuing programme
of supplier oversight.
• To ensure continued efforts to
strengthen controls, the procurement
and outsourcing (P&O) business
standard was refreshed for 2024.
• Aviva continued to hold its Net Zero
supplier summit.
• Aviva remains a signatory to the
Prompt Payment Code.
Regulators
As an insurance company,
we are subject to financial
services regulation and
approvals in all the markets
we operate in.
How we have engaged
• We have maintained a constructive and
open relationship with our regulators
and the Board has regular meetings
with our UK regulators.
• Regulators engaged with us to discuss
their objectives, priorities and
concerns, and how they affect our
business.
• The Prudential Regulation Authority
(PRA) attended a Board meeting during
the year and both the PRA and
Financial Conduct Authority (FCA)
discuss regulatory issues with board
members.
• The Group CEO led the Group annual
strategy meeting with the PRA and the
FCA, supported by the Group CFO and
Group Chief Risk Officer.
• Continued focus on Consumer Duty
with training was provided to the
Group and subsidiary Boards in 2024.
Outcomes and actions
during the year
• Regulatory priorities were regularly
discussed at Board and Audit and Risk
Committee meetings.
• The Board, together with the
Customer and Sustainability and Risk
Committees, monitored and received
regular updates on the implementation
of the FCA's Consumer Duty and
requested a quarterly dashboard in
order to ensure appropriate oversight.
Our stakeholders
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We report here on how our
directors have performed
their duty under section 172(1)
of the Companies Act 2006
(s.172).
s.172 sets out a series of matters which
the directors must have regard to when
performing their duty to promote the
success of the Company for the benefit
of its shareholders, including having
regard to other stakeholders.
Our Board considers it crucial that the
Company maintains a reputation for high
standards of business conduct. The Board
is responsible for establishing, monitoring
and upholding the culture, values, standards,
ethics, and reputation of the Company
to ensure that our obligations to our
stakeholders are met. The Board monitors
adherence to our policies and compliance
with local corporate governance
requirements across the Group and is
committed to acting where our businesses
fall short of the standards we expect.
The Board requires stakeholder
implications to be considered within
all proposals submitted to it from across
the organisation. Stakeholder interests are
identified in proposals, both within papers
to the Board and as part of accompanying
presentations.
Our Board is also focused on the wider
social context in which our businesses
operate. Examples of how stakeholder
engagement and s.172 matters have
influenced Board discussion and decision
making during the year can be found in
Our Board's activities.
This section sets out where key disclosures
in respect of each of the s.172 matters can
be found.
The likely consequences of
any decision in the long term
Delivering for Customers and
Shareholders: page 4
Our strategy: page 21
Our sustainability ambition: page 56
Our Board's activities: page 96
The impact of our operations
on communities and the
environment
Our strategy: page 21
Our stakeholders: page 48
Our sustainability ambition: page 56
Customer and Sustainability Committee
report: page 110
Non-financial and sustainability
information statement: page 69
The interest of the Company’s
employees
Our people and culture: page 53
Our sustainability ambition: page 56
Our stakeholders: page 48
Our Board's activities: page 96
Governance Report: page 85
Remuneration report: page 112
Non-financial and sustainability
information statement: page 69
The desirability in maintaining
a reputation for high standards
of business conduct
Non-financial and sustainability
information statement: page 69
Our risks and risk management:
page 74
The need to foster the Company’s
business relationships with
suppliers, customers and others
Our strategy: page 21
Our stakeholders: page 48
Our sustainability ambition: page 56
Non-financial and sustainability
information statement: page 69
Customer and Sustainability Committee
report: page 110
The need to act fairly as
between members of the
Company
Our stakeholders: page 48
Directors’ report: page 145
Governance report: page 85
Our section 172(1) statement
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“It’s our 25,000 brilliant
people working together,
for our customers, across
the UK, Ireland and
Canada, that make Aviva
a great business and a
fantastic place to work.”
Danny Harmer
Chief People Officer
Aviva’s success is down
to our people. Which is why
we are relentless in supporting
our colleagues to be at their
very best and equipping them
to deliver for our customers
and the business.
Brilliant leaders, learning
and careers
In 2024 we identified six future skills to
prioritise; data, digital, change, leadership,
collaboration, and commercial acumen.
We delivered skills booster sessions
across these areas throughout 2024.
The Foundry, our digital and data reskilling
hub, which launched in January 2023, has
gone from strength to strength and we hit
our initial goal of equipping more than 200
colleagues with digital and data skills for
the future.
In 2024 we also launched our Wealth
Academy to develop people for careers
in our Wealth business.
On average our people completed 3 days
of learning in 2024. 88% of our colleagues
tell us that they feel they have opportunities
to learn new skills at Aviva.
In Early Careers we had an increase of
86% in applications for graduate roles with
over 200 graduates and apprentices joining
in September. Our apprenticeship levy
commitment has continued to increase and
we now have 531 colleagues studying for
apprenticeships across Aviva. We continue
to gift some of our unspent apprenticeship
levy to support local businesses.
Developing Our
Workforce to be Gen AI
Ready in 2024
This year, we established a programme
to help all of our people safely embrace
Gen AI focusing on four key areas:
Culture, Leadership, Adoption, and
Data Skills.
In September, we launched our
internally designed 'World of Gen AI'
digital learning module on Aviva
University. This training featured Aviva
Gen AI experts alongside interactive
content explaining the fundamentals
of Gen AI and common risks to look
out for. Over 20,500 colleagues have
completed this module.
In October, we introduced our
Executive Gen AI Development
programme for our top 300 leaders,
covering AI Horizons, Art of Prompt
Engineering, AI in Business, Ethical AI,
and AI Ready Organisation.
And we’re excited that our first Gen AI
tool, CoPilot Chat, is now available to
all our people. This is helping people
to work more efficiently, so they can
focus on the work that makes the
biggest difference to our customers.
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Engaging our people
In 2024, our annual Voice of Aviva survey
showed exceptional levels of engagement,
with 91% of colleagues saying they would
recommend Aviva as an employer.
The credit for our positive culture and high
engagement belongs to every one of our
colleagues. We use insights from our
engagement surveys and data to understand
the key drivers of engagement and performance
and to build robust plans around those areas.
For example, we have been relentless
about helping our colleagues understand
our strategy and how what they do
contributes to our pillars of customer,
growth, efficiency and sustainability.
Regular Aviva wide leadership and
employee communications and broadcasts
keep our people engaged and informed.
We also know that inclusion and a sense
of belonging along with perceptions of
agility and adaptability are key drivers
of engagement.
Leadership effectiveness is also high
and continues to increase. Our Customer
Focus Index increased over the last year,
with 95% of colleagues understanding how
their work impacts customer outcomes.
Diagnosing culture
Our annual culture diagnostic focuses
on six dimensions of culture and tracks
colleague perception data from the Voice
of Aviva survey, as well as customer and
people metrics. This is presented to and
used by the Board to monitor culture.
In 2024, we again saw improvements across
all dimensions of the culture diagnostic,
particularly around encouraging a culture of
innovation and colleagues seeing how our
values guide decision making and behaviour.
Putting strategic insights
into action
In response to Voice of Aviva and
our Culture Diagnostic we have three
company-wide priorities for 2025:
1. Continue to focus on our ability
to adapt to new ways of working
2.Maintain high levels of inclusion
and belonging; and
3.Invest in leadership development
+6%
Leadership effectiveness increase
since 2022
Our people and culture
54
While improving in the
moments that matter
We want Aviva colleagues to have an
exceptional experience throughout
their career. We introduced Lifecycle
surveys to gather feedback at key
moments such as recruitment,
promotion, parental leave, working
pattern changes and leaving Aviva.
The surveys provide powerful insights
and we have used them, for example,
to improve the experience of joiners
with our New Starter Hub and better
leader guidance for onboarding new
joiners. In addition, the support we
provide colleagues taking parental
leave is improved as a result of
feedback from the surveys.
With our people at every stage
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The Culture Diagnostic
The six dimensions used to assess Aviva’s
culture reflect regulatory expectations
and frame discussion with the Group
Executive Committee and Board on how
we measure and monitor our culture.
Data sources
The data used to inform the analysis
against the six dimensions is based
on three key sources:
• Colleague perspectives on, and
experiences of, our culture captured
in Voice of Aviva.
• Colleague behaviours across the
employee lifecycle captured via
HR data (such as senior leadership
diversity, absence rates etc.).
• Colleague and customer metrics
and feedback on their experiences
of Aviva’s service.
Leadership & direction
Leadership and tone from the top
has the greatest influence on the
culture of an organisation.
Values
Values are drivers of habitual behaviours
and mindsets that characterise an
organisation, and impact customer
and colleague experience.
Accountability
Accountability is a critical driver of
colleague performance metrics – higher
accountability tends to drive better
productivity and lower absence.
Diversity of thinking
Where a culture of diverse thinking exists,
customers feel we are better able to meet
their needs and there are higher levels of
innovation and organisational agility.
Safe to speak up
A culture where it is safe to speak up
enables colleagues to feel they can ask
questions and raise issues without
worrying about the consequences.
Customer focus
A culture where the customer is
front of mind and colleagues feel
able to challenge decisions and
quickly resolve customer issues.
We are a Great Place to Work
In 2024, we were accredited as a Great
Place to Work™ in the UK, Ireland and
Canada. This accreditation recognises
the very best employers and supports
our ambition to retain and attract the
best talent.
We ranked in the Best Place to Work™
in Ireland (ranking 2nd), UK (ranking 15th)
and Canada (ranking 19th).
All of our people have the opportunity to
share in Aviva's success as shareholders
through membership of our global
share plans.
Aviva is for everyone
We want all our colleagues to feel they belong
and for our people to reflect the customers
and communities we serve. It is a key driver
of engagement and performance and is good
for our business and for society.
We have six broad and thriving colleague-led
inclusion communities that work together
across Aviva.
Our Executive Long-Term Incentive Plans
are linked to performance against our
diversity, equity, and inclusion targets,
reinforcing our commitment to action and
driving sustainable change. Gender and
Ethnicity are areas where we need better
senior leader representation.
How our people feel
86%
believe Aviva values their
health and wellbeing
85%
'feel like they belong'
at Aviva
89%
feel that they ‘can be themselves’
at work
We have increased female senior
leadership to 40.9%, up 3.6 percentage
points since the start of 2022. Our policies,
including equal parental leave and job
sharing, support gender balance, and we’ve
made hiring processes more accessible for
all candidates by reducing the number of
criteria, using more inclusive language,
and publishing salary bands.
For senior leader ethnicity, we have
achieved 13%. We are founder members
of Change the Race Ratio, chaired by Sir
Trevor Philips.
At the 31 December 2024 we
had the following gender split
Board Membership
46.2%
l Female (6)
l Male (7)
Senior Leaders
40.9%
l Female (444)
l Male (641)
Aviva Group Employees
52.3%
l Female (13,441)
l Male (12,275)
We have sharpened our focus on both
socio- economic mobility and
neurodiversity by being founder members
of Progress Together and GAIN (Group for
Autism in Insurance and Neurodiversity)
respectively.
We progressed from 25th to 15th on the
Social Mobility Index, and were the top
FTSE financial services firm. Carers UK,
recognized Aviva as an Ambassador,
one of only six in the UK.
As a Disability Confident Employer, we
interview every disabled applicant who
meets the minimum criteria for the job and
as part of our Smart Working approach,
offer workplace adjustment passports for
colleagues. Our training, development
and career paths are accessible to all.
Looking ahead to 2025
• Invest in the development
of leaders.
• Grow our Academies and the
Aviva University curriculum
to offer learning for all that is
relevant to our customers and
strategy, with a focus on future
skills development.
• Maintain momentum on building
a workforce that reflects our
customers and communities.
• Leverage our colleague value
proposition and use our
accreditation with Great Place
to Work to attract and retain
the best talent.
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46.2%
53.8%
40.9%
59.1%
52.3%
47.7%
“Taking action on climate
change and building
stronger, more resilient
communities is core to our
sustainability ambition,
as well as to achieving
our business priorities.
Creating sustainable
value for our customers,
shareholders, colleagues,
and communities is
integral to everything
we do at Aviva.”
Stephen Doherty
Group Chief Brand and
Corporate Affairs Officer
Aviva aims to be a sustainability leader. Sustainability is integral to how we do business at Aviva.
The three elements of our strategic sustainability framework are closely interconnected.
Our sustainability ambition
Our sustainability pillars
Social action
Climate action
Sustainable
business
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Decarbonising
our business
Read more on
page 59
Protecting and
restoring nature
Read more on
page 62
Insuring and
investing in the
energy transition
Read more on
page 61
Supporting
climate adaption
Read more on
page 61
Improving
employability
prospects
Read more on
page 58
Investing in
housing and
infrastructure
Read more on
page 58
Good
governance
Read more on
page 65
Employer of
choice
Read more on
page 63
Purposeful
propositions
Read more on
page 63
Protecting
Human Rights
Read more on
page 64
Strengthening
financial
resilience
Read more on
page 57
Find our regularly updated
sustainability news at:
www.aviva.com/sustainability/
sustainability-news
Find out more on climate
reporting within the Climate-
related Financial Disclosure
and more about our long-term
climate ambitions and how we
aim towards a 'Just Transition'
to Net Zero within the
Transition Plan and a summary
of this on: page 25
Find all our latest sustainability
metrics in the 2024
Sustainability Datasheet
Aviva aims to help in building
stronger, inclusive communities
at the local level. We focus on
enhancing financial resilience,
housing and infrastructure, and
employability prospects.
Increasingly, we are taking a place-based
approach, working with cross-sector
leaders on priority local challenges and
opportunities to help regenerate the
places where we live and work.
In 2024, the amount we contributed to
communities was £32.9 million, which
represented 2% of our Group adjusted
operating profit.
Over one million people are estimated to
have benefitted from our community
investment programmes across the UK,
Ireland, and Canada compared to over
800,000 in 2023.
Find out more about our sustainability
action stories within Norwich, York
and Sheffield at:
www.aviva.com/sustainability/our-
ambition/#places
Strengthening financial resilience
Aviva’s principal partners
helping families and businesses
Citizens Advice and Money
Advice Trust
During 2024, our partnership with Citizens
Advice has:
• Delivered support to 25 local offices,
funded 35 telephone-based advisors
and digital services
• Identified £14.5 million of additional
income for individuals - such as through
new benefit claims
• Supported over 102,000 people
with advice
In addition to the impact of funding, we
have established a volunteering and skill-
sharing programme, including participation
from Aviva marketing and data experts
using their time to work on Citizens Advice
projects.
2024 was the busiest year on record for
local Citizens Advice since 2018.
In December 2024, Aviva pledged over
£4 million additional support to:
• Support the transformation of Citizens
Advice online advice service, including
AI and new online chat functionality -
helping to meet more client needs,
more quickly
• Develop a dedicated customer referral
line for Aviva customers showing signs
of vulnerability– a first for an insurer
and Citizen’s Advice tie-up
• Continue to fund 35 advisors across
the UK
• Train Aviva colleagues who will
volunteer one day per week for 12
months to serve as frontline advisers
at Citizens Advice.
During 2024, our partnership with Money
Advice Trust helped an additional 18,500
small businesses via their Business
Debtline. We also supported their Building
Up Business project, which will provide
vital insight and recommendations on how
to close the business finance skills and
confidence gap and improve support for
small business owners.
Business in the Community (BITC)
(King’s Responsible Business Network)
Aviva is BITC's first National Place Partner,
helping bring together key stakeholders of
community groups, businesses, and local
councils to create a strategic vision for
long-term change. We are supporting
BITC’s ambition to be working with 50
communities across every region and
nation in the UK by 2032.
Aviva Foundation1 driving
financial resilience initiatives
In 2024, the Foundation granted over
£2 million and supported 17 new projects.
Many of the new initiatives supported
focused upon financial well-being.
Aviva Community Fund helping
inspirational projects
The Aviva Community Fund has formed
a key part of our community investment
approach since it was launched in the UK
in 2015.
In 2024, the Fund helped 442 community
projects across the UK raise £5.4 million.
This was made up of match-funding
donations of £2.2 million from Aviva in
addition to partner donations and
crowdfunding.
Volunteering
In 2024, our people volunteered for
107,810 hours vs 87,599 in 2023 across
the UK, Ireland, and Canada.
Social action
Social action
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Read more about Aviva Foundation
supported initiatives at:
https://www.aviva.com/sustainability/
aviva-foundation/case-studies/
https://www.aviva.com/sustainability/
aviva-foundation/#our-impact
Discover thousands of the amazing
causes we've supported here:
www.aviva.com/sustainability/taking-
social-action/aviva-community-fund-
map/
1. The Aviva Foundation is administered by Charities
Trust under charity registration number 327489
Investing in housing and infrastructure
Improving employability prospects
Aviva invests to generate
income for customers,
while also contributing to
the development of more
inclusive communities1.
This is not only on behalf of the 14% of the
UK adult population who save or retire
with Aviva, or the 12% of the UK that insure
with Aviva, but for the wider community
we have a responsibility to serve.
Real estate and infrastructure
Aviva Investors, has invested £11.4 billion
in UK real estate and infrastructure since
2020, including debt refinancing. These
investments, on behalf of savers and
investors, have helped support job
creation across the UK.
Across 2024, we’ve increased
investment in some innovative areas.
Zero energy bill homes
In October 2024, we announced the
partnering with Octopus Energy, to offer
the ‘Zero Bills’ energy tariff at two of our
UK build-to-rent developments with
Packaged Living. This follows Aviva
helping to fund the creation of almost
1,400 single-family homes across 10
developments in the UK, which have
either exchanged or are under
construction, as part of Aviva Investors’
UK single-family housing platform.
Student accommodation
Aviva Investors are investing in the
UK’s universities, supporting cities that
build the UK’s future skills base.
In October 2024, we acquired purpose-
built student accommodation in Glasgow.
In July 2024, we supported the funding
of a new student village in Staffordshire,
that aims to provide modern, sustainable
living spaces for almost 1,000 students.
Retirement homes
In November 2024, we partnered with
Broadwood Later Living Sustainable
Construction Finance Fund by providing
a £100 million credit fund for the
development of later-living properties,
which meet selected sustainability criteria.
Sustainable transport
In April 2024, we launched ‘Rock Road’,
a zero-emission bus financing platform,
through Aviva Capital Partners. Partnering
with UK Infrastructure Bank (National
Wealth Fund) and HSBC UK, collectively
committing an initial £100 million to
accelerate fleet decarbonisation of up to
250 buses and associated infrastructure.
In May 2024, we announced additional
funding for Zenobē, which operates over
a quarter of the UK's electric bus fleet.
Health and schools
In April 2024, we announced the
completion of an investment to finance the
development of the new Velindre Cancer
Centre in Cardiff, Wales. This centre will
replace the current facility, which serves
over 1.7 million people. The project is part of
the Welsh Government’s Mutual Investment
Model (MIM), focusing on improving public
services and community benefits.
1. While we integrate environmental, social, and
governance (ESG) factors into our investment
processes, not all investments in our portfolio
are focused on ESG
Aviva is taking a place-
based approach to
improving employability
skills in the UK and has
been involved in many
initiatives across 2024.
Bringing the world of work
to young people in Sheffield
Aviva is involved in the See It Be It
Sheffield programme and intends to
help scale it nationally. This programme
provides school age children with
meaningful encounters with employers.
Raising career aspirations
through education and
engagement in York
‘The Place’ in York helps children and
young people prepare for employment.
Aviva, York University, and other donors
support it by creating skills and
employability programs.
Early Careers pilot - live in
York and Norwich
Aviva offers a range of student and graduate
opportunities, including apprenticeships,
placements, and work experience,
designed to develop the knowledge and
skills needed to succeed in the future of
work. In 2024, we have given young
people with Special Educational Needs or
Disabilities (SEND) supported internships
as a pilot in York and Norwich.
Digital skills development
in Norwich
The Aviva Foundry in Norwich
develops digital skills for tech roles.
Partnering with Norwich City College,
it helps Norfolk T-Level students
gain new skills and provides work
placements, potentially leading to
digital careers at Aviva.
Social action
Social action
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Find out more on
www.aviva.com/sustainability/
sustainability-news
As an insurer, and long-term
investor, we have an important
role in helping our customers
manage the risks associated
with climate change so they
can approach the future
with confidence. In 2024,
we continued to decarbonise
our business, supported the
energy transition, and helped
protect and restore nature.
Find out more in
Our Climate-related Financial Disclosure
Decarbonising our business
Our Net Zero ambition
We set out our ambition in March 2021.
At the time, and indeed today, the
pathways to Net Zero were not well
understood. Furthermore, government
action on policy, and development of new
technologies were, and remain, of
fundamental importance to create
the conditions for success.
Without progress on these issues, achieving
our climate ambitions is, and will continue
to be, challenging. We acknowledge that
while we have control over Aviva’s
operations and influence on its supply
chain, decarbonising the broader
economy in which we operate and invest
is a collective effort. Aviva is just one
part of a much larger global ecosystem.
We have learnt a lot, and the complexities
and challenges are coming into sharper
focus. One example relates to Scope 3 of
our Category 15: investments and
underwriting activities - our ‘Scope 3 of
3’. While Greenhouse Gas (GHG) data
availability is improving, it is still of low
quality and methodologies are
developing. Additionally, when these
emissions are aggregated at a portfolio
level, it introduces significant double
counting. Based on what we understand
today, and the low degree of control we
have over these emissions, we do not
currently see a route to Net Zero for
these emissions. Nevertheless, we
remain committed to using our best
endeavours to address them. For these
emissions, like much of our Scope 3
across all categories, our focus is on
engagement and advocacy as a key lever
to reduce these emissions over time.
Reducing Aviva’s operational
emissions
We have a medium term ambition to
reduce Aviva's Scope 1 and Scope 2
operational emissions by 90% from
a 2019 baseline by end of 2030.
We have achieved a 51% reduction in
Aviva's operational carbon emissions
Scope 1 and 2 against our 2019 baseline.
Influencing our supply chain
We are working with our suppliers to
engage them with our Net Zero ambitions.
We hosted our third supplier summit in
November 2024 which was attended by
over 100 of our supply chain partners to
provide opportunities for education and
collaboration.
To support the achievement of our ambition
our short-term goal is for 70% of Aviva’s
suppliers (by spend) to have validated
science-based targets by year-end 2025.
By the end of 2024 51% of suppliers by
spend had validated science-based
targets.
Reducing the carbon intensity
of our investments
To date, we have reduced the Scope 1
and 2 carbon intensity of our corporate
bond and equity portfolio in shareholder
and with-profit funds by 64% compared to
2019. Looking ahead, we have included
additional asset classes and funds within
our 2030 portfolio decarbonisation
ambition, against which we are making
good progress.
“Since the release of our first
transition plan in 2022 I had
the privilege of co-chairing
the UK’s Transition Plan
Taskforce (TPT) which has
issued a gold standard
disclosure framework and
implementation guidance
for private companies. We
have leveraged this guidance
to outline how we are
translating our ambitions
into tangible actions in our
latest Transition Plan.”
Amanda Blanc DBE
Group Chief Executive Officer
Climate action
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Find out more in our
Transition Plan
Summarised below are the scope boundaries of the 2030 and 2040 ambitions included in our Transition Plan.
Additional details on these ambitions can be found in the relevant section of this report.
Year-end 2024: achieved
2030
2040
GHG Scope
Categories applicable to Aviva
Data
availability
Materiality
of emissions
Aviva’s level
of influence
Scope or
basis
Ambition
Scope or
basis
Ambition
Ambition
Aviva Operations
Net Zero Group8
Direct
action
Scope 1 and
2
Own operations
Yes
Low
High
Scope 1 and
2
100% electricity from
renewable sources
Scope 1 and 2
90% reduction of emissions against 2019
baseline1
Direct action + Influence and advocacy
Scope 3
Cat 1: Purchased goods & services
Yes
Medium
Medium
Engagement
70% of suppliers by spend setting validated
science-based targets2
Cat 2: Capital goods
Yes
Medium
Medium
Cat 3: Fuel & energy-related activities
Partial3
Low
Low
Zero waste to landfill by 2030 with additional
ambitions to be set in 2026 for categories 5
and 6
Cat 5: Waste generated in operations
Partial3
Low
Medium
Cat 6: Business travel
Partial3
Low
Medium/high
Cat 7: Employee commuting
Partial3
Low
Low
Investments
Scope 3
Cat 15: Investments
Yes
High
Low/medium
Scope 3 Cat
15 (Scope 1
and 2 of
investment
s only)
25% reduction in Scope
1 and 2 carbon intensity
by revenue of listed
equities and corporate
bonds held in shareholder
and with-profits funds
on 2019 baseline
Scope 3 Cat 15
(Scope 1 and 2
of
investments
only)
60% reduction in the Scope 1 and Scope 2
economic carbon intensity of equity, corporate
bonds and loans, infrastructure and real estate
assets4 held in shareholder, with-profits and
policyholder funds (where we have decision
making control5 and data) by year-end 2029
from a 2019 baseline
Yes
High
Low/medium
Sustainable
assets
£6 billion investment in
sustainable assets6
Cat 15: Investments (sovereign bonds and
other asset classes)
Partial3
High
Low/medium
Insurance
Scope 3
Cat 11: Claims emissions
(Use of sold products)7
Partial3
Medium
Medium
Engagement
70% of suppliers by spend setting
validated science-based targets2
Cat 15: Underwriting
Partial3
High
Low
1. Aviva will offset the residual emissions for our Scope 1 and 2 up to a maximum of 10% from 2030
2. Group level ambition covering general insurance claims supply chain and operational supply chain with a target year-end of 2025
3. Data quality and methodology availability are a challenge for commercial decision making and reporting
4. Covers whole building operational emissions of direct real estate investments, commercial real estate mortgages and equity release mortgages
5. Aviva is deemed to have investment decision-making control when they are responsible for defining the investment mandate – setting the investment objective, guidelines and risk appetites; choice of benchmark to meet customer and shareholder
outcomes; and manager selection. This does not include external fund links made available on platforms, consultant instructed scheme blends or external client mandates.
6. Defined as green and sustainability assets, sustainability-linked debt, social bonds and investment of £1.5bn of policyholder money to AI climate transition funds (available at the time)
7. During the period, the emissions associated with the supply chain have been reclassified to Scope 3 Category 11 to better align to the location of these emissions within the value chain
8. Our ambition covers all parts of Aviva’s business including investments (Scope 3 Category 15), insurance underwriting (Scope 3 Category 15), insurance claims supply chain (Scope 3 Category 11), Aviva’s operations and supply chain (Scope 1 and 2 and
Scope 3 Categories 1-14)
The scope of our ambitions
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Insuring and investing in the energy transition
Supporting climate adaptation
As a major investor and
underwriter, we can help
to enable the transition
to a low-carbon future.
Providing finance for
sustainable assets
Since the end of 2019 (our baseline year)
we have invested £8.7 billion in sustainable
assets, exceeding our target of £6 billion
by 2025. From street lighting to charging
networks for electric vehicles, ultra-low
carbon homes and windfarms, we are
helping economies get ready for
the future.
Providing insurance to
support the energy transition
Aviva currently provides commercial
insurance for onshore and offshore wind,
solar, and battery storage. This remains
a relatively small portion of our portfolio
that we see is growing rapidly.
Providing insurance to
support the adoption of
electric vehicles
Aviva is already a leading provider
of Electric Vehicle (EV) insurance, as at
Q3 2024 covering around one in nine
privately registered EVs on UK roads.
We've launched a range of specific cover
features to meet the unique needs of EV
drivers. This includes boost roadside
charging and cover for home charging
equipment.
Providing insurance to
support a solar power
subscription service
In February 2024, we teamed up with
Howden to provide bespoke insurance
to an innovative UK start-up, which
offers homeowners solar panels on
a subscription service.
We see supporting
climate adaption and
efforts to build resilience
as critical to supporting
our customers and
communities.
Improving climate resilience
In 2021 Aviva formed a three year
partnership with WWF, funding nature-
based solution projects to restore
ecosystems and tackle the impacts of
climate change on communities, such as
helping to reduce flood risk using natural
flood management.
Restoring woodlands,
peatlands and nature
Our £10 million Woodland Trust partnership
is contributing to the understanding of
climate change impacts. We’re researching
how tree planting reduces flood risks at
Snaizeholme in Yorkshire, one of England’s
biggest new native woodlands.
Supporting brokers in building
a more resilient business
In 2023, we launched the Sustainable
Business Coach. It offers SMEs guidance on
starting their sustainability journey, including
climate action and adaptation. By end of
2024 about 70% of our UK Club 110 brokers
completed the tool, using it to embed
sustainability strategies and increasing their
understanding by 30%. This support has
also been extended to other distribution
relationships and SME customers.
Helping economies become
more climate ready
We want to help the countries where
our major businesses operate – the UK,
Ireland and Canada – become climate
ready. So, in 2024 we launched our third
Climate-Ready Index.
Our Index provides insights for
policymakers by highlighting areas
where countries are succeeding vs.
lagging in their climate adaptation
efforts. It serves as a benchmarking tool,
encouraging governments to enhance
their climate policies and strategies.
Restoring shrinking
saltmarshes
It is estimated that 85% of English
saltmarsh has been lost in the last 200
years. Our £25 million partnership with
WWT, the charity for wetland and
wildlife, aims to help reverse this loss.
Climate action
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Find out more within the WWF Aviva
report - Celebrating three years of
strategic partnership 2021-2024 at:
www.aviva.com/sustainability/
resources-and-reporting-hub
Find out more at
www.aviva.com/sustainability/
climateready
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Protecting and restoring nature
We recognise that our
society, economies, and
financial systems are
embedded in nature, and the
prosperity of our business,
customers, and wider society
relies on the health and
resilience of nature and its
biodiversity.
Investing to enhance Nature
During 2024 Aviva Ventures contributed
to one of the largest early stage funding
rounds in the nature restoration sector,
raising £40 million of equity for Nattergal.
Claudine Blamey, Aviva's Group
Sustainability Director, has joined
Nattergal's Board as a Board Advisor.
Collaborating to advance
action on Nature
Across October and November, the
UN Convention for Biological Diversity
(CBD) hosted its 16th Conference of
the Parties (COP16) in Cali, Colombia.
COP16 presented a key opportunity for
Parties to focus on the full and timely
implementation of the Kunming-
Montreal Global Biodiversity
Framework (GBF).
We had a delegation on the ground to
share our work and progress on nature,
and promote our policy positions.
Collectively our delegation actively
participated in more than 20 events,
including delivering a first Aviva event
at a UN CBD COP, “Nature with Aviva”,
which included the formal launch
of Aviva Investors’ “Navigating Nature –
Opportunities for the Investor of
Tomorrow”.
Bringing back the British Isles lost
rainforests with The Wildlife Trusts
Our £38 million Temperate Rainforest
Programme, launched in partnership with
The Wildlife Trusts in 2023, has made
significant progress.
Temperate rainforest restoration sites
include two new locations recently added.
In July 2024, The Wildlife Trust of South
and West Wales announced that it will be
restoring a rainforest in Pembrokeshire.
In September 2024, England's highest nature
reserve was established at Skiddaw in the
Lake District.
Read more: within The Wildlife Trusts
and Aviva Impact Report 2023-2024 at:
https://www.aviva.com/sustainability/
taking-action-with-partners
Restoring oyster populations and
seagrass beds in Scotland
As part of our partnership with WWF-UK,
we have been one of the main funders of
Restoration Forth – a marine restoration
project led by WWF-Scotland which is
working with local communities to restore
lost seagrass and oyster habitats to the
Firth of Forth.
Canadian grasslands, forests,
and tidal marshes restoration
In April 2024, Aviva pledged CAD$6 million
to support Nature Conservancy of Canada
in protecting and restoring up to 900
hectares of grasslands, forests, and tidal
marshes. This initiative contributes
positively to addressing the biodiversity
crisis, while also supporting flood
protection and the resilience of local
communities.
Safeguarding natural
landscapes in Ireland
In October 2024, we announced our
partnership with Leave No Trace Ireland
to protect and preserve Ireland’s natural
landscapes. This will be done through
delivering educational programmes,
service projects, and conservation efforts.
Connecting people to Nature
with WWF
The Aviva Access to Nature fund,
established as part of our partnership
with WWF and Norfolk Rivers Trust aims
to remove barriers such as transport
issues, costs and isolation that prevent
people from benefitting from time spent
in the Norfolk countryside.
During 2024, our fund provided grants to
community groups, schools, and charities.
Read more about impact and case
studies at:
https://www.accesstonature.co.uk
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Aviva aims to act as a trusted
sustainability leader. Our actions
focus on providing purposeful
proposition choice1, being the
employer of choice, and
protecting human rights while
maintaining good governance.
In 2024, we launched a Sustainability
Resources and Reporting hub online
to share our commitment to being a
responsible and transparent organisation.
Find out more at
www.aviva.com/sustainability/resources-
and-reporting-hub
If you have any suggestions or queries
about Aviva’s sustainability programme
or policies, please e-mail us at:
crteam@aviva.com
Purposeful propositions
Employer of choice
Providing customers
with sustainability-related
investment options
We assist our customers in saving for
retirement by offering products through
their employers in the workplace.
My Future Focus is a core default
investment solution for Aviva. ESG
continues to be a core pillar of the
investment process for the active
elements of the solution. Creating
carbon optimised fund propositions and
increasing the assets managed under
them demonstrates our approach to
aligning our portfolio to our ambition
while delivering customer investment
outcomes.
Tools for customers
to interrogate their
investment portfolio
Our adviser platform provides an ESG
profiler tool supporting financial advisers
reviewing customers’ investments
from an ESG perspective. It improves
the transparency of funds, enabling
customers to understand if a fund
meets their investment appetite and
ESG objectives. This supports advisers
in their conversations with clients on ESG,
allowing them to show the scale and
quantifiable impact of investments -
in terms they understand.
Providing customers
with sustainability related
insurance
In 2022 we launched our Aviva Zero
motor product, offering customers the
opportunity to purchase offsets for car
emissions. By October 2024, we’d sold
over 1 million policies.
In June 2024, we launched our Trees
for Rentals Program across Canada.
This program offers eligible customers
the option to have Aviva Canada donate
to Tree Canada to plant a tree instead of
taking a rental vehicle during the repair
process.
In October 2024, Aviva Canada launched
a new Parametric Insurance platform
that allows customers to insure against
unexpected seasonal events, leveraging
historical weather data and live access to
satellite/weather stations. Currently,
Aviva is the only insurer in Canada to
offer this parametric add-on solution
nationwide, servicing key weather-
impacted industries.
Diversity Equity
and Inclusion
Aviva has continued to make
improvements in supporting diversity,
equity, and inclusion (DE&I)
throughout 2024.
We continue to be recognized in the
Times Top 50 Employers for Gender
Equality for the eighth year running.
We are signatories of the Race at
Work Charter and have introduced
initiatives to support its focus areas.
We publish our UK Pay Gap Report
annually to highlight current
performance and steps being taken
to improve the recruitment, retention,
and progression of female and
ethnically diverse employees.
Living Wage, Pensions
and Hours
In addition to paying the Living Wage
and Living Pension in the UK we also
support the Living Hours campaign to
ensure that workers have sufficient,
predictable hours.
Speak Up
Our malpractice helpline, Speak Up,
makes it easy to report any concerns
in confidence, with all reports referred
to an independent investigation team.
In 2024, 208 cases were reported
through Speak Up (2023: 150), with
none related to modern slavery.
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1. While we integrate environmental, social, and governance (ESG) factors into our product development processes, not all propositions are focused on ESG
Read more about
diversity aims on page 28
Protecting human rights
“At Aviva, we are
committed to
upholding human
rights as outlined by
the United Nations
Guiding Principles
(UNGPs). We view
forced labour as an
ongoing risk and are
dedicated to raising
awareness among our
suppliers, conducting
due diligence to
identify and prevent
instances of forced
labour, sharing our
learning and using our
influence to provide
remedies.”
Firza Sofya Safira
Sustainable Business Lead
Ongoing assessments across our
businesses and supply chain
In 2023, we refreshed our risk-based
approach to prioritise the assessment and
engagement of suppliers who may directly
or indirectly employ workers at higher risk
of exploitation. Guided by the International
Labour Office’s 11 indicators of forced
labour, we engaged our suppliers to
understand their employment practices
and the systems they have in place to
prevent human rights abuses throughout
the employment lifecycle, including during
recruitment.
Through the course of our assessments
we found an issue within our Aviva India
supply chain. We discovered that a third
party had not paid security and housekeeping
staff for hours spent during training. As a
result of our robust governance we were
able to identify and rectify the issue with
full retrospective payment made to staff
hired by our supplier during 2024.
Adopting a realistic, transparent and risk
based approach allows us to uncover the
true challenges within a value chain.
We find this requires focused collaboration
among diverse stakeholders, including
regulators and value chain businesses,
to improve systems and protect those
at risk of exploitation.
We view forced labour as an ongoing risk
and are dedicated to raising awareness
among our suppliers, conducting due
diligence to identify and prevent instances
of forced labour, sharing our learning,
and using our influence to provide
remedies. We continue to work across
sectors to encourage business action and
disclosure on Human Rights and Modern
Slavery. Furthermore, we have completed
our human rights saliency assessment
in 2024. We will be embedding the result
into our action plan to enhance our
approach to respecting human rights
across our value chain.
Independent recognition
of our improvements in
respecting human rights
During 2024 we enhanced our score
in the Churches, Charities and Local
Authorities (CCLA) FTSE 100 Modern
Slavery Statement Benchmark. The
benchmark evaluates companies based
on their public disclosures, compliance
with the Modern Slavery Act, and
conformance with Home Office
guidance. The benchmark is updated
annually, and in 2024 we were one of
twelve companies identified as ‘leaders
in human rights’ moving up two tiers in
the benchmark (2024 rating 1; 2023
rating 3).
Our modern slavery statement, as well
as our Human Rights Policy and the
Aviva Business Ethics Code 2024, can
all be found on www.aviva.com.
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Good governance
Our governance frameworks
help to improve transparency
and accountability in all our
dealings.
The high standards of ethical behaviour
we expect are outlined in the Aviva
Business Ethics Code. We require all
our people, at every level, to read and
sign-up to our Code every year. 99.5%
of our employees did so in 2024.
We conduct due diligence when
recruiting and engaging external
partners. At the end of 2024, 99.9% of
our UK, Canada, Ireland and India
registered suppliers have agreed to
abide by our Third-Party Business Code
of Behaviour (or provided a satisfactory
reason why they didn’t do so, for
example, because they have their own
existing code of behaviour). Our Third-
Party Business Code of Behaviour
outlines the way in which we commit to
behave and includes guidance on
financial crime laws and regulations.
Aviva plc is subject to the 2018 UK
Corporate Governance Code (the
Code), which we comply with. Where
appropriate, specific teams and
committees exist to drive action on
particular material issues, including
data protection, climate change and
diversity, equity and inclusion, among
others. Governance information required
in accordance with recommendations
of the Taskforce for Climate-related
Financial Disclosure (TCFD) can be
found in the Climate-related Financial
Disclosure.
Sustainability governance
We have a clear and robust governance
structure in place. Aviva’s Sustainability
Ambition Steering Committee drives and
monitors the delivery of our plan - with
delegated authority from the Group
Executive Committee. Our Sustainability
function reports to Stephen Doherty, Chief
Brand and Corporate Affairs Officer who
chairs the steering committee and is the
Aviva senior executive responsible for
sustainability. The team provides expertise
to enable delivery and coordination of local
activity across Aviva’s businesses.
Crucially, there is clear individual executive
accountability for all sustainability KPIs.
Sustainability factors are included in senior
executive long term incentive plans.
Our progress and key performance metrics
are reviewed regularly and overseen by
the Customer & Sustainability Committee.
Our overarching Sustainability Business
Standard includes how we manage our
material operational and core business
environmental and climate impacts, and
our community impacts.
Data privacy and security
At Aviva, our customers, colleagues and
other stakeholders trust us to process
their personal data responsibly and keep
it secure. In order to do this we comply
with laws and regulations and key regulators’
requirements in the countries and markets
in which we operate.
We have a dedicated section on this in
our Business Ethics Code as well as a
standalone Data Privacy Statement which
details our specific commitments and
practices.
Bribery, corruption and our
Financial Crime Standard
Preventing and tackling bribery and
corruption is anchored in Aviva’s values,
with a clear message from senior
management around a zero-tolerance
approach to financial crime. We cover this
in our Business Ethics Code as well as a
standalone Prevention of Bribery and
Corruption Statement which details our
commitments and practices.
The Financial Crime Business Standard,
and supporting Minimum Compliance
Standards, guide our risk-based financial
crime programmes. These seek to prevent,
detect and report financial crime, including
any instances of bribery and corruption,
while complying fully with relevant
legislation and regulation.
At a Group level, the Chief Risk Officer
provides the Risk Committee with regular
reporting on financial crime matters.
These include Aviva’s anti-bribery and
anti-corruption programme.
Additional information
The Company’s compliance with the
Code, as well as the activities of the
Customer and Sustainability Committee
can be found in the Governance Report
section of this document. Our climate
risks and impacts can be found in our
Climate-related Financial Disclosure.
Read more about how our directors
have performed their statutory
duty within our Section 172(1)
Statement on page 52
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Engagement
As an active owner and
active asset manager with
scale and global reach, we
use engagement, voting
and investment decisions
to help drive a transition to
a sustainable future.
Holistic stewardship
We use our influence to help drive change
among our investment and lending
partners. While corporate engagement
is vital for enhancing company value,
it is equally important to engage with
institutions, agencies, and governments
that set market rules and incentives.
Our 'Holistic Stewardship' approach,
coordinated across six levels of influence
aims to deliver positive investment
outcomes and support our clients'
sustainability goals. This approach is a key
part of our responsibility to help accelerate
the energy transition and assist economy-
wide climate action.
Using our vote
In 2024 as part of our stewardship
approach, Aviva:
• Exercised our voting rights on 6,354
resolutions at AGMs and EGMs
• Voted against 22.4% of company
management recommendations that
did not align with our sustainable
investment strategy
• Conducted 962 substantive
sustainability engagement meetings
through Aviva Investors
• Achieved 190 sustainability
engagement objectives through Aviva
Investors, resulting in changes in
investee companies’ strategies,
actions or behaviours.
National Wealth Fund
Our CEO Amanda Blanc was invited to
be a part of the National Wealth Fund
Taskforce, an independent group
convened by Green Finance Institute
that includes the CEOs of some of the
UK’s leading financial institutions,
tasked with supporting the design of a
first of a kind public-private partnership
that deploys catalytic capital to crowd
private investment into priority net
zero sectors. The Taskforce submitted
final recommendations to Labour just
ahead of the 2024 election and in the
week following the election met with
Rachel Reeves and Ed Milliband to
discuss next steps, which have now
been taken forward.
Transition Finance
Market Review
Aviva Investors was represented on the
Expert Group for the Transition Finance
Market Review, an independent Review
commissioned by HMT and DESNZ and
led by Vanessa Havard-Williams which
focused on how the UK can become the
best place in the world to raise transition
capital, invest and obtain financial and
professional services to support a net
zero future.
Indices
MSCI
Rating
AAA
MSCI provides ESG Ratings on
companies on a scale of AAA (leader)
to CCC (laggard), according to exposure
to industry specific ESG risks and the
ability to manage those risks relative to
peers. As of August 2024, Aviva received
an MSCI ESG Rating of AAA.
Indices
S&P Global
Rating
94th percentile
S&P Global ESG Scores provide a depth
and breadth of ESG insight, built upon
multiple layers of ESG data, and
underpinned by a rich bedrock of
underlying data intelligence captured by
the S&P Global Corporate Sustainability
Assessment (CSA). As of December 2024,
Aviva scores within the 94th percentile for
the insurance industry, achieving inclusion
in the Dow Jones Sustainability Indices.
Indices
Carbon Disclosure Project
Rating
A-
CDP runs the global environmental
disclosure system. Each year, CDP takes the
information supplied in its annual
reporting process and awards
companies a score, which represents a
snapshot of a company's performance
on environmental action. Scores for
companies range from D/D- to A/A-. For
2023, Aviva received an A- score.
Indices
Sustainalytics
Rating
14.2 low risk
Sustainalytics’ ESG Risk Ratings measure a
company’s exposure to industry specific
material ESG risks and how well a company
is managing those risks. They provide a
quantitative measure of unmanaged ESG
risk and distinguish between five levels:
negligible, low, medium, high and severe.
As of August 2023, Aviva received an ESG
Risk Rating of 14.2 and was assessed to
be at low risk of experiencing material
financial impacts from ESG factors.
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Find out more about our
engagement actions in
Our Transition Plan
Sustainability ratings and indices
Benchmarking companies1 rate Aviva based on independently gathered
ESG insight and data.
1. Aviva discloses performance against the most material ESG ratings
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As one of the UK’s largest
companies, the tax we pay
helps support a sustainable
economy.
£3.7 billion of taxes contributed
globally in 2024
In 2023/2024 we were the 12th largest tax
contributor in the UK1, contributing
£2.9 billion in 2024, made up of £0.6 billion
of tax paid and £2.3 billion of tax collected.
Furthermore, we pay additional amounts
of tax to governments around the world.
We consider our total tax contribution
in two ways. Firstly, the tax paid by
Aviva Group, which is a cost to our
shareholders. Secondly, we collect and
pay amounts to tax authorities on behalf
of customers, suppliers and employees.
1. Based on PwC analysis of the 100 Group Total Tax
Contribution Survey, published December 2024
l VAT, sales and premium taxes
£0.9bn
l Payroll taxes
£0.6bn
l Taxes on customer pensions,
income and investments
£1.1bn
£1.1 billion of tax paid globally
by the Aviva Group
l Corporate Income Taxes
£0.2bn
l Payroll taxes
£0.2bn
l VAT, sales and premium taxes
£0.6bn
l Business rates, environmental
and other taxes
£0.1bn
Our global total tax contribution of £3.7 billion
is focused in our core businesses
l UK
£2.9bn
l Ireland
£0.2bn
l Canada
£0.6bn
£2.6 billion of tax collected globally on
behalf of customers, suppliers and employees
Our tax contribution
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Our Tax Strategy1
Our tax strategy is to pay the right amount
of tax at the right time in each of the
countries in which we operate.
We act with honesty and integrity, engaging
with HMRC and other relevant tax authorities
on a transparent and cooperative basis. We
conduct our business dealings in accordance
with both the letter and spirit of all tax law,
with our core values underpinning our
approach to taxation.
This approach is consistent with the
Group’s appetite to manage its operational
risk to as low a level as is commercially
sensible, taking account of the financial
impact and the value placed by the Group
on maintaining a reputation for upholding
the highest standard of corporate ethics.
With a low appetite for litigation, we prefer
to seek clarity through timely discussion
and prompt disclosure of all relevant
information, to enable tax authorities to
form an accurate assessment of the tax
implications of our activities, and assess
the current, future, and past tax risks.
We engage proactively in external
developments on tax policy and engage
with national governments, the European
Union, The Organisation for Economic
Co-operation and Development, and
others where appropriate.
Ensuring that we pay the right
amount of tax in each country
We pay tax on the profits earned in each
country and require all our businesses
to comply with the tax laws in their
markets and not enter into schemes
or structures which result in an abusive
tax result. When we undertake tax
planning, we only do so in the context
of wider business activity with a real
and commercial basis.
Annual reviews are carried out to ensure
that appropriate prices have been used for
services provided cross border. These prices
are subject to regular benchmarking to
external markets to ensure the prices
charged are consistent with arm’s length
transfer pricing principles and that profits
arising in each company reflect the activity
undertaken by that business.
Cross border reinsurance
Our UK resident reinsurance company
has quota share reinsurance arrangements
with Aviva subsidiaries from the UK,
Ireland and Canada. The terms of our
reinsurance treaties are consistent with
arm’s length principles.
Aviva also has a captive reinsurance
company in Barbados, which supports
the Canadian business. This was put in
place to provide capital efficient pooling
of risk in a traditional reinsurance location
with a supportive regulatory regime and
significant local experience. The company
is now in run-off.
Offshore Investment Funds
As is common practice in the investment
management industry, investment funds
are structured to facilitate pooling of
capital from different investors.
Aviva Investors manages various
investment fund vehicles which are
resident in low tax jurisdictions, including
Luxembourg, Guernsey and Jersey.
These market standard offshore
investment fund vehicles are cost efficient
and mitigate tax arising within the fund,
ensuring that income and gains are
predominantly taxed in the hands of the
investor. This allows investors with
different tax profiles (e.g. tax exempt UK
pension funds) to pool capital without
increasing the amount of tax they
would otherwise pay.
Managing our tax risks
All tax returns and correspondence are
prepared and reviewed by qualified and
trained colleagues, acting under appropriate
delegated authorities. Where the Group
outsources activities, the outsourcing
partner must be able to meet all relevant
tax compliance responsibilities.
External advice will be sought where the
risk, complexity and size of the decision
requires an opinion from a third party.
The tax strategy is supported by the Tax
Business Standard and our Operational Risk
& Control Management (ORCM) framework.
All our businesses are required to manage
the tax risks in their jurisdiction,
considering both proximate and long-term
risks. Regular updates detailing the Group’s
tax position are provided to the Group Audit
Committee.
The management of tax risks is overseen
by the risk and audit functions.
The tax strategy is aligned with the
Aviva Business Ethics code. It is owned by
the Group Chief Financial Officer and is
approved and overseen by the Board.
1. This document has been prepared and published on 27th
February 2025 in accordance with paragraph 16(2),
Schedule 19, Finance Act 2016, on behalf of Aviva plc and
all the UK tax resident companies in the Aviva plc Group
for the year ended 31 December 2024
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The information presented here, including
the sections referred to, represents our
non-financial and sustainability information
statement as required by sections 414CA
and 414CB of the Companies Act 2006.
We aim to be the leading UK provider and
go-to customer brand for all insurance,
wealth and retirement solutions. In Canada
and Ireland we continue to build strong
businesses.
For further information, see Our business
model and Our strategy.
The table below outlines Aviva’s policies
across certain key, non-financial areas with
links to where further information on these
topics can be found in this Strategic report.
Our policies can be read in full at
www.aviva.com/sustainability/reporting/
#policies-and-response.
On the next page is a summary of how we
go about managing these aspects of our
business and measuring our performance.
Climate and nature
Employees
Social matters
Human rights
Anti-corruption
We announced our ambition to
become a Net Zero carbon
emissions company in 2021. The first
iteration of our Transition Plan was
published in March 2022. Since then,
we have gained further insight and
understanding of the challenges we
face. The second iteration, published
in February 2025, represents an
evolution of our strategy to deliver
our ambitions whilst addressing new
risks and capturing new
opportunities.
We are delivering our climate
ambition through an implementation
strategy based on actions across our
investment, insurance, and
operational activities. Our approach
is underpinned by engagement with
key stakeholders we need to support
and influence in our Net Zero
journey and enabled by our
governance, risk management, and
reporting frameworks.
Our focus is on unleashing the power
of our people to deliver our strategy.
We believe in a high-performance
culture and expect the highest
standards of behaviour and integrity
of our people consistent with our
values. Our Conduct and
Performance Policy sets out the
standards for all colleagues at work.
Our mandatory learning covers all the
important things employees need to
know about working at Aviva so we
can protect our business, customers
and colleagues. We also want our
people to feel comfortable sharing
their insights and experiences so we
can work together to understand the
needs of all customers and find
solutions to problems together.
Our Fairness and Equality at Work
policy and its supporting procedures
help colleagues understand what it
means to work in a way that’s fair,
equal and within the law – and also
how to raise concerns.
We are aiming to build stronger
communities by allocating an average
of 2% of our Group adjusted operating
profit a year to community investment;
helping people with financial, climate
and health challenges.
Through our fund management
operations, we seek to invest in assets
that can be put to positive social use,
where we can. We finance many social
infrastructure developments, including
healthcare, education, transport,
housing, water and renewable energy.
Through our life insurance companies
we have a goal to help at least 13% of
adults in the UK to save or retire
with Aviva.
Across Aviva we work with our
customers, communities and partners
to help more people get the insurance
protection and income in retirement
they need for a better tomorrow.
Our approach is to be committed to
respecting the human rights of others.
This includes preventing, addressing
and remediating any potential
adverse human rights impacts in our
operations, our business activities
and relationships, and our
investments. We continue to pursue
our anti-modern slavery agenda
within our operations and supply
chain, and through our partnerships.
We continue to regularly review and
refresh our wider human rights
approach following our last biennial,
Group-wide human rights due
diligence assessment. In addition we
widened the scope of our supplier
assessments and selected a new
Sustainability partner - Business for
Social Responsibility (BSR). BSR will
specifically support the ongoing
development of our Human Rights
and Anti-modern slavery agendas,
aiming to identify the most salient
issues across our operations and
value chain.
We will always seek to protect our
customers, shareholders, employees
and communities from financial crime.
We have a zero-tolerance approach
to acts of bribery and corruption.
All Group offices must comply
with our Financial Crime Business
Standard and associated Minimum
Compliance Standards, which
include robust anti-bribery and
corruption requirements based on
the UK Bribery Act.
Our Business Ethics Code strictly
prohibits any person associated with
the Group from doing anything that
supports, encourages or facilitates
bribery and corruption.
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Read more on
Our sustainability ambition:
page 56 and our Climate-
related Financial Disclosure:
page 71
Read more on
Our people and culture:
page 53
Read more on
Our sustainability ambition:
page 56
Find out more in this report
under our support for human
rights. Also see our modern
slavery statement on
www.aviva.com
Find out more about
Our Business Ethics Code
on www.aviva.com
Climate and environment
Employees
Social matters
Human rights
Anti-corruption
Due diligence processes
• Climate governance structure
in place involving the Board and
its Committees.
• Sustainability Ambition
Steering Committee monitors
the climate-related risks and
opportunities and evaluates
progress against ambitions set.
• Sustainability Business
Standard includes how we
manage material operational,
climate, environmental and
community impacts.
• Annual all colleague Voice of
Aviva engagement survey and
pulse surveys.
• People Risk dashboard and
regular tracking of HR metrics
and trends.
• Global People Business
Standard and Remuneration
Standard.
• Inclusion Council and
executive-sponsored diversity,
equity and inclusion
communities.
• Customer and Sustainability
Committee – oversees the
execution of the Aviva
Sustainability Ambition.
• We have a place-based
approach, collaborating with
cross-sector leaders on
priority local challenges and
opportunities.
• In 2023 we conducted our most
recent biennial Group-wide
human rights due diligence
assessment across all our
businesses, guided by the UN
Guiding Principles on Business
and Human Rights (UNGPs).
• Updated our Human Rights
policy in 2023.
• The assessment and policy is
regularly reviewed and
refreshed, the next review will
be conducted in 2025.
• Financial Crime Business
Standard oversight and
governance structure.
• Ongoing Group-wide bribery
and corruption risk assessment.
• Risk-based training for those
acting on Aviva’s behalf.
• Due diligence and risk rating of
all third-party relationships.
• Gifts and Entertainment and
Conflicts of Interest procedures.
• Speak Up malpractice helpline.
Policy outcomes
• Taking climate action and
making progress towards our
ambitions.
• A great place to work, where
colleagues can build fantastic
careers, feel included and be
fairly rewarded.
• Use of Aviva’s community
investment and asset
investments as a force for good.
• We have conducted modern
slavery threat assessments on a
range of key suppliers using a
risk based approach.
• Maintaining a culture of the
highest ethics and compliance
with our Business Ethics Code.
• Seeking to prevent, detect and
report financial crime, including
any instances of bribery and
corruption.
Principal risks
• Reduction in returns from
investments not compatible with
transition to low-carbon
economy.
• Disruption to Life or General
Insurance businesses e.g.
extreme weather, see our Risk
Framework.
• Talent recruitment, retention
and reskilling.
• Creating a diverse and inclusive
workplace.
• Reduction in returns from
investments in real estate and
social infrastructure.
• Macroeconomic conditions
impacting customers' capacity
to invest in our insurance,
wealth or retirement products.
• Talent recruitment, retention
and reskilling.
• Failure to prevent, detect and
report financial crime, including
instances of bribery and
corruption.
• Cyber criminals: attempting
to access our IT systems
to steal or utilise company
and customer data.
Non-financial KPIs
• Aviva operational Scope 1 and
Scope 2 (market based)
emissions reduction from 2019
baseline.
• Carbon intensity reduction for
Scope 1 and Scope 2 emissions
from investments.
• Number of suppliers with
validated science-based
targets.
• Employee engagement.
• Women in senior leadership.
• Ethnic diversity in senior
leadership roles.
• Investment in communities.
• People saving or retiring
with Aviva.
• % of registered suppliers that
have agreed to Supplier Codes
of Behaviour.
• % of businesses which have
completed a human rights due
diligence review.
• Specialist colleagues trained
on business human rights and
modern slavery issues.
• Number of cases reported
through Speak Up.
• % of registered suppliers that
have agreed to Supplier Codes
of Behaviour.
• Employees who have read,
understood and accepted the
Business Ethics Code.
Non-financial and sustainability information statement
70
Aviva plc
Annual Report and Accounts 2024
Strategic
Report
Governance
Report
IFRS Financial
Statements
Other
Information
Read more on
Climate action: page 59
Read more on
Our people and culture: page
53
Read more on
Social action: page 57
Read more on
Protecting human rights: page
64
Read more on
Good governance: page 65
This section includes our
Climate-related Financial
Disclosure.
We have £407 billion assets under
management and can leverage stewardship
opportunities where possible to affect climate
action, alongside the innovations and
customers we support via our insurance.
Governance
Our governance framework and a clear
division of responsibilities enables the
Board to operate effectively, fulfil its
responsibilities and provide valuable
oversight. It allows the Board to integrate
climate-related risks and opportunities into
our strategy, decision making and business
processes. The Board's Customer and
Sustainability Committee is responsible for
assisting the Board in its oversight of Aviva's
Sustainability Ambition. The impact of
climate change is considered by the Risk
Committee and climate disclosures by the
Group Audit Committee. The Remuneration
Committee assists the Board with oversight
of remuneration including consideration of
climate metrics when reviewing the
Director's Remuneration Policy.
See the Governance Report for further
information including the consideration of
climate-related matters by our Board and
Committees during 2024.
Read more in
Governance Report: page 84
Strategy
We have an ambition to be a Net Zero
company by 2040. We recognise that to
enable and embed a global transition to a low-
carbon economy, we cannot singularly focus
on decarbonisation. Our Transition Plan takes
an integrated approach, incorporating nature,
adaptation and social considerations. We are
now much clearer on the dependencies on
which our ambition relies, many of which are
outside of our direct control. We are therefore
using our voice to push for enabling policy,
regulation and capital market norms to
deliver a more secure and stable future for
our customers and our people; and to provide
long term value to our shareholders.
Our ambitions are contingent on global
momentum on climate action.
Read more in
Our sustainability ambition: page 56
Risk management
Aviva’s risk management framework sets
out how we identify, measure, monitor,
manage and report on the risks to which our
business, customers' and wider society are,
or could be, exposed to (including climate
and sustainability related risks).
We use our risk identification process to
identify potential exposure to climate-related
risks via the associated physical risk (for
example flood, wildfires, windstorms and
tropical cyclones and heavy precipitation),
transition risk (for example new climate
policies) and litigation risk (including
greenwashing).
We have identified climate-related risks
covering investment returns and disruption
to the life and general insurance markets.
Weather events are already demonstrating
the impact of physical risk on our customers
lives. Additionally, transition risks are
emerging as we move towards a lower-
carbon economy. There are also climate-
related opportunities, such as potential
enhanced return on investments aligning to
a lower-carbon economy, or developing
lower-carbon insurance products.
We use the following time horizons to classify
climate-related opportunities and risks,
aligned to our strategy and business plans:
• Short term - 0 to 3 years: risks and
opportunities deemed material to our three
year business and financial planning cycle.
• Medium term - 3 to 10 years: risks
and opportunities deemed material
to our 2030 ambitions.
• Long term > 10 years: risks and
opportunities deemed material to
our 2040 ambition.
We then conduct exposure analysis to
understand how these risks will impact our
most material exposures. The principal risks
impacted by climate change are credit risk,
market risk and general insurance risk.
Read more in
Our risks and risk management: page 74
Metrics and targets
We use scenario analysis as a tool to
assist to identify the potential impact
of climate change on our organisation.
Despite the impacts from climate change,
Aviva’s strategy remains resilient to climate-
related risks and opportunities in all scenarios
examined, taking into account the possibility
and availability of future management actions.
To maintain this resilience, we need to
influence others and support a co-ordinated
global response to the low-carbon transition
to limit both ours, and humanity's, exposure
to climate breakdown. As expected, the
proportion of transition risk generally reduces
as we move to higher temperature pathways.
There remains a benefit to Aviva in terms
of keeping temperature rises below 2°C.
We continue to work towards limiting global
warming to under 1.5°C in line with the
Paris Agreement.
Financed emissions
Financed emissions represent the carbon
emissions of our investment portfolio (i.e.
Aviva’s emissions for Scope 3 category
15 from the GHG Protocol). We monitor the
emissions of our investment portfolio for
shareholder and policyholder funds and our
progress towards our climate ambitions.
Our metrics include investee Scope 1 and
Scope 2 emissions. We do not yet report
Scope 3 of our investees (Scope 3 of 3).
The below table sets out the assets included
in our climate metrics compared to the AUM
on the IFRS consolidated statement of
financial position excluding external assets:
2024
2023
Total AUM for climate
metrics (£bn)
225
213
AUM on the IFRS
consolidated statement
of financial position (£bn)
313
292
Coverage (%)
72%
73%
The coverage of 72% reflects that there are
asset classes for which climate metrics are
not yet calculated due to lack of methodology
and available, robust data. The reduction in
coverage is due to the changes in our asset
portfolio, with a higher proportion of other
investments and cash and cash equivalents,
not included in AUM for climate metrics. AUM
for climate metrics by asset class and more
information on our climate metrics is included
in the Metrics and Targets section of the Aviva
plc Climate-related Financial Disclosure 2024.
Operational emissions
We have set out below our GHG emissions
on an absolute CO2e basis in accordance
with the Streamlined Energy and Carbon
Reporting (SECR).
Non-financial and sustainability information statement
71
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Other
Information
Emissions (market-based)1
Scope 1 (tCO2e)2
6,090
1,347
7,437
6,082
1,421
7,503
Scope 2 (tCO2e)3
—
413
413
—
429
429
Scope 3 (tCO2e)4
6,711
3,980
10,691
6,045
3,409
9,454
Total market-based emissions (tCO2e)
12,801
5,740
18,541
12,127
5,259
17,386
Carbon offsets for which credits have been purchased and retired during
the year (tCO2e)5
(12,801)
(5,740) (18,541)
(12,127)
(5,259) (17,386)
Total net market-based emissions (tCO2e)
—
—
—
—
—
—
Intensity ratios (market-based)1
Scope 1 and 2 - market-based emissions (tCO2e) / £ million Total income2,3
0.36
0.33
0.35
0.41
0.37
0.40
Total market-based emissions (tCO2e) / £ million Total income
0.76
1.09
0.84
0.82
1.06
0.88
Total market-based emissions (tCO2e) / employee
0.61
0.69
0.64
0.62
0.62
0.62
Emissions (location-based)6
Scope 1 (tCO2e)2
6,090
1,347
7,437
6,082
1,421
7,503
Scope 2 (tCO2e)3
4,839
2,521
7,360
5,204
2,669
7,873
Scope 3 (tCO2e)4
6,711
3,980
10,691
6,045
3,409
9,454
Total location-based (tCO2e)
17,640
7,848 25,488
17,331
7,499 24,830
Intensity ratios (location-based)6
Scope 1 and 2 - location-based emissions (tCO2e) / £ million Total income2,3
0.65
0.74
0.67
0.76
0.83
0.78
Total location-based emissions (tCO2e) / £ million Total income
1.04
1.49
1.15
1.17
1.52
1.25
Total location-based emissions (tCO2e) / employee
0.85
0.95
0.88
0.89
0.89
0.89
Energy consumption
Energy consumption (MWh)7
53,583
12,712 66,295
55,146
13,199 68,345
Footnotes:
1. Market-based: A market-based method reflects emissions from electricity that companies have purposefully chosen
2. Scope 1: Natural gas, fugitive emissions (leakage of gases from air conditioning and refrigeration systems), oil, and company-owned cars
3. Scope 2: Electricity (location-based), district heating (location-based, market-based) and district cooling (location-based, market-based)
4. Scope 3: Includes certain Scope 3 categories for fuel and energy-related activities (category 3), business travel (category 6) and grey fleet (private cars used for business) (category 6),
waste (category 5). Scope 3 emissions have increased compared to 2023 principally as a result of business travel increasing.
5. All residual emissions have been offset. Since 2022 we have offset our residual carbon emissions from our Scope 2 market-based total as this takes account of the reduced emissions
from our use of electricity from renewable sources. As at 10 February 2025, the 18,541 credits purchased in relation to the 2024 market-based emissions footprint were retired.
6. Location-based: A location-based method reflects the average emissions intensity of grids on which energy consumption occurs
7. Includes Scopes 1 and 2 energy MWh used within our occupied buildings
8. Partial reporting under employee commuting reflects homeworking emissions. These are reported separately from our Streamlined Energy and Carbon Reporting.
This metric was subject to external independent reasonable assurance by EY in 2024 and PwC in 2023, where indicated. For the results of that assurance in 2024, see Aviva plc
Climate-related Financial Disclosure 2024 Independent Assurance section and Aviva plc 2024 Reporting Criteria Independent Assurance section.
Operational emissions
UK Overseas
2024
Total
UK Overseas
2023
Total
Our Climate-related Financial Disclosures
72
Operational and financed emissions
Scope 1 emissions relate to Aviva’s operations
excluding electricity usage. Scope 2 emissions
relate to electricity usage of Aviva's operations.
Scope 3 emissions in the table on the left include
emissions related to categories 3, 5 and 6, as outlined
below. For these categories the emissions do not
include the counterparties’ Scope 3 emissions. For
category 15 financed emissions, Scope 1 and Scope 2
emissions are included and do not include investee
Scope 3 emissions (Scope 3 of Scope 3).
Status
Scope 3 category name:
Included in
operational
carbon
emissions
Category 3 - Fuel and energy-
related activities
Category 5 - Waste generated in
operations
Category 6 - Business travel
Category 7 - Employee commuting8
Aviva does
not engage in
activities
linked to
these
categories
Category 4 - Upstream transportation
and distribution
Category 8 - Upstream leased assets
Category 9 - Downstream
transportation and distribution
Category 10 - Processing of sold goods
Category 12 - End-of-life treatment
of sold products
Category 13 - Downstream leased
assets
Category 14 - Franchises
Included in
Financed
emissions
Category 15 - Investments
Financed emission metrics include
investee Scope 1 and Scope 2.
Not yet
reported
Category 1 - Purchased goods
and services
Category 2 - Capital goods
Category 11 - Use of sold products
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Other
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Task Force on Climate-related Financial Disclosures (TCFD) Compliance Summary
The TCFD outlines 11 recommendations for organisations to include in their climate-related reporting. Consistent with the requirements of section 414CB of the Companies Act, climate-
related financial disclosures are embedded within the Strategic report. The Group's general purpose financial reports include a Climate-related Financial Disclosure report, which
provides more detailed information. The table below outlines how the 11 recommendations have been addressed both within the Strategic report, and with greater granularity within
the Climate-related Financial Disclosure.
TCFD pillars
TCFD recommended disclosures
Section of the Strategic report, that disclosures are
included in, in compliance with the Companies Act
Section of the Climate-related Financial Disclosure with
further details, in compliance with the Listing Rules
Governance
Disclose the
organisation’s
governance around
climate-related issues
and opportunities.
a. Describe the Board’s oversight of climate-related risks
and opportunities.
• Sustainability governance (see page 65)
• Non-financial and sustainability information statement
(see page 69)
• Governance - Our management’s climate roles and
responsibilities (see page 32)
b. Describe management’s role in assessing and managing
climate-related risks and opportunities.
• Our risks and risk management (see page 74-page 82)
• Governance - Our management’s climate roles and
responsibilities (see page 32)
Strategy
Disclose the actual and
potential impacts of
climate-related risks and
opportunities on the
organisation’s business,
strategy and financial
planning where such
information is material.
a. Describe the climate-related risks and opportunities the
organisation has identified over the short, medium, and
long-term.
• Non-financial and sustainability information statement
(see page 69)
• Our principal risks (see page 76)
• Our climate strategy, risks and opportunities
(see page 11)
b. Describe the impact of climate-related risks and
opportunities on the organisation’s businesses, strategy,
and financial planning.
• Climate action (see page 59)
• Our climate strategy (see page 14)
• Our Engagement Strategy (see page 15)
• Our Implementation Strategy (see page 18 to page 24)
c. Describe the resilience of the organisation’s strategy,
taking into consideration different climate-related
scenarios, including a 2°C or lower scenario.
• Climate-related Financial Disclosure (see page 71)
• Our climate strategy (see page 14)
• Scenario analysis - Our Climate VaR measure
(see page 53)
Risk management
Disclose how the
organisation identifies,
assesses and manages
climate-related risks.
a. Describe the organisation’s processes for identifying
and assessing climate-related risks.
• Our risks and risk management (see page 74-page 82)
• Risk management - Our process for identifying and
assessing climate-related risks (see page 27)
b. Describe the organisation’s processes for managing
climate-related risks.
• Our risks and risk management (see page 74-page 82)
• Risk management - Our process for monitoring and
managing climate-related risks (see page 27)
c. Describe how processes for identifying, assessing, and
managing climate-related risks are integrated into the
organisation’s overall risk management.
• Our risks and risk management (see page 74-page 82)
• Risk management - Our process for integrating
climate-related risks into risk management
(see page 26)
Metrics and Targets
Disclose the metrics and
targets used to assess
and manage relevant
climate-related risks and
opportunities where such
information is material.
a. Disclose the metrics used by the organisation to assess
climate-related risks and opportunities in line with its
strategy and risk management process.
• Our Non-financial KPIs (see page 28)
• Non-financial and sustainability information statement
(see page 69)
• Metrics and targets - Overview of our metrics
(see page 34)
b. Disclose Scope 1, Scope 2, and, if appropriate, Scope 3
greenhouse gas emissions (GHG), and the related risks.
• Climate-related Financial Disclosure - Operational
emissions (see page 72)
• Metrics and targets - Operational emissions/Financed
emissions/Monitoring sovereign holdings (see page 39
to page 48)
c. Describe the targets used by the organisation to manage
climate-related risks and opportunities and
performance against targets.
• Climate action (see page 59)
• Decarbonising our business (see page 59)
• Strategy - Our climate strategy (see page 14)
• Metrics and targets - Overview of our metrics
(from page 34)
• Metrics and targets - Our science based targets
(see page 56)
Our Climate-related Financial Disclosures
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“We enable informed, risk-
based decision making
through the identification,
acceptance and proactive
management of risks.
Our diverse range of
products, service and sales
channels, combined with
our scale helps mitigate the
inherent risks across our
business, support our
customers and achieve
our strategic ambitions.”
James Hillman
Group Chief Risk Officer
Our risk strategy
Effective risk management, leadership,
capability and culture are fundamental
to the sustained success of Aviva.
We receive premiums which we invest
to maximise risk-adjusted returns, so that
we can fulfil our promises to our customers
while providing a return to our shareholders.
We prefer and retain risks that we can
measure and manage, are consistent with
our strategy and generate appropriate
returns. Details of our inherent risk
exposures are set out in Note 52 of the
Financial Statements.
Our risk strategy is delivered through our
Risk Leadership, consisting of Chief Risk
Officers and Risk Directors, and teams
specialising in financial and non-financial
risks (including IT, cyber, climate and
conduct).
Operational highlights
2024 presented a challenging risk
environment, characterised by continuing
global conflicts, political and regulatory
change and extreme weather events.
Aviva's Risk Function has continued to
grow, move forward and adapt to these
challenges, providing support to the
business units and our partners to ensure
good outcomes for our customers and our
shareholders.
Through the year we gave input and
support to the cross-business working
group preparing for the implementation
of Provision 29 of the revised 2024
Corporate Governance Code, relating to
the effectiveness of internal controls, which
becomes effective for financial years
beginning 1 January 2026.
Our risk culture
Our people and culture underpin all aspects
of risk management at Aviva. In 2024 we
have continued to maintain a risk-aware
culture throughout the Group and continued
to grow the maturity of our three lines of
defence model.
We encourage diversity of thought and
a culture of curiosity to ensure a broad
range of risks are identified and considered.
We continuously develop the skills and
capabilities of our people to drive better
business decisions that appropriately
balance risk and reward. Throughout Aviva
our mandatory training includes modules
on financial crime, conduct and information
security, ensuring that risk is a key
consideration when colleagues are making
business decisions.
All colleagues have an annual risk-based
goal focused on personal responsibility,
supporting our commitment to embed our
risk culture at all levels of the business.
During 2024, Aviva's Risk Function has
been independently reviewed, with the
outcome confirming the effectiveness
of the function and Aviva's risk culture.
Our risk governance
Our governance approach includes
the maintenance of risk policies and
business standards, through risk
oversight committees (both Board
and management) and clearly defined
roles and responsibilities.
Our suite of risk policies sets out the
Board's expectations for the Group-wide
management of risk. The Group’s suite
of business standards sets out Aviva’s
required control objectives and minimum
requirements for effective internal control.
Line management in the business is
accountable for risk management which,
together with the Risk Function and Internal
Audit, form our ‘three lines of defence’ risk
governance model.
The roles and responsibilities of the
Risk and Audit Committees in relation
to the oversight of risk management
and internal control are set out in the
Governance Report. The Risk Committee
engages with the Customer and
Sustainability Committee on the Climate
and wider sustainability agenda.
The Risk Function is committed to enabling
Aviva to grow profitably, responsibly and
sustainably through oversight and challenge,
and has been proactive on key business
initiatives, for example, supporting organic
and inorganic growth; and the continued
embedding of compliance with Consumer
Duty requirements in the year.
Our risk management framework
Our Risk Management Framework (RMF),
as illustrated on the next page, sets out our
Group-wide approach to risk management.
The RMF is owned by the Aviva plc Board,
and adopted by subsidiary boards.
Our RMF is made up of several key
components, including sub-frameworks
for risk appetite and key risk categories,
as well as our risk policy, governance,
processes, procedures, systems and
desired behaviours and attitudes for risk
management.
The processes and systems we use
to identify, measure, manage, monitor
and report risks are designed to enable
dynamic risk-based decision making and
effective day-to-day risk management.
Our risks and risk management
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Three lines of defence
1st line (line management)
Accountable for the implementation
and practice of risk management, and
has primary responsibility for risk
identification, measurement,
management, monitoring and reporting.
2nd line (risk function)
Sets frameworks and standards to
manage risk, and provides oversight,
challenge and advisory support to the
business on risk matters.
3rd line (internal audit)
Assesses and reports on the
effectiveness of the design and
operation of the internal control
framework, which enables risks to
be assessed and managed.
Read more in
The Risk Committee Report:
page 108
Risk appetite framework
Risk taxonomy
Risk management process
Aviva uses the IMMMR model (below) to help the
business identify, predict, understand and
manage our risks, maintaining a safe risk
environment and enabling dynamic risk-based
decision making. Key components include the
top-down risk assessment, Operational Risk &
Control Management (ORCM), Own Risk &
Solvency Assessment (ORSA) and Stress &
Scenario Testing (SST).
We have Group manuals for IFRS Accounting
Standards, Solvency UK, Non-Financial, and
Climate Reporting. Financial and Non-Financial
Reporting Control Frameworks are in place to
support the preparation of our disclosures,
including in respect of non-financial metrics and
disclosures.
Risk strategy:
Defines how Aviva thinks about risk. Set by the Board
as part of approving the Risk Appetite Framework.
Risk appetite:
Clearly defined quantitative or qualitative overarching
statements, with associated metrics and thresholds,
that express the level of risk the business is willing
to accept. The Group has risk appetites for solvency,
liquidity, climate, operational, conduct and reputational
risk. Reviewed and approved by Boards or sub-
committees.
Risk preferences:
Qualitative statements that express where the business
prefers to take risks, or else accept or avoid them,
and why. Expressed as absolute terms and set by the
Board or Board Risk Committee.
Risk tolerances & risk triggers:
Risk tolerances are defined as qualitative or quantitative
boundaries that may constrain specific risk-taking
activities and are set by the Board or Board Risk
Committee. Risk tolerances are in place for material,
volatile or unrewarded risk types impacting solvency
and liquidity.
Risk triggers are thresholds to monitor capital exposure,
and are approved by relevant management
committees.
A comprehensive catalogue of risks that the organisation is
exposed to. Provides a consistent basis for assessing risk and
to support the summarisation, aggregation and reporting of risk,
capital and control information. Also considers cross-cutting
risks (e.g. Climate) and outcomes and impacts (e.g. Conduct,
Reputation). Changes require approval from the Group Chief
Risk Officer.
Level 1:
The broad categories covering the six main risks which affect
Aviva: Market & Credit Risk, Liquidity Risk, General Insurance
Risk, Life Insurance Risk, Operational Risk and Strategic Risk.
Read more in Note 52 of the Financial Statements on page 269.
Level 2:
Shows more specific manifestations of level 1 risks, for example
GI Reserve, GI CAT and GI Premium/Underwriting under General
Insurance Risk.
Level 3:
Represents the most granular risk types, for example Policy
Volumes and Premium Rates under GI Premium/Underwriting.
Risk management framework policy
Establishes the principles and fundamental statements by
which Aviva manages risk in line with its agreed risk strategy,
comprising the systems of governance, risk management
processes and risk appetite framework.
Framework enablers
Skillset and tools
Organisational structure and reporting lines
Risk solutions, tools and data
Capabilities, knowledge and expertise
Resourcing
Mindset
Culture and behaviours
Performance management
Leadership
Our risk management framework
75
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Other
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Our principal risks, with their
potential impact and key
mitigating or management
actions, are set out in the
following pages. They are not
intended to be exhaustive but
have been identified as those
most likely to seriously affect
Aviva's strategic objectives,
future performance, solvency,
liquidity, or reputation over
the next twelve months.
Our selection of principal risks has
remained stable throughout the year and
are aligned with those regularly reported
to the Group Executive Risk Committee
and Board Risk Committee for review
and discussion.
The risks are assessed by their likelihood
to impact the business and have been
selected on the basis of the potential
significance of the impact (post-current
mitigation).
The Group continues to operate in an
environment of elevated macroeconomic
uncertainty with global growth forecasts
slowing, global trade restrictions and
geopolitical tensions. Regulatory change
is expected to continue throughout the
coming year, and there remains an increased
level of cyber attacks across the world.
The radar (right) has been updated to show
our current assessment of the principal
risks to our business.
The view is dynamic and reflects the
continued prioritisation of risk management
activity across the business.
We regularly use stress and scenario
testing (including reverse stress testing) of
our principal risks to test the operational
and financial resilience of our business
plans and to inform our risk appetites and
decision-making. We also test the availability
and the impact of key management actions
(e.g. expense and volume management,
hedging, de-risking and debt raising), which
we would use to mitigate the impact of
severe financial or non-financial stresses.
Such actions would significantly improve
the Group's liquidity and Solvency II Own
Funds if used. The testing that we perform
demonstrates that the Group maintains
sufficient liquidity and surplus of Solvency
II own funds over SCR to withstand a
variety of severe scenarios and stresses.
Risk
Geopolitical instability
Strategic change
Economic and credit
People risk
Regulatory change
Third parties
Climate change
IT Control environment
Current view
Our principal risks
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Geopolitical instability
Description
Ongoing global instability could have a
significant impact on financial markets and
our supply chains (including claims
inflation) and therefore the service we
provide to our customers.
There is a risk of direct contagion of the
conflicts in Ukraine and the Middle East to
surrounding countries. Second and third
order impacts may affect global energy
prices, financial markets, global trade and
inflation.
The uncertain global political landscape
has the potential to lead to a higher
volume of covert cyber security and
critical infrastructure threats.
Proposed measures to boost domestic
production in the US risk triggering a
global response of retaliatory tariffs. A
potential increase in isolationist regional
policies, impacting market volatility,
capacity, pricing could also lead to
inflationary pressures on our supply chain.
Key mitigation actions
We actively monitor the economic
environment through our Financial Event
Response Plan, as well as the
cybersecurity threat environment.
We manage our direct underwriting
exposure to conflict zones via our policy
wordings and underwriting boundaries.
A key focus is to identify how geopolitical
environmental changes might impact
Aviva's customers and balance sheet,
allowing us to anticipate and proactively
plan to prevent harmful outcomes.
We perform exercises of plausible
scenarios, including identification of
triggers, early warning signs and
developing prevention actions and
contingency plans to minimise impact
to our customers.
We undertake stress testing and scenario
analysis to understand potential impacts
to our balance sheet, customers, and
business suppliers.
We develop contingency plans in case
of major supply chain disruption,
incorporating lessons learned from the
2022 outbreak of the Ukraine conflict and
the Covid-19 pandemic.
Strategic pillar
Focus level: Increasing
Risk Taxonomy
Economic and credit
Description
The year ahead is likely to be marked by
significant policy uncertainty, leading to a
wide range of possible outcomes for the
global economy.
A change in the US government is
expected to bring with it a host of
substantial changes across the policy
spectrum: from trade to tax and spending,
regulation, immigration, and foreign policy.
While high inflation has eased, interest
rates remain high and currency weakness
may impact our customers’ saving
behaviour, the returns we can offer to
customers, and our ability to profitably
meet our promises.
In the UK, the rise in employer national
insurance contributions, reduction in the
level at which they are paid and increases
to minimum wages, risks adversely
impacting our business partners' financial
stability and ability to deliver positive
customer outcomes.
Key mitigation actions
We limit the sensitivity of our balance
sheet to investment risks.
While interest rate exposures are
complex, we aim to closely duration-
match assets and liabilities and take
additional measures to limit interest
rate risk.
We hold substantial capital for market
risks and protect our capital with a variety
of hedging strategies to reduce our
sensitivity to market shocks.
We regularly monitor our exposures and
employ both structured and ad hoc
processes to evaluate changing market
conditions.
We are transparent with our customers,
ensuring Consumer Duty is embedded at
the heart of our business.
Strategic pillar
Focus level: Maintaining
Risk Taxonomy
Our principal risks
Strategic pillars
Growth
Customer
Efficiency
Sustainability
Risk taxonomy key
Market and credit risk
Liquidity risk
General insurance risk
Life insurance risk
Operational risk
Strategic risk
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Regulatory change
Description
The Group is subject to extensive
regulatory oversight and disclosure
requirements, with multiple bodies
operating across different markets and
jurisdictions.
Changes in government policy, legislation
or regulatory expectations applying to
companies in the financial services and
insurance industries, in any of the markets
in which the Group operates, may risk
adversely affecting the range of products
offered, the terms and conditions
applicable to these products, distribution
channels and capital requirements. This
has the potential to impact financial
results, dividends payable by subsidiaries
and financing requirements.
Insurance regulation in the UK and Ireland
is currently largely based on the
requirements of EU directives, though
incoming Solvency UK introduces
adjustments to better suit the UK's
regulatory objectives post-Brexit.
Ambiguity or inconsistency in regulation
across different jurisdictions risks placing
the Group at a competitive disadvantage
to other European financial services
groups.
Key mitigation actions
We closely monitor local compliance and
reporting against regulatory change
requirements.
We proactively engage with regulators
across Group and markets, ensuring Aviva
is compliant and well prepared for future
changes.
We provide clear, transparent pricing,
expert underwriting and great customer
service to ensure Aviva continues to
provide high quality products and meet
regulatory expectations in facilitating
good customer outcomes.
Strategic pillar
Focus level: Maintaining
Risk Taxonomy
Climate change
Description
Aviva considers climate change to
represent a significant risk to our
customers, strategy, business model and
wider society. Its effects are already being
felt and we are proactively addressing
these through our business plan and
Sustainability Ambition.
We seek to minimise our exposure to the
downside from climate transition risk,
which may result from the expected
extensive policy, technology and market
changes, while supporting solutions that
will drive a transition to a low-carbon
climate resilient economy.
We recognise that there will be acute and
chronic physical effects of climate change.
We seek to limit our exposure to these
risks, whilst actively supporting adaptation
and building resilience. Additionally, we
aim to minimise climate litigation risks,
including those related to greenwashing.
Climate-related risks are ‘cross-cutting’
rather than standalone risks within our risk
taxonomy, recognising that these risks
impact many other risks.
Key mitigation actions
Our risk policies and business standards
explicitly cover the climate-related risks
and integrate them in our risk and control
management activities supporting our
day-to-day decisions. We take into
consideration the fact that these risks do
not always easily align with existing risk
management processes.
Aviva’s climate risk appetite framework
expresses the level of risk our business is
willing to accept or avoid. It enables
confident risk-based decision-making.
We monitor our exposure using a variety
of metrics and consider the rapidly
evolving regulatory requirements along
with changes to, and dependencies with,
the macroeconomic environment.
We engage with companies to encourage
them to transition to a lower-carbon
economy and we invest in/underwrite
companies that are working towards
robust and credible transition plans.
We have built the possibility of extreme
weather events into our general insurance
pricing, reinsurance programme design
and monitor actual weather losses versus
expected weather losses by business.
Strategic pillar
Focus level: Increasing
Risk Taxonomy
Our principal risks
Strategic pillars
Growth
Customer
Efficiency
Sustainability
Risk taxonomy key
Market and credit risk
Liquidity risk
General insurance risk
Life insurance risk
Operational risk
Strategic risk
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Strategic Change
Description
The delivery of Aviva's Strategic Change
activity is essential to our ambition to be
market leading, and to continue delivering
great customer outcomes.
Numerous multi-year Transformation
programmes are underway or planned
across all markets. To support our growth
aspirations, plans are in place and
continue to be developed to increase the
capability and capacity of our change
delivery expertise.
The scale of our change programmes
requires a significant resourcing
commitment. The ability to recruit,
develop and retain highly skilled change
delivery experts to ensure we successfully
deliver the required programmes remains
a risk to our strategic ambitions.
Reliance on third party business partners
to deliver change, in a competitive market,
presents a risk to our change capacity.
The integration of change programmes
into business units presents a risk of
disruption to business activity.
Acquisitions of new businesses into the
Aviva Group present integration risks and
legacy business risks.
Key mitigation actions
We continue to develop the Aviva Change
Framework, performance metrics and
underlying data quality, with second-line
support, review, and challenge
throughout.
A key design element of our change
programmes is how implementation is
achieved to minimise the impact to our
daily business and maximise the benefits
of the change. This aims to enable our
customers to enjoy the benefits of the
program without affecting the great
service they receive.
Our change programmes are subject to
regular review and assurance. This
oversight ensures that our projects are
meeting projected markers and continue
to add value through their implementation.
We aim to develop our staff to meet the
needs of the change team, aligning skills
and ambitions to develop and grow both
the capacity of our teams and the
individual members.
Post implementation, we review change
programmes in detail, to ensure lessons
are learnt from both the programme and
process, ensuring the change process
continues to evolve and refine.
Strategic pillar
Focus level: Increasing
Risk Taxonomy
People risk
Description
Our people are critical to the delivery of
our strategy and business plan.
A failure to recruit a talented, engaged
workforce risks our ability to service the
needs of our customers and achieving our
strategic goals.
Through recruitment, development and
merger and acquisition activity, Aviva have
highly skilled colleagues. Not retaining our
talented people risks a loss of skills and
knowledge, which could have an adverse
impact on our customers and on the
profitability of Aviva.
A diverse, inclusive workforce is at the
heart of Aviva. Failure to attract staff with
a diverse range of backgrounds,
experiences and views would risk
negatively impacting Aviva's culture.
Leadership is key to the continued
success of Aviva; loss of key leadership
roles is a risk to the structure and
underlying skills of our teams.
Key mitigation actions
We have a range of development and
talent programmes, graduate and
apprentice schemes supported by a
various diversity, equity and inclusion
initiatives to ensure we attract and retain
the best talent.
Our Aviva University and learning
academies enable colleagues to develop
their skills in key capabilities such as
Wealth, Underwriting, Claims and Change.
The Aviva Foundry is our flagship
reskilling programme enabling us to build
a future-ready workforce, in particular
strengthening the digital and data skills we
require both now and in the future.
To ensure we retain our talent we have
implemented innovative people policies
such as flexible working and equal
parental leave, as well as supporting
career progression for all colleagues.
Strategic pillar
Focus level: Increasing
Risk Taxonomy
Our principal risks
Strategic pillars
Growth
Customer
Efficiency
Sustainability
Risk taxonomy key
Market and credit risk
Liquidity risk
General insurance risk
Life insurance risk
Operational risk
Strategic risk
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Third parties
Description
Aviva has reliance on third-parties for
numerous essential services and for the
successful delivery of strategic change
projects.
Third party control failure could pose a
risk to their business performance and
operational resilience, with impact to our
customers' outcomes and our reputation.
Aviva is reliant on third-party business
partners to provide essential IT services
to enable our customers to receive the
great service they expect. Loss of a
critical IT service is a risk to the
operational capability and reputation of
Aviva.
Government policy changes and business
environment pressures on third-parties
creates risk to their business models and
viability. Aviva’s priority is to provide
excellent service to our customers which
may be impacted by failing third-party
business partners.
Key mitigation actions
We work closely with third-and fourth-
party suppliers to ensure greater visibility
and alignment of their risk management,
particularly in relation to IT, cyber
security, customer and employee data
protection and retention.
We continue to implement measures to
improve and embed the Group’s
operational resilience including ensuring
the resilience of outsourcers and third and
fourth parties that support our important
business services. This includes risk
management, scenario testing and crisis
response planning to ensure customer
harm is minimised and that Aviva
continues to be a trusted, financially safe
business.
We provide support to our business
partners, sharing our skills and
experience to aide them through
challenging business environments to
ensure our customers experience great
outcomes.
Strategic pillar
Focus level: Maintaining
Risk Taxonomy
IT Control environment
Description
New and rapidly advancing technologies
such as generative Artificial Intelligence
and quantum computing threaten to out-
pace regulations, governance and control
frameworks. Failure to understand and
react to their impacts on customer
behaviours, pricing, and distribution
models could pose a risk to delivering on
our strategy, competitive advantage and
reputation.
Heightened geopolitical tensions have also
caused an increase in the frequency and
aggressiveness of cyber-attacks on large
institutions.
Systems outages that could affect our
ability to service customers, either due to
the direct effect on Aviva’s systems, or on
the systems of third-party business
partners.
Key mitigation actions
Our operational risk and control
management framework provides us with
the tools and techniques to reduce future
losses, protect good customer outcomes,
and protect against adverse reputational
and regulatory impact.
We carefully design, assess and regularly
test our controls to ensure they are
effectively mitigating the key causes and
consequences of risks inherent to the
business. We have specific controls in
place to manage the increasingly volatile
IT, cyber and data threat landscape.
We invest heavily in our IT infrastructure,
ensuring our business is at the forefront
of technology and suitably equipped to
defend against cyber-attacks. We actively
monitor and respond to attacks on our IT
infrastructure, continually evolving our
protection mechanism to ensure the
integrity of our systems.
Through our internal communications
system, we educate all our colleagues on
the moving trends of cyber criminals.
Through our mandatory training, we
ensure all our staff are aware of how to
identify cyber-attacks.
Strategic pillar
Focus level: Maintaining
Risk Taxonomy
Our principal risks
Strategic pillars
Growth
Customer
Efficiency
Sustainability
Risk taxonomy key
Market and credit risk
Liquidity risk
General insurance risk
Life insurance risk
Operational risk
Strategic risk
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Framework, processes,
and management
We maintain a comprehensive library of
emerging risks, which are distinguished
from current risks by the high degree of
uncertainty as to how and when the risk
will crystallise and its impact on Aviva.
In order to prioritise emerging risks for
management action and reporting, we
articulate scenarios as to how these
emerging risks could crystallise and
assess these scenarios according to their
impact, post mitigation, on the Group’s
strategy, capital and liquidity, operational
resilience and reputation or franchise.
The UK general election and the resulting
Labour majority has reduced some policy
uncertainty, but we continue to monitor
developments carefully and engage with
the new government.
We have increased focus on societal
inequality as an emerging risk, and in
particular concerns around increasing
protection gaps and affordability of cover
in some segments.
Climate change and its associated risks
remain a key area of focus across many
dimensions, including asset risk, legal risk
and physical risk.
The following page provides more detail on
the scenarios set out in the radar (right), the
potential impact to Aviva and the mitigating
actions in place.
Risk
Climate: Litigation
Increasing sustainability regulation
Medical advances
New generation of treatments
Societal inequality
Increasing protection gaps
Escalating geopolitical tensions
China – Taiwan conflict
Trade wars
Russia – Ukraine conflict
Middle East conflict
Climate: Transition
Rapid policy implementation
Global debt crisis
Next financial crisis
Climate: Physical risk
Increase in physical hazards
Artificial intelligence
Artificial general intelligence (AGI)
Current view
Emerging risks
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Climate: Litigation
Scenario: Changes in regulatory
requirements and increased demand for
climate disclosure from customers and
investors leads to inappropriate disclosures.
Impact: Damage to our reputation or
franchise if we fail to deliver on our
ambitions or not do enough to protect our
customers. Increasing cost of compliance
with regulatory requirements. Financial loss
from litigation against Aviva or companies
we insure, or from regulatory fines.
Mitigation: Implementation of robust
governance, controls, development and
delivery of tangible pathways to achieve our
ambitions. Compliance with regulatory
requirements. Disclosure in accordance with
TCFD (including transparency of the data
sources and methodologies).
Medical advances
Scenario: New generation of medical
treatments (e.g. Advanced Therapy Medical
Products, GLP-1 receptor agonists) bring
unexpected mortality and morbidity
experience.
Impact: Movements in mortality, morbidity
and medical expense inflation result in
deviations from expected claim patterns and
annuity payments, leading to a requirement
to strengthen reserves.
Mitigation: Detailed analysis of experience
and factors that influence mortality informs
our pricing and reserving policies. We buy
longevity and mortality reinsurance to
protect against adverse trends.
Societal inequality
Scenario: Increasing unaffordable cover for
low-income groups resulting in protection
gaps.
Impact: Increasing protection gaps (i.e.
cover is unaffordable), risk of adverse public
policy action to address insurance “poverty
premium” and increasing fraudulent claims.
This also creates opportunities for private
insurance solutions where public healthcare
and long-term social care is failing.
Mitigation: Addressed via Aviva’s Social
Action strategy. Financial Inclusion working
group created to co-ordinate group wide
approach to creating accessible propositions,
including poverty premium response. UK
business’s vulnerable customer plans and
activity.
Escalating geopolitical tensions
Scenario: Escalation of the Israel-Gaza-
Lebanon conflict to the wider Middle East,
a China-Taiwan blockade or conflict and
spread of the Ukraine conflict to NATO
neighbours. Trade wars through
imposition of punitive tariffs triggering
retaliatory tariffs and trade restrictions.
Impact: Major supply chain disruption
and claims supply chain inflation.
Increased cyber risk to operations. Global
macroeconomic shock impacting
solvency or new business.
Mitigation: Policy wording, underwriting
boundaries, investment in cyber security
controls, supply chain diversification,
Financial Event Response Plan and
Operational Resilience Framework.
Climate: Transition
Scenario: Quicker or broader than expected
climate policy implementation, stricter
carbon pricing and market shifts.
Impact: Reduction in returns from
investments in high carbon-intensive
sectors/companies. Increased green
spending creating opportunity for boosting
economic growth. Disruption to the supply
chain and to the insurance market affecting
customers preferences, profitability and
pricing.
Mitigation: Monitor and manage exposure to
high carbon-intensive sectors. Invest in or
underwrite companies that are working
towards a robust/credible Transition Plan.
Invest in sustainable assets. Respond to
customers’ needs and reward responsible
actions. Engage with suppliers to promote
sustainable business.
Global debt crisis
Scenario: Next financial crisis with
multiple potential triggers. Exacerbated by
high-levels of corporate debt issued at
low interest rates requiring refinancing
between 2025 to 2030 and sustainability of
ever increasing sovereign indebtedness.
Impact: Credit defaults or downgrades
impacting Aviva’s solvency,
Macroeconomic recessionary shock
impacting new business.
Mitigation: Credit limit framework
and credit hedging. Financial Event
Response Plan. Ongoing stress and
scenario testing. Deep downside
scenarios in quarterly financial
forecasting.
Climate: Physical risk
Scenario: Greater than expected increase in
acute or chronic physical hazards.
Impact: Reduction in returns from
investments and insurance products that are
exposed to losses from business
interruption. Supply chains may be
vulnerable, affecting companies' profitability.
Some real assets become uninsurable.
Mitigation: Ensure the transition (renewables,
EVs, etc.). Monitor and manage exposure and
enhance products’ design and reinsurance.
Engage with suppliers to ensure they are
signed-up to SBTi and have Transition Plans.
Build resilience through schemes such as
‘Build Back Better’. Engage with customers in
higher-risk zones to mitigate weather
impacts.
Artificial Intelligence
Scenario: The emergence and adoption of
artificial general intelligence (AGI).
Impact: Rapid changes to finance and
insurance sectors, with impacts on and
opportunity for the workforce. Current value
propositions may be diminished with the
availability of tools that 'level the playing
field', impacting profitability and competitive
advantage. Use of AGI may polarise
sentiment and impact existing and future
customer base.
Mitigation: Action in hand to strengthen the
control framework for the current risks Gen
AI presents as well as exploit the
opportunities for process efficiency, better
pricing and/or underwriting, product
personalisation and improved customer
service.
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Going concern and longer-term
viability
A detailed going concern and longer-term
viability review has been undertaken as part
of the 2024 reporting process. The Group’s
business activities, together with the factors
likely to affect its future development,
performance and capital and liquidity
positions are set out in the Strategic report,
along with the Group’s approach to risk and
risk management. In addition, the Financial
statements sections include notes on the
Group’s borrowings (note 45); its contingent
liabilities and other risk factors (note 48); its
capital management (note 50); management
of its risks including market, climate, credit
and liquidity risk (note 52); and derivative
financial instruments (note 53).
The going concern and longer-term
viability review includes consideration of
the Group’s current and forecast solvency
and liquidity positions over a three-year
period and evaluates the results of stress
and scenario testing. A three-year time
horizon has been deemed an appropriate
period for the assessment as it aligns to
management’s 2025-2027 business plan
and to the period for which the Group
establishes its internal and external targets.
Stress and scenario testing (including
reverse stress testing) is used to test the
resilience of business plans and to inform
decision-making.
These tests are driven by the Group’s
risk profile at a range of severities, as
well as a range of other scenarios as part
of the Group solvency and liquidity
management processes.
The Group continues to maintain strong
solvency and liquidity positions through
a range of scenarios and stress testing.
Particular areas of uncertainty include
credit downgrades where a specific focus
has been our commercial mortgage
portfolio, which we continue to monitor
closely and have taken several actions
including debt restructuring. The Group’s
balance sheet exposure has been reviewed
and actions taken to reduce the sensitivity
to economic shocks.
Even in severe downside scenarios, no
material uncertainty in relation to going
concern and longer-term viability has
been identified, due to the Group’s strong
solvency and liquidity positions providing
considerable resilience to external shocks,
underpinned by the Group’s approach to
risk management (see note 52).
It is fundamental to the Group’s longer-term
strategy that the directors manage and
monitor risk, considering all key risks the
Group faces, including longer-term
insurance risks, so that it can continue
to meet its obligations to policyholders.
The Group is also subject to extensive
regulation and supervision under the
Solvency II regulatory framework.
Going concern
After making enquiries, the directors have
a reasonable expectation that the Company
and the Group as a whole have adequate
resources to continue in operational
existence for a period of at least 12 months
from the date of approval of the financial
statements (at least to 26 February 2026).
For this reason, they continue to adopt, and
to consider appropriate, the going concern
basis in preparing the financial statements.
Longer-term viability statement
The directors have assessed the
prospects of the Group in accordance
with Provision 31 of the 2018 UK
Corporate Governance Code, with
reference to the Group’s current position
and prospects, its strategy, risk appetite,
and the potential impact of the principal
risks and how these are managed. Based
on this assessment, the directors have a
reasonable expectation that the Group
will be able to continue in operation and
meet its liabilities as they fall due over
the three-year assessment period to
31 December 2027.
Strategic Report
By order of the Board on 26 February 2025.
Amanda Blanc DBE
Group Chief Executive Officer
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Our approach to governance
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Our Board of Directors
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Our Board’s activities
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Nomination and Governance Committee report
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Audit Committee report
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Risk Committee report
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Customer and Sustainability Committee report
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Remuneration Committee report
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Remuneration at a glance
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Annual report on remuneration
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Directors’ Remuneration Policy
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Directors’ report
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Statement of directors' responsibilities
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“Good governance is
central to achieving our
ambition through the
delivery of our strategy.”
George Culmer
Chair
Governance at Aviva
This report outlines our approach to
governance and how the Board and
its Committees operated during 2024.
The Board is responsible for ensuring
that strong corporate governance
practices are in place to support the
success of the Company and generate
value for shareholders while fulfilling
responsibilities to all our stakeholders.
Our robust governance framework enables
the Board to provide leadership, set the
Group’s strategic aims and risk appetite,
and uphold the purpose, culture, values
and ethics of the Company.
You will find more information about our
governance practices in 'Our approach
to governance'.
Our Board
It is important to me that our businesses are
formally represented on the Board. In 2024,
we made three new Non-Executive Director
appointments to support this goal. Ian Clark
joined the Board and was appointed chair
of Aviva Insurance Limited in March,
Cheryl Agius joined the Board and was
appointed chair of Aviva Investors Holdings
Limited in May, and Neil Morrison joined the
Board in June, just before his appointment
as chair designate of Aviva Canada Inc.
While our Insurance, Wealth & Retirement,
UK & Ireland General Insurance, and Aviva
Investors businesses have been represented
on the Board for several years, Neil's
appointment ensures that Canada General
Insurance now has the same Board-level
representation as our other businesses.
I would also like to express my gratitude
to Martin Strobel and Mike Craston, who
both retired in 2024, for their exceptional
contributions to the Board.
I am confident that the Board has the right
balance of skills, knowledge, and experience
and I am proud that the Board continues to
meet the sex and ethnic background targets
set by the Financial Conduct Authority and
The Parker Review.
You will find the Board's biographies in 'Our
Board of Directors', and more information
on Board composition in the 'Nomination
and Governance Committee report'.
Board effectiveness
The Board is committed to the highest
performance standards and every year
we take the opportunity to reflect on our
effectiveness and create an action plan
for the coming year. This year we conducted
an internal Board and Committee evaluation
and the results were highly positive.
Following the evaluation, the Board agreed
actions focused on enhancing the Board's
understanding of our communities and
suppliers. You can read more about the Board
and Committee evaluation in the 'Nomination
and Governance Committee report'.
Our Board’s activities
This has been an exceptionally busy year for
the Board, with additional time being spent
on the proposed acquisition of Direct Line.
Other highlights during the year for me
included our annual strategy session in June
and inspiring site visits to York in May,
Ireland in September, and with Aviva
Investors in December. You can read more
about this in 'Our Board's activities'.
Stakeholder engagement
The Board considers the views and interests
of the Group's stakeholders in all decision
making. You can read about how the Board
has engaged with each of our stakeholder
groups in the Strategic report.
Evolution Council
One of the most enjoyable aspects of my role
is chairing the Evolution Council, which comprises
of 12 high potential colleagues from across the
Group. The Evolution Council meets prior to
each Board meeting and ensures that the
employee voice is heard at Board-level. The
Council acts as the Board's chosen employee
engagement mechanism. We have recently
decided to appoint two graduates from our
early careers programme, providing the Board
with a Gen Z perspective. You can read more
about the Evolution Council in the 'Culture'
section of 'Our approach to governance'.
Annual General Meeting
In May, we held our AGM in York, a key
location for our Insurance Wealth &
Retirement business. This year’s AGM will
be in Bristol, which has been an important
location for us since the acquisition of
Friends Life in 2015. We look forward
to meeting shareholders, hearing your
views and answering your questions.
You will find more detail about the meeting
in 'Shareholder Services'.
George Culmer
Chair
26 February 2025
Read more on:
Our approach to governance: page 87
Our Board of Directors: page 91
Nomination and Governance Committee
report: page 99
Board and Committee evaluation:
page 102
Our Board's activities: page 96
Stakeholder engagement: page 48
Annual General Meeting: page 327
Chair’s introduction to governance
85
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Other
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Aviva is committed to the principles of
the 2018 UK Corporate Governance Code
(the Code), which is publicly available at
www.frc.org.uk.
The Board can confirm that the Company
was compliant with the Code throughout
the financial year ended 31 December 2024.
The table below sets out where relevant
information is disclosed about how the
Company has applied the principles of
the Code during the year.
Meeting the revised 2024 Code
During 2025, the Board and its
Committees will oversee the application
of the revised 2024 Code which will
apply to the financial year beginning on
1 January 2025, with the exception of the
changes to Provision 29, which
relate to the effectiveness of the risk
management and internal control
framework. The changes to Provision
29 will apply to the financial year
beginning on 1 January 2026.
The Company is led by an
effective Board whose role is to
promote the long-term success
of the Company and generate
value for shareholders
91 to
95,
102
The Board is responsible for
establishing the Company's
purpose, values, and strategy
and ensures our culture is
aligned to these
2, 21,
53 to
55, 90
The Board ensures that
necessary resources are in place
for the Company to meet its
objectives
21, 41
to 42,
96
The Board ensures effective
engagement with shareholders
and stakeholders
48 to
52, 90
The Board ensures that
workforce policies and practices
are consistent with the
Company's values and support
its long-term success and the
workforce can raise any matters
of concern
49,
85,
96,
107
Board leadership and
company purpose
Pages
The Chair leads the Board and is
responsible for its overall
effectiveness
87, 102
The Board includes an
appropriate combination of
executive and non-executive
directors and there is a clear
division of responsibilities
between the Board and the
executive
87, 91
to 95,
100
Non-Executive Directors have
sufficient time to meet their
responsibilities. They provide
challenge, guidance, and hold
management to account
87, 100
The Group Company Secretary
supports the Board in ensuring
that it has the policies, processes,
information, time, and resources
it needs
88, 90
Division of responsibilities
Pages
Appointments to the Board are
subject to a formal procedure
and effective succession plans
are maintained for Board and
senior management. Both
appointments and succession
plans promote diversity
99 to
101
The Board and its Committees
have a combination of skills,
experience, and knowledge.
Consideration is given to the
length of service of the Board as
a whole and membership is
regularly refreshed
91 to
95, 100
Annual Board and Committee
evaluation considers
composition, diversity, and
effectiveness. Individual
evaluation demonstrates that
each director continues to
contribute effectively
102
Composition, succession
and evaluation
Pages
The Board has established
procedures to ensure the
independence and effectiveness
of internal and external auditors
and integrity of financial and
narrative statements
103 to
107
The Board presents a fair,
balanced, and understandable
assessment of the Company's
position and prospects
104,
149
The Board has established
procedures to manage risk and
internal controls and determine
principal risks
74 to
83, 90,
108
Remuneration
Pages
Remuneration policies and
practices are supportive of
strategy and promote long-term
sustainable success
112
There is a procedure for
developing executive
remuneration policy and
determining director and senior
management remuneration
119
Directors exercise independent
judgement and consider
performance when authorising
remuneration outcomes
122
Audit, risk and
internal control
Pages
Our compliance with the Code
86
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Governance framework
A strong system of governance throughout
the Group is essential to achieving our
purpose and delivering our strategy. Our
governance framework and a clear division
of responsibilities enables the Board to
operate effectively, fulfil its responsibilities
and provide valuable oversight.
Whilst the Board reserves certain
responsibilities, day-to-day management of
the Group has been delegated to the Group
Chief Executive Officer, who is supported
by the Group Executive Committee.
The Board has established five Board
Committees which operate under
Terms of Reference, available online
at www.aviva.com/committees.
In January 2025, the Committee Terms of
Reference were reviewed and refreshed to
align to current legislation and regulation,
whilst being clear and concise.
The Board Committees work closely
together in particular areas. For example,
the Audit and Risk Committees work
together on internal control matters and
both Committee Chairs are members of
the other Committee to ensure a co-
ordinated approach.
Board
Collectively responsible for promoting
the long-term, sustainable success
of the Company through seeking to
generate value for shareholders
while fulfilling responsibilities to all
our stakeholders. This includes setting
the Group’s strategic priorities and
monitoring management’s
performance against those priorities,
setting the Group’s risk appetite and
ensuring effective controls are in
place, monitoring compliance with
corporate governance principles
and upholding the purpose, culture,
values, and ethics of the Company.
Chair
The Chair is tasked with the
leadership of the Board, setting its
agenda, ensuring its effectiveness,
and enabling the constructive
challenge of the performance and
strategic plans of the Executive
Directors by the Non-Executive
Directors. The Chair meets with the
Non-Executive Directors regularly
without the Executive Directors
present. The Chair also plays a key
role in the effective communication
with shareholders and working with
the Board to establish our culture,
purpose, and values.
Senior Independent Director
The Senior Independent Director’s
principal duties are to provide a
sounding board for the Chair and
serve as an intermediary to other
directors and shareholders where
necessary. The Senior Independent
Director also leads on reviewing
the performance of the Chair and
meets with the Non-Executive
Directors at least annually without
the Chair present.
Non-Executive Directors
Non-Executive Directors are
expected to exercise independent
judgement through constructive
challenge and scrutiny of
management’s performance.
They assist in the development
of strategy and must satisfy
themselves that financial controls
and systems of risk management
are robust. Non-Executive Directors
are central in the appointment,
removal, succession planning,
and determination of appropriate
levels of remuneration for
Executive Directors.
Roles and responsibilities
Our approach to governance
87
Board
Senior Independent Director
Chair
Non-Executive Directors
Board committees
Nomination and
Governance Committee
Audit
Committee
Risk
Committee
Customer and
Sustainability Committee
Remuneration
Committee
Executive team
Group Chief
Executive Officer
Group Chief
Financial Officer
Group
Executive Committee
Group
Company
Secretary
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Roles and responsibilities continued
Board Committees
Nomination and
Governance
Committee
Oversees Board
composition, Board
and senior executive
succession, and Group
corporate governance.
Audit Committee
Assesses the integrity of
financial and non-financial
and climate-related
reporting and monitors the
effectiveness of internal
controls, internal and
external auditors, and
whistleblowing.
Risk Committee
Provides oversight and
advice to the Board in
relation to the current and
future risk exposures of the
Group by reference to
strategic developments and
including determination of
risk appetite, tolerance, and
desired risk culture.
Customer and
Sustainability
Committee
Oversees the Group’s
ambition to be a leading
customer centric company
and Aviva’s Sustainability
Ambition.
Remuneration
Committee
Reviews the Group
Remuneration Policy,
compliance with the Policy,
and the remuneration
approach for relevant staff
under any of the applicable
regulatory regimes.
Executive team
Group Chief Executive Officer
The Group CEO has overall
accountability for the development
and execution of the Group’s
strategy in line with the policies
and objectives agreed by the
Board, as well as the operational
effectiveness and profitability of
the Group. The Group CEO leads
the Group Executive Committee.
Group Chief Financial Officer
The Group CFO is responsible for
the financial affairs of the Group
whilst supporting the Group CEO
in the development and execution
of the Group’s strategy.
The Group Executive
Committee
The Group Executive Committee
is made up of senior executives
who have accountability for their
own business area or function,
as delegated by the CEO.
Group Company Secretary
The Group Company Secretary is
responsible for advising the Board
on governance matters and ensuring
compliance with applicable rules
and regulations. They ensure good
information flows within the Board
and its committees and between
senior management and Non-Executive
Directors. They support the Board
in ensuring that it has the policies,
processes, information, time and
resources it needs. All directors have
access to the advice of the Group
Company Secretary.
Our approach to governance
88
Read more in the
Nomination and
Governance Committee
report: page 99
Read more in the
Audit Committee
report: page 103
Read more in the
Risk Committee report:
page 108
Read more in the
Customer and
Sustainability Committee
report: page 110
Read more in the
Remuneration Committee
report: page 112
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Induction, training and
development
A commitment to support the continuing
development of all employees is a central
part of Aviva’s culture. Our directors are
highly supportive of this and are committed
to their own ongoing professional
development. During 2024, the directors
participated in internal training sessions
on subjects including Lloyd's of London,
Consumer Duty, Speak Up, climate and
sustainability, and crisis management.
A number of training sessions have been
incorporated into the Board and Committee
plans for 2025.
The Board also receives regular briefings
on a range of strategically important
matters to ensure they are informed
of developments in these areas.
All newly appointed directors are provided
with a structured and tailored induction
programme, taking into account their
experience and capabilities and knowledge
of Aviva. This covers, amongst other matters,
the current financial and operational plan,
meeting packs and minutes from recent
Board and Committee meetings, stakeholder
engagement, organisation structure charts,
a history of the Group, role profiles,
and all relevant policies, procedures and
other governance materials. The induction
also includes meeting key members of
senior management and the external
and internal auditors.
Any knowledge or skill enhancements
identified during the directors’ regulatory
application process are also addressed
through the induction programme.
As described earlier in this report, the
Board appointed three new Non-Executive
Directors during 2024. Cheryl Agius and Ian
Clark were already serving as Directors of
Group companies, whereas Neil Morrison
was an external appointment. You can read
about the difference between an induction
programme tailored for an internal
appointment compared to an external
appointed in the case studies of Cheryl
and Neil's induction programmes.
Cheryl Agius
Cheryl Agius was appointed as a
Non-Executive Director of the Aviva
plc Board and a member of the
Nomination and Governance, Risk,
and Customer and Sustainability
Committees on 21 May 2024. At the
same time, Cheryl was appointed
chair of Aviva Investors Holdings
Limited, being the legal entity that
controls our Aviva Investors
business. Before this point, Cheryl
had served as a Non-Executive
Director of Aviva Life Holdings UK
Limited, being the legal entity that
controls our IWR business, and
several of its subsidiaries.
Noting Cheryl's knowledge of the
Aviva Group, her induction
programme was tailored to focus
on being a non-executive director
of a UK-listed company (Aviva plc)
and an asset management business
(Aviva Investors). Cheryl met with
key Board members and executives
from each company and was
provided with their financial and
strategic plans. Following her
appointment to the Audit Committee
in February 2025, Cheryl had in-
depth sessions with management
and the external auditors.
Neil Morrison
Neil Morrison was appointed as
a Non-Executive Director of the
Aviva plc Board and a member of
the Nomination and Governance
and Risk Committees on 17 June
2024. Shortly afterwards, Neil was
appointed chair designate of Aviva
Canada Inc., being the legal entity
that controls our Canada GI
business.
Whilst being a specialist in the
Canadian insurance market with
international experience, Neil had
no previous experience within Aviva
and his induction programme was
designed to focus on Group history,
finance, risk, governance, and the
UK regulatory landscape as the
majority of his executive and non-
executive experience was gained
in Canada. Neil also attended
the Board's strategy session in
June which allowed him to get an
in-depth view of Aviva's strategy
and progress against our strategic
priorities.
Our approach to governance
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Culture
The Board is responsible for establishing
the Company's cultural direction, ensuring
the culture is aligned to our purpose,
strategy, and values, and monitoring
behavioural patterns and standards
across the Group.
In December 2024, the Board had its
annual culture and engagement update.
They discussed the findings from the
Voice of Aviva (VoA) engagement survey
and cultural diagnostic in great detail.
Colleague engagement levels in 2024
were at an all-time high of 91% and
the culture diagnostic highlighted progress
too, with positive improvements across
all dimensions. Even with these strong
improvements, management, supported by
the Board, has identified three company-
wide priorities for 2025:
1. continue to focus on our ability
to adapt to new ways of working;
2.maintain high levels of inclusion
and belonging; and
3.investing in leadership development.
You can read more about this, as well as
the Company's approach to investing in and
rewarding our people, in the Our People
section of the Strategic report.
The Board also monitors culture through
regular site visits, Your Forum, and the
Evolution Council, which was established in
2018 and acts as our principal employee
engagement mechanism as required by the
Code. The Council meets seven times a year,
ahead of each scheduled Board meeting and
is chaired by the Board Chair and attended by
Non-Executive Directors on rotation. The
outcomes from the meeting are reported to
the Board by the Board Chair.
Communication with shareholders
The Board places considerable importance
on communication with shareholders.
The Executive Directors have an ongoing
dialogue and a programme of meetings
with institutional investors, fund managers,
and analysts which are managed by the
Company’s investor relations function.
The Chair also meets with the Group’s
major shareholders. At those meetings a
range of issues is discussed to understand
shareholders’ perspectives, within the
constraints of rules around confidential
information. Shareholders’ views are
regularly communicated to the Board
through reports from the Group CEO
and Group CFO and regular briefings from
the investor relations team.
The Senior Independent Director is also
available to meet with major shareholders
to discuss any concerns that cannot be
resolved through normal channels.
Read more in
Our stakeholders: page 48
Shareholders are also given the opportunity
to communicate with the Board at the
Annual General Meeting.
Read more in
Shareholder Services: page 327
Conflicts of interest
In accordance with the Companies Act 2006,
the Company’s Articles of Association allow
the Board to authorise potential conflicts of
interest that may arise and to impose such
limits or conditions as are deemed necessary.
The Board continues to monitor and note any
actual or potential conflicts of interest that
each director may have and decides whether
these should be authorised.
Directors are required to disclose potential
conflicts of interest as and when they arise
and to confirm the information held by the
Company is correct on a bi-annual basis.
Independent advice
All directors have access to the advice
of the Group Company Secretary in relation
to the discharge of their duties on the Board
and any Committees they serve on.
Furthermore, any directors may take
independent professional advice at the
Company’s expense. During the year,
no directors sought to do so.
Risk management and
internal control
The Board is responsible for setting the
Group’s risk appetite and ensuring that
there is an appropriate system of risk
governance in place.
To carry out this responsibility, the Board
has established frameworks for risk
management and internal control using
a ‘three lines of defence’ risk governance
model, which help the Group comply with
the Financial Reporting Council guidance on
risk management, internal control and
related financial and business reporting.
In-depth monitoring of the establishment
and operation of prudent and effective key
controls for assessing and managing the
key risks associated with the Group’s
operations is delegated mostly to the Risk
Committee, with the Audit Committee
responsible for internal controls over
Financial Reporting and Non-Financial and
Climate-related Reporting.
The Risk Committee, on behalf of the
Board, continually assesses the Group’s
principal and emerging risks and these are
regularly reported to the Board.
Assessment of effectiveness
of risk management
Each business unit CEO is required to make
a declaration that the Group’s governance
and system of internal controls are
effective and are fit for purpose for their
business and that they are kept under
review throughout the year.
The effectiveness assessment draws on the
regular cycle of assurance activity carried
out during the year and is supported by the
application of the Group's operational risk and
control management framework whereby the
details of any key failings or weaknesses are
reported to the Audit and Risk Committees
and to the Board on a regular basis. Any
material risks not previously identified,
key control weaknesses or non-compliance
with the Group’s risk policies or local
delegations of authority must be highlighted
as part of this process. This assessment
is subject to Chief Risk Officer review and
challenge both at local business unit and
Group-level.
The Risk Committee monitors the operation
of the Group's risk management and
internal controls and the Audit Committee
monitors internal controls over financial
reporting through regular reports. In
February 2025, the Risk Committee carried
out a full review of the effectiveness of the
systems of risk management and internal
control for the financial year ended 31
December 2024. This review covered all
key controls including financial,
operational, and compliance controls and
the risk management framework. The Audit
Committee also reviewed internal controls
over Financial Reporting and Non-Financial
and Climate-related Reporting.
Read more on
Our risks and risk management: page 74
Our approach to governance
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George Culmer
Chair
Appointed
Non-Executive Director – Sep 2019
Senior Independent Director – Jan 2020
Chair – May 2020
Experience and competencies
George brings significant board-level
exposure with over 20 years experience as a
FTSE 100 Director, including CFO of Lloyds
Banking Group plc and, prior to that, CFO of
RSA Insurance Group plc. George has also
worked at Zurich Financial Services and
Prudential plc.
George has a deep understanding of
insurance and wider financial services
and insight into the challenges that affect
Aviva’s businesses and the implications for
shareholders, which make him well placed
to lead the Board in driving the strategy,
culture, and values of the Group.
External appointments
• Senior Independent Director of
Rolls-Royce Holdings plc
• Trustee of the Army Benevolent Fund
Dame Amanda Blanc
Group Chief Executive Officer (CEO)
Appointed
Non-Executive Director - Jan 2020
Group CEO - Jul 2020
Experience and competencies
Amanda started her career as a graduate at
one of Aviva’s legacy companies, Commercial
Union plc. Since then, she has held senior
executive roles across the insurance industry
as Group CEO at AXA UK PPP & Ireland, and
CEO, EMEA & Global Banking at Zurich
Insurance Group. Amanda held executive
leadership positions at Towergate Insurance
Brokers, Groupama Insurance Company and
Commercial Union. She served as Chair of the
Insurance Fraud Bureau, President of the
Chartered Insurance Institute, a member of
the Prime Minister's Business Council, and Co-
Chair of the UK Transition Taskforce.
Amanda’s broad executive experience in the
insurance industry makes her well qualified to
lead Aviva. Amanda has greatly simplified
Aviva and overseen a significant strengthening
of Aviva's financial position. Amanda is a
director of Aviva Group Holdings Limited.
External appointments
• Senior Independent Director of BP plc
• Board member of the Association of British
Insurers
• Women in Finance Charter Champion for
HM Treasury
Charlotte Jones
Group Chief Financial Officer (CFO)
Appointed
Group CFO - Sep 2022
Experience and competencies
Charlotte has held a number of executive
positions during her career, including CFO of
RSA Insurance plc, Interim CEO of the RSA UK
& International business, and CFO of Jupiter
Fund Management plc. Before that, Charlotte
was Head of Group Finance at Credit Suisse
Group, Deputy Group CFO at Deutsche Bank
Group and an audit partner at EY. Charlotte is
a Chartered Accountant.
Charlotte is a highly experienced CFO with an
impressive track record across the insurance,
banking, and asset management industries.
Charlotte’s financial expertise and strategic
decision-making skills play a fundamental role
in driving Aviva towards its strategic goals.
Charlotte is a director of Aviva Insurance
Limited and Aviva Group Holdings Limited.
External appointments
• Member of the Sheffield University
Management School Advisory Board
Cheryl Agius
Independent Non-Executive Director
Appointed
Non-Executive Director – May 2024
Experience and competencies
Cheryl is a qualified actuary with over 30 years’
experience in the financial services industry.
Cheryl was CEO of Saga plc’s general insurance
business and, prior to that, CEO of Legal &
General Group plc’s general insurance
business. Cheryl held senior leadership roles in
Legal & General’s retirement division and was
responsible for setting up the US retirement
business.
Cheryl is currently Chair of Aviva Investors
Holdings Limited and previously served as a
Non-Executive Director of Aviva Life Holdings
UK Limited, Aviva Life & Pensions Limited and
Chair of Aviva Equity Release UK Limited, all
subsidiaries in the Aviva Group. Cheryl was
also Chair of the Aviva Life Holdings UK Limited
Conduct and Investment Committees.
Cheryl’s extensive experience of both listed
and regulated financial services companies
and her knowledge of the Aviva Group make
her a strong addition to the Board.
External appointments
• Chair and Trustee of British Coal Staff
Superannuation Scheme
Our Board of Directors
Committee membership key
Nomination and Governance Committee
Audit Committee
Risk Committee
Customer and Sustainability Committee
Remuneration Committee
Chair
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Andrea Blance
Independent Non-Executive Director
Appointed
Non-Executive Director – Feb 2022
Experience and competencies
Andrea is an experienced financial services
leader and board member who has deep
understanding of governance, the regulatory
environment and risk management, making
her a strong Chair of the Risk Committee.
Andrea spent her executive career at Legal &
General Group plc where she held a range of
senior leadership roles including Group Chief
Risk Officer and Strategy & Marketing
Director. More recently, Andrea has been
Senior Independent Director and
Remuneration Committee Chair of Vanquis
Banking Group plc, Senior Independent
Director and Audit Committee Chair of
ReAssure plc, and Risk Committee Chair of
Scottish Widows plc and Lloyds Banking
Group Insurance.
External appointments
• Non-Executive Director and Risk Committee
Chair of Hargreaves Lansdown plc
Ian Clark
Independent Non-Executive Director
Appointed
Non-Executive Director – Mar 2024
Experience and competencies
Ian is a chartered accountant with over 40
years’ experience of working in the financial
services industry. He has extensive executive
experience, most notably as an equity partner
at Deloitte where he led the strategy and
corporate finance practice for the insurance
sector. Prior to that, he was a partner at Bacon
& Woodrow. Ian also has significant
experience as a Non-Executive Director of
regulated companies.
Ian has a strong knowledge of Aviva and
excellent understanding of the General
Insurance business and market. He has a very
good understanding of the risks faced by the
general insurance sector and of the regulatory
regime in which it operates, as well as the
wider UK regulatory environment. This makes
Ian a valuable addition to the Board and Chair
of Aviva Insurance Limited.
External appointments
• Non-Executive Director of EGV
(Holdings) Limited
• Treasurer and member of the Court of the
Worshipful Company of Insurers
• Trustee of African Revival
Patrick Flynn
Senior Independent Director
Appointed
Non-Executive Director - Jul 2019
Senior Independent Director - Sep 2020
Experience and competencies
Patrick is an experienced finance executive
and has significant experience in retail,
financial and insurance services.
Patrick was previously CFO of ING, a
European banking group. Prior to that, Patrick
was CFO of HSBC Insurance. He also served
as a Non-Executive Director of two listed
former ING insurance companies. His
experience thoroughly equips Patrick to chair
the Audit Committee and to support the Chair
as Senior Independent Director.
External appointments
• Non-Executive Director and Audit
Committee Chair of NatWest Group plc
Shonaid Jemmett-Page
Independent Non-Executive Director
Appointed
Non-Executive Director - Dec 2021
Experience and competencies
Shonaid is an experienced director and her
business leadership and broad experience
including in the financial services,
sustainability and digital sectors make her a
valuable addition to the Board and Chair of the
Customer and Sustainability Committee.
Shonaid was previously Chair of MS Amlin and
has held a number of senior roles during her
executive career including as Chief Operating
Officer of CDC Group, Global SVP Finance and
Information at Unilever and a partner at
KPMG. More recently, Shonaid chaired
Greencoat UK Wind PLC.
External appointments
• Chair of ClearBank Ltd
• Chair of Cordiant Digital Infrastructure
Limited
• Non-Executive Director of QinetiQ Group plc
Our Board of Directors
Committee membership key
Nomination and Governance Committee
Audit Committee
Risk Committee
Customer and Sustainability Committee
Remuneration Committee
Chair
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Mohit Joshi
Independent Non-Executive Director
Appointed
Non-Executive Director – Dec 2020
Experience and competencies
Mohit is CEO and Managing Director of
Tech Mahindra Limited, a leading provider of
digital transformation, consulting and business
re-engineering services and solutions.
Prior to that he was President of Infosys
Limited, where he led the financial services,
healthcare and life sciences business verticals
for the company and was Chair of EdgeVerve,
its software subsidiary. Mohit joined Infosys
in 2000 after an initial career in banking and
has over 24 years of professional experience
working across the US, India, Mexico,
and Europe.
Mohit is an established business leader
in technology and transformation, adding
significantly to the skills and expertise of
the Board.
External appointments
• Chief Executive Officer and Managing
Director of Tech Mahindra Limited
Pippa Lambert
Independent Non-Executive Director
Appointed
Non-Executive Director – Jan 2021
Experience and competencies
Pippa was previously Global Head of
Human Resources at Deutsche Bank
where she was responsible for leading the
development of a successful and progressive
HR transformation programme, focused on
improving the Group’s culture, diversity and
inclusion and digital agendas.
Prior to that, Pippa was Group Head of
Reward at the Royal Bank of Scotland plc
(now NatWest Group plc) where she worked
closely with the Board on the redevelopment
and restructure of the bank’s compensation
and benefits programme. Pippa’s experience
makes her a valuable Chair of the
Remuneration Committee and contributes
significantly to the Board discussions in areas
relating to people and reward matters.
External appointments
• Board Member and Remuneration
Committee Chair of Zopa Bank Limited
• Trustee of Future Dreams Trust Limited
Jim McConville
Independent Non-Executive Director
Appointed
Non-Executive Director – Dec 2020
Experience and competencies
Jim was previously Group Finance Director of
The Phoenix Group, where he was responsible
for all aspects of the Group’s financial strategy
and management and led the transition
programme bringing Phoenix and Standard
Life Assurance together. Prior to that he was
CFO of Northern Rock from 2010 to 2012, and
for many years worked for Lloyds TSB Group
(now Lloyds Banking Group plc) in a number
of senior finance and strategy related roles.
Jim’s expertise makes him a strong Chair
of the Aviva Life Holdings UK Board and its
subsidiary Aviva Life & Pensions UK Limited.
Jim’s experience also significantly adds to
the knowledge and expertise of the Board
and its Committees.
External appointments
• Director of The Royal Bank of Scotland
International (Holdings) Limited and The
Royal Bank of Scotland International Limited
• Trustee of the National Galleries of Scotland
Michael Mire
Non-Executive Director
Appointed
Non-Executive Director – Sep 2013
Experience and competencies
Michael was most recently senior partner
at McKinsey & Company where he worked
for more than 30 years, and through his
governmental experience, he brings a
unique perspective and insight to the Board.
His experience with the Department of Health
and Social Care and the Care Quality
Commission gives Michael insight into the
Health and Protection market.
Michael also has a detailed understanding
of the financial services sector, and a wealth
of experience in business transformation
and developing strategies for retail and
financial services companies. This makes
Michael a valuable member of the Customer
and Sustainability Committee and Nomination
and Governance Committee.
External appointments
• Chair of Luther Systems Ltd
• Senior Adviser to Lazard
Our Board of Directors
Committee membership key
Nomination and Governance Committee
Audit Committee
Risk Committee
Customer and Sustainability Committee
Remuneration Committee
Chair
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T.Neil Morrison
Independent Non-Executive Director
Appointed
Non-Executive Director – Jun 2024
Experience and competencies
Neil has over 38 years of experience in the
insurance industry, most recently as a
Managing Partner and Chair of Platform
Insurance Management Inc., one of Canada’s
fastest growing insurance brokers.
Neil’s experience includes executive roles with
Hub International Limited (US, Canada, Brazil &
Caribbean). Prior to this, Neil was President &
CEO of Hub International HKMB Ontario where
Neil led a diverse executive team focused on
delivering great customer service, organic
revenue growth and retention, M&A, and strong
margin contribution. Neil is a past Chair of the
Insurance Institute of Canada and a past Chair
of Worldwide Broker Network.
Neil’s knowledge of Aviva’s products and
operations, the London market as a past
Lloyd’s coverholder, and the competitive and
regulatory landscape Aviva operates within
makes him a valuable addition to both the Aviva
plc and Aviva Canada Inc. Boards.
External appointments
• Chair of BOXX Insurance Inc.
• Board Observer of InsurePay Inc.
Susan Adams
Group Company Secretary
Appointed
Group Company Secretary – Jan 2024
Experience and competencies
Before joining Aviva, Susan was the Corporate
Governance Director for Lloyds Banking
Group plc, having previously been the Group
Company Secretary and a member of the
executive committee for challenger bank
Monzo. Susan qualified as a lawyer in 1994.
After working for several years in the financial
services practice at international law firm
Hogan Lovells, Susan moved to Standard
Chartered Bank where she held a number of
senior executive roles including responsibility
for Legal, Western Hemisphere.
External appointments
• Chair of Climate Outreach
Gender
l Female
6
l Male
7
Nationality
l British
9
l Canadian
1
l Irish
2
l Indian
1
Ethnicity
l Asian
1
l White
12
Non-Executive Director tenure
l 0–3 years
4
l 3–6 years
6
l 6–9+ years
1
Our Board of Directors
Committee membership key
Nomination and Governance Committee
Audit Committee
Risk Committee
Customer and Sustainability Committee
Remuneration Committee
Chair
94
Biographies for our Board and Group
Executive Committee can be found at
www.aviva.com
Read more in the Nomination and
Governance Committee report: page 99
Read more in the Directors' report:
page 145
Board composition as at 26 February 2025
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Board skills and experience as at
26 February 2025
The Code recommends that the Board and
its Committees should have a combination
of skills, experience and knowledge. The
Nomination and Governance Committee,
on behalf of the Board, evaluates Board
composition with these factors in mind.
To assist the Board and Nomination and
Governance Committee, a skills and
experience matrix for our Board is
maintained and is assessed at least
annually.
Board and Committee meeting
attendance in 2024
During 2024, ten Board meetings were held,
of which seven were scheduled meetings
and three were additional meetings called
to approve certain strategic matters.
If any directors are unable to attend a
meeting, they can communicate their
opinions and comments on the matters
to be considered via the Chair of the Board
or the relevant Committee Chair.
The Non-Executive Directors met without
the Executive Directors or members of the
Group Executive Committee present before
every scheduled meeting of the Board.
Insurance
Asset management
Strategy and business planning
Financial and actuarial
People and reward
Risk management
Legal and regulatory
Technology, digital and operations
Customer service and experience
Sustainability and climate
Skills and experience
Key
Directors with more than three years experience as a director
Board and Committee meetings attendance
Nomination and
Governance
Committee
Audit
Committee
Risk
Committee
Customer and
Sustainability
Committee
Remuneration
Committee
Board
Meetings held
7 scheduled
(3 additional)
3 scheduled
(2 additional) 6 scheduled 5 scheduled
5 scheduled
5 scheduled
George Culmer
7/7 (3/3)
3/3 (2/2)
Amanda Blanc
7/7 (3/3)
Charlotte Jones
7/7 (3/3)
Cheryl Agius1
4/4 (3/3)
2/2 (1/1)
2/2
2/2
Andrea Blance
7/7 (3/3)
3/3 (2/2)
6/6
5/5
5/5
Ian Clark2
4/5 (3/3)
2/2 (1/2)
3/4
2/3
Patrick Flynn
7/7 (3/3)
3/3 (2/2)
6/6
5/5
5/5
Shonaid
Jemmett-Page3
7/7 (3/3)
3/3 (2/2)
6/6
4/5
5/5
Mohit Joshi4
6/7 (2/3)
2/3 (1/2)
4/5
Pippa Lambert
7/7 (3/3)
3/3 (2/2)
5/5
5/5
Jim McConville
7/7 (3/3)
3/3 (2/2)
6/6
5/5
5/5
5/5
Michael Mire
7/7 (3/3)
3/3 (2/2)
5/5
Neil Morrison5
3/3 (2/2)
2/2
2/2
1. Cheryl was appointed to the Board on 21 May 2024
2. Ian was appointed to the Board on 11 March 2024 and was unable to attend one scheduled Board meeting, one additional
Nomination and Governance Committee meeting, one scheduled Audit Committee meeting, and one scheduled Risk
Committee meeting due to prior commitments as the meetings were scheduled prior to this appointment
3. Shonaid was unable to attend a scheduled Risk Committee meeting due to prior commitments
4. Mohit was unable to attend one scheduled and one additional Board meeting, one scheduled and one additional Nomination
and Governance Committee meeting, and one scheduled Risk Committee meeting due to international travel
5. Neil was appointed to the Board on 17 June 2024
Our Board of Directors
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January
Board and Committee Meetings
which included outcomes of the Board
Effectiveness Review and setting 2024
Board Objectives.
February
The Board held joint meetings with
the Board of Aviva Insurance Limited for
each entity to approve the acquisition of
Probitas' fully integrated Lloyd's
platform.
March
Board and Committee meetings,
including the approval of the 2023 Full
Year Results, 2023 final dividend, and a
£300 million share buyback.
The Board appointed Ian Clark as an
Independent Non-Executive Director
and member of the Audit, Risk, and
Nomination and Governance
Committees.
May
The Board and Group Executive
Committee members visited our
York office for two days.
The Board held its 2024 AGM at the
York Racecourse.
Board and Committee meetings including
the approval of the Q1 2024 Trading
Update and the redemption of
€700 million Dated Tier 2 Reset Notes.
The Board appointed Cheryl Agius as an
Independent Non-Executive Director
and member of the Customer and
Sustainability, Risk, and Nomination
and Governance Committees.
Deloitte carried out a training session for
the Board and material subsidiary boards
on the Lloyd's of London market.
June
The Board held its annual two-day
strategy offsite to review progress
against the delivery of our strategic
priorities and to outline forward looking
priorities.
The Board approved the appointment of
Neil Morrison as an Independent Non-
Executive Director and member of the
Risk and Nomination and Governance
Committees.
July
Board training session covering
Consumer Duty and Speak Up.
August
Board and Committee Meetings, which
included the approval of the 2024
Interim Results, 2024 interim dividend,
and the issuance of £500 million Tier 2
Notes under the £7 billion Euro Note
Programme, with a concurrent tender of
£500 million legacy Tier 2 Notes.
Board training session covering Climate
and Sustainability.
September
The Board visited our Ireland offices
over two days to gain a deeper
understanding of our General Insurance
and Insurance, Wealth & Retirement
businesses in Ireland.
November
Board and Committee meetings,
including the approval of the Q3 2024
Trading Update.
The Board approved the terms of
the approach to acquire Direct Line.
December
Board and Committee meetings, which
included the Strategic Delivery update,
2025-27 Group Financial Plan, Culture
and engagement deep dive, and
Transition Plan.
Board training session covering a crisis
management exercise followed by an
Aviva Investors site visit.
The Board approved the full terms of
the potential acquisition of Direct Line, as
set out in the 2.7 Announcement.
2025 priorities
• Review and support the
delivery of the change agenda,
including M&A integration.
• Review and support the
delivery of the customer
agenda.
• Play an active role in Aviva's
sustainability and diversity
agendas.
• Site visits to engage with
colleagues, customers, and
other stakeholders.
Our Board’s activities
Strategic Pillars
Growth
Customer
Efficiency
Sustainability
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During the year the Board
undertook the following
activities. The key indicates
which of our stakeholder
groups were affected.
Read more on
Our stakeholders: page 48
Our Section 172 (1) statement: page 52
York AGM
and site visit
The Board held the Annual General
Meeting in York, where Aviva has a long
standing history since the 1960s when
General Accident acquired the Yorkshire
Insurance Company and York became
home to Aviva's life insurance business.
The AGM gave local shareholders and
employees the opportunity to attend in
person to hear from the Board on the
Company's performance and ask questions
on the topics that matter to them. The
AGM was held at the York Racecourse.
Whilst in York, the Board and Group
Executive Committee visited the York
office over a two-day period and
attended showcases about the IWR
business, primarily focusing on platform
developments, customer operations
which included call listening with the
Protection claims team, and a sustainability
workstream with the University of York.
The Board also held a recognition event
for finance colleagues that delivered
2023 reporting under the new IFRS 17
accounting standard and Aviva
community leads.
Strategy
Offsite
In June 2024, the Board held its
annual two-day strategy meeting at
an offsite location to review progress
against the delivery of our strategic
priorities and to outline forward-
looking priorities to deliver on our
commitments to our shareholders
and our wider stakeholders.
This provided opportunities to hear
from our IWR, UK & Ireland General
Insurance, Canada General Insurance,
and Aviva Investors leadership on
growing our businesses. The Board
also conducted deep dives into horizon
scanning, customer experience
and engagement, and digital and
Generative AI opportunities and
roadmaps. This was followed by
another strategy deep dive in
November, where the strategy was
further reviewed and refined within
the context of the Group three-year
business plan which was tabled to
the Board in December.
Our Board’s activities
Our stakeholders
Our people
Our customers
Our shareholders
Our communities
Our suppliers
Regulators
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Aviva Ireland
Board Offsite
The Board visited the Aviva offices
in Ireland for a two-day visit to meet
colleagues and to gain a deeper
understanding of our Insurance.
Wealth & Retirement and General
Insurance business operations in
Ireland. The directors attended sessions
covering a number of customer
segments, such as customer
experience, transformation and
specialty, and financial lines
and distribution channels.
The Board joined discussions on
culture and engagement, Voice of
Aviva results, and diversity, equity
and inclusion. They discussed plans
to build an ethnically diverse talent
pipeline and the learning and
development programmes in place to
provide colleagues with future skills.
There were a number of opportunities
for directors to meet our people,
including a Town Hall meeting where
the Chair and Group CEO answered
colleagues’ questions, and recognised
individuals within the business in living
our values and delivering for our
customers. The Board also met with
Irish subsidiary board directors.
Proposed
acquisition of
Direct Line
At its scheduled meeting in November,
the Board considered the acquisition of
Direct Line. Given the Board's collective
responsibility for the acquisition under
the UK Takeover Code, the Board held
an additional meeting in November to
focus solely on the background and
rationale of the acquisition, seeking
input from both the executive team
and external advisers.
At that meeting, the Board established a
committee comprising both Non-Executive
Directors and Executive Directors with
the full power of the Board to oversee
the acquisition. The Board also scheduled
weekly update calls.
Following the November Board meeting,
the Chair of the Board briefed the Boards
of Aviva Insurance Limited, being the entity
that controls our UK & Ireland General
Insurance business, and Aviva International
Insurance Limited, the onshore reinsurance
vehicle for the Group. These Boards also
received regular updates as the acquisition
progressed.
The Board received an acquisition update at
its scheduled meeting in December and then
held an additional meeting later in December
to review the final terms of the acquisition.
The Board Committee approved the final
terms and release of the 2.7
Announcement on 23 December 2024.
The Board discussed the acquisition at
its January meeting and reviewed the
Scheme Document, which was later
approved by the Board Committee.
Throughout the process, the Board has
carefully considered the potential impact
of the acquisition on our customers,
people, and shareholders and
requirements of the regulators.
Read more on
Our proposed acquisition of Direct
Line: page 13
Our Board’s activities
Our stakeholders
Our people
Our customers
Our shareholders
Our communities
Our suppliers
Regulators
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“The Committee focused
on the appointment and
induction of our new
Non-Executive Directors,
succession planning, and
on our diversity, equity
and inclusion initiatives.”
George Culmer
Chair of the Nomination and
Governance Committee
Committee at a glance
George Culmer (Chair)
Cheryl Agius (from 21 May 2024)
Andrea Blance
Ian Clark (from 11 March 2024)
Mike Craston (until 16 April 2024)
Patrick Flynn
Shonaid Jemmett-Page
Mohit Joshi
Pippa Lambert
Jim McConville
Michael Mire
Neil Morrison (from 17 June 2024)
Martin Strobel (until 11 March 2024)
Membership
Read more on
Our Board of Directors: page 91
Nomination and Governance Committee report
99
2024 highlights
• Led the appointment process for three
new Non-Executive Directors.
• Reviewed the succession plans and
the talent development framework
for senior executives and continued
to oversee the governance and
effectiveness of the Group’s
subsidiary boards.
• Focused on strengthening the Board,
Group Executive Committee (ExCo)
and business CEO succession plans.
• Continued to focus on the initiatives
to increase diversity throughout the
organisation.
• Reviewed the Board Diversity, Equity
and Inclusion Statement and continued
to strengthen initiatives throughout
the Group.
2025 priorities
• Continue to focus on succession
planning at Board and senior
executive level to ensure there
is a strong and diverse pipeline.
• Continue to oversee and
strengthen subsidiary governance.
Purpose
The purpose of the Nomination and Governance Committee (the Committee) is to:
1. keep the Company’s (and its subsidiaries’ and associates’ from time to time) (the Group)
governance arrangements under review and to make appropriate recommendations to the
Board to ensure that such arrangements are consistent with best corporate governance
standards and practices;
2. consider and make recommendations to the Board in respect of appointments to that Board
and ensure that effective plans are maintained to result in a diverse pipeline of succession to
the Board and senior management positions, based on merit and objective criteria and which
promote diversity, inclusion and equal opportunity; and
3. consider and make recommendations in respect of membership and chairing of the Board’s
Committees, and of appointments to the boards of directors of the Company’s Material
Subsidiaries.
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The Committee's detailed responsibilities are set out in the Terms of Reference, available
online at www.aviva.com/about-us/nomination-and-governance-committee/.
I am pleased to present the Nomination and
Governance Committee report for the year
ended 31 December 2024.
Board appointments
Following the retirement of Martin Strobel
as a Non-Executive Director and chair of
Aviva Insurance Limited in March 2024,
MWM Consulting were engaged to conduct
a process to identify potential candidates
with the required skills, knowledge, and
experience to replace Martin. From a
diverse longlist, a number of candidates
were put forward for consideration and,
following meetings with potential
candidates, the Committee recommended
that Ian Clark be appointed as a Non-
Executive Director and chair of Aviva
Insurance Limited in March 2024.
Following the retirement of Mike Craston
as a Non-Executive Director and chair
of Aviva Investors Holdings Limited in
March 2024, Russell Reynolds Associates
were engaged to undertake an extensive
external search based on the role
specifications agreed by the Committee.
The Committee considered the skills,
knowledge, and experience of the
candidates and how they would
compliment the existing mix of skills on the
Board. Members of the Committee met with
potential candidates and recommended the
appointment of Cheryl Agius as a Non-
Executive Director and chair of Aviva
Investors Holdings Limited in May 2024.
The Committee also engaged Russell
Reynolds Associates to support a search
for a candidate with expertise in the
Canadian insurance industry. The preferred
candidate met with members of the
Committee and the Committee
recommended the appointment of Neil
Morrison as a Non-Executive Director
in June 2024. Neil also joined the board
of Aviva Canada Inc. as chair designate
in July 2024.
MWM Consulting and Russell Reynolds
Associates do not have any other
connection to the Company or
individual directors.
Board composition
The Committee, on behalf of the Board,
evaluates the structure, size, and composition
of the Board, taking into account the required
balance of skills, knowledge, experience,
and diversity and the Company’s risk appetite
and strategy. Consideration is also given
to the length of service of the directors.
In December 2024, the Committee confirmed
that the structure, size, and composition of
the Board was appropriate.
These factors were strongly considered
as part of the appointments of Ian and
Cheryl and the search for a candidate
with expertise in the Canadian insurance
industry and Neil's subsequent appointment
to the Board was made following the
identification of a desired set of skills
and experience. Board composition is also
considered as part of the annual Board and
Committee evaluation, which you can read
more about later in this report.
Board independence
The independence of the Board is fundamental
in ensuring that Non-Executive Directors
can properly fulfil their responsibility to
provide constructive challenge and scrutiny
of management’s performance.
The Committee assess the independence
of each Non-Executive Director upon
appointment and on an annual basis,
against the criteria set out in the Code,
and makes recommendations to the Board.
The Committee determined that Ian,
Cheryl, and Neil were all independent on
appointment and in January 2025, the
Committee recommended to the Board
that all Non-Executive Directors, other
than Michael Mire due to his tenure on
the Board, met the independence criteria
set out in the Code and were free from
any relationship or circumstance that
could affect, or appear to affect, their
independent judgement. The Committee
determined that Michael continued to
contribute strongly to the discussions at
the Board and continued to bring significant
experience of strategy and transformation,
and recommended that Michael should
remain on the Board.
In line with the Code, over half of the Board
members, excluding the Chair, are
independent non-executive directors.
Directors’ time commitment
Another factor that is vital to the effective
operation of the Board is our directors
having sufficient time to meet their
responsibilities.
When appointing new directors to the Board,
the Committee considers prospective
directors’ external appointments to ensure
that they have sufficient time to dedicate to
Aviva. The existing demands on Ian, Cheryl,
and Neil's time were carefully considered
and significant appointments were
disclosed with an indication of time
involved.
The Committee also considers existing
directors’ time commitments if they wish
to take on additional external appointments
and, recognising the importance of keeping
directors’ time commitments under review,
the Committee assesses each director’s
external appointments and demand on their
time annually and makes recommendations
to the Board. In January 2025, the Committee
recommended to the Board that all directors
continued to demonstrate that they have
sufficient time to devote to their role
with Aviva.
Directors’ external appointments
During the year, the Committee considered
all additional external appointments, taking
into consideration time commitment and
conflicts of interest, before making
recommendations to the Board. As required
by the Code, significant appointments are
outlined below.
In April 2024, Amanda Blanc was appointed
Senior Independent Director of BP plc, having
been a Non-Executive Director since
September 2022. The Committee reviewed
and approved the potential appointment
in January 2024.
In March 2024, Jim McConville was
appointed as Chair of The Royal Bank of
Scotland International (Holdings) Limited
and The Royal Bank of Scotland International
Limited, subsidiaries of the Royal Bank of
Scotland plc. The Committee reviewed and
approved the potential appointment in
March 2024.
The Committee considered conflicts of
interest and time commitment in relation
to both external appointments and was
satisfied that no conflicts of interest existed
and that each director continued to have
sufficient time to allocate to the Company
to discharge their responsibilities effectively.
Executive Directors are not permitted to
take on more than one non-executive
directorships in a FTSE 100 company or
other significant appointment.
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Succession planning
The Code places an emphasis on
succession planning and the Committee
continues to build on its existing processes
to strengthen its focus in this area.
The Committee reviewed the succession
plans for the Group CEO and Group CFO to
ensure that the internal and external talent
pipeline was robust and diverse.
The development of the Group Executive
Committee (ExCo) is also monitored to
ensure that there is an appropriate pipeline
of senior executives and potential future
Executive Directors with the required skills
and experience.
During 2024, the Committee received
updates from the Group CEO on
composition of the Group ExCo and
considered the development plans and
talent profiles of these individuals in line
with the Group’s succession plans.
The development plans designed to
prepare successors for ExCo roles
were also considered. Internal talent
development and developing a pipeline
of potential future leaders remained an
area of focus for the Committee during
the year.
The Committee also considered Non-
Executive Director succession planning,
recognising the current and future
business needs.
The Committee also considered initiatives
to enhance, strengthen and diversify the
talent pipeline across the wider Group and
members of the Committee remain involved
in various initiatives, including the Ethnically
Diverse Leadership programme and cross-
company mentoring programmes with
senior leaders.
Diversity, equity and inclusion
The Board is committed to having a diverse
and inclusive leadership team which
provides a range of perspectives and
insights and the challenge needed to
support good decision making. Diversity at
Aviva includes, but is not limited to, gender,
ethnicity, skills and experience, geographic
and socio-economic and educational
backgrounds, disability, and sexual
orientation.
The ways in which we seek to put into
practice these values are set out in our
Board Diversity, Equity and Inclusion
Statement (the Statement), which supports
the Committee’s approach to succession
planning. This includes our achievement of
our commitment of 40% female
representation among our senior
leadership cadre (the most senior 5% of
Aviva employees). The Committee reviews
the Statement annually, before
recommending it to the Board, to ensure it
reflects developments in the diversity,
equity and inclusion regulatory landscape
and progress against targets. The
Statement, which aligns to the
overall Group diversity, equity and inclusion
strategy, is available on the Company’s
website at www.aviva.com/corporate-
governance.
In accordance with Listing Rule 6.6.6R(9),
the representation of women on the Board
as at 31 December 2024 was 46.2%, with
both the Group CEO and Group CFO
positions being held by women, as are
the roles of Chair of the Risk, Customer
and Sustainability and Remuneration
Committees. The Board is pleased to have
met the Parker Review Committee’s target
for all FTSE 100 boards to have at least one
director from an ethnic minority
background.
Numerical data on the sex and ethnic
background of the Board and Group
Executive Committee required by Listing
Rule 6.6.6(10) can be found in the
'Directors' report'.
Read more on
Director and senior management
diversity in the Directors' report:
page 145
In accordance with the Code, I can report
that the gender balance of the Group
Executive Committee and their direct
reports as at 31 December 2024 was 34.5%
female and 65.5% male.
Further details on diversity in the workforce
and wider senior leadership population can
be found in the Strategic report.
We actively support women advancing
into senior roles, with the Group CEO the
Champion for HM Treasury's Women in
Finance Charter, aimed at boosting gender
diversity across UK financial services.
Corporate governance
The Committee monitors the Group’s
compliance with the Code and other areas
of regulation and guidance. The Group
Company Secretary provides updates to
the Committee on governance matters
which have the potential to impact the
reputation of the Group.
During 2024, the Committee continued
to focus on the embedding of the Group
Governance Framework for the oversight
of the Group’s subsidiaries, as reported
in the Subsidiary Governance dashboard.
Updates were provided relating to
enhancements to the Subsidiary
Governance Principles, the effectiveness
of the Company’s subsidiary boards
and the Group conflicts of interest
policy and related safeguards.
Succession planning for material
subsidiaries around the Group is
considered and, where appropriate,
changes to the composition of the material
subsidiary boards are approved by the
Committee. The Committee also reviews
the outcomes of the evaluations completed
by subsidiary boards and monitors and
actions plans developed by those boards
in response to those outcomes.
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Board effectiveness
The effectiveness of the Board is vital to the
success of the Group. The Board undertakes
a rigorous evaluation process each year to
assess how it, its Committees, and individual
directors are performing. In line with the Code,
the Board instructed Lintstock Limited to
conduct an externally facilitated evaluation
in November and December 2022. Lintstock
Limited has no other connection with Aviva
or its directors.
In 2023 and 2024, the Board conducted
internal evaluation processes, building on
the process facilitated by Lintstock in 2022.
The 2024 evaluation was conducted through
a questionnaire completed by all directors and
the results of the evaluation were presented
and discussed at the Board in January 2025.
The results of the evaluation were very positive
on the whole and the Board continues to have
a high level of confidence in its composition
and dynamics, as well as its oversight of
strategy and risk, which provides a strong
foundation for governance. After discussing
the results, the Board agreed the key areas
of focus, and an action plan to address these
specific areas as shown in the table. All actions
from the 2023 Board evaluation were addressed
during 2024 and the progress made on the
recommendations from the 2023 Board
evaluation was highly rated overall.
The Chair reviews the performance of individual
directors regularly and the Non-Executive
Directors, led by the Senior Independent
Director, review the performance of the Chair
annually. These reviews confirmed that each
director makes an effective and valuable
contribution and continues to demonstrate
commitment to their role.
George Culmer
Chair of the Nomination and
Governance Committee
Our Board and Committee
evaluation cycle
Progress against 2023 evaluation outcomes
Focus area
Theme
Progress
Delivery of
strategy
Delivering the growth agenda,
maintaining a capital-light
business.
The Board identified opportunities for capital-light growth such as the
acquisitions of Probitas, AIG's UK protection business, and the proposed
acquisition of Direct Line.
Customer
strategy
Focus on the customer through
innovation and embedding
Consumer Duty.
The Board focused on driving the customer agenda through digital innovations
such as the launch of the new MyAviva app. The Board also maintained
effective oversight of Consumer Duty throughout the year.
Sustainability
Focus on embedding
sustainability into the way we run
our business.
The Board maintained focus on the priorities and objectives of Aviva's
Sustainability Ambition through regular reports, climate and sustainability
training, and oversight of the second iteration of the Transition Plan.
Outcomes from the 2024 evaluation
Focus area
Theme
Actions
Suppliers and
Communities
Enhancing the Board's oversight
of key stakeholders.
Focus on Aviva's relationship and engagement mechanisms with its suppliers
and communities, through enhanced reporting to the Board and its
Committees.
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“The Committee focused on
the integrity of reporting,
robustness of internal
controls, and the transition
to the new external
auditor.”
Patrick Flynn
Chair of the Audit Committee
Committee at a glance
Patrick Flynn (Chair)
Cheryl Agius (from 28 January 2025)
Andrea Blance
Ian Clark (from 11 March 2024)
Shonaid Jemmett-Page
Jim McConville
Martin Strobel (until 11 March 2024)
Membership
Read more on
Our Board of Directors: page 91
The Committee's detailed responsibilities
are set out in the Terms of Reference,
available online at www.aviva.com/about-
us/audit-committee.
Audit Committee report
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Purpose
The purpose of the Audit Committee (the Committee) is to monitor and review:
1. the integrity of the financial disclosures within the Annual Report and Accounts, Q1 Results,
Half Year Report, Q3 Results, Solvency and Financial Condition Report, and related
announcements and other documents for publication (together, Financial Reporting) of the
Company and its subsidiaries (the Group);
2. the integrity of the non-financial and climate-related disclosures within the Annual Report
and Accounts, Climate-related Financial Disclosure, and Reporting Criteria (together, Non-
Financial and Climate-related Reporting);
3. the adequacy and effectiveness of the system of internal controls over Financial Reporting
of the Group;
4. the independence and effectiveness of the internal and external auditors; and
5. the integrity, independence, and effectiveness of the Group’s whistleblowing procedures.
2024 highlights
• Reviewed and recommended for
approval the Annual Report and
Accounts, Half Year Report, Results
Announcements, and Q1 and Q3
Trading Updates.
• Reviewed and recommended for
approval the Climate-related Financial
Disclosure and related reports.
• Reviewed the disclosures and
judgements for material acquisitions
and disposals, and reports from the
auditor and/or reporting accountants
related to the acquisitions.
• Monitored the transition of the external
auditor from PwC to EY.
• Assessed the Group's whistleblowing
procedures, including 'Speak Up'.
• Assessed the effectiveness of the
work of the external auditors and
the internal audit function including
the outcomes of associated external
reviews.
• Monitored the effectiveness of the
system of internal controls over
financial reporting that support the
integrity of Aviva’s financial
disclosures. including the embedding
of the IFRS 17 controls and processes.
• Monitored corporate reporting and
regulatory developments, including
the impact of Provision 29 of the
revised 2024 UK Corporate
Governance Code (Code).
• Reviewed the Transition Plan.
2025 priorities
• Review the effectiveness of the
external auditor, following completion
of the first year-end audit.
• Continue to assess the judgement
and disclosures related to material
acquisitions and disposals.
• Continue to monitor the
implementation of Provision 29
of the revised 2024 Code.
• Oversee the external disclosure
for the PRA Life Insurance Stress
Tests Results.
Aviva plc
Annual Report and Accounts 2024
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IFRS Financial
Statements
Other
Information
I am pleased to present the Audit
Committee report for the year ended
31 December 2024. This report covers
the significant issues that the Committee
considered and how these issues
were addressed.
Financial Reporting
The Committee reviewed the integrity of
the financial disclosures within the Annual
Report and Accounts, Half Year Report,
Q1 and Q3 Trading Updates, and Solvency
and Financial Condition Report and related
documents and recommended them to
the Board for approval. In addition, the
Committee considered the following
areas supporting financial reporting.
Insurance liabilities
The Committee reviewed and challenged
the assumptions used in the calculation of
the Best Estimate Liability component of the
insurance liabilities required under IFRS
and Technical provision under SII across
our IWR and General Insurance businesses.
The Committee reviewed and challenged
the longevity, persistency, expense,
mortality, morbidity and residential and
commercial property growth assumptions
used for the quarterly operating updates,
and 2024 Half Year and Full Year financial
statements. An area of focus for the
Committee was the with-profits reserving,
given the complexity introduced by IFRS 17
accounting.
The process around the setting of longevity
assumptions was a particularly significant
area for review as those judgements could
have a material impact on Aviva’s IFRS and
SII results. During 2024, the Committee
continued to work closely with the Audit
Committee of the Group’s IWR subsidiary,
Aviva Life Holdings UK Limited, to review
the detailed analysis and to validate
changes observed in recent mortality
experience and the resulting impact on
the existing longevity assumptions. The
Committee also reviewed the process for
setting assumptions in General Insurance
including the update to the Ogden rate.
The Committee reviewed the controls
associated with the IFRS and SII reserving
process, including the sign off procedures
and control framework for movements in
IFRS reporting and SII results.
Solvency UK
The Committee reviewed the impacts of the
Solvency UK reform including progress
made towards the enhanced matching
adjustment attestation and the framework
for deriving fundamental spread add-ons.
Key accounting judgements and
disclosures
The Committee reviewed the impact
of the AIG, Probitas and Optiom
acquisitions and the Singapore disposal
on the Group’s balance sheet, and the
required accounting disclosures, as well
as the outcome of goodwill and intangible
asset impairment reviews.
The Committee reviewed the Group's
exposure to contingent liabilities and
other risk factors, including amounts
allowed for and disclosures. The
Committee reviewed the accounting for
Integration and Restructuring costs and
the disclosure with the Group’s APMs.
Embedding of IFRS 17
The Committee reviewed the integrity
and accuracy of first time IFRS 17 financial
statements in the Annual Report and
Accounts 2023. The Committee has
reviewed the impact on the measurement
and presentation of insurance contracts,
and the disclosure impacts in the financial
statements. During 2024, the Committee’s
review has also included the embedding of
the IFRS 17 controls and processes into the
financial accounting in the second year of
reporting. The Committee has received
regular updates on the embedding and
automation of the IFRS 17 toolkit.
Corporate reporting and regulatory
developments
The Committee monitors reporting and
regulatory developments, and the
implementation of new requirements.
In 2024, this has focused on embedding
of IFRS 17, and the impacts from Solvency
UK reforms. In addition, the Committee
has reviewed the plans to address the
PRA’s requirements for Life Insurers
Stress Testing, including approach,
assurance and internal controls.
Going concern and
longer-term viability
The Code requires the Board to state
whether it considers it appropriate to
adopt the going concern basis for
accounting in preparing the Half Year
Report and Annual Report and Accounts
and explain how it has assessed the
prospects of the Company and whether it
has a reasonable expectation the Company
will be able to continue in operation and
meet its liabilities as they fall due over the
period of their assessment.
The Committee supports the Board in
making that assessment and in February
2025, the Committee reviewed the going
concern and longer-term viability review
and recommended it to the Board for
approval.
Non-Financial and
Climate-related Reporting
The Committee reviewed the principal
climate-related disclosures within the
Annual Report and Accounts, Climate-
related Financial Disclosure, and the
Reporting Criteria and Sustainability
Datasheet and recommended them to
the Board for approval.
The Committee noted the developing
nature of climate metrics measurement
standards, particularly in relation to the
estimation of Scope 3 financed emissions
in context of continued challenges towards
measurement of Scope 3 emissions and
associated complexity, due to limited and
unsophisticated data and methodologies.
Audit Committee report
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Other
Information
The Committee reviewed and challenged
the application of critical climate-related
policies, practices, methods and judgements
to calculate the metrics. The Committee
focused on the continued development of
the climate reporting control environment
which supports non-financial disclosures.
The Committee reviewed the second
iteration of the Transition Plan, with a
focus on the metrics and baselines used
to measure our progress, the disclosure
considerations and internal controls.
As part of this review, the Committee
discussed and provided feedback on
Net Zero ambition and climate disclosures
in the Transition Plan, and reviewed the
consistency of the Aviva plc 2024 Annual
Report and Accounts and Climate-related
Financial Disclosure report with the
Transition Plan. A significant area of
discussion on our Net Zero ambition
related to understanding the elements of
the ambition which are in Aviva's direct
control and the elements for which Aviva
has dependency on external factors and
whether they continued to support
achievement of the ambition.
The Committee noted the developing
nature of climate measurement standards,
particularly in relation to the estimation of
Scope 3 financed emissions, which has an
inherent potential for double counting
across entities in the same value chain.
The Committee noted that emissions
estimates and other climate metrics should
be read acknowledging these are in initial
stages of development and subject to
change as standards emerge and
underlying data sources become more
complete and developed. The Committee
recognised that climate measurement
standards are not at the same level of
maturity as financial accounting standards.
In addition, enhancements to availability
of data and control frameworks will be
required to align with IFRS financial
statements. Currently, industry wide,
the attestation provided by an auditor
is to a weaker level than applies to IFRS
financial statements.
The Committee also addressed in the
context of the emerging nature of climate
measurement, the differing degrees of
control Aviva, or any company, has over
scope 3 of 3. The Committee also considered
the challenges to achieve Net Zero and the
difficulty in charting a path to that end.
The Committee considered the disclosures
related to climate ambition against this
backdrop.
Fair, balanced and understandable
The Code requires the Board to present a fair, balanced, and understandable assessment of the Company's position and prospects. The Committee reviewed the Annual
Report and Accounts, Half Year Report, and Q1 and Q3 Trading Updates to support the Board's conclusion that taken as a whole, these reports were fair, balanced, and
understandable and provided the information necessary for shareholders to assess the Group’s position, performance, business model, and strategy. The Committee's
recommendation of the directors’ statement in the Annual Report and Accounts is supported by the process set out below.
Production
There is a robust
process to ensure each
section of the report
is signed off by an
appropriate member
of management and
the overall production
of the report is overseen
by the Group Financial
Controller to ensure
consistency across
the document.
Verification
An extensive verification
process to ensure factual
accuracy of statements
and numerical data
is undertaken and a
style guide is applied
to the report.
Internal review
The report is reviewed by
management, the Group
Executive Committee,
the Disclosure Committee,
and each of the Board
Committees review
sections relevant to
their area of focus.
External review
The external auditor
reviews the report to
ensure consistency and
compliance with relevant
legal and regulatory
requirements and
presents the results
of their audit to the
Committee.
Recommendation
The Committee
recommended that
the fair, balanced, and
understandable statement
could be made in the
Statement of Directors'
Responsibilities, which
was approved by the
Board in February 2025.
Audit Committee report
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IFRS Financial
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Other
Information
Internal controls over Financial
Reporting and Non-Financial and
Climate-related Reporting
The Committee reviewed reports from
management, aligned to the quarterly
reporting cycle, to gain assurance that
these remained in tolerance with no control
weaknesses which could have a material
impact on the financial results and to allow
the evaluation of the effectiveness of the
system of internal controls over Financial
Reporting and Non-Financial and Climate-
related Reporting.
As referenced in 'Our approach to
governance’ section, the Committee
received reports on the assessment of
financial reporting controls deficiencies
and the detailed findings of the testing
undertaken for their remediation. The
Committee continued to challenge and
support developments to the risk aware
culture of our people and strong internal
control framework.
Internal Audit
The Committee received quarterly reports
from the Internal Audit function covering
internal audit core metrics, key findings,
and functional key performance indicators.
The reports included the status of internal
audit opinions that were rated as
unsatisfactory or where major
improvement was needed; emerging trends
and their impacts on the organisation’s risk
profile; and the status of management
actions to resolve issues identified.
The Committee pays particular attention to
the evolution of the control environment
and noted the trend of a decreased number
of lower-rated internal audit reports. The
Committee also discussed the culture of
control awareness and responsiveness.
In November 2024, the Committee
reviewed and approved the Internal Audit
plan and functional budget. The report to
the Committee covered the planning
approach and coverage, as well as the
required skills, resources, and budget.
The Committee also approved minor
changes to the Internal Audit Charter
which ensured alignment to updated Global
Internal Audit Standards and Internal
Audit Code of Practice. Finally, the
Committee conducted a deep dive into the
Internal Audit function, which covered an
introduction to the team, the evolution of
the function, and how the function was
moving to be led by data and technology.
The Committee also conducts an annual
review of the internal audit function to
assess its independence, effectiveness and
to satisfy itself that the quality, experience
and expertise of the internal audit function
is appropriate for the business.
This is carried out by reviewing the regular
reporting from the function and the output
of an annual stakeholder effectiveness
survey. In November 2024, the Committee
concluded that the function had performed
well in 2024 and remained effective.
In January 2025, the Committee approved
the appointment of PwC as the provider
of the 2025 external quality assurance
exercise, which was planned to start in
May 2025 with results reported to the
Committee in November 2025. The Internal
Audit function also conducted their annual
assessment of the effectiveness of the
governance, risk, and control framework
and reported to the Committee that it was
operating effectively and that the risk
appetite framework was being adhered to.
In August 2024 and February 2025, the
Committee met with the Group Chief Audit
Officer without management present.
External Audit
At the end of March 2024, PwC presented
their report on the audit of the Group's
Solvency and Financial Condition Report
(SFCR) and issued an unmodified audit
opinion.
In 2021, the Committee conducted a
competitive audit tender process and
recommended the appointment of EY to the
Board, which was approved. At the 2024
Annual General Meeting, shareholders
approved the appointment of EY as the
Group's external auditor and PwC resigned
after 12 years in position. The Committee
reviewed and approved EY's terms of
engagement, including the engagement
letter and audit fee, and 2024 audit plan.
The Committee received reports from
EY in relation to their review of the Half
Year financial results and audit of the Full
Year financial results and assurance of the
non-financial and climate-related reporting,
as well as the agreed upon procedures for
the Q1 and Q3 Trading Updates.
The Committee reviews the contents of
these reports and the level of professional
scepticism and challenge of management
assumptions demonstrated by the external
auditor, and where appropriate, requests
that management respond to that challenge
and tracks management response to
ensure a satisfactory outcome to the
challenges raised.
The Committee reviewed the Management
Representation Letters relating to the Half
Year and Full Year financial results, SFCR,
and non-financial metric assurance and
recommended them to the Board for
approval.
The Committee and management have
a regular and open dialogue with EY and the
audit partner attends every Committee
meeting. In August 2024 and February
2025, the Committee met with EY without
management present.
The Committee has monitored the
transition of auditor from PwC to EY and
undertaken a review of the effectiveness
of EY to assist the Committee in assessing
the quality of external auditor services
provided to the Group, since transition,
through completion of an abridged
questionnaire by the Committee, subsidiary
company audit committees, senior
management, and members of the Group’s
finance teams.
As this is an auditor transition year, the
abridged review focused on the period
since transition, covering the review
procedures over the Half Year Report, the
audit planning and year-end preparation
including interim walkthroughs and testing,
and covered the effectiveness of the
external auditor team, expertise and
resources and interaction with Audit
Committee meetings. Overall feedback
was positive and where opportunities for
improvement were identified, EY was asked
to take account of that feedback in audit
activity. A full review of the effectiveness of
EY, following completion of the first year-end
audit will be performed in 2025.
Audit Committee report
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Other
Information
The Committee monitors the External
Auditor Business Standard to ensure no
firm, other than PwC (until completion of
the final subsidiary audit) and EY (from 1
January 2023 to ensure independence from
1 January 2024), undertakes audit and
audit-related services other than in
exceptional circumstances. The Committee
also monitors non-audit services (including
audit-related and other assurance services)
provided by the auditor. The Committee
has put in place a structure to review and
approve the provision of audit and audit-
related services by the auditor and receives
annual reports on these services provided
and the fees charged for those services.
The Committee also gains assurance that
the fees remain well below the 70% non-
audit services fee cap. There were no
material non-audit services provided by
PwC before their resignation or EY during
2024, therefore the Committee can confirm
that the external auditor remains
independent.
In 2024 the Group paid EY £25 million
(2023: £27 million paid to PwC) for audit
and audit-related assurance services. EY
were paid £2 million (2023: £1 million paid
to PwC) for other assurance services,
giving a total fee to EY of £27 million (2023:
£28 million paid to PwC). Further
information on auditors' remuneration is
set out in note 12.
In February 2025, the Committee
recommended to the Board that EY be
reappointed as external auditor for the
financial year ended 31 December 2025,
and the Board endorsed that recommendation
and will propose the reappointment of EY
at the Annual General Meeting to be held
on 30 April 2025.
When making the recommendation to the
Board, the Committee confirmed that the
recommendation was free from influence
by a third party and that no contractual
term of the kind mentioned under Article
16(6) of the Audit Regulation had been
imposed on Aviva.
Whistleblowing
In my role as Committee Chair, I am the
whistleblowers’ champion for the Group
and, as a Committee, we are responsible
for overseeing the integrity, independence
and effectiveness of the Group’s policies
in relation to whistleblowing.
The Committee receives reports on the
number of cases reported to the Speak Up
service, the proportion of reports that are
designated as instances of whistleblowing,
the number of substantiated cases and
summaries of the action taken.
The Committee continues to support the
Speak Up team and review opportunities
to further enhance the Speak Up service.
The Committee takes into consideration
the Voice of Aviva scores in relation to
confidence our staff have in using and
relying on the function. The Committee
also noted the positive development in the
elevation provided by an external charity
which focuses on whistleblowing.
Other matters
The Committee reviewed quarterly reports
on the Group's current and emerging legal
and regulatory matters and any potential
impact on Aviva’s financial statements.
The Committee also reviewed regular
reports relating to the implementation of
Provision 29 of the revised 2024 Code,
which will require the Board to make
a disclosure relating to the effectiveness
of internal controls including a declaration
in relation to material internal controls as
at year-end. The Provision becomes effective
for financial years beginning 1 January
2026. A cross-business working group was
created to focus on the implementation of
Provision 29. The priorities for the Group
were the creation of an implementation
plan, agreeing the definition of 'material
controls', and drafting the proposed
directors' declaration. The Committee
provided input and guidance.
Committee compliance
In December 2024, the Nomination and
Governance Committee assessed the
composition of the Committee against
the experience, competence, and
independence criteria set out in the
UK Corporate Governance Code (Code)
and the FCA Disclosure Guidance and
Transparency Rules (DTRs). All Committee
members fulfilled both the Code and the
DTR requirements for financial experience,
competence, and independence.
The Company is compliant with the
Audit Committees and the External Audit:
Minimum Standard (the Minimum Standard).
Activities undertaken to meet the
requirements of the Minimum Standard
are described throughout this report.
The Company is compliant with the
requirements of the Statutory Audit
Services for Large Companies Market
Investigation (Mandatory Use of Competitive
Tender Processes and Audit Committee
Responsibilities) Order 2014.
No Audit Committee member had a
connection with either PwC or EY as
the Company's external auditors
during the year.
Patrick Flynn
Chair of the Audit Committee
26 February 2025
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Other
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“Strong risk management
remains vital in the
continuing challenging
macroeconomic and
political environment.
The Committee has
focused on key areas
of financial and non-
financial risk and
on overseeing the
continued evolution
of the Risk function.”
Andrea Blance
Chair of the Risk Committee
Committee at a glance
Membership
Andrea Blance (Chair)
Cheryl Agius (from 21 May 2024)
Ian Clark (from 11 March 2024)
Patrick Flynn
Shonaid Jemmett-Page
Mohit Joshi
Jim McConville
Neil Morrison (from 17 June 2024)
Martin Strobel (until 11 March 2024)
Read more on
Our Board of Directors: page 91
Risk Committee report
108
2024 highlights
• Reviewed and recommended the
revised Risk Appetite Framework, Risk
Strategy, Group Risk Appetites, and
Preferences to the Board for approval.
• Monitored external risk factors and
assessed the most significant emerging
risk scenarios with the potential to
affect the implementation of the
Group’s strategy.
• Reviewed and approved the outcome of
the Group Risk Identification Process,
confirming the appropriateness of the
risk categories currently included in the
Internal Model.
• Monitored reporting on the Group's
capital and liquidity requirements,
particularly in light of changing
macroeconomic conditions, and related
risks to the financial plan.
• In conjunction with the Customer and
Sustainability Committee, oversaw the
continued implementation of the FCA's
Consumer Duty throughout the Group,
including Phase 2 for closed products
and services.
• Reviewed operational risks to the
financial plan, including people, cyber,
AI, operational resilience, sustainability,
conduct and reputation risks.
• Reviewed the management of change
delivery and transformation risk across
the Group.
• Approved the scenarios for Group-wide
stress testing to support the financial
plan and the Group recovery plan.
2025 priorities
• Monitor the impacts and associated
risks arising from changes to the
macroeconomic and geopolitical
environment, regulatory landscape,
and from global climate change.
• Oversee the current and projected
future risk exposures of the Group,
including determination of risk
appetites and tolerances.
• Provide effective oversight of the
management of key areas of financial
and non-financial risk, including cyber,
data, AI, reputation, third party
suppliers and people risks.
• Review the results and analysis of
the PRA Life Insurance Stress
Tests exercise.
• Continue to support the Group Chief
Risk Officer (CRO) in the evolution of
an effective target operating model
for the Group Risk function.
Purpose
The purpose of the Risk Committee (the Committee) is to provide oversight and advice to the
Board in relation to the current and future risk exposures of the Company and its subsidiaries
(the Group), by reference to strategic developments and including determination of risk
appetite, tolerance, and desired risk culture.
Aviva plc
Annual Report and Accounts 2024
Strategic
Report
Governance
Report
IFRS Financial
Statements
Other
Information
The Committee's detailed responsibilities are set out in the Terms of Reference,
available online at https://www.aviva.com/about-us/risk-committee/.
I am pleased to present the Risk Committee
report for the year ended 31 December 2024.
Oversight of risk management
The Committee plays a vital role in
supporting the Board in the oversight and
management of risk throughout the Group.
The main purpose of the Committee in
assisting the Board in its oversight of risk
within the Group is to review the Group’s
risk appetite and risk profile in relation to
solvency, liquidity, climate, operational,
conduct, and reputational risks. It also
reviews the effectiveness of the Group’s
risk management framework (RMF), making
recommendations to the Board as required.
The Committee reviews the methodology
and oversees the governance of the
internal model used in determining the
Group’s capital requirements and
associated stress testing, including the
key assumptions, methodologies and areas
of expert judgement, activities undertaken
to validate the outputs of the model and
the development required to ensure that
it continues to reflect the risk profile of
the Group.
The Group Own Risk and Solvency
Assessment (ORSA) is an ongoing
assessment of the risks the Group is
exposed to, and of the capital resources
available to ensure that the Group is able to
sustain its business over the plan horizon.
The Committee's review of the Group’s
ORSA process includes proposed stress
tests and scenarios to be used in the
evaluation of capital adequacy, the profile
of risks within the Group’s strategic plan
and how they may change over the
planning period and the Group’s overall
capacity for the risks identified.
Group CRO Report
The Committee receives and reviews a
report from the Group CRO at each meeting
which highlights key information impacting
the Group-wide risk profile, as well as
providing an assessment of the current and
forward-looking Group risk exposures.
The report includes analysis of risks arising
from the macroeconomic outlook and from
conditions and developments in financial
markets, together with geopolitical,
legislative and regulatory change risks that
may impact the Group's business, and the
Groupwide top risk themes. It includes
updates on key activities undertaken by
the Risk function to deliver on its vision
and purpose in supporting the Group's
strategic objectives, the outputs of regular
risk monitoring activities and, details of any
current and specific financial, non-financial
or regulatory and compliance risk matters.
As part of the Group CRO report, the
Committee is provided with information
on risk appetites and tolerances, assessing
actual positions relative to the Group's
risk appetite statements, and quantitative
analysis of the Group's exposures to
financial and operational risks, including
risk-based capital requirements in relation
to the core risks within the Group's
businesses.
Macroeconomic and political
environment
During the year, the Committee monitored
the impacts and potential impacts of
macroeconomic challenges and global
geopolitical instabilities, including potential
cross-cutting impacts in a number areas
including in relation to the management of
interest rate risk, credit risk and
reinsurance market capacity reduction risk.
The impact of changes in the UK political
and regulatory environment following the
election of a Labour Government in July
2024 were assessed and continue to be
closely monitored.
Other matters considered
During 2024, the Committee considered
a wide range of risks facing the Group, both
current and forward-looking, across all
key areas of risk management, in addition
to risk culture and risk appetite.
A number of strategic reviews and deep
dives aligned to key financial and non-
financial risk themes were carried out
throughout the year. These included
interest rate and credit risk, operational
resilience and third party supplier
management risk, people risk and
reputation risk. The Committee continued
to monitor the climate risk appetite
framework, including in relation to the
Group's external commitments in this area.
Employee wellbeing remained an area
of focus and the Committee considered
a number of operational people risks,
including resource stretch, and the further
embedding of strategic workforce planning.
The Committee also carried out a deep
dive review of the Group's data risk
environment, including our data ethics
framework. It continued to review reporting
on the ongoing deployment of Generative
AI technologies across the Group and
considered and approved a number of new
AI Risk preferences in relation to this.
The Committee also reviewed the Group
transformation risk profile and the associated
change execution and delivery risks,
including the material Groupwide thematic
drivers to our change delivery risk.
In conjunction with the Customer and
Sustainability Committee, the Committee
reviewed the progress of measures taken
within the UK subsidiaries to comply with
Consumer Duty, including the Phase 2
implementation deadline for closed
products and services. This was supported
by regular updates on customer outcomes
in relation to Conduct Risk policy.
The Committee reviewed the approach
to stress testing for the 2025-2027 Plan,
including the Downside and Deep Downside
calibrations, and the Group Recovery Plan.
The Committee monitored progress of the
Second Line Assurance Plan which was
based on targeted in-depth reviews of
agreed market plans overlaid with Group
second and third line assurance activity.
Andrea Blance
Chair of the Risk Committee
26 February 2025
Risk Committee report
109
Aviva plc
Annual Report and Accounts 2024
Strategic
Report
Governance
Report
IFRS Financial
Statements
Other
Information
“The Committee focuses
on our ambition to be a
leading customer centric
company and Aviva's
Sustainability Ambition,
both of which are vital
to Aviva’s Strategy and
form two of our strategic
priorities”
Shonaid Jemmett-Page
Chair of the Customer and
Sustainability Committee
Committee at a glance
Shonaid Jemmett-Page (Chair)
Cheryl Agius (from 21 May 2024)
Pippa Lambert
Jim McConville
Michael Mire
Membership
Read more on
Our Board of Directors: page 91
Customer and Sustainability Committee report
110
Purpose
The purpose of the Customer and Sustainability Committee (the Committee) is to assist
the Board in its oversight of customer and sustainability issues, and the Committee is
responsible for:
1. Overseeing the Company's and its subsidiaries ambition to be a leading customer centric
company; and
2. Overseeing Aviva's Sustainability Ambition, within the overarching context of One Aviva.
2024 highlights
• Continued to review the impact of the
FCA's Consumer Duty from a customer
experience perspective.
• Undertook deep dives in relation to
various aspects of customer journeys
including Aviva's digital roadmap.
• Monitored the progress in building
an enhanced customer experience
through improved reporting by way of
a Customer Dashboard as a standing
agenda item at each committee
meeting.
• Monitored the progress of Aviva's
Sustainability Ambition, including
tracking performance against key
metrics and targets.
• Reviewed our Sustainability reporting
within the Annual Report and
Accounts, and Climate-related
Financial Disclosure report and non-
financial metrics.
• Reviewed our second iteration of the
Transition Plan, with a particular focus
on progress since the first iteration,
and review of the Strategy and actions
in the next three year period to make
further progress against out ambitions.
The Committee recommended the Plan
to the Board for approval.
• Reviewed the Group's Modern Slavery
Statement and approved Aviva's
Human Right's Policy and Business
Ethics Code.
2025 priorities
• Continue to focus on the customer
agenda and the progress of the
customer strategy, including further
developments to enable us to
gain a deeper understanding of
our customers and improve
customer experience and journeys
through the development of the new
MyAviva app.
• Continue to monitor the impact
the implementation of the FCA's
Consumer Duty from a customer
perspective.
• Continue to oversee progress
against our sustainability ambition,
including our work on social action
and communities.
• Oversee progress against our
updated Transition Plan.
Aviva plc
Annual Report and Accounts 2024
Strategic
Report
Governance
Report
IFRS Financial
Statements
Other
Information
The Committee's detailed responsibilities are set out in the Terms of Reference,
available online at www.aviva.com/about-us/customer-and-sustainability-committee.
I am pleased to present the Customer and
Sustainability Committee report for the
year ended 31 December 2024.
Customer
During 2024, the Committee provided
oversight of our customer strategy. This
included reviewing the customer
dashboard at each meeting as a standing
agenda item. The dashboard provided
insight into key customer metrics, material
customer trends, customer growth,
experience, and engagement. There had
been strong performance against all
customer metrics in 2024, as a result of a
more focused approach to customers,
operational improvements, and the
implementation of digital improvements.
The Committee oversaw the progress
made to step change the customer data
capabilities required to support Aviva's
customer centric transformation,
particularly the implementation of a
Strategic Customer Master as a unified and
single version of truth for all Aviva's UK
customers. This ensured that deep
customer insights were developed and
utilised to enable Aviva to serve more
customer needs as well as to continue to
optimise the digital and marketing customer
experience.
The Committee monitored progress in
building an enhanced customer experience,
through improvements to customer
journeys, our digital capability through
better transactional functionality and digital
support through the development of the
new MyAviva app, and conducted a deep
dive on our digital roadmap, outlining
further enhancements and opportunities for
consolidation.
The impact of the FCA’s Consumer Duty on
customer experience was closely
monitored by the Committee during the
year and reports from management relating
to the customer considered the impact of
Consumer Duty. The Committee received
quarterly updates on Consumer Duty
through the Consumer Duty Dashboard,
and also received an update on an internal
audit review of Consumer Duty and Aviva's
approach to actively engage and support
customers.
The Committee conducted deep dives on
customer delivery and actions in Canada
and Ireland and on customer retention and
Aviva's digital roadmap.
The Committee also reviewed updates on
customer marketing to support a customer
centric approach and our further plans to
transform our marketing capability.
Sustainability
The Committee tracked progress against
Aviva’s Sustainability Ambition (ASA) and
the work undertaken on the three pillars:
Climate Action, Social Action and
Sustainable Business. The Committee
monitored progress on the ASA, which
included Key Performance Indicators and
the Sustainability Ambition scorecard.
The Committee monitored the development
of our second iteration of the Transition Plan,
particularly progress since the first iteration
of the Plan and a review of the Strategy, and
actions in the next three year period to make
progress against our ambitions. The
Committee focused on how Aviva will meet
our ambition to reduce Scope 1 and Scope 2
emissions by 90% by 2030 through internal
actions, while noting the external key
dependencies we are relying on.
The Committee discussed the pathways to
Aviva’s ambition to reach Net Zero by 2040,
whilst being clear that Aviva can not achieve
this without significant third-party action.
The Committee noted that control over
Scope 3 emissions is limited, and we are part
of a wider system and therefore have
dependencies and externalities that impact
our ability to meet targets, such as
Government actions on policy, other
businesses and wider society. Our ambition
is supported by strong governance, risk and
opportunity management and robust data
and measurement. Following review, the
Committee recommended the Transition
Plan to the Board for approval.
The Committee reviewed Group
sustainability and climate reporting,
including the Climate-related Financial
Disclosure report in preparation for the
climate disclosures summary being voted
on (on an advisory basis) at the 2025
Annual General Meeting. In addition the
Committee reviewed the Sustainability
section of the Annual Report.
The Committee reviewed Aviva's social
action strategy, which focuses on the
difference we make to society. The
Committee also received updates on the
Sustainability Campaigns work, including
the 'Get Ready' campaign which was an
evolution of the 'Climate Ready' work and
wrapped together both the climate and
social agendas and Aviva's positive impact
on society. The Committee reviewed the
work of the Aviva Foundation and received
an impact report on the work Aviva was
doing to help people from some of the most
vulnerable parts of the UK. The Committee
also monitored progress on the social
action taken through the roll out of a new
volunteering platform for colleagues and
our partnership with Citizen's Advice,
supporting vulnerable customers through a
dedicated customer referral line and help
on online channel development.
The Committee also received updates
on the progress of Aviva's sustainability
governance activity, including reviewing the
refreshed Aviva Human Rights Policy, our
Business Ethics Code, Sustainability
Business Standard and our performance in
external sustainability benchmarks and
indices. The Committee also focused on
meeting the FCA's Anti-Greenwashing
Guidance.
Further information on our integrated
responsibility and sustainable business
approach can be found on the Company’s
website at: www.aviva.com/sustainability.
Aviva Canada and Aviva Ireland
During the year, Aviva Canada and Aviva
Ireland presented to the Committee
updates on their customer strategies
including customer journeys and
experience, and on the sustainability
scorecards for their markets. The
presentations provided the Committee with
information on how Aviva Canada and
Ireland contributed to the overall Group
performance in both respect.
Shonaid Jemmett-Page
Chair of the Customer and
Sustainability Committee
26 February 2025
Customer and Sustainability Committee report
111
Aviva plc
Annual Report and Accounts 2024
Strategic
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Governance
Report
IFRS Financial
Statements
Other
Information
Membership
Pippa Lambert (Chair)
Andrea Blance
Patrick Flynn
Jim McConville
Read more on
Our Board of Directors: page 91
The Committee's detailed
responsibilities are set out in the
Terms of Reference, available
online at www.aviva.com/about-us/
remuneration-committee.
Committee at a glance
Purpose
The purpose of the Remuneration Committee (the Committee) is to:
1. Review and make recommendations to the Board on the Group’s overall remuneration policy
and practice (the Group Remuneration Policy) and the remuneration policy for the Company’s
Directors (the Directors’ Remuneration Policy);
2. Oversee the implementation of and review compliance with the Group Remuneration Policy
and the Directors’ Remuneration Policy (the Policy), and to review performance and approve
relevant remuneration arrangements; and
3. Review the remuneration approach for individuals identified as relevant staff under any of
the regulatory regimes applicable to the Company or its subsidiaries (together, the Group)
including the Solvency II Directive as implemented in the UK, applicable Financial Conduct
Authority (FCA) and Prudential Regulation Authority (PRA) remuneration requirements and
associated guidance (Remuneration Regulated Employees).
“Our remuneration
outcomes reflect
Aviva’s strong
momentum and the
excellent performance
delivered in 2024”
Pippa Lambert
Chair of the Remuneration
Committee
2024 highlights
• Implementation of the Policy approved
by shareholders at the 2024 Annual
General Meeting (AGM).
• Senior management objectives, pay
decisions, bonus and Long Term
Incentive Plan (LTIP) target setting.
• Ensuring the broader colleague reward
proposition remains competitive.
• Progressing our ambitious diversity,
equity and inclusion (DE&I) agenda.
• Share plan operations and
performance testing.
• Governance and regulatory matters.
More details are provided in the Annual
report on remuneration.
The Committee’s decisions are taken in
the context of the Reward Governance
Framework, which sets out the key
policies, guidelines and internal controls
and is summarised in the Annual report
on remuneration.
2025 priorities
• Ensuring the broader colleague
reward proposition remains fair
and competitive.
• Oversight of relevant arrangements
in connection with Merger and
Acquisition (M&A) activity to
support our broader strategy.
• Review executive remuneration
arrangements in the context of
evolving market practice and
Aviva's priorities.
Remuneration Committee report
112
Read more in
Annual report on remuneration:
page 118
Find out more in our
Remuneration Policy on
www.aviva.com
Aviva plc
Annual Report and Accounts 2024
Strategic
Report
Governance
Report
IFRS Financial
Statements
Other
Information
The Directors Remuneration
Report (DRR) is presented in
three parts in addition to
this letter:
Remuneration at a glance -
key aspects of interest to
shareholders.
Read more in
Remuneration at a glance:
page 116
Annual report on remuneration -
further detail on how the Policy
has been applied and
remuneration outcomes in respect
of 2024, and how the Policy will be
implemented in 2025.
Read more in
Annual report on remuneration:
page 118
The Policy, outlines the
remuneration framework that
applies to our Executive Directors
(EDs) and Non-Executive Directors
(NEDs) following approval at our
AGM in May 2024.
Read more in
Directors' Remuneration Policy:
page 136
On behalf of the Committee, I am pleased
to present the DRR, for the year ended
31 December 2024.
Over the next few pages, we set out our
key considerations and the remuneration
decisions taken in 2024, both for the EDs of
Aviva and for the wider workforce.
I would like to thank you, our shareholders,
for the support you showed at our 2024
AGM, approving our current Directors’
Remuneration Policy to apply for three
years from the date of that meeting –
supported by 97.66% of shareholder votes.
2024 Company performance
2024 was another year of strong
performance and continued growth,
reflecting our consistent strategy, which is
delivering for our customers and for our
shareholders. We are growing organically
and through M&A, continuing to accelerate
towards a majority capital-light portfolio.
We are resolutely focused on our customers
and realising the full potential of our
unrivalled franchise.
Performance against the annual bonus
financial measures was very strong,
exceeding the targets set for the majority of
measures including:
• Increased gross cash remittances
exceeding target levels.
• Growth and expense discipline delivered
increased Group adjusted operating profit.
• The efficiency measures introduced for
2024 to replace the already achieved
cost reduction measure, exceeded
target overall.
• Solvency II shareholder cover ratio
remains strong at 203%, underpinned
by robust capital generation.
Performance against our non-financial
measures was also very strong.
• Performance against our customer
measures reflects above target
performances for both Transactional Net
Promoter Score (TNPS) and Online
Experience Scores (OES) reflecting our
investments and focus in these areas.
• Employee engagement levels increased
by 3pp to 91%, a figure well ahead of
market norms. This reflects the focus
on strong leadership alignment and our
high-performance culture.
• The risk and control environment has
continued to improve, reflected in
an above target assessment against
the qualitative and quantitative risk
scorecard measures.
Supporting our people
Oversight of remuneration across the
wider colleague population remains a
focus area for the Committee.
• We are proud to pay all of our UK
colleagues at least the Real Living
Wage, plus an additional 8% to enable
colleagues to benefit from our 14%
matching pension contribution and
save for their retirement.
• In addition, we continue to review our
broad reward packages across markets,
balancing global alignment with local
market competitiveness.
For 2025, the UK salary budget was 4.2%.
Remuneration Committee report
113
Aviva plc
Annual Report and Accounts 2024
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IFRS Financial
Statements
Other
Information
Remuneration outcomes
for 2024
Our remuneration outcomes reflect
Aviva’s strong momentum and the
excellent performance delivered in
2024, as set out below.
No person was present during any
discussion relating to their own
remuneration.
2024 annual bonus
The formulaic outcome from the
annual bonus scorecard was 80.5% of
maximum (at 160.9%). The Committee
carefully considered this outcome in
the context of broader performance
and a quality of earnings assessment,
noting input from the Audit and Risk
Committees, to ensure the scorecard
outcome was reflective of overall
performance and aligned with the
experience of shareholders. The
Committee determined that no
adjustments were required to the
formulaic bonus scorecard outcome.
In line with the Policy, the Committee
also considered the individual
performance of the Group Chief
Executive Officer (CEO) and Group
Chief Financial Officer (CFO) to
determine whether individual
adjustments to the scorecard
outcome were required.
Amanda Blanc’s exceptional leadership
has been pivotal in driving another year
of excellent performance at Aviva. Her
significant achievements include strong
financial results, continuing to progress the
strategy of pivoting to majority capital-light
and continued focus on customer
experience.
Financially, Aviva has seen another year
of strong results, with growth in Group
adjusted operating profit and substantial
cash remittances. There has been
significant progress in prioritising the shift to
majority capital-light business with a
number of acquisitions completed and the
announcement of the proposed acquisition
of Direct Line Group (Direct Line).
Amanda has also driven continuous
enhancement of customer experience,
achieving strong TNPS and OES. Under
Amanda’s leadership, Aviva has also
achieved number one brand recognition
across several key metrics.
Amanda has continued to build a
consistently high performing Executive
Committee (ExCo). Employee engagement
has reached an all-time high of 91%, with
Amanda’s strong and visible leadership
further strengthening trust in leadership.
Externally, Amanda has worked with the
UK government and industry regulators to
shape numerous pieces of legislation for the
benefit of our customers. She continues to
represent Aviva in multiple industry and
public forums, including being a founding
member of the Government's National
Wealth Fund Taskforce.
This exceptional performance is reflected
in Amanda’s annual bonus for 2024 of
98.0% of maximum (at 195.9% of salary).
Charlotte Jones has had a very strong
year, contributing significantly to the
company's strong performance in 2024.
Charlotte supported the delivery of strong
financial results, maintained balance sheet
strength and drove effective capital
management, enabling investment for
growth and efficiency in the business.
Charlotte also drove robust and effective
performance management processes
across the Group, ensuring strong
progress on Group targets related to Group
adjusted operating profit, Solvency II Own
Funds Generated (Solvency II OFG), and
cash remittances.
Charlotte’s increased focus on investor
engagement has led to a significant
increase in meetings, including in new
investor geographies. She successfully
executed acquisitions of Probitas, AIG’s
UK protection business, and Optiom in
Canada, and played a pivotal role in the
proposed acquisition of Direct Line.
Charlotte also strengthened and
developed the Finance function and
delivered high-quality financial and non-
financial reporting.
Beyond Aviva, Charlotte is a member of
the PRA Practitioner Panel & Chair of the
Insurance Practitioner Panel, and plays
an important role in working with the
government on Solvency II reform.
Charlotte’s annual bonus for 2024
was 92.0% of maximum (at 138.0%
of salary).
2022-24 LTIP
The formulaic vesting outcome
was 76.6%, reflecting very strong
performance against Total Shareholder
Return (TSR), Solvency II Return on
Equity (Solvency II RoE) and cumulative
cash remittances. The Committee
determined that no adjustments were
required to the formulaic vesting
outcome.
Remuneration Committee report
114
Aviva plc
Annual Report and Accounts 2024
Strategic
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IFRS Financial
Statements
Other
Information
Shareholder consultation
We have consulted with institutional
shareholders and proxy voting agencies
during the year, including on our new Policy.
I look forward to the continued
constructive engagement with
shareholders this year.
Remuneration in 2025
Salary
In reviewing the CEO’s salary for 2025,
the Committee recognised that since her
appointment in 2020, Amanda’s performance
has been exceptional. She has refocused
Aviva around leading positions in attractive
markets and built a balanced and diversified
business. Internally, her leadership, and that
of the executive team that she has put
together, has driven colleague engagement
to exceptional levels. Aviva’s TSR of over
155% during her tenure – upper quartile
performance against the FTSE 350 Financial
Services sector – is a reflection of the
change that she has led.
Within this context, the Committee
determined that Amanda will receive a
salary increase of 10% for 2025. The
Committee recognises that this is above
the overall percentage increase of 4.2%
for UK colleagues, but we are very mindful
of the need to ensure Amanda’s salary
remains competitive, from a UK and
European perspective, recognising both
are competitors for our top talent.
The Committee also considered that
Amanda’s percentage salary increases
since appointment have been consistently
below that of our wider workforce.
Charlotte will receive a salary increase
of 2%.
The Committee continues to monitor the
evolving executive remuneration landscape
in the UK and intends to review our
executive remuneration arrangements
during the course of 2025 to ensure that
they support our business needs and are
sufficiently competitive to retain and
motivate our highly talented senior
leadership team. The Committee will
engage with institutional shareholders and
proxy voting agencies as appropriate.
2025 Annual Bonus and 2025-27 LTIP
For Amanda and Charlotte, the
opportunities are unchanged from the
awards made for the prior year.
Annual bonus
LTIP
Target
opportunity
Maximum
opportunity
Maximum
opportunity
Group
CEO
100%
200%
350%
Group
CFO
100%
150%
225%
Opportunities are in line with the Policy.
2025 focus areas
In addition to reviewing executive
remuneration arrangements, the
Committee will continue to focus on
ensuring that remuneration fairly rewards,
and is aligned with business performance
and strategy, particularly in the context of
oversight of relevant arrangements in
connection with planned M&A activity.
Conclusion
We have continued to deliver very strong
year-on-year results demonstrating the
benefits of our capital-light and diversified
businesses. As a Committee, we have
sought to make decisions which effectively
drive and reward results, while continuing
to align with UK best practice remuneration
and governance expectations.
I hope that this report is clear and
informative and I look forward to seeing
shareholders at the forthcoming AGM.
Pippa Lambert
Chair of the Remuneration Committee
26 February 2025
Remuneration Committee report
115
Aviva plc
Annual Report and Accounts 2024
Strategic
Report
Governance
Report
IFRS Financial
Statements
Other
Information
Remuneration elements
Fixed pay
Annual bonus
LTIP
1. What are the elements
of our EDs’
remuneration?
2. How did we determine performance-based pay in 2024 and how does it align to strategy?
Cash remittances
50.0%
Solvency II OFG
19.1%
40.0%
Group adjusted operating profit
22.4%
30.0%
Efficiency measures
14.4%
20.0%
Risk scorecard
25.0%
30.0%
Employee engagement
10.0%
OES
10.0%
TNPS
10.0%
Total
160.9% 200%
Component: 2024 Annual bonus
Measure
Outcome
Maximum
Relative TSR
28.6%
40.0%
Cumulative cash remittances
22.2% 25.0%
Solvency II RoE
15.0%
Reduction in CO2 intensity
of shareholder assets and with profit funds
7.5%
Relational Net Promoter Score (RNPS)
0.0%
7.5%
Ethnically diverse employees in
senior leadership roles
0.8%
2.5%
Females in senior leadership roles
2.5%
2022 LTIP vesting outcome
76.6%
100%
Component: 2022-24 LTIP
Measure
Outcome
Maximum
Remuneration at a glance
116
Short Term
Long Term
Variable
Fixed
Salary
Pension and
other benefits
Bonus:
Cash
Bonus:
Deferred into
shares released
annually over
three years
Total
remuneration
LTIP
Strategic Pillars
Growth
Customer
Efficiency
Sustainability
Aviva plc
Annual Report and Accounts 2024
Strategic
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IFRS Financial
Statements
Other
Information
Remuneration elements
Fixed pay
Annual bonus
LTIP
3. Remuneration policy and implementation for 2025
Fixed pay
Group CEO: £1,232,000 (10.0% increase)
Group CFO: £750,000 (2.0% increase)
Pension contribution rate aligned to wider workforce (14% of basic salary)
Benefits are in line with the Policy
Annual Bonus
LTIP
Group CEO - maximum of 200% of salary
Group CFO - maximum of 150% of salary
Group CEO - maximum of 350% of salary
Group CFO - maximum of 225% of salary
Operation:
Operation:
1/2 paid in cash
1/2 deferred into
shares
3 year performance period followed
by 2 year holding period
Shares released in
equal tranches after
years 1, 2 and 3
Year
1
Year
3
2025 - 2027
2028 - 2029
2030
Year
2
3 Year
Performance
Period
2 Year
Holding Period
Released
Measures
Financial measures (70% of total):
Measures
Financial measures (80% of total):
25%
20%
15%
10%
Cash remittances
Solvency II OFG
Group adjusted operating profit
Efficiency measures
40%
25%
15%
Relative TSR
Cumulative cash remittances
Solvency II RoE
Strategic measures (30% of total)
Including: Risk scorecard, Employee
engagement, OES and TNPS
Strategic measures (20% of total):
7.5%
7.5%
2.5%
2.5%
Reduction in Economic Carbon
Intensity of shareholder and with-
profits funds including credit, equity
and private assets
Customer scorecard
Females in senior leadership roles
Ethnically diverse employees in
senior leadership roles
Shareholding requirements
Group CEO – 300% of salary
Group CFO - 225% of salary
Post-cessation shareholding requirements apply for two years
Read more on Directors' Remuneration Policy: page 136
4. How much did we pay our EDs in 2024?
£000
£000
l Salary, pension and other benefits
1,317
l Salary, pension and other benefits
832
l Bonus
2,194
l Bonus
1,014
l LTIP
3,682
l LTIP
1,508
Total
7,193
Total
3,355
5. Performance against our peer group and the FTSE 100 - rTSR
3 year rTSR Performance
6. Wider workforce remuneration
Salary
4.2% UK salary increase
budget for 2025
We remain committed to
ensuring competitive and
fair reward for our wider
workforce
Pension
Aviva pays all UK colleagues
at least the Real Living Wage,
plus 8% enabling colleagues to
benefit from our 14% matching
pension contribution and save
for their retirement
Living pension accreditation
Achieved in March 2023
Health and wellbeing
Competitive provision
for all UK colleagues
includes Digital GP
services, and either
full Private Medical
Benefit, or access to
physio support and
critical illness cover
(all company funded)
More detail can be found in table 19
Remuneration at a glance continued
117
48.0%
33.9%
27.1%
Aviva
2022 LTIP comparator
group median
FTSE 100
Chief Executive Officer
Amanda Blanc
Chief Financial Officer
Charlotte Jones
Aviva plc
Annual Report and Accounts 2024
Strategic
Report
Governance
Report
IFRS Financial
Statements
Other
Information
Remuneration elements
Fixed pay
Annual bonus
LTIP
This section of the report sets out how Aviva has implemented its Policy during 2024.
This is in accordance with the requirements of the Large & Medium Sized Companies and
Groups (Accounts and Reports) Regulations 2008 (as amended).
Single total figures of remuneration for 2024
The table below sets out the total remuneration for 2024 and 2023 for each of our EDs.
Table 1 Total 2024 remuneration – Executive Directors (audited information)
Executive Directors
Total emoluments of
Executive Directors
Amanda Blanc
Charlotte Jones6
2024
£000
2023
£000
2024
£000
2023
£000
2024
£000
2023
£000
Basic salary1
1,110
1,068
728
699
1,838
1,767
Benefits2
71
48
15
18
85
66
Pension3
137
131
90
86
226
217
Total fixed pay
1,317
1,247
832
804
2,150
2,051
Annual bonus4
2,194
1,902
1,014
906
3,208
2,808
LTIP5
3,682
4,161
1,508
—
5,190
4,161
Total variable pay
5,876
6,063
2,522
906
8,398
6,968
Total7
7,193
7,309
3,355
1,710
10,548
9,019
1. Basic salary received during the relevant year
2. The benefits disclosure includes the cost, where relevant, of private medical insurance, life insurance, accommodation, travel
and car benefits. All numbers disclosed include the tax charged on the benefits, where applicable.
3. Pension contributions consist of employer defined contribution benefits, excluding salary exchange contributions made by the
employees, plus cash payments in lieu of pension. Amanda and Charlotte received cash payments equivalent to a pension
contribution of 14%, reduced for the effect of employers’ National Insurance contributions when paid as cash. No ED has a
prospective entitlement to benefit in a defined benefit scheme.
4. Bonus payable in respect of the financial year including any deferred element at the face value at the date of award. EDs are
required to defer two-thirds of any bonus awarded in 2023 and half of any bonus awarded in 2024 into Aviva shares. The
deferred share element is granted under the Annual Bonus Plan (ABP) and will vest in equal tranches on the first, second and
third anniversary of the award date, subject to continued employment.
5. The value of the LTIP awards for 2024 relate to the 2022 award, which had a three-year performance period ended
31 December 2024. 76.6% of the award will vest in March 2025. An assumed share price of 472.98 pence has been used to
determine the value of the award based on the average share price over the final quarter of the 2024 financial year. The
amount of the value of the LTIP that is attributable to share price appreciation (the appreciation being the difference between
the face value at the date of award and the vested value of the award) is £381,246 for Amanda and £156,207 for Charlotte. The
LTIP amounts shown in last year’s report in respect of the LTIPs awarded in 2021 were calculated with an assumed vesting
share price of 413.49 pence. The actual share price at vesting was 494.50 pence, and the table has been updated to reflect this
change. The estimated value of the award was £3.5 million; the actual value was £4.2 million (increase of £681,603).
6. Charlotte Jones was appointed as Group CFO on 5 September 2022. The value of LTIP awards for 2024 relate to the 2022
award, which is the first LTIP award Charlotte received.
7. The EDs have not received any items in the nature of remuneration other than those disclosed in table 1. Due to rounding, the
totals above may be higher than the sum of individual elements.
Alignment with the UK Corporate
Governance Code
The Committee is mindful of the UK
Corporate Governance Code’s six
principles when it determines
remuneration policy. The Committee’s
view is that the Remuneration
Framework at Aviva is well-aligned
with these areas.
1. Clarity
• Our remuneration framework is
structured to support the financial and
strategic objectives of the Company,
aligning the interests of our EDs with
those of shareholders and wider
stakeholders.
• We are committed to transparent
communication with all our
stakeholders, including shareholders –
further details of our engagement
process for the Policy are set out under
the consideration of wider colleague
pay and shareholder views section.
2. Risk
Our reward structure ensures risk
events are reflected in remuneration
outcomes through:
• Opinion from Risk on appropriate
performance measures and targets;
risk, performance management and
consequence management inputs are
considered before awards are made.
• Overarching discretion is retained to
adjust formulaic outcomes to properly
reflect any risk events.
• Deferral of annual bonus (over three
years) and LTIP (five years, including
an additional two-year holding period
for EDs), subject to malus and
clawback provisions which mitigates
against future risk.
• Our within- and post-employment
shareholding guidelines align to the
successful delivery of the company’s
long-term strategy.
3. Simplicity
• We operate a simple remuneration
framework, comprising fixed pay
elements, along with short- and long-
term variable elements.
• This structure provides clear line of
sight for both executives and
shareholders.
• The annual bonus and LTIP are focused
on our strategic priorities, rewarding
performance against key measures of
success for the business.
4. Proportionality
• There is clear alignment between the
performance of the Company and the
rewards available to EDs.
• Incentive elements are closely aligned
to our strategic goals, transparent and
robustly assessed, with the Committee
having full discretion to adjust outcomes
to ensure they align with overall Aviva
performance.
5. Predictability
The Policy sets out the possible future
value of remuneration which EDs could
receive, including the impact of share price
appreciation of 50 % – see under the
illustration of the Policy for further details.
6. Alignment to culture
• We are committed to effective
stakeholder and colleague engagement.
• As part of this, the Committee regularly
reviews data and insights relating to pay
and broader employment conditions in
the workforce, and takes these into
account when considering executive
remuneration.
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Remuneration elements
Fixed pay
Annual bonus
LTIP
Terms of reference, policies and guidelines
Terms of reference
Remuneration Committee terms of reference
Sets out the Committee’s scope and responsibilities, including authorities
which may be delegated but which still retain Committee oversight
Control and assurance
Remuneration
business standard
Assurance framework
to attest reward
operations are
conducted within the
Aviva Remuneration
Policy, Directors’
Remuneration Policy
and supporting policies
Reward approvals
framework
Approval requirements
to ensure Reward
operations are
conducted within the
Aviva Remuneration
Policy, Directors’
Remuneration Policy
and supporting policies
Subsidiary board remuneration committee terms of reference
Sets out the subsidiary remuneration committees’ scopes and responsibilities
Overarching policy
Aviva Remuneration Policy
Approved by the Committee,
applies to all employees in
entities within Aviva Group
Directors’ Remuneration Policy
Approved by shareholders, applies
to directors of Aviva Group plc
Supporting policies
Identification of remuneration
regulated employees
Variable pay and risk
adjustment (includes bonus,
LTIPs, buyout, retention,
recognition awards
and funding)
Malus and
clawback
Internal guidelines and
non-Remuneration
Committee approved
policies (examples)
Benchmarking
Bonus deferral
Buyouts and
guarantees
Global mobility
Retention awards
Secondments
Reward Governance Framework
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Key
Element of the Reward Governance Framework managed
as part of the business of the Committee
Element of the Reward Governance Framework managed
mainly under delegated authority from the Committee
Views
Shareholders
In its ongoing dialogue with shareholders
and proxy advisory bodies, the Committee
actively seeks their views, ensuring
that feedback received is discussed
at Committee meetings and ultimately
feeds into the development of new
proposals. The Committee is grateful for
Shareholder feedback in response to the
new Policy proposed at the 2024 AGM, as it
provided useful context implementing the
policy in the latter part of the year.
Our colleagues
The Committee has sight of colleague
views through the colleague engagement
survey (Voice of Aviva), input from the
People function during Committee meetings,
colleague forums and the Evolution Council,
chaired by the Board Chair. Specifically for
the last two channels:
• The Committee Chair met with Your
Forum (a fully elected employee forum
representing UK colleagues) and members
of Unite the Union. Discussions included
matters of interest to colleagues and
members covering areas such as the
Committee's role and areas of focus for
the Committee over the past 12-months
including:
• Monitoring business performance
• The new Policy
• Market practices
• Regulatory updates
• The Committee's work in relation
to recruitment and retention
• Monitoring new government initiatives
The Evolution Council consists of a diverse
group of high calibre colleagues from
across the business who discuss a range
of topics related to the Group strategy,
values, culture and performance.
When determining the Policy and
arrangements for EDs, the Committee also
reviews pay and employment conditions
elsewhere in the Group to ensure reward
structures are suitably aligned and that
levels of remuneration remain appropriate.
Other considerations include:
• Changes in remuneration (salary,
benefits and bonus) of UK colleagues
compared with that of directors
(see table 8).
• The ratio of CEO pay to that of
colleagues (see tables 11 and 12).
• Gender and ethnicity pay gaps.
We release our UK Pay Gap Report
2024 in March 2025. This will be the
eighth year that we publish our gender
pay gap and the third time we publish our
ethnicity pay gap. The report also includes
details of actions we are taking to drive
change and close the gap. The report will
be available at www.aviva.com/about-
us/uk-pay-gap-report.
• Any material changes to benefit and
pension provision for colleagues
more widely.
Remuneration consultants
During the year, the Committee
received advice on executive
remuneration matters from Deloitte
LLP. Deloitte LLP were approved by
the Committee and appointed as their
advisers in 2012 following a competitive
tender process. The Committee regularly
reviews and satisfies itself that the
advice received from Deloitte LLP is
independent and objective.
The Committee notes Deloitte LLP is a
member of the Remuneration Consultants
Group and adheres to its Code of
Conduct. During the year, Deloitte LLP
also provided advice to the Group on
various taxation, risk, compliance and
other consulting advisory services.
Tapestry Compliance Limited,
appointed by the Company, provided
legal and regulatory advice on share
incentive plan related matters, including
on senior executive remuneration
matters and views on shareholder
perspectives.
During the year, Deloitte LLP were paid
fees totalling £152,800 and Tapestry
Compliance Limited were paid fees
totalling £26,181 for their advice to the
Committee on these matters. Fees were
charged on a time plus expenses basis.
The Committee reflects on the quality
of the advice provided and whether
it properly addresses the issues under
consideration as part of its normal
deliberations. Deloitte LLP and Tapestry
Compliance Limited have no other
connections with Aviva or individual
directors and therefore the Committee
is satisfied that the advice received
during the year was objective
and independent.
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Information
The chart below summarises how our annual bonus1 operated for 2024.
Step I - Bonus scorecard
Step II – Individual performance
The bonus scorecard outcome from
step I may then be modified based on:
• Individual contribution and
achievements;
• Individual contribution in driving
progress against Group strategic
objectives;
• The leadership they have exhibited;
and
• How the individual has demonstrated
Aviva’s values.
Individual adjustments are not
determined in a formulaic manner.
The Committee reviews overall
performance against each individual’s
objectives and applies judgement as
to whether any adjustment is warranted.
In recent years adjustments have
ranged from -17.5% to +35%.
Financial measures
Performance
against financial
measures
subject to a
quality of
earnings
assessment.
• 25% Cash remittances
• 20% Solvency II OFG
• 15% Group adjusted
operating profit
• 10% Efficiency measures
Strategic measures
• 15% Risk scorecard
• 5% Employee
engagement
• 5% OES
• 5% TNPS
Performance
against defined
minimum, target
and maximum
targets
1. This approach also used as the basis for determining bonuses for colleagues across the Group.
For Aviva Investors, bonus funding is primarily based on profitability.
Step I – Bonus scorecard
The table below sets out performance against financial and strategic measures under the
bonus scorecard. The overall scorecard outcome percentage applies to all EDs.
Table 2 2024 performance against bonus scorecard for Executive Directors’ bonuses
(audited information)
Measure
Weighting
Minimum
(50%)
Target
(100%)
Maximum
(200%)
Actual
Outcome
Financial measures (70% of total)
Cash remittances
25.0%
£1,865m
£1,925m
£1,985m
£1,992m
50.0%
Solvency II OFG1
20.0%
£1,546m
£1,666m
£1,786m
£1,655m
19.1%
Group adjusted
operating profit1
15.0%
£1,580m
£1,705m
£1,830m
£1,767m
22.4%
Efficiency measures2
10.0%
Scorecard Outcome
14.4%
Total financial measures
70.0%
105.9%
Strategic measures (30% of total)
Risk scorecard3
15.0%
7.5%
15.0%
30.0%
25.0%
25.0%
Employee engagement
5.0%
80.0%
83.0%
86.0%
91.0%
10.0%
OES
5.0%
54.3%
57.3%
60.3%
67.4%
10.0%
TNPS
5.0%
38.7
42.7
46.7
47.8
10.0%
Total strategic measures
30.0%
55.0%
Scorecard outcome
100.0%
160.9%
1. Targets reflect the actual in year contribution from businesses acquired in the year. To the extent these contributions
exceeded original expectations, award outcomes have not been increased.
2. Aggregate measure reflecting efficiency objectives for our major business areas. Outcome reflects target or better
performance across the majority of businesses.
3. The risk scorecard objectively assesses and reports on how effectively first line Aviva employees and senior management
manage risk and controls. The risk scorecard considered risk behaviours, outcomes and a second line check and challenge.
The Group out-turn rating reflects ongoing progress with strengthening the risk and control environment and desired risk
culture throughout Aviva.
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Remuneration elements
Fixed pay
Annual bonus
LTIP
Step II – Individual performance
The Committee assessed Amanda and Charlotte on their individual performance in the year
which is set out below.
Amanda Blanc
Amanda’s exceptional leadership has
underpinned another year of excellent
performance at Aviva. Her significant
achievements include:
• Another year of very strong financial
results with 20% growth in Group
adjusted operating profit and £2 billion
of Cash remittances.
• Continuing to progress the strategy of
pivoting to majority capital-light,
completing the acquisitions of
Probitas, AIG's UK Protection business,
and Optiom, and driving a +1pp
increase in percentage of our
operating profit from capital-light
businesses as well as announcing the
proposed acquisition of Direct Line on
23rd December.
• Returning £10 billion to shareholders
since 2020, including a £300 million
share buyback in 2024 and upgraded
dividend guidance to the market.
• Continuing to build an ExCo which
delivers consistently high
performance.
• Very strong risk performance,
particularly in the most material
businesses, together with strong
support for the Chief Risk Officer and
risk function leading to excellent
progress against broader regulatory
objectives and actions.
• Continuous enhancement of customer
experience and achieving strong TNPS
scores, including delivery of the new
MyAviva app with +18% improvement
in our OES.
• Achieving number one brand recognition
across key metrics including
Spontaneous Awareness, Consideration
and Net Brand Affinity.
• Unlocking the inherent value in our
customer base, growing total customers
to 20.5 million and UK multi-product
holders to 5.4 million.
• Employee engagement at an all-time
high at 91% (vs FS norm of 81%), with
Amanda’s strong and visible leadership
further strengthening trust in senior
leadership. Continued accreditation by
Great Place to Work.
• Driving progress on efficiency ratios
across the business, including
thoughtfully piloting GenAI, for example
in claims where we have reduced
customer wait times by up to 50%,
resulting in the Insurance Post “Claims
Innovation Award” recognising the
service uplift.
• Working with the UK government and
regulators to play a key role in shaping
numerous pieces of legislation, for
example enabling more effective use of
capital including Solvency II reforms and
the Mansion House Compact.
• Continuing to represent Aviva in multiple
industry and public forums. Amanda is a
founding member of the Government's
National Wealth Fund Taskforce, Co-
Chair of the UK Government’s Transition
Plan Taskforce and Co-chair of the
Glasgow Financial Alliance for Net Zero
(GFANZ) Nature in Net Zero Transition
Plan workstream.
Charlotte Jones
Charlotte provided very strong
leadership through the Finance function,
contributing significantly to the
company's strong performance
throughout 2024. Key achievements are
as follows:
• Continuing to support the delivery of
very strong financial results while
maintaining resilient balance sheet
strength and effective capital
management to enable investment for
growth and efficiency in the business
and deliver regular and sustainable
capital returns.
• Continuing to drive robust and
effective performance management
processes across the Group, ensuring
strong progress across Group targets
announced in March, relating to Group
adjusted operating profit, Solvency II
OFG and cash remittances.
• Increased focus on investor
engagement through the development
of Aviva’s equity story and focus on
capital-light with extensive investor
outreach across more than 350
meetings (vs. 200 in 2023), ten
conferences, exploring new investor
geographies, including Asia, and
improving external awareness of
propositions via Health and Customer
‘In Focus’ sessions.
• Successfully executed inorganic
activity including acquisitions of
Probitas, AIG’s UK Protection business
and Optiom in Canada, and the
disposal of Singapore. She has also
played a pivotal role in pursuing and
executing more sizeable growth
ambitions, such as the proposed
acquisition of Direct Line.
• Continuing to focus on strengthening
and developing the Finance function,
including changes to key leadership
positions succession with excellent
engagement at 91%.
• Delivering high quality non-financial
reporting and partnering with Group
Sustainability Team to ensure critical
external reporting expertise and input
to the Transition Plan.
• Delivering IFRS 17 reporting with good
external recognition of our approach.
• Successfully supporting the transition to
our new external auditors.
• Ensured execution and delivery of
£300 million share buyback, upgraded
external dividend guidance, redemption
of €700 million Tier 2 debt and
successfully completed tender and new
issuance of £500 million Tier 2 debt at
equivalent rates.
• Contributing beyond Aviva as a member
of the PRA Practitioner Panel and Chair
of the Insurance Practitioner Panel, and
she played an important contribution in
the development of Solvency UK.
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Remuneration elements
Fixed pay
Annual bonus
LTIP
The Committee considered that in light of Amanda and Charlotte’s performance during the
year, it was appropriate to apply an individual adjustment of 35.0% to Amanda's bonus
outcome and 15.0% to Charlotte's bonus outcome.
Table 3 2024 bonus outcomes for Executive Directors (audited information)1
Amanda Blanc
Charlotte Jones
Bonus scorecard (0% – 200%)
160.9%
160.9%
Individual adjustment
35.0%
15.0%
Final outcome
195.9%
175.9%
Target opportunity (% of salary)
100.0%
100.0%
Maximum opportunity for 2024 (% of salary)1
200.0%
150.0%
Final bonus outcomes
% of salary2
195.9%
138.0%
% of maximum
98.0%
92.0%
£ amount
£2,194,080
£1,013,933
1. The CEO has a maximum bonus opportunity, inclusive of any individual adjustment, of two times target (i.e. 200% of salary)
while the CFO has a maximum opportunity, inclusive of any individual adjustment, of one and a half times target (150% of
salary)
2. The bonus scorecard for EDs can range from 0% to 200%. When the final outcome is above 100%, the resulting final bonus
outcome, as a percentage of salary, is on a ‘1% for 1%’ basis for the CEO and on a ‘2% for 1%’ basis for other EDs; e.g. a final
outcome of 140% would result in a bonus of 140% of salary for the CEO and 120% of salary for other EDs. When below 100%,
scaling is ‘1% for 1%’, such that a final outcome of 80% would result in a bonus of 80% of salary for all EDs, including the CEO.
Discretion
The Committee is conscious of the expectations for them to review incentive outcomes
(ABP and LTIP) against individual and company performance, together with any wider
circumstances, and to exercise independent judgement and discretion in relation to
remuneration outcomes. Taking into account the impact of the outcome of the quality of
earnings assessment, the Committee is of the view that these outcomes appropriately
reflect the overall performance of Aviva during the year and align with the experience of
shareholders and no discretion was exercised.
2022 LTIP vesting in respect of performance period 2022-2024
On a formulaic basis, the 2022 LTIP award vested at 76.6% of maximum which has been
reviewed and approved by the Committee. The outcome reflects very strong performance.
Table 4 2022 LTIP award – performance conditions (audited information)
Measure
Threshold
(20% vest)1
Outcome
Maximum
(100% vest)
Vesting
rTSR2
40%
Target:
Median
Upper Quintile
Aviva
performance:
4.7 out of 13
28.6 %
Cumulative
cash remittances3
25%
Target:
£5.3bn
£5.8bn
Aviva
performance:
5.7bn
22.2 %
Solvency II RoE3
15%
Target:
11%
13 %
Aviva
performance:
16.7%
15.0 %
Reduction in CO2
intensity4
7.5%
Target:
25%
27.5 %
Aviva
performance:
64%
7.5 %
RNPS
7.5%
Target:
11
14
Aviva
performance:
1.1
— %
Ethnically diverse
employees in senior
leadership roles5
2.5%
Target:
10%
13 %
Aviva
performance:
10.4%
0.8 %
Females in senior
leadership roles6
2.5%
Target:
37%
40 %
Aviva
performance:
40.9%
2.5 %
Total
100.0%
Final outcome
76.6 %
1. Threshold vesting is 20% for each performance measure independently
2. Aviva’s rTSR performance was assessed against that of the following companies: Admiral Group, Allianz, AXA, Direct Line
Group, Hargreaves Lansdown, Hiscox, Intact Financial, Legal & General, Lloyds Banking Group, M&G, Phoenix Group, Quilter
and Zurich Insurance. The performance period for the rTSR performance condition was the three years beginning
1 January 2022. For the purposes of measuring the rTSR performance condition, the Company’s TSR and that of the
comparator group is based on the 90-day average TSR for the period immediately preceding the start and end of the
performance period.
3. Any vesting of the Solvency II RoE and Cumulative cash remittances elements of the LTIP are subject to a Solvency II
shareholder cover ratio that meets or exceeds the minimum of the stated working range (range: 160% to 180%)
4. Reduction in CO2 intensity of shareholder and with-profits fund assets (measured on a weighted average revenue basis) over
the three-year performance period is aligned to Aviva Group’s target of being Net Zero by 2040. A 64% reduction in the CO2
intensity of shareholder and with-profits fund credit and equities has been achieved in 2024 from our 2019 baseline with
delivery underpinned by the embedding of carbon intensity into our investment strategy, including the implementation of our
coal exclusions policy and divestments, stewardship actions and ongoing emission reduction activities.
5. Percentage of colleagues in senior leadership roles in the UK who identify their ethnicity as anything other than ‘white’.
6. Percentage of colleagues in senior leadership roles in the UK, Ireland, Canada who are female.
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Remuneration elements
Fixed pay
Annual bonus
LTIP
Quality of earnings assessment – 2024 remuneration decisions
The Committee discussed those items that impacted the overall results in 2024 e.g. foreign
exchange, acquisitions and disposals, life assumption and modelling changes, prior year
reserve development, and other items that are non-recurring in nature. This process
provides the Committee with an understanding of the core profitability of the business
taking these factors into account.
Malus and clawback
As part of the annual pay review process, the Committee has considered whether any
recovery or withholding under the malus and clawback provisions of Aviva’s incentive
plans is required by any current circumstances.
No incidents concerning the EDs are currently subject to action under Aviva’s Malus
and Clawback policy (2023: No incidents).
Share awards granted to EDs during the year are set out below.
Table 5 Awards granted during the year (audited information)
Date of
award
Award
type1
Face value
(% of basic
salary)2
Face value
(£)2
Threshold
performance
(% of face
value)3
Maximum
performance
(% of face
value)
End of
performance
period
End of
vesting/
holding
period
Amanda
Blanc
25 Mar
2024
LTIP
350% 3,779,999
20%
100%
31 Dec 2026
25 Mar
2029
25 Mar
2024
ABP
117%
1,267,918
N/A
N/A
N/A
25 Mar
2027
Charlotte
Jones
25 Mar
2024
LTIP
225%
1,591,998
20%
100%
31 Dec 2026
25 Mar
2029
25 Mar
2024
ABP
85%
603,969
N/A
N/A
N/A
25 Mar
2027
1. ABP and LTIP awards have been granted as conditional share awards. The LTIP is a conditional right to receive shares, which
vest at the end of a three-year performance period, with an additional two-year holding period. ABP represents half of the
2024 bonus, which is deferred into shares and vests in three equal annual tranches. Shares issued in lieu of dividends accrue
on ABP and LTIP awards during the ABP deferral period and the LTIP performance period.
2. Face values for the awards granted on 25 Mar 2024 have been calculated using the average of the middle-market closing
price of an Aviva ordinary share on the three consecutive business days immediately preceding the date of the main grant for
employees, 25 Mar 2024, of 489.00 pence
3. Threshold vesting is 20% for each performance measure independently. This means less than 20% may vest overall.
Targets for LTIP awards made in 2024
Three-year targets are set annually within the context of the Company’s strategic plan.
The 2024 targets were reviewed and approved by the Committee and are provided below.
Table 6 2024 LTIP performance targets (audited information)
Vesting
Below
threshold
Threshold
Maximum
Above
maximum
Measure
Weighting
0%
20%
20-100%
100%
100%
rTSR1
40%
Median
Upper quartile
Cumulative cash
remittances¹
25%
£5.6bn
£6.1bn
Solvency II RoE2
15%
13.0%
15.0%
Reduction in weighted
average carbon intensity
of shareholder and with-
profit credit and equity
assets3
7.5%
17.5%
22.5%
Customer Scorecard:
Customer Numbers
(millions)4
3.75%
20.1
20.5
Customer Scorecard: Multi
Product Holding (MPH)
(millions)4
3.75%
5.25
5.50
Ethnically diverse
employees in senior
leadership roles5
2.5%
13.0%
15.0%
Females in senior
leadership roles6
2.5%
41.0%
43.0%
1. Aviva’s rTSR performance will be assessed against that of the following companies: Admiral, Direct Line Group, Hargreaves
Lansdown, Hiscox, Intact Financial, Legal & General, Lloyds Banking Group, M&G, Phoenix Group and Quilter. The
performance period for the TSR performance condition is the three years beginning 1 January 2024. For the purposes of
measuring the TSR performance condition, the Company’s TSR and that of the comparator group will be based on the 90-day
average TSR for the period immediately preceding the start and end of the performance period. For all in flight schemes, if
companies within the comparator group are subject to acquisition, the Committee will evaluate options including, but not
limited to, their removal.
2. Any vesting of the Solvency II RoE and Cumulative cash remittances elements of the LTIP are subject to a Solvency II
shareholder cover ratio that meets or exceeds the minimum of the stated working range (Range: 160% to 180%)
3. Reduction in weighted average carbon intensity (measured on a revenue basis) of shareholder and with-profit credit and
equity assets from a year end 2023 baseline
4. Customer measures re-based to reflect acquisitions during the year
5. Percentage of colleagues in senior leadership roles in the UK, Ireland and Canada who identify their ethnicity as anything other
than ‘white’
6. Percentage of colleagues in senior leadership roles in the UK, Ireland and Canada who are female
Payments to past directors (audited information)
There were no payments made to past directors during the year.
Payments for loss of office (audited information)
There were no payments for loss of office made during the year.
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Remuneration elements
Fixed pay
Annual bonus
LTIP
The table below sets out the total remuneration earned by each NED who served during 2024 for Group-related activities.
Table 7 Total 2024 remuneration for Non-Executive Directors (audited information)
Aviva plc
Subsidiaries6
Group
Fees
Benefits1
Total
Fees
Benefits1
Total
Total
2024
£000
2023
£000
2024
£000
2023
£000
2024
£000
2023
£000
2024
£000
2023
£000
2024
£000
2023
£000
2024
£000
2023
£000
2024
£000
2023
£000
Chair
George Culmer
550
550
26
15
576
565
—
—
—
—
—
—
576
565
NEDs
Cheryl Agius2
76
—
5
—
82
—
125
—
3
—
129
—
210
—
Andrea Blance
179
175
8
9
187
184
—
—
—
—
—
—
187
184
Ian Clark2
101
—
3
—
104
—
122
—
2
—
125
—
229
—
Mike Craston3
30
104
5
11
35
115
61
205
—
—
61
205
96
320
Patrick Flynn4
214
210
7
8
221
218
—
—
—
—
—
—
221
218
Shonaid Jemmett-Page
178
170
9
10
187
180
—
—
—
—
—
—
187
180
Mohit Joshi
105
105
1
4
106
109
—
—
—
—
—
—
106
109
Pippa Lambert
156
145
7
4
164
149
—
—
—
—
—
—
164
149
Neil Morrison2,5
57
—
30
—
87
—
41
—
—
—
41
—
128
—
Jim McConville
163
154
28
16
191
170
150
150
14
10
164
160
355
330
Michael Mire
104
100
3
6
106
106
—
—
—
—
—
—
106
106
Martin Strobel4
25
125
4
15
28
140
29
150
1
4
31
154
59
294
Total emoluments of NEDs7
1,936
1,838
138
98
2,074
1,935
529
505
21
14
550
519
2,624
2,454
1. Benefits include the gross taxable value of expenses relating to accommodation, travel and other expenses incurred through Company business in accordance with our expense policy and may vary year-on-year dependent on the time required to
be spent in the UK
2. Cheryl Agius was appointed to the Board on 21 May 2024, Ian Clark on 11 March 2024 and Neil Morrison on 17 June 2024
3. Mike Craston retired from the Board 16 April 2024 and Martin Strobel on 11 March 2024
4. Patrick Flynn was appointed as Senior Independent Director of Aviva plc on 7 September 2020
5. Canadian subsidiary fees have been calculated using a CAD to GBP exchange rate of 0.5713
6. Only the fees payable during time served as a director of Aviva plc are disclosed
7. Due to rounding, the totals above may be higher than the sum of individual elements
The Aviva plc total fees paid to NEDs in 2024 was £1,935,576, which is within the limits set
in the Company’s Articles of Association, as previously approved by shareholders.
Subsidiary company board memberships
During 2024, the following NEDs were appointed to subsidiary companies and received
emoluments in respect of those appointments:
• Cheryl Agius: Chair of Aviva Investors Holdings Limited (appointed 21 May 2024)
• Ian Clark: Chair of Aviva Insurance Limited (Chair 11 March 2024, NED for whole period)
• Mike Craston: Chair of Aviva Investors Holdings Limited (retired 16 April 2024)
• Jim McConville: Chair of both Aviva Life Holdings UK Limited and Aviva Life & Pensions
UK Limited
• Martin Strobel: Chair of Aviva Insurance Limited (retired 11 March 2024)
• Neil Morrison: Chair Designate of Aviva Canada Inc (appointed 25 July 2024)
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Percentage change in remuneration of the directors
Table 8 sets out the change in the basic salary, bonus and benefits of each of the directors
and that of the wider workforce.
The regulations require a comparison between the remuneration of each director and that
of all employees of the parent company on a full-time equivalent basis.
As Aviva plc has no direct employees, and in line with our approach in prior years, we have
voluntarily disclosed for the UK employee workforce.
The Group CEO and CFO are based in the UK (albeit with global responsibilities) and pay
changes across the Group vary widely depending on local market conditions.
Table 8 Percentage change in remuneration of the directors
2023-24
2022-23
2021-22
2020-21
Salary/Fees
Bonus
Benefits7
Salary/Fees
Bonus
Benefits7,8
Salary/Fees
Bonus
Benefits7,8
Salary/Fees
Bonus
Benefits
Group CEO¹
Amanda Blanc
4.0%
15.4 %
47.0%
4.4%
(5.0) %
(18.3) %
2.3%
13.3%
(51.4) %
0.0 %
47.2%
(23.9) %
Group CFO¹
Charlotte Jones
4.1%
11.9%
(19.6) %
3.6%
3.5%
141.1%
—
—
—
—
—
—
Chair¹
George Culmer
0.0%
—
73.4%
0.0%
—
6.0%
0.0%
—
74.8%
0.0%
—
57.7%
NEDs
Cheryl Agius2
—
—
—
—
—
—
—
—
—
—
—
—
Andrea Blance
2.1%
—
(8.9) %
0.0%
—
86.3%
—
—
—
—
—
—
Ian Clark2
—
—
—
—
—
—
—
—
—
—
—
—
Mike Craston3
(70.8) %
—
(51.2) %
4.5%
—
(26.4) %
—
—
—
—
—
—
Patrick Flynn1,4
1.8%
—
(17.7) %
0.0%
—
(9.6) %
0.0%
—
1433.4%
5.0%
—
(75.0) %
Shonaid Jemmett-Page1,5
4.4%
—
(3.9) %
9.2%
—
141.8%
83.0%
—
—
—
—
—
Mohit Joshi
0.0%
—
(58.2) %
0.0%
—
130.4%
0.0%
—
69.8%
—
—
—
Pippa Lambert1
7.8%
—
107.5%
0.0%
—
90.8%
17.0%
—
350.7%
—
—
—
Jim McConville6
2.9%
—
64.1%
15.0%
—
(16.5) %
55.3%
—
4997.8%
—
—
—
Michael Mire3
3.8%
—
(53.9) %
(19.7) %
—
57.8%
(7.8) %
—
484.0%
4.9%
—
10.5%
Neil Morrison2
—
—
—
—
—
—
—
—
—
—
—
—
Martin Strobel1, 3
(80.4) %
—
(72.6) %
31.6%
—
(51.6) %
67.2%
—
—
—
—
—
All UK-based employees
7.9%
22.1%
28.4%
9.5%
9.5%
2.4%
6.5%
2.1%
(14.2) %
3.8%
47.4%
34.8%
1. Salary/fees, annual bonus and benefit amounts for the EDs, the Chair and the NEDs have been annualised where applicable to reflect what they would have been over a full 12-month period to aid comparison
2. Cheryl Agius was appointed to the Board on 21 May 2024, Ian Clark on 11 March 2024 and Neil Morrison on 17 June 2024
3. Michael Mire stood down from the Risk Committee and Remuneration Committee on 14 September 2022. Mike Craston retired from the Board 16 April 2024 and Martin Strobel 11 March 2024.
4. Patrick Flynn was appointed as Senior Independent Director of Aviva plc and a Remuneration Committee member on 15 June and 7 September 2020 respectively
5. Shonaid Jemmett-Page joined the Audit Committee and the Risk Committee on 14 February 2022; she became chair of the Customer and Sustainability Committee on 17 May 2022
6. Jim McConville stood down as Chair of the Customer and Sustainability Committee, remaining a member, on 17 May 2022. He joined the Remuneration Committee on 1 February 2023.
7. The primary reason for the increase in UK taxable benefits in 2024 is due to the increased usage of our online recognition platform. The increase in taxable benefits for UK based employees in 2021, and subsequent decrease in 2022 has been mainly driven by the
one-off recognition in 2021 of colleagues for their hard work during the pandemic. The taxable benefits also increased in 2021 due to the increase in the cost of private medical insurance. Without these items, benefits would have increased by 8.4% in 2021
reflecting greater use of our online recognition platform.
8. The increase in benefits for NEDs in 2022 compared to 2021 is largely reflective of the return of taxable travel and subsistence costs after the pandemic. The reduction in benefits in 2021 compared to 2020 is largely reflective of reduced taxable travel and
subsistence costs due to the pandemic.
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Remuneration elements
Fixed pay
Annual bonus
LTIP
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Historical TSR performance and Group CEO remuneration outcomes
The table below compares the TSR performance of the Company over the past ten years
against the TSR of the FTSE 100. This index has been chosen because it is a recognised
equity market index of which Aviva plc is a member.
For additional context, the chart below also shows on a three-year basis the performance
against the FTSE 100 and median TSR performance for the LTIP comparator group.
The companies that comprise the 2024 LTIP group for TSR purposes are listed as part of
table 6.
Table 9
Three-year TSR performance against the FTSE 100 and the median of the 2024 LTIP
comparator group
Aviva plc ten-year TSR performance against the FTSE 100
The table below summarises the historical Group CEO single figure for total remuneration, and annual bonus and LTIP outcomes as a percentage of maximum over this period.
Table 10 Historical Group CEO remuneration outcomes
Group CEO
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Annual bonus payout
(as a % of maximum opportunity)
Amanda Blanc1
—
—
—
—
—
60.0%
88.3%
97.2%
88.1%
98.0%
Maurice Tulloch2
—
—
—
—
48.1%
—
—
—
—
—
Mark Wilson3
91.0%
91.0%
94.0%
42.0%
—
—
—
—
—
—
LTIP vesting
(as a % of maximum opportunity)
Amanda Blanc
—
—
—
—
—
—
—
72.2%
91.8%
76.6%
Maurice Tulloch
—
—
—
—
50.0%
—
—
—
—
—
Mark Wilson
53.0%
41.3%
36.9%
—
—
—
—
—
—
—
Group CEO single figure
of remuneration (£000)
Amanda Blanc
—
—
—
—
—
1,205
3,010
5,449
7,309
7,193
Maurice Tulloch
—
—
—
—
2,352
1,030
—
—
—
—
Mark Wilson
5,438
4,523
4,318
1,836
—
—
—
—
—
—
1. Amanda Blanc was appointed Group CEO on 6 July 2020
2. Maurice Tulloch was appointed Group CEO on 4 March 2019. Maurice stepped down as Group CEO and retired from the Board on 6 July 2020.
3. Mark Wilson joined the Board as an ED with effect from 1 December 2012 and became Group CEO on 1 January 2013. Mark stepped down as Group CEO and left the Board on 9 October 2018.
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FTSE 100
Aviva
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
0
100
200
48.0%
27.2%
11.2%
Aviva
FTSE 100
2024 TSR Group Median
.0%
50.0%
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Remuneration elements
Fixed pay
Annual bonus
LTIP
CEO Pay ratio reporting
The table below sets out the ratio at median, 25th and 75th percentile of the total
remuneration received by the Group CEO compared to the total remuneration received by
our UK employees. Total remuneration reflects all remuneration received by an individual
in respect of the relevant years, and includes salary, benefits, bonus, pension, and value
received from incentive plans.
Table 11 CEO Pay ratio table
Year
Method
P25
(lower quartile)
P50
(median)
P75
(upper quartile)
2024
Option A
210:1
149:1
91:1
2023
Option A
203:1
145:1
88:1
2022
Option A
181:1
127:1
76:1
2021
Option A
102:1
70:1
42:1
2020
Option A
80:1
56:1
34:1
2019
Option A
90:1
63:1
37:1
We would highlight the following in terms of the approach taken.
• In calculating the ratio for 2020, the single figure for both Amanda Blanc and Maurice
Tulloch in respect of their services as Group CEO were aggregated.
• In 2019, the single figure for Maurice Tulloch was aggregated with the pro rata fees for
Sir Adrian Montague as Executive Chairman.
• The P25, P50 and P75 employees were calculated based on full-time equivalent data as
at 31 December of the relevant years.
• Out of the three alternatives available for calculating the ratio, we chose to use Option A
as it is considered to be the most accurate way of identifying employees at P25, P50 and
P75, and is aligned with shareholder expectations. Under this approach we calculate
total remuneration on a full-time equivalent basis for all of our UK employees and rank
them accordingly.
The 2024 CEO pay ratio has remained relatively stable with a slight increase since the
calculation of the 2023 ratio. In previous years, various considerations affected the CEO
pay ratio:
• The difference between the 2023 and 2022 ratios reflected a pro-rata LTIP vesting for
the CEO, as well as 10% reduction for windfall gains.
• The 2021 ratio reflected no LTIP vesting for the CEO.
EDs receive a greater proportion of their remuneration in elements tied to performance,
including participation in the LTIP. This means that the pay ratio will vary in large part due
to incentive outcomes each year.
The total remuneration for each quartile employee has increased slightly since 2023.
Table 12 provides further information on the total remuneration figure for each quartile
employee, and the salary component within this.
Table 12 Salary and total remuneration used in the CEO pay ratio calculations
Year
Pay element
P25
(lower quartile)
P50
(median)
P75
(upper quartile)
2024
Salary
£26,850
£38,781
£65,000
Total remuneration
£34,269
£48,229
£79,257
In reviewing the employee pay data, the Committee is comfortable that the P25, P50
and P75 individuals identified appropriately reflect the employee pay profile at those
quartiles, and that the overall picture presented by the ratios is consistent with our pay,
reward and progression policies for UK employees.
At Aviva, we are equally focused on our colleagues as we are on our customers.
We recognise the individual needs of colleagues and we are proud of the reward, benefits
and overall career packages that we offer our colleagues:
• In the UK, we have been an accredited Real Living Wage employer since April 2014 and a
Real Living Hours employer since October 2020. Our salaries are at least 8% above Real
Living Wage to allow colleagues to save for their retirement and benefit from an employer
pension contribution up to 14% whilst still earning the Real Living Wage.
• In addition, in March 2023, Aviva was one of the first UK employers to be awarded the
Living Pension accreditation. This signifies that we provide a Living Pension savings level
which equates to 12% of a full-time real Living Wage salary, of which at least 7% comes
from Aviva as an employer. We have been at the forefront of campaigning to drive
proposals to abolish auto-enrolment contribution thresholds to enable more people to
save into a pension for their retirement.
• We have a structured salary progression scheme for our frontline colleagues, providing
salary increases to recognise colleagues as they develop and gain experience.
• We conduct regular market reviews of our salary ranges in order to maintain
competitiveness to market rates, and we move everyone who is below a band to at least
the minimum of that range each year.
• Our comprehensive, flexible benefits offering provides colleagues with the opportunity to
select the benefits that matter most to them, and our range of inclusive colleague policies
support life's big moments, including equal parental leave.
• UK colleagues are eligible to participate in the Savings Related Share Option Scheme 2017
(SAYE) and All Employee Share Ownership Plan (AESOP) offerings with similar plans
operating for many of our overseas colleagues. We are proud of the participation rates in
these plans, with over 60% participating in the SAYE and over 70% in the AESOP, meaning
colleagues both share in Aviva's success and benefit from tax-efficient savings.
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Relative importance of spend on pay
Table 13 outlines Group adjusted operating profit, dividends paid to shareholders and share
buybacks, compared to overall spend on pay in total. This measure of profit has been chosen
as it is used for decision-making and the internal performance management of the Group’s
operating segments.
Table 13 Relative importance of spend on pay
2024
£m
2023
£m
% change between
2024 – 2023
Group adjusted operating profit
1,767
1,467
20%
Ordinary dividends paid to shareholders
921
878
5%
Share buybacks1
300
300
—%
Total staff costs2
2,045
1,754
17%
1. On 1 July 2024, Aviva completed the share buyback programme originally announced on 7 March 2024 for up to a maximum
aggregate consideration of £300 million. During the period £300 million (2023: £300 million) of shares were purchased and
shares with a nominal value of £20 million (2023: £24 million) were cancelled, giving rise to an additional capital redemption
reserve of an equivalent amount. See note 31 for further details.
2. Total staff costs includes wages and salaries, social security costs, post-retirement obligations, profit sharing and incentive
plans, equity compensation plans and termination benefits. The average number of employees was 27,873 (2023: 25,529).
Statement of Directors’ shareholdings and share interests
Under our Shareholding Policy, the Company requires the Group CEO to build a shareholding in
the Company equivalent to 300% of basic salary and each ED to build a shareholding in the
Company equivalent to 225% of basic salary.
• The EDs are required to retain 50% of the net shares released from ABP and LTIP awards until
the shareholding requirement is met.
• The shareholding requirement needs to be built up over a period not exceeding five years.
• Unvested share awards, including shares held in connection with bonus deferrals, are not
taken into account in applying this test.
• A post-cessation holding period of two years applies. This is at the same level as the current
(within employment) guideline. The Committee retains the discretion to waive part or all of the
guideline where considered appropriate, for example in exceptional or compassionate
circumstances.
• EDs are required to retain shares vesting from incentive plans within the Company-sponsored
nominee account, and are not permitted to transfer them, e.g. into their own brokerage
accounts, unless otherwise agreed by the Committee. In this manner, the Committee is able to
retain oversight of the shares and is comfortable that this provides the ability to enforce the
post-cessation guidelines in practice and helps with the enforcement of malus and clawback.
Table 14 Executive Directors – share ownership requirement (audited information)
Shares held
Options held
Executive
Directors
Owned
outright1
Unvested and
subject to
performance
conditions2
Unvested and
subject to
continued
employment3
Unvested
and subject
to continued
employment
Vested
but not
exercised
Shareholding
requirement
(% of salary)
Current
shareholding4
(% of salary)
Requirement
met
Amanda
Blanc
1,410,276
2,479,895
569,318
—
—
300%
590%
Yes
Charlotte
Jones
22,019
1,055,150
154,255
—
—
225%
14%
No
1.
Directors’ beneficial holdings in the ordinary shares of the Company. This information includes holdings of any connected persons.
2. Awards granted under the Aviva LTIPs, which vest only if the performance conditions are achieved
3. Awards arising through the ABP. Under this plan, some of the earned bonuses are paid in the form of conditional shares which
are deferred for three years and released in three equal annual tranches. The transfer of the shares to the director at the end
of the period is not subject to the attainment of performance conditions but the shares can be forfeited if the ED leaves service
before the end of the period.
4. Based on the closing middle-market price of an ordinary share of the Company on 31 December 2024 of 468.8 pence. The
closing middle-market price of an ordinary share of the Company during the year ranged from 416.9 pence to 506.6 pence.
There were no changes to the EDs interests in Aviva shares during the period 1 January
2025 to 26 February 2025.
Table 15 Non-Executive Directors’ shareholdings1 (audited information)
1 January 2024
Number of shares
31 December 2024
Number of shares
George Culmer
210,175
210,175
Cheryl Aguis
—
15,000
Andrea Blance
15,000
30,000
Ian Clark
—
—
Patrick Flynn
7,600
7,600
Shonaid Jemmett-Page
10,490
10,490
Mohit Joshi
65,089
65,089
Pippa Lambert
12,739
17,886
Jim McConville
14,186
14,186
Michael Mire
38,000
38,000
Neil Morrison
—
100,000
1. This information includes holdings of any connected persons
There were no changes to the NEDs interests in Aviva shares during the period 1 January 2025
to 26 February 2025.
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Share awards and share options
Details of the EDs who were in office for any part of the 2024 financial year and hold or held
outstanding share awards or options over ordinary shares of the Company pursuant to
the Company’s share based incentive plans are set out in the table below.
EDs are eligible to participate in the Company’s broad-based employee share plans on the
same basis as other eligible employees.
Details of awards granted to EDs under these plans are also included in tables 1, 5 and 14.
More information around HMRC tax-advantaged plans can also be found in note 32. EDs
are restricted from entering into any form of hedging arrangement or remuneration and
liability-related insurance policies which might undermine the risk alignment features of
share awards (such as delivery in shares, performance conditions, malus and
clawback provisions).
Table 16 LTIP, ABP and options over Aviva shares (audited information)
At 1 January
2024
(number)
Options/awards
granted during year1
(number)
Options/awards
exercised/vesting
during year2
number)
Options/awards
lapsing during
year (number)
At 31 December
2024
(number)
Market price at
date awards
granted3
(pence)
SAYE exercise
price (options)
(pence)
Market price at
date awards
vested/option
exercised (pence)
Vesting date(s)/
exercise period(s)4
Amanda Blanc
LTIP5,6
2021
759,493
—
841,381
(62,279)
—
412.50
—
494.50
Mar-24
2022
825,471
—
—
—
825,471
426.30
—
—
Mar-25
2023
881,418
—
—
—
881,418
411.60
—
—
Mar-26
2024
—
773,006
—
—
773,006
495.00
—
—
Mar-27
ABP
2021
33,022
—
39,850
—
—
412.50
—
494.50
Mar-24
2022
185,115
—
106,077
—
92,558
426.30
—
494.50
Mar-25
2023
326,208
—
117,669
—
217,472
411.60
—
494.50
1/2: Mar-25
1/2: Mar-26
2024
—
259,288
—
—
259,288
495.00
—
—
1/3: Mar-25
1/3: Mar-26
1/3: Mar-27
Charlotte Jones
LTIP5,6
2022
358,195
—
—
—
358,195
426.30
—
—
Mar-25
2023
371,393
—
—
—
371,393
411.60
—
—
Mar-26
2024
—
325,562
—
—
325,562
495.00
—
—
Mar-27
ABP
2023
46,115
—
16,634
—
30,744
411.60
—
494.50
1/2: Mar-25
1/2: Mar-26
2024
—
123,511
—
—
123,511
495.00
—
—
1/3: Mar-25
1/3: Mar-26
1/3: Mar-27
1. The aggregate net value of share awards granted to the EDs in the period was £7.3 million (2023: £6.7 million). The net value has been calculated by reference to the closing middle-market price of an ordinary share of the Company at the date of grant.
2. The shares comprised in these vested awards include shares issued in lieu of dividends accrued during the deferral period
3. The actual price used to calculate the ABP and LTIP awards is based on a three-day average closing middle-market price of an ordinary share of the Company, prior to the date of main grant to employees. These were in 2021: 395 pence, 2022: 424 pence, 2023:
409 pence and 2024: 489 pence.
4. Vesting date(s)/exercise period(s) for awards outstanding at 31 December 2024. ABP awards are deferred and released in three equal annual tranches.
5. For the 2021 LTIP, the rTSR comparator group is: Aegon, Allianz, AXA, Direct Line Group, Generali, Intact, Legal & General, Lloyds Banking Group, M&G, Phoenix and Zurich Insurance Group. For the 2022 and 2023 LTIP, the rTSR comparator group is: Admiral,
Allianz, AXA, Direct Line Group, Hargreaves Lansdown, Hiscox, Intact, Legal & General, Lloyds Banking Group, M&G, Phoenix, Quilter and Zurich Insurance Group. For the 2024 LTIP, the rTSR comparator group is: Admiral, Direct Line Group, Hargreaves
Lansdown, Hiscox, Intact Financial, Legal & General, Lloyds Banking Group, M&G, Phoenix and Quilter.
6. The performance periods for these awards begin at the commencement of the financial year in which the award is granted and run for a three-year period
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Remuneration elements
Fixed pay
Annual bonus
LTIP
Dilution
Awards granted under Aviva employee
share plans, are satisfied primarily through
shares purchased in the market. Shares are
held in employee trusts, details of which
are set out in note 33.
The Company monitors the number of
shares issued under the Aviva employee
share plans and their impact on dilution
limits. The Company’s usage of shares
compared to the relevant dilution limits set
by the Investment Association in respect of
all share plans (10% in any rolling ten-year
period) and executive share plans (5% in any
rolling ten-year period) were 2.02% and
1.04% respectively on 31 December 2024.
Governance Regulatory
Remuneration Code
Aviva Investors Global Services Limited
(AIGSL) and a number of small ‘firms’ (as
defined by the FCA) within the Insurance,
Wealth & Retirement business are subject
to the Investment Firms Prudential Regime
(IFPR) and the Markets in Financial
Instruments Directive II (MiFID II).
Aviva Investors UK Funds Services Ltd and
Aviva Investors Luxembourg are subject to
the Alternative Investment Fund
Management Directive (AIFMD) and the
Undertakings for Collective Investments in
Transferable Securities (UCITS V) directive.
Remuneration Code requirements include
an annual disclosure. For AIFMD and
UCITS V the disclosure is part of the
Financial Statements and/or Annual
accounts of the Alternative Investment
Funds or UCITS.
For IFPR the 2024 AIGSL disclosure will be
found, when published, at
www.aviva.com/investors/regulatory-
returns/ along with the disclosure for the
UK Insurance firms.
Solvency II remuneration
Remuneration Requirements (PRA PS22/16
& SS10/16) apply to the Aviva Group.
Our remuneration structures have been
designed in a way that is compliant with
these requirements for all senior managers
across the Group, not just those identified
as being specifically covered by the
requirements of the regulation. Such
employees at Aviva are termed ‘Covered
Employees’. We are required to complete
a Remuneration Policy Statement, which
outlines how we have complied with each
of the requirements. This document is
approved annually by the Group
Remuneration Committee.
The Solvency II reporting requirements
for the year ended 31 December 2024
necessitate firms to produce the Solvency
and Financial Condition Report (SFCR)
which contains remuneration information
and is publicly available. Aviva’s reward
principles and arrangements are designed
to incentivise and reward employees for
achieving stated business goals in a manner
that is consistent with the Company’s
approach to sound and effective risk
management.
The Committee review and approve the list
of remuneration code staff and Solvency II
covered employees on an annual basis.
Table 17 Results of votes at AGM
Statement of voting at AGM
The results of the shareholder votes at the Company’s 2024 AGM in respect of
the Policy and DRR are set out in the below table. The Committee was pleased
with the level of support received from shareholders for the resolutions.
Directors’ Remuneration Policy
Directors’ Remuneration Report
Percentage of
votes cast
Number of votes cast
Year of
AGM
For
Against
For
Against
Votes
withheld
Policy
2024
97.66%
2.34%
1,559,031,728 37,360,745
1,236,255
DRR
2024
97.59%
2.41%
1,558,072,480 38,505,788
1,052,339
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l For
97.66%
l Against
2.34%
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l For
97.59%
l Against
2.41%
Approach to NED fees for 2024
NED fees are reviewed annually with a limited number of the fee
arrangements increased by the Board on 5 March 2024, effective
from 1 April 2024 as previously disclosed.
No further changes were made during the year.
Table 18 Non-Executive Directors’ fees
Role
Fee from 1 April
2024
Fee from 1 January
2024
Board Chair1
£550,000
£550,000
Board membership
£75,000
£75,000
Additional fees are paid as follows:
Senior Independent Director
£35,000
£35,000
Committee Chair (inclusive of committee membership fee):
Audit
£55,000
£55,000
Risk
£55,000
£55,000
Customer and Sustainability
£55,000
£45,000
Remuneration
£55,000
£45,000
Committee membership:
Nomination and Governance
£10,000
£10,000
Audit
£20,000
£20,000
Risk
£20,000
£20,000
Customer and Sustainability
£20,000
£15,000
Remuneration
£20,000
£15,000
1. Inclusive of Board membership fee and any committee membership fees, and committee Chair of the Nomination and Governance Committee
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Table 19 Operation of the Remuneration policy throughout the wider workforce
Element
Executive Directors
Executive Committee
Senior management
Wider workforce
Salary
Our principle is of pay equity for performing the same, or broadly similar, work, accounting for local market benchmarks and union/collective agreements,
where applicable.
Salaries are reviewed annually and consider factors including increases awarded to the wider colleague population.
Salaries are reviewed annually
subject to engagement with
employee representatives/unions
where applicable.
It is important that all colleagues
enjoy a reasonable standard of living
and we are proud to be both a Real
Living Wage and a Living Hours
employer in the UK.
Benefits
Eligible for a range of voluntary benefits and wellbeing provisions available to all colleagues in respective markets.
Colleagues can participate in a share matching plan (Aviva matches two shares for every one bought up to £50 per month) and, in the UK, the SAYE.
UK benefits include 8 times’ salary death-in-service. In addition, flexible benefits allow colleagues to add to and/or supplement where Company provisions
differ, e.g. private health benefit
Pension
Eligible to participate in Aviva’s UK defined contribution pension scheme with a 14% contribution (or where applicable receive cash in lieu).
Rates in Ireland are 14%, different rates apply in Canada in line with market.
Bonus Basis
Annual performance-related bonus based on Group, business unit (where applicable) and individual performance against goals.
Bonus Deferral
½ into shares
½ into shares
⅓ into shares
All paid in cash
Long-Term Incentive
LTIP share awards are subject to strategic performance measures
over three years.
Eligible for Restricted Share Awards
aligned with shareholder interests,
long-term Aviva performance and
retention of key talent.
Not eligible
Additional two-year holding period
post-vesting applies to EDs.
Additional holding period post-vesting
not applicable to ExCo.
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Remuneration elements
Fixed pay
Annual bonus
LTIP
The implementation of the Policy will be consistent with that outlined in table 21.
Table 20 How will our Policy be implemented in 2025?
Key element
Phasing
Implementation in 2025
2025
2026
2027
2028
2029
2030
Fixed
Pay
Group CEO
• Salary1: £1,232,000 per annum
Group CFO
• Salary1: £750,000 per annum
• Pension: 14% of salary in line with wider workforce
• Benefits: As outlined in the Policy
Annual
Bonus2,3
• Group CEO – 200% of salary
• Group CFO - 150% of salary
• One-year performance assessed against financial and strategic performance
measures
Financial measures (70% of total)
• 25% – Cash remittances
• 20% – Solvency II OFG
• 15% – Group adjusted operating profit
• 10% – Efficiency measures
Strategic measures (30% of total)
• Including: Risk scorecard, employee
engagement, OES and TNPS
• A quality of earnings assessment will be undertaken by the Committee to provide
assurance that bonus payouts appropriately reflect underlying performance and
the shareholder experience
• Individual performance during the year will be taken into account
LTIP3,4
• Group CEO – 350% of salary
• Group CFO - 225% of salary
• Performance assessed over three years against financial (80%) and non-financial
(20%) performance measures
• Performance measures (see LTIP measures and weightings for 2025 on next page)
Share
ownership
guidelines
• Group CEO – 300% of salary
• Group CFO - 225% of salary
• To be built up over a period not exceeding five years
• Post-cessation shareholding requirements also apply to EDs, equal to the guideline
or the holding on termination of employment, for two years post-cessation
1. Salaries will be effective from 1 April 2025
2. The target ranges are considered by the Board to be commercially sensitive and disclosure of these would put the Company at a disadvantage compared to its competitors. Target ranges will be disclosed in the 2025 DRR.
3. The Committee will continue to consider the impacts of any future acquisitions and disposals on targets
4. The 2025 LTIP grant will be based on 1 April 2025 salary
2024 Annual bonus outcomes
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Performance
period
1/2 paid
in cash
1/2 deferred into shares vesting in three equal
tranches over three years
1/3 released
after 1 year
1/3 released
after 2 years
1/3 released
after 3 years
Released
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Remuneration elements
Fixed pay
Annual bonus
LTIP
Performance period
2 year holding period
LTIP measures and weightings for 2025
Vesting
Below
threshold
Threshold
Maximum
Above
maximum
Measure
Weighting
0%
20%
20-100%
100%
100%
rTSR1
40.00%
Median
Upper Quartile
Cumulative cash remittances2
25.00%
£5.85bn
£6.35bn
Solvency II RoE2,3
15.00%
15%
17%
CO2 Intensity reduction vs 2019 baseline4
7.50%
56%
66%
Customer Scorecard: Customer Numbers (millions)
3.75%
21.1
21.5
Customer Scorecard: MPH (millions)
3.75%
5.70
5.90
Ethnically diverse employees in senior leadership roles5
2.50%
13.5%
15.0%
Females in senior leadership roles6
2.50%
42%
44%
The Committee will continue to consider the impacts of any future acquisitions and disposals on targets.
1. Aviva’s rTSR performance will be assessed against that of the following companies: Admiral, Direct Line Group, Hiscox, Intact Financial, Legal & General, Lloyds Banking Group, M&G, Phoenix and Quilter.
The performance period for the rTSR performance condition is the three years beginning 1 January 2025. For the purposes of measuring the rTSR performance condition, the Company’s TSR and that of the comparator
group will be based on the 90-day average TSR for the period immediately preceding the start and end of the performance period. If companies within the comparator group are subject to acquisition, the Committee will evaluate options including, but not limited
to, their removal.
2. For 2025 awards, the Solvency II shareholder cover ratio is to meet or exceed the minimum of the stated working range (Range: 160% to 180%)
3. The Committee is mindful of the volatile economic environment and the impact of significant changes in key external variables such as interest rates on RoE outcomes. The Committee therefore will keep the economic assumptions
and environment under review.
4. Reduction in CO2 intensity of shareholder and with-profits assets over the three-year performance period measured on an Economic Carbon Intensity basis (previous schemes measured on Weighted Average Carbon Intensity – Revenue basis) and is aligned to
Aviva Group’s wider ambition of delivering a 60% reduction in carbon intensity by 2030
5. Percentage of colleagues in senior leadership in the UK, Ireland and Canada who identify their ethnicity as anything other than 'white', excluding colleagues who have not disclosed their ethnicity
6. Percentage of colleagues in senior leadership roles in the UK, Ireland and Canada who are female
Approval by the Board
This Directors Remuneration Report
was reviewed and approved by the Board
on 26 February 2025.
Pippa Lambert
Chair of the Remuneration Committee
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Remuneration elements
Fixed pay
Annual bonus
LTIP
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The full and definitive Policy is set out in
our 2023 Annual Report and Accounts,
which can be found on our website at
www.aviva.com/reports/
Although reproduced here for convenience,
the 2024 Policy is our formally approved
Policy. Please note the updates to the
scenario charts to reflect 2025 remuneration
arrangements for our EDs, as well as
appointment end dates for NEDs.
Alignment of Group strategy with
executive remuneration
The Committee considers that alignment
between Group strategy and ED
remuneration is critical. The Policy
provides market competitive remuneration,
and incentivises EDs to achieve the annual
business plan and the longer-term strategic
objectives of the Group. Significant levels
of deferral, and within and post-employment
shareholding requirements, align EDs’
interests with those of shareholders and
aid retention of key personnel. As well as
rewarding the achievement of objectives,
variable remuneration can be zero
if performance thresholds are not met.
Remuneration payments to Directors can
only be made if they are consistent with
the approved Policy.
Table 21 provides an overview of the
Policy for EDs. The Policy for NEDs is in
table 23.
Table 21 Key aspects of the Policy for Executive Directors
Basic
salary
Purpose
To provide core market related
pay to attract and retain the
required level of talent.
Operation
Annual review, with changes normally
taking effect from 1 April each year.
The review is informed by:
• Individual and business
performance.
• Levels of increase for the
broader employee population.
• Relevant pay data including
market practice among relevant
FTSE listed companies of
comparable size to Aviva in
terms of market capitalisation,
large European and global
insurers, and UK financial
services companies.
Maximum opportunity
There is no maximum increase
within the Policy. However, basic
salary increases take account of
the average basic salary increase
awarded to the broader employee
population. Different levels of
increase may be agreed in certain
circumstances at the Committee’s
discretion, such as:
• An increase in job scope and
responsibility.
• Development of the individual
in the role.
• A significant increase in the
size, value or complexity of
the Group.
Assessment of performance
Any movement in basic salary
takes account of the performance
of the individual and the Group.
Element
Directors’ Remuneration Policy
Remuneration elements
Fixed pay
Annual bonus
LTIP
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Annual
bonus
Purpose
To reward EDs for achievement
against the Company’s strategic
objectives and for
demonstrating the Aviva values
and behaviours.
Deferral provides alignment
with shareholder interests and
aids retention of key personnel.
Operation
Awards are based on
performance in the year.
Targets are normally set
annually and pay-out levels are
determined by the Committee
based on performance against
those targets and a quality of
earnings assessment and risk
review.
Form and timing of payment
• 50% of any bonus is payable
in cash at the end of the year.
• 50% of any bonus awarded is
deferred into shares which
vest in three equal annual
tranches.
Additional shares are awarded
at vesting in lieu of dividends
paid on the deferred shares.
Malus and clawback
Cash and deferred awards are
subject to malus and clawback.
Details of when these may be
applied are set out in the
notes below.
Maximum opportunity
200% of basic salary for
Group CEO
150% of basic salary for other EDs
Outcome at threshold and on
target
Performance is assessed against
multiple measures. Threshold
performance against a single
measure would result in a bonus
payment of no more than 25% of
basic salary.
100% of basic salary is payable for
on target performance.
Assessment of performance
Performance is assessed against
a range of relevant financial,
employee, customer and risk
targets designed to incentivise
the achievement of our strategy,
as well as individual strategic
objectives as set by the
Committee.
Although financial performance
is the major factor in considering
overall expenditure on bonuses,
performance against non-financial
measures including progress
towards our strategic priorities and
behaviours in line with our values
will also be taken into
consideration.
Discretion
See notes to this table.
Element
Long-term
incentive plan
Purpose
To reward EDs for achievement
against the Company’s longer-
term objectives; to align EDs’
interests with those of
shareholders and to aid the
retention of key personnel and
to encourage focus on long-
term growth in enterprise value.
Operation
Shares are awarded annually
which vest dependent on the
achievement of performance
conditions. Vesting is subject
to an assessment of quality of
earnings, the stewardship of
capital and risk review.
Performance period
Three years. Additional shares
are awarded at vesting in lieu
of dividends on any shares
which vest.
Additional holding period
Two years.
Malus and clawback
Awards are subject to malus
and clawback. Details of when
these may be applied are set
out in the notes below.
Maximum opportunity
350% of basic salary.
Performance measures
Awards will vest based on a
combination of financial, rTSR and
strategic performance measures.
The Policy provides for a minimum
aggregate weighting of 80% for
financial measures and rTSR and
for up to 20% to be based on strategic
performance measures. We would
engage with shareholders before
changing measures or weighting
in future years.
For the 2025 awards the measures
and weightings will be:
• 40% rTSR
• 25% Cumulative cash
remittances
• 15% Solvency II RoE
• 20% Strategic measures:
• 7.5% CO2 intensity reduction
• 7.5% Customer scorecard
• 2.5% Ethnicity
• 2.5% Gender
Vesting at threshold
Threshold vesting for all
measures is 20%.
Discretion
See notes to this table.
Element
Directors’ Remuneration Policy
Remuneration elements
Fixed pay
Annual bonus
LTIP
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Pension
Purpose
To give a market competitive level of
provision for post-retirement income.
Operation
EDs are eligible to participate in a
defined contribution plan up to the
annual limit.
Any amounts above annual or
lifetime limits are paid in cash.
Maximum opportunity
If suitable employee contributions
are made, the Company contributes
14% of basic salary for all EDs,
aligned to the rate available to the
majority of the UK workforce.
Benefits
Purpose
To provide EDs with a suitable but
reasonable package of benefits as
part of a competitive remuneration
package. This involves both core
executive benefits, and the
opportunity to participate in
flexible benefits programmes
offered by the Company (via salary
sacrifice).
This enables us to attract and
retain the right level of talent
necessary to deliver the
Company’s strategy.
Operation
Benefits are provided on a market
related basis. The Company
reserves the right to deliver benefits
to EDs depending on their individual
circumstances, which may include
a cash car allowance, life insurance,
private medical insurance and
access to a company car and driver
for business use. In the case of
non-UK executives, the Committee
may consider additional allowances
in line with standard relevant
market practice.
EDs are eligible to participate in the
Company’s broad based employee
share plans on the same basis as
other eligible employees.
Maximum opportunity
Set at a level which the Committee
considers appropriate against
comparable roles in companies
of a similar size and complexity
to provide a reasonable level
of benefit.
Costs would normally be limited
to providing a cash car allowance,
private medical insurance, life
insurance, and reasonable travel
benefits (including the tax cost
where applicable). In addition,
there may be one-off or
exceptional items on a case by
case basis, which would be
disclosed in the DRR.
Element
Relocation
and mobility
Purpose
To assist with mobility across the
Group to ensure the appropriate
talent is available to execute
strategy locally.
Operation
EDs who are relocated or
reassigned from one location to
another receive relevant benefits
to assist them and their dependants
in moving home and settling into
the new location.
Maximum opportunity
Dependent on location and family
size, benefits are market related
and time bound. They are not
compensated for performing the
role but to defray costs of a
relocation or residence outside
the home country.
The Committee would reward no
more than it judged reasonably
necessary, in the light of all
applicable circumstances.
Shareholding
requirements
Purpose
To align EDs’ interests with those
of shareholders.
Operation
A requirement to build a shareholding
in the Company equivalent to 300%
of basic salary for the Group CEO
and 225% for other EDs.
This shareholding is normally
to be built up over a period not
exceeding five years (subject to
the Committee’s discretion where
personal circumstances dictate).
Post-cessation shareholding
requirements also apply to EDs
being the lower of 300% of basic
salary for the Group CEO and 225%
for other EDs, or the holding on
termination of employment, for
two years post-cessation.
Element
Directors’ Remuneration Policy
Remuneration elements
Fixed pay
Annual bonus
LTIP
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Notes to the table:
Performance measures
For the annual bonus, performance
measures are chosen to align to the
Group’s key performance indicators and
include financial, strategic, risk, employee
and customer measures. Achievement
against individual strategic objectives is
also taken into account.
LTIP performance measures are chosen to
provide an indication of both absolute and
relative return generated for shareholders.
In terms of target setting, a number of
reference points are taken into account
each year including, but not limited to,
the Group’s business plan and external
market expectations of the Company.
Maximum payouts require performance
that significantly exceeds expected
performance under both the annual
bonus and the LTIP.
Quality of earnings assessments
Throughout the year, the Committee
engages in a regular quality of earnings
assessment. A quality of earnings
assessment sign-off is the final step in
determining annual bonus scorecard
outcomes, and is performed before vesting
is determined against financial measures
under the LTIP.
As a minimum, at any Committee meeting
where LTIP vesting or annual bonus
scorecard decisions are considered, the
Financial Controller or equivalent prepares
a report to the Committee on the quality
of earnings reflected in the results being
assessed, against performance targets.
Extensive information from the audited
accounts is used to explain the vesting
and scorecard outcomes – ranging from
movements in reserves, capital
management decisions, consistency of
accounting treatment and period to period
comparability. The Financial Controller or
equivalent attends the Committee meeting
to answer any questions that any member
of the Committee may choose to ask. Any
vesting decision or confirmation of awards
is made after this process has been
undertaken.
Malus and clawback
The circumstances when malus (the
forfeiture or reduction of unvested shares
awarded under the ABP and LTIP) and
clawback (the recovery of cash and share
awards after release) may apply include
(but are not limited to) where the
Committee considers that the employee
concerned has been involved in or
partially/wholly responsible for:
• A materially adverse misstatement (as
defined by the Board) of the Company’s
financial statements, or a misleading
representation of performance;
• A significant failure of risk management
and/or controls;
• A scenario or event which causes
material reputational damage to the
Company;
• A scenario or event which causes
material corporate failure;
• Any regulatory investigation or breach of
laws, rules or codes of conduct;
• Misconduct which, in the opinion of the
Committee, ought to result in the
complete or partial lapse of an award;
• Conduct which resulted in significant
loss(es) or summary termination of
employment;
• Failure to meet appropriate standards of
fitness and propriety;
• A material error (as defined by the Board)
in the calculation of a financial or
strategic measure used to determine the
outcome of variable pay, or any other
error or material misstatement that
results in overpayment to employees;
• Any circumstances determined by the
Board that mean the underlying financial
health of the Group or member of the
Group has significantly deteriorated,
resulting in severe financial constraints
which preclude or limit the ability to fund
variable pay; and
• Any other circumstance required by
local regulatory obligations or that, in the
Board’s opinion, justifies the reduction
or repayment of variable pay.
The clawback period runs for two years
from the date of payment in the case of the
cash element of any annual bonus award.
For deferred bonus elements and LTIP
awards, the overall malus and clawback
period is five years from the date of grant.
Discretions
The discretions the Committee has in
relation to the operation of the ABP and
LTIP are set out in the plan rules. In relation
to the outcomes under these plans, the
Committee has unfettered discretion to
adjust upward or downward (including to
nil) the mechanical outcome where it
considers that:
• The outcome does not reflect the
underlying financial or strategic
performance of the participant or
the Group over the relevant period;
• The outcome is not appropriate in
the context of circumstances that
were unexpected or unforeseen at
the award date;
• There exists any other reason why
an adjustment is appropriate; and/or
• It is appropriate to do so, taking into
account a range of factors, including
the management of risk and good
governance and, in all cases, the
experience of shareholders.
Other discretions include, but are not
limited to, the ability to set additional
conditions and the discretion to change or
waive those conditions. Such discretions
would only be applied in exceptional
circumstances, to ensure that awards
properly reflect underlying business
performance. Any use of the discretions
and how they were exercised will be
disclosed, where relevant, in the DRR
and, where appropriate, be subject to
consultation with Aviva’s shareholders.
Change in control
In the event of a change in control, unless
a new award is granted in exchange for
an existing award, or if there is a significant
corporate event like a demerger, awards
under the LTIP would normally vest to
the extent that the performance conditions
have been satisfied as at the date of
the change in control, and unless the
Committee decides otherwise, would be
pro-rated to reflect the time between the
date of grant and the change in control
event. Awards under the ABP would
normally vest on the date of the change
in control and may vest if there is a
significant corporate event.
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Consistency of executive Policy
across the Group
The Policy for our EDs is designed as part
of the remuneration philosophy and
principles that underpin remuneration for
the wider Group. Remuneration arrangements
for colleagues below the EDs take account
of the seniority and nature of the role,
individual performance and local market
practice. The components and levels of
remuneration for different colleagues may
therefore differ from the Policy for EDs.
Any such elements are reviewed against
market practice and approved in line with
internal guidelines and frameworks.
Differentiation in reward outcomes based
on performance and behaviour that is
consistent with the Aviva values is a feature
of how Aviva operates its annual bonus
plan for its senior leaders and managers
globally.
A disciplined approach is taken to
moderation across the Company in order to
recognise and reward the key contributors.
The allocation of LTIP awards also involves
strong differentiation, with expected
contribution and ability to collaborate
effectively in implementation of the
strategy driving award levels.
Legacy payments
The Committee reserves the right to make
any remuneration payments and payments
for loss of office (including exercising any
discretions available to it in connection with
such payments) notwithstanding that they
are not in line with the Policy set out above,
where the terms of the payment were
agreed (i) before May 2014 (the date the
Company’s first Policy came into effect),
(ii) before the Policy set out above came
into effect, provided that the terms of the
payment were consistent with the Policy in
force at the time they were agreed, or (iii)
at a time when the relevant individual was
not a director of the Company and, in the
opinion of the Committee, the payment
was not in consideration for the individual
becoming a director of the Company.
For these purposes, ‘payments’ includes
the Committee satisfying awards of variable
remuneration and, in relation to an award
over shares, the terms of the payment are
‘agreed’ at the time the award is granted.
Approach to recruitment
remuneration
On hiring a new ED, the Committee would
align the proposed remuneration package
with the Policy in place for EDs at the time
of the appointment.
In determining the actual remuneration for
a new ED, the Committee would consider
the package in totality, taking into account
elements such as the skills and experience
of the individual, local market benchmarks,
remuneration practice, and the existing
remuneration of other senior executives.
The Committee would ensure any
arrangements agreed would be in the best
interests of Aviva and its shareholders.
It would seek not to pay more than
necessary to secure the right candidate.
Where considered appropriate the
Committee may make awards on hiring
an external candidate to ‘buyout’
remuneration arrangements forfeited on
leaving a previous employer. In doing so,
the Committee would take account of
relevant factors including any performance
conditions attached to these awards, the
form in which it was paid (e.g. cash or
shares) and the timeframe of awards.
Buyout awards would be awarded on
a ‘like for like’ basis compared to
remuneration being forfeited, and would
be capped to reflect the value being
forfeited. The Committee considers that a
buyout award is a significant investment in
human capital by Aviva, and any buyout
decision will involve careful consideration
of the contribution that is expected from
the individual.
The maximum level of variable pay which
could be awarded to a new ED, excluding
any buyouts, would be in line with the
Policy set out above and would therefore
be no more than 550% of basic salary for
the Group CEO (200% of basic salary
annual bonus opportunity and 350% of
basic salary as the face value of a LTIP
grant) and 500% of basic salary for other
EDs (150% of basic salary annual bonus
opportunity and 350% of basic salary as
the face value of a LTIP grant).
All other elements of remuneration will also
be in line with the Policy set out above.
Should the Company have any prior
commitments outside of this Policy in
respect of an employee promoted
internally to an ED position, the Committee
may continue to honour these for a period
of time. Where an ED is appointed from
within the organisation, the normal policy
of the Company is that any legacy
arrangements would be honoured in line
with the original terms and conditions.
Similarly, if an ED is appointed following
Aviva’s acquisition of, or merger with,
another company, legacy terms and
conditions may be honoured.
On appointing a new NED, the Committee
would align the remuneration package with
the Policy for NEDs, outlined in table 23,
including fees and travel benefits.
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Illustration of the Policy
The charts below illustrate how much EDs could earn under different performance
scenarios in one financial year:
• Minimum – basic salary, pension
or cash in lieu of pension and
benefits, no bonus and no vesting
of the LTIP.
• Target - basic salary, pension or
cash in lieu of pension, benefits, and:
– A bonus of 100% and a LTIP of
350% of basic salary (with notional
LTIP vesting at 50% of maximum)
for the Group CEO.
– A bonus of 100% and a LTIP of
225% of basic salary (with notional
LTIP vesting at 50% of maximum)
for the Group CFO.
• Maximum – basic salary, pension or
cash in lieu of pension, benefits, and:
– A bonus of 200% and a LTIP of
350% of basic salary (with notional
LTIP vesting at maximum) for the
Group CEO.
– A bonus of 150% and a LTIP of
225% of basic salary (with notional
LTIP vesting at maximum) for the
Group CFO.
• Maximum with share price
appreciation – indicative maximum
remuneration, assuming a notional
LTIP vesting at maximum and
share price appreciation of 50%
on the LTIP.
Potential earnings by pay element - Amanda Blanc
Potential earnings by pay element - Charlotte Jones
Notes to the charts
1. The charts are illustrative only and the actual value EDs could earn is subject to business performance and share
price movement to the date of vesting of the LTIP and of the deferred share element of the annual bonus
2. Fixed pay consists of basic salary, pension as described in table 1, and estimated value of benefits provided under
the Policy, excluding any one-offs. Actual figures may vary in future years.
3. The value of the deferred element of the annual bonus assumes a constant share price and does not include
additional shares awarded in lieu of dividends that may accrue during the vesting period
4. The value of the LTIP assumes a constant share price (with the exception of the maximum with share price
increase scenario) and does not include additional shares awarded in lieu of dividends that may accrue during the
vesting period
5. The LTIP is as proposed to be awarded in 2025, which would vest in 2028, subject to the satisfaction of
performance conditions. The shares would then be subject to a further two-year holding period.
Directors’ Remuneration Policy
141
£m
2025 Minimum
2025 Target
2025 Maximum
2025 Maximum with
share price
appreciation
0.0
5.0
10.0
£m
£0.9
£2.5m
£3.7m
£4.5m
2025 Minimum
2025 Target
2025 Maximum
2025 Maximum with
share price
appreciation
0.0
2.5
5.0
£1.5m
25%
30%
44%
62%
24%
14%
52%
30%
18%
£8.2m
£10.4m
100%
56%
25%
19%
46%
31%
24%
30%
35%
34%
£4.9m
Remuneration elements
Fixed pay
Annual bonus
LTIP
Aviva plc
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100%
Employment contracts and letters of appointment
ED employment contracts and NED letters of appointment are available for inspection at the
Company’s registered office during normal hours of business, and at the place of the
Company’s 2025 AGM on 30 April 2025 from 09.00am until the close of the meeting.
The key employment terms and conditions of the current EDs, and those who served during
the year, as stipulated in their employment contracts, are set out in the table below.
Table 22 Executive Directors’ key conditions of employment
Provision
Policy
Notice period
By the ED
By the Company
6 months.
12 months, rolling. No notice or payment in lieu of notice to be paid where
the Company terminates for cause.
Termination
payment
Pay in lieu of notice up to a maximum of 12 months’ basic salary.
Any payment is subject to phasing and mitigation requirements. An ED
would be expected to mitigate the loss of office by seeking alternative
employment. Any payments in lieu of notice would be reduced, potentially
to zero, by any salary received from such employment.
Remuneration
and benefits
The operation of the annual bonus and LTIP is at the Company’s discretion.
Expenses
Reimbursement of expenses reasonably incurred in accordance with
their duties.
Holiday
entitlement
30 working days plus public holidays.
Private medical
insurance
Private medical insurance is provided for the ED and their family. The ED
can choose to opt out of this benefit or take a lower level of cover.
However, no payments are made in lieu of reduced or no cover.
Other benefits
Other benefits include participation in the Company’s staff pension
scheme, life insurance and, where applicable, access to a Company car
and driver for business related use.
Sickness
100% of salary for the first 52 weeks and up to £150,000 per annum for
a further 5 years.
Non-compete
During employment and for nine months after leaving (less any period
of garden leave) without the prior written consent of the Company.
Contract dates
Director Date current contract commenced
Amanda Blanc 6 July 2020
Charlotte Jones 5 September 2022
Policy on payment for loss of office
There are no pre-determined ED special
provisions for compensation for loss of
office. The Committee has the ability to
exercise its discretion on the final amount
actually paid. Any compensation would be
based on basic salary, pension entitlement
and other contractual benefits during the
notice period, or a payment made in lieu
of notice, depending on whether the
notice is worked.
Where notice of termination of a contract
is given, payments to the ED would
continue for the period worked during the
notice period. Alternatively, the contract
may be terminated, and phased monthly
payments made in lieu of notice for, or for
the balance of, the 12 months’ notice
period. During this period, EDs would be
expected to mitigate their loss by seeking
alternative employment. Payments in lieu
of notice would be reduced by the salary
received from any alternative employment,
potentially to zero. The Company would
typically make a reasonable contribution
towards an ED’s legal fees in connection
with advice on the terms of their departure.
There is no automatic entitlement to an
annual bonus for the year in which loss
of office occurs. The Committee may
determine that an ED may receive a pro
rata bonus in respect of the period of
employment during the year loss of office
occurs based on an assessment of
performance. Where an ED leaves the
Company by reason of death, disability or
ill health, or any other reason determined
by the Committee, there may be a payment
of a pro rata bonus for the relevant year at
the discretion of the Committee.
The treatment of leavers under the ABP
and LTIP is determined by the rules of the
relevant plans. Good leaver status under
these plans would be granted in the event
of, for example, the death of an ED. Good
leaver status for other leaving reasons is
at the discretion of the Committee, taking
into account the circumstances of the
individual’s departure, but would typically
include planned retirement, or their
departure on ill health grounds.
In circumstances where good leaver status
has been granted, awards may still be
subject to malus and clawback in the event
that inappropriate conduct of the ED is
subsequently discovered post departure,
and retirees are subject to post-activity
restrictions which allow the Committee
to reduce or recover awards if certain
employment is taken elsewhere. If good
leaver status is not granted, all outstanding
awards will lapse.
In the case of LTIP awards, where the
Committee determines an ED to be a good
leaver, vesting is normally based on the
extent to which performance conditions
have been met at the end of the relevant
performance period, and the proportion
of the award that vests is pro-rated for
the time from the date of grant to final date
of service (unless the Committee decides
otherwise). Any decision not to apply
this would only be made in exceptional
circumstances and would be fully
disclosed. It is not the practice to allow
such treatment.
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Consideration of wider employee
pay and shareholder views
When determining the Policy and arrangements
for our EDs, the Committee considers:
• Pay and employment conditions elsewhere
in the Group to ensure that pay structures
are suitably aligned and that levels of
remuneration remain appropriate. The
Committee reviews levels of basic salary
increases for other employees and
executives based on their respective
locations. It reviews changes in overall
bonus pool funding and long-term
incentive grants. The Committee considers
feedback on pay matters from sources
including the employee opinion survey and
employee forums. The Committee also
takes into account information provided by
the people function and external advisers
and the Committee Chair has in place a
programme of consultation and meetings
with employee forums including trade
unions, Your Forum and the Evolution
Council to discuss remuneration.
• In its ongoing dialogue with shareholders,
the Committee seeks shareholder views
and takes them into account when any
significant changes are being proposed
to remuneration arrangements and when
formulating and implementing the Policy.
For example, there was detailed
engagement with our largest shareholders
regarding the proposed Policy during 2023.
Non-Executive Directors
The table below sets out details of our Policy for NEDs.
Table 23 Key aspects of the Policy for Non-Executive Directors
Chair and
NEDs’ fees
Purpose
To attract individuals with the required range of skills and experience to serve
as a Chair or as a NED.
Operation
NEDs receive a basic annual fee in respect of their Board duties. Further fees
are paid for membership and, where appropriate, chairing Board committees.
The Chair receives a fixed annual fee. Fees are reviewed annually taking into
account market data and trends and the scope of specific Board duties. NEDs are
able to use up to 100% of their post-tax base fees to acquire shares in Aviva plc.
The Chair and NEDs do not participate in any incentive or performance plans or
pension arrangements and do not receive an expense allowance.
NEDs are reimbursed for reasonable expenses, and any tax arising on those
expenses is settled directly by Aviva. To the extent that these are deemed taxable
benefits, they will be included in the DRR, as required.
NEDs may be provided with benefits, if deemed appropriate including health
and wellbeing benefits.
Maximum opportunity
The Company’s Articles of
Association provide that the
total aggregate remuneration
paid to the Chair of the Company
and NEDs will be determined
by the Board within the limits
set by shareholders and
detailed in the Company’s
Articles of Association.
Chair’s travel
benefits
Purpose
To provide the Chair with suitable travel arrangements for them to discharge their
duties effectively.
The Chair has access to a
company car and driver for
business use. Where these are
deemed a taxable benefit, the
tax is paid by the Company.
NED travel and
accommodation
Purpose
To reimburse NEDs for appropriate business travel and accommodation, including
attending Board and committee meetings.
Operation
Reasonable costs of travel and
accommodation for business
purposes are reimbursed to
NEDs. On the limited occasions
when it is appropriate for a
NED’s spouse or partner to
attend, such as a business
event, the Company will meet
these costs. The Company will
meet any tax liabilities that may
arise on such expenses.
Element
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The NEDs, including the Chair of the Company, have letters of appointment which set
out their duties and responsibilities. The key terms of the appointments are set out in the
table below.
Table 24 Non-Executive Directors’ key terms of appointment
Provision
Policy
Period
In line with the requirement of the Code, all NEDs, including the Chair,
are subject to annual re-election by shareholders at each AGM.
Termination
By the director or the Company at their discretion without compensation
upon giving one month’s written notice for NEDs and three months written
notice for the Chair of the Company.
Fees
As set out in table 18.
Expenses
Reimbursement of travel and other expenses reasonably incurred in the
performance of their duties.
Time commitment
Each director must be able to devote sufficient time to the role in order
to discharge responsibilities effectively.
Director
Appointment date1
Appointment end date2
Committee
George Culmer
25 September 2019
AGM 2025
Cheryl Agius
21 May 2024
AGM 2025
Andrea Blance
21 February 2022
AGM 2025
Ian Clark
11 March 2024
AGM 2025
Patrick Flynn
16 July 2019
AGM 2025
Shonaid Jemmett-Page
20 December 2021
AGM 2025
Mohit Joshi
1 December 2020
AGM 2025
Pippa Lambert
1 January 2021
AGM 2025
Jim McConville
1 December 2020
AGM 2025
Michael Mire
12 September 2013
AGM 2025
Neil Morrison
17 June 2024
AGM 2025
1. The dates shown reflect the date the individual was appointed to the Aviva plc Board
2. All appointment end dates are the 2025 AGM, in accordance with the NEDs' letters of appointment
Committee membership key
Nomination and Governance Committee
Audit Committee
Risk Committee
Customer and Sustainability Committee
Remuneration Committee
Chair
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Disclosure
Pages
Accounting policies
164 to 180
Agreement for compensation for loss of office because of a takeover bid
148
Appointment and removal of directors
145
Board of Directors
145
Change of control
148
Changes to the Articles of Association
148
Corporate governance statement
149
Culture
53 to 55, 90
Directors’ indemnities
145
Directors’ training
89
Disclosure of information to the auditors
149
Dividends
147
Dividend waivers
225
Engagement with employees
49, 54, 85
Engagement with suppliers, customers and others
48 to 52
Employment of disabled people
55
Financial instruments and risk management
216, 217, 219
269, 281, 283
Future developments
2 to 83
Greenhouse gas emissions
69 to 73
Hedging policy
281
Major shareholders
147
Political donations
148
Purchase of own shares
147
Related party transactions
284
Research and development
2 to 83
Share capital and rights
147
Subsequent events
300
Subsidiaries, joint ventures and associates
286
In accordance with Section 415 of the Companies Act 2006 (the Act), the directors present
their report for the year ended 31 December 2024. Other sections of the Annual Report and
Accounts have been deemed to be incorporated into the Directors’ Report by reference
and the table to the left details where required disclosures can be found. In accordance
with section 414C(11), some disclosures have been included in the Strategic report.
Directors
The Company’s directors who served during the financial year ended 31 December 2024
were George Culmer, Amanda Blanc, Charlotte Jones, Cheryl Agius, Andrea Blance,
Ian Clark, Mike Craston, Patrick Flynn, Shonaid Jemmett-Page, Mohit Joshi, Pippa Lambert,
Jim McConville, Michael Mire, Neil Morrison and Martin Strobel.
Appointment and removal of directors
The rules regarding the appointment and removal of directors are contained in the Company’s
Articles of Association (the Articles) and all appointments are made in accordance with the
UK Corporate Governance Code 2018 (the Code). All directors must submit themselves for
re-election each year at the AGM. Under the Articles, the Board can appoint additional
directors or appoint a director to fill a casual vacancy.
Powers of directors
The powers of directors are described in the Aviva plc Matters Reserved for the Board and
the Articles, both of which can be found on our website. The powers of the Company’s
directors are subject to relevant legislation and, in certain circumstances (including in
relation to the issue or buying back by the Company of its shares), are subject to authority
being given to the directors by shareholders at a general meeting. At the 2025 Annual
General Meeting (AGM), shareholders will be asked to renew the directors’ authority to
allot new securities and buy back Company shares. Details will be contained in the Notice
of 2025 AGM (the Notice) due to be published at the end of March 2025.
Directors’ indemnities and insurance
In accordance with the Articles, the Company has granted qualifying third-party indemnity
provisions for the benefit of each person who was a director of the Company during the year,
in respect of liabilities that may attach to them in their capacity as directors of the Company
or of associated companies. These indemnities were in force during the financial year and
remain in force. Throughout the year, the Company has also purchased and maintained
directors’ and officers’ liability insurance in respect of itself, its directors, and others.
The Company has also granted qualifying third-party indemnities to the directors of the
Group’s subsidiary companies. These indemnities were in force during the financial year
and remain in force.
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Director and senior management diversity
In accordance with Listing Rule 6.6.6R(10), the following tables set out numerical data on
the sex and ethnic background of the Company’s directors and ‘executive management’,
being members of the Group Executive Committee and the Group Company Secretary,
as at 31 December 2024.
Data concerning sex and ethnic background is collected directly from individuals.
The Company's directors and members of Group Executive Committee are required
to complete a diversity declaration upon joining the Company and are required to
complete a form on an annual basis.
(a) Table for reporting on sex
Number
of Board
members
Percentage
of the Board
Number
of senior
positions on
the Board
(CEO, CFO,
SID and
Chair)
Number in
executive
management
Percentage
of executive
management
Male
7
54 %
2
7
54 %
Female
6
46 %
2
6
46 %
Not specified/
prefer not to say
—
— %
—
—
— %
(b) Table for reporting on ethnic background
Number
of Board
members
Percentage
of the Board
Number
of senior
positions on
the Board
(CEO, CFO,
SID and
Chair)
Number in
executive
management
Percentage
of executive
management
White British or
other White
(including
minority-white
groups)
12
92 %
4
13
100 %
Mixed/Multiple
Ethnic Groups
—
— %
—
—
— %
Asian/Asian
British
1
8 %
—
—
— %
Black/African/
Caribbean/
Black British
—
— %
—
—
— %
Other ethnic group
—
— %
—
—
— %
Not specified/
prefer not to say
—
— %
—
—
— %
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Share capital
At 31 December 2024, the Company’s issued share capital comprised:
Number of shares
% of total capital
Type
Nominal value
2,677,649,489
82.00%
Ordinary Shares
3217/19 pence each
200,000,000
18.00%
Preference Shares
£1 each
The Ordinary Shares are listed on the London Stock Exchange (LSE) under the 'Equity
shares (commercial companies)' category and the Preference Shares are listed on the LSE
under the 'Non-equity shares and non-voting equity shares' category. All the Company’s
shares in issue are fully paid up, the Company held no treasury shares during the year or up
to the date of this report, and the free float percentage of voting rights is 100. Further
details of the Company’s issued share capital, together with information on movements in
the Company’s issued share capital during the year, can be found in note 31 and note 34 of
the financial statements. The categories of ordinary shareholders and the range and size of
shareholdings can be found at www.aviva.com/investors/shareholder-profile.
Share class rights
Rights and obligations attaching to the Company’s shares are set out in the Articles. No person
holds securities in the Company carrying special rights with regard to control of the Company.
Restrictions on transfer of securities or voting rights
With the exception of restrictions under the Company’s employee share incentive plans,
where the shares are subject to the plan rules, there are no restrictions on the voting rights
attaching to the Company’s ordinary shares or the transfer of securities in the Company.
The Company is not aware of any agreements between holders of securities that may result
in restrictions on the transfer of securities or voting rights.
Rights attaching to shares under employee share schemes
Where, under an employee share incentive plan operated by the Company, participants
are the beneficial owners of shares but not the registered owners, the voting rights are
normally exercised at the discretion of the participants.
Authority to purchase own shares
At the 2024 AGM, shareholders renewed the Company’s authorities to make market
purchases of up to 273 million ordinary shares, up to 100 million preference shares of 8¾%
each and up to 100 million preference shares of 8⅜% each. No shares have been purchased
under this authority.
At the 2025 AGM, shareholders will be asked to renew the authorities to buy the
Company’s shares for another year and the resolution in relation to the ordinary shares will
once again propose a maximum aggregate number of ordinary shares which the Company
can purchase of less than 10% of the issued ordinary share capital. Details will be contained
in the Notice due to be published at the end of March 2025.
Acquisition of own shares
On 1 July 2024, Aviva completed the share buyback programme of ordinary shares
originally announced on 7 March 2024 for an aggregate purchase price of up to
£300 million. In total, 62,815,617 ordinary shares of 3217/19 pence each were repurchased
for an aggregate consideration of £300 million and a nominal value of c.£21 million.
Overall, the number of shares in issue is reduced by 62,815,617 in respect of shares
acquired and cancelled under the buyback programme. Net of new shares issued, in
respect of the Company’s employee share plans, during the period from 7 March 2024
to 1 July 2024, the number of shares in issue reduced by 62,815,617.
Details of shares purchased, held, or disposed by employee share plan trusts on the
recommendation of the Company in 2024 for use in conjunction with the Company’s
employees’ share plans are set out in note 32 to the financial statements.
Major shareholders
The table below shows the holdings of major shareholders in the Company’s issued
ordinary share capital in accordance with section 5.1.2 of the Disclosure Guidance and
Transparency Rules (DTRs) notified to the Company as at 31 December 2024 and 26
February 2025. Information provided to the Company under the DTRs is publicly available
via the regulatory information services and on the Company’s website.
As at 31 December 2024
As at 26 February 2025
Shareholder
Date of change
in interest
% of issued ordinary
share capital
Date of change
in interest
% of issued ordinary
share capital
BlackRock, Inc.
26 November 2015
5.01%
26 November 2015
5.01%
Dodge & Cox
23 August 2024
4.99%
23 August 2024
4.99%
Norges Bank
3 August 2024
2.99%
3 August 2024
2.99%
Dividends
Dividends for ordinary shareholders of Aviva plc are as follows:
• Paid interim dividend of 11.9 pence per 3217/19 pence ordinary share (2023: 11.1 pence per
3217/19 pence ordinary share).
• Proposed final dividend of 23.8 pence per 3217/19 pence ordinary share (2023: 22.3 pence
per 3217/19 pence ordinary share). Total ordinary dividend of 35.70 pence per 3217/19 pence
ordinary share (2023: 33.4 pence per 3217/19 pence ordinary share).
• Total cost of ordinary dividends paid in 2024 was £921 million (2023: £878 million).
Information about our dividend policy and historical dividend payments can be found at
www.aviva.com/investors/dividends.
Directors’ report
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Articles of association
Unless expressly stated to the contrary in the Articles, the Company’s Articles may only be
amended by special resolution of the shareholders. The Company’s current Articles were
adopted on 2 May 2024.
Change of control
There are a number of agreements that take effect, alter, or terminate upon a change of
control of the Company following a takeover bid, such as commercial contracts and joint
venture agreements. None are considered to be significant in terms of their potential
impact on the business of the Group as a whole. There are no agreements with employees
or directors for compensation for loss of office or employment that occurs because of a
takeover bid. However, all of the Company’s employee share incentive plans contain
provisions relating to a change of control. Outstanding awards and options would normally
vest and become exercisable on a change of control, subject to the satisfaction of any
performance conditions and pro rata reduction as may be applicable under the rules of the
employee share incentive plans.
Significant contracts
During the year, there were no significant contracts of the Company or a subsidiary in
which a director was materially interested.
Political donations
Aviva did not make any political donations during 2024.
Information required by UK Listing Rule (LR) 6.6.1
Disclosure
More information
Shareholder waiver of dividend
Note 33 to the financial statements
Shareholder waiver of future dividends
Note 33 to the financial statements
Management report
The Strategic report, Governance Report, and Directors’ Report together are the
management report for the purposes of DTR 4.1.5(2).
Corporate governance statement
The Governance Report, including the Directors' Remuneration Report, fulfils the
requirement of a corporate governance statement under DTR 7.2.1.
By order of the Board on 26 February 2025.
Susan Adams
Group Company Secretary
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Directors’ responsibilities
The directors are responsible for preparing
the Annual Report and Accounts including
the Directors’ Remuneration Report and the
Financial Statements in accordance with
applicable law and regulations.
UK company law requires the directors
to prepare financial statements for each
financial year. Under that law, the directors
have prepared the Group and parent
financial statements in accordance with
UK-adopted international accounting
standards.
Under UK company law, the directors must
not approve the financial statements unless
they are satisfied that they give a true and
fair view of the state of affairs of the Group
and Company and of the profit or loss for
that period.
In preparing these financial statements,
the directors are required to:
• select suitable accounting policies
and apply them consistently;
• make reasonable and prudent
judgements and accounting estimates;
• state where applicable the directors have
prepared the Group and Company's
financial statements in accordance with
UK-adopted international accounting
standards; and
• prepare the financial statements on
the going concern basis unless it is
inappropriate to presume that the Group
and Company will continue in business.
The directors are responsible for keeping
adequate accounting records that are
sufficient to show and explain the
Company’s transactions and disclose
with reasonable accuracy at any time
the financial position of the Group and
Company, enable them to ensure that
the financial statements and the Directors’
Remuneration report comply with the
Companies Act 2006 and, as regards the
Group financial statements, Article 4 of the
IAS Regulation. They are also responsible
for safeguarding the assets of the Company
and the Group and hence for taking
reasonable steps for the prevention and
detection of fraud and other irregularities.
The directors are responsible for making,
and continuing to make, the Company’s
Annual Report and Accounts available
on the Company’s website. The directors
are responsible for the maintenance
and integrity of the Company’s website.
Legislation in the UK governing the
preparation and dissemination of financial
statements may differ from legislation in
other jurisdictions.
Directors’ confirmations
The directors consider that the Annual
Report and Accounts, taken as a whole,
is fair, balanced and understandable and
provides the information necessary for
shareholders to assess the Group’s and
the Company’s position, performance,
business model and strategy.
Each of the current directors whose names
and functions are detailed in the Our Board
of Directors section confirm that, to the
best of their knowledge:
• the Group and Company's financial
statements, which have been prepared
in accordance with UK-adopted
international accounting standards,
give a true and fair view of the assets,
liabilities, financial position and profit
of the Group; and
• the Strategic report, Governance
Report, and the Directors’ Report in
this Annual Report include a fair review
of the development and performance
of the business and the position of the
Group, together with a description of
the principal risks and uncertainties
that it faces.
In the case of each director in office
at the date the Directors’ report is
approved:
• so far as they are aware, there is no
relevant audit information of which
the Company’s external auditor, EY,
is unaware; and
• each director has taken all steps that
ought to have been taken as a director
in order to make themselves aware
of any relevant audit information and
to establish that EY is aware of that
information.
By order of the Board on 26 February 2025.
Amanda Blanc DBE
Group Chief Executive Officer
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Financial
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IFRS
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IFRS Financial
Statements
In this section
Independent auditors’ report to the members
of Aviva plc
153
Accounting policies
164
Consolidated financial statements
Consolidated income statement
181
Consolidated statement of comprehensive income
182
Reconciliation of Group adjusted operating profit
to profit/(loss) for the year
183
Consolidated statement of changes in equity
184
Consolidated statement of financial position
185
Consolidated statement of cash flows
186
Notes to the consolidated financial statements
1
Exchange rates
187
2
Strategic transactions
187
3
Segmental information
189
4
Insurance revenue
193
5
Net financial result
194
6
Fee and commission income
195
7
Expenses
196
8
Other finance costs
197
9
Investment variances and economic
assumption changes
197
10
Employee information
198
11
Directors
199
12
Auditors’ remuneration
199
13
Tax
200
14
Earnings per share
201
15
Dividends and appropriations
203
16
Goodwill
203
17
Acquired value of in-force business (AVIF)
and intangible assets
205
18
Interests in, and loans to, joint ventures
206
19
Interests in, and loans to, associates
207
20
Property and equipment
208
21
Investment property
208
22
Lease assets and liabilities
208
23
Fair value methodology
210
24
Loans
216
25
Securitised mortgages and related assets
217
26
Interests in structured entities
217
27
Financial investments
219
28
Receivables
221
29
Deferred acquisition costs on non-
participating investment contracts
222
30
Pension surpluses, other assets,
prepayments and accrued income
222
31
Ordinary share capital
222
32
Group’s share plans
223
33
Treasury shares
225
34
Preference share capital
225
35
Tier 1 notes
225
36
Capital reserves and retained earnings
226
37
Other reserves
226
38
Non-controlling interests
227
39
Insurance and reinsurance contracts
227
40
Non-participating investment contracts
252
41
Effect of changes in non-financial
assumptions and estimates during the year
254
42
Tax assets and liabilities
254
43
Pension deficits and other provisions
255
44
Pension obligations
256
45
Borrowings
262
46
Payables and other financial liabilities
265
47
Other liabilities
265
48
Contingent liabilities and other risk factors
265
49
Commitments
266
50
Group capital management
266
51
Statement of cash flows
268
52
Risk management
269
53
Derivative financial instruments
and hedging
281
54
Financial assets and liabilities subject to
offsetting, enforceable master netting
agreements and similar arrangements
283
55
Related party transactions
284
56
Organisational structure
286
57
Related undertakings
287
58
Subsequent events
300
Financial statements of the Company
Income statement
301
Statement of comprehensive income
301
Statement of changes in equity
302
Statement of financial position
303
Statement of cash flows
304
Notes to the Company’s financial statements
305
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Opinion
In our opinion:
• Aviva plc’s Group financial statements and Parent Company financial statements (the “financial statements”) give a true and
fair view of the state of the Group’s and of the Parent Company’s affairs as at 31 December 2024 and of the Group’s and the
Parent Company’s profit for the year then ended;
• the financial statements have been properly prepared in accordance with UK adopted international accounting standards; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements of Aviva plc (the 'Parent Company') and its subsidiaries (the 'Group') for the year ended
31 December 2024 which comprise:
Group
Parent Company
Consolidated statement of financial position as at
31 December 2024
Statement of financial position as at 31 December 2024
Consolidated income statement for the year then ended
Income statement for the year then ended
Consolidated statement of comprehensive income for the year
then ended
Statement of comprehensive income for the year then ended
Reconciliation of Group adjusted operating profit to profit/(loss)
for the year then ended
Statement of changes in equity for the year then ended
Consolidated statement of changes in equity for the year
then ended
Statement of cash flows for the year then ended
Consolidated statement of cash flows for the year then ended
Accounting Policies and related notes A to P to the
financial statements
Accounting Policies and related notes 1 to 58 to the financial
statements, including material accounting policy information
The financial reporting framework that has been applied in their preparation is applicable law and UK adopted international
accounting standards.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial
statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Independence
We are independent of the Group and Parent in accordance with the ethical requirements that are relevant to our audit of the
financial statements in the UK, including the FRC’s Ethical Standard as applied to listed public interest entities, and we have
fulfilled our other ethical responsibilities in accordance with these requirements.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Group or the Parent Company and we
remain independent of the Group and the Parent Company in conducting the audit.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our evaluation of the directors’ assessment of the Group and Parent
Company’s ability to continue to adopt the going concern basis of accounting included:
• In conjunction with our walkthrough of the Group’s financial close process, we confirmed our understanding of management’s
going concern assessment process;
• We evaluated management’s going concern assessment which included assessing their evaluation of long-term business and
strategic plans, capital adequacy, liquidity and funding positions. Management also assessed these positions considering
internal stress tests which included consideration of principal and emerging risks. The Group’s risk profile and risk
management practices were considered including business model, capital commitments and contingent liabilities, the funding
position of the pension schemes, acquisitions, disposals and distributable reserves;
• We evaluated management’s assessment by considering the Group’s ability to continue in operation and meets its liabilities
under different scenarios including the impact of the Group’s strategic plans, and the current uncertain geopolitical and
economic outlook;
• We assessed management’s consideration of how solvency and liquidity has been managed in response to the current
economic environment and evaluated the liquidity and solvency position of the Group by reviewing management’s liquidity and
solvency projections, and their associated stress and scenario testing (including reverse stress testing); and
• We reviewed the Group’s going concern disclosures included in the annual report for conformity with the accounting
standards.
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Independent auditors' report to the members of Aviva plc
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the Group and Parent Company’s ability to continue as a going concern
for a period to 26 February 2026, being twelve months from the date when the financial statements are authorised for issue.
In relation to the Group and Parent Company’s reporting on how they have applied the UK Corporate Governance Code, we have
nothing material to add or draw attention to in relation to the directors’ statement in the financial statements about whether the
directors considered it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections
of this report. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the
Group’s and parent Company's ability to continue as a going concern.
Overview of our audit approach
Audit scope
• We performed an audit of the complete financial information of six components and audit procedures on
specific balances for a further 18 components and central procedures on tax balances.
Key audit matters
• Valuation of Life Insurance Contract Liabilities.
• Valuation of General Insurance Liabilities and Reinsurance Assets.
• Valuation of certain hard-to-value assets.
• Revenue Recognition - Contractual Service Margin (‘CSM’).
• Valuation of investment in subsidiaries (Company only).
Materiality
• Overall Group materiality of £135 million which represents 1% of IFRS adjusted shareholders’ equity.
An overview of the scope of the Parent Company and Group audits
Tailoring the scope
In the current year our audit scoping reflects the new requirements of ISA (UK) 600 (Revised). We have followed a risk-based
approach when developing our audit approach to obtain sufficient appropriate audit evidence on which to base our audit opinion.
We performed risk assessment procedures, with input from our component auditors, to identify and assess risks of material
misstatement of the Group financial statements and identified significant accounts and disclosures. When identifying components
at which audit work needed to be performed to respond to the identified risks of material misstatement of the Group financial
statements, we considered our understanding of the Group and its business environment, the applicable financial framework, the
group’s system of internal control at the entity level, the existence of centralised processes, applications and any relevant
internal audit results.
We determined that the following components are subject to the centralised audit procedures.
Key audit area on which procedures were performed centrally
Component subject to central procedures
Tax accounts
All components
We then identified 6 components as individually relevant to the Group due to a significant risk or an area of higher assessed
risk of material misstatement of the Group financial statements being associated with the components.
For those individually relevant components, we identified the significant accounts where audit work needed to be performed
at these components by applying professional judgement, having considered the Group significant accounts on which
centralised procedures will be performed, the reasons for identifying the financial reporting component as an individually
relevant component and the size of the component’s account balance relative to the Group significant financial statement
account balance.
We then considered whether the remaining Group significant account balances not yet subject to audit procedures, in aggregate,
could give rise to a risk of material misstatement of the Group financial statements. We selected 68 components of the group to
include in our audit scope to address these risks.
Having identified the components for which work will be performed, we determined the scope to assign to each component.
Of the 74 components selected, we designed and performed audit procedures on the entire financial information of 6 components
(“full scope components”). For 18 components, we designed and performed audit procedures on specific significant financial
statement account balances or disclosures of the financial information of the component (“specific scope components”). For the
remaining 50 components, we performed specified audit procedures to obtain evidence for one or more relevant assertions.
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Independent auditors’ report to the members of Aviva plc
The table below shows the components which were assigned full scope:
Full scope component
Auditor
Aviva Plc
EY UK
Aviva Life & Pensions UK Limited ('UKLAP')
EY UK
Aviva Equity Release UK Limited
EY UK
Equity Release Special Purpose Vehicles
EY UK
Aviva Insurance Limited ('AIL')
EY UK
Aviva Canada Inc ('Canada GI')
EY Canada
Our scoping to address the risk of material misstatement for each key audit matter is set out in the Key audit matters section of
our report.
Involvement with component teams
In establishing our overall approach to the Group audit, we determined the type of work that needed to be undertaken at each of
the components by us, as the Group audit engagement team, or by component auditors operating under our instruction.
The Group audit team followed a programme of planned visits that has been designed to ensure that the Senior Statutory Auditor
visits each of the full scope components. During the current year’s audit cycle, visits were undertaken by the primary audit team
to the component teams in the United Kingdom, Canada and Republic of Ireland. These visits involved attending planning
meetings and reviewing relevant audit working papers on key areas. The Group audit team interacted regularly with the
component teams where appropriate during various stages of the audit, reviewed relevant working papers and were responsible
for the scope and direction of the audit process. Where relevant, the section on key audit matters details the level of involvement
we had with component auditors to enable us to determine that sufficient audit evidence had been obtained as a basis for our
opinion on the Group as a whole.
This, together with the additional procedures performed at Group level, gave us appropriate evidence for our opinion on the
Group financial statements.
Climate change
Stakeholders are interested in how climate change will impact the Group. The Group has determined that the most significant
future impacts from climate change on their operations will be from climate transition, physical and litigation risks. These are
explained in the required Task Force on Climate-related Financial Disclosures Compliance Summary in the Non-financial and
sustainability information statement, and in the Climate Change section within the Our Principal Risks section. All of these
disclosures form part of the “Other information,” rather than the audited financial statements. Our procedures on these unaudited
disclosures therefore consisted solely of considering whether they are materially inconsistent with the financial statements, or
our knowledge obtained in the course of the audit or otherwise appear to be materially misstated, in line with our responsibilities
on “Other information”.
In planning and performing our audit we assessed the potential impacts of climate change on the Group’s business and any
consequential material impact on its financial statements.
The Group has explained in Note 52 how they have reflected the impact of climate change in their financial statements including
how this aligns with their commitment to the aspirations of the Paris Agreement to achieve net zero emissions by 2050. The Group
has considered the impact of climate risk on the carrying value of assets and liabilities and considers that there is no significant
risk of a material adjustment within the next financial year resulting from climate risk. The impact of climate risk on the valuation
of financial instruments and investment property is described in note 23(g).
Our audit effort in considering the impact of climate change on the financial statements was focused on evaluating management’s
assessment of the impact of climate risk, physical and transition, their climate commitments, the effects of material climate risks
disclosed and the significant judgements and estimates disclosed in note 23(g) and whether these have been appropriately reflected
in asset values where these are impacted by future cash flows and associated sensitivity disclosures following the requirements
of IFRS. As part of this evaluation, we performed our own risk assessment, supported by our climate change internal specialists,
to determine the risks of material misstatement in the financial statements from climate change which needed to be considered in
our audit.
We also challenged the directors’ considerations of climate change risks in their assessment of going concern and viability and
associated disclosures. Where considerations of climate change were relevant to our assessment of going concern, these are
described above.
Based on our work, we have not identified the impact of climate change on the financial statements to be a key audit matter, or to
impact a key audit matter.
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Independent auditors’ report to the members of Aviva plc
First year audit considerations
In the preparation for our first-year audit of the 31 December 2024 financial statements, we performed a number of transitional
procedures. Following our selection as the Group's statutory auditor, we undertook procedures to establish our independence of
the Group, including ensuring that all staff who work on the audit worldwide are independent of the Group. We used time prior to
commencing any audit work to gain an understanding of the business issues and meet with key management. We were appointed
by the Audit Committee in May 2024. Our transition activities included shadowing the former auditor PricewaterhouseCoopers
LLP (‘PwC’) at key meetings with management, such as meetings of the Audit and Risk Committees. We reviewed PwC’s 2023
audit work papers and gained an understanding of their risk assessment and key judgements.
We held a number of meetings with management to understand the key judgements being made for the 31 December 2023 year
end. In May 2024, we held our global team planning event attended by the audit partners and senior staff responsible for auditing
the full and specific scope components of the Group. This provided the opportunity for the entire team to prepare themselves for
the audit including the alignment of our audit approach. Our global audit team has deep knowledge of the insurance industry and
has been involved in the audits of large international financial services companies. We used the understanding the audit team had
formed to establish our audit base and assist in the formalisation of our audit strategy for the 2024 Group audit. This involved
gaining an understanding of the Group’s key processes and controls over financial reporting through walkthroughs of the
processes.
Given this is a first-year audit, we gave a particular focus on validating the robustness of the actuarial models used by
management to calculate the insurance contract liabilities.
For general insurance liabilities we used our own actuarial models to perform independent re-projections of material classes of
business and compared these to the results from management’s own models. Our audit approach to life insurance actuarial
models was based on considering the inherent risk in the model, the relative materiality of the associated insurance liabilities, the
controls around the model, including management’s model risk independent validation process, and the extent of internal testing
and governance performed by management. Based on this risk assessment, we selected a sample of models where we
independently recalculated the liabilities and then selected a further sample where we reviewed the pre-existing model
baselining performed by management.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not
due to fraud) that we identified. These matters included those which had the greatest effect on: the overall audit strategy,
the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in
the context of our audit of the financial statements as a whole, and in our opinion thereon, and we do not provide a separate
opinion on these matters.
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Independent auditors’ report to the members of Aviva plc
Valuation of Life Insurance Contract
Liabilities (2024: £109 billion, 2023:
£108 billion)
Refer to Accounting policy (M)
‘Insurance, participating investment
and reinsurance contracts’ and Note
39 – Insurance and Reinsurance
Contracts
A key focus of our audit relates to
management’s selection of assumptions
to determine the insurance contract
liabilities given the scope that exists for
the exercise of judgement and therefore
potential manipulation.
The assumptions that we have
determined to have the most significant
impact are:
• Longevity assumptions used to value
the best estimate liabilities for annuity
business;
• Expenses, reflect the expected future
expenses that will be required to
maintain the in-force policies at the
balance sheet date;
• Discount Rate used, including an
allowance for illiquidity (in particular,
top-down discount rates applied to
annuity liabilities);
• Risk Adjustment, representing the
compensation that the Group requires
for bearing the uncertainty about the
amount and timing of the cash flows
that arise from non-financial risk
To obtain sufficient audit evidence to conclude on the appropriateness of actuarial
assumptions, using EY actuaries as part of our audit team, we performed the following
procedures:
• Obtained an understanding and tested the design and operating effectiveness of key controls
over management’s process for setting and updating key actuarial assumptions;
• Determined whether the methodology and assumptions applied are appropriate by
comparing it to our knowledge of ’industry standards and the Groups’ regulatory and
financial reporting requirements;
• Corroborated the results of management’s experience analysis, including the base longevity,
to agree whether these justified the adopted assumptions;
• Evaluated and corroborated the methodology used in determining the discount rate applied;
• Discussed management’s decisions on the inclusion or exclusion of data from the period
impacted by COVID-19 when setting individual assumptions;
• Evaluated the results of management’s analysis with respect to longevity improvements
using the results from the industry standard Continuous Mortality Investigation (‘CMI’) on
longevity trends, and benchmarked the output against other industry participants;
• Benchmarked the significant assumptions against those of other comparable industry
participants;
• Performed procedures to test that the assumptions used in the year end valuation are
consistent with the approved basis;
• Corroborated the expense assumptions adopted by management considering an impact of
the recent economic volatility (including inflation), the impact of the increase in volumes of
new insurance business written and the inclusion of benefits arising from planned future
management actions;
• Corroborated the credit default assumptions used by considering the relevant rules and
actuarial guidance, such as the adoption of an appropriate risk allowance, and by applying
our industry knowledge and experience; and
• Testing management’s approach to derive the risk adjustment, including comparison to
the wider market, particularly where adjustments are applied to the calibration to reflect
external events.
Key observations communicated to the Audit Committee
We determined that the actuarial assumptions, including the risk adjustment used by management, are reasonable based on the
analysis of experience to date, industry practice and the financial reporting and regulatory requirements.
How we scoped our audit to respond to the risk and involvement with component teams
We performed full scope, specific scope and specified audit procedures over this risk which covered 100% of the risk amount.
Risk
Our response to the risk
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Valuation of General Insurance
Liabilities and Reinsurance Assets
(£15 billion & £2 billion, 2023: £14
billion & £2 billion)
Refer to Accounting policy (M)
‘Insurance, participating investment
and reinsurance contracts’ and Note
39 – Insurance and Reinsurance
Contracts
The valuation of general insurance
contract liabilities and the related
reinsurance assets is highly
judgmental and susceptible to
management override.
The key judgements and focus of our
procedures were:
• The risk of inappropriate
methodologies and assumptions
being used to estimate the incurred
but not yet reported claims (‘IBNR’),
which forms part of the liability for
incurred claims (‘LIC’), and the
associated reinsurers share of
incurred but not yet reported claims
cash flows, which form part of the
assets for incurred claims (‘AIC’);
• The determination of the bottom up
discount rates (including choice of
illiquidity premium in the discount
rates used to determine latent claim
and structured settlements
liabilities) and payment patterns
used to derive the cash flows for
incurred claims;
• The appropriateness of
methodologies and assumptions
adopted to value reinsurance assets
associated with Adverse
Development Covers ('ADC')
measured under the General
Measurement Model (‘GMM’); and
• The appropriateness of
methodologies and assumptions
adopted to calculate the amount of
the risk adjustment to reflect the
entity’s view of the compensation
that it requires for bearing risk.
To obtain sufficient audit evidence to conclude on the appropriateness of the actuarial
methodology and assumptions used in the calculation of the general insurance liabilities and
reinsurance assets, with support from our EY actuaries, as part of the audit team, we performed
the following procedures:
• Assessed the reserving methodology applied by management on a gross and net of
reinsurance basis. This also involved comparing the Group’s reserving methodology with
industry practice;
• Performed independent re-projections of material classes of business by applying our
own assumptions, across attritional classes of business and comparing these to
management’s results;
• Assessed whether the assumptions, such as inflation and selected expected loss ratios,
applied to key areas of uncertainty are appropriate based on our knowledge of the Group,
industry practice and regulatory and financial reporting requirements. As part of our re-
projections we formed an independent view of the additional claims cost arising from the
current economic inflationary environment and emerging areas such as cladding and
concussion;
• Performed benchmarking related to material industry issues such as catastrophe and large
losses, assumptions used in inherently uncertain classes and new growing classes. We have
also assessed Aviva’s approach to dealing with regulatory and legal changes (such as the
Ogden discount rate) against both the requirements of IFRS 17 and the approach of other
comparable industry participants;
• Compared the approach to calculating the discount rate, including illiquidity premium, for
consistency across periods, whilst comparing against industry benchmarks. In addition, we
compared the changes in yield curves against our expectations which consist of comparison
to the movement in the Bank of England risk free rates;
• Assessed the appropriateness of the methodology and assumptions involved in the
recognition of reinsurance assets associated with ADC contracts by reviewing the inputs to,
and outputs from management’s model including assessing any manual adjustments made to
the output of the model; and
• Testing management’s approach to derive the risk adjustment, including comparison to
the wider market, particularly where adjustments are applied to the calibration to reflect
external events.
Key observations communicated to the Audit Committee
Based on our procedures performed we are satisfied that the methodology and assumptions used in the valuations of the insurance and
reinsurance contract assets and liabilities are reasonable.
How we scoped our audit to respond to the risk and involvement with component teams
We performed full scope and specified audit procedures over this risk which covered 97% of the risk amount.
Risk
Our response to the risk
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Valuation of certain hard-to-value
assets (£26 billion, 2023: £26 billion)
Refer to Accounting policy (Y)
Loans and Note 24 – Loans
The Group holds a number of complex
and illiquid financial investments that
are hard-to-value, and whose
valuation is subject to judgment. We
considered that those with subjective
or uncertain inputs are a significant
risk, specifically the following
modelled debt securities:
• Healthcare, infrastructure and
Private Finance Initiative ('PFI')
other loans;
• UK securitised mortgage loans; and
• Non-securitised mortgage loans.
The mortgage loans consist of
residential equity release mortgages
('ERM'), commercial mortgages and
mortgages to UK primary healthcare
and PFI businesses.
Modelled debt securities
Our work over the valuation of modelled debt securities included the following:
• We obtained an understanding and tested the design and operating effectiveness of key
controls over management’s valuation process;
• Stratified the population of assets based on risk for sample selection, considering the
concentration of assets with specific investment managers, asset type and those from higher
risk industries;
• Engaged EY valuation specialists to calculate a range of reasonable values for a sample of
securities, using an independent valuation model, and considered reasonable alternative and
independent model inputs in deriving the assumptions, with a particular focus on:
• Loans - credit spreads, being the bond index and ratings adjustments; and
• Mortgages - discount rate assumptions; and
• Validated that management’s valuation models, including the portfolio credit risk model
(‘PCRM’) accurately reflect the complete and updated contract terms for a sample of assets.
Equity release mortgages
Our work over the valuation of equity release mortgages included the following:
• We obtained an understanding and tested the design and operating effectiveness of key
controls over management’s valuation process;
• Tested the accuracy of mortgage data used in the valuation model by agreeing a sample of
new loans to supporting evidence and validating a sample of movements on static data over
the period;
• Evaluated methodology, inputs and assumptions used in valuing the ERM financial
investments, including voluntary early redemption, base mortality, mortality improvements,
entry into long term care and longevity improvements as well as economic assumptions such
as discount rate;
• Performed benchmarking of key demographic and economic assumption against peers to
confirm the relative strength of management’s assumptions versus other industry
participants;
• Assessed the reasonableness of the current property price by comparing management’s
property indexation to the published market indices;
• Assessed the reasonableness of the valuation approach adopted for the no negative equity
guarantee (‘NNEG’) by comparing this to the approach adopted by other market participants;
and
• Tested the integrity and appropriateness of the model, by developing our own independent
model, using our actuarial team to value the ERM financial investments and compared the
output to the results produced by the Group.
Key observations communicated to the Audit Committee
Based on our procedures performed on the modelled debt securities and ERM financial investments, we are satisfied that the valuation
of these hard-to-value assets is reasonable.
How we scoped our audit to respond to the risk and involvement with component teams
We performed full audit procedures over this risk which covered 98% of the risk amount.
Risk
Our response to the risk
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Revenue Recognition - Contractual
Service Margin (‘CSM’)
(2024: £10 billion, 2023: £8 billion)
Refer to Accounting policy (M)
‘Insurance, participating investment
and reinsurance contracts’ and Note
39 – Insurance and Reinsurance
Contracts - (e) Contractual Service
Margin
The contractual service margin (‘CSM’)
represents the future profits within the
in-force book that will be recognised
as revenue in future periods. The
approach to calculate CSM differs
based on the measurement model.
As the new CSM generated during
the period is subject to a number of
sensitive assumptions, in particular
around the locked-in discount rates
assumed for illiquid asset classes, it is
highly judgmental. For the CSM relating
to new and existing business, the
assessment of onerous groups of
contracts is a key judgment.
As such, we consider it to present a
higher risk of material misstatement
and a fraud risk
To obtain sufficient audit evidence to conclude on the valuation of the CSM, we engaged our
actuaries as part of our audit team and performed the following procedures:
• Performed walkthroughs of the process implemented by management to determine the CSM
(including both the derivation of the source data, input of the data into the CSM model and
output from the model) and tested the design and operating effectiveness of key controls;
• Compared the appropriateness of the methodology proposed by management for the used to
determine coverage units and tested the appropriateness of the release of the CSM to the
consolidated income statement and tested the appropriateness of the coverage units;
• Performed analytical procedures to identify unusual release patterns and discussed these
with management to understand and validate the appropriateness of their selection,
confirming that amounts released to the consolidated income statement were reasonable
and in line with requirements of the standard;
• Validated the actual and projected cashflows which are input into the model on a sample
basis by vouching back to source information;
• Corroborated the locked-in discount rates used by considering the requirements of IFRS 17
and actuarial guidance, and by applying our industry knowledge and experience; and
• Challenged management’s assessment of onerous contracts to confirm the completeness of
those contracts designated as onerous and ensure they have been calculated accurately.
Key observations communicated to the Audit Committee
Based on our procedures performed we are satisfied that revenue has been recognised in-line with the requirements of IFRS17.
How we scoped our audit to respond to the risk and involvement with component teams
We performed full and specific scope audit procedures over this risk which covered 100% of the risk amount.
Valuation of investment in
subsidiaries (Company only) (£32
billion, 2023: £32 billion)
Refer to Accounting policy (F) The
Company’s investments and Note E -
Investments in subsidiaries and joint
venture
In the Company's statement of
financial position, investments in
subsidiaries are reported at cost less
impairment. The investments in
subsidiaries are the largest assets on
the Company's statement of financial
position.
There is a risk that the carrying value
of the investments in subsidiaries
exceeds the recoverable amount and
therefore an impairment loss should
be recognised.
The estimated recoverable amount of
the investment in subsidiaries has a
high degree of estimation uncertainty.
We obtained management’s assessment of the recoverability of the carrying value of the
investment in group undertakings and reviewed for indicators of impairment including whether
the current net asset value (‘NAV’) supports the carrying value.
Where there were indicators of impairment, we:
• Tested the reasonableness and appropriateness of the assumptions used in the cash
flows based on our knowledge of the Group and the business units in which the subsidiaries
operate;
• Evaluated and corroborated the methodology used in determining the discount rate applied,
including engaging our EY valuation experts to assess the appropriateness of the inputs into
the discount rate;
• Obtained management’s assessment of the terminal value and validated the assumptions
applied by management by comparing key assumptions and judgments with experience of
the wider market and that of Aviva; and
• Evaluated the adequacy of the Company’s disclosures.
Key observations communicated to the Audit Committee
Based on the work performed and the evidence obtained, we consider the carrying amount of the Company’s investment in subsidiaries
to be appropriate.
How we scoped our audit to respond to the risk and involvement with component teams
We performed full scope audit procedures over this risk, which covered 100% of the risk amount.
All audit work performed to address this risk was undertaken by the Group audit team.
Risk
Our response to the risk
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In the prior year, PwC identified ‘Adoption of IFRS 17 and restatement of comparatives’ as a key audit matter. This reflects the
adoption of IFRS 17 for the first time for the year ending 31 December 2023 and consequently we do not consider it to be a key
audit matter for 2024.
Our application of materiality
We apply the concept of materiality in planning and performing the audit, in evaluating the effect of identified misstatements on
the audit and in forming our audit opinion.
Materiality
The magnitude of an omission or misstatement that, individually or in the aggregate, could reasonably be expected to influence
the economic decisions of the users of the financial statements. Materiality provides a basis for determining the nature and extent
of our audit procedures.
We determined materiality for the Group to be £135 million (2023 PwC: £142 million), which is 1% (2023 PwC: 1%) of IFRS adjusted
shareholders’ equity. IFRS adjusted shareholders’ equity represents the equity attributable to shareholders of Aviva plc plus the
CSM, net of the associated tax. This measure represents the current equity attributable to Aviva shareholders and an estimate of
locked-in future net profits to be generated from current in-force business which will ultimately increase the total shareholders’
equity available for distribution as dividends. Since this metric provides an expectation of the future total equity of Aviva, we
consider it to be an appropriate benchmark to determine materiality.
We determined materiality for the Parent Company to be £142 million (2023 PwC: £75 million), which is 1% of Equity attributable to
shareholders. For Group audit purposes, we performed our audit procedures on the Company to the lower of the Parent
Company and the Group allocated performance materiality.
Performance materiality
The application of materiality at the individual account or balance level. It is set at an amount to reduce to an appropriately low
level the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality.
On the basis of our risk assessments, together with our assessment of the Group’s overall control environment, our judgement
was that performance materiality should be 50% of our planning materiality, namely £67 million (2023 PwC: £106 million).
Audit work was undertaken at component locations for the purpose of responding to the assessed risks of material misstatement
of the Group financial statements. The performance materiality set for each component is based on the relative scale and risk of
the component to the Group as a whole and our assessment of the risk of misstatement at that component. In the current year,
the range of performance materiality allocated to components was £13.5 million to £67.5 million.
Reporting threshold
An amount below which identified misstatements are considered as being clearly trivial.
We agreed with the Group Audit Committee that we would report to them all uncorrected audit differences in excess of £7 million
(2023 PwC: £7 million) that impact IFRS shareholders’ equity, which is set at 5% of planning materiality, as well as differences
below that threshold that, in our view, warranted reporting on qualitative grounds.
We evaluate any uncorrected misstatements against both the quantitative measures of materiality discussed above and in light of
other relevant qualitative considerations in forming our opinion.
Other information
The other information comprises the information included in the annual report, including the Strategic Report, Governance and
Other Information, other than the financial statements and our auditor’s report thereon. The directors are responsible for the
other information contained within the annual report.
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated
in this report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to be
materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to
determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we
have performed, we conclude that there is a material misstatement of the other information, we are required to report that fact.
We have nothing to report in this regard.
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Opinions on other matters prescribed by the Companies Act 2006
In our opinion, the part of the directors’ remuneration report to be audited has been properly prepared in accordance with the
Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the strategic report and the directors’ report for the financial year for which the financial statements
are prepared is consistent with the financial statements; and
• the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and the Parent Company and its environment obtained in the course
of the audit, we have not identified material misstatements in the strategic report or the directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to
you if, in our opinion:
• adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not been
received from branches not visited by us; or
• the Parent Company financial statements and the part of the Directors’ Remuneration Report to be audited are not in
agreement with the accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Corporate Governance Statement
We have reviewed the directors’ statement in relation to going concern, longer-term viability and that part of the Corporate
Governance Statement relating to the Group and company’s compliance with the provisions of the UK Corporate Governance
Code specified for our review by the UK Listing Rules.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial statements or our knowledge obtained during the audit:
• Directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any material
uncertainties identified;
• Directors’ explanation as to its assessment of the company’s prospects, the period this assessment covers and why the period
is appropriate;
• Director’s statement on whether it has a reasonable expectation that the Group will be able to continue in operation and meets
its liabilities;
• Directors’ statement on fair, balanced and understandable;
• Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks;
• The section of the annual report that describes the review of effectiveness of risk management and internal control systems;
and;
• The section describing the work of the Audit Committee.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement, the directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors
determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether
due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group and Parent Company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or the Parent Company or to cease operations, or have
no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is
a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial
statements.
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect irregularities, including fraud. The risk of not detecting a material misstatement due to
fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for
example, forgery or intentional misrepresentations, or through collusion. The extent to which our procedures are capable of
detecting irregularities, including fraud is detailed below.
However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of
the company and management.
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• We obtained an understanding of the legal and regulatory frameworks that are applicable to the Group and determined that the
most significant are relevant laws and regulations related to elements of company law and tax legislation, and the financial
reporting framework. Our considerations of other laws and regulations that may have a material effect on the financial
statements included permissions and supervisory requirements of the Prudential Regulation Authority (‘PRA’), the Financial
Conduct Authority (‘FCA’), relevant tax authorities and the Office of the Superintendent of Financial Institutions (‘OSFI’).
• We understood how Aviva plc is complying with those frameworks by making enquiries of management, internal audit and
those responsible for legal and compliance matters. We also reviewed correspondence between the Group and insurance
regulatory bodies in respective jurisdictions; reviewed minutes of the Board and Risk Committees; and gained an understanding
of the Group’s governance, demonstrated by the board’s approval of the Group’s governance framework.
• Conducted a review of correspondence with and reports from the insurance regulators, in relevant jurisdictions, including the
PRA and the FCA.
• We assessed the susceptibility of the Group’s financial statements to material misstatement, including how fraud might occur
by considering the controls that the Group has established to address risks identified by the Group, or that otherwise seek to
prevent, deter or detect fraud. We also assessed the risks of fraud in our key audit matters. Our procedures over our key audit
matters and other significant accounting estimates included challenging management on the assumptions and judgements
made in determining these estimates.
• Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations.
Our procedures involved making enquiries of those charged with governance, internal audit and senior management for their
awareness of any non-compliance of laws or regulations, enquiring about the policies that have been established to prevent
non-compliance with laws and regulations by officers and employees, enquiring about the Group and Company’s methods of
enforcing and monitoring compliance with such policies, and inspecting significant correspondence with the PRA, FCA, relevant
tax authorities and the Office of the Superintendent of Financial Instututions ('OSFI').
• We identified and tested journal entries, including those posted with certain descriptions or unusual characteristics, backdated
journals or posted by infrequent and unexpected users.
• The Group operates in the insurance industry which is a highly regulated environment. As such the Senior Statutory Auditor
considered the experience and expertise of the engagement team to ensure that the team had the appropriate competence and
capabilities, which included the use of specialists where appropriate.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s
website at https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Other matters we are required to address
• Following the recommendation from the Audit Committee we were appointed by the Company on 20th May 2024 to audit the
financial statements for the year ending 31 December 2024 and subsequent financial periods.
• The period of total uninterrupted engagement is one year, covering the year ending 31 December 2024.
• The audit opinion is consistent with the additional report to the Audit Committee.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act
2006. Our audit work has been undertaken so that we might state to the company’s members 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 to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for
the opinions we have formed.
Stuart Wilson (Senior statutory auditor)
for and on behalf of Ernst & Young LLP, London
26 February 2025
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Aviva plc (the ‘Company’), a public limited company
incorporated and domiciled in the United Kingdom (UK),
together with its subsidiaries (collectively, the ‘Group’ or
‘Aviva’) transacts life assurance and long-term savings
business, fund management and most classes of general
insurance and health business through its subsidiaries,
joint ventures, associates and branches in the UK, Ireland,
Canada, India and China.
The principal accounting policies adopted in the preparation
of these financial statements are set out below. These policies
have been consistently applied to all years presented, unless
otherwise stated.
(A) Basis of preparation
The consolidated financial statements and those of the
Company have been prepared and approved by the directors
in accordance with UK-adopted international accounting
standards and the legal requirements of the Companies
Act 2006.
The consolidated financial statements have been prepared
under the historical cost convention, as modified by:
• The revaluation of land and buildings, investment property
and financial assets and financial liabilities (including
derivative instruments) at fair value through profit or loss;
• Insurance and reinsurance contracts at fulfilment cash flows
plus the Contractual Service Margin (CSM); and
• Net pension surplus at fair value for plan assets less the
present value of the defined benefit obligations.
Items included in the financial statements of each of the
Group’s entities are measured in the currency of the primary
economic environment in which that entity operates (the
functional currency). The consolidated financial statements
are stated in pounds sterling, which is the Company’s
functional and presentational currency. Unless otherwise
noted, the amounts shown in these financial statements are
in millions of pounds sterling (£m).
New standards, interpretations and amendments
to published standards that have been issued and
endorsed by the UK and adopted by the Group or
the Company
The Group and the Company has adopted the following
amendments to standards which became effective for the
annual reporting period beginning on 1 January 2024. The
amendments do not have a significant impact on the Group’s
consolidated financial statements or the Company’s financial
statements.
(i) Amendments to IAS 1 Presentation of Financial Statements:
Classification of Liabilities as Current or Non-current and Non-
current Liabilities with Covenants
(ii) Amendments to IFRS 16 Leases: Lease Liability in a Sale
and Leaseback
(iii) Amendments to IAS 7 Statement of Cash Flows and IFRS 7
Financial Instruments Disclosures: Supplier Finance
Arrangements
Standards, interpretations and amendments to
published standards that are not yet effective and have
not been adopted early by the Group or the Company
The following standards and amendments to existing
standards have been issued, are not yet effective for the
Group and the Company, and have not been adopted early by
the Group and the Company.
(i) IFRS 18: Presentation and Disclosure in Financial
Statements
In April 2024, the International Accounting Standards Board
(IASB) published IFRS 18, which aims to improve how
companies communicate in their financial statements by:
• Requiring additional defined subtotals in the statement
of profit or loss;
• Requiring disclosures about management-defined
performance measures; and
• Adding new principles for grouping of information.
IFRS 18 is effective for annual reporting beginning on or
after 1 January 2027 and has yet to be endorsed by the UK.
The standard is expected to result in presentational changes
to the Group's consolidated income statement and the
Company's income statement, and new disclosures of
management-defined performance measures will be required
in the notes to the financial statements. The Group is in the
early stages of implementation, however, no financial impacts
are expected as a result of adoption.
The following new standards and amendments to existing
standards have been issued, are not yet effective and have
not been adopted early by the Group and the Company, and
are not expected to have a significant impact on the Group’s
consolidated financial statements or the Company’s financial
statements.
(i) Amendments to IAS 21 The Effects of Changes in
Foreign Exchange Rates: Lack of Exchangeability
Published by the IASB in August 2023. The amendments are
effective for annual reporting beginning on or after 1 January
2025 and have been endorsed by the UK.
(ii) Amendments to IFRS 9 Financial Instruments and
IFRS 7 Financial Instruments: Disclosures: Amendments
to the Classification and Measurement of Financial
Instruments
Published by the IASB in May 2024. The amendments are
effective for annual reporting beginning on or after 1 January
2026 and have yet to be endorsed by the UK.
(iii) Annual improvements to IFRS Accounting Standards
– Volume 11: Amendments to IFRS 1, IFRS 7, IFRS 9, IFRS
10 and IAS 7
Published by the IASB in July 2024. The amendments are
effective for annual reporting beginning on or after 1 January
2026 and have been endorsed by the UK.
(iv) Contracts Referencing Nature-dependent
Electricity: Amendments to IFRS 9 and IFRS 7
Published by the IASB in December 2024. The amendments
are effective for annual reporting beginning on or after 1
January 2026 and have yet to be endorsed by the UK.
(v) IFRS 19: Subsidiaries without Public Accountability:
Disclosures
Published by the IASB in May 2024. This standard cannot be
applied by the Group or the Company because it is only
applicable to subsidiaries that have no public accountability.
IFRS 19 is effective for annual reporting beginning on or after
1 January 2027 and has yet to be endorsed by the UK.
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Accounting policies
(B) Group adjusted operating profit
The long-term nature of much of the Group’s operations
means that, for management’s decision-making and internal
performance management of our operating segments, the
Group focuses on Group adjusted operating profit, a non-
GAAP alternative performance measure (APM) which is not
bound by IFRS. The APM incorporates the expected return on
investments which supports its long-term and non-long-term
businesses.
Group adjusted operating profit for life and non-life 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. This includes movements
in the liabilities to with-profit policyholders that offset the
operating result of non-profit contracts written in the with-
profit funds. Group adjusted operating profit also includes
the effect of the mismatch between movements in expected
future insurance contract cash flows measured at current
discount rates and the corresponding adjustment to the CSM
measured at locked-in rates (see policy M).
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.
The exclusion of economic variances from the Group adjusted
operating profit APM reflects the long-term nature of much of
our business and presents separately the operating profit
APM, which is used in managing the performance of our
operating segments from the impact of economic factors.
Further details of this analysis and the assumptions used are
given in note 9.
Group adjusted operating profit excludes impairment
of goodwill, associates and joint ventures; amortisation and
impairment of intangibles acquired in business combinations;
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 mergers 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’s chief
operating decision maker.
Group adjusted operating profit excludes integration and
restructuring (I&R) costs that relate to a well-defined
programme that materially changes the scope of our business
or the manner in which it is conducted, with the exception of
I&R costs directly attributable to insurance contracts. Directly
attributable I&R costs are reflected in the CSM, and the impact
recognised in Group adjusted operating profit as the CSM is
amortised.
Group adjusted operating profit also excludes other items,
which are those items that, in the Directors’ view, are required
to be separately disclosed by virtue of their nature or
incidence to enable a full understanding of the Group’s
financial performance. Details of these items, including an
explanation of the rationale for their exclusion, are provided in
the Alternative Performance Measures section within ‘Other
information’.
The Group adjusted operating profit APM 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.
(C) Critical accounting policies and the
use of estimates
The preparation of financial statements requires the Group
to select accounting policies and make estimates and
assumptions that affect items reported in the consolidated
income statement, consolidated statement of financial
position, other primary statements and notes to the
consolidated financial statements.
The Audit Committee reviews the reasonableness of
judgements and assumptions applied and the appropriateness
of material accounting policies. The material judgements
considered by the Committee in the year are included within
the Audit Committee Report.
The accounting policies in the table below are those that have
the most material impact on the amounts recognised in the
financial statements, with those judgements involving
estimation summarised thereafter.
Critical accounting judgement
Consolidation (accounting policy – D)
Assessment of whether the Group controls the underlying
entities including consideration of its decision-making
authority and rights to the variable returns from the entity.
Classification of insurance and investment contract
(accounting policy – G)
Assessment of the significance of insurance risk transferred
to the Group and discretionary participation features in
determining whether a contract should be accounted for as
an insurance or investment contract. Insurance contracts are
defined as those containing significant insurance risk.
Contracts that transfer financial risks, but not significant
insurance risk are classified as investment contracts.
Judgement is required to assess whether insurance risk is
significant at inception of the contract. Some insurance and
investment contracts contain a discretionary participation
feature which is a supplement to guaranteed benefits.
Judgement is required to determine whether discretionary
additional benefits are likely to be a significant portion of the
total contractual payments.
Level of aggregation and measurement model for insurance,
participating investment and reinsurance contracts
(accounting policies - M(b) and M(c))
For measurement purposes, insurance contracts are
aggregated into groups based on an assessment of risks and
dividing each portfolio into annual cohorts by year of issue.
Judgement is required in assessing if the contracts have
similar risks that are managed together. Each annual cohort is
further subdivided into three groups, and judgement is applied
to determine the profitability of contracts at initial recognition.
Judgement is then applied to determine if the group of
contracts is eligible for either the variable fee approach (VFA)
or premium allocation approach (PAA) to measurement.
All estimates are based on management’s knowledge of
current facts and circumstances, assumptions based on that
knowledge and their predictions of future events and actions.
Actual results may differ from those estimates, possibly
significantly.
The table sets out those items considered particularly
susceptible to changes in estimates and assumptions, that
have a significant risk of resulting in a material adjustment to
the carrying amounts of assets and liabilities within the next
financial year, and the relevant accounting policy and note
disclosures.
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Accounting policies
Measurement of insurance, participating investment and
reinsurance contracts (accounting policy - M, assumptions -
note 39(g), carrying values - note 39(a), sensitivities - note 52(h))
The principal subjective or complex assumptions used in the
calculation of life insurance and participating investment contract
fulfilment cash flows include non-financial assumptions (in
particular, annuitant and assurance mortality and future expenses)
and the allowance for illiquidity in discount rates (in particular, top-
down discount rates applied to annuity liabilities). The immediate
impact of changes in these assumptions on the carrying amounts
of insurance, participating investment and reinsurance contracts is
reduced when there is a corresponding adjustment to the CSM, i.e.
for all changes in non-financial assumptions (calculated at locked-
in discount rates for General Measurement Model (GMM)
contracts) and for financial changes to Variable Fee Approach
(VFA) contracts, unless the contracts are onerous.
The principal subjective or complex assumptions used in the
calculation of non-life liabilities include the allowance for
illiquidity in the discount rates used to determine our latent claim
and structured settlements liabilities and the assumption that
past claims experience can be used as a basis to project future
claims (estimated using a range of standard actuarial claims
projection techniques).
Fair value of financial instruments and investment property
(accounting policies - F, R, W, assumptions - note 23(g),
carrying values - note 23(g), sensitivities - note 23(g))
Where quoted market prices are not available, valuation
techniques are used to value financial instruments and
investment property. These include broker quotes and models
using both observable and unobservable market inputs. The
valuation techniques involve judgement with regard to the
valuation models used and the inputs to these models can lead
to a range of plausible valuations for financial investments.
Deferred tax assets (accounting policy - AE, assumptions -
note 42(b), carrying values - note 42(b))
The deferred tax asset relates to UK tax losses which carry
forward indefinitely and the reduction in net assets on adoption
of IFRS 17, including the CSM recognition. This element of the
deferred tax asset will reverse as the CSM unwinds and profits
are recognised in future. The losses are recognised based on
probable future taxable investment income and gains and
taxable profits within five years. Assumed investment returns
and profits are consistent with assumptions used in actuarial
reserving and the Group Board approved Plan. Alternative
assumptions modelled by the Group also show full recovery of
the deferred tax asset over this period.
Material accounting estimates
The Group has considered the impact of climate risk on the
carrying value of assets and liabilities and considers that there
is no significant risk of a material adjustment within the next
financial year resulting from climate risk. The impact of climate
risk on the valuation of financial instruments and investment
property is described in note 23(g).
(D) Consolidation principles
(a) Subsidiaries
Subsidiaries are those entities over which the Group has
control. The Group controls an investee if and only if the
Group has all of the following:
• Power over the investee;
• Exposure, or rights, to variable returns from its involvement
with the investee; and
• The ability to use its power over the investee to affect
its returns.
The Group considers all relevant facts and circumstances in
assessing whether it has power over an investee, including:
the purpose and design of an investee, relevant activities,
substantive and protective rights, and voting and potential
voting rights.
The Group reassesses whether or not it controls an investee if
facts and circumstances indicate that there are changes to one
or more of the three elements of control.
(b) Investment vehicles
The Group has invested in a number of specialised investment
vehicles such as Open-Ended Investment Companies (OEICs)
and unit trusts. These invest mainly in equities, bonds, cash
and cash equivalents, and properties, and distribute most of
their income. In determining whether the Group controls such
vehicles, primary considerations include whether the Group is
acting as a principal or an agent (including an assessment of
the substantive removal rights of third parties) and the
variability in the returns associated with the Group’s aggregate
economic interest in the fund (direct interest and expected
management fees) relative to the total variability of returns.
Additionally, the Group’s percentage ownership in these
vehicles can fluctuate on a daily basis according to the level of
participation of the Group and third parties. To avoid transitory
or minor changes in fund holdings (which do not reflect the
wider facts and circumstances of the Group’s involvement)
resulting in binary changes in the consolidation conclusions,
the Group takes into account the trend of ownership over a
period of time.
The assessment is performed in line with the following
principles:
• Where the entity is managed by a Group asset manager, and
the Group’s ownership holding in the entity exceeds 40%,
the Group is judged to have control over the entity;
• Where the entity is managed by a Group asset manager, and
the Group’s ownership holding in the entity is between 30%
and 40%, the facts and circumstances of the Group’s
involvement in the entity are considered in forming a
judgement as to whether the Group has control over the
entity. Considerations include the rights held by other parties,
the Group’s rights to fees from the entity, the variability in the
returns associated with the Group’s aggregate economic
interest in the fund and the nature of the Group’s exposure to
variability compared with that of other investors; and
• Where the entity is managed by a Group asset manager, and
the Group’s ownership holding in the entity is less than 30%,
the Group is judged to not have control over the entity.
Where the Group is deemed to control such vehicles, they are
consolidated, with the interests of parties other than Aviva
being classified as liabilities. These appear as ‘Net asset value
attributable to unitholders’ in the consolidated statement of
financial position.
The interest of parties other than Aviva in the investment
return on these funds appear as ‘Investment expense/
(income) attributable to unitholders’ in the income statement.
Where the Group does not control such vehicles (e.g. the
Group is not the asset manager and has no substantive
removal rights), and these investments are held by its
insurance or investment funds, they are carried at fair value
through profit or loss within financial investments in the
consolidated statement of financial position, in accordance
with IFRS 9 Financial Instruments.
As part of their investment strategy, long-term business
policyholder funds have invested in a number of property
limited partnerships (PLPs), either directly or via property unit
trusts (PUTs), through a mix of capital and loans. The PLPs are
managed by general partners (GPs), in which the long-term
business shareholder companies hold equity stakes and which
themselves hold nominal stakes in the PLPs. The PUTs are
managed by a Group subsidiary.
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Accounting policies
Accounting for the PUTs and PLPs as subsidiaries, joint
ventures, associates or other financial investments depends
on whether the Group is deemed to have control or joint
control over the PUTs and PLPs’ shareholdings in the GPs and
the terms of each partnership agreement are considered along
with other factors that determine control, as outlined above.
Where the Group exerts control over a PUT or a PLP, it has
been treated as a subsidiary and its results, assets and
liabilities have been consolidated.
Where the partnership is managed by an agreement such
that there is joint control between the parties, notwithstanding
that the Group’s partnership share in the PLP (including its
indirect stake via the relevant PUT and GP) may be lower or
higher than 50%, such PUTs and PLPs have been classified
as joint ventures.
Where the Group has significant influence over the PUT or PLP,
as defined in the following section, the PUT or PLP is classified
as an associate. Where the Group holds non-controlling
interests in PLPs, with no significant influence or control over
their associated GPs, the relevant investments are carried at
fair value through profit or loss within financial investments.
(c) Consolidation procedure
Subsidiaries are consolidated from the date the Group obtains
control and are excluded from consolidation from the date the
Group loses control. All intercompany transactions, balances
and unrealised surpluses and deficits on transactions between
Group companies have been eliminated. Accounting policies of
subsidiaries are aligned on acquisition to ensure consistency
with Group policies.
The Group is required to use the acquisition method of
accounting for business combinations. Under this method, the
Group recognises identifiable assets, liabilities and contingent
liabilities at fair value, and any non-controlling interest in the
acquiree. For each business combination, the Group has the
option to measure the non-controlling interest in the acquiree
either at fair value or at the proportionate share of the
acquiree’s identifiable net assets. The excess of the
consideration transferred over the fair value of the net assets
of the subsidiary acquired is recorded as goodwill (see
accounting policy O below). Acquisition-related costs are
expensed as incurred.
Transactions with non-controlling interests that lead to
changes in the ownership interests in a subsidiary, but do not
result in a loss of control, are treated as equity transactions.
(d) Merger accounting and the merger reserve
Prior to 1 January 2004, the date of first-time adoption of IFRS,
certain significant business combinations were accounted for
using the ‘pooling of interests method’ (or merger accounting),
which treats the merged groups as if they had been combined
throughout the current and comparative accounting periods.
Merger accounting principles for these combinations gave rise
to a merger reserve in the consolidated statement of financial
position, being the difference between the nominal value of
new shares issued by the Parent Company for the acquisition
of the shares of the subsidiary and the subsidiary’s own share
capital and share premium account. These transactions have
not been restated, as permitted by the IFRS 1 transitional
arrangements.
The merger reserve is also used where more than 90% of the
shares in a subsidiary are acquired and the consideration
includes the issue of new shares by the Company, thereby
attracting merger relief under the Companies Act 1985 and,
from 1 October 2009, the Companies Act 2006.
(e) Associates and joint ventures
Associates are entities over which the Group has significant
influence. Significant influence is the power to participate in
the financial and operating policy decisions of the investee,
but is not control or joint control. Generally, it is presumed that
the Group has significant influence if it has between 20% and
50% of voting rights. Joint ventures are joint arrangements
whereby the Group and other parties that have joint control
of the arrangement have rights to the net assets of the joint
venture. Joint control is the contractually agreed sharing of
control of an arrangement, which exists only when decisions
about the relevant activities require unanimous consent of
the parties sharing control. In a number of these, the Group’s
share of the underlying assets and liabilities may be greater or
less than 50% but the terms of the relevant agreements make
it clear that control is not exercised. Such jointly controlled
entities are referred to as joint ventures in these financial
statements.
Gains on transactions between the Group and its associates
and joint ventures are eliminated to the extent of the Group’s
interest in the associates and joint ventures. Losses are also
eliminated, unless the transaction provides evidence of an
impairment of the asset transferred between entities.
Investments in associates and joint ventures are accounted
for using the equity method of accounting, except for
investments in investment vehicles which are carried at fair
value through profit or loss. Under this method, the cost of
the investment in a given associate or joint venture, together
with the Group’s share of that entity’s post-acquisition
changes to shareholders’ funds, is included as an asset in the
consolidated statement of financial position. As explained in
accounting policy O, the cost includes goodwill recognised on
acquisition. The Group’s share of their post-acquisition profit
or losses is recognised in the income statement and its share
of post-acquisition movements in reserves is recognised in
reserves. Equity accounting is discontinued when the Group
no longer has significant influence or joint control over the
investment.
If the Group’s share of losses in an associate or joint venture
equals or exceeds its interest in the undertaking, the Group
does not recognise further losses unless it has incurred
obligations or made payments on behalf of the entity.
(f) The Company’s investments
In the Company’s statement of financial position, subsidiaries,
associates and joint ventures are stated at cost less
impairment. Investments are reviewed annually to test
whether any indicators of impairment exist.
Where there is objective evidence of such an asset being
impaired, the investment is impaired to its recoverable value
and any unrealised loss is recorded in the income statement.
(E) Foreign currency translation
Income statements and cash flows of foreign entities are
translated into the Group’s presentation currency at average
exchange rates for the year, while their statements of financial
position are translated at the year-end exchange rates.
Exchange differences arising from the translation of the net
investment in foreign subsidiaries, associates and joint
ventures, and of borrowings and other currency instruments
designated as hedges of such investments, are recognised in
other comprehensive income and taken to the currency
translation reserve within equity.
On disposal of a foreign entity, such exchange differences are
transferred out of this reserve and are recognised in the
income statement as part of the gain or loss on sale.
The cumulative translation differences were deemed to be
zero at the transition date to IFRS.
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Accounting policies
Foreign currency transactions are accounted for at the
exchange rates prevailing at the date of the transactions.
Gains and losses resulting from the settlement of such
transactions, and from the translation of monetary assets and
liabilities denominated in foreign currencies, are recognised in
the income statement.
Translation differences on fixed maturity securities and other
monetary financial assets measured at fair value through profit
or loss (FVTPL) (see accounting policy W) are included in
foreign exchange gains and losses in the income statement.
Translation differences on non-monetary items, such as
equities which are designated as FVTPL, are reported as part
of the fair value gain or loss.
(F) Fair value measurement
Fair value is the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between
market participants at the measurement date, regardless of
whether that price is directly observable or estimated using
another valuation technique. This presumes that the transaction
takes place in the principal (or most advantageous) market
under current market conditions. Fair value is a market-based
measure and in the absence of observable market prices in
an active market, it is measured using the assumptions that
market participants would use when pricing the asset
or liability.
The fair value of a non-financial asset is determined based
on its highest and best use from a market participant’s
perspective. When using this approach, the Group takes into
account the asset’s use that is physically possible, legally
permissible and financially feasible.
The best evidence of the fair value of a financial instrument at
initial recognition is normally the transaction price i.e. the fair
value of the consideration given or received. In certain
circumstances, the fair value at initial recognition may differ
from the transaction price.
If the fair value is evidenced by comparison with other
observable current market transactions in the same
instrument (i.e. without modification or repackaging), or is
based on a valuation technique whose variables include only
data from observable markets, then the difference between
the fair value at initial recognition and the transaction price is
recognised as a gain or loss in the income statement.
When unobservable market data has a significant impact on
the valuation of financial instruments, the difference between
the fair value at initial recognition and the transaction price is
not recognised immediately in the income statement, but deferred
and recognised in the income statement on an appropriate
basis over the life of the instrument, but no later than when the
valuation is supported wholly by observable market data or
the transaction is closed out or otherwise matured.
If an asset or a liability measured at fair value has a bid price
and an ask price, the price within the bid-ask spread that is
most representative of fair value in the circumstances is used
to measure fair value.
(G) Product classification
Insurance contracts are defined as those containing significant
insurance risk if, and only if, an insured event could cause an
insurer to make significant additional payments (determined
on a present value basis) in any scenario, excluding scenarios
that lack commercial substance, at the inception of the
contract. Such contracts remain insurance contracts until all
rights and obligations are extinguished or expire. Contracts
can be reclassified as insurance contracts after inception if
insurance risk becomes significant. Contracts that transfer
financial risks, but not significant insurance risk, are classified
as investment contracts.
Some insurance and investment contracts contain a
discretionary participation feature, which is a contractual right
to receive additional benefits as a supplement to guaranteed
benefits (i) that are likely to be a significant portion of the total
contractual payments; (ii) whose amount or timing is at the
discretion of the issuer; and (iii) that are based on the performance
of a specified pool of assets, company, or other entity that
issues the contracts. Investment contracts with discretionary
participation features, referred to as participating investment
contracts, are accounted for under IFRS 17 as set out in policy
(M). This includes hybrid participating investment contracts,
which are a combination of unit-linked and with-profits
investments for which the discretionary participation feature
is a significant portion of the combined contract. Investment
contracts without discretionary participation features, referred
to as non-participating investment contracts, and the related
reinsurance assets are accounted for as financial instruments
under IFRS 9.
The classification of the Group’s main contracts is
summarised below:
Type of contract
Classification
Annuities
Insurance contract
Unit-linked with significant
insurance risk or with a
significant discretionary
participation feature
Insurance contract/
Participating investment
contract
Unit-linked without significant
insurance risk and without
significant discretionary
participation features
Non-participating investment
contract
Protection
Insurance contract
General insurance
(motor, property, liability)
Insurance contract
Health
Insurance contract
With-profits
Insurance contract/
Participating investment
contract
(H) Insurance service result
The insurance service result represents the Group’s profit
or loss recognised on insurance contracts, participating
investment contracts and reinsurance contracts (measured in
accordance with policy M) in the period, excluding the impact
of the time value of money and financial risks related to such
contracts. The insurance service result contains three
components:
(a) Insurance revenue
For insurance contracts and participating investment contracts
applying GMM and VFA, insurance revenue is comprised of:
• The amortisation of Contractual Service Margin (CSM);
• The release of the risk adjustment included within the
liability for remaining coverage;
• Claims and expenses expected to be incurred in the period,
as released from the liability for remaining coverage and
adjusted for the allocation of loss;
• Other, including revenue recognised for policyholder
tax and other incurred expenses that have been charged
to policyholder funds; and
• The recovery of insurance acquisition cash flows,
which offsets the amortisation included in insurance
service expenses.
For insurance contracts applying the Premium Allocation
Approach (PAA), insurance revenue is based upon the
amount of expected premium receipts allocated to insurance
contracts in the period. Premium receipts are allocated to
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Accounting policies
insurance contracts based upon the passage of time or,
where there is evidence that the release of risk differs from
the passage of time, on the basis of the expected timing of
insurance service expenses.
(b) Insurance service expenses
For insurance contracts and participating investment
contracts, insurance service expenses are comprised of:
• Actual claims (excluding investment components) and non-
acquisition fulfilment expenses incurred, adjusted for the
allocation of loss components;
• The recognition and reversal of losses on onerous contracts;
• Non-financial assumption changes which do not
adjust the CSM;
• Non-financial assumption changes which affect the
valuation of the liability for incurred claims;
• Any impairment of acquisition cash flows, net of
reversals; and
• The amortisation of insurance acquisition cash flows.
For contracts measured under the GMM and VFA, recovery
of insurance acquisition cash flows is included in insurance
revenue, as described above, and an equal and opposite
amount for the amortisation of insurance acquisition cash
flows is included in insurance service expenses.
For contracts measured under the PAA, amortisation of
insurance acquisition cash flows is based on the passage of
time or, where there is evidence that the release of risk differs
from the passage of time, on the basis of the expected timing
of insurance service expenses.
(c) Net income and expenses from reinsurance
contracts
Net income (expenses) from reinsurance contracts held
represents the insurance service result for groups of
reinsurance contracts held and is comprised of:
• The allocation of reinsurance premiums paid, which is
calculated using the same principles as used to calculate
revenue on insurance contracts;
• Amounts recoverable from reinsurers, which is calculated
using the same principles as used to calculate insurance
service expenses on insurance contracts;
• The recognition of, and subsequent movements in,
reinsurance loss recovery components; and
• The effect of changes in the risk of reinsurers’ non-
performance.
(I) Insurance finance result
Insurance finance income/expenses are calculated on
insurance contracts, participating investment contracts
and reinsurance contracts, comprising:
• Changes in the fair value of underlying items;
• The accretion of interest on the CSM;
• The unwind of discounting on fulfilment cash flows; and
• The impact of financial assumption changes upon fulfilment
cash flows.
The latter two components apply to contracts measured under
the GMM and PAA, in addition to VFA contracts where the risk
mitigation option is applied.
Where changes in expected future cash flows and risk
adjustment on GMM contracts arise from non-financial
assumption changes and experience variances, the difference
between measuring the change in fulfilment cash flows using
current financial assumptions and the impact which adjusts the
CSM using locked in financial assumptions is recognised
in the income statement in net finance expenses.
The accounting policies used to calculate amounts within
the insurance finance result are discussed in greater detail
in policy M.
(J) Investment contract fee revenue
Non-participating investment contract policyholders are
charged fees for policy administration, investment
management, surrenders or other contract services.
The fees may be for fixed amounts or vary with the amounts
being managed, and will generally be charged as an
adjustment to the policyholder’s balance. Fees related to
investment management services are recognised as revenue
over time, as performance obligations are satisfied. In most
cases this revenue is recognised in the same period in which
the fees are charged to the policyholder. Fees that are related
to services to be provided in future periods are deferred and
recognised when the performance obligation is fulfilled.
Variable consideration, such as performance fees and
commission subject to clawback arrangements, is not
recognised as revenue until it is reasonably certain that no
significant reversal of amounts recognised would occur.
Initiation and other ‘front-end’ fees (fees that are assessed against
the policyholder balance as consideration for origination of the
contract) are charged on some non-participating investment
and investment fund management contracts.
Where the investment contract is measured at fair value,
the front-end fees that relate to the provision of investment
management services are deferred and recognised as the
services are provided. Origination fees are recognised
immediately where the sale of fund interests represent
a separate performance obligation.
(K) Other fee and commission income
Other fee and commission income consists primarily of fund
management fees, distribution fees from mutual funds, asset
origination fees, commission revenue from the sale of mutual
fund shares and transfer agent fees for shareholder record
keeping. Fee and commission income is recognised over time
as the services are provided.
(L) Investment return
Investment return consists of dividends, interest and rents
receivable for the year, movements in amortised cost on fixed
maturity securities, realised gains and losses, and unrealised
gains and losses on investments held at FVTPL (as defined in
accounting policy W). Dividends on equity securities are
recorded as revenue on the ex-dividend date. Interest income
is recognised as it accrues, taking into account the effective
yield on the investment. It includes the interest rate differential
on forward foreign exchange contracts.
Rental income is recognised on an accruals basis using
a straight-line method, unless there is compelling evidence
that benefits do not accrue evenly over the period of the lease.
A gain or loss on a financial investment is only realised
on disposal or transfer, and is the difference between the
proceeds received, net of transaction costs, and its original
cost or amortised cost, as appropriate.
Unrealised gains and losses, arising on investments which
have not been derecognised as a result of disposal or transfer,
represent the difference between the carrying value at the
year end and the carrying value at the previous year end or
purchase value during the year, less the reversal of previously
recognised unrealised gains and losses in respect of disposals
made during the year.
Realised gains or losses on investment property represent the
difference between the net disposal proceeds and the carrying
amount of the property.
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(M) Insurance, participating investment and
reinsurance contracts
Insurance contracts, participating investment contracts
and reinsurance contracts are accounted for in accordance
with IFRS 17.
The key measurement principles are outlined below.
(a) IFRS 17 measurement models
The Group applies three measurement models to insurance
contracts, participating investment contracts and reinsurance
contracts as follows:
Model
Applicable business
GMM
• Bulk purchase annuities
• Individual immediate and deferred annuities
• Individual and group protection
• With-profits contracts with guaranteed
annuity terms
• Reinsurance contracts held, including non-
life reinsurance contracts that are not
eligible for PAA
VFA
• Participating investment contracts
• Unit linked or with-profits contracts with
significant insurance risk
PAA
• Short duration non-life insurance contracts
• Longer duration non-life insurance
contracts which are eligible for PAA
• Reinsurance contracts held which are
eligible for PAA
The Group applies judgement when determining eligibility
criteria for the VFA and PAA measurement models (see
Accounting policy M section (b)).
Under each measurement model insurance contract
liabilities are measured as the sum of the liability for
remaining coverage (LRC) and the liability for incurred
claims (LIC). The LRC represents the obligation under the
insurance contract for insured events that have not yet
occurred, i.e. the obligation that relates to the unexpired
portion of the coverage period, including the contractual
service margin (CSM). The LIC reflects the obligation to
investigate and pay valid claims for insured events that
have already occurred, including events that have already
occurred but for which claims have not been reported.
The key features of each measurement model are set
out below.
(i) General measurement model (GMM)
The GMM is the default IFRS 17 measurement model.
The fulfilment cash flows comprise the present value of
future cash flows within the boundary of the contract,
discounted at current rates, and an explicit risk adjustment
for non-financial risk.
At inception, a CSM liability is recognised for each new group
of contracts which represents the unearned profit to be
recognised over the coverage period.
Initial measurement is based on the cash flows within the
boundary of the contract discounted at the rate when the
contract is written. Except for reinsurance contracts held,
losses on groups of contracts that are onerous at inception
are recognised immediately.
For subsequent measurement, fulfilment cash flows are
discounted at current rates at each balance sheet date, while
the CSM is remeasured applying the discount rate when the
contract is written (the locked-in rate). Other financial
assumptions including inflation and foreign exchange rates are
also locked in at inception for the purposes of remeasuring the
CSM. The CSM is remeasured for changes in the fulfilment
cash flows relating to non-financial risk only, applying these
locked in financial assumptions. Interest is accreted on the
CSM using the locked-in discount rate and the CSM is
amortised over the coverage period of the contract.
The coverage period is determined based on the service
provided to customers including both insurance and
investment services. Losses on groups of contracts that
are profitable at inception but subsequently become
onerous are recognised immediately.
In contrast to insurance contracts, the CSM for groups
of reinsurance contracts held can be an asset or liability.
If reinsurance is in place when underlying groups of insurance
contracts become onerous, the reinsurance CSM recognised
is adjusted to offset the gross losses arising.
Where the net cost of purchasing reinsurance contracts held
relates to events that occurred prior to purchase (for example
adverse development cover), no CSM is recognised, and the
net cost is recognised immediately in the income statement.
(ii) Variable fee approach (VFA)
The VFA is a modified approach to the GMM that is applied to
groups of insurance and investment contracts with direct
participating features, which meet eligibility requirements that
demonstrate they provide substantial investment related
services to policyholders.
Fulfilment cash flows for VFA contracts comprise the
obligation to pay policyholders an amount equal to the
fair value of underlying items, less the variable fee for
future service.
Changes in the obligation to pay policyholders the fair value of
underlying items are recognised within net finance expenses
from insurance contracts in the income statement.
The variable fee includes the present value of the Group’s
share of the fair value of underlying items, adjusted for cash
flows that do not vary with those underlying items. The risk
adjustment reflects the compensation for non-financial risk
in relation to the variable fee only.
The CSM is subsequently remeasured for changes in the
variable fee due to both financial and non-financial risks using
current market discount rates.
Consistent with the GMM, the CSM is recognised in profit or
loss over the coverage period in line with the insurance and
investment services provided to customers.
(iii) Premium allocation approach (PAA)
The PAA is a simplified measurement model which can
be applied to all short duration contracts and to longer
duration contracts that meet PAA eligibility criteria.
It is applied to all of the Group's non-life insurance and
reinsurance contracts except for contracts that reinsure
adverse development of incurred claims.
The LRC is measured as the amount of premium received net
of acquisition cash flows, less the amount of premiums and
acquisition cash flows that have been recognised in profit or
loss over the expired portion of the coverage period.
Premium receipts and acquisition cash flows are recognised
in profit or loss over the life of the contract, based on the
passage of time.
Where policyholder premiums are yet to be remitted by
intermediaries, these premiums are treated as received within
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the LRC with a separate financial asset recognised for the
amounts due from intermediaries. Commissions due to
intermediaries are treated as paid within the LRC with a
separate financial liability recognised. Variable commissions
which are not yet due and which are dependent upon
underwriting performance are measured within the liability for
remaining coverage, until the coverage period expires and the
liability amount is known, at which point they are reclassified
as financial liabilities.
If facts and circumstances indicate that a group of contracts
may be onerous, the LRC is measured using GMM principles
and losses for onerous contracts are recognised immediately
in the income statement.
For most contracts applying PAA, the measurement of the LIC
aligns to the GMM, with an explicit risk adjustment for non-
financial risk, and discounting applied to expected cash flows.
For Health contracts a PAA exemption is applied to measure
the LIC on an undiscounted basis, allowable because claims
are settled within 12 months of their incurred date.
(b) Choice of measurement model
(i) VFA eligibility
Life business is considered to have direct participating
features, and is required to be measured under the VFA
model where:
• Contractual terms evidence that policyholders participate
in a pool of clearly identified underlying items, for example
unit-linked or with-profits funds;
• The policyholders expect to receive a substantial share
of the returns on underlying items (defined by the Group
as greater than 50%); and
• A substantial proportion of changes in amounts payable
to policyholders varies with returns on the underlying items
(defined by the Group as a correlation coefficient of greater
than 50%).
Reinsurance contracts held are not eligible to apply the VFA.
(ii) PAA eligibility
The vast majority of the Group’s direct non-life business has
a duration of one year or less and is automatically eligible
for the PAA model. For the remainder, financial modelling is
performed to compare the value of the LRC measured under
GMM and PAA.
Where the LRC does not materially differ between the two
measurement models (over the duration of the contract and
in a range of reasonably foreseeable scenarios), the contract
group is PAA eligible.
The Group has multiple non-life reinsurance contracts which
are greater than one year in duration. These are assessed
for PAA eligibility by applying the same financial modelling
approach and are all PAA eligible, except for treaties
reinsuring the adverse development of incurred claims.
(c) Level of aggregation
Generally, an insurance policy with the legal form of a single
contract is accounted for as a single contract. Such policies
will be separated into multiple insurance contracts if: more
than one type of cover is included; risks covered by the
different components are independent; each component can
be measured without considering the other; components can
lapse or terminate independently; and components can be
priced and sold separately. This results in the separation of a
small proportion of non-life insurance policies into multiple
insurance contracts.
The unit of account is a group of contracts, so individual
insurance contracts are aggregated into groups for
measurement purposes. Discrete CSMs are determined for
each group of insurance contracts applying GMM or VFA.
Groups of insurance contracts have been determined by
identifying portfolios of insurance contracts, comprising
contracts subject to similar risks that are managed together,
and dividing each portfolio into annual cohorts by year
of issue.
Each annual cohort is then further subdivided into three
groups based on the profitability of contracts determined
at initial recognition and comprising:
• Contracts that are onerous;
• Contracts that have no significant possibility of becoming
onerous; (based on the probability that changes
in assumptions would result in contracts becoming
onerous); and
• All remaining contracts.
Reinsurance contracts held are also subdivided into
three profitability groups, determined by reference to
net gains/losses on initial recognition, and comprising:
• Contracts that have a net gain at initial recognition;
• Contracts that have no significant possibility of a net
gain arising subsequently; and
• All remaining contracts.
The approach to profitability grouping makes use of sets.
Where it can be demonstrated that all contracts within a set
are sufficiently homogeneous, they are allocated to the same
profitability group without performing an individual contract
assessment. For life product lines, sets of contracts usually
correspond to policyholder pricing groups. The likelihood of
changes in insurance, financial and other exposures resulting
in contracts becoming onerous is monitored at the level of
these pricing groups.
For contracts measured under the PAA, IFRS 17 permits
a simplification whereby contract groups are assumed
not to be onerous, unless facts and circumstances indicate
otherwise. The Group uses internal management information
to identify facts and circumstances that may indicate that
a group is onerous.
(d) Recognition and derecognition
An insurance contract issued by the Group is recognised from
the earliest of:
• The beginning of its coverage period (i.e. the period during
which the Group provides insurance contract services in
respect of any premiums within the boundary of the contract);
• The date the first payment from the policyholder becomes due
or, if there is no contractual due date, when it is received from
the policyholder; and
• The date when facts and circumstances indicate that the
contract is onerous.
Reinsurance contracts are recognised on the following dates:
• Reinsurance contracts that provide proportionate coverage:
the later of the date on which any underlying insurance
contract is initially recognised and the date the reinsurance is
entered into. This applies to the Group’s quota share
reinsurance contracts.
• Other reinsurance contracts: The beginning of the coverage
period of the group of reinsurance contracts. However, if the
Group recognises an onerous group of underlying insurance
contracts on an earlier date and the related reinsurance
contract was entered into before that earlier date, then the
group of reinsurance contracts is recognised on that earlier
date. This applies to the Group’s excess of loss and
catastrophe cover reinsurance contracts.
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An insurance or reinsurance contract acquired in a transfer
of contracts or a business combination is recognised on the
date of acquisition.
When the contract is recognised, it is added to an existing group
of contracts or, if the contract does not qualify for inclusion in an
existing group, it forms a new group to which future contracts are
added. Groups of contracts are established on initial recognition
and their composition is not revised once all contracts have been
added to the group.
Insurance contracts are derecognised when the contract
is extinguished, i.e. when the specified obligations expire,
are discharged, or are cancelled.
The Group also derecognises a contract if its terms are
modified in a way that would have changed the accounting
for the contract significantly had the new terms always
existed, in which case a new contract based on the modified
terms is recognised.
(e) Estimate of future cash flows
The estimate of future cash flows is assessed at the level
of groups of contracts and represents the best estimate of
the Group's cost to fulfil a contract incorporating current
estimates of non-financial assumptions. The estimate allows
for all the cash inflows and outflows expected to occur within
the contract boundary. Cash flows are modelled separately
for gross and reinsurance contracts.
(i) Contract boundaries
Cash flows are within the contract boundary if they arise
from substantive rights and obligations that exist during
the reporting period in which the Group can compel the
policyholder to pay premiums or has a substantive obligation
to provide insurance contract services.
A substantive obligation to provide services ends when the Group
has the practical ability to reassess the risks (insurance and
financial risks transferred from the policyholder, so excluding
lapse and expense risks) and set a price or level of benefits that
fully reflects those reassessed risks for either the particular
policyholder or the portfolio that contains the contract.
Riders, representing add-on provisions to a basic insurance
policy that provide additional benefits to the policyholder
at additional cost, issued together with the main insurance
contracts, form part of a single insurance contract with all
of the cash flows within its boundary.
Some insurance contracts issued by the Group provide
policyholders with the option to buy additional insurance
coverage. The Group assesses the practical ability to reprice
such insurance contracts in their entirety to determine if the
option cash flows are within or outside the insurance contract
boundary. As a result of this assessment, options for which
pricing is not guaranteed are not measured by the Group until
they are exercised.
Cash flows are within the boundaries of participating
investment contracts if they result from a substantive
obligation of the Group to deliver cash at a present or
future date.
Cash flows are within the contract boundary of a reinsurance
contract held if they arise from substantive rights and
obligations that exist during the reporting period in which the
Group is compelled to pay amounts to the reinsurer, or has a
substantive right to receive services from the reinsurer.
The contract boundary is reassessed at each reporting date to
include the effect of changes in circumstances on the Group’s
substantive rights and obligations and, therefore, may change
over time. Cash flows outside the contract boundary relate to
future insurance contracts and are recognised when those
contracts meet the recognition criteria.
(ii) Principal non-financial assumptions
Principal non-financial assumptions used in the calculation of
life insurance and participating investment contract fulfilment
cash flows include those in respect of annuitant and assurance
mortality and future expenses. Expenses must be directly
attributable to fulfilling insurance contracts, including an
allocation of overheads to the extent that they can be allocated
to groups of contracts in a systematic and rational way.
Principal non-financial assumptions used in the calculation of
the non-life LIC use past claims experience to project future
claims (estimated using a range of standard actuarial claims
projection techniques).
(iii) Financial assumptions
Discount rates
Discounting is applied to the estimate of future cash flows.
The Group uses a bottom-up discount rate for all life and non-
life insurance contracts, except for annuities. A top-down
discount rate is applied to annuities to reflect more
appropriately the characteristics of the annuity liabilities.
For other contracts where liabilities are subject to lapse risk
or where cash flows depend on underlying asset performance
(such as unit-linked and with-profits), the characteristics of the
liability can be reflected using the bottom-up method which
requires the application of less judgement.
Top-down discount rates
The discount rate is determined from the yield implicit in the
fair value of an appropriate reference portfolio of assets that
reflects the characteristics of the liability. Adjustments are
made for differences between the reference portfolio and
liability cash flows, including an allowance for defaults, which
reflects the compensation a market participant would require
for credit risk.
The CSM for annuity contracts is measured using a locked-in
discount rate based on assets expected to be originated
for new business at initial recognition of the contracts.
On subsequent measurement of the fulfilment cash flows
the reference portfolio is based on the assets held to match
the portfolio of liabilities. For recently written contracts, an
adjustment is made to liabilities where appropriate assets
are yet to be sourced.
Bottom-up discount rates
The discount rate is determined as the risk-free yield, adjusted
for differences in liquidity characteristics between the financial
assets used to derive the risk-free yield and the relevant
liability cash flows (known as an ‘illiquidity premium’).
The illiquidity premium is determined as a percentage
of the current spread over the risk-free yield on an index of
covered bonds. The percentage applied reflects the liquidity
characteristics of the liabilities including the propensity and
ability of policyholders to lapse or surrender their contracts;
for example, 100% for structured settlements where
surrenders are not possible, and 0% for unit-linked contracts
where policyholders can normally immediately surrender their
contract for the unit value. An intermediate percentage is
applied for other types of business.
Inflation assumptions
Future inflation assumptions are treated as a financial
assumption when applied to policyholder benefits or
outsourced maintenance expenses that are contractually
linked to an inflation index.
Presentation of financial assumption changes
The Group recognises the impact of financial assumption
changes in the income statement, except for those that relate
to changes in the variable fee for VFA contracts, which adjust
the CSM.
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(f) Risk Adjustment
The risk adjustment reflects the compensation required by the
Group to accept the uncertainty about the amount and timing
of future cash flows that arises from non-financial risk.
The calculation of the risk adjustment is calibrated to
the Group’s pricing and capital allocation framework,
leveraging the Solvency II view of non-financial risk,
considering a lifetime view, and including diversification
between risks.
The risk adjustment calibration is set at least annually, based
on the Group’s current view of risk. The risk adjustment
calculation is reassessed at each reporting date.
The change in risk adjustment relating to current or past
service is recognised within insurance revenue in the income
statement. The impact of discounting the risk adjustment for
GMM and PAA contracts is disaggregated and recognised
within net finance expenses from insurance contracts.
(g) CSM
The CSM represents a liability for unearned profit measured at
inception and recognised in the income statement over the life
of the contract, as insurance and investment related services
are provided to the customer.
For profitable groups of insurance contracts, the CSM is
established to ensure no profit is recognised at inception, hence
it is equal and opposite to the net present value of the expected
cash flows (including initial premiums and insurance acquisition
cash flows) and the risk adjustment. For groups of gross
insurance contracts issued that are onerous at initial recognition,
the CSM is set to nil and losses are recognised in the income
statement. For reinsurance contracts, the CSM is initially
recognised at a value that ensures no gain or loss is recognised,
but may be adjusted for loss offsetting as set out in (h).
Subsequently, the CSM is adjusted for:
• Accretion of interest at locked-in discount rates (groups
of GMM contracts only), which is charged to net finance
expenses in the income statement;
• New contracts added to the same group;
• Changes in fulfilment cash flows (including risk adjustment)
that relate to future service;
• For reinsurance contracts held, income recognised in profit
or loss on initial recognition of onerous underlying contracts
and adjustments to the loss recovery component set out in
(h); and
• Currency exchange differences.
Changes in fulfilment cash flows that relate to future
service include:
• Experience variances in premiums received during the
period that relate to services provided from the start of the
current period;
• Changes in expected future cash flows and risk adjustment
on GMM contracts arising from non-financial assumption
changes and experience variances, measured using locked
in financial assumptions;
• Changes in the variable fee and risk adjustment on VFA
contracts arising from financial and non-financial
assumption changes and experience variances, except
where the risk mitigation option is applied; and
• Experience variances in non-distinct investment
components, premium refunds and rights to withdraw
payable in the period.
Changes in fulfilment cash flows that relate to past or current
service do not adjust the CSM and are recognised immediately
in the income statement, including the following:
• Experience variances in claims and expenses incurred,
which are recognised as the difference between insurance
revenue (expected claims and expenses incurred) and
insurance service expenses (actual claims and expenses
incurred); and
• Changes in expected future cash flows and risk adjustment
on GMM contracts arising from financial assumption
changes and experience variances, including changes in
cash flows that are contractually linked to an inflation index,
which are recognised in net finance expenses from
insurance contracts.
The balance on the CSM at the end of the period is available
for release to profit or loss.
The amount of CSM recognised in insurance revenue
each period (the CSM amortisation) is determined by
considering, for each group of contracts, coverage units that
reflect the quantity of the benefits provided in each period and
the expected coverage period.
Benefits provided include those arising from both insurance
and investment services. Investment services are only
included if the Group is managing underlying items (typically
with-profits and unit-linked contracts) or where contracts
have an investment component or policyholder’s right to
withdraw that is expected to include an investment return that
is generated by investment activity performed by the Group.
This includes contracts where the value of the investment
return that the policyholder benefits from is not directly related
to the value of the underlying investments.
Coverage units are discounted and are updated at each
reporting date to reflect the current best estimate of service
expected to be provided in future periods.
Coverage units for reinsurance contracts held are typically
consistent with the underlying gross contracts, adjusted for
differences in the services provided.
(h) Loss components and loss offsetting
Losses on onerous contracts are recognised immediately
within insurance service expenses in the income statement,
and a loss component is established. Subsequent losses, and
reversals of losses, arising from changes in fulfilment cash
flows that relate to future service adjust the loss component
and are recognised immediately in insurance service expenses
to the extent that a balance remains on the loss component,
after which a CSM will be established.
A variable proportion approach is used to systematically
allocate changes in fulfilment cash flows that relate to past or
current service to the loss component, resulting in a deduction
from the amount of these changes that is recognised within
insurance revenue in the income statement with an offsetting
adjustment to insurance service expenses. The variable
proportion is determined each reporting date as the proportion
of the balance on the loss component relative to the fulfilment
cash flows for that group of contracts.
A reinsurance loss recovery component is established for a
group of reinsurance contracts that covers a group of onerous
underlying contracts. At initial recognition this is the amount
that the reinsurance CSM has been adjusted as a result of
recognising income to offset losses recognised at inception on
underlying insurance contracts, based on the percentage of
the claims that are recoverable through the reinsurance.
Subsequently the loss recovery component is adjusted for
changes in the reinsurance fulfilment cash flows that
correspond to change in fulfilment cash flows that relate to
future service for the underlying onerous contracts.
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The balance on the loss recovery component is systematically
allocated to the income statement, using a similar approach to
loss components.
(i) Investment components and rights to withdraw
Investment components are amounts that are payable to the
policyholder in all circumstances, regardless of whether an
insured event occurs. This typically includes the account
balance on unit-linked and with-profit contracts, surrender
and maturity values on protection contracts and guaranteed
payments on immediate annuities. Rights to withdraw, which
may include items that are investment components,
are amounts payable to policyholders that do not represent an
additional benefit payable when an insured event occurs.
This includes, but is not restricted to, maturity values that are
not determined by the occurrence of an insured event, a
policyholder’s rights to receive a surrender value or refund of
premiums on cancellation of a policy, rights to transfer an
amount to another insurance provider and guaranteed annuity
payments on a deferred annuity in excess of the death benefit
payable prior to retirement. Investment components and rights
to withdraw are excluded from insurance revenue and
insurance service expenses in the income statement.
(j) Insurance acquisition cash flows
Insurance acquisition cash flows are initially deferred on the
balance sheet as an insurance acquisition cash flow asset and
then allocated against groups of insurance contracts to which
they are directly attributable.
This includes instances where insurance acquisition cash flows
are directly attributable to the future renewal of existing contract
groups for some products in the Group’s non-life business. For
contract groups applying PAA, the Group has chosen not to apply
an exemption to recognise insurance acquisition cash flows as an
expense at the point they are incurred.
Where insurance acquisition cash flows are allocated to
contract groups applying GMM or VFA, they are included
within the measurement of the CSM and recognised in the
income statement over the period which services are provided
to the customer. Insurance acquisition cash flows allocated to
contract groups applying PAA are recognised in the income
statement over the life of the contract based on the expected
timing of incurred claims.
Insurance acquisition cash flow assets are assessed for
impairment where facts and circumstances indicate that they
may be impaired. The Group uses data on customer retention
rates and the profitability of products to identify such facts and
circumstances.
(N) Non-participating investment contract
liabilities
(a) Claims
For non-participating investment contracts with an account
balance, claims reflect the excess of amounts paid over the
account balance released.
(b) Contract liabilities
Non-participating investment contract liabilities are
designated at FVTPL. Under IFRS 9, the Group elects to
recognise the movement in own credit risk through the income
statement in order to eliminate an accounting mismatch.
Deposits collected under non-participating investment
contracts are not accounted for through the income
statement, except for the investment return attributable to
those contracts, but are accounted for directly through the
statement of financial position as an adjustment to the
investment contract liability.
The majority of the Group’s contracts classified as non-
participating investment contracts are unit-linked contracts
and are measured at fair value.
The liability’s fair value is determined using a valuation
technique to provide a reliable estimate of the amount for
which the liability could be transferred in an orderly
transaction between market participants at the measurement
date, subject to a minimum equal to the surrender value. For
unit-linked contracts, the fair value liability is equal to the
current unit fund value, including any unfunded units.
In addition, if required, non-unit reserves are held based on a
discounted cash flow analysis. For non-linked contracts, the
fair value liability is based on a discounted cash flow analysis,
with allowance for risk calibrated to match the market price
for risk.
(O) Reinsurance for non-participating investment
contracts
Reinsurance assets for non-participating investment
contracts includes balances in respect of investment contracts
that are legally reinsurance contracts but do not meet the
definition of a reinsurance contract under IFRS 17 as they
principally transfer financial risk. Premiums payable on these
contracts are accounted for directly through the statement
of financial position.
A deposit asset is initially recognised, based on the
consideration paid less any explicitly identified premiums
or fees to be retained by the reinsured. The assets are
subsequently measured at FVTPL.
(P) Goodwill, AVIF and intangible assets
(a) Goodwill
Goodwill represents the excess of the cost of an acquisition
over the fair value of the Group’s share of the net assets of
the acquired subsidiary, associate or joint venture at the date
of acquisition. Goodwill arising on the Group’s investments
in subsidiaries is shown as a separate asset, while that on
associates and joint ventures is included within the carrying
value of those investments.
Goodwill on acquisitions prior to 1 January 2004 (the date of
transition to IFRS) is carried at its book value (original cost less
cumulative amortisation) on that date, less any impairment
subsequently incurred. Goodwill arising before 1 January 1998
was eliminated against reserves and has not been reinstated.
Where negative goodwill arises on an acquisition, this is
recognised immediately in the consolidated income statement.
(b) Acquired value of in-force business (AVIF)
AVIF represents the present value of future profits on
a portfolio of long-term non-participating investment
contracts, acquired either directly or through the purchase
of a subsidiary, is recognised as an asset.
If the AVIF results from the acquisition of an investment
in a joint venture or an associate, it is held within the carrying
amount of that investment. In all cases, the AVIF is amortised
over the useful lifetime of the related contracts in the portfolio
on a systematic basis. The rate of amortisation is chosen by
considering the profile of the additional value of in-force
business acquired and the expected depletion in its value.
AVIF is reviewed for evidence of impairment, consistent with
reviews conducted for other finite life intangible assets and
impairment tested at product portfolio level by reference to
a projection of future profits arising from the portfolio.
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(c) Intangible assets
Intangible assets consist primarily of contractual relationships
such as access to distribution networks, customer lists and
software.
The economic lives of these are determined by considering
relevant factors such as usage of the asset, typical product
life cycles, potential obsolescence, maintenance costs, the
stability of the industry, competitive position and the period
of control over the assets. Finite life intangibles are amortised
over their useful lives, which range from three to 30 years,
using the straight-line method.
The amortisation charge for the year is included in the income
statement under ‘Other expenses’. For intangibles with finite
lives, impairment charges will be recognised in the income
statement where evidence of such impairment is observed.
Intangibles with indefinite lives are subject to regular
impairment testing, as described below.
(d) Impairment testing
For impairment testing, goodwill and intangible assets with
indefinite useful lives have been allocated to cash-generating
units. The carrying amount of goodwill and intangible assets
with indefinite useful lives is reviewed at least annually or
when circumstances or events indicate there may be
uncertainty over this value. Goodwill and indefinite life
intangibles are written down for impairment where the
recoverable amount is insufficient to support its carrying
value. Further details on goodwill allocation and impairment
testing are given in note 16. Any impairments are charged as
expenses in the income statement.
(Q) Property and equipment
Owner-occupied properties are carried at their revalued amounts,
and movements are recognised in other comprehensive income
and taken to a separate reserve within equity. When such
properties are sold, the accumulated revaluation surpluses are
transferred from this reserve to retained earnings.
These properties are depreciated down to their estimated
residual values over their useful lives.
This excludes owner-occupied properties held under lease
arrangements, which are measured at amortised cost.
See accounting policy AB for further information.
All other items classed as property and equipment within the
statement of financial position are carried at historical cost
less accumulated depreciation.
Investment properties under construction are included within
property and equipment until completion, and are stated at cost
less any provision for impairment in their values until construction
is completed or fair value becomes reliably measurable.
Depreciation is calculated on a straight-line basis to write
down the cost of other assets to their residual values over
their estimated useful lives as follows:
• Properties under construction
No depreciation
• Owner-occupied properties,
and related mechanical and
electrical equipment
25 years
• Motor vehicles
Three years, or lease
term (up to useful life)
if longer
• Computer equipment
Three to five years
• Other assets
Three to five years
The assets’ residual values, useful lives and method of
depreciation are reviewed regularly, and at least at each
financial year end, and adjusted if appropriate. Where the
carrying amount of an asset is greater than its estimated
recoverable amount, it is written down immediately to its
recoverable amount.
Gains and losses on disposal of property and equipment
are determined by reference to their carrying amount.
Borrowing costs directly attributable to the acquisition and
construction of property and equipment are capitalised.
All repair and maintenance costs are charged to the income
statement during the financial period in which they are
incurred. The cost of major renovations is included in the
carrying amount of the asset when it is probable that future
economic benefits in excess of the most recently assessed
standard of performance of the existing asset will flow to the
Group and the renovation replaces an identifiable part of the
asset. Major renovations are depreciated over the remaining
useful life of the related asset.
(R) Investment property
Investment property is held for long-term rental yields and is
not occupied by the Group.
Completed investment property is stated at its fair value, as
assessed by qualified external valuers or by qualified staff of
the Group. Changes in fair values are recorded in the income
statement in investment return.
As described in accounting policy Q above, investment
properties under construction are included within property
and equipment, and are stated at cost less any impairment in
their values until construction is completed or fair value
becomes reliably measurable.
(S) Impairment of non-financial assets
Property and equipment and other non-financial assets are
reviewed for impairment losses whenever events or changes
in circumstances indicate that the carrying amount may not be
recoverable.
An impairment loss is recognised in the income statement for
the amount by which the carrying amount of the asset exceeds
its recoverable amount, which is the higher of an asset’s fair
value less costs of disposal and value in use. For the purposes
of assessing impairment, assets are grouped at the lowest
level for which there are separately identifiable cash flows.
Non-financial assets, except goodwill which have suffered
an impairment, are reviewed annually for possible reversal
of the impairment.
(T) Recognition and classification of financial assets
Financial assets are measured initially at fair value plus eligible
transaction costs for financial assets held at amortised cost.
Financial assets are subsequently measured at amortised cost
or FVTPL based on a business model assessment and the extent
to which the contractual cash flows associated with the financial
assets are solely payments of principal and interest (SPPI).
The Group measures financial assets at FVTPL if they do not
meet the SPPI criteria or if they are held within a business
model where they are managed and evaluated on a fair value
basis resulting from the Group’s management of capital on a
regulatory basis.
A financial asset is classified at amortised cost if it is held
within a business model whose objective is to hold assets to
collect contractual cash flows and its contractual terms give
rise to cash flows that are SPPI on the principal amount
outstanding.
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On initial recognition, the Group may irrevocably designate a
financial asset at FVTPL if doing so eliminates or significantly
reduces an accounting mismatch that would otherwise arise.
The Group has designated certain cash balances at FVTPL to
reduce an accounting mismatch when these balances form
part of the risk mitigation for insurance contracts measured
under the VFA and to which the risk mitigation option is applied
under IFRS 17. These cash balances would otherwise be
measured at amortised cost.
The Group measures equity instruments at FVTPL, with
subsequent changes in fair value recognised in the income
statement, as it did not make an irrevocable election on initial
recognition to measure equity instruments at fair value
through other comprehensive income (FVOCI).
Financial assets are not reclassified subsequent to their initial
recognition unless the Group changes its objectives for
managing those financial assets, in which case all affected
financial assets are reclassified on the first day of the next
reporting period.
(U) Impairment of financial assets
Financial assets held at amortised cost and lease receivables
are in the scope of expected credit loss requirements under
IFRS 9.
This includes financial assets held at amortised cost such as
loans to banks, other loans, and receivables.
Expected credit loss is an unbiased, probability-weighted
estimate of credit losses. It considers all reasonable and
supportable information, including forward looking economic
assumptions and a range of possible outcomes.
Expected credit losses are calculated on either a 12-month
or lifetime basis depending on the extent to which credit risk
has increased significantly since initial recognition, except
where the Group uses the simplified approach to apply lifetime
expected credit losses to trade receivables that do not contain
a significant financing component.
The gross carrying amount of a financial asset is written
off to the extent that there is no reasonable expectation of
recovery. Subsequent recoveries in excess of the financial
asset’s written-down carrying value are credited to the
income statement.
(V) Derecognition, contract modification and
offset of financial assets and financial liabilities
A financial asset (or, where applicable, a part of a financial
asset or part of a group of similar financial assets) is
derecognised where:
• The rights to receive cash flows from the asset have expired;
• The Group retains the right to receive cash flows from the
asset, but has assumed an obligation to pay them in full
without material delay to a third party under a ‘pass-
through’ arrangement; or
• The Group has transferred its rights to receive cash flows
from the asset and has either transferred substantially all
the risks and rewards of the asset, or has neither transferred
nor retained substantially all the risks and rewards of the
asset, but has transferred control of the asset.
A financial liability is derecognised when the obligation under
the liability is extinguished (that is when the obligation is
discharged, or cancelled or expires). The difference between
the carrying amount extinguished and the consideration paid is
recognised in profit or loss.
If the terms of a financial asset or financial liability measured
at amortised cost are substantially modified, then the
contractual rights to cash flows from the original financial
asset or financial liability are deemed to have expired or
extinguished. The original financial asset or financial liability
is derecognised, and a new financial asset or financial liability
is recognised at fair value.
A financial asset measured at amortised cost is not derecognised
if the contractual terms are not substantially modified and a
modification gain or loss is recognised in profit or loss.
Financial assets and liabilities are offset, and the net amount
reported in the statement of financial position when there is
a currently enforceable legal right to set off the recognised
amounts and there is the ability and intention to settle on a
net basis, or realise the asset and settle the liability
simultaneously.
(W) Financial investments
The Group classifies financial investments at FVTPL using
the business model assessment as described in accounting
policy T.
The FVTPL category has two subcategories – those that meet
the definition as being held for trading and those that are held
at FVTPL based on the business model assessment. Fixed
maturity securities and equity securities, which the Group
acquires with the intention to resell in the short term and
derivatives are classified as trading. All other investments
are classified as other than trading.
The fair value of investments is based on the quoted price
within the bid-ask spread that is most representative of fair
value or based on the cash flow models using market
observable inputs or unobservable inputs. Changes in the fair
value of investments are included in the income statement in
the period in which they arise.
Purchases and sales of investments are recognised on
the trade date, which is the date that the Group commits
to purchase or sell the assets, at their fair values.
(X) Derivative financial instruments and hedging
Derivative financial instruments include foreign exchange
contracts, interest rate futures, currency and interest rate
swaps, currency and interest rate options (both written and
purchased) and other financial instruments that derive their
value mainly from underlying interest rates, foreign exchange
rates, credit or equity indices, commodity values or equity
instruments.
All derivatives are initially recognised in the statement of
financial position at their fair value, which usually represents
their cost. They are classified as mandatorily held at FVTPL,
with the method of recognising movements in this value
depending on whether they are designated as hedging
instruments and, if so, the nature of the item being hedged.
Fair values are obtained from quoted market prices or, if these
are not available, by using valuation techniques such as
discounted cash flow models or option pricing models.
All derivatives are carried as assets when the fair values are
positive and as liabilities when the fair values are negative.
Premiums paid for derivatives are recorded as an asset on
the statement of financial position at the date of purchase,
representing their fair value at that date.
Derivative contracts may be traded on an exchange or over-
the-counter (OTC). Exchange-traded derivatives are
standardised and include certain futures and option contracts.
OTC derivative contracts are individually negotiated between
contracting parties and include forwards, swaps, caps and
floors.
Derivatives are subject to various risks including market,
liquidity and credit risk, similar to those related to the
underlying financial instruments. Many OTC transactions are
contracted and documented under International Swaps and
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Derivatives Association master agreements or their
equivalent, which are designed to provide legally enforceable
set-off in the event of default, reducing the Group’s exposure
to credit risk.
The notional or contractual amounts associated with
derivative financial instruments are not recorded as assets or
liabilities on the statement of financial position as they do not
represent the fair value of these transactions. These amounts
are disclosed in note 53(b).
The Group has collateral agreements in place between the
individual Group entities and relevant counterparties.
Accounting policy Z covers collateral, both received and
pledged, in respect of these derivatives.
(a) Interest rate and currency swaps
Interest rate swaps are contractual agreements between two
parties to exchange fixed rate and floating rate interest by
means of periodic payments, calculated on a specified notional
amount and defined interest rates. Most interest rate swap
payments are netted against each other, with the difference
between the fixed and floating rate interest payments paid
by one party. Currency swaps, in their simplest form, are
contractual agreements that involve the exchange of both
periodic and final amounts in two different currencies.
Both types of swap contracts may include the net exchange
of principal. Exposure to gain or loss on these contracts will
increase or decrease over their respective lives as a function
of maturity dates, interest and foreign exchange rates, and the
timing of payments.
(b) Interest rate futures, forwards and options
contracts
Interest rate futures are exchange-traded instruments and
represent commitments to purchase or sell a designated
security or money market instrument at a specified future date
and price.
Interest rate forward agreements are OTC contracts in which
two parties agree on an interest rate and other terms that will
become a reference point in determining, in concert with an
agreed notional principal amount, a net payment to be made
by one party to the other, depending upon what rate prevails
at a future point in time.
Interest rate options, which consist primarily of caps and
floors, are interest rate protection instruments that involve the
potential obligation of the seller to pay the buyer an interest
rate differential in exchange for a premium paid by the buyer.
This differential represents the difference between current
rate and an agreed rate applied to a notional amount. Exposure
to gain or loss on all interest rate contracts will increase or
decrease over their respective lives as interest rates fluctuate.
Certain contracts, known as swaptions, contain features which
can act as swaps or options.
(c) Foreign exchange contracts
Foreign exchange contracts, which include spot, forward and
futures contracts, represent agreements to exchange the
currency of one country for the currency of another country at
an agreed price and settlement date.
Foreign exchange option contracts are similar to interest rate
option contracts, except that they are based on currencies,
rather than interest rates.
(d) Hedge accounting
The Group applies hedge accounting to certain transactions in
accordance with IFRS 9, so that the financial statements
represent the impact of the Group’s hedging strategies for
currency risk.
Hedge accounting can be applied only if all the following
criteria are met:
• The hedge relationship consists only of eligible hedging
instruments and hedged items;
• There is formal designation and documentation of the
hedging relationship and the risk management objective and
the risk management strategy; and
• The hedge relationship meets the hedge effectiveness
requirements.
The Group uses net investment hedges to hedge the currency
risk arising from our foreign operations (hedged item) against
foreign currency borrowings (hedging instrument). Cash flow
hedging was also used to hedge currency risk arising from the
sale of Aviva Singapore. Changes in the fair value of the
hedging instrument is recognised in other comprehensive
income in a separate reserve within equity to the extent that it
is effective. Gains and losses accumulated in this reserve are
transferred to the income statement on disposal or part-
disposal of the foreign operation.
For derivative transactions where hedge accounting is not
applied, the fair value gains and losses on these derivatives
are recognised immediately in other investment income.
(Y) Loans
Loans with fixed maturities, mortgage loans on investment
property, securitised mortgages and collateral loans, are
recognised when cash is advanced to borrowers. Certain
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 as an
adjustment to loan yield using the effective interest rate
method.
As described in accounting policy T, loans are classified
and measured at either amortised cost or FVTPL based on
the outcome of an assessment of the business model for
managing financial assets and the extent to which the financial
assets’ contractual cash flows are solely payment of principal
and interest.
The majority of mortgage loans are measured at fair value
since they’re managed and evaluated on a fair value basis.
The fair values of these mortgages are estimated using
discounted cash flow models, based on a risk-adjusted
discount rate which reflects the risks associated with these
products. They are revalued at each period end, with
movements in their fair values being taken to the income
statement.
The impairment policy is described in accounting policy U
for loans measured at amortised cost.
(Z) Collateral
The Group receives and pledges collateral in the form of cash
or non-cash assets in respect of stock lending transactions
and certain derivative contracts and loans, in order to reduce
the credit risk of these transactions. Collateral is also pledged
as security for bank letters of credit. The amount and type of
collateral required depends on an assessment of the credit
risk of the counterparty.
Collateral received in the form of cash, which is not
legally segregated from the Group, is recognised as an asset
in the statement of financial position with a corresponding
liability for the repayment in financial liabilities (see note 54).
However, where the Group has a currently enforceable legal
right of set-off and the ability and intent to settle net, the
collateral liability and associated derivative balances are
shown net. Non-cash collateral received is not recognised in
the statement of financial position unless the transfer of the
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Accounting policies
collateral meets the derecognition criteria from the
perspective of the transferor.
Such collateral is typically recognised when the Group either
(a) sells or repledges these assets in the absence of default, at
which point the obligation to return this collateral is recognised
as a liability; or (b) the counterparty to the arrangement
defaults, at which point the collateral is seized and recognised
as an asset.
Collateral pledged in the form of cash, which is legally
segregated from the Group, is derecognised from the
statement of financial position with a corresponding receivable
recognised for its return. Non-cash collateral pledged is not
derecognised from the statement of financial position unless
the Group defaults on its obligations under the relevant
agreement, and therefore continues to be recognised in the
statement of financial position within the appropriate asset
classification.
(AA) Deferred acquisition costs for non-
participating investment contracts and other
assets
For non-participating investment and investment fund
management contracts, incremental acquisition costs
and sales enhancements that are directly attributable to
securing an investment management service are deferred.
These deferred acquisition costs are amortised over the
period in which the service is provided.
Deferred acquisition costs are reviewed by category of
business at the end of each reporting period and are written-
off where they are no longer considered to be recoverable.
Other receivables and payables are initially recognised at cost,
being fair value. Subsequent to initial measurement they are
measured at amortised cost.
(AB) Leases
Where the Group is the lessee, a lease liability equal to
the present value of outstanding lease payments and a
corresponding right-of-use asset equal to cost are initially
recognised.
The right-of-use asset is subsequently measured at amortised
cost and depreciated on a straight-line basis over the length of
the lease term. Depreciation on lease assets and interest on
lease liabilities is recognised in the income statement.
The Group has made use of the election available under IFRS 16 to
not recognise any amounts on the balance sheet associated with
leases that are either deemed to be short term, or where the
underlying asset is of low value. A short-term lease in this context
is defined as any arrangement which has a lease term of 12
months or less. Lease payments associated with such
arrangements are recognised in the income statement as an
expense on a straight-line basis. The Group’s total short-term and
low value lease portfolio is not material.
Where the Group is the lessor, leases are classified as finance
leases if the risks and rewards of ownership are substantially
transferred to the lessee and operating leases if they are not
substantially transferred. Lease income from operating leases
is recognised in the income statement on a straight-line basis
over the lease term. When assets are subject to finance
leases, the present value of the lease payments, together with
any unguaranteed residual value, is recognised as a receivable.
(AC) Provisions and contingent liabilities
Provisions are recognised when the Group has a present legal
or constructive obligation as a result of past events, it is more
probable than not that an outflow of resources embodying
economic benefits will be required to settle the obligation, and
a reliable estimate of the amount of the obligation can be made.
The Group recognises provisions under a variety of
circumstances including for product governance rectification,
which may include customer redress, and for onerous
contracts when the expected benefits to be derived from a
contract are less than the unavoidable costs of meeting the
obligations under the contract.
The amount recorded as a provision is the best estimate of the
expenditure required to settle the present obligation at the
balance sheet date. Discounting is applied to the provision
where the effect of the time value of money is material.
Provisions are not recognised for future operating losses.
Restructuring provisions are recognised when the Group has
a detailed formal plan and has raised a valid expectation that
the restructure will be carried out, for example by announcing
its main features to those affected. Costs included in
restructuring provisions comprise only the direct expenditures
arising from the restructuring. Costs associated with the
ongoing activities of the entity are excluded.
Where the Group expects a provision to be reimbursed, for
example under an insurance contract, the reimbursement is
recognised as a separate asset but only when the
reimbursement is virtually certain.
Contingent liabilities are disclosed if there is a possible future
obligation as a result of a past event, or if there is a present
obligation as a result of a past event but either a payment is
not probable or the amount cannot be reasonably estimated.
(AD) Employee benefits
(a) Pension obligations
The Group operates a number of pension schemes, whose
members receive benefits on either a defined benefit or
defined contribution basis. Under a defined contribution plan,
the Group’s legal or constructive obligation is limited to the
amount it agrees to contribute to a fund and there is no
obligation to pay further contributions if the fund does not
hold sufficient assets to pay benefits.
A defined benefit pension plan is a pension plan that is not a
defined contribution plan and typically defines the amount of
pension benefit that an employee will receive on retirement.
The defined benefit obligation is calculated by independent
actuaries using the projected unit credit method. The pension
obligation is measured as the present value of the estimated
future cash outflows, using a discount rate based on market
yields for high-quality corporate bonds that are denominated
in the currency in which the benefits will be paid and that
have durations approximating to the terms of the related
pension liability.
The resultant net surplus or deficit recognised as an asset
or liability on the statement of financial position is the fair
value of plan assets less the present value of the defined
benefit obligation at the end of the reporting period.
Plan assets exclude unpaid contributions due from Group
entities to the schemes, and any non-transferrable financial
instruments issued by a Group entity and held by the schemes.
If the fair value of plan assets exceeds the present value of the
defined benefit obligation, the resultant asset is limited to the
asset ceiling defined as present value of economic benefits
available in the form of future refunds from the plan or
reductions in contributions to the plan. In order to calculate
the present value of economic benefits, consideration is given
to any minimum funding requirements that apply to any plan
in the Group.
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Accounting policies
Remeasurements of defined benefit plans comprise actuarial
gains and losses arising from experience adjustments and
changes in actuarial assumptions, the return on plan assets
(excluding net interest) and the effect of the asset ceiling
(if any). The Group recognises remeasurements immediately
in other comprehensive income and does not reclassify them
to the income statement in subsequent periods.
Service costs comprising current service costs, past service
costs, gains and losses on curtailments and net interest expense/
income are charged or credited to the income statement.
Past service costs are recognised at the earlier of the date
the plan amendment or curtailment occurs or when related
restructuring costs are recognised.
The Group determines the net interest expense/income on
the net defined benefit liability/asset for the period by applying
the discount rate used to measure the defined benefit
obligation at the beginning of the year to the net defined
benefit liability/asset. Net interest expense is charged to
finance costs, whereas net interest income is credited to
other investment income.
For defined contribution plans, the Group pays contributions
to publicly or privately administered pension plans. Once the
contributions have been paid, the Group, as employer, has no
further payment obligations. The Group’s contributions are
charged to the income statement in the year to which they
relate and are included in staff costs.
(b) Equity compensation plans
The Group offers share award and option plans over
the Company’s ordinary shares for certain employees,
including a Save As You Earn plan (SAYE plan), details of which
are given in the Directors’ Remuneration Report and in note 32.
The Group accounts for options and awards under equity
compensation plans, which were granted after 7 November
2002, until such time as they are fully vested, using the fair
value based method of accounting (the ‘fair value method’).
Under this method, the cost of providing equity compensation
plans is based on the fair value of the share awards or option
plans at date of grant, which is recognised in the income
statement over the expected vesting period of the related
employees and credited to the equity compensation reserve,
part of shareholders’ funds. In certain jurisdictions, awards
must be settled in cash instead of shares, and the credit is
taken to liabilities rather than reserves. The fair value of these
cash-settled awards is recalculated each year, with the income
statement charge and liability being adjusted accordingly.
Shares purchased by employee share trusts to fund these
awards are shown as deduction from shareholders’ equity
at their weighted average cost.
When the options are exercised and new shares are issued,
the proceeds received, net of any transaction costs, are
credited to share capital (par value) and the balance to
share premium.
Where the shares are already held by employee trusts,
the net proceeds are credited against the cost of these shares,
with the difference between cost and proceeds being taken
to retained earnings. In both cases, the relevant amount in
the equity compensation reserve is then credited to
retained earnings.
(AE) Income taxes
The current tax expense is based on the taxable profits
for the year, after any adjustments in respect of prior years.
Tax, including tax relief for losses if applicable, is allocated
over profits before taxation and amounts charged or credited
to components of other comprehensive income and equity,
as appropriate.
Provision is made for deferred tax liabilities, or credit taken
for deferred tax assets, using the liability method, on all
material temporary differences between the tax bases of
assets and liabilities and their carrying amounts in the
consolidated financial statements.
The rates enacted or substantively enacted at the statement
of financial position date are used to value the deferred tax
assets and liabilities.
Deferred tax assets are recognised to the extent that it is
probable that future taxable profit will be available against
which the temporary differences can be utilised. Where
there is a history of tax losses, deferred tax assets are only
recognised in excess of deferred tax liabilities if there is
convincing evidence that future profits will be available.
Deferred tax is provided on any temporary differences arising
from investments in subsidiaries, associates and joint ventures,
except where the timing of the reversal of the temporary
difference can be controlled and it is probable that the
difference will not reverse in the foreseeable future.
Deferred taxes are not provided in respect of temporary
differences arising from the initial recognition of goodwill,
or from the initial recognition of an asset or liability in a
transaction which is not a business combination and affects
neither accounting profit nor taxable profit or loss at the time
of the transaction.
Current and deferred tax relating to items recognised in other
comprehensive income and directly in equity are similarly
recognised in other comprehensive income and directly in
equity respectively.
Current and deferred tax includes amounts provided
in respect of uncertain tax positions, where management
expects it is more likely than not that an economic outflow will
occur as a result of examination by a relevant tax authority.
Provisions reflect management’s best estimate of the ultimate
liability based on their interpretation of tax law, precedent and
guidance, informed by external tax advice as necessary.
The final amounts of tax due may ultimately differ from
management’s best estimate at the balance sheet date.
Changes in facts and circumstances underlying these
provisions are reassessed at each balance sheet date,
and the provisions are re-measured as required to reflect
current information.
In addition to paying tax on shareholders’ profits (‘shareholder
tax’), the Group’s life businesses in the UK and Ireland pay tax
on policyholders’ investment returns (‘policyholder tax’) on
certain products at policyholder tax rates. The incremental tax
borne by the Group represents income tax on policyholder’s
investment return.
In jurisdictions where policyholder tax is applicable, the total
tax charge in the income statement is allocated between
shareholder tax and policyholder tax. The shareholder tax
is calculated by applying the corporate tax rate to
the shareholder profit. The difference between the total tax
charge and shareholder tax is allocated to policyholder tax.
This calculation methodology is consistent with the legislation
relating to the calculation of tax on shareholder profits.
The Group has decided to show separately the amounts
of policyholder tax to provide a meaningful measure of the tax
the Group pays on its profit. In the pro forma reconciliations,
the Group adjusted operating profit has been calculated after
charging policyholder tax.
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(AF) Borrowings
Borrowings are classified as being for either core structural
or operational purposes. They are recognised initially at their
issue proceeds less transaction costs incurred. Subsequently,
most borrowings are stated at amortised cost and any
difference between net proceeds and the redemption value
is recognised in the income statement over the period of
the borrowings using the effective interest rate method.
All borrowing costs are expensed as they are incurred except
where they are directly attributable to the acquisition or
construction of property and equipment as described in
accounting policy Q.
Where loan notes have been issued in connection with certain
securitised mortgage loans, the Group has taken advantage of
the fair value option under IFRS 9 to present them at fair value
to eliminate any accounting mismatch which would otherwise
arise from using different measurement bases for these items
and the associated mortgages and derivative financial
instruments.
The Group elects to recognise the amount of change in the fair
value of borrowings attributable to changes in credit risk in the
income statement, as the alternative of recognising the impact
in other comprehensive income would create an accounting
mismatch.
(AG) Share capital and treasury shares
(a) Equity instruments
An equity instrument is a contract that evidences a residual
interest in the assets of an entity after deducting all its
liabilities. Accordingly, a financial instrument is treated as
equity if:
• There is no contractual obligation to deliver cash or other
financial assets or to exchange financial assets or liabilities
on terms that may be unfavourable from the perspective
of the issuer; and
• The instrument is a non-derivative that contains no
contractual obligation to deliver a variable number of
shares or is a derivative that will be settled only by the
Group exchanging a fixed amount of cash or other assets
for a fixed number of the Group’s own equity instruments.
(b) Share issue costs
Incremental external costs directly attributable to the issue
of new shares are shown in equity as a deduction, net of tax,
from the proceeds of the issue and disclosed where material.
(c) Dividends
Interim dividends on ordinary shares are recognised in equity
in the period in which they are paid. Final dividends on these
shares are recognised when they have been approved by
shareholders. Dividends on preference shares are recognised
in the period in which they are declared and appropriately
approved.
(d) Treasury shares
Where the Company or its subsidiaries purchase the Company’s
share capital or obtain rights to purchase its share capital, the
consideration paid (including any attributable transaction costs
net of income taxes) is shown as a deduction from total
shareholders’ equity. Gains and losses on own shares are
charged or credited to the treasury share account in equity.
(AH) Fiduciary activities
Assets and income arising from fiduciary activities, together with
related undertakings to return such assets to customers, are
excluded from these financial statements where the Group has
no contractual rights in the assets and acts in a fiduciary
capacity such as nominee, trustee or agent.
(AI) Earnings per share
Basic earnings per share is calculated by dividing net income
available to ordinary shareholders by the weighted average
number of ordinary shares in issue during the year, excluding
the weighted average number of treasury shares.
Earnings per share has also been calculated on Group adjusted
operating profit attributable to ordinary shareholders, net of
tax, non-controlling interests, preference dividends and
coupon payments on the direct capital instrument (DCI) as the
directors believe this figure provides a better indication of
operating performance. Details are given in note 14.
For the diluted earnings per share, the weighted average
number of ordinary shares in issue is adjusted to assume
conversion of all dilutive potential ordinary shares, such as
convertible debt and share options granted to employees.
Potential or contingent share issuances are treated as dilutive
when their conversion to shares would decrease net earnings
per share components.
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For the year ended 31 December 2024
Insurance revenue
4
20,747
18,497
Insurance service expense
(18,240)
(16,217)
Net expense from reinsurance contracts
(689)
(761)
Insurance service result
1,818
1,519
Investment return
19,882
22,380
Net finance expense from insurance contracts and participating investment contracts
(1,121)
(7,228)
Net finance (expense)/income from reinsurance contracts
(168)
641
Movement in non-participating investment contract liabilities
(17,124)
(13,558)
Investment expense attributable to unitholders
(1,179)
(861)
Net financial result
5
290
1,374
Fee and commission income
6
1,410
1,309
Share of profit/(loss) after tax of joint ventures and associates
136
(71)
Profit on disposal and remeasurement of subsidiaries, joint ventures and associates
195
—
Other operating expenses
(2,200)
(2,108)
Other net foreign exchange gains
109
146
Other finance costs
8
(491)
(479)
Profit before tax
1,267
1,690
Tax attributable to policyholders’ returns
(270)
(249)
Profit before tax attributable to shareholders’ profits
997
1,441
Tax expense
13
(562)
(584)
Less: tax attributable to policyholders’ returns
270
249
Tax attributable to shareholders’ profits
(292)
(335)
Profit for the year
705
1,106
Attributable to:
Equity holders of Aviva plc
683
1,085
Non-controlling interests
22
21
Profit for the year
705
1,106
Earnings per share
14
Basic (pence per share)
23.6
37.7
Diluted (pence per share)
23.3
37.2
2024
2023
Note
£m
£m
The above consolidated income statement should be read in conjunction with the accounting policies and accompanying notes to
the financial statements.
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Consolidated income statement
For the year ended 31 December 2024
2024
2023
Note
£m
£m
Profit for the year
705
1,106
Other comprehensive income:
Items that may be reclassified subsequently to income statement
Foreign exchange rate movements
(107)
(86)
Aggregate tax effect – shareholder tax on items that may be reclassified subsequently to income statement
13(b)
(10)
(2)
Items that will not be reclassified to income statement
Remeasurements of pension schemes
44(b)(i)
(386)
(495)
Aggregate tax effect – shareholder tax on items that will not be reclassified subsequently to income
statement
13(b)
141
122
Total other comprehensive loss, net of tax
(362)
(461)
Total comprehensive income for the year
343
645
Attributable to:
Equity holders of Aviva plc
324
627
Non-controlling interests
19
18
Total comprehensive income for the year
343
645
The above consolidated statement of comprehensive income should be read in conjunction with the accounting policies and
accompanying notes to the financial statements.
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Consolidated statement of comprehensive income
For the year ended 31 December 2024
2024
2023
Note
£m
£m
Group adjusted operating profit before tax attributable to shareholders' profits
1,767
1,467
Adjusted for the following:
Investment variances and economic assumptions
9
(666)
322
Amortisation of intangibles acquired in business combinations
17
(61)
(52)
Amortisation of acquired value of in-force business
17
(52)
(59)
Profit on disposal and remeasurement of subsidiaries, joint ventures and associates
195
—
Integration and restructuring costs
(217)
(61)
Other1
31
(176)
Adjusting items before tax
(770)
(26)
Profit before tax attributable to shareholders' profits
997
1,441
Tax on Group adjusted operating profit
(407)
(289)
Tax on other activities
115
(46)
Tax attributable to shareholders' profits
13
(292)
(335)
Profit for the year
705
1,106
1. Other in 2024 primarily includes a gain of £68 million relating to a revision to the 2023 restatement; a charge of £19 million (2023: £92 million) relating to fees paid to bondholders in
respect of certain modifications to the terms and conditions of the Group’s £500 million (2023: £600 million) Tier 2 Fixed rate notes; a gain of £18 million (2023: charge of £71 million)
relating to provisions for indemnities entered into, and fair value adjustments on contingent consideration associated with acquisition and disposal activities; a charge of £24 million
(2023: £2 million) relating to costs associated with acquisitions completed in the period; and charges totalling £13 million (2023: £11 million) relating to the cost of the employee free
share award, fees and charges associated with the share buyback programme, and costs to equalise Guaranteed Minimum Pension benefits.
The above reconciliation of Group adjusted operating profit to profit/(loss) for the year should be read in conjunction with the
accounting policies and accompanying notes to the financial statements.
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Reconciliation of Group adjusted operating profit to profit for the year
For the year ended 31 December 2024
Ordinary
share
capital
Preference
share
capital
Capital
reserves
Treasury
shares
Other
reserves
Retained
earnings
Tier 1
notes
Total equity
excluding
non-
controlling
interests
Non-
controlling
interests
Total
equity
Note 31
Note 34
Notes 36
Note 33
Note 37
Note 36
Note 35
Note 38
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
Balance at 1 January
901
200 5,265
(87)
279 2,228
496
9,282
318 9,600
Profit for the year
—
—
—
—
—
683
—
683
22
705
Other comprehensive loss
—
—
—
—
(114) (245)
—
(359)
(3)
(362)
Total comprehensive (loss)/income for the
year
—
—
—
—
(114)
438
—
324
19
343
Dividends and appropriations
—
—
—
—
— (972)
—
(972)
—
(972)
Shares purchased in buyback
(20)
—
20
—
— (300)
—
(300)
—
(300)
Capital reductions
—
—
—
—
—
—
—
—
—
—
Non-controlling interests share of dividends
declared in the year
—
—
—
—
—
—
—
—
(21)
(21)
Reserves credit for equity compensation
plans
—
—
—
—
61
—
—
61
—
61
Shares purchased under equity
compensation plans
—
—
—
6
(48)
(27)
—
(69)
—
(69)
Movements attributable to disposals of
subsidiaries, joint ventures and associates
—
—
—
—
(21)
—
—
(21)
—
(21)
Owner-occupied properties fair value gains
transferred to retained earnings on disposals
—
—
—
—
(21)
21
—
—
—
—
Non-controlling interests in acquired
subsidiaries
—
—
—
—
—
—
—
—
—
—
Changes in non-controlling interests in
subsidiaries
—
—
—
—
—
—
—
—
—
—
Balance at 31 December
881
200 5,285
(81)
136 1,388
496
8,305
316 8,621
For the year ended 31 December 2023
Ordinary
share
capital
Preference
share
capital
Capital
reserves
Treasury
shares
Other
reserves
Retained
earnings
Tier 1
notes
Total equity
excluding
non-
controlling
interests
Non-
controlling
interests
Total
equity
Note 31
Note 34
Notes 36
Note 33
Note 37
Note 36
Note 35
Note 38
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
Balance at 1 January
924
200 10,342
(85)
355 (2,328)
496
9,904
310 10,214
Profit for the year
—
—
—
—
— 1,085
—
1,085
21
1,106
Other comprehensive loss
—
—
—
—
(85)
(373)
—
(458)
(3)
(461)
Total comprehensive (loss)/income for the
year
—
—
—
—
(85)
712
—
627
18
645
Dividends and appropriations
—
—
—
—
— (929)
—
(929)
—
(929)
Shares purchased in buyback
(24)
—
24
—
— (300)
—
(300)
—
(300)
Capital reductions
—
— (5,108)
—
— 5,108
—
—
—
—
Non-controlling interests share of
dividends declared in the year
—
—
—
—
—
—
—
—
(21)
(21)
Reserves credit for equity compensation
plans
—
—
—
—
61
—
—
61
—
61
Shares purchased under equity
compensation plans
1
—
7
(2)
(52)
(35)
—
(81)
—
(81)
Non-controlling interests in acquired
subsidiaries
—
—
—
—
—
—
—
—
2
2
Changes in non-controlling interests in
subsidiaries
—
—
—
—
—
—
—
—
9
9
Balance at 31 December
901
200 5,265
(87)
279 2,228
496
9,282
318 9,600
The above consolidated statement of changes in equity should be read in conjunction with the accounting policies and
accompanying notes to the financial statements.
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Consolidated statement of changes in equity
As at 31 December 2024
2024
2023
Note
£m
£m
Assets
Goodwill
16
2,584
2,100
Acquired value of in-force business and intangible assets
17
1,131
968
Interests in, and loans to, joint ventures
18
1,257
1,189
Interests in, and loans to, associates
19
38
160
Property and equipment
20
355
424
Investment property
21
6,313
6,232
Loans
24
30,553
31,685
Financial investments
27 263,979 245,831
Reinsurance contract assets
39
9,700
7,704
Reinsurance assets for non-participating investment contracts
40
5,280
4,713
Deferred tax assets
42
614
958
Current tax assets
42
146
95
Receivables
28
3,813
3,721
Deferred acquisition costs on non-participating investment contracts
29
821
788
Pension surpluses and other assets
30
461
862
Prepayments and accrued income
30
3,357
3,392
Cash and cash equivalents
51
23,481
17,273
Assets of operations classified as held for sale
2
—
748
Total assets
353,883 328,843
Equity
Ordinary share capital
31
881
901
Preference share capital
34
200
200
Capital
1,081
1,101
Share premium
36
17
17
Capital redemption reserve
36
44
24
Merger reserve
36
5,224
5,224
Capital reserves
5,285
5,265
Treasury shares
33
(81)
(87)
Other reserves
37
136
279
Retained earnings
36
1,388
2,228
Equity attributable to shareholders of Aviva plc
7,809
8,786
Tier 1 notes
35
496
496
Equity excluding non-controlling interests
8,305
9,282
Non-controlling interests
38
316
318
Total equity
8,621
9,600
Liabilities
Insurance contract and participating investment contract liabilities
39
124,151
121,875
Non-participating investment contract liabilities
40 179,142 158,588
Net asset value attributable to unitholders
17,333
14,184
Pension deficits and other provisions
43
726
795
Deferred tax liabilities
42
345
453
Current tax liabilities
42
1
15
Borrowings
45
5,612
6,374
Payables and other financial liabilities
46
14,655
13,670
Other liabilities
47
3,297
3,289
Total liabilities
345,262 319,243
Total equity and liabilities
353,883 328,843
Approved by the Board on 26 February 2025
Charlotte Jones
Chief Financial Officer
Company number: 02468686
The above consolidated statement of financial position should be read in conjunction with the accounting policies and
accompanying notes to the financial statements.
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Consolidated statement of financial position
For the year ended 31 December 2024
The cash flows presented in this statement cover all the Group’s activities and include flows from both policyholder
and shareholder activities. All cash and cash equivalents are available for use by the Group.
2024
2023
Note
£m
£m
Cash flows from operating activities
Cash generated from/(used in) operating activities1
51(a)
8,688
(2,664)
Tax paid
(243)
(68)
Total net cash generated from/(used in) operating activities
8,445
(2,732)
Cash flows from investing activities
Acquisitions of, and additions to, subsidiaries, joint ventures and associates, net of cash acquired
51(c)
(760)
—
Disposals of subsidiaries, joint ventures and associates, net of cash transferred
51(d)
1,095
—
Purchases of property and equipment
(50)
(149)
Purchases of intangible assets
(123)
(201)
Total net cash generated from/(used in) investing activities
162
(350)
Cash flows from financing activities
Proceeds from issue of ordinary shares
31
—
8
Shares purchased in buyback
31
(300)
(300)
Treasury shares purchased for employee trusts
(53)
(76)
New borrowings drawn down, net of expenses
640
941
Repayment of borrowings2
(1,400)
(1,181)
Net repayment of borrowings
(760)
(240)
Interest paid on borrowings
(328)
(206)
Repayment of leases
(60)
(62)
Preference dividends paid
15
(17)
(17)
Ordinary dividends paid
15
(921)
(878)
Capital contributions from non-controlling interests of subsidiaries
—
6
Coupon payments on tier 1 notes
15
(34)
(34)
Dividends paid to non-controlling interests of subsidiaries
(21)
(21)
Total net cash used in financing activities
(2,494)
(1,820)
Total net drawn down/(decrease) in cash and cash equivalents
6,113
(4,902)
Cash and cash equivalents at 1 January
16,652
21,576
Effect of exchange rate changes on cash and cash equivalents
(212)
(22)
Cash and cash equivalents at 31 December
51(e)
22,553
16,652
1. Cash flows from operating activities include interest received of £5,420 million (2023: £5,560 million) and dividends received of £2,829 million (2023: £3,999 million).
2. Repayment of borrowings includes the redemption of £1,095 million (2023: £531 million) subordinated debt and senior notes.
The above consolidated statement of cash flows should be read in conjunction with the accounting policies and accompanying
notes to the financial statements.
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Consolidated statement of cash flows
1 - Exchange rates
The Group’s principal overseas operations during the year were located within the Eurozone and Canada. The results and cash
flows of these operations have been translated into sterling at the average rates for the year, and the assets and liabilities have
been translated at the year end rates as follows:
2024
2023
£
£
Eurozone
Average rate (€1 equals)
0.85
0.87
Year end rate (€1 equals)
0.83
0.87
Canada
Average rate ($CAD1 equals)
0.57
0.60
Year end rate ($CAD1 equals)
0.55
0.59
2 - Strategic transactions
(a) Acquisitions
(i) AIG Life Limited (AIG Life UK)
On 8 April 2024 the Group acquired 100% of the ordinary share capital of AIG Life Limited, American International Group’s UK
protection business for a cash consideration of £453 million.
AIG Life Limited (now named Aviva Protection UK Limited) provides individual and group protection products which, when
combined with Aviva’s existing protection business, will create a more efficient platform from which to serve existing and new
customers and will reach more customers through its relationships with regional and corporate Independent Financial Advisors
(IFAs) as well as other key partners. The acquisition significantly enhances our position in the protection market.
The total cash consideration of £453 million represents the consideration paid to acquire £123 million of net assets of AIG Life
Limited and £330 million of goodwill recognised on acquisition. The net assets acquired include the impact of aligning the
valuation of insurance contract liabilities and reinsurance contract assets with Group accounting policies. The following table
summarises the consideration for the acquisition, the fair value of the assets acquired, liabilities assumed and resulting allocation
to goodwill.
Fair value
£m
Assets
Intangible assets
35
Financial investments
79
Reinsurance assets
984
Tax assets
79
Other assets (including cash and cash equivalents)
22
Total identifiable assets
1,199
Liabilities
Insurance contract liabilities
1,034
Other liabilities
42
Total identifiable liabilities
1,076
Net identifiable assets acquired
123
Goodwill arising on acquisition
330
Total consideration
453
An intangible asset of £35 million was recognised upon acquisition representing the value of future revenue streams from
renewals of AIG Life Limited’s existing group protection business. This will be amortised over its useful economic life in
accordance with the Group’s accounting policies (along with the corresponding release of the deferred tax liability).
The residual goodwill on acquisition of £330 million, none of which is expected to be deductible for tax purposes, represents
future synergies expected to arise from combining the operations of AIG Life Limited with those of the Group as well as the value
of the workforce in place and other future business value.
Acquisition costs of £16 million related to legal and professional fees incurred to support the transaction have been recognised
within Other operating expenses in the income statement.
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Notes to the consolidated financial statements
(ii) Probitas Holdings (Bermuda) Limited and its subsidiaries (Probitas)
On 9 July 2024 the Group acquired 100% of the ordinary share capital of Probitas Holdings (Bermuda) Limited and its subsidiaries
(Probitas) for a total consideration of £249 million. The transaction includes the acquisition of Probitas’ fully-integrated Lloyd’s
platform, encompassing its Corporate Member, Managing Agent, international distribution entities and tenancy rights to Syndicate
1492. The acquisition of Probitas provides entry into the Lloyd's market and opens up new opportunities to accelerate growth in
our capital-light General Insurance business. The acquisition will diversify and expand Aviva's Global Corporate & Specialty
(GCS) footprint, which is a key pillar of Aviva's UK General Insurance business.
The total consideration of £249 million represents the consideration paid to acquire £175 million of net assets of Probitas and
£74 million of goodwill recognised on acquisition. The acquisition amounts are provisional and include an estimate of the impact
of aligning the valuation of insurance contract liabilities and reinsurance contract assets with Group policies. The balance sheet
values are subject to review during the remeasurement period of up to 12 months after the acquisition date as permitted by IFRS
3 Business Combinations. The following table summarises the consideration for the acquisition, the fair value of the assets
acquired, liabilities assumed and resulting allocation to goodwill.
Fair value
£m
Assets
Intangible assets
144
Financial investments
165
Reinsurance assets
153
Other assets
22
Cash and cash equivalents
77
Total identifiable assets
561
Liabilities
Insurance contract liabilities
291
Other liabilities
95
Total identifiable liabilities
386
Net identifiable assets acquired
175
Goodwill arising on acquisition
74
Total consideration
249
An indefinite life intangible asset of £144 million was recognised upon acquisition representing the value of the underwriting
capacity of Probitas. The residual goodwill on acquisition of £74 million, none of which is expected to be deductible for tax
purposes, represents future synergies expected to arise from combining the operations of Probitas with those of the Group as
well as the value of the workforce in place and other future business value.
(iii) Optiom O2 Holdings Inc (Optiom)
On 5 January 2024 the Group acquired 100% of the ordinary share capital of Optiom, a Canadian vehicle replacement insurance
business, from Novacap and other minority shareholders for a consideration of $CAD 172 million (£100 million). The acquisition
supports Aviva’s capital-light growth in the Canadian market and strengthens Aviva Canada’s specialty lines business and
distribution capabilities. Intangible assets of £72 million and goodwill of £39 million were recognised in the Group statement of
financial position on acquisition.
(iv) Succession Wealth Acquisitions
During the period Succession Wealth acquired 100% of the ordinary share capital of three businesses for a total consideration of
£64 million. These acquisitions support Succession Wealth's strategy and reflect it's continued trend of acquisition pre-
ownership by Aviva. Intangible assets of £15 million and goodwill of £50 million were recognised in the Group statement on
financial position.
(v) Direct Line Insurance Group Plc
On 23rd December 2024, Aviva plc and Direct Line announced that they had reached agreement on the terms of a recommended
cash and share offer for Direct Line. Based on the Closing Price of Aviva shares of 489.3 pence on 27 November 2024 (being the
last closing share price before the commencement of the Offer Period), this values the entire diluted share capital of Direct Line
at approximately £3.7 billion. Subject to Direct Line shareholder vote and regulatory approvals, the acquisition is expected to
complete in mid-2025. On 10 February 2025, Direct Line published a Scheme Document which contained details relating to the
acquisition and a notice convening the Court Meeting and the General Meeting on 10 March 2025 and actions to be taken by
Direct Line Shareholders.
(b) Disposals
(i) Aviva SingLife Holdings Ptd Ltd
On 18 March 2024 the Group announced that it had completed the sale of its entire shareholding in Aviva SingLife Holdings Pte
Ltd, along with an associated debt instrument, to Sumitomo Life Insurance Company. On this date vendor finance notes of
$SGD 250 million issued to Aviva as part of the consideration for a sale of its majority shareholding in SingLife on 30 November
2020 were also redeemed. Total cash proceeds received were $SGD 1,596 million (£937 million). These transactions have
resulted in a total gain on disposal of £195 million being recognised within Gain on disposal and remeasurement of subsidiaries,
joint ventures and associates within the income statement. The shareholding, associated debt instrument and vendor finance
notes were classified within Assets of operations classified as held for sale in the Group’s consolidated statement of financial
position at 31 December 2023.
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Notes to the consolidated financial statements
3 - Segmental information
The Group’s results can be segmented either by activity or by geography. Our primary reporting format is along business unit
reporting lines, with supplementary information being given by business activity. This note provides segmental information on the
consolidated income statement.
Financial performance of our key business units are presented as Insurance, Wealth & Retirement (IWR), General Insurance
(which brings together our UK & Ireland General Insurance businesses and Canada General Insurance) and Aviva Investors.
Our international businesses are presented as International investments (consisting of our interests in India, China and
Singapore).
(a) Operating segments
Insurance, Wealth & Retirement (IWR)
The principal activities of our IWR operations are the provision of a range of products to individuals and businesses across
Insurance (life insurance, long-term health and accident insurance), Wealth (savings and investments) & Retirement (pensions,
annuities and lifetime mortgage business).
General Insurance
UK & Ireland
The principal activities of our UK & Ireland General Insurance operations are the provision of insurance cover to individuals and
businesses, for risks associated mainly with motor vehicles, property and liability (such as employers’ liability and professional
indemnity liability).
Canada
The principal activity of our Canada General Insurance operation is the provision of personal and commercial lines insurance
products, for risks associated mainly with motor, property and liability principally distributed through insurance brokers.
Aviva Investors
Aviva Investors manages policyholders' and shareholders' invested funds, provides investment management services for
institutional pension fund mandates and manages a range of retail investment products. We offer clients solutions across a broad
range of asset classes including fixed income, equities, multi-asset, real estate and infrastructure. Clients include Aviva Group
businesses and third-party financial institutions, pension funds, public sector organisations, investment professionals and private
investors
International investments
International investments comprise our long-term business operations in India and China, and until 18 March 2024 also included
our investment in Singapore. In India, the Group has a 74% shareholding in Aviva India. In China, Aviva plc have a 50%
shareholding in Aviva-COFCO Life Insurance Company Limited. On 18 March 2024 the Group announced that it had completed
the sale of its entire shareholding in Aviva SingLife Holdings Pte Ltd (see note 2(b)). Aviva SingLife has been included within the
results of the Group up to the date of completion.
Other Group activities
Other Group activities includes investment return on centrally held assets, head office (Corporate centre) expenses such as
Group treasury and finance functions, financing costs arising on central borrowings, the elimination entries for certain inter-
segment transactions and group consolidation adjustments.
Measurement basis
The accounting policies of the segments are the same as those for the Group as a whole. Any transactions between the business
segments are subject to normal commercial terms and market conditions. The Group evaluates performance of operating
segments on the basis of:
i.
profit or loss from operations before tax attributable to shareholders; and
ii. profit or loss from operations before tax attributable to shareholders, adjusted for non-operating items, including investment
market performance.
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Notes to the consolidated financial statements
(i) Segmental income statement for the year ended 31 December 2024
Insurance,
Wealth &
Retirement
(IWR)
UK &
Ireland
General
Insurance
Canada
General
Insurance
Aviva
Investors
International
investments
(India, China
and Singapore)
Other
Group
activities
Total
£m
£m
£m
£m
£m
£m
£m
Insurance revenue1
8,973
7,388
4,326
—
78
(18) 20,747
Insurance service expense
(7,800)
(6,252)
(4,117)
—
(82)
11 (18,240)
Net (expense)/income from reinsurance contracts
(219)
(519)
43
—
—
6
(689)
Insurance service result
954
617
252
—
(4)
(1)
1,818
Investment return1
17,720
424
304
17
142
1,275 19,882
Net finance (expense)/income from insurance
contracts and participating investment contracts
(630)
(144)
(209)
—
(130)
(8)
(1,121)
Net finance (expense)/income from reinsurance
contracts
(212)
—
15
—
—
29
(168)
Movement in non-participating investment contract
liabilities
(17,123)
—
—
—
—
(1) (17,124)
Investment expense attributable to unitholders
—
—
—
—
—
(1,179)
(1,179)
Net financial result
(245)
280
110
17
12
116
290
Fee and commission income1
1,192
59
27
127
—
5
1,410
Inter-segment revenue
—
—
—
259
—
—
259
Share of profit/(loss) after tax of joint ventures and
associates1
48
—
1
—
87
—
136
Profit on disposal and remeasurement of subsidiaries,
joint ventures and associates
—
—
—
—
—
195
195
Other operating expenses
(1,245)
(104)
(65)
(384)
1
(403) (2,200)
Other net foreign exchange gains
—
4
—
—
—
105
109
Other finance costs
(212)
(1)
(7)
—
—
(271)
(491)
Inter-segment expenses
(240)
(11)
(6)
—
—
(2)
(259)
Profit/(loss) before tax
252
844
312
19
96
(256)
1,267
Tax attributable to policyholders’ returns
(270)
—
—
—
—
—
(270)
(Loss)/profit before tax attributable to
shareholders’ profits
(18)
844
312
19
96
(256)
997
Adjusting items:
Reclassification of unallocated interest
(19)
1
17
—
—
1
—
Investment variances and economic assumption changes
898
(150)
(57)
—
(48)
23
666
Amortisation of intangibles acquired in business
combinations
43
3
15
—
—
—
61
Amortisation of acquired value of in-force business
52
—
—
—
—
—
52
Profit on disposal and remeasurement of subsidiaries,
joint ventures and associates
—
—
—
—
—
(195)
(195)
Integration and restructuring costs
173
—
—
21
—
23
217
Other
(58)
10
1
—
—
16
(31)
Group adjusted operating profit/(loss) before tax
attributable to shareholders' profits
1,071
708
288
40
48
(388)
1,767
1. Total reported income, excluding inter-segment revenue, includes £35,119 million from the United Kingdom (Aviva plc’s country of domicile). Income is attributed on the basis of
geographical origin which does not differ materially from revenue by geographical destination, as most risks are located in the countries where the contracts were written.
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Notes to the consolidated financial statements
(ii) Segmental income statement for year ended 31 December 2023
Insurance,
Wealth &
Retirement
(IWR)
UK &
Ireland
General
Insurance
Canada
General
Insurance
Aviva
Investors
International
investments
(India, China
and Singapore)
Other
Group
activities
Total
£m
£m
£m
£m
£m
£m
£m
Insurance revenue1
8,164
6,219
4,070
—
61
(17)
18,497
Insurance service expense
(7,055)
(5,443)
(3,639)
—
(81)
1
(16,217)
Net (expense)/income from reinsurance contracts
(278)
(409)
(78)
—
—
4
(761)
Insurance service result
831
367
353
—
(20)
(12)
1,519
Investment return1
20,604
442
303
13
98
920
22,380
Net finance (expense)/income from insurance
contracts and participating investment contracts
(6,593)
(399)
(180)
—
(73)
17
(7,228)
Net finance income/(expense) from reinsurance
contracts
531
133
10
—
—
(33)
641
Movement in non-participating investment contract
liabilities
(13,559)
—
—
1
—
—
(13,558)
Investment expense attributable to unitholders
—
—
—
—
—
(861)
(861)
Net financial result
983
176
133
14
25
43
1,374
Fee and commission income1
1,110
54
11
126
—
8
1,309
Inter-segment revenue
—
—
—
238
—
—
238
Share of (loss)/profit after tax of joint ventures and
associates2
(46)
—
1
—
(26)
—
(71)
Profit on disposal and remeasurement of subsidiaries,
joint ventures and associates
—
—
—
—
—
—
—
Other operating expenses
(1,065)
(90)
(44)
(357)
(1)
(551)
(2,108)
Other net foreign exchange gains
—
48
—
—
—
98
146
Other finance costs
(200)
(1)
(5)
—
—
(273)
(479)
Inter-segment expenses
(219)
(10)
(6)
—
—
(3)
(238)
Profit/(loss) before tax
1,394
544
443
21
(22)
(690)
1,690
Tax attributable to policyholders’ returns
(249)
—
—
—
—
—
(249)
Profit/(loss) before tax attributable to shareholders’
profits
1,145
544
443
21
(22)
(690)
1,441
Adjusting items:
Reclassification of unallocated interest
(9)
(27)
48
—
—
(12)
—
Investment variances and economic assumption
changes
(302)
(67)
(104)
—
85
66
(322)
Amortisation of intangibles acquired in business
combinations
40
2
10
—
—
—
52
Amortisation of acquired value of in-force business
59
—
—
—
—
—
59
Profit on disposal and remeasurement of subsidiaries,
joint ventures and associates
—
—
—
—
—
—
—
Integration and restructuring costs
61
—
—
—
—
—
61
Other
—
—
2
—
—
174
176
Group adjusted operating profit/(loss) before tax
attributable to shareholders' profits
994
452
399
21
63
(462)
1,467
1. Total reported income, excluding inter-segment revenue, includes £37,751 million from the United Kingdom (Aviva plc’s country of domicile). Income is attributed on the basis of
geographical origin which does not differ materially from revenue by geographical destination, as most risks are located in the countries where the contracts were written.
(b) Further analysis by products and services
The Group’s results can be further analysed by products and services which comprise long-term business, general insurance and
health, fund management and other activities.
Long-term business
Our long-term business comprises life insurance, long-term health and accident insurance, savings, pensions and annuity
business written by our life insurance subsidiaries, including managed pension fund business. Long-term business also includes
our share of the other life and related business written in our associates and joint ventures, as well as lifetime mortgage business
written in the UK.
General insurance and health
Our general insurance and health business provides insurance cover to individuals and to businesses, for risks associated mainly
with motor vehicles, property and liability, such as employers’ liability and professional indemnity liability, and medical expenses.
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Fund management
Aviva Investors manages policyholders' and shareholders' invested funds, provides investment management services for
institutional pension fund mandates and manages a range of retail investment products. We offer clients solutions across a broad
range of asset classes including fixed income, equities, multi-asset, real estate and infrastructure. Clients include Aviva Group
businesses, third-party financial institutions, pension funds, public sector organisations, investment professionals and private
investors.
Other
Other includes service companies, head office expenses such as Group treasury and finance functions, and certain financing
costs and taxes not allocated to business segments and elimination entries for certain inter-segment transactions and group
consolidation adjustments.
(i) Segmental income statement - product and services for the year ended 31 December 2024
Long-term
business
General
insurance
and health1
Fund
management
Other
Total
£m
£m
£m
£m
£m
Insurance revenue
8,339
12,426
—
(18)
20,747
Insurance service expense
(7,225)
(11,026)
—
11 (18,240)
Net (expense)/income from reinsurance contracts
(219)
(476)
—
6
(689)
Insurance service result
895
924
—
(1)
1,818
Investment return
17,862
728
17
1,275
19,882
Net finance expense from insurance contracts and participating investment
contracts
(760)
(353)
—
(8)
(1,121)
Net finance (expense)/income from reinsurance contracts
(212)
15
—
29
(168)
Movement in non-participating investment contract liabilities
(17,123)
—
—
(1)
(17,124)
Investment expense attributable to unitholders
—
—
—
(1,179)
(1,179)
Net financial result
(233)
390
17
116
290
Fee and commission income
1,187
91
127
5
1,410
Inter-segment revenue
—
—
259
—
259
Share of profit after tax of joint ventures and associates
135
1
—
—
136
Profit on disposal and remeasurement of subsidiaries, joint ventures and
associates
—
—
—
195
195
Other operating expenses
(1,253)
(160)
(384)
(403)
(2,200)
Other net foreign exchange gains
—
4
—
105
109
Other finance costs
(212)
(8)
—
(271)
(491)
Inter-segment expenses
(240)
(17)
—
(2)
(259)
Profit/(loss) before tax
279
1,225
19
(256)
1,267
Tax attributable to policyholders’ returns
(270)
—
—
—
(270)
Profit/(loss) before tax attributable to shareholders’ profits
9
1,225
19
(256)
997
Adjusting items
1,044
(163)
21
(132)
770
Group adjusted operating profit/(loss) before tax attributable to
shareholders' profits
1,053
1,062
40
(388)
1,767
1. General insurance and health product segment includes insurance revenue of £712 million relating to health business. The remaining segment relates to property and liability
insurance.
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(ii) Segmental income statement - product and services for the year ended 31 December 2023
Long-term
business
General
insurance
and health 1
Fund
management
Other
Total
£m
£m
£m
£m
£m
Insurance revenue
7,589
10,925
—
(17)
18,497
Insurance service expense
(6,554)
(9,664)
—
1
(16,217)
Net (expense)/income from reinsurance contracts
(278)
(487)
—
4
(761)
Insurance service result
757
774
—
(12)
1,519
Investment return
20,680
715
14
971
22,380
Net (expense)/income from insurance contracts and participating
investment contracts
(6,667)
(578)
—
17
(7,228)
Net income/(expense) from reinsurance contracts
531
143
—
(33)
641
Movement in non-participating investment contract liabilities
(13,558)
—
—
—
(13,558)
Investment expense attributable to unitholders
—
—
—
(861)
(861)
Net financial result
986
280
14
94
1,374
Fee and commission income
1,105
70
126
8
1,309
Inter-segment revenue
—
—
238
—
238
Share of (loss)/profit after tax of joint ventures and associates
(72)
1
—
—
(71)
Profit on disposal and remeasurement of subsidiaries, joint ventures and
associates
—
—
—
—
—
Other operating expenses
(1,070)
(101)
(357)
(580)
(2,108)
Other net foreign exchange gains
—
42
—
104
146
Other finance costs
(200)
(6)
—
(273)
(479)
Inter-segment expenses
(219)
(16)
—
(3)
(238)
Profit/(loss) before tax
1,287
1,044
21
(662)
1,690
Tax attributable to policyholders’ returns
(249)
—
—
—
(249)
Profit/(loss) before tax attributable to shareholders’ profits
1,038
1,044
21
(662)
1,441
Adjusting items
(47)
(128)
—
201
26
Group adjusted operating profit/(loss) before tax attributable to
shareholders' profits
991
916
21
(461)
1,467
1. General insurance and health product segment includes insurance revenue of £637 million relating to health business. The remaining segment relates to property and liability
insurance.
4 - Insurance revenue
This note analyses the insurance revenue recognised in relation to our insurance contracts and participating investment
contracts (which are described in note 39).
Insurance revenue for the year ended 31 December comprised:
2024
2023
Life Risk
Participating
Non-Life
Total
Life Risk
Participating
Non-Life
Total
£m
£m
£m
£m
£m
£m
£m
£m
Amounts relating to changes in liabilities for remaining coverage
CSM recognised for services provided
821
178
1
1,000
729
151
—
880
Change in risk adjustment for non-
financial risk for risk expired
109
3
1
113
96
3
—
99
Expected incurred claims and other
insurance service expenses
6,522
264
11
6,797
5,788
462
—
6,250
Other1
—
81
—
81
—
36
—
36
Recovery of insurance acquisition
cashflows
336
7
—
343
301
6
—
307
Contracts not measured under the PAA
7,788
533
13
8,334
6,914
658
—
7,572
Contracts measured under the PAA
—
—
12,413
12,413
—
—
10,925
10,925
Total insurance revenue
7,788
533
12,426
20,747
6,914
658
10,925
18,497
1. Other in 2024 includes a gain of £68 million relating to a revision to the 2023 restatement in respect of accounting processes for with-profit funds. Both 2024 and 2023 also include
revenue recognised for incurred policyholder tax expenses on participating business.
For contracts measured under the Premium Allocation Approach, amounts recognised in insurance revenue are based on the
expected premiums earned in the year.
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Notes to the consolidated financial statements
5 - Net financial result
This note analyses the Group’s net financial results in profit or loss. This analysis is provided by reportable product groups for
insurance and participating investment contracts, which are explained in note 39(a).
2024
Life Risk
Participating
General
Insurance
& Health
Non-
Participating
Non
Insurance
Total
Product
Note
£m
£m
£m
£m
£m
£m
Interest and similar income from financial
instruments at amortised cost
7
6
8
—
2
23
Interest and similar income from financial
instruments at FVTPL
2,311
519
396
473
1,616
5,315
Other investment income
5(a)
(3,292)
1,242
300
16,342
(46)
14,546
Net impairment loss on financial assets
—
—
(2)
—
—
(2)
Total investment return
(974)
1,767
702
16,815
1,572
19,882
Changes in fair value of underlying items
62
(1,933)
—
—
—
(1,871)
Effects of risk mitigation option
—
37
—
—
—
37
Interest accreted on contractual service margin
(298)
(3)
—
—
—
(301)
Effect of, and changes in, interest rates and other
financial assumptions
1,517
(48)
(353)
—
—
1,116
Effect of measuring changes in estimates at current
rates and adjusting the CSM at rates on initial
recognition
(65)
(37)
—
—
—
(102)
Net finance expense from insurance contracts and
participating investment contracts
1,216
(1,984)
(353)
—
—
(1,121)
Interest accreted
54
—
89
—
—
143
Other
(265)
—
(46)
—
—
(311)
Net finance income from reinsurance contracts
(211)
—
43
—
—
(168)
Investment expense allocated to non-participating
investment contracts
—
—
—
(17,124)
—
(17,124)
Changes in non-participating investment contract
provisions
—
—
—
1
—
1
Change in reinsurance asset for non-participating
investment contract provisions
—
—
—
(1)
—
(1)
Movement in non-participating investment contract
liabilities
—
—
—
(17,124)
—
(17,124)
Investment expense attributable to unitholders
—
—
—
—
(1,179)
(1,179)
Net financial result
31
(217)
392
(309)
393
290
Underlying items comprise financial instruments and other assets and liabilities held within unit-linked and with-profits funds
whose value determines some of the amounts payable to policyholders. For policyholders invested in with-profits funds with a
policyholder estate the underlying items may include non-profit insurance contracts written within the funds.
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2023
Life Risk
Participating
General
Insurance
& Health
Non-
Participating
Non
Insurance
Total
Product
Note
£m
£m
£m
£m
£m
£m
Interest and similar income from financial
instruments at amortised cost
9
5
6
27
48
95
Interest and similar income from financial
instruments at FVTPL
648
392
359
1,902
2,753
6,054
Other investment income
5(a)
3,586
2,163
353
11,648
(1,516)
16,234
Net impairment loss on financial assets
—
—
(3)
—
—
(3)
Total investment return
4,243
2,560
715
13,577
1,285
22,380
Changes in fair value of underlying items
(204)
(2,383)
—
—
—
(2,587)
Effects of risk mitigation option
—
5
—
—
—
5
Interest accreted on contractual service margin
(207)
—
—
—
—
(207)
Effect of, and changes in, interest rates and other
financial assumptions
(3,454)
(120)
(578)
—
—
(4,152)
Effect of measuring changes in estimates at current
rates and adjusting the CSM at rates on initial
recognition
(292)
5
—
—
—
(287)
Net finance income from insurance contracts and
participating investment contracts
(4,157)
(2,493)
(578)
—
—
(7,228)
Interest accreted
18
—
81
—
—
99
Other
513
—
29
—
—
542
Net finance expense from reinsurance contracts
531
—
110
—
—
641
Investment expense allocated to non-participating
investment contracts
—
—
—
(13,558)
—
(13,558)
Changes in non-participating investment contract
provisions
—
—
—
(1)
—
(1)
Change in reinsurance asset for non-participating
investment contract provisions
—
—
—
1
—
1
Movement in non-participating investment contract
liabilities
—
—
—
(13,558)
—
(13,558)
Investment expense attributable to unitholders
—
—
—
—
(861)
(861)
Net financial result
617
67
247
19
424
1,374
(a) Other investment income
2024
£m
2023
£m
Dividend income
2,829
3,999
Net gains/(losses)
11,886
12,317
From financial assets mandatorily held at FVTPL
11,050
15,206
From financial assets held at amortised cost
(29)
91
From borrowings designated as FVTPL
(44)
74
From financial liabilities mandatorily held at FVTPL1
909
(3,054)
Net gains/(losses) from investment properties
206
(14)
Rent
250
319
Expenses relating to these properties
(27)
(22)
Realised losses on disposal
(4)
(10)
Fair value losses on investment properties
(13)
(301)
Net foreign exchange losses on financial instruments not held at FVTPL
(275)
(91)
Other
(100)
23
Other investment income
14,546
16,234
1. Financial liabilities consist of derivative financial liabilities which meet the definition of held for trading under IFRS 9
6 - Fee and commission income
2024
£m
2023
£m
Fee income from non-participating investment contract business
753
715
Fund management fee income
136
134
Other fee income
431
369
Other commission income
88
86
Net change in deferred revenue
2
5
Total
1,410
1,309
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7 - Expenses
This note analyses the Group’s expenses in profit or loss.
Note
2024
£m
2023
£m
Claims and benefits incurred
Claims and benefits on long-term business
Insurance contracts and participating investment contracts
6,362
5,850
Claims and benefits on general insurance and health business
7,537
6,557
13,899
12,407
Claim recoveries from reinsurers
Insurance contracts and participating investment contracts
(3,693)
(3,040)
Claims and benefits incurred, net of recoveries from reinsurers
10,206
9,367
Losses on onerous insurance contracts and participating investment contracts
150
122
Fee and commission expense
Acquisition costs
Commission expenses
2,799
2,541
Other acquisition costs
1,218
1,055
Amount attributed to insurance acquisition cash flows incurred during the year
(3,557)
(3,179)
Acquisition costs for non-participating investment contracts
460
417
Amortisation of insurance acquisition cash flows
3,104
2,842
Change in deferred acquisition costs for non-participating investment contracts
(40)
70
Other fee and commission expense
45
36
Fee and commission expense
3,569
3,365
Other expenses
Staff costs
10(b)
1,270
1,032
Central costs
246
354
Depreciation
62
66
Amortisation of acquired value of in-force business on non-participating investment contracts
52
59
Amortisation of intangible assets
130
119
Impairment of intangible assets
16
—
Other expenses (see below)
1,091
959
Other net foreign exchange gains
(109)
(146)
Other expenses
2,757
2,443
Total expenses
16,682
15,297
Represented by expenses included within the income statement:
Insurance service expense
18,240
16,217
Expense recovery from reinsurance contracts1
(3,648)
(2,882)
Other operating expenses
2,200
2,108
Other net foreign exchange gains
(109)
(146)
Total expenses
16,682
15,297
1. Expense recovery from reinsurance contracts is presented in the consolidated income statement within net expense from reinsurance contracts, which comprises an allocation of
premiums paid to reinsurers of £(4,337) million (2023: £(3,643) million) and amount recovered from reinsurers of £3,648 million (2023: £2,882 million)
Other expenses were £1,091 million (2023: £959 million) which mainly included costs relating to written and maintenance
expenses, staff costs, software and data services, and outsourced services. In 2024, it also included £19 million
(2023: £92 million) of fees paid to bondholders in respect of modification to the terms and conditions of the Group's Tier 2 Fixed
to Floating notes and integration and restructuring costs of £217 million (2023: £61 million) as set out below. In 2023, it also
included charges of £71 million relating to our historic divestments.
Other operating expenses presented on the consolidated income statement of £2,200 million (2023: £2,108 million) includes the
Group's Aviva Investors segment, amortisation on AVIF and intangibles acquired in business combinations, expenses attributable
to non-participating investment contracts, expenses attributable to non-insurance products such as wealth management
services and Corporate Centre costs. Other operating expenses also includes integration and restructuring (I&R) costs of
£217 million (2023: £61 million), which relate to a well-defined programme that materially changes the scope of our business or
the manner in which it is conducted, and are not directly attributable to insurance contracts.
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8 - Other finance costs
This note analyses the interest costs on our borrowings (which are described in note 45) and similar charges. Other finance costs
comprise:
Note
2024
£m
2023
£m
Subordinated debt
229
219
Long term senior debt
8
10
Commercial paper
2
4
Interest expense on core structural borrowings at amortised cost
239
233
Amounts owed to financial institutions at amortised cost
25
26
Securitised mortgage loan notes at fair value
66
70
Interest expense on operational borrowings
91
96
Interest on collateral received
32
39
Net finance charge on pension schemes
44(b)(i)
23
25
Interest on lease liabilities
10
8
Other similar charges
96
78
Total finance costs
491
479
9 - Investment variances and economic assumption changes
The investment variances and economic assumption changes impacting the Group consolidated income statement are as follows:
2024
£m
2023
£m
Life business1
(850)
217
General insurance business
207
171
Other operations2
(23)
(66)
Total investment variances and economic assumption changes
(666)
322
1. Life business includes IWR and International Investments
2. Other operations represents short-term fluctuations on Group centre investments, including the centre hedging programme
(a) Definitions
Group adjusted operating profit is based on expected investment returns on financial investments over the year, with consistent
allowance for the corresponding expected movements in liabilities.
Changes due to economic items, such as market value movements 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, in investment variances and economic assumption changes.
(b) Methodology and assumptions
The expected investment returns and corresponding expected movements in liabilities are calculated separately for each
principal business unit.
The expected return on investments for both policyholders’ and shareholders’ funds is based on opening economic assumptions
applied to the expected funds under management over the reporting period:
• For fixed interest securities the expected investment returns are based on average prospective yields for the actual assets
held less an adjustment for credit risk (assessed on a best estimate basis).
• The expected return on equities and properties is calculated using the appropriate risk-free rate in the relevant currency plus a
risk premium. The risk-free rates are consistent with those used to determine bottom-up discount rates applied to
measurement of insurance contracts as set out in note 39(g), and typically use the 1-year or 10-year duration. The use of risk
premium reflects management’s long-term expectations of asset return in excess of the risk-free yields from investing in these
asset classes. The asset risk premiums are set out in the table below:
2024
2023
Equity risk premium
3.5 %
3.5 %
Property risk premium
2.0 %
2.0 %
• The expected return on cash holdings is the 1-year risk-free rate in the relevant currency.
• Expected funds under management are equal to the opening value of funds under management, adjusted for sales and
purchases during the year 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, as well as other market movements. To the extent that these differences arise from the operating experience, or
management decisions to change asset mix, the effect is included in the Group adjusted operating profit. The residual difference
between actual and expected investment return is included in investment variances, outside Group adjusted operating profit, but
included in profit before tax attributable to shareholders' profits.
Similarly, the effect of differences between actual and expected economic experience on liabilities, and changes to economic
assumptions used to value liabilities, are taken outside Group adjusted operating profit.
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Notes to the consolidated financial statements
For many types of life 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. The profit impact of economic volatility on other business
depends on the degree of matching of assets and liabilities, exposure to financial options and guarantees, and the application of
relevant IFRS 17 risk-mitigation options.
(c) Analysis of investment variances and economic assumption changes
(i) Life business
The loss of £850 million (2023: gain of £217 million) in relation to investment variances and economic assumption changes on Life
business was primarily due to UK 10-year term interest rates rising c.80 bps and losses from hedging gains on equity markets;
partially offset by reduced credit risk allowances on equity release mortgages.
The negative impact of interest rate rises and adverse impact of equity market gains reflect the fact that we hedge on a Solvency
II basis rather than an IFRS basis. For example, when equity markets increase we gain from the increase in the value of future
annual management charges on unit-linked products on an economic basis which are not immediately recognised as IFRS profit,
however, the loss from hedges in place is recognised on both Solvency II and IFRS bases.
The gain for 2023 was primarily due to UK 10-year term interest rates falling c.40 bps and favourable credit default experience,
partly offset by a loss from hedging gains on equity markets.
(ii) General insurance business
The gain of £207 million (2023: gain of £171 million) in relation to investment variances and economic assumption changes for the
general insurance and health business was primarily driven by interest rate movements, equity market gains and currency
movements. The gain for 2023 was primarily driven by currency movements and equity, as well as smaller contributions from
falling interest rates and narrower credit spreads.
10 - Employee information
This note shows where our staff are employed, excluding staff employed by our joint ventures and associates, and analyses the
total staff costs.
(a) Employee numbers
The number of persons employed by the Group, including directors under a service contract, was:
At 31 December
Average for the year1
2024
2023
2024
2023
Number
Number
Number
Number
Insurance, Wealth & Retirement (IWR)
10,944
9,963
10,388
9,562
UK & Ireland General Insurance
10,000
8,653
9,443
8,333
Canada General Insurance
5,132
4,657
5,003
4,643
Aviva Investors
973
963
959
967
International investments (India, China and Singapore)
1,300
1,490
1,398
1,447
Other operations
742
656
682
577
Total employee numbers
29,091
26,382
27,873
25,529
1. Average employee numbers have been calculated using a monthly average that takes into account recruitment, leavers, transfers, acquisitions and disposals of businesses during
the year
(b) Employee costs
Note
2024
£m
2023
£m
Wages and salaries
1,381
1,132
Social security costs
142
132
Post-retirement obligations
Defined benefit schemes
44(d)
29
27
Defined contribution schemes
44(d)
225
190
Profit sharing and incentive plans
190
198
Equity compensation plans
32(d)
61
61
Termination benefits
17
14
Total staff costs
2,045
1,754
Staff costs are charged within:
Note
2024
£m
2023
£m
Acquisition costs
497
465
Claims handling expenses
219
190
Central costs
59
67
Staff costs
7
1,270
1,032
Total staff costs
2,045
1,754
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Notes to the consolidated financial statements
11 - Directors
Information concerning individual directors’ emoluments, interests and transactions is given in the Directors’ Remuneration
report in the ‘Corporate governance’ section of this report. For the purposes of the disclosure required by Schedule 5 to the
Companies Act 2006, the total aggregate emoluments of the directors in respect of 2024 was £8.0 million (2023: £7.3 million).
Employer contributions to pensions for executive directors for qualifying periods were £nil in both 2024 and 2023. The aggregate
net value of share awards granted to the directors in the year was £nil in both 2024 and 2023. No share options were exercised
by directors during the year in either 2024 and 2023.
12 - Auditors’ remuneration
This note shows the total remuneration payable by the Group, excluding VAT and any overseas equivalent thereof, to our auditors.
2024
£m
2023
£m
Fees payable to the auditor and its associates for the statutory audit of the Aviva Group and Company financial
statements
3
3
Fees payable to the auditor and its associates for other services
Audit of Group subsidiaries
17
19
Additional fees related to the prior year audit of Group subsidiaries
—
—
Total audit fees
20
22
Audit related assurance
5
5
Total audit and audit-related assurance fees
25
27
Other assurance services
2
1
Total audit and assurance fees
27
28
Tax compliance services
—
—
Tax advisory services
—
—
Services relating to corporate finance transactions
—
—
Other non-audit services not covered above
—
Fees payable to the auditor and its associates for services to Group companies
27
28
Fees payable for the audit of the Group’s subsidiaries include fees for the statutory audit of the subsidiaries, both inside and
outside the UK, and for the work performed by the principal auditors in respect of the subsidiaries for the purpose of the
consolidated financial statements of the Group.
Ernst & Young LLP (EY) became the Group's statutory auditor in 2024 replacing PricewaterhouseCoopers LLP (PwC) who were the
statutory auditors during 2023. The 2024 fees shown above are wholly in respect of fees payable to EY whilst the 2023 fees were
the fees paid to PwC.
Audit related assurance comprises services in relation to statutory and regulatory filings. These include fees for the audit of the
Group’s Solvency II regulatory returns, services for the audit of other regulatory returns of the Group’s subsidiaries and review of
interim financial information under the Listing Rules of the UK Listing Authority. Total audit fees (including additional fees related
to the audit of Group subsidiaries) and audit-related assurance fees were £25 million (2023: £27 million).
Other assurance services in 2024 of £2 million (2023: £1 million) mainly include assurance fees over a selection of
non-financial reporting metrics.
In addition to these fees, audit fees payable in respect of investment funds consolidated in the Group financial statements were
£1 million (2023: £1 million). These fees are borne directly by the unitholders of the funds.
Details of the Group’s process for safeguarding and supporting the independence and objectivity of the external auditors are
given in the Audit Committee report.
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Notes to the consolidated financial statements
13 - Tax
This note analyses the tax charge for the year and explains the factors that affect it.
(a) Tax charged to the income statement
(i) The total tax charged comprises:
2024
£m
2023
£m
For the period
201
321
Adjustments in respect of prior years
(19)
(29)
Current tax
182
292
Origination and reversal of temporary differences
380
306
Write down/(back) of deferred tax assets
—
(14)
Deferred tax
380
292
Total tax charged to income statement
562
584
(ii) Policyholder tax
The Group, as a proxy for policyholders in the UK and Ireland, is required to record taxes on investment income and
gains each year. Accordingly, the tax benefit or expense attributable to UK and Ireland life insurance policyholder returns is
included in the tax charge. The tax charge attributable to policyholder returns included in the charge above is £270 million
(2023: charge of £249 million).
(iii) Global minimum tax
The Group is subject to the reform of the international tax system proposed by The Organisation for Economic Co-operation and
Development (OECD) which introduces a global minimum effective rate of corporation tax of 15% and took effect in the current
period. No current tax charge is included in respect of these provisions. No amount is recorded in 2023 as the tax had not been
introduced in this period.
(iv) The tax charged to the income statement, comprising current and deferred tax, can be analysed as follows:
2024
£m
2023
£m
UK tax
491
517
Overseas tax
71
67
Total tax charged to income statement
562
584
(v) Unrecognised tax losses and temporary differences
Unrecognised tax losses and temporary differences of previous years were used to reduce the current tax expense and deferred
tax charge by £nil million and £nil million (2023: £nil million and £14 million) respectively.
(vi) Deferred tax charged to the income statement
Deferred tax charged to the income statement represents movements on the following items:
2024
£m
2023
£m
Insurance and investment contract liabilities
185
(195)
Deferred acquisition costs
9
(25)
Unrealised gains on investments
79
57
Pensions and other post-retirement obligations
8
14
Unused losses and tax credits
(18)
225
Intangibles and additional value of in-force long-term business
(20)
(27)
Provisions and other temporary differences
137
243
Total deferred tax charged to income statement
380
292
(b) Tax credited to other comprehensive income
(i) The total tax credited comprises:
2024
£m
2023
£m
In respect of pensions and other post-retirement obligations
(4)
(3)
In respect of foreign exchange movements
10
2
Current tax
6
(1)
In respect of pensions and other post-retirement obligations
(137)
(119)
Deferred tax
(137)
(119)
Total tax credited to comprehensive income
(131)
(120)
(ii) Policyholder tax
There is no tax charge/(credit) attributable to policyholders’ return included above in either 2024 or 2023.
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(c) Tax credited/(charged) to equity
No tax was charged or credited directly to equity in either 2024 or 2023.
(d) Tax reconciliation
The tax on the Group’s profit before tax differs from the theoretical amount that would arise using the tax rate of the home
country of the Group as follows:
2024
2023
Shareholder
£m
Policyholder
£m
Total
£m
Shareholder
£m
Policyholder
£m
Total
£m
Total profit before tax
997
270
1,267
1,441
249
1,690
Tax calculated at standard UK corporation tax rate of
25.00% (2023: 23.50%)
249
68
317
339
58
397
Reconciling items
Different basis of tax – policyholders
—
203
203
—
192
192
Adjustment to tax charge in respect of prior periods
108
—
108
(9)
—
(9)
Non-assessable income and items not taxed at the full
statutory rate
(17)
—
(17)
(13)
—
(13)
Non-taxable profit on sale of subsidiaries and
associates
(57)
—
(57)
—
—
—
Disallowable expenses
17
—
17
32
—
32
Different local basis of tax on overseas profits
3
(1)
2
8
(1)
7
Movement in valuation of deferred tax
7
—
7
(30)
—
(30)
Tax effect of profit from joint ventures and associates
(22)
—
(22)
6
—
6
Other
4
—
4
2
—
2
Total tax charged to income statement
292
270
562
335
249
584
The tax charge/(credit) attributable to policyholder returns is removed from the Group’s total profit before tax in arriving at the
Group’s profit before tax attributable to shareholders’ profits. As the net of tax profits attributable to with-profits and unit-linked
policyholders is zero, the Group’s pre-tax profit attributable to policyholders is an amount equal and opposite to the tax charge/
(credit) attributable to policyholders included in the total tax charge.
The UK government announced reduction in the authorised surplus payments charge, applicable to withdrawing amounts from
pension schemes in surplus, from 35% to 25% took effect from 6 April 2024. This has reduced the deferred tax liabilities in the
balance sheet by £40 million at 31 December 2024.
In accordance with the amendments to IAS 12, endorsed in the UK on 19 July 2023, the Group has applied the exemption and not
provided for deferred tax in respect of the global minimum tax reforms.
(e) Tax paid reconciliation
The tax on the Group’s profit before tax differs from the tax paid per the consolidated statement of cash flows as follows:
2024
£m
2023
£m
Total tax charged to income statement
562
584
Deferred tax
(380)
(292)
Adjustments in respect of prior years
19
29
Current tax recorded in other comprehensive income
6
(1)
Accounts adjustments
(355)
(264)
Amounts paid for later/(in earlier) accounting periods
36
(180)
Amounts received relating to prior accounting periods
—
(72)
Payment timing differences
36
(252)
Total tax paid
243
68
Total tax paid has arisen in our main jurisdictions of the UK, Canada and Ireland of £165 million, £65 million and £12 million,
respectively (2023: £46 million, £20 million and £2 million). Other jurisdictions accounted for £1 million (2023: £nil million).
Deferred tax represents the tax on profits or losses, which are required by legislation to be taxed in a different period to which
they impact the Group’s financial statements. Adjustments in respect of prior years arise where the final tax liability payable to
tax authorities is different from the tax charge for the period reported in the Annual Report and Accounts.
14 - Earnings per share
This note shows how to calculate earnings per share on profit attributable to ordinary shareholders, based both on the present
shares in issue (the basic earnings per share) and the potential future shares in issue, including conversion of share options
granted to employees (the diluted earnings per share). We have also shown the same calculations based on our Group adjusted
operating profit as we believe this gives an important indication of operating performance. Consideration of both these measures
gives a full picture of the performance of the business during the year.
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Notes to the consolidated financial statements
(a) Basic earnings per share
(i) Basic earnings per share is calculated as follows:
2024
2023
Group
adjusted
operating
profit
Adjusting
items
Total
Group
adjusted
operating
profit
Adjusting
items
Total
Note
£m
£m
£m
£m
£m
£m
Profit/(loss) before tax attributable to shareholders’ profits
1,767
(770)
997
1,467
(26)
1,441
Tax attributable to shareholders’ profits
(407)
115
(292)
(289)
(46)
(335)
Profit/(loss) for the period
1,360
(655)
705
1,178
(72)
1,106
Amount attributable to non-controlling interests
(21)
—
(21)
(21)
—
(21)
Coupon payments in respect of tier 1 notes
(34)
—
(34)
(34)
—
(34)
Cumulative preference dividends
(17)
—
(17)
(17)
—
(17)
Profit attributable to ordinary shareholders
1,288
(655)
633
1,106
(72)
1,034
Weighted average number of shares
14(a)(iii)
2,685
2,685
2,685
2,744
2,744
2,744
Operating earnings per share/Basic earnings per share
48.0 p
(24.4) p
23.6 p
40.3 p
(2.6) p
37.7 p
(ii) Basic earnings per share comprises:
2024
2023
Before tax
Net of tax, NCI,
preference
dividends and
tier 1 notes
coupon
payments
Per share
Before tax
Net of tax, NCI,
preference
dividends and
tier 1 notes
coupon
payments
Per share
£m
£m
pence
£m
£m
pence
Group adjusted operating profit attributable to ordinary
shareholders
1,767
1,288
48.0
1,467
1,106
40.3
Adjusting items:
Investment variances and economic assumption changes
(666)
(526)
(19.6)
322
207
7.5
Amortisation of intangibles acquired in business
combinations
(61)
(46)
(1.7)
(52)
(40)
(1.5)
Amortisation of acquired value of in-force business
(52)
(39)
(1.5)
(59)
(43)
(1.6)
Loss on disposal and remeasurement of subsidiaries,
joint ventures and associates
195
218
8.1
—
—
—
Integration and restructuring costs
(217)
(164)
(6.1)
(61)
(46)
(1.7)
Other
31
(98)
(3.6)
(176)
(150)
(5.5)
Profit attributable to ordinary shareholders
997
633
23.6
1,441
1,034
37.7
(iii) Weighted average number of shares
The calculation of basic earnings per share uses a weighted average of 2,685 million (2023: 2,744 million) ordinary shares in
issue, after deducting treasury shares. The actual number of shares in issue at 31 December 2024 was 2,678 million
(2023: 2,739 million) or 2,660 million (2023: 2,718 million) excluding 18 million (2023: 21 million) treasury shares. See note 31 for
further information on the movements in share capital during the year.
(b) Diluted earnings per share
(i) Diluted earnings per share on Profit attributable to ordinary shareholders is calculated as follows:
2024
2023
Net of tax, NCI,
preference
dividends and
tier 1 notes
coupon
payments
Weighted
average
number of
shares
Per share
Net of tax, NCI,
preference
dividends and
tier 1 notes
coupon
payments
Weighted
average
number of
shares
Per share
£m
£m
pence
£m
£m
pence
Profit attributable to ordinary shareholders
633
2,685
23.6
1,034
2,744
37.7
Dilutive effect of share awards and options
31
(0.3)
33
(0.5)
Diluted earnings per share
633
2,716
23.3
1,034
2,777
37.2
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(ii) Diluted earnings per share on Group adjusted operating profit attributable to ordinary shareholders is calculated as follows:
2024
2023
Net of tax, NCI,
preference
dividends and
tier 1 notes
coupon
payments
Weighted
average
number of
shares
Per share
Net of tax, NCI,
preference
dividends and
tier 1 notes
coupon
payments
Weighted
average
number of
shares
Per share
£m
£m
pence
£m
£m
pence
Group adjusted operating profit attributable to ordinary
shareholders
1,288
2,685
48.0
1,106
2,744
40.3
Dilutive effect of share awards and options
31
(0.6)
33
(0.5)
Diluted earnings per share
1,288
2,716
47.4
1,106
2,777
39.8
15 - Dividends and appropriations
This note analyses the total dividends and other appropriations paid during the year, as set out in the table below. Details are also
provided of the proposed final dividend for 2024, which is not accrued in these financial statements and is therefore excluded
from the table.
2024
£m
2023
£m
Interim 2024 – 11.9 pence per share, paid on 17 October 2024
318
—
Final 2023 – 22.3 pence per share, paid on 23 May 2024
603
—
Interim 2023 – 11.1 pence per share, paid on 5 October 2023
—
302
Final 2022 – 22.3 pence per share, paid on 18 May 2023
—
576
Ordinary dividends declared and charged to equity in the year
921
878
Preference dividends declared and charged to equity in the year
17
17
Coupon payments on tier 1 notes charged to equity in the year
34
34
Total dividends and appropriations
972
929
Subsequent to 31 December 2024, the directors proposed a final dividend for 2024 of 23.8 pence pence per ordinary share,
amounting to £634 million in total. The cash value of the dividend is calculated using 2,667,628,034 shares as at 24 February 2025
representing issued shares eligible for dividend payment. Subject to approval by shareholders at the AGM, the dividend will be
paid on 22 May 2025 and will be accounted for as an appropriation of retained earnings in the year ending 31 December 2025. See
shareholder services in the 'Other Information' section for further details. See note 31 for information on share buyback.
16 - Goodwill
This note analyses the changes to the carrying amount of goodwill during the year and details the results of our impairment
testing on both goodwill and intangible assets with indefinite lives.
(a) Carrying amount
2024
2023
Gross
amount
Accumulated
impairment
Carrying
amount
Gross
amount
Accumulated
impairment
Carrying
amount
£m
£m
£m
£m
£m
£m
At 1 January
2,182
(82)
2,100
2,185
(83)
2,102
Acquisitions and additions
493
—
493
2
—
2
Foreign exchange rate movements
(13)
4
(9)
(5)
1
(4)
At 31 December
2,662
(78)
2,584
2,182
(82)
2,100
Goodwill from acquisitions and additions arose on the acquisitions of AIG's UK Protection business, Probitas, Optiom and a
number of acquisitions within Succession Wealth (see note 2).
Impairment tests on goodwill were conducted as described in section (b).
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Notes to the consolidated financial statements
(b) Goodwill allocation and impairment testing
A summary of the goodwill and intangibles with indefinite useful lives allocated to groups of cash generating units (CGUs) is
presented below.
2024
2023
Carrying
amount of
goodwill
Carrying
amount of
intangibles
with indefinite
useful lives
Total
Carrying
amount of
goodwill
Carrying
amount of
intangibles with
indefinite
useful lives
Total
note 17
note 17
£m
£m
£m
£m
£m
£m
United Kingdom – long-term business
993
—
993
663
—
663
United Kingdom – fund management business
406
—
406
356
—
356
United Kingdom – general insurance
998
145
1,143
924
1
925
Ireland – general insurance
92
—
92
96
—
96
Canada
95
—
95
61
—
61
Total
2,584
145
2,729
2,100
1
2,101
Goodwill in all business units is tested for impairment by comparing the carrying value of the cash generating unit to which
the goodwill relates, to the recoverable value of that CGU. The recoverable amount is the value in use of the CGU unless
otherwise stated.
(i) Long-term business
Value in use has been calculated based on a shareholder value of the business calculated in accordance with Solvency II principles,
adjusted where Solvency II does not represent a best estimate of shareholders’ interests. The principal adjustments relate to the
exclusion of the benefit of transitional measures on technical provisions and the volatility adjustment under Solvency II, and removal of
restrictions on contract boundaries or business scope.
The present value of expected profits arising from future new business may be included within the shareholder value and is
calculated on an adjusted Solvency II basis, using profit projections based on the most recent three-year business plans
approved by management. These plans reflect management’s best estimate of future profits based on both historical experience
and expected growth rates for the relevant cash generating unit. The underlying assumptions of these projections include market
share, customer numbers, mortality, morbidity and persistency.
Future new business profits beyond the initial three years are extrapolated using a steady growth rate. Growth rates and
expected future profits are set with regards to management estimates, past experience and relevant available market statistics.
Expected profits from future new business are discounted using a risk adjusted discount rate. The discount rate is a combination
of a risk-free rate and a risk margin to make prudent allowance for the risk that experience in future years for new business may
differ from that assumed.
(ii) Long-term business key assumptions
The Solvency II non-economic assumptions in relation to mortality, morbidity, persistency and expenses and other items are,
based on management’s best estimate assumptions. Economic assumptions are based on market data as at the end of each
reporting period. The basic risk-free rate curves used to value the technical provisions reflect the curves, credit risk adjustment
and fundamental spread for the matching adjustment published by the Bank of England and the European Insurance and
Occupational Pensions Authority (EIOPA) on their websites. For the purposes of calculating value in use, the UK Solvency II risk
margin is used as it is considered to apply an economic view.
(iii) General insurance, health, fund management and other businesses
Value in use is calculated as the discounted value of expected future profits of each business. The calculation uses cash flow
projections based on business plans approved by management covering at least a three-year period. These plans reflect
management’s best estimate of future profits based on both historical experience and expected growth rates for the relevant
cash generating unit. The underlying assumptions of these projections include market share, customer numbers, premium rate
and fee income changes, claims inflation and commission rates and consider future risks associated with climate change.
Cash flows beyond the plan period are extrapolated using a steady growth rate. Growth rates and expected future profits are
set with regards to past experience and relevant available market statistics.
Future profits are discounted using a risk adjusted discount rate which is based on the Capital Asset Pricing Model (CAPM).
The inputs include the risk-free rate of interest appropriate to the geographic location of the cash flows related to each CGU
being tested, market risk premium and beta.
2024
2023
Key assumptions
Extrapolated
future profits
growth rate
Future pre-
tax profits
discount rate
Extrapolated
future profits
growth rate
Future pre-
tax profits
discount rate
%
%
%
%
United Kingdom general insurance
1.0
10.9
1.0
11.9
Ireland general insurance
Nil
8.1
Nil
9.3
Canada general insurance
6.0
9.3
5.0
10.8
Results of impairment testing
Management’s impairment review of the Group’s cash generating units did not identify any necessary impairments to goodwill.
There were no impairments in 2023.
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Notes to the consolidated financial statements
17 - Acquired value of in-force business (AVIF) and intangible assets
This note shows the movements in cost, amortisation and impairment of the acquired value of in-force business and intangible
assets during the year.
2024
2023
AVIF on
investment
contracts
(a)
Internally
generated
intangibles
assets
Other
intangible
assets with
finite useful
lives (b)
Intangible
assets with
indefinite
useful lives
Total
AVIF on
investment
contracts (a)
Internally
generated
intangibles
assets
Other
intangible
assets with
finite useful
lives (b)1
Intangible
assets with
indefinite
useful lives
Total
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
Gross amount
At 1 January
1,431
870
841
1
3,143
1,432
687
822
1
2,942
Additions
—
115
121
144
380
—
185
25
—
210
Disposals
—
—
—
—
—
—
—
—
—
—
Foreign exchange rate
movements
(1)
(8)
(21)
—
(30)
(1)
(2)
(6)
—
(9)
At 31 December
1,430
977
941
145
3,493
1,431
870
841
1
3,143
Accumulated amortisation
At 1 January
(945)
(582)
(576)
—
(2,103)
(886)
(516)
(528)
—
(1,930)
Amortisation for the
year
(52)
(69)
(61)
—
(182)
(59)
(67)
(52)
—
(178)
Disposals
—
—
—
—
—
—
—
—
—
—
Foreign exchange rate
movements
—
2
9
—
11
—
1
4
—
5
At 31 December
(997)
(649)
(628)
—
(2,274)
(945)
(582)
(576)
—
(2,103)
Accumulated Impairment
At 1 January
(25)
(47)
—
—
(72)
(25)
(47)
—
—
(72)
Impairment charges
—
(16)
—
—
(16)
—
—
—
—
—
Foreign exchange rate
movements
—
—
—
—
—
—
—
—
—
—
At 31 December
(25)
(63)
—
—
(88)
(25)
(47)
—
—
(72)
Carrying amount at 1
January
461
241
265
1
968
521
124
294
1
940
Carrying amount at 31
December
408
265
313
145
1,131
461
241
265
1
968
(a) Acquired value of in-force business
Of the total of £408 million, £356 million (2023: £409 million) is expected to be recoverable more than one year after the
statement of financial position date.
AVIF is reviewed for evidence of impairment, consistent with reviews conducted for other finite life intangible assets. If evidence
of impairment exists, AVIF is tested at product portfolio level by reference to the value of future profits in accordance with
Solvency II principles, adjusted where Solvency II does not represent a best estimate of shareholders’ interests, consistent with
the impairment test for goodwill for long term business (see note 16(b)).
(b) Other intangible assets
Additions to Internally generated intangible assets in 2024 relate to capitalisation of software costs in relation to the Group’s
digital initiatives. Impairments totalling £16 million (2023: £nil) have been recognised in 2024.
Other intangible assets with finite useful lives primarily includes the value of bancassurance and other distribution agreements.
Additions to indefinite life intangible assets in 2024 consist of the syndicate underwriting capacity of Probitas acquired in the
period (see note 2).
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Notes to the consolidated financial statements
18 - Interests in, and loans to, joint ventures
In several businesses, Group companies and other parties jointly control certain entities. This note analyses these interests and
describes the principal joint ventures in which we are involved.
(a) Carrying amount and details of joint ventures
(i) The movements in the carrying amount comprised:
2024
2023
Goodwill and
intangibles
Equity
interests
Total
Goodwill and
intangibles
Equity
interests
Total
£m
£m
£m
£m
£m
£m
At 1 January
67
1,671
1,738
70
1,802
1,872
Share of profit/(loss) after tax
—
93
93
—
(33)
(33)
Additions
—
17
17
—
8
8
Disposals
(66)
(480)
(546)
—
(19)
(19)
Dividends received from joint ventures
—
(23)
(23)
—
(51)
(51)
Foreign exchange rate movements
(1)
(21)
(22)
(3)
(36)
(39)
At 31 December
—
1,257
1,257
67
1,671
1,738
Less: Joint venture classified as held for sale
—
—
—
(67)
(482)
(549)
At 31 December
—
1,257
1,257
—
1,189
1,189
Additions of £17 million in 2024 relate to the Group's holdings in long-term business undertakings (2023: £8 million relating to
property management undertakings).
Disposals of £546 million in 2024 include the sale of the Group's entire shareholding in its joint venture in Singapore, Aviva
SingLife Holdings Pte Ltd, along with an associated debt instrument, to Sumitomo Life Insurance Company. The shareholding,
associated debt instrument and vendor finance notes were classified within Assets of operations classified as held for sale in the
Group’s consolidated statement of financial position at 31 December 2023 (see note 2(b)).
The Group’s share of total comprehensive income related to joint venture entities is £93 million (2023: £33 million loss).
(ii) The carrying amount at 31 December comprised:
2024
2023
Goodwill and
intangibles
Equity
interests
Total
Goodwill and
intangibles
Equity
interests
Total
£m
£m
£m
£m
£m
£m
Property management undertakings
—
898
898
—
927
927
Long-term business undertakings
—
359
359
67
744
811
At 31 December
—
1,257
1,257
67
1,671
1,738
Less: Joint venture classified as held for sale
—
—
—
(67)
(482)
(549)
At 31 December
—
1,257
1,257
—
1,189
1,189
The property management undertakings perform property ownership and management activities, and are incorporated and
operate in the UK. All such investments are held by subsidiary entities.
The long-term business undertakings perform life insurance activities. All investments in such undertakings are unlisted and held
by subsidiaries, except for the shares in the Chinese joint venture, Aviva-COFCO Life Insurance Company Limited, which are held
by Aviva plc. The Group’s share of net assets of that company is £337 million (2023: £252 million) and the investment has a cost
of £123 million (2023: £123 million).
(iii) Principal joint ventures
No joint ventures are considered to be material to the Group in either 2024 or 2023. The Group's principal joint ventures are
defined as those where the carrying amount is 10% or more of the total interests in, and loans to, joint ventures at the period end.
The Group’s principal joint ventures are as follows:
2024
2023
Nature of activities
Principal place
of business
Proportion of
ownership
interest
%
p
of
ownership
interest
%
2-10 Mortimer Street Limited Partnership
Property management
UK
50.00%
50.00%
Aviva-COFCO Life Insurance Company Ltd.
Life insurance
China
50.00%
50.00%
Singapore Life Holdings Pte Limited (formerly known as
Aviva Singlife Holdings Pte. Ltd)
Insurance holding
company
Singapore
-
24.19%
(iv) Contingent liabilities and commitments
From time to time Group joint ventures may receive liability claims or become involved in actual or threatened related litigation.
The joint ventures have no other contingent liabilities at 31 December 2024 (2023: none) to which the Group has significant
exposure. The Group has no commitments to provide funding to property management joint ventures (2023: none).
In certain jurisdictions the ability of joint ventures to transfer funds in the form of cash dividends or to repay loans and advances
made by the Group is subject to local corporate or insurance laws and regulations and solvency requirements.
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(b) Impairment testing
Interests in joint ventures are tested for impairment of goodwill and intangibles when there is an indicator of impairment.
They are tested for impairment by comparing the carrying value of the cash generating unit to which the goodwill or intangible
relates to the recoverable value of that cash generating unit. Recoverable amount for long-term and general insurance
businesses are calculated on a consistent basis with that used for impairment testing of goodwill, as set out in note 16(b).
The recoverable amount of property management undertakings is the fair value less costs to sell of the joint venture,
measured in accordance with the Group’s accounting policy for investment property (see accounting policy R).
19 - Interests in, and loans to, associates
This note analyses our interests in entities which we do not control but where we have significant influence. No associates are
considered to be material from a Group perspective in either 2024 or 2023.
(a) Carrying amount and details of associates
(i) The movements in the carrying amount comprised:
2024
2023
£m
£m
At 1 January
160
41
Share of results before tax
43
(39)
Share of tax
—
—
Share of profit/(loss) after tax
43
(39)
Reclassification from financial investments1
—
195
Additions
2
1
Disposals
(161)
(8)
Dividends received from associates
(6)
(30)
At 31 December
38
160
1. The reclassification from financial investments of £195 million in 2023 includes the Group’s shareholding in Balanced Commercial Property Trust Ltd, a property management
undertaking
Disposals of £161 million in 2024 include the sale of the Group's entire shareholding in Balanced Commercial Property Trust Ltd to
Starlight Bidco Ltd.
The Group’s share of total comprehensive income related to associates is £43 million (2023: £39 million loss).
(ii) Contingent liabilities
The associates have no contingent liabilities to which the Group has significant exposure. The Group has no commitments to
provide funding to property management associates (2023: none).
In certain jurisdictions the ability of associates to transfer funds in the form of cash dividends or to repay loans and advances
made by the Group is subject to local corporate or insurance laws and regulations and solvency requirements.
(b) Impairment testing
The recoverable amount of property management undertakings is the fair value less costs to sell of the associate, measured
in accordance with the Group’s accounting policy for investment property (see accounting policy R).
There are no impairment charges in either 2024 or 2023.
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Notes to the consolidated financial statements
20 – Property and equipment
This note analyses our property and equipment, the total of which primarily consists of properties occupied by Group companies.
2024
2023
Owner occupied
properties
Motor
vehicles
£m
Computer
equipment
£m
Other
assets
£m
Owner occupied
properties
Motor
vehicles
£m
Computer
equipment
£m
Other
assets
£m
Total
£m
Freehold
£m
Leasehold
£m
Total
£m
Freehold
£m
Leasehold
£m
Cost or valuation
At 1 January
9
1,186
6
63 245 1,509
9
1,125
6
64
181 1,385
Additions
2
22
7
17
25
73
—
69
—
9
71
149
Disposals
—
(377)
(1)
— (110) (488)
—
(2)
—
(7)
15
6
Transfers
1
(73)
(1)
(5)
(4)
(82)
—
(3)
—
—
(4)
(7)
Fair value losses
(3)
—
—
—
(6)
(9)
—
—
—
—
(16)
(16)
Foreign exchange rate
movements
—
(6)
—
(3)
(9)
(18)
—
(3)
—
(3)
(2)
(8)
At 31 December
9
752
11
72
141 985
9
1,186
6
63 245 1,509
Depreciation and impairment
At 1 January
(1)
(937)
(3)
(43) (101) (1,085)
(1)
(895)
(3)
(48)
(88) (1,035)
Charge for the year
—
(36)
(4)
(11)
(11)
(62)
—
(47)
—
(5)
(14)
(66)
Disposals
—
377
—
—
45 422
—
1
—
7
(7)
1
Transfers
—
75
1
5
5
86
—
4
—
1
7
12
Foreign exchange rate
movements
1
3
—
2
3
9
—
—
—
2
1
3
At 31 December
—
(518)
(6)
(47)
(59) (630)
(1)
(937)
(3)
(43)
(101) (1,085)
Carrying amount at 31 December
9
234
5
25
82 355
8
249
3
20
144 424
Owner-occupied properties, excluding £234 million (2023: £249 million) held under lease arrangements, are stated at their
revalued amounts, as assessed by qualified external valuers. The valuation assessment adopts market-based evidence and is in
line with guidance from the International Valuation Standards Committee and the requirements of IAS 16 Property, Plant and
Equipment. If owner-occupied properties carried at their revalued amount were stated on a historical cost basis, the carrying
amount would be £9 million (2023: £16 million).
Owner-occupied properties held under lease arrangements are stated at amortised cost and are amortised on a straight-line
basis over the lease term, unless the carrying value of the leased asset exceeds the recoverable amount. Where this is the case,
the asset is impaired to its recoverable amount and the impaired carrying value is amortised on a straight-line basis over the
remainder of the lease term. For further information on the Group’s lease arrangements see note 22.
21 – Investment property
This note gives details of the properties we hold for long-term rental yields or capital appreciation.
2024
2023
Freehold
Leasehold
Total
Freehold
Leasehold
Total
£m
£m
£m
£m
£m
£m
At 1 January
5,107
1,125
6,232
4,476
1,423
5,899
Additions
124
226
350
809
23
832
Capitalised expenditure on existing properties
100
44
144
132
52
184
Fair value gains/(losses)
67
(80)
(13)
(250)
(51)
(301)
Disposals
(292)
(94)
(386)
(63)
(318)
(381)
Foreign exchange rate movements
(7)
(7)
(14)
3
(4)
(1)
At 31 December
5,099
1,214
6,313
5,107
1,125
6,232
See note 23 for further information on the fair value measurement and valuation techniques of investment property.
The fair value of investment properties leased to third parties under operating leases at 31 December 2024 was £6,158 million
(2023: £6,085 million). Future contractual aggregate minimum lease rentals receivable under the non-cancellable portion of these
leases are given in note 22.
22 – Lease assets and liabilities
The Group’s leased assets primarily consist of properties occupied by Group companies carried at amortised cost (see note 20),
leasehold investment properties carried at fair value (see note 21) which are sublet to third parties and real estate long income
finance leases (see note 28). Leasehold investment properties are measured in accordance with IAS 40 Investment Property
(see accounting policy R).
Although the Group is exposed to changes in the residual value at the end of the current leases to third parties on investment
property, the Group typically enters into new operating leases and therefore is not expected to immediately realise any reduction
in residual value at the end of these leases. Expectations about the future residual values are reflected in the fair value of the
properties.
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Notes to the consolidated financial statements
(a) The following amounts in respect of leased assets have been recognised in the Group’s consolidated income
statement.
2024
2023
£m
£m
Interest expense on lease liabilities
10
8
Total lease expenses recognised in the income statement
10
8
Total cash outflows recognised in the year in relation to leases were £60 million (2023: £62 million).
(b) Right-of-use assets
The following table analyses the right-of-use assets relating to leased properties occupied by Group companies.
2024
2023
£m
£m
At 1 January
249
230
Additions
22
69
Disposals
—
(1)
Foreign exchange rate movements
(2)
(2)
Depreciation
(37)
(47)
Modification of right-of-use assets
2
—
At 31 December
234
249
There were no gains arising from sale and leaseback transactions during the year. Included within the income statement is
£4 million (2023: £6 million) of income in respect of sublets of right-of-use assets. There were no impairments of right-of-use
assets during the year (2023: £3 million).
(c) Future contractual aggregate minimum lease payments
Lease liabilities included within note 46 total £346 million (2023: £372 million). Future contractual aggregate minimum lease
payments are as follows:
2024
2023
£m
£m
Within one year
74
77
Later than one year and not later than five years
209
149
Later than five years
111
128
Total future contractual aggregate minimum lease payments
394
354
The Group is exposed to potential future increases in variable lease payments based on an index or rate, which are not included
in the lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect, the lease
liability is reassessed and adjusted against the right-of-use asset.
The lease agreements do not impose any covenants other than the security interest in the leased assets that are held by the lessor.
(d) Future contractual aggregate minimum lease rentals receivable
Future contractual aggregate minimum lease rentals receivable under non-cancellable operating leases are as follows:
2024
2023
£m
£m
Within one year
206
192
Between one and two years
193
171
Between two and three years
177
154
Between three and four years
161
130
Between four and five years
135
113
Later than five years
1,143
998
Total future contractual aggregate minimum lease rentals receivable - operating leases
2,015
1,758
Future contractual aggregate minimum lease rentals receivable under non-cancellable finance leases are as follows:
2024
2023
£m
£m
Within one year
5
4
Between one and two years
9
4
Between two and three years
9
4
Between three and four years
9
4
Between four and five years
9
4
Later than five years
397
133
Total future contractual aggregate minimum lease rentals receivable - finance leases
438
153
Finance income on the net investment in finance leases during the year was £4 million (2023: £3 million).
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Notes to the consolidated financial statements
Unearned finance income in respect of finance leases at 31 December 2024, representing the difference between the gross and
net investment in the leases, was £239 million (2023: £30 million). Unguaranteed residual value in respect of finance leases was
£nil (2023: £nil).
23 – Fair value methodology
This note explains the methodology for valuing our assets and liabilities measured at fair value and for fair value disclosures. It also
provides an analysis of these according to a fair value hierarchy, determined by the market observability of valuation inputs.
(a) Basis for determining fair value hierarchy
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair
value hierarchy described as follows, based on the lowest level input that is significant to the fair value measurement as a whole.
Level 1
Inputs to Level 1 fair values are quoted prices (unadjusted) in active markets for identical assets and liabilities that the entity can
access at the measurement date. Level 1 inputs implicitly reflect market view of climate risks to future cashflows.
Level 2
Inputs to Level 2 fair values are inputs other than quoted prices included within Level 1 that are observable for the asset or
liability, either directly or indirectly. If the asset or liability has a specified (contractual) term, a Level 2 input must be observable
for substantially the full term of the instrument. Level 2 inputs include the following:
• Quoted prices for similar assets and liabilities in active markets;
• Quoted prices for identical or similar assets and liabilities in markets that are not active, the prices are not current, or price
quotations vary substantially either over time or among market makers, or in which little information is released publicly;
• Inputs other than quoted prices that are observable for the asset or liability (for example, interest rates and yield curves
observable at commonly quoted intervals, implied volatilities and credit spreads); and
• Market corroborated inputs.
Where we use broker quotes and no information as to the observability of inputs is provided by the broker, the investments
are classified as follows:
• Where the broker price is validated by using internal models with market observable inputs and the values are similar,
we classify the investment as Level 2; and
• In circumstances where internal models are not used to validate broker prices, or the observability of inputs used by brokers
is unavailable, the investment is classified as Level 3.
Level 3
Inputs to Level 3 fair values are unobservable inputs for the asset or liability. 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 or liability 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 or owes the
liability. Unobservable inputs reflect the assumptions the business unit considers that market participants would use in pricing the
asset or liability. Examples are investment properties and commercial and equity release mortgage loans. Climate risks are
factored into the inputs to Level 3 fair values as described in note 23(g).
The majority of the Group’s assets and liabilities measured at fair value are based on quoted market information or observable
market data. Of the total assets and liabilities measured at fair value 13.4% (2023: 14.3%) of assets and 0.6% (2023: 0.7%) of
liabilities are based on estimates and recorded as Level 3. Where estimates are used, these are based on a combination of
independent third-party evidence and internally developed models, calibrated to market observable data where possible.
Third-party valuations using significant unobservable inputs validated against Level 2 internally modelled valuations are
classified as Level 3, where there is a significant difference between the third-party price and the internally modelled value.
Where the difference is insignificant, the instrument would be classified as Level 2.
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Notes to the consolidated financial statements
(b) Changes to valuation techniques
There were no changes in the valuation techniques during the year compared to those described in the Group's 2023 Annual
Report and Accounts.
(c) Carrying amount and fair values of financial instruments
The carrying amounts of financial assets and financial liabilities are set out in the following table:
2024
2023
Mandatorily
held at FVTPL
Designated
at FVTPL on
initial
recognition
Amortised
cost
Total
carrying
amount
Mandatorily
held at FVTPL
Designated
at FVTPL on
initial
recognition
Amortised
cost
Total
carrying
amount
Note
£m
£m
£m
£m
£m
£m
£m
£m
Financial assets
Loans
24(a)
26,181
—
4,372
30,553
27,220
—
4,465
31,685
Cash and cash equivalents
—
1,096
22,385
23,481
—
959
16,314
17,273
Fixed maturity securities
115,539
—
— 115,539
113,889
—
—
113,889
Equity securities
96,040
—
— 96,040
92,572
—
—
92,572
Other investments (including
derivatives)
52,400
—
— 52,400
39,370
—
—
39,370
Financial investments
27(a)
263,979
—
— 263,979
245,831
—
— 245,831
Reinsurance assets for non-
participating investment contracts
40
5,280
—
—
5,280
4,713
—
—
4,713
Financial assets classified as held
for sale
—
—
—
—
—
—
199
199
Financial liabilities
Non-participating investment
contracts
40
— 179,142
— 179,142
— 158,588
— 158,588
Net asset value attributable to
unitholders
—
17,333
—
17,333
—
14,184
—
14,184
Borrowings
45(a)
—
887
4,725
5,612
—
941
5,433
6,374
Derivative liabilities1
53(b)
8,271
—
—
8,271
7,426
—
—
7,426
1. Derivative financial liabilities meet the definition of held for trading.
For financial liabilities designated at FVTPL where the change in the credit risk of the financial liability impacts the fair value,
the amounts recognised in the income statement are set out below:
2024
2023
During the
year
From initial
recognition
During the
year
From initial
recognition
£m
£m
£m
£m
Borrowings
(53)
(40)
4
13
Fair values for borrowings held at amortised cost are presented in note 45(a). Fair values of the following financial assets and
financial liabilities approximate to their carrying amounts:
• Receivables;
• Cash and cash equivalents;
• Loans at amortised cost; and
• Payables and other financial liabilities.
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Notes to the consolidated financial statements
(d) Fair value hierarchy analysis
An analysis of assets and liabilities measured at amortised cost and fair value categorised by fair value hierarchy is given below.
2024
2023
Fair value hierarchy
Fair value
total
Amortise
d cost
Total
carrying
amount
Fair value hierarchy
Fair value
total
Amortise
d cost
Total
carrying
amount
Level 1
Level 2
Level 3
Level 1
Level 2
Level 3
Note
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
Recurring fair value measurements
Investment property
21
—
— 6,313
6,313
—
6,313
—
— 6,232 6,232
— 6,232
Loans
24(a)
—
— 26,181 26,181 4,372 30,553
—
— 27,220 27,220 4,465 31,685
Cash and cash
equivalents
1,096
—
—
1,096 22,385 23,481
959
—
—
959 16,314 17,273
Fixed maturity
securities
57,434 51,033 7,072 115,539
— 115,539 42,989 64,876 6,024 113,889
— 113,889
Equity securities
95,703
—
337 96,040
— 96,040 92,259
—
313 92,572
— 92,572
Other investments
(including derivatives)
47,854 3,777
769 52,400
— 52,400 34,354 4,158
858 39,370
— 39,370
Financial investments
measured at fair value
27(a) 200,991 54,810 8,178 263,979
— 263,979 169,602 69,034 7,195 245,831
— 245,831
Reinsurance assets
for non-participating
investment contracts
40(a) 5,280
—
—
5,280
—
5,280 4,713
—
—
4,713
—
4,713
Financial assets
classified as held for
sale
—
—
—
—
—
—
—
—
—
—
199
199
Total financial assets
207,367 54,810 40,672 302,849 26,757 329,606 175,274 69,034 40,647 284,955 20,978 305,933
Non-participating
investment contracts
40(a) 179,142
—
— 179,142
— 179,142 158,588
—
— 158,588
— 158,588
Net asset value
attributable to
unitholders
17,333
—
— 17,333
— 17,333 14,184
—
— 14,184
— 14,184
Borrowings
45(a)
—
—
887
887 4,725
5,612
—
—
941
941 5,433 6,374
Derivative liabilities
53(b)
201 7,825
245
8,271
—
8,271
50 7,072
304 7,426
— 7,426
Total financial liabilities
196,676 7,825 1,132 205,633 4,725 210,358 172,822 7,072 1,245 181,139 5,433 186,572
Non-recurring fair value measurements
Properties occupied
by group companies
—
—
8
8
—
8
—
—
8
8
—
8
Total
—
—
8
8
—
8
—
—
8
8
—
8
IFRS 13 Fair Value Measurement permits assets and liabilities to be measured at fair value on either a recurring or
non-recurring basis. Recurring fair value measurements are those that other IFRSs require or permit in the statement of financial
position at the end of each reporting period, whereas non-recurring fair value measurements of assets or liabilities are those that
other IFRSs require or permit in the statement of financial position in particular circumstances. The value of freehold owner-
occupied properties measured on a non-recurring basis at 31 December 2024 was £8 million (2023: £8 million), stated at their
revalued amounts in line with the requirements of IAS 16 Property, Plant and Equipment.
(e) Valuation approach for fair value assets and liabilities classified as Level 2
Please see section (a) for a description of typical Level 2 inputs.
Fixed maturity securities, in line with market practice, are generally valued using an independent pricing service. These
valuations are determined using independent external quotations from multiple sources and are subject to a number of
monitoring controls, such as monthly price variances, stale price reviews and variance analysis.
Pricing services, where available, are used to obtain the third-party broker quotes. Where pricing services providers are used,
a single valuation is obtained and applied. When prices are not available from pricing services, quotes are sourced from brokers.
Over-the-counter derivatives are valued using broker quotes or models such as option pricing models, simulation models or
a combination of models. The inputs for these models include a range of factors which are deemed to be observable, including
current market and contractual prices for underlying instruments, period to maturity, correlations, yield curves and volatility of
the underlying instruments.
Unit Trusts and other investment funds (included under the other investments category) are valued using net asset values which
are not subject to a significant adjustment for restrictions on redemption or for limited trading activity.
(f) Transfers between levels of the fair value hierarchy
For financial instruments that are recognised at fair value on a recurring basis, the Group determines whether transfers have
occurred between levels of the fair value hierarchy by re-assessing categorisation (based on the lowest level input that is
significant to the fair value measurement as a whole) at the end of the reporting period.
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Notes to the consolidated financial statements
Transfers between Level 1 and Level 2
There were no significant transfers between Level 1 and Level 2 (2023: no significant transfers).
Transfers to/from Level 3
£95 million (2023: £152 million) of assets transferred into Level 3 and £14 million (2023: £2,398 million) of assets transferred out of
Level 3 relate principally to fixed maturity securities held by our business in the UK. These are transferred between Levels
depending on the availability of observable inputs and whether the counterparty and broker quotes are corroborated using
valuation models with observable inputs.
There were no liabilities transferred into Level 3 during 2024 (2023: £16 million). During 2023, transfers into Level 3 related to
derivatives held by our business in the UK and were transferred following a change to using an internally-derived valuation model
from the previous counterparty-supplied valuations to ensure consistency of approach with the associated assets and liabilities
held at fair value. There were no liabilities transferred out of Level 3 during 2024 (2023: £54 million). During 2023, transfers out of
Level 3 related to derivatives held by our business in the UK.
(g) Further information on Level 3 assets and liabilities
The table below shows movement in the Level 3 assets measured at fair value.
2024
2023
Investment
Property
Loans
Fixed
maturity
securities
Equity
securities
Other
investments
(including
derivatives)
Investment
Property
Loans
Fixed
maturity
securities
Equity
securities
Other
investments
(including
derivatives)
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
At 1 January
6,232 27,220
6,024
313
858
5,899
25,919
7,188
331
1,307
Total net (losses)/gains
recognised in the income
statement1
(53)
(828)
(309)
—
(40)
(258)
124
116
(50)
13
Purchases
432
3,214
1,841
27
42
971
2,777
1,531
23
170
Issuances
—
172
—
—
—
—
189
—
—
—
Disposals
(283) (3,592)
(557)
—
(81)
(369)
(1,786)
(530)
(8)
(634)
Settlements
—
—
—
—
—
—
—
—
—
—
Transfers into Level 3
—
—
95
—
—
—
—
67
23
62
Transfers out of Level 3
—
—
(13)
—
(1)
—
—
(2,343)
—
(55)
Foreign exchange rate
movements
(15)
(5)
(9)
(3)
(9)
(11)
(3)
(5)
(6)
(5)
At 31 December
6,313
26,181
7,072
337
769
6,232 27,220
6,024
313
858
1. Total net (losses)/gains recognised in the income statement includes realised gains/(losses) on disposals
The table below shows movement in the Level 3 liabilities measured at fair value.
2024
2023
Net asset value
attributable
to unitholders
Derivative
liabilities
Borrowings
Net asset value
attributable
to unitholders
Derivative
liabilities
Borrowings
£m
£m
£m
£m
£m
£m
At 1 January
—
(304)
(941)
(10)
(355)
(1,091)
Total net gains/(losses) recognised in the income statement1
—
19
(47)
10
(53)
66
Purchases
—
—
—
—
(10)
—
Issuances
—
—
—
—
—
—
Disposals
—
39
—
—
64
—
Settlements
—
1
101
—
9
84
Transfers into Level 3
—
—
—
—
(16)
—
Transfers out of Level 3
—
—
—
—
54
—
Foreign exchange rate movements
—
—
—
—
3
—
At 31 December
—
(245)
(887)
—
(304)
(941)
1. Total net gains/(losses) recognised in the income statement includes realised gains/(losses) on disposals
Total net losses recognised in the income statement in the year ended 31 December 2024 in respect of Level 3 assets measured
at fair value amounted to £1,230 million (2023: net losses of £55 million) with net losses in respect of liabilities of £28 million
(2023: net gains of £23 million). Net losses of £1,006 million (2023: net losses of £27 million) attributable to assets and net losses
of £28 million (2023: net gains of £32 million) attributable to liabilities relate to those still held at 31 December 2024.
The principal assets classified as Level 3, and the valuation techniques applied to them, are described below.
(i) Investment property
• Investment property is valued in the UK at least annually by external chartered surveyors in accordance with guidance issued
by The Royal Institution of Chartered Surveyors, and using estimates during the intervening period. Outside the UK, valuations
are produced by external qualified professional appraisers in the countries concerned. External valuers in the UK comply with
the 'Sustainability and ESG in commercial property valuation and strategic advice' professional standard reissued by the Royal
Institution of Chartered Surveyors in May 2023. In a valuation context, sustainability involves the consideration of matters that
include environment and climate change, health and wellbeing, and personal and corporate responsibility that can or do impact
the valuation of an asset. This includes the consideration of capital expenditure required to maintain the utility of the asset due
to the longer-term obsolescence and risk.
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Notes to the consolidated financial statements
• Investment properties are valued on an income approach that is based on current rental income plus anticipated uplifts at the
next rent review, lease expiry, or break option taking into consideration lease incentives and assuming no further growth in the
estimated rental value of the property. The uplift and discount rates are derived from rates implied by recent market
transactions on similar properties. These inputs are deemed unobservable. The yield used to value the portfolio ranges from
17bps to 3407bps (2023: 20bps to 2620bps) with higher yields predominately relating to properties in the retail and leisure
sectors. Over 95% of the portfolio is valued using spreads within the range from 17bps to 792bps (2023: 20bps to 795bps).
(ii) Loans
• Commercial mortgage loans and Primary Healthcare loans held by our IWR business are valued using a Portfolio Credit Risk
Model. This model calculates a Credit Risk Adjusted Value for each loan. The risk adjusted cash flows are discounted using a
yield curve plus an allowance for illiquidity. Loans valued using the Portfolio Credit Risk Model have been classified as Level 3
as the liquidity premium is deemed to be non-market observable. At 31 December 2024 the liquidity premium used in the
discount rate was 185bps (2023: 170bps). Future capital expenditure costs of 0.9% per annum (2023: 0.9%) are included in the
modelling of the Credit Risk Adjusted Value of the loans to address climate change actions, including potential climate-related
impacts. The impact is a reduction in the fair value of the properties securing the loans.
• Equity release mortgage loans held by our IWR business are valued using an internal model, with fair value initially being equal
to the transaction price. The value of these loans is dependent on the expected term of the mortgage and the forecast property
value at the end of the term, and is calculated by adjusting future cash flows for credit risk and discounting using a yield curve
plus an allowance for illiquidity. At 31 December 2024 the illiquidity premium used in the discount rate was 185bps (2023:
205bps).
• The equity release mortgages include a no negative equity guarantee (‘NNEG’) such that the cost of any potential shortfall
between the value of the loan and the realised value of the property at the end of the term is recognised by a deduction to the
value of the loan. Property valuations at the reporting date are obtained by taking the most recent valuation for the property
and indexing using an internal house price index based on published Land Registry data. NNEG is calculated using base
property growth rates reduced for the cost of potential dilapidations, using a stochastic model. In addition, a cost of capital
charge is applied to reflect the variability in these cash flows. The base property growth rate assumption is RPI +0.75%
(2023: RPI +0.75%) which includes a reduction to the growth rate of 0.75% per annum (2023: 0.75%) for the potential impact of
climate change actions. The modelled growth rates include an adjustment for the 5-year period 2025-2029 to reflect the
market view of short-term growth being lower than long-term average growth.
• The combination of the adjusted rate over the first five years and the base property growth rate equates to a long-term
average growth rate of 3.7% per annum at 31 December 2024 (2023: 3.0%) over a twenty five year projection. After applying
the cost of capital charge, dilapidations and the stochastic distribution, the effective net long-term growth rate equates to 1.2%
per annum (2023: 0.8%).
• Infrastructure and Private Finance Initiative (PFI) loans held by our IWR business are valued using a discounted cash flow
model. This adds spreads for credit and illiquidity to a risk-free discount rate. Credit spreads used in the discount rate are
calculated using an internally developed methodology which depends on the credit rating of each loan, credit spreads on
publicly traded bonds and an estimated recovery rate in event of default and are deemed to be unobservable. At 31 December
2024, the illiquidity premium used in the discount rate was 150bps (2023: 140bps) for the PFI loans and ranged from 25bps to
594bps (2023: 25bps to 594bps) for the infrastructure loans.
(iii) Fixed maturity securities
• Structured bond-type, non-standard debt products and privately placed notes held by our business in the UK do not trade in an
active market. These fixed maturity securities are valued using discounted cash flow model, designed to appropriately reflect
the credit and illiquidity risk of the instrument. These bonds have been classified as Level 3 because the valuation approach
includes significant unobservable inputs and an element of subjectivity in determining appropriate credit and illiquidity spreads.
• Other fixed maturity securities held by our Life business in the UK which are not traded in an active market have been valued
using third-party or counter party valuations. These prices are considered to be unobservable due to infrequent market
transaction.
• The unobservable credit and illiquidity spreads used in the discount rate range from 34bps to 567bps
(2023: 33bps to 499bps) with 99% of the modelled assets valued using spreads within the range from 38bps to 566bps
(2023: 33bps to 419bps). Fixed maturity securities held by our UK and Asian businesses which are not traded in an active
market have been valued using third-party or counterparty valuations. These prices are considered to be unobservable due to
infrequent market transaction.
(iv) Equity securities
• Equity securities which primarily comprise private equity holdings held in the UK are valued by a number of third-party
specialists. These are valued using a range of techniques, including earnings multiples, forecast cash flows and
price/earnings ratios which are deemed to be unobservable.
(v) Other investments (including derivatives)
• Other investments are held for index-linked, unit-linked and with-profit funds and are valued based on external valuation
reports received from fund managers. The investments consist of:
– Unit trusts;
– Other investment funds including property funds; and
– Derivatives.
• Where valuations are at a date other than the balance sheet date, as is the case for some private equity funds, adjustments are
made for items such as subsequent draw-downs and distributions and the fund manager’s carried interest.
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Notes to the consolidated financial statements
(vi) Liabilities
• The principal liabilities classified as Level 3 are securitised mortgage loan notes, presented within Borrowings, which are
valued using a similar technique to the related Level 3 securitised mortgage assets. These liabilities are included within the
relevant liability category within the sensitivity table below.
Sensitivities
The valuation of Level 3 assets involves a high degree of judgement and estimation uncertainty due to the reliance of valuation
models on unobservable inputs. Where possible, the Group tests the sensitivity of the fair values of Level 3 assets and liabilities
to changes in unobservable inputs to reasonable alternatives. Level 3 valuations are sourced from independent third parties
when available and, where appropriate, validated against internally-modelled valuations, third-party models or broker quotes.
Where third-party pricing sources are unwilling to provide a sensitivity analysis for their valuations, the Group undertakes, where
feasible, sensitivity analysis on the following basis:
• For third-party valuations validated against internally-modelled valuations using significant unobservable inputs, the sensitivity
of the internally-modelled valuation to changes in unobservable inputs to a reasonable alternative is determined.
• For third-party valuations either not validated or validated against a third-party model or broker quote, the third-party
valuation in its entirety is considered an unobservable input. Sensitivities are determined by flexing inputs of internal models to
a reasonable alternative, including the yield, NAV multiple or other suitable valuation multiples of the financial instrument
implied by the third-party valuation. For example, for a fixed income security the implied yield would be the rate of return which
discounts the security’s contractual cash flows to equal the third-party valuation.
The tables below show the sensitivity of the fair value of Level 3 assets and liabilities to changes in unobservable inputs to a
reasonable alternative:
2024
2023
Sensitivities
Sensitivities
Most significant unobservable input
Reasonable
alternative
Fair
value
Positive
impact
Negative
impact
Fair
value
Positive
impact
Negative
impact
£bn
£bn
£bn
£bn
£bn
£bn
£bn
Investment property
Equivalent rental yields
+/-5-10%
6.3
0.2
(0.2)
6.2
0.3
(0.3)
Loans
Commercial mortgage loans
and Primary Healthcare
loans
Illiquidity premium
+/-20 bps
10.1
0.1
(0.1)
9.3
0.1
(0.1)
Equity release mortgage
loans
Base property growth rate
+/-50 bps p.a.
9.1
0.1
(0.1)
9.8
0.2
(0.2)
Current property market values
+/-10%
0.3
(0.3)
0.3
(0.3)
Infrastructure and Private
Finance Initiative (PFI) loans
Illiquidity premium
+/-25 bps1
6.2
0.1
(0.1)
7.0
0.2
(0.2)
Other
Illiquidity premium
+/-25 bps1
0.8
—
—
1.1
—
—
Fixed maturity securities
Structured bond-type and
non-standard debt products
Market spread (credit, liquidity
and other)
+/-25 bps
2.2
0.2
(0.2)
1.5
0.1
(0.1)
Privately placed notes
Credit spreads
+/-25 bps1
4.6
0.2
(0.2)
4.0
0.1
(0.1)
Other fixed maturity
securities
Credit and liquidity spreads
+/-20-25 bps
0.3
—
—
0.5
—
—
Equity securities
Market multiples applied to net
asset values
+/-30bps
0.3
0.1
(0.1)
0.3
0.1
(0.1)
Other investments
Property Funds
Market multiples applied to net
asset values
+/-5-20%
0.2
—
—
0.2
—
—
Other investments
(including derivatives)
Market multiples applied to net
asset values
+/-10-40%2
0.6
0.1
(0.1)
0.7
0.1
(0.1)
Liabilities
Borrowings
Illiquidity premium
+/-50 bps
(0.9)
—
—
(0.9)
—
—
Other liabilities (including
derivatives)
Independent valuation vs
counterparty
N/A
(0.2)
—
—
(0.3)
—
—
Total Level 3 investments
39.5
1.4
(1.4)
39.4
1.5
(1.5)
1. On discount rate spreads
2. Dependent on investment category
The above tables demonstrate the effect of a change in one unobservable input while other assumptions remain unchanged.
In reality, there may be a correlation between the unobservable inputs and other factors. It should also be noted that some of
these sensitivities are non-linear, and larger or smaller impacts should not be interpolated or extrapolated from these results.
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Notes to the consolidated financial statements
(h) Liabilities not carried at fair value for which fair value is disclosed
The table below shows the fair value and fair value hierarchy for those liabilities not carried at fair value.
2024
2023
Fair value hierarchy
Fair value
total
£m
As recognised in
the consolidated
statement of
financial position
line item
£m
Fair value hierarchy
Fair value
total
£m
As recognised in
the consolidated
statement of
financial position
line item
£m
Note
Level 1
£m
Level 2
£m
Level 3
£m
Level 1
£m
Level 2
£m
Level 3
£m
Liabilities not carried at fair value
Borrowings
45(a) 4,427
49
180 4,656
4,725 5,104
—
258
5,362
5,433
24 – Loans
This note analyses the loans our Group companies have made, the majority of which are mortgage loans.
(a) Carrying amounts
The carrying amounts of loans were as follows:
2024
2023
Mandatorily
held at FVTPL
At amortised
cost
Total
Mandatorily
held at FVTPL
At amortised
cost
Total
Note
£m
£m
£m
£m
£m
£m
Loans to banks
463
4,023
4,486
1,050
3,815
4,865
Healthcare, infrastructure & PFI other loans
9,478
—
9,478
8,766
—
8,766
UK securitised mortgage loans
25
1,524
—
1,524
1,633
—
1,633
Non-securitised mortgage loans
14,716
—
14,716
15,771
—
15,771
Other loans
—
349
349
—
849
849
Total loans
26,181
4,372
30,553
27,220
4,664
31,884
Less: Loans classified as held for sale
—
—
—
—
(199)
(199)
At 31 December
26,181
4,372
30,553
27,220
4,465
31,685
Of the above total loans, £25,131 million (2023: £25,595 million) are due to be recovered in more than one year after the statement
of financial position date.
Loans at fair value
Fair values have been calculated by using cash flow models appropriate for each portfolio of mortgages. Further details of the
fair value methodology and models utilised are given in note 23(g).
Healthcare, infrastructure and PFI other loans of £9,478 million (2023: £8,766 million) are secured against the income from
healthcare and educational premises.
Non-securitised mortgage loans include £7,534 million (2023: £8,184 million) of residential equity release mortgages,
£5,407 million (2023: £5,646 million) of commercial mortgages and £1,775 million (2023: £1,940 million) relating to UK primary
healthcare and PFI businesses. The healthcare and PFI mortgage loans are secured against General Practitioner premises, other
primary health-related premises or other 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 and premises provides considerable comfort of an ongoing business model and low risk of default.
The maximum exposure to credit risk at the end of the reporting period is the carrying amount of each class of financial assets
mentioned above.
Loans at amortised cost
The carrying amount of these loans at both 31 December 2024 and 31 December 2023 was a reasonable approximation for their
fair value.
(b) Analysis of loans carried at amortised cost
2024
2023
At amortised
cost
Impairment
Carrying
Value
At amortised
cost
Impairment
Carrying
Value
£m
£m
£m
£m
£m
£m
Loans to banks
4,023
—
4,023
3,815
—
3,815
Other loans
349
—
349
849
—
849
Total loans at amortised cost
4,372
—
4,372
4,664
—
4,664
Less: Loans classified as held for sale
—
—
—
(199)
—
(199)
Total loans at amortised cost
4,372
—
4,372
4,465
—
4,465
There are no material expected credit losses on these loans.
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Notes to the consolidated financial statements
(c) Collateral
Loans to banks include cash collateral received under stock lending arrangements (see note 54 for further discussion regarding
these collateral positions). The obligation to repay this collateral is included in payables and other financial liabilities (see note
46). The Group holds collateral in respect of loans where it is considered appropriate in order to reduce the risk of non-recovery.
This collateral generally takes the form of liens or charges over properties for the majority of the loan balances above. In all other
situations, the collateral must be in a readily realisable form, such as listed securities, and is held in segregated accounts.
25 – Securitised mortgages and related assets
The Group, in its IWR business, has loans receivable, secured by mortgages, which have then been securitised through non-
recourse borrowings. This note gives details of the relevant transactions.
(a) Description of current arrangements
In a UK long-term business subsidiary, Aviva Equity Release UK Limited (AER), the beneficial interest in certain portfolios of
lifetime mortgages has been transferred to five special purpose securitisation companies (the ERF companies), in return for initial
consideration and, at later dates, deferred consideration. The deferred consideration represents receipts accrued within the ERF
companies after meeting all their obligations to the note holders, loan providers and other third parties in the priority of
payments. The purchases of the mortgages were funded by the issue of fixed and floating rate notes by the ERF companies.
All the shares in the ERF companies are held by independent companies, whose shares are held on trust. Although AER does not
own, directly or indirectly, any of the share capital of the ERF companies or their parent companies, it has control of the
securitisation companies, and they have therefore been treated as subsidiaries in the consolidated financial statements. AER has
no right to repurchase the benefit of any of the securitised mortgage loans, other than in certain circumstances where AER is in
breach of warranty or loans are substituted in order to effect a further advance.
AER has purchased subordinated notes and granted subordinated loans to some of the ERF companies. In addition,
Group companies have invested £172 million (2023: £180 million) in loan notes issued by the ERF companies. These have been
eliminated on consolidation through offset against the borrowings of the ERF companies in the statement of financial position.
In all of the above transactions, the Company and its subsidiaries are not obliged to support any losses that may be suffered by
the note holders and do not intend to provide such support. Additionally, the notes were issued on the basis that note holders are
only entitled to obtain payment, of both principal and interest, to the extent that the available resources of the respective special
purpose securitisation companies, including funds due from customers in respect of the securitised loans, are sufficient and that
note holders have no recourse whatsoever to other companies in the Aviva Group.
(b) Carrying values
The following table summarises the securitisation arrangements:
2024
2023
Securitised
assets
Securitised
liabilities
Securitised
assets
Securitised
liabilities
Note
£m
£m
£m
£m
Securitised mortgage loans and loan notes issued
24
1,524
(1,059)
1,633
(1,121)
Other securitisation assets/(liabilities)
278
(743)
280
(792)
Total securitisation arrangements
1,802
(1,802)
1,913
(1,913)
Loan notes held by third parties are as follows:
2024
2023
Note
£m
£m
Total loan notes issued, as above
1,059
1,121
Less: Loan notes held by Group companies
(172)
(180)
Loan notes held by third parties
45(c)(i)
887
941
26 – Interests in structured entities
A structured entity is defined as an entity that has been designed so that voting or similar rights are not the dominant factor in
deciding who controls the entity, such as when any voting rights relate to administrative tasks only, or when the relevant
activities are directed by means of contractual arrangements.
The Group has interests in both consolidated and unconsolidated structured entities as described below.
The Group holds redeemable shares or units in investment vehicles, which consist of:
• Debt securities comprising of securitisation vehicles that Aviva does not originate. These investments are comprised of
a variety of debt instruments, including asset-backed securities and other structured securities.
• Investment funds which include: hedge funds, liquidity funds, private equity funds, unit trusts, mutual funds and Private Finance
Initiatives (PFIs).
• Specialised investment vehicles include Open-Ended Investment Companies (OEICs), Property Limited Partnerships (PLPs),
Sociétés d’Investissement a Capital Variable (SICAVs), Tax Transparent Funds (TTFs) and other investment vehicles.
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Notes to the consolidated financial statements
The Group’s holdings in investment vehicles are subject to the terms and conditions of the respective investment
vehicle’s offering documentation and are susceptible to market price risk arising from uncertainties about future values of those
investment vehicles. The investment manager makes investment decisions after extensive due diligence of the underlying
investment vehicle including consideration of its strategy and the overall quality of the underlying investment vehicle’s manager.
All of the investment vehicles in the investment portfolio are managed by portfolio managers who are compensated by the
respective investment vehicles for their services. Such compensation generally consists of an asset-based fee and a
performance-based incentive fee, and is reflected in the valuation of the investment vehicles.
(a) Interests in consolidated structured entities
The Group has determined that where it has control over investment vehicles, these investments are consolidated structured
entities. As at 31 December 2024, the Group has granted loans to consolidated PLPs for a total of £166 million (2023: £72 million).
The purpose of these loans is to assist the consolidated PLPs to purchase or construct properties. The Group has also provided
support, without having a contractual obligation to do so, to certain consolidated PLPs via letters of support amounting to
£1 million (2023: £28 million). The Group has commitments to provide funding to consolidated structured entities of £31 million
(2023: £159 million), primarily relating to a commitment to provide funding to the Aviva Investors Climate Transition Real
Assets Fund.
The Group has also given support to five special purpose securitisation companies (the ERF companies) that are consolidated
structured entities. As set out in note 25, at the inception of the securitisation vehicles, the UK subsidiary, Aviva Equity Release
UK Limited (AER), has granted subordinated loan facilities to some of the ERF companies. AER receives various fees in return for
the services provided to the entities. AER receives cash management fees based on the outstanding loan balance at the start of
each quarter for the administration of the loan note liabilities. AER receives portfolio administration fees as compensation for
managing the mortgage assets. See note 25 for details of securitised mortgages and related assets as at 31 December 2024.
As at the reporting date, the Group has no intentions to provide financial or other support in relation to any other
investment vehicles.
(b) Interests in unconsolidated structured entities
As part of its investment activities, the Group invests in unconsolidated structured entities. As at 31 December 2024, the Group’s
total interest in unconsolidated structured entities was £63,444 million (2023: £50,033 million) on the Group’s statement of
financial position. The Group’s total interest in unconsolidated structured entities is classified as ‘interests in, and loans to, joint
ventures and associates’ and ‘financial investments held at fair value through profit or loss’. The Group does not sponsor any of
the unconsolidated structured entities.
A summary of the Group’s interest in unconsolidated structured entities is as follows:
2024
2023
Interest in,
and loans
to, joint
ventures
£m
Interest in,
and loans
to,
associates
£m
Financial
investments
£m
Loans
£m
Total
assets
£m
Interest in,
and loans
to, joint
ventures
£m
Interest in,
and loans
to,
associates
£m
Financial
investments
£m
Loans
£m
Total
assets
£m
Structured debt
securities1
—
—
4,014
—
4,014
—
—
3,983
—
3,983
Unit trust and other
investment vehicles
—
—
47,632
—
47,632
—
—
34,159
—
34,159
PLPs and property
funds
898
37
651
—
1,586
927
159
702
—
1,788
Other
—
—
433
—
433
—
—
416
—
416
Other investments
898
37
48,716
—
49,651
927
159
35,277
—
36,363
Loans2
—
—
—
9,779
9,779
—
—
—
9,687
9,687
Total
898
37
52,730
9,779 63,444
927
159
39,260
9,687
50,033
1. Primarily reported within other debt securities in note 27(a)
2. Loans include Healthcare, Infrastructure & PFI other loans along with certain non-securitised mortgage loans
The Group’s maximum exposure to loss related to the interests in unconsolidated structured entities is £63,444 million
(2023: £50,033 million).
The majority of debt securities above are investment grade securities held by the UK business. In some cases, the Group may be
required to absorb losses from an unconsolidated structured entity before other parties when and if Aviva’s interest is more
subordinated with respect to other owners of the same security.
For commitments to property management joint ventures and associates, please see notes 18 and 19, respectively. The Group has
not provided any other financial or other support in addition to that described above as at the reporting date, and there are no
intentions to provide support in relation to any other unconsolidated structured entities in the foreseeable future.
In relation to risk management, disclosures on debt securities and investment vehicles are given in note 52(b). In relation to other
guarantees and commitments that the Group provides in the course of its business, please see note 48(f).
Aviva’s interest in unconsolidated structured entities under management at 31 December 2024 amounts to £1,872 million
(2023: £1,167 million) and the total funds under management relating to these investments at 31 December 2024 is £15,233 million
(2023: £14,209 million).
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Notes to the consolidated financial statements
(c) Other interests in unconsolidated structured entities
The Group receives management fees and other fees in respect of its asset management businesses. The Group does not
sponsor any of the funds or investment vehicles from which it receives fees. Management fees received for investments that
the Group manages, but does not have a holding in, also represent an interest in unconsolidated structured entities. As these
investments are not held by the Group, the investment risk is borne by the external investors and therefore the Group’s maximum
exposure to loss relates to future management fees.
The table below shows the assets under management of entities that the Group manages but does not have a holding in and the
fees earned from those entities.
2024
2023
Assets
under
management
£m
Investment
management
fees
£m
Assets under
management
£m
Investment
management
fees
£m
OEICs
—
—
387
1
PLPs
2,608
17
4,258
16
SICAVs
606
3
831
3
Specialised investment vehicles
3,214
20
5,476
20
27 – Financial investments
This note analyses our financial investments by type and shows their cost and fair value. These will change from one period to
the next as a result of new business written, claims paid and market movements.
(a) Carrying amount
Financial investments comprise:
2024
2023
Note
£m
£m
UK government
25,759
24,281
Non-UK government
27(d)
25,418
24,722
Corporate bonds - public utilities
4,334
5,563
Other corporate bonds
49,764
46,385
Other
2,656
2,313
Debt securities
107,931 103,264
Certificates of deposit
7,608
10,625
Fixed maturity securities
115,539
113,889
Public utilities
1,793
2,732
Banks, trusts and insurance companies
13,412
19,337
Industrial, miscellaneous and all other
80,809
70,410
Ordinary shares
96,014
92,479
Non-redeemable preference shares
26
93
Equity securities
96,040
92,572
Unit trusts and other investment vehicles
47,632
34,159
Derivative financial instruments
53
3,335
3,992
Deposits with credit institutions
267
77
Minority holdings in property management undertakings
651
702
Other investments – long-term
185
184
Other investments – short-term
330
256
Other investments
52,400
39,370
Total financial investments
263,979 245,831
Financial investments are held mandatorily at fair value through profit or loss (FVTPL) as the investments are managed and their
performance evaluated on a fair value basis to support the Group in managing its capital on a regulatory basis (Solvency II).
Of the above total, excluding those financial investments with no fixed contractual maturity date, £98,103 million
(2023: £93,033 million) is due to be recovered in more than one year after the statement of financial position date.
Other debt securities of £2,656 million (2023: £2,313 million) include residential and commercial mortgage-backed securities,
as well as other structured credit securities.
Financial investments include £4,428 million (2023: £3,511 million) in respect of non-cash collateral pledged to third parties where
the economic rights are retained by the Group.
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Notes to the consolidated financial statements
(b) Cost, unrealised gains and fair value
The following is a summary of the cost/amortised cost, gross unrealised gains and losses and fair value of financial investments:
2024
2023
Cost/
amortised
cost
£m
Unrealised
gains
£m
Unrealised
losses and
impairments
£m
Fair value
£m
Cost/
amortised
cost
£m
Unrealised
gains
£m
Unrealised
losses and
impairments
£m
Fair value
£m
Fixed maturity securities
124,443
1,316
(10,220) 115,539 121,436
2,757
(10,304) 113,889
Equity securities
78,080 22,742
(4,782) 96,040 77,769
19,849
(5,046) 92,572
Unit trusts and other investment vehicles
39,457
8,825
(650) 47,632
36,601
14,231
(16,673)
34,159
Derivative financial instruments
(82)
4,396
(979)
3,335
(90)
5,156
(1,074)
3,992
Deposits with credit institutions
267
—
—
267
77
—
—
77
Minority holdings in property management
undertakings
661
56
(66)
651
705
57
(60)
702
Other investments – long-term
216
14
(45)
185
194
21
(31)
184
Other investments – short-term
330
—
—
330
256
—
—
256
Other investments
40,849
13,291
(1,740) 52,400 37,743
19,465
(17,838) 39,370
Total financial investments
243,372 37,349
(16,742) 263,979 236,948
42,071
(33,188) 245,831
All unrealised gains and losses and impairments on financial investments classified as fair value through profit or loss have been
recognised in the income statement.
Unrealised gains and losses on financial investments classified as fair value through profit or loss, recognised in the income
statement in the year, were a net gain of £10,142 million (2023: £8,779 million net gain). Of this net gain, £11,845 million net gain
(2023: £6,606 million net gain) related to investments designated as other than trading and £(1,703) million net loss
(2023: £2,173 million net gain) related to financial investments designated as trading.
The movement in the unrealised gain/loss position reported in the statement of financial position during the year, shown in the
table above, includes foreign exchange movements on the translation of unrealised gains and losses on financial investments
held by foreign subsidiaries, which are recognised in other comprehensive income, as well as transfers due to the realisation
of gains and losses on disposal and the recognition of impairment losses.
(c) Financial investment arrangements
(i) Stock lending arrangements
The Group has entered into stock lending arrangements in the UK and overseas in accordance with established market conventions.
The majority of the Group’s stock lending transactions occur in the UK, where investments are lent to EEA-regulated, locally
domiciled counterparties and governed by agreements written under English law.
The Group receives collateral in order to reduce the credit risk of these arrangements, either in the form of securities or cash.
See note 54 for further discussion regarding collateral positions held by the Group.
(ii) Other arrangements
In carrying on its bulk purchase annuity business, the Group’s IWR operation is required to place certain investments in trust on
behalf of the policyholders. Amounts become payable from the trust funds to the trustees if the Group were to be in breach of its
payment obligations in respect of policyholder benefits. At 31 December 2024, £1,419 million (2023: £1,570 million) of financial
investments were restricted in this way.
Certain financial investments are also required to be deposited under local laws in various overseas countries as security for the
holders of policies issued in those countries. Other investments are pledged as security collateral for bank letters of credit.
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Notes to the consolidated financial statements
(d) Non-UK government fixed maturity securities (gross of non-controlling interests)
The following is a summary of non-UK government debt.
2024
2023
Total
£m
Total
£m
Belgium
849
715
Czech Republic
294
361
France
935
619
Germany
375
481
Italy
428
465
Luxembourg
354
310
Poland
653
458
European supranational debt
1,132
1,957
Other European countries
2,076
1,597
Europe
7,096
6,963
Canada
2,776
2,949
United States
6,296
5,273
North America
9,072
8,222
Chile
432
528
China
707
564
India
921
802
Indonesia
560
434
Japan
2,439
1,995
Mexico
240
399
South Africa
85
308
South Korea
598
566
United Arab Emirates
382
372
Other supranational debt
605
825
Other
2,281
2,744
Asia Pacific and other
9,250
9,537
Total Non-UK government fixed maturity securities
25,418
24,722
28 – Receivables
This note analyses our total receivables.
2024
2023
£m
£m
Amounts owed by contract holders for non-participating investment contracts
148
122
Amounts owed by intermediaries
1,239
1,115
Amounts due from reinsurers for non-participating investment contracts
126
96
Amounts due from brokers for investment sales
107
601
Amounts receivable for collateral pledged
153
165
Amounts due from government, social security and taxes
797
675
Finance lease receivables
197
153
Other receivables
1,046
794
Total receivables
3,813
3,721
Expected to be recovered in less than one year
3,775
3,552
Expected to be recovered in more than one year
38
169
Total receivables
3,813
3,721
Exposure to significant concentrations of credit risk is limited due to the regulations applicable in most markets and the Group
credit policy and limits framework, which limits investments in individual assets and asset classes.
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Notes to the consolidated financial statements
29 – Deferred acquisition costs on non-participating investment contracts
(a) Carrying amount and movements in the year
2024
2023
Total
Total
£m
£m
Carrying amount at 1 January
788
851
Acquisition costs deferred during the year
96
78
Amortisation
(45)
(116)
Impact of assumption changes
(10)
(32)
Foreign exchange rate movements
(8)
(3)
Other movements1
—
10
Carrying amount at 31 December
821
788
1. Other movements in 2023 related to an allocation of £10 million to deferred acquisition costs from deferred income liability
Deferred acquisition costs (DAC) on non-participating investment contracts are generally recoverable in more than one year.
Of the above total, £712 million (2023: £767 million) is expected to be recovered in more than one year after the statement of
financial position date. Where amortisation of the DAC balance depends on projected profits, the amount expected to be
recovered is estimated and actual experience will differ.
DAC for non-participating business increased overall over 2024 as increases from new business sales more than offset
amortisation.
Where amortisation of the DAC balance depends on projected profits, changes to economic conditions may lead to a movement
in the DAC balance and a corresponding impact on profit.
At both 31 December 2024 and 31 December 2023 the DAC balance has been restricted by the value of projected future profits.
30 – Pension surpluses, other assets, prepayments and accrued income
(a) Pension surpluses and other assets – carrying amount
The carrying amount comprises:
2024
2023
Note
£m
£m
Surpluses in the staff pension schemes
44(a)
451
817
Other assets
10
45
Total pension surpluses and other assets
461
862
Surpluses in the staff pension schemes and £nil (2023: £nil) of other assets are recoverable more than one year after the
statement of financial position date.
(b) Prepayments and accrued income
Prepayments and accrued income of £3,344 million (2023: £3,392 million) are expected to be recovered within one year.
31 – Ordinary share capital
This note gives details of Aviva plc’s ordinary share capital and shows the movements during the year.
(a) Carrying amount
Details of the Company’s ordinary share capital are as follows:
2024
£m
2023
£m
The allotted, called up and fully paid share capital of the Company was: 2,677,649,489
(2023: 2,739,487,140) ordinary shares of 3217/19 pence each
881
901
At the Annual General Meeting that took place on 4 May 2024, the Company was authorised to allot up to a further maximum
nominal amount of:
• £598 million of which £299 million can be in connection with an offer by way of a rights issue
• £150 million in relation to any issue of UK Solvency II compliant capital instruments
(b) Movement in issued share capital
2024
2023
Share
capital
Share
capital
Note
3217/19p
3217/19p
each
£m
each
£m
At 1 January
2,739,487,140
901
2,807,964,676
924
Shares issued under the Group’s Employee and Executive
Share Option Schemes
977,966
—
4,319,655
1
Shares cancelled through buyback
31(b)(i)
(62,815,617)
(20)
(72,797,191)
(24)
31 December
2,677,649,489
881
2,739,487,140
901
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Notes to the consolidated financial statements
Ordinary shares in issue in the Company rank pari passu with any new ordinary shares issued in the Company. All the ordinary
shares in issue carry the same right to receive all dividends and other distributions declared, made or paid by the Company.
(i) Share buyback
On 7 March 2024, Aviva announced a share buyback programme for up to a maximum aggregate consideration of £300 million to
commence immediately (the "Programme"). On 1 July 2024, Aviva announced that it had successfully completed the Programme.
In total, 62,815,617 shares were purchased with a nominal value of £20 million and were subsequently cancelled, giving rise to an
additional capital redemption reserve of an equivalent amount. The 62,815,617 shares were acquired at an average price of 478
pence per share.
On 9 March 2023, Aviva announced a share buyback programme for up to a maximum aggregate consideration of £300 million
to commence on 10 March 2023 (the "Programme"). On 2 June 2023, Aviva announced that it had successfully completed the
Programme. In total, 72,797,191 shares were purchased with a nominal value of £24 million and were subsequently cancelled,
giving rise to an additional capital redemption reserve of an equivalent amount. The 72,797,191 shares were acquired at an
average price of 412 pence per share.
32 – Group’s share plans
This note describes various equity compensation plans operated by the Group, and shows how the Group values the options and
awards of shares in the Company.
(a) Description of the plans
The Group maintains a number of active share option and award plans and schemes across all markets (the Group’s share plans).
All employees are eligible for share plans and the plans offered are as follows:
Plan
Description
(i) Savings-related options
These are options granted under the tax-advantaged Save As You Earn (SAYE) share option
scheme in the UK and Irish revenue-approved SAYE share option scheme in Ireland. The SAYE
allows eligible employees to acquire options over the Company’s shares at a discount of up to
20% of their market value at the date of grant.
Options are normally exercisable during the six month period following either the third or fifth
anniversary of the start of the relevant savings contract. Seven year contracts were offered
prior to 2012. Savings contracts are subject to the statutory savings limits of £500 per month in
the UK and €500 per month in Ireland. A limit of £250 per month was applied to contracts in the
UK prior to 2016.
(ii) Aviva long-term incentive plan
awards
These awards have been made under the Aviva Long-Term Incentive Plan 2011 (LTIP), and are
described in section (b) below and in the directors’ remuneration report.
(iii) Aviva annual bonus plan awards
These awards have been made under the Aviva Annual Bonus Plan 2011 (ABP), and are
described in section (b) below and in the directors’ remuneration report.
(iv) Aviva recruitment and retention
share plan awards
These are conditional awards granted under the Aviva Recruitment and Retention Share Award
Plan (RRSAP) in relation to the recruitment or retention of senior managers excluding executive
directors. The awards vest in tranches on various dates and vesting is conditional upon the
participant being employed by the Group on the vesting date and not having served notice of
resignation. Some awards can be subject to performance conditions. If a participant’s
employment is terminated due to resignation or dismissal, any tranche of the award which has
vested within the 12 months prior to the termination date will be subject to clawback and any
unvested tranches of the award will lapse in full.
(v) Aviva Investors deferred share
award plan awards
These awards have been made under the Aviva Investors Deferred Share Award Plan (AI
DSAP), where employees can choose to have the deferred element of their bonus deferred into
awards over Aviva shares. The awards vest in three equal tranches on the second, third and
fourth year following the year of grant.
(vi) Various all employee share plans
The Company maintains a number of active stock option and share award voluntary schemes:
a) The global matching share plan
b) Aviva Group employee share ownership scheme
No new Aviva plc ordinary shares will be issued to satisfy awards made under plans (iv), (v), (vi b).
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Notes to the consolidated financial statements
(b) Outstanding options
The following table summarises information about options outstanding at 31 December:
2024
2023
Range of exercise prices
Outstanding
options
number
Weighted
average
remaining
contractual life
years
Weighted
average
exercise price
pence
Outstanding
options
number
Weighted
average
remaining
contractual life
years
Weighted
average
exercise price
pence
£2.20 – £3.16
25,945,027
2.24
269.98 35,089,530
2.65
260.47
£3.17 – £3.67
7,182,408
1.57
334.00
9,043,614
2.40
333.38
£3.68 – £4.19
7,005,319
3.93
403.00
138,673
0.41
387.16
(c) Movements in the year
A summary of the status of the option and share plans as at 31 December 2024 and 2023, and changes during the years ended on
those dates, is shown below.
2024
2023
Options
Weighted
average
exercise
price
Awards
Options
Weighted
average
exercise
price
Awards
number
years
number
number
years
number
Outstanding at 1 January
44,271,817
275.76 36,796,790 43,965,547
255.64 40,030,981
Granted during the year
7,125,550
403.00 17,149,117
17,123,614
298.00 17,236,818
Exercised during the year
(9,438,680)
243.12 (12,801,800) (13,599,458)
233.58 (16,024,769)
Forfeited during the year
(1,531,527)
311.15 (3,284,766) (2,624,572)
301.08 (4,446,240)
Cancelled during the year
(219,853)
283.42
—
(299,957)
257.82
—
Expired during the year
(74,553)
304.66
—
(293,357)
305.61
—
Outstanding at 31 December
40,132,754
37,859,342 44,271,817
275.76 36,796,790
Exercisable at 31 December
2,652,142
308.30
—
6,917,910
222.99
—
(d) Expense charged to the income statement
The total expense recognised for the year arising from equity compensation plans was as follows:
2024
£m
2023
£m
Equity-settled expense
(61)
(61)
(e) Fair value of options and awards
The weighted average fair values of options and awards granted during the year, estimated by using the Binomial option pricing
model and Monte Carlo Simulation model, were £0.96 and £4.73 (2023: £0.86 and £3.75) respectively.
(i) Share options
The fair value of the options was estimated on the date of grant, based on the following weighted average assumptions:
Weighted average assumption
2024
2023
Share price
484p
376p
Exercise price
403p
298p
Expected volatility
24.58 %
32.13 %
Expected life
4.19 years
4.11 years
Expected dividend yield
7.07 %
8.47%
Risk-free interest rate
3.63 %
4.41%
The expected volatility used was based on the historical volatility of the share price over a period equivalent to the expected life
of the option prior to its date of grant. The risk-free interest rate was based on the yields available on UK government bonds as at
the date of grant. The bonds chosen were those with a similar remaining term to the expected life of the options. 9,438,680
options were exercised during the year (2023: 13,599,458).
(ii) Share awards
The fair value of the awards was estimated on the date of grant based on the following weighted average assumptions:
Weighted average assumption
2024
2023
Share price
489p
393p
Expected volatility1
30 %
33 %
Expected volatility of comparator companies’ share price1
29 %
30 %
Correlation between Aviva and comparator competitors’ share price1
49 %
55 %
Expected life1
3.00 years
3.00 years
Expected dividend yield
0.00 %
0.00%
Risk-free interest rate1
4.02 %
3.32 %
1. For awards with market-based performance conditions only
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Notes to the consolidated financial statements
33 – Treasury shares
The following table summarises information about treasury shares:
2024
2023
number
£m
number
£m
Shares held by employee trusts
17,993,161
81
21,193,467
87
Total treasury shares
17,993,161
81
21,193,467
87
Shares held by employee trusts
Prior to 2021, we primarily issued new shares except where it is necessary to use shares held by an employee share trust. From
2021, we satisfy awards and options granted under the Group’s share plans primarily through shares purchased in the market and
held by employee share trusts. This note gives details of the shares held in these trusts.
Movements in the carrying value of shares held by employee trusts comprise:
2024
2023
number
£m
number
£m
At 1 January
21,193,467
87
19,986,626
85
Acquired in the year
11,013,221
53
18,905,610
76
Distributed in the year
(14,213,527)
(59) (17,698,769)
(74)
At 31 December
17,993,161
81
21,193,467
87
The shares are owned by employee share trusts with an undertaking to satisfy awards of shares in the Company under the
Company’s share plans and schemes. Details of the features of the plans can be found in the directors’ remuneration report and/
or in note 32.
These shares were either purchased in the market or, in 2015, new shares were issued to the trust and are carried at weighted
average cost. At 31 December 2024, they had an aggregate nominal value of £5,918,803 (2023: £6,971,535) and a market value of
£84,351,939 (2023: £92,128,001). The trustees have waived their rights to dividends on the shares held in the trusts.
34 – Preference share capital
The issued and paid up preference share capital of the Company at 31 December was:
2024
2023
£m
£m
100,000,000 8.375% cumulative irredeemable preference shares of £1 each
100
100
100,000,000 8.75% cumulative irredeemable preference shares of £1 each
100
100
Total preference share capital
200
200
The issued preference shares are non-voting except where their dividends are in arrears, on a winding up or where their rights
are altered.
On a winding up, they carry a preferential right of return of capital ahead of the ordinary shares. Holders are entitled to receive
dividends out of the profits available for distribution and resolved to be distributed in priority to the payment of dividends to
holders of ordinary shares. The Company does not have a contractual obligation to deliver cash or other financial assets to the
preference shareholders and therefore the directors may make dividend payments at their discretion.
At 31 December 2024, the fair value of Aviva plc’s preference share capital was £273 million (2023: £261 million).
35 – Tier 1 notes
The carrying amount of Tier 1 notes at 31 December was:
2024
£m
2023
£m
Tier 1 notes
496
496
On 15 June 2022, Aviva plc issued £500 million of 6.875% fixed rate reset perpetual Restricted Tier 1 contingent convertible notes
(the RT1 notes). The RT1 notes are callable at par between 15 December 2031 and 15 June 2032 (the First Reset Date) inclusive and
thereafter every five years after the First Reset Date. If not called, the coupon from 15 June 2032 will be reset to the prevailing
five year benchmark gilt yield plus 4.649%. The notes have no fixed maturity date. Optional cancellation of coupon payments is at
the discretion of Aviva plc and mandatory cancellation is upon the occurrence of certain conditions. The RT1 notes are therefore
treated as equity and the coupon payment is recognised directly in equity. During the year coupon payments of £34 million were
made (2023: £34 million). On the occurrence of certain conversion trigger events the notes are convertible into ordinary shares
of Aviva plc.
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Notes to the consolidated financial statements
36 – Capital reserves and retained earnings
This note analyses the movements in the consolidated capital reserves and retained earnings during the year.
2024
2023
Capital reserves
Retained
earnings
Capital reserves
Retained
earnings
Share
premium
Capital
redemption
reserve
Merger
reserve
Share
premium
Capital
redemption
reserve
Merger
reserve
Note
£m
£m
£m
£m
£m
£m
£m
£m
At 1 January
17
24
5,224
2,228
1,263
3,855
5,224
(2,328)
Profit for the year attributable to equity
shareholders
—
—
—
683
—
—
—
1,085
Remeasurements of pension schemes
44(b)(i)
—
—
—
(386)
—
—
—
(495)
Dividends and appropriations
15
—
—
—
(972)
—
—
—
(929)
Shares purchased in buyback
31(b)(i)
—
20
—
(300)
—
24
—
(300)
Capital Reductions
36(b)
—
—
—
—
(1,253)
(3,855)
—
5,108
Net shares issued under equity
compensation plans
—
—
—
(27)
7
—
—
(35)
Owner-occupied properties fair value
gains transferred to retained earnings
on disposals
—
—
—
21
—
—
—
—
Aggregate tax effect
—
—
—
141
—
—
—
122
31 December
17
44
5,224
1,388
17
24
5,224
2,228
(a) Capital Reductions
At a General Meeting of Aviva held on 4 May 2023, Aviva received shareholder approval to a reduction of £1,253 million in its
share premium account and to a reduction of £3,855 million in its capital redemption reserve (the Capital Reductions). The Capital
Reductions received Court approval on 23 May 2023 and were effected on 25 May 2023.
(b) Aviva plc company
Retained earnings of Aviva plc, the Company, were £10,397 million at 31 December 2024 (2023: £10,589 million) (see note H on the
Company Financial statements).
37 – Other reserves
This note gives details of the other reserves forming part of the Group’s consolidated equity and shows the movements during
the year net of non-controlling interests:
2024
2023
Currency
translation
reserve
Owner
occupied
properties
reserve
Investment
valuation
reserve
Hedging
instruments
reserve
Equity
compensation
reserve
Total Other
reserves
Currency
translation
reserve
Owner
occupied
properties
reserve
Investment
valuation
reserve
Hedging
instruments
reserve
Equity
compensation
reserve
Total
Other
reserves
Accounting policy
E
P
T
U
AB
E
P
T
U
AB
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
At 1 January
378
22
(3)
(240)
122
279
485
22
(3)
(262)
113
355
Foreign exchange rate
movements
(156)
—
—
52
—
(104)
(111)
—
—
28
—
(83)
Aggregate tax effect –
shareholders’ tax
3
—
—
(13)
—
(10)
4
—
—
(6)
—
(2)
Total other
comprehensive income
for the year
(153)
—
—
39
—
(114)
(107)
—
—
22
—
(85)
Fair value gains
transferred to retained
earnings on disposals
—
(21)
—
—
—
(21)
—
—
—
—
—
—
Transfer to profit on
disposal of subsidiaries,
joint ventures and
associates
(17)
—
—
(4)
—
(21)
—
—
—
—
—
—
Reserves credit for equity
compensation plans
—
—
—
—
61
61
—
—
—
—
61
61
Shares issued under
equity compensation
plans
—
—
—
—
(48)
(48)
—
—
—
—
(52)
(52)
At 31 December
208
1
(3)
(205)
135
136
378
22
(3)
(240)
122
279
Foreign exchange rate movements recorded in the consolidated statement of comprehensive income of £(107) million
(2023 : £(86) million) relate to foreign exchange rate movements on the currency translation reserve of £(156) million
(2023 : £(111) million), the hedging instrument reserve of £52 million (2023: £28 million) and non-controlling interests (see note 38)
of £(3) million (2023: £(3) million).
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Notes to the consolidated financial statements
38 – Non-controlling interests
This note gives details of the Group’s non-controlling interests and shows the movements during the year.
2024
2023
£m
£m
At 1 January
318
310
Profit for the year attributable to non-controlling interests
22
21
Foreign exchange rate movements
(3)
(3)
Total comprehensive income attributable to non-controlling interests
19
18
Changes in non-controlling interests in subsidiaries
—
9
Non-controlling interests share of dividends declared in the year
(21)
(21)
Non-controlling interest in acquired subsidiaries
—
2
At 31 December
316
318
Comprising:
Equity shares in subsidiaries
66
68
Preference shares in subsidiaries
250
250
Total non-controlling interests
316
318
39 – Insurance and reinsurance contracts
For the purpose of this note, all references to insurance contracts include participating investment contracts. The Group has
presented the information about insurance and reinsurance contracts using the following product groups.
Reportable product
group
Products and services
Measurement model
Life risk
(see note 39(b)(i))
• Annuities (bulk purchase and individual), term
assurance, income protection and critical illness
General Measurement Model (GMM)
• Includes participating pension saving contracts with
guaranteed annuity terms as these contracts are
expected to convert to annuity contracts and the
predominant characteristics are life risk
Life participating
(see note 39(b)(ii))
• With profits savings contracts, unit linked insurance and
unit linked participating contracts
Predominantly measured using the Variable Fee
Approach (VFA). There is some participating business
which is measured using the GMM.
Non-life
(see note 39(b)(iii))
• General insurance contracts
Predominantly measured using the Premium
Allocation Approach (PAA). There is a small portion of
non-life business which is measured using the GMM.
• Health insurance contracts
This note analyses the following in respect of these insurance and reinsurance contracts:
(a) Carrying amount
(b) Movements in the year
(c) Assets of insurance acquisition cashflows
(d) Effect of contracts initially recognised in the year
(e) Contractual service margin (CSM) emergence
(f) Non-life claims development
(g) Significant judgements, estimates and assumptions
(h) Financial guarantees and options
(a) Carrying amount
Insurance and reinsurance contracts at 31 December comprised:
2024
2023
Life risk
Participating
Non-life
Total
Life risk
Participating
Non-life
Total
Note
£m
£m
£m
£m
£m
£m
£m
£m
Insurance contracts
Insurance contract balances
39(b)
71,452
37,225 15,694 124,371 68,134
39,544
14,372
122,050
Assets for insurance acquisition
cashflows
39(c)
—
—
(220)
(220)
—
—
(175)
(175)
Total insurance contract liabilities
71,452
37,225 15,474 124,151 68,134
39,544
14,197
121,875
Reinsurance contracts
Reinsurance contract assets
39(b)
(7,579)
—
(2,121) (9,700) (5,739)
—
(1,965)
(7,704)
Carrying amounts of insurance and reinsurance contracts expected to be settled/(recovered) more than 12 months from
reporting date:
2024
2023
£m
£m
Insurance contract and participating investment contract liabilities
110,330 104,773
Reinsurance contract assets
(8,330)
(5,501)
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Notes to the consolidated financial statements
At 31 December 2024, the maximum exposure to credit risk from insurance contracts is £2,319 million (2023: £2,664 million),
which primarily relates to premiums receivable for services that the Group has already provided, and the maximum exposure to
credit risk from reinsurance contracts is £7,742 million (2023: £6,534 million).
(b) Movements in the year
The following movements have occurred in the carrying amount of insurance contract balances in the year:
2024
2023
Carrying amount
Note
£m
£m
At 1 January
122,050
117,639
Insurance revenue
4 (20,747)
(18,497)
Insurance service expenses
18,240
16,217
Insurance finance expense
1,121
7,228
Foreign exchange rate movements and other charges
(571)
(300)
Premiums received
25,928
20,532
Claims and expenses paid, including investment component
(19,446)
(17,628)
Acquisition cash flows
(3,557)
(3,141)
Effect of portfolio transfers, acquisitions and disposals
1,353
—
At 31 December
124,371 122,050
Included within the carrying amounts are: the present value of expected future cashflows, representing a best estimate view; risk
adjustment for non-financial risk; and CSM representing the unearned profit for future service.
The carrying amount for reinsurance contracts are recognised separately from insurance contract balances. Detailed movements
on both are included in sections 39(b)(i) to 39(b)(iii).
The following summarises movements in CSM that have occurred during the year:
2024
2023
Life risk
Participating
Non-life
Total
Life risk
Participating
Non-life
Total
£m
£m
£m
£m
£m
£m
£m
£m
CSM in respect of insurance contracts
At 1 January
7,378
1,040
—
8,418
5,714
1,218
—
6,932
CSM recognised for services provided
(821)
(178)
(1)
(1,000)
(729)
(151)
—
(880)
Other movements in CSM
1,575
261
7
1,843
2,393
(27)
—
2,366
Effect of portfolio transfers, acquisitions
and disposals
365
—
—
365
—
—
—
—
At 31 December
8,497
1,123
6
9,626
7,378
1,040
—
8,418
CSM in respect of reinsurance contracts
At 1 January
(1,170)
—
—
(1,170)
(452)
—
—
(452)
CSM recognised for services received
129
—
—
129
80
—
—
80
Other movements in CSM
(495)
—
(2)
(497)
(798)
—
—
(798)
Effect of portfolio transfers, acquisitions
and disposals
(316)
—
—
(316)
—
—
—
—
At 31 December
(1,852)
—
(2)
(1,854)
(1,170)
—
—
(1,170)
Net CSM at 1 January
6,208
1,040
—
7,248
5,262
1,218
—
6,480
Net CSM at 31 December
6,645
1,123
4
7,772
6,208
1,040
—
7,248
Other movements in CSM include:
• Recognition of additional CSM in respect of new insurance and reinsurance contracts recognised in the year;
• Remeasurement of existing contracts (covering non-financial assumption changes and experience variances for all contracts,
plus financial assumption changes and experience variances for contracts in scope of the VFA); and
• For contracts in scope of the GMM, interest accretion on the CSM balance which is recognised within net finance expense/
income from insurance contracts;
There are also changes in CSM arising as a result of portfolio transfers, acquisitions and disposals.
Each of these items can be seen in more detail in the respective tables in section 39(b)(i) for life risk, 39(b)(ii) for participating and
39(b)(iii) for non-life.
For insurance contracts the largest driver of the movement in CSM for 2023 was longevity assumption changes on annuity
contracts. These were not repeated in 2024, leading to the smaller balance of other movements in CSM (excluding acquisitions).
Assumption changes are described in more detail in note 41.
The CSM recognised for services provided on insurance contracts in the year of £1,000 million (2023: £880 million) is a key
component of insurance revenue.
The CSM asset in respect of reinsurance contracts has also increased, with a key driver being acquisition activity.
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Notes to the consolidated financial statements
The following summarises movements in the risk adjustment that have occurred during the year:
Life
Non-life
Risk
Participating
PAA
GMM
Total
Total
2024
£m
£m
£m
£m
£m
£m
Risk adjustment in respect of insurance contracts
At 1 January
1,363
65
523
—
523
1,951
Change in risk adjustment for risk expired
(109)
(3)
—
(1)
(1)
(113)
Other movements in risk adjustment
61
(7)
27
—
27
81
Effect of portfolio transfers, acquisitions and disposals
75
—
—
10
10
85
At 31 December
1,390
55
550
9
559
2,004
Risk adjustment in respect of reinsurance contracts
At 1 January
(639)
—
(80)
(70)
(150)
(789)
Change in risk adjustment for risk expired
44
—
—
8
8
52
Other movements in risk adjustment
(78)
—
9
(13)
(4)
(82)
Effect of portfolio transfers, acquisitions and disposals
(62)
—
—
(5)
(5)
(67)
At 31 December
(735)
—
(71)
(80)
(151)
(886)
Net risk adjustment at 1 January
724
65
443
(70)
373
1,162
Net risk adjustment at 31 December
655
55
479
(71)
408
1,118
Life
Non-life
Risk
Participating
PAA
GMM
Total
Total
2023
£m
£m
£m
£m
£m
£m
Risk adjustment in respect of insurance contracts
At 1 January
1,443
62
553
—
553
2,058
Change in risk adjustment for risk expired
(96)
(3)
—
—
—
(99)
Other movements in risk adjustment
16
6
(30)
—
(30)
(8)
At 31 December
1,363
65
523
—
523
1,951
Risk adjustment in respect of reinsurance contracts
At 1 January
(570)
—
(72)
(90)
(162)
(732)
Change in risk adjustment for risk expired
33
—
—
11
11
44
Other movements in risk adjustment
(102)
—
(8)
9
1
(101)
At 31 December
(639)
—
(80)
(70)
(150)
(789)
Net risk adjustment at 1 January
873
62
481
(90)
391
1,326
Net risk adjustment at 31 December
724
65
443
(70)
373
1,162
The change in risk adjustment for risk expired is recognised in insurance revenue.
The net risk adjustment has decreased in the year. Other movements in risk adjustment include the risk adjustment established
on new business (details of which can be seen in note 39(d)) and the impact of movements in discount rates.
There are also changes in risk adjustment arising as a result of portfolio transfers, acquisitions and disposals.
For 2023 there was additional impact of reforms to the Solvency II risk margin in the UK and impact of a reduction in the risk
adjustment due to changes in assumptions, primarily for longevity.
Movements in carrying amounts of insurance and reinsurance contracts
The following reconciliations present the movements in the carrying amounts of insurance and reinsurance contracts in each
product group.
For life risk and participating contracts each table presents a different analysis of the movements in both insurance and
reinsurance balances. The first disclosure, split by remaining coverage and incurred claims, presents the income statement items
that constitute insurance revenue, insurance service expenses and net expenses from reinsurance contracts. The sum of these
items represents the contribution to insurance service result. Movements in the balances relating to finance expenses and cash
flows are shown below the insurance service result.
In the second disclosure, split by measurement component (present value of expected future cash flows, risk adjustment and
CSM), the movements are presented by driver of change. The insurance service result and subsequent movements have
consistent totals across the two disclosure tables.
For non-life business for both gross and reinsurance contracts, the movements in balances are presented split by remaining
coverage and incurred claims with the incurred claims further analysed between the cash flow and risk adjustment components.
A further table then follows for both gross and reinsurance contracts to display the results exclusively for the sub-group of
contracts measured under the GMM. For 2023 the only GMM business in non-life was adverse development cover reinsurance
contracts, which had no CSM.
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Notes to the consolidated financial statements
(i) Life risk
Insurance contracts
The following table shows life risk insurance contracts analysed by remaining coverage and incurred claims:
2024
2023
Liabilities for remaining
coverage
Liabilities
for incurred
claims
Total
Liabilities for remaining
coverage
Liabilities
for incurred
claims
Total
Excluding loss
component
Loss
component
Excluding loss
component
Loss
component
Carrying amount
Note
£m
£m
£m
£m
£m
£m
£m
£m
Opening liabilities at 1 January
66,473
418
1,243 68,134
61,626
497
1,300 63,423
Changes in comprehensive income
Insurance revenue
4
(7,788)
—
— (7,788)
(6,914)
—
— (6,914)
Contracts under the modified
retrospective transition approach
(156)
—
—
(156)
(169)
—
—
(169)
Contracts under the fair value
transition approach
(4,107)
—
— (4,107)
(4,426)
—
— (4,426)
Other contracts
(3,525)
—
— (3,525)
(2,319)
—
— (2,319)
Insurance service expenses
336
(21)
6,569 6,884
301
(96)
5,937
6,142
Incurred claims and other insurance
service expenses
—
(67)
6,569 6,502
—
(40)
5,937
5,897
Amortisation of insurance
acquisition cash flows
336
—
—
336
301
—
—
301
Losses and reversals of losses on
onerous contracts
—
46
—
46
—
(56)
—
(56)
Investment components and
premium refunds
(1,033)
—
1,033
—
(906)
—
906
—
Insurance service result
(8,485)
(21)
7,602
(904)
(7,519)
(96)
6,843
(772)
Net finance (income)/expenses from
insurance contracts
5
(1,236)
20
— (1,216)
4,139
18
—
4,157
Effect of movements in exchange rates
(109)
(3)
(11)
(123)
(80)
(1)
(5)
(86)
Total changes in comprehensive income
(9,830)
(4)
7,591 (2,243)
(3,460)
(79)
6,838
3,299
Cash flows
Premiums received
12,668
—
— 12,668
8,777
—
—
8,777
Claims and other insurance service
expenses paid, including investment
component
—
—
(7,508) (7,508)
—
—
(6,895) (6,895)
Insurance acquisition cash flows
(633)
—
—
(633)
(470)
—
—
(470)
Total cash flows
12,035
—
(7,508) 4,527
8,307
—
(6,895)
1,412
Effect of portfolio transfers, acquisitions
and disposals
872
—
162
1,034
—
—
—
—
Closing liabilities at 31 December
69,550
414
1,488 71,452
66,473
418
1,243 68,134
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Notes to the consolidated financial statements
The following table shows life risk insurance contracts analysed by measurement component:
Estimates of
present
value of
future cash
flows
Risk
adjustment for
non-financial
risk
Contractual service margin (CSM)
Total
2024 Carrying amount
Contracts
under
modified
retrospective
transition
approach
Contracts
under fair
value
transition
approach
Other
contracts
CSM
Total
Note
£m
£m
£m
£m
£m
£m
£m
Opening liabilities at 1 January
59,393
1,363
1
3,652
3,725
7,378
68,134
Changes in comprehensive income
CSM recognised for services provided
—
—
—
(392)
(429)
(821)
(821)
Change in risk adjustment for risk expired
—
(109)
—
—
—
—
(109)
Experience adjustments
(20)
—
—
—
—
—
(20)
Changes that relate to current services
(20)
(109)
—
(392)
(429)
(821)
(950)
Contracts initially recognised in the period
(971)
222
—
—
750
750
1
Changes in estimates that adjust the CSM
(519)
(23)
(1)
301
242
542
—
Changes in estimates that result in losses
and reversal of losses on onerous
contracts
45
—
—
—
—
—
45
Changes that relate to future services
(1,445)
199
(1)
301
992
1,292
46
Insurance service result
(1,465)
90
(1)
(91)
563
471
(904)
Net finance expenses/(income) from
insurance contracts
5
(1,382)
(132)
—
165
133
298
(1,216)
Effect of movements in exchange rates
(102)
(6)
—
(8)
(7)
(15)
(123)
Total changes in comprehensive income
(2,949)
(48)
(1)
66
689
754
(2,243)
Cash flows
Premiums received
12,668
—
—
—
—
—
12,668
Claims and other insurance service expense
paid, including investment components
(7,508)
—
—
—
—
—
(7,508)
Insurance acquisition cashflows
(633)
—
—
—
—
—
(633)
Total cash flows
4,527
—
—
—
—
—
4,527
Effect of portfolio transfers, acquisitions and
disposals
594
75
—
—
365
365
1,034
Closing liabilities at 31 December
61,565
1,390
—
3,718
4,779
8,497
71,452
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Estimates of
present value
of future cash
flows
Risk
adjustment for
non-financial
risk
Contractual service margin (CSM)
Total
2023 Carrying amount
Contracts
under
modified
retrospective
transition
approach
Contracts
under fair
value
transition
approach
Other
contracts
CSM
Total
Note
£m
£m
£m
£m
£m
£m
£m
Opening liabilities at 1 January
56,266
1,443
—
3,283
2,431
5,714
63,423
Changes in comprehensive income
CSM recognised for services provided
—
—
—
(376)
(353)
(729)
(729)
Change in risk adjustment for risk expired
—
(96)
—
—
—
—
(96)
Experience adjustments
109
—
—
—
—
—
109
Changes that relate to current services
109
(96)
—
(376)
(353)
(729)
(716)
Contracts initially recognised in the period
(602)
177
—
1
424
425
—
Changes in estimates that adjust the CSM
(1,619)
(149)
1
598
1,169
1,768
—
Changes in estimates that result in losses
and reversal of losses on onerous
contracts
(56)
—
—
—
—
—
(56)
Changes that relate to future services
(2,277)
28
1
599
1,593
2,193
(56)
Insurance service result
(2,168)
(68)
1
223
1,240
1,464
(772)
Net finance expenses/(income) from
insurance contracts
5
3,959
(9)
—
150
57
207
4,157
Effect of movements in exchange rates
(76)
(3)
—
(4)
(3)
(7)
(86)
Total changes in comprehensive income
1,715
(80)
1
369
1,294
1,664
3,299
Cash flows
Premiums received
8,777
—
—
—
—
—
8,777
Claims and other insurance service expense
paid, including investment components
(6,895)
—
—
—
—
—
(6,895)
Insurance acquisition cashflows
(470)
—
—
—
—
—
(470)
Total cash flows
1,412
—
—
—
—
—
1,412
Effect of portfolio transfers, acquisitions and
disposals
—
—
—
—
—
—
—
Closing liabilities at 31 December
59,393
1,363
1
3,652
3,725
7,378
68,134
Key changes that impact the income statement include the release of CSM for services provided and the release of risk
adjustment for expired risks.
Changes that relate to future service include:
• New contracts initially recognised in the year which give rise to a CSM liability representing unearned future profit on service
yet to be provided;
• Experience variances and assumption changes on profitable contracts that impact the expected fulfilment cash flows and
adjust the CSM liability; and
• Recognition of new onerous contracts and experience variances or assumption changes on onerous contracts impacting the
income statement immediately.
The changes in estimates that increase the CSM include the effect of both experience variances and assumption changes on
expected future cash flows. The assumption changes within the changes in estimates that increases the CSM at
31 December 2024 of £542 million are relatively small compared to prior years.
The assumption changes within estimates that increase the CSM at 31 December 2023 of £1,768 million related primarily to
spouses of BPA scheme members and changes to longevity assumptions.
Assumption changes are explained in more detail in note 41.
The net finance income from insurance contracts of £(1,216) million (2023: £4,157 million net finance expenses recognised in the
income statement includes the impact of the change in financial assumptions, the unwind of discounting on the fulfilment cash
flows and interest accretion on the CSM. Discount rates have increased at most durations during 2024, leading to a reduction in
the value of the liabilities.
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Notes to the consolidated financial statements
Reinsurance contracts
The following table shows life risk reinsurance contracts analysed by remaining coverage and incurred claims:
2024
2023
Assets for remaining
coverage
Assets for
incurred
claims
Total
Assets for remaining
coverage
Assets for
incurred
claims
Total
Carrying amount
Excluding
loss
recovery
component
Loss
recovery
component
Excluding
loss
recovery
component
Loss
recovery
component
Note
£m
£m
£m
£m
£m
£m
£m
£m
Opening assets at 1 January
5,245
(11)
505
5,739
4,261
150
515
4,926
Changes in comprehensive income
Allocation of reinsurance premiums paid
(3,287)
—
—
(3,287)
(2,693)
—
—
(2,693)
Recoveries of incurred claims and other
insurance service expenses
—
(2)
3,116
3,114
—
(4)
2,576
2,572
Recoveries and reversals of recoveries of
losses on onerous underlying contracts
—
(45)
—
(45)
—
(158)
—
(158)
Adjustments to assets for incurred claims
—
—
—
—
—
—
—
—
Amounts recoverable from reinsurers
—
(47)
3,116
3,069
—
(162)
2,576
2,414
Investment components and premium
refunds
(3)
—
3
—
—
—
—
—
Net expenses from reinsurance contracts
(3,290)
(47)
3,119
(218)
(2,693)
(162)
2,576
(279)
Net finance (expenses)/income from
reinsurance contracts
5
(213)
2
—
(211)
530
1
—
531
Effect of movements in exchange rates
(32)
—
(4)
(36)
(16)
—
(1)
(17)
Total changes in comprehensive income
(3,535)
(45)
3,115
(465)
(2,179)
(161)
2,575
235
Cash flows
Premiums paid
4,366
—
—
4,366
3,163
—
—
3,163
Amounts received
—
—
(3,045)
(3,045)
—
—
(2,585)
(2,585)
Total cash flows
4,366
—
(3,045)
1,321
3,163
—
(2,585)
578
Effect of portfolio transfers, acquisitions
and disposals
800
—
184
984
—
—
—
—
Closing assets at 31 December
6,876
(56)
759
7,579
5,245
(11)
505
5,739
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Notes to the consolidated financial statements
The following table shows life risk reinsurance contracts analysed by measurement component:
Estimates of
present
value of
future cash
flows
Risk
adjustment
for
non-financial
risk
Contractual service margin (CSM)
Total
Contracts
under
modified
retrospective
transition
approach
Contracts
under fair
value
transition
approach
Other
contracts
CSM
Total
2024 Carrying amount
Note
£m
£m
£m
£m
£m
£m
£m
Opening assets at 1 January
3,930
639
(76)
451
795
1,170
5,739
Changes in comprehensive income
CSM recognised for services provided
—
—
7
(53)
(83)
(129)
(129)
Change in risk adjustment for risk expired
—
(44)
—
—
—
—
(44)
Experience adjustments
—
—
—
—
—
—
—
Changes that relate to current services
—
(44)
7
(53)
(83)
(129)
(173)
Contracts initially recognised in the period
(347)
186
—
—
162
162
1
Changes in estimates that adjust the CSM
(236)
(46)
6
46
230
282
—
Changes in estimates that relate to losses
and reversals of losses on onerous
underlying contracts
(46)
—
—
—
—
—
(46)
Changes that relate to future services
(629)
140
6
46
392
444
(45)
Net (expenses)/income from reinsurance
contracts
(629)
96
13
(7)
309
315
(218)
Net finance (expenses)/income from
reinsurance contracts
5
(206)
(59)
(3)
18
39
54
(211)
Effect of movements in exchange rates
(30)
(3)
—
(3)
—
(3)
(36)
Total changes in comprehensive income
(865)
34
10
8
348
366
(465)
Cash flows
Premiums paid
4,366
—
—
—
—
—
4,366
Amounts received
(3,045)
—
—
—
—
—
(3,045)
Total cash flows
1,321
—
—
—
—
—
1,321
Effect of portfolio transfers, acquisitions and
disposals
606
62
—
—
316
316
984
Closing assets at 31 December
4,992
735
(66)
459
1,459
1,852
7,579
Estimates of
present value
of future cash
flows
Risk
adjustment
for
non-financial
risk
Contractual service margin (CSM)
Total
Contracts
under
modified
retrospective
transition
approach
Contracts
under fair
value
transition
approach
Other
contracts
CSM
Total
2023 Carrying amount
Note
£m
£m
£m
£m
£m
£m
£m
Opening assets at 1 January
3,904
570
(74)
386
140
452
4,926
Changes in comprehensive income
CSM recognised for services provided
—
—
11
(50)
(41)
(80)
(80)
Change in risk adjustment for risk expired
—
(33)
—
—
—
—
(33)
Experience adjustments
(8)
—
—
—
—
—
(8)
Changes that relate to current services
(8)
(33)
11
(50)
(41)
(80)
(121)
Contracts initially recognised in the period
(143)
155
—
—
(12)
(12)
—
Changes in estimates that adjust the CSM
(714)
(80)
(11)
105
700
794
—
Changes in estimates that relate to losses and
reversals of losses on onerous underlying
contracts
(158)
—
—
—
—
—
(158)
Changes that relate to future services
(1,015)
75
(11)
105
688
782
(158)
Net (expenses)/income from reinsurance contracts
(1,023)
42
—
55
647
702
(279)
Net finance (expenses)/income from reinsurance
contracts
5
485
28
(2)
12
8
18
531
Effect of movements in exchange rates
(14)
(1)
—
(2)
—
(2)
(17)
Total changes in comprehensive income
(552)
69
(2)
65
655
718
235
Cash flows
Premiums paid
3,163
—
—
—
—
—
3,163
Amounts received
(2,585)
—
—
—
—
—
(2,585)
Total cash flows
578
—
—
—
—
—
578
Effect of portfolio transfers, acquisitions and
disposals
—
—
—
—
—
—
—
Closing assets at 31 December
3,930
639
(76)
451
795
1,170
5,739
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Notes to the consolidated financial statements
Some gross onerous contracts do not have reinsurance in place so movements in the gross loss component occur without a
corresponding movement being seen in the reinsurance loss recovery component.
(ii) Participating
Insurance contracts
The following table shows participating insurance contracts analysed by remaining coverage and incurred claims:
2024
2023
Liabilities for remaining
coverage
Liabilities
for incurred
claims
Total
Liabilities for remaining
coverage
Liabilities for
incurred
claims
Total
Carrying amount
Excluding
loss
component
Loss
component
Excluding
loss
component
Loss
component
Note
£m
£m
£m
£m
£m
£m
£m
£m
Opening liabilities at 1 January
38,677
9
858 39,544
40,439
6
525
40,970
Changes in comprehensive income
Insurance revenue
4
(533)
—
—
(533)
(658)
—
—
(658)
Contracts under the modified
retrospective transition approach
(147)
—
—
(147)
(154)
—
—
(154)
Contracts under the fair value
transition approach
(354)
—
—
(354)
(483)
—
—
(483)
Other contracts
(32)
—
—
(32)
(21)
—
—
(21)
Insurance service expenses
7
11
312
330
6
3
402
411
Incurred claims and other
insurance service expenses
—
(2)
312
310
—
(1)
402
401
Amortisation of insurance
acquisition cash flows
7
—
—
7
6
—
—
6
Losses and reversals of losses on
onerous contracts
—
13
—
13
—
4
—
4
Investment components and premium
refunds
(3,973)
—
3,973
—
(3,941)
—
3,941
—
Insurance service result
(4,499)
11
4,285
(203)
(4,593)
3
4,343
(247)
Net finance expenses/(income) from
insurance contracts
5
1,986
(2)
—
1,984
2,493
—
—
2,493
Effect of movements in exchange rates
(41)
—
(1)
(42)
(37)
—
—
(37)
Total changes in comprehensive income
(2,554)
9
4,284
1,739
(2,137)
3
4,343
2,209
Cash flows
Premiums received
434
—
—
434
391
—
—
391
Claims and other insurance service
expenses paid, including investment
component
—
—
(4,467)
(4,467)
—
—
(4,010)
(4,010)
Insurance acquisition cash flows
(25)
—
—
(25)
(16)
—
—
(16)
Total cash flows
409
—
(4,467)
(4,058)
375
—
(4,010)
(3,635)
Closing liabilities at 31 December
36,532
18
675
37,225
38,677
9
858
39,544
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Notes to the consolidated financial statements
The following table shows participating insurance contracts analysed by measurement component:
Estimates of
present value
of future cash
flows
Risk
adjustment
for
non-financial
risk
Contractual service margin (CSM)
Total
2024 Carrying amount
Contracts
under
modified
retrospective
transition
approach
Contracts
under fair
value
transition
approach
CSM
Total
Note
£m
£m
£m
£m
£m
£m
Opening liabilities at 1 January
38,439
65
388
652
1,040 39,544
Changes in comprehensive income
CSM recognised for services provided
—
—
(90)
(88)
(178)
(178)
Change in risk adjustment for risk expired
—
(3)
—
—
—
(3)
Experience adjustments
(22)
—
—
—
—
(22)
Revenue recognised for incurred policyholder tax
expenses
(13)
—
—
—
—
(13)
Changes that relate to current services
(35)
(3)
(90)
(88)
(178)
(216)
Changes in estimates that adjust the CSM
(259)
1
85
173
258
—
Changes in estimates that result in losses and
reversal of losses on onerous contracts
13
—
—
—
—
13
Changes that relate to future services
(246)
1
85
173
258
13
Insurance service result
(281)
(2)
(5)
85
80
(203)
Net finance expenses/(income) from insurance
contracts
5
1,989
(8)
—
3
3
1,984
Effect of movements in exchange rates
(42)
—
—
—
—
(42)
Total changes in comprehensive income
1,666
(10)
(5)
88
83
1,739
Cash flows
—
—
Premiums received
434
—
—
—
—
434
Claims and other insurance service expense paid,
including investment components
(4,467)
—
—
—
— (4,467)
Insurance acquisition cashflows
(25)
—
—
—
—
(25)
Total cash flows
(4,058)
—
—
—
— (4,058)
Closing liabilities at 31 December
36,047
55
383
740
1,123 37,225
Estimates of
present value
of future cash
flows
Risk
adjustment for
non-financial
risk
Contractual service margin (CSM)
Total
Full year 2023
under
modified
retrospective
transition
approach
Contracts
under fair
value
transition
approach
CSM
Total
Note
£m
£m
£m
£m
£m
£m
Opening liabilities at 1 January
39,690
62
438
780
1,218 40,970
Changes in comprehensive income
CSM recognised for services provided
—
—
(58)
(93)
(151)
(151)
Change in risk adjustment for risk expired
—
(3)
—
—
—
(3)
Experience adjustments
(61)
—
—
—
—
(61)
Revenue recognised for incurred policyholder
tax expenses
(36)
—
—
—
—
(36)
Changes that relate to current services
(97)
(3)
(58)
(93)
(151)
(251)
Changes in estimates that adjust the CSM
31
(3)
8
(36)
(28)
—
Changes in estimates that result in losses and
reversal of losses on onerous contracts
4
—
—
—
—
4
Changes that relate to future services
35
(3)
8
(36)
(28)
4
Insurance service result
(62)
(6)
(50)
(129)
(179)
(247)
Net finance expenses/(income) from insurance
contracts
5
2,483
9
—
1
1
2,493
Effect of movements in exchange rates
(37)
—
—
—
—
(37)
Total changes in comprehensive income
2,384
3
(50)
(128)
(178)
2,209
Cash flows
Premiums received
391
—
—
—
—
391
Claims and other insurance service expense paid,
including investment components
(4,010)
—
—
—
—
(4,010)
Insurance acquisition cashflows
(16)
—
—
—
—
(16)
Total cash flows
(3,635)
—
—
—
—
(3,635)
Effect of portfolio transfers, acquisitions and
disposals
—
—
—
—
—
—
Closing liabilities at 31 December
38,439
65
388
652
1,040 39,544
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Notes to the consolidated financial statements
Key changes that impact the income statement include the release of CSM for services provided and experience variances for
the period. Other changes that relate to current services include revenue recognised for policyholder tax expenses, representing
income tax on policyholders' investment return, charged to the policyholder funds.
Net finance (income)/expenses mainly represents investment returns on the net assets held in policyholder funds.
(iii) Non-life
Insurance contracts
The following table shows non-life insurance contracts analysed by remaining coverage and incurred claims:
Liabilities for remaining
coverage
Liabilities for incurred claims
Total
Contracts under PAA
2024 Carrying amount
Excluding
loss
component
Loss
component
Contracts
not under
PAA
Estimates
of present
value of
future cash
flows
Risk
adjustment
for non-
financial
risk
Note
£m
£m
£m
£m
£m
£m
Opening liabilities at 1 January
2,727
31
—
11,091
523 14,372
Changes in comprehensive income
Insurance revenue
4 (12,426)
—
—
—
— (12,426)
Incurred claims and other insurance service expenses
—
(50)
6
8,204
171
8,331
Amortisation of insurance acquisition cash flows
2,762
—
—
—
—
2,762
Losses and reversals of losses on onerous contracts
—
47
—
—
—
47
Adjustments to liabilities for incurred claims
—
—
—
27
(141)
(114)
Insurance service expenses
2,762
(3)
6
8,231
30 11,026
Insurance service result
(9,664)
(3)
6
8,231
30 (1,400)
Net finance expenses from insurance contracts
5
4
—
—
338
11
353
Effect of movements in exchange rates
(67)
(2)
—
(323)
(14)
(406)
Total changes in comprehensive income
(9,727)
(5)
6
8,246
27 (1,453)
Cash flows
Premiums received
12,826
—
—
—
— 12,826
Claims and other insurance service expenses paid,
including investment component
—
—
(6)
(7,465)
— (7,471)
Insurance acquisition cash flows
(2,899)
—
—
—
— (2,899)
Total cash flows
9,927
—
(6)
(7,465)
— 2,456
Effect of portfolio transfers, acquisitions and disposals
319
—
—
—
—
319
Closing liabilities at 31 December
3,246
26
—
11,872
550 15,694
The £(141) million adjustment to the risk adjustment in the liability for incurred claims comprises the release of the risk adjustment as
claims are paid and also includes assumption changes in calculating the risk adjustment.
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Notes to the consolidated financial statements
Liabilities for remaining
coverage
Liabilities for incurred
claims
Total
Contracts under PAA
2023 Carrying amount
Excluding loss
component
Loss
component
present
value of
future cash
flows
Risk
adjustment
for non-
financial risk
Note
£m
£m
£m
£m
£m
Opening liabilities
2,439
44
10,210
553
13,246
At 1 January
2,439
44
10,210
553
13,246
Changes in comprehensive income
Insurance revenue
4
(10,925)
—
—
— (10,925)
Incurred claims and other insurance service expenses
—
(29)
7,037
160
7,168
Amortisation of insurance acquisition cash flows
2,535
—
—
—
2,535
Losses and reversals of losses on onerous contracts
—
16
—
—
16
Adjustments to liabilities for incurred claims
—
—
148
(203)
(55)
Insurance service expenses
2,535
(13)
7,185
(43)
9,664
Insurance service result
(8,390)
(13)
7,185
(43)
(1,261)
Net finance expenses from insurance contracts
5
—
—
558
20
578
Effect of movements in exchange rates
(31)
—
(139)
(7)
(177)
Total changes in comprehensive income
(8,421)
(13)
7,604
(30)
(860)
Cash flows
Premiums received
11,364
—
—
—
11,364
Claims and other insurance service expenses paid, including
investment component
—
—
(6,723)
—
(6,723)
Insurance acquisition cash flows
(2,655)
—
—
—
(2,655)
Total cash flows
8,709
—
(6,723)
—
1,986
Effect of portfolio transfers, acquisitions and disposals
—
—
—
—
—
At 31 December
2,727
31
11,091
523
14,372
Closing liabilities
2,727
31
11,091
523
14,372
At 31 December
2,727
31
11,091
523
14,372
The £(203) million adjustment to the risk adjustment in the liability for incurred claims comprises the release of the risk
adjustment as claims are paid and also includes assumption changes in calculating the risk adjustment.
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Notes to the consolidated financial statements
The following table shows non-life insurance contracts analysed by measurement component (contracts measured under the
GMM). There were no such contracts in 2023:
Estimates of
present value of
future cash
flows
Risk
adjustment for
non-financial
risk
Contractual service margin
(CSM)
Total
2024 Carrying amount
Other
contracts
CSM Total
£m
£m
£m
£m
£m
Opening liabilities at 1 January
—
—
—
—
—
Changes in comprehensive income
CSM recognised for services provided
—
—
(1)
(1)
(1)
Change in risk adjustment for risk expired
—
(1)
—
—
(1)
Experience adjustments
(6)
—
—
—
(6)
Changes that relate to current services
(6)
(1)
(1)
(1)
(8)
Contracts initially recognised in the period
—
—
—
—
—
Changes in estimates that adjust the CSM
(6)
(1)
7
7
1
Changes in estimates that result in losses and reversal of
losses on onerous contracts
—
—
—
—
—
Changes that relate to future services
(6)
(1)
7
7
1
Insurance service result
(12)
(2)
6
6
(7)
Net finance expenses/(income) from insurance contracts
4
1
—
—
5
Effect of movements in exchange rates
—
—
—
—
—
Total changes in comprehensive income
(8)
(1)
6
6
(3)
Cash flows
Premiums received
—
—
—
—
—
Claims and other insurance service expense paid, including
investment components
(6)
—
—
—
(6)
Insurance acquisition cashflows
—
—
—
—
—
Total cash flows
(6)
—
—
—
(6)
Effect of portfolio transfers, acquisitions and disposals
180
10
—
—
190
Closing liabilities at 31 December
166
9
6
6
181
Reinsurance contracts
The following table shows non-life reinsurance contracts analysed by remaining coverage and incurred claims (contracts
measured under the PAA or GMM):
Assets for
remaining
coverage
Assets for incurred claims
Total
Contracts under PAA
2024 Carrying amount
Contracts
not under
PAA
Estimates of
present
value of
future cash
flows
Risk
adjustment
for non-
financial risk
Note
£m
£m
£m
£m
£m
Opening assets at 1 January
844
—
1,041
80
1,965
Changes in comprehensive income
Allocation of reinsurance premiums paid
(1,049)
—
—
—
(1,049)
Recoveries of incurred claims and other insurance service
expenses
20
77
446
21
564
Adjustments to assets for incurred claims
—
—
49
(31)
18
Amounts recoverable from reinsurers
20
77
495
(10)
582
Effect of changes in non-performance risk of reinsurers
1
—
(4)
—
(3)
Net income/(expenses) from reinsurance contracts
(1,028)
77
491
(10)
(470)
Net finance income/(expenses) from reinsurance contracts
5
14
—
27
2
43
Effect of movements in exchange rates
(10)
—
(33)
(1)
(44)
Total changes in comprehensive income
(1,024)
77
485
(9)
(471)
Cash flows
Premiums paid
880
—
—
—
880
Amounts received
—
(77)
(329)
—
(406)
Total cash flows
880
(77)
(329)
—
474
Effect of portfolio transfers, acquisitions and disposals
153
—
—
—
153
Closing assets at 31 December
853
—
1,197
71
2,121
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Notes to the consolidated financial statements
Assets for
remaining
coverage
Assets for incurred claims
Total
Contracts under PAA
2023 Carrying amount
Contracts
not under
PAA
Estimates of
present value
of future
cash flows
Risk
adjustment
for non-
financial risk
Note
£m
£m
£m
£m
£m
Opening assets at 1 January
855
—
907
72
1,834
Changes in comprehensive income
Allocation of reinsurance premiums paid
(949)
—
—
—
(949)
Recoveries of incurred claims and other insurance service expenses
34
46
261
16
357
Adjustments to assets for incurred claims
—
—
123
(12)
111
Amounts recoverable from reinsurers
34
46
384
4
468
Effect of changes in non-performance risk of reinsurers
1
—
(2)
—
(1)
Net income/(expenses) from reinsurance contracts
(914)
46
382
4
(482)
Net finance income/(expenses) from reinsurance contracts
5
73
—
33
4
110
Effect of movements in exchange rates
7
—
(5)
—
2
Total changes in comprehensive income
(834)
46
410
8
(370)
Cash flows
Premiums paid
823
—
—
—
823
Amounts received
—
(46)
(276)
—
(322)
Total cash flows
823
(46)
(276)
—
501
Effect of portfolio transfers, acquisitions and disposals
—
—
—
—
—
Closing assets at 31 December
844
—
1,041
80
1,965
The following table shows non-life reinsurance contracts analysed by measurement component (contracts measured under the
GMM):
Estimates
of present
value of
future cash
flows
Risk
adjustment for
non-financial
risk
Contractual service margin (CSM)
Total
2024 Carrying amount
Contracts
under fair
value
transition
approach
Other
contracts
CSM Total
£m
£m
£m
£m
£m
£m
Opening assets at 1 January
852
70
—
—
—
922
Changes in comprehensive income
Change in risk adjustment for risk expired
—
(8)
—
—
—
(8)
Experience adjustments
(5)
—
—
—
—
(5)
Changes that relate to current services
(5)
(8)
—
—
—
(13)
Changes in estimates that adjust the CSM
(2)
—
—
2
2
—
Changes in estimates for adverse development cover
7
7
—
—
—
14
Changes in estimates that relate to losses and
reversals of losses on onerous underlying contracts
(3)
6
—
—
—
3
Changes that relate to future services
2
13
—
2
2
17
Effect of changes in non-performance risk of reinsurers
2
—
—
—
—
2
Net expenses from reinsurance contracts
(1)
5
—
2
2
6
Net finance income/(expenses) from reinsurance contracts
5
—
—
—
—
5
Effect of movements in exchange rates
(14)
—
—
—
—
(14)
Total changes in comprehensive income
(10)
5
—
2
2
(3)
Cash flows
Amounts received
(77)
—
—
—
—
(77)
Total cash flows
(77)
—
—
—
—
(77)
Effect of portfolio transfers, acquisitions and disposals
89
5
—
—
—
94
Closing assets at 31 December
854
80
—
2
2
936
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Notes to the consolidated financial statements
Estimates
of present
value of
future
cash flows
Risk
adjustment for
non-financial
risk
Contractual service margin (CSM)
Total
Contracts
under modified
retrospective
transition
approach
Contracts
under fair
value
transition
approach
CSM Total
2023 Carrying amount
£m
£m
£m
£m
£m
£m
Opening assets at 1 January
809
90
—
—
—
899
Changes in comprehensive income
Change in risk adjustment for risk expired
—
(11)
—
—
—
(11)
Experience adjustments
8
—
—
—
—
8
Changes that relate to current services
8
(11)
—
—
—
(3)
Changes in estimates for adverse development cover
49
(15)
—
—
—
34
Changes that relate to future services
49
(15)
—
—
—
34
Effect of changes in non-performance risk of reinsurers
1
—
—
—
—
1
Net expenses from reinsurance contracts
58
(26)
—
—
—
32
Net finance income/(expenses) from reinsurance contracts
67
6
—
—
—
73
Effect of movements in exchange rates
(7)
—
—
—
—
(7)
Total changes in comprehensive income
118
(20)
—
—
—
98
Cash flows
Amounts received
(75)
—
—
—
—
(75)
Total cash flows
(75)
—
—
—
—
(75)
Effect of portfolio transfers, acquisitions and disposals
—
—
—
—
—
—
Closing assets at 31 December
852
70
—
—
—
922
(c) Assets for insurance acquisition cashflows
The following table sets out carrying amount and movement of assets for non-life insurance acquisition cash flows at
31 December:
2024
2023
Carrying amount
£m
£m
At 1 January
175
78
Effect of portfolio transfers, acquisitions and disposals
28
—
Amounts incurred during the year
70
115
Amounts derecognised and included in the measurement of insurance contracts
(53)
(18)
Balance at 31 December
220
175
The following table sets out when the Group expects to derecognise assets for non-life insurance acquisition cash flows after the
reporting date:
2024
2023
£m
£m
Less than one year
88
52
One to two years
45
42
Two to three years
38
33
Three to four years
30
24
Four to five years
6
6
Five to ten years
13
18
Total
220
175
(d) Effect of contracts initially recognised in the year
2024
2023
Life risk
Participating
Total
Life risk
Participating
Total
Note
£m
£m
£m
£m
£m
£m
Expected premiums from new insurance contracts
11,576
— 11,576
8,439
—
8,439
The following tables summarise the effect on the measurement components arising from the initial recognition of insurance and
reinsurance contracts not measured under the PAA in the year.
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Notes to the consolidated financial statements
(i) Life risk
Insurance contracts
2024
2023
Profitable
contracts
issued
Onerous
contracts
issued
Total
Profitable
contracts issued
Onerous
contracts
issued
Total
£m
£m
£m
£m
£m
£m
Claims and other insurance service expenses
payable
9,627
315
9,942
7,073
257
7,330
Insurance acquisition cash flows
538
125
663
503
4
507
Estimates of present value of cash outflows
10,165
440
10,605
7,576
261
7,837
Estimates of present value of cash inflows
(11,126)
(450)
(11,576)
(8,171)
(268)
(8,439)
Risk adjustment
211
11
222
170
7
177
CSM
750
—
750
425
—
425
Losses recognised on initial recognition
—
1
1
—
—
—
Reinsurance contracts
2024
2023
Contracts
initiated
without a loss
recovery
component
Contracts
initiated with
a loss
recovery
component
Total
Contracts
initiated without a
loss recovery
component
Contracts
initiated with a
loss recovery
component
Total
£m
£m
£m
£m
£m
£m
Estimates of present value of cash outflows
8,659
267
8,926
5,132
505
5,637
Estimates of present value of cash inflows
(8,295)
(284)
(8,579)
(4,996)
(499)
(5,495)
Risk adjustment
(177)
(9)
(186)
(140)
(14)
(154)
CSM
(187)
25
(162)
4
8
12
Income recognised on initial recognition
—
(1)
(1)
—
—
—
(ii) Participating
There were no Participating business contracts initially recognised in either the current or prior year.
(iii) Non-life
There were no non-life insurance contracts initially recognised (due to writing new business) in the prior year or current year
measured under the general measurement model.
(e) Contractual service margin emergence
The following tables set out when the Group expects to recognise the remaining CSM in the income statement for contracts
measured under the GMM or VFA, after allowing for future accretion of interest on the CSM for GMM contracts. The amounts
presented represent the net impact in each period of expected release of the CSM recognised in revenue less the accretion of
interest on the CSM recognised in insurance finance expenses.
Less than
one year
One to
two
years
Two to
three
years
Three to
four
years
Four to
five
years
Five to
ten years
10 to 15
years
15 to 20
years
Greater
than 20
years
Total
2024
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
Life risk
514
476
428
407
391
1,713
1,362
1,055
2,151
8,497
Participating
117
109
99
90
81
296
160
83
88
1,123
Non-life
1
1
1
1
1
1
—
—
—
6
Insurance contracts
632
586
528
498
473
2,010
1,522
1,138
2,239
9,626
Life risk
59
62
58
59
59
298
291
271
695
1,852
Participating
—
—
—
—
—
—
—
—
—
—
Non-life
1
1
—
—
—
—
—
—
—
2
Reinsurance contracts
60
63
58
59
59
298
291
271
695
1,854
Net CSM
572
523
470
439
414
1,712
1,231
867
1,544
7,772
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Notes to the consolidated financial statements
Less than
one year
One to
two years
Two to
three
years
Three to
four
years
Four to
five years
Five to
ten years
10 to 15
years
15 to 20
years
Greater
than 20
years
Total
2023
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
Life risk
483
420
378
361
346
1,499
1,179
917
1,795
7,378
Participating
88
85
81
76
71
280
164
90
105
1,040
Non-life
—
—
—
—
—
—
—
—
—
—
Insurance contracts
571
505
459
437
417
1,779
1,343
1,007
1,900
8,418
Life risk
45
49
47
46
45
202
173
154
409
1,170
Participating
—
—
—
—
—
—
—
—
—
—
Non-life
—
—
—
—
—
—
—
—
—
—
Reinsurance contracts
45
49
47
46
45
202
173
154
409
1,170
Net CSM
526
456
412
391
372
1,577
1,170
853
1,491
7,248
(f) Non-life claims development
The table illustrates how estimates of cumulative claims for the Group’s non-life business have developed over time on a gross
and net of reinsurance basis. Each table shows how the Group’s estimates of total claims for each accident year have developed
over time and reconciles the cumulative claims to the amount included in the statement of financial position. Balances have been
translated at the exchange rates prevailing at the reporting date as per note 1.
In the claims development table, the cumulative claim payments and estimates of cumulative claims for each accident year
are translated into sterling at the exchange rates that applied at the end of that accident year. The impact of using varying
exchange rates is shown at the bottom of each table. Disposals are dealt with by treating all outstanding and IBNR claims of the
disposed entity as ‘paid’ at the date of disposal.
The claims development table include information on asbestos and environmental pollution claims provisions from business
written more than 10 years ago. The undiscounted claim provisions, net of reinsurance, in respect of this business at 31 December
2024 were £82 million (2023: £78 million). The movement in asbestos and environmental pollution liabilities in the year reflects an
increase of £4 million due to adverse claims development.
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Notes to the consolidated financial statements
All prior
years
2015
2016
2017
2017
2019
2020
2021
2022
2023
2024
Total
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
Gross of reinsurance
Estimates of undiscounted cumulative claims
4,461 5,289 5,302 5,690 5,451 5,380 4,974 6,292 7,159 8,502
At end of accident year
4,491 5,334 5,354 5,613 5,422 5,345 5,044 6,123 7,239 8,502
—
One year
4,581 5,362 5,310 5,644 5,384 5,383 5,104 6,216 7,159
—
—
Two years
4,576 5,312 5,307 5,710 5,431 5,378 4,987 6,292
—
—
—
Three years
4,503 5,286 5,301 5,741 5,414 5,460 4,974
—
—
—
—
Four years
4,494 5,305 5,291 5,734 5,423 5,380
—
—
—
—
—
Five years
4,476 5,307 5,283 5,706 5,451
—
—
—
—
—
Six years
4,474 5,319 5,282 5,690
—
—
—
—
—
—
—
Seven years
4,482 5,298 5,302
—
—
—
—
—
—
—
—
Eight years
4,462 5,289
—
—
—
—
—
—
—
—
—
Nine years
4,461
—
—
—
—
—
—
—
—
—
—
Cumulative gross claims paid
(4,406) (5,126) (5,063) (5,409) (4,951) (4,443) (4,025) (4,757) (5,000) (3,970)
2,831
55
163
239
281
500
937
949 1,535 2,159 4,532 14,181
Effect of discounting
(1,102)
(7)
(28)
(28)
(25)
(88)
(47)
(70)
(124)
(194)
(312) (2,025)
Effect of the risk adjustment for
non-financial risk
108
3
6
10
12
22
36
40
64
92
166
559
Effect of claims payable
1
—
—
—
1
2
13
2
3
14
13
49
Cumulative effect of foreign
exchange movements
—
5
(6)
(7)
(7)
(11)
(17)
(18)
(59)
(67)
—
(187)
Effect of acquisitions
15
7
3
—
—
—
—
—
—
—
—
25
Claims liabilities classified within
the Liability for remaining coverage
—
—
—
—
—
—
—
—
—
—
(180) (180)
Gross liabilities for incurred
claims included in the statement
of financial position
1,853
63
138
214
262
425
922
903 1,419 2,004 4,219 12,422
Net of reinsurance
Estimates of undiscounted net cumulative claims
4,301 4,908 5,149 5,516 5,230 4,832 4,721 5,911 6,885 7,909
At end of accident year
4,338 4,996 5,193 5,457 5,263 4,889 4,876 5,794 6,912 7,909
—
One year
4,435 5,008 5,138 5,457 5,247 4,861 4,838 5,893 6,885
—
—
Two years
4,423 4,939 5,146 5,530 5,285 4,858 4,762 5,911
—
—
—
Three years
4,357 4,917 5,144 5,562 5,262 4,890 4,721
—
—
—
—
Four years
4,353 4,923 5,135 5,560 5,253 4,832
—
—
—
—
—
Five years
4,332 4,922 5,115 5,516 5,230
—
—
—
—
—
—
Six years
4,315 4,929 5,141 5,516
—
—
—
—
—
—
—
Seven years
4,295 4,912 5,149
—
—
—
—
—
—
—
—
Eight years
4,300 4,908
—
—
—
—
—
—
—
—
—
Nine years
4,301
—
—
—
—
—
—
—
—
—
—
Cumulative net claims paid
(4,226) (4,762) (4,932) (5,247) (4,827) (4,129) (3,877) (4,574) (4,830) (3,842)
998
75
146
217
269
403
703
844 1,337 2,055 4,067 11,114
Effect of discounting
(348)
(7)
(22)
(25)
(23)
(51)
(40)
(65)
(111)
(182) (289) (1,163)
Effect of the risk adjustment for
non-financial risk
11
2
6
8
11
18
23
35
51
84
142
391
Effect of non-performance risk of
reinsurers
1
—
—
—
—
—
—
1
2
2
5
11
Effect of claims payable
5
(4)
55
94
(24)
(30)
(98)
51
(8)
(97)
(20)
(76)
Cumulative effect of foreign
exchange movements
—
16
(15)
(13)
(6)
(9)
(10)
(19)
(52)
(55)
—
(163)
Effect of acquisitions
12
15
3
—
—
—
—
—
—
3
—
33
Reinsurance presented in net
liabilities for remaining coverage
1,007
—
—
—
—
—
—
—
—
—
— 1,007
Net liabilities for incurred claims
included in the statement of
financial position
1,686
97
173
281
227
331
578
847 1,219 1,810 3,905 11,154
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Notes to the consolidated financial statements
(g) Significant judgements, estimates and assumptions
This note gives details of the significant judgements made in applying IFRS 17, explaining the inputs, assumptions, methods and
estimation techniques used to measure insurance, participating investment and reinsurance contracts. Accounting policy C sets
out the critical accounting judgements and the material accounting estimates that are considered particularly susceptible to
changes in estimates and assumptions. This note provides further detail of how these are applied in the context of IFRS 17.
The Group underwrites life business primarily in the UK and Ireland. This is mainly written in the ‘Non-Profit’ funds and in a
number of ‘With-Profits’ sub-funds. In the ‘Non-Profit’ funds shareholders are entitled to 100% of the distributed profits. In the
‘With-Profits’ sub-funds the with-profits policyholders are entitled to between 40% and 100% of distributed profits, depending on
the fund rules. There is also the Reattributed Inherited Estate External Support Account (RIEESA) in the UK, which does not itself
underwrite any business, but provides capital support to one of the 'With-Profits' sub-funds and receives any surplus or deficit
emerging from it. In the RIEESA, shareholders are entitled to 100% of the distributed profits, but these can only be distributed in
line with the criteria set by the Reattribution Scheme.
The Group underwrites non-life business in the UK, Ireland and Canada, providing individual and corporate customers with
a wide range of insurance products.
Significant judgments, estimates and assumptions associated with measuring insurance products and associated reinsurance
are outlined below.
(i) Fulfilment cash flows
Fulfilment cash flows comprise:
• estimates of future cash flows;
• an adjustment (discount rate) to reflect the time value of money and the financial risks related to future cash flows, to the
extent that the financial risks are not included in the estimates of future cash flows; and
• a risk adjustment.
The Group’s objective in estimating future cash flows is to determine the expected value of a range of scenarios that reflects
the full range of possible outcomes. A deterministic approach, producing point estimates based on best estimate assumptions,
is used for valuing most of the Group’s business. The exception is for contracts with embedded options and guarantees,
in particular with-profits participation business, where a stochastic approach based on the average of a number of scenarios
is used. Stochastic modelling involves projecting future cash flows under a large number of possible economic scenarios for
market variables such as interest rates and equity returns.
Estimates of future cash flows
In estimating future cash flows, the Group incorporates, in an unbiased way, all reasonable and supportable information that is
available without undue cost or effort at the reporting date. This information includes both internal and external historical data
about claims and other experience, updated to reflect current expectations of future events.
The estimates of future cash flows reflect the Group’s view of current conditions at the reporting date, using market variables
consistent with observable market prices, where applicable.
When estimating future cash flows, the Group takes into account current expectations of future events that might affect those
cash flows. However, expectations of future changes in legislation that would change or discharge a present obligation or create
new obligations under existing contracts are not taken into account until the change in legislation is substantively enacted. For
cash flows which are contractually linked to an index of prices or wages, the Group derives an assumption for future RPI from RPI
swap curves, and adjusts this to derive future inflation assumptions for other price and wage indices.
Cash flows within the boundary of a contract relate directly to the fulfilment of the contract, including those for which the Group
has discretion over the amount or timing. These include payments to (or on behalf of) policyholders, insurance acquisition cash
flows and other costs that are incurred in fulfilling contracts.
Insurance acquisition cash flows arise from the activities of selling, underwriting and starting a group of contracts that are
directly attributable to the portfolio of contracts to which the group belongs. This includes initial and recurring commissions
payable on instalment premiums receivable within the contract boundary. Other costs that are incurred in fulfilling the
contracts include:
• claims handling, maintenance and administration costs;
• costs that the Group will incur in providing investment services;
• costs that the Group will incur in performing investment activities to the extent that the Group performs them to enhance
benefits from insurance coverage for policyholders by generating an investment return from which policyholders will benefit
if an insured event occurs; and
• income tax and other costs specifically chargeable to the policyholders under the terms of the contracts.
Insurance acquisition cash flows and other costs that are incurred in fulfilling contracts comprise both direct costs and an
allocation of fixed and variable overheads.
Cash flows are attributed to acquisition activities, other fulfilment activities and other activities at local entity level using
activity-based costing techniques. Cash flows attributable to acquisition and other fulfilment activities are allocated to
groups of contracts using methods that are systematic and rational and are consistently applied to all costs that have similar
characteristics.
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Contract boundaries
The assessment of the contract boundary, which defines which future cash flows are included in the measurement of a contract,
requires judgement and consideration of the Group’s substantive rights and obligations under the contract as follows.
Insurance contracts
Group protection policies issued by the Group have terms that are guaranteed to be renewable every two or three years.
The Group determines that the cash flows related to future renewals (i.e. the guaranteed renewable terms) of these contracts
are outside the contract boundary. This is because the premium charged for the period reflects the Group’s expectation of its
exposure to risk for that period and, on renewal, the Group can reprice the premium to reflect the reassessed risks for the next
period based on claims experience and expectations for the respective portfolio. Any renewal of the contract is treated as a new
contract and is recognised, separately from the initial contract, when the recognition criteria are met.
Pension savings contracts with guaranteed annuity terms allow the policyholder to convert, on maturity of the stated term,
the maturity benefit into an immediately starting life-contingent annuity at a predetermined rate. The Group has assessed the
contract boundary for the entire contract, including the option, and concluded that the cash flows related to the fulfilment of
the annuity option fall within the boundary of the contract. This is because the Group does not have the practical ability to
reprice the contract on maturity of the stated term.
Reinsurance contracts
Quota share - The Group manages risks arising from Life insurance contracts through external quota share reinsurance
contracts. These reinsurance contracts cover underlying contracts issued within the term on a risk-attaching basis and provides
unilateral rights to both the Group and the reinsurer to terminate the cession of new business subject to giving notice to the other
party. Notice can usually be given at any time, with termination to new business effective three months from notice being given,
albeit a limited number of the Group’s quota share reinsurance contract currently stipulate a different notice period. On initial
recognition, the cash flows within the reinsurance contract boundary are determined to be those arising from underlying
contracts that the Group expects to issue and cede under the reinsurance contract within the next three months. Subsequently
risks expected to attach beyond the end of this initial notice period are considered cash flows of new reinsurance contracts and
are recognised, separately from the initial contract, as they fall within the rolling three-month notice period.
Excess of loss - The Group’s non-Life excess of loss reinsurance contracts held provide coverage for claims incurred during an
accident year. Thus, all cash flows arising from claims incurred and expected to be incurred in the accident year are included in
the measurement of the reinsurance contracts held. Some of these contracts include mandatory reinstatement premiums, which
are guaranteed per the contractual arrangements and are thus within the contract boundary. Estimated reinstatement premiums
due are offset against recoveries within the liability for incurred claims.
Risk attaching reinsurance - The Group’s risk-attaching non-life treaties have varying coverage periods, ranging from annual
treaties to indefinite treaties. Such treaties provide unilateral rights to the Group and reinsurer to terminate the cession of new
business by giving notice to the other party based upon notice periods defined by the treaty. On initial recognition, the cash flows
within the reinsurance contract boundary are determined to be those arising from underlying contracts that the Group expects to
issue and cede under the reinsurance contract within the termination notice period. Subsequently risks attaching beyond the end
of the initial termination notice period are considered cash flows of new reinsurance contracts and are recognised, separately
from the initial contract, as they fall within subsequent termination notice periods.
Adverse development cover - The Group’s non-Life adverse development cover treaties are deemed to expire when all
uncertainty associated with the ceded claims liabilities has expired. The contract boundary is based upon the best estimate of
when all obligations associated with the liabilities will be extinguished.
Life contracts
Death and other claim benefits
Death and other claim benefits are projected using decrements appropriate to each class of business, including persistency,
mortality and morbidity.
Mortality assumptions are set with regard to recent Company experience and general industry trends. Local, generally accepted,
published standard mortality tables are used for different categories of business as appropriate.
The mortality tables used in the valuation for the most material lines of business are summarised below:
2024
2023
UK business
Life protection
AM00/AF00 or TM16/TF16 adjusted for
smoker status and age/sex specific
factors with allowance for future
mortality improvements
AM00/AF00 or TM16/TF16 adjusted for
smoker status and age/sex specific
factors with allowance for future
mortality improvements
Pure endowments
and deferred annuities
before vesting
AM00/AF00 adjusted with allowance
for improvements
AM00/AF00 adjusted with allowance for
improvements
Ireland business
Life protection
TMS08/TMN08/TFS08/TFN08
adjusted
plus allowance for future mortality
improvement
TMS08/TMN08/TFS08/TFN08 adjusted
plus allowance for future mortality
improvement
Annuity payments
The conventional immediate and deferred annuity business is valued by discounting future benefit payments with an allowance
for mortality, including future improvements in mortality. Mortality assumptions are set with regard to Company experience and
general industry trends.
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The mortality tables used in the valuation for the most material lines of business are summarised below:
2024
2023
UK business
Pensions business and
general annuity business
PMA16_IND/PFA16_IND or
PMA16_IND_INT/PFA16_IND_INT plus
allowance for future mortality
improvement
PMA16_IND/PFA16_IND or
PMA16_IND_INT/PFA16_IND_INT plus
allowance for future mortality
improvement
Bulk purchase annuities
CV6 plus allowance for future
mortality improvement
CV3 plus allowance for future mortality
improvement
Ireland business
Annuities
PMA08/PFA08 (conventional) adjusted
plus allowance for future mortality
improvement
PMA08/PFA08 (conventional) adjusted
plus allowance for future mortality
improvement
For the largest portfolio of pensions annuity business, the underlying mortality assumptions, before risk adjustment for males are
104.1% of PMA16_IND with base year 2016 (2023: 106.6% of PMA16_IND with base year 2016). For females the underlying mortality
assumptions, before risk adjustment, are 100.0% of PFA16_IND with base year 2016 (2023: 101.3% of PFA16_IND with base year
2016). The base rates on some contracts are adjusted for lifestyle, medical, and other factors.
Improvements before risk adjustment are based on ‘CMI_2023 (S=7.25) Advanced with adjustments’ (2023: ‘CMI_2022 (S=7.25)
Advanced with adjustments’) with zero weight on 2022 and 2023 data within the model. Instead of placing weight on post-
pandemic data within the CMI improvements model, a separate adjustment is made to reflect the impact that the drivers of
excess mortality post-pandemic are expected to have in future years. This adjustment was added to the base table % in 2023 but
it is now an explicit overlay (and this change is part of the reason for base table % falling 2023 to 2024). We use a long-term
improvement rate of 1.5% for both males and females (31 December 2023: 1.5% for both males and females) . An allowance has
been made to adjust for greater mortality improvements in the annuitant population relative to the general population on which
CMI_2023 is based, using a parameter of 0.15% for males and 0.20% for females (for 2023 the same approach was taken with
respect to CMI_2022).
Expenses
Maintenance expense assumptions for life business are generally expressed as a per policy charge set with regards to an
allocation of current year expense levels by category of business, adjusted for known changes in contractual arrangements with
external suppliers and using the policy counts for in-force business. Expenses are generally charged to with-profits funds using a
fixed per policy charge in line with a memorandum of understanding between the with-profits funds and the non-profit fund
within the company. Any differential between that and the total charge for each policy accrues to the non-profit fund and is also
included in the fulfilment cash flows. The assumptions also include an allowance for future expense inflation over the lifetime of
each contract, which is assumed to be in line with RPI. An additional liability is held if projected per policy expenses in future
years are expected to exceed current assumptions. A further allowance is made for non-discretionary project costs that typically
relate to mandatory requirements. Investment expense assumptions are generally expressed as a proportion of the assets
backing the liabilities.
Non-life contracts
The Group establishes reserves for claim events that occurred before the valuation date, whether reported or not. When calculating
claim costs, the Group takes into account estimated future recoveries from salvage and subrogation. Where non-Life contracts
are onerous, the measurement of the loss component includes an estimate of future claims that are expected to occur within the
remaining coverage period.
The undiscounted ultimate cost of outstanding claims is estimated by using a range of standard actuarial claims projection
techniques, such as the Chain Ladder and Bornhuetter-Ferguson methods. Historical claims development is mainly analysed by
accident period, although underwriting or notification period is also used where this is considered appropriate.
The assumptions used in most non-life actuarial projection techniques, including future rates of claims inflation or loss ratio
assumptions, are implicit in the historical claims development data on which the projections are based. Additional qualitative
judgement is used to assess the extent to which past trends may not apply in the future in order to arrive at a point estimate for
the ultimate cost of claims that represents the likely outcome. The ultimate cost of outstanding claims includes provision for
expenses associated with handling claims.
UK mesothelioma claims
The level of uncertainty associated with latent claims is considerable due to the relatively small number of claims and the long-
tail nature of the liabilities. UK mesothelioma claims account for a large proportion of the Group’s latent claims. The key assumptions
underlying the estimation of these claims include claim numbers, the base average cost per claim, future inflation in the average
cost of claims and legal fees. The best estimate of the liabilities considers the latest available market information and studies and
how these might impact Aviva’s liabilities.
Lump sums payable to bodily injury claimants
Lump sum payments in settlement of UK bodily injury claims are influenced by the Ogden discount rate among other factors.
The Ogden discount rate is set by the Lord Chancellor and is applied when calculating the present value of future care costs and
loss of earnings for claims settlement purposes. The Lord Chancellor announced in December 2024 that the Ogden discount rate
applicable to claims settled from 11th January 2025 is +0.5% (previously -0.25%).
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Discount rates
All cash flows are discounted using risk-free yield curves adjusted to reflect the characteristics of the cash flows and the liquidity
of the insurance contracts. For the risk-free yield curves, the Group generally uses the risk-free interest rate curves published by
the PRA and EIOPA for regulatory reporting, which are based on swap rates and in the UK based on SONIA (Sterling Over Night
Index Average). In Canada, the Group uses the Bank of Canada zero-coupon bond curve. Where necessary, yield curves are
interpolated between the last available market data point and an ultimate forward rate, which reflects long-term real interest rate
and inflation expectations.
The Group uses a bottom-up discount rate for all life and non-life insurance contracts except for annuities. A top-down discount
rate is applied to annuities to reflect more appropriately the characteristics of the annuity liabilities. For other contracts where
liabilities are subject to lapse risk or where cash flows depend on underlying asset performance (such as unit-linked and with-
profits), the characteristics of the liability can be reflected using the bottom-up method which requires the application of less
judgement.
Under the top-down approach, the discount rate is determined from the yield implicit in the fair value of an appropriate reference
portfolio of assets that reflects the characteristics of the liabilities. Adjustments are made for differences between the reference
portfolio and liability cash flows, including an allowance for defaults which reflects the compensation a market participant would
require for credit risk.
For the measurement of new annuity business at inception only, the discount rates are based on assets expected to be originated
for new business at initial recognition of the contracts. On subsequent measurement of the fulfilment cash flows the reference
portfolio is based on the assets held to match the portfolio of liabilities. For recently written contracts, an adjustment is made to
liabilities where appropriate assets are yet to be sourced.
Under the bottom-up approach, the discount rate is determined as the risk-free yield, adjusted for differences in liquidity
characteristics between the financial assets used to derive the risk-free yield and the relevant liability cash flows (known as an
‘illiquidity premium’).
For UK and Ireland business, the illiquidity premium is determined as a percentage of the current spread over the risk-free yield
on an index of covered bonds. For Canadian business, the illiquidity premium is determined with reference to a spread of bonds
available on the market. The percentage applied reflects the liquidity characteristics of the liabilities including the propensity and
ability of policyholders to lapse or surrender their contracts; for example, 100% for structured settlements where surrenders are
not possible, and 0% for unit-linked contracts where policyholders can normally immediately surrender their contract for the unit
value. An intermediate percentage is applied for other types of business. In Canada, a single illiquidity premium is selected given
the limited duration differences and similar liquidity characteristics.
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The tables below set out key points on the yield curves used to discount the cash flows of insurance contracts for major
currencies:
2024
2023
1 year
5
years
10
years
15
years
20
years
40
years
1 year
5
years
10
years
15
years
20
years
40
years
Life contracts
Immediate and deferred annuities
GBP
6.2 %
5.8 %
5.8 %
6.0 %
6.0 %
5.8 %
6.5 %
5.1 %
5.0 %
5.2 %
5.2 %
4.9 %
EUR
3.4 %
3.3 %
3.4 %
3.4 %
3.4 %
3.7 %
4.3 %
3.2 %
3.3 %
3.4 %
3.3 %
3.6 %
Life protection contracts
GBP
4.7 %
4.3 %
4.3 %
4.4 %
4.5 %
4.2 %
5.1 %
3.7 %
3.6 %
3.7 %
3.8 %
3.5 %
EUR
2.5 %
2.4 %
2.5 %
2.6 %
2.5 %
2.7 %
3.6 %
2.5 %
2.6 %
2.7 %
2.6 %
2.8 %
With-profits contracts
GBP
4.8 %
4.4 %
4.4 %
4.5 %
4.6 %
4.3 %
5.2 %
3.7 %
3.8 %
3.9 %
3.9 %
3.6 %
EUR
2.5 %
2.4 %
2.5 %
2.6 %
2.5 %
2.7 %
3.6 %
2.5 %
2.6 %
2.7 %
2.6 %
2.8 %
Unit-linked contracts
GBP
4.5 %
4.0 %
4.1 %
4.2 %
4.3 %
4.0 %
4.7 %
3.4 %
3.3 %
3.4 %
3.4 %
3.2 %
EUR
2.5 %
2.4 %
2.5 %
2.6 %
2.5 %
2.7 %
3.6 %
2.5 %
2.6 %
2.7 %
2.6 %
2.8 %
Non-life contracts
Structured settlements
GBP
4.9 %
4.5 %
4.5 %
4.7 %
4.7 %
4.5 %
5.4 %
4.0 %
3.9 %
4.0 %
4.1 %
3.8 %
Latent claims
GBP
4.8 %
4.4 %
4.4 %
4.5 %
4.6 %
4.3 %
5.2 %
3.8 %
3.8 %
3.9 %
3.9 %
3.6 %
EUR
2.6 %
2.5 %
2.7 %
2.7 %
2.6 %
2.9 %
3.9 %
2.8 %
2.9 %
3.0 %
2.9 %
3.2 %
Other general insurance claims
GBP
4.7 %
4.3 %
4.3 %
4.4 %
4.5 %
4.2 %
5.1 %
3.7 %
3.6 %
3.7 %
3.8 %
3.5 %
EUR
2.5 %
2.4 %
2.5 %
2.6 %
2.5 %
2.8 %
3.7 %
2.7 %
2.7 %
2.8 %
2.7 %
3.1 %
CAD
3.6 %
3.6 %
3.8 %
3.9 %
3.9 %
4.0 %
5.4 %
3.9 %
3.9 %
3.9 %
3.9 %
3.8 %
The yields used are after a reduction for risk, but before allowance for investment expenses (which are included in the expected
future cash flows).
For annuity business, the allowance for risk comprises long-term assumptions for defaults or, in the case of equity release
assets, expected losses arising from the No-Negative-Equity Guarantee. These allowances vary by asset category and for some
asset classes by rating.
The risk allowances made for corporate bonds (including overseas government bonds and structured finance assets), mortgages
(including healthcare mortgages, commercial mortgages and infrastructure assets), and equity release equated to 34bps, 23bps,
and 52bps respectively at 31 December 2024 (2023: 36bps, 25bps, and 89bps respectively).
For with-profits business, the liabilities associated with guarantees and options are measured using a market-consistent
stochastic model. The cash flows are discounted at scenario-specific rates calibrated, on average, to be the bottom-up discount
rates. Volatility assumptions are set with reference to implied volatility data on traded market instruments, where available, or on
a best estimate basis where not.
2024
2023
Equity returns
15.3 %
17.8 %
Property returns
14.5 %
15.0 %
The equity volatility used depends on term, moneyness and region. The figure shown is for a sample UK equity, at the money,
with a ten-year term.
Risk adjustments for non-financial risk
The risk adjustment for non-financial risk reflects the compensation required by the Group to accept the uncertainty about the
amount and timing of future cash flows that arises from non-financial risk. The calculation of the risk adjustment is calibrated
with reference to the Group’s pricing and capital allocation framework. The calibration leverages the Solvency II view of non-
financial risk, considering a lifetime view, but excludes financial risks which are included within the Solvency II risk margin. The
risk adjustment includes diversification between different portfolios of insurance and participating investment contracts, financial
and non-financial risks, non-participating investment contracts and other non-insurance contracts using correlation matrix
techniques. Diversification between entities across the Group is not included.
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For life business, the risk adjustment is allocated to individual contracts, including reinsurance contracts, using provisions for
adverse deviation (PADs) applied to the best estimate non-financial assumptions.
For non-life business, the risk adjustment is allocated to groups of contract level based upon their capital intensity, with a greater
amount allocated to contract groups with greater valuation uncertainty. Initially the Group applies these techniques on a net of
reinsurance basis before calculating gross up factors for each group of contracts and calculating the reinsurance risk adjustment
as the difference between net and gross.
For with-profits contracts the risk adjustment reflects the shareholder’s interest in the with-profits fund. However, for non-profit
contracts in the with-profit funds, the fund is treated as the entity and the risk adjustment reflects a 100% share of the risk, as for
other non-profit business.
The Group estimates the Risk Adjustment’s corresponding confidence level by comparing the combined value of best estimate
cash flows and Risk Adjustment with a distribution of possible outcomes on an ultimate horizon. For life and participating
contracts the confidence interval, net of reinsurance corresponds to the 68th percentile (2023: 68th percentile), for non-life
contracts it corresponds to the 80th percentile (2023: 77th percentile). The percentiles disclosed benefit from the diverse profile
of entities within the Group, but not from diversification between the Group's Life and non-Life segments and are uncertain
estimates made as of 31 December, which could reasonably change within 12 months. Factors which could cause them to change
include variations in the Company's risk profile or quantification thereof, for example as might arise from economic factors such
as changes in risk-free discount rates or changes in the composition of insurance liabilities. the movements in the value of the net
risk adjustment required to move the confidence level by 2.5 percentage points can be seen in the table below. The figures
assume that there are no changes in estimate of future cashflows when in reality a lot of factors which influence the risk
adjustment calibration will also impact the estimate of future cashflows.
2024
2023
£m
£m
Life and participating business
Movement in net risk adjustment required for 2.5pp confidence level increase
54
65
Movement in net risk adjustment required for 2.5pp confidence level reduction
(54)
(65)
Non-Life business
Movement in net risk adjustment required for 2.5pp confidence level increase
46
45
Movement in net risk adjustment required for 2.5pp confidence level reduction
(44)
(41)
For Life risk and Participating contracts, this is the confidence level that the liabilities recognised and associated reinsurance
balances, excluding CSM, are sufficient to cover the ultimate cost of in-force insurance liabilities applying period end assumptions.
For non-Life contracts, this represents the confidence level that net claims liabilities recognised are sufficient to cover the
ultimate cost of claims. Net non-Life claims liabilities include the liability for incurred claims, asset for incurred claims and the
asset for remaining coverage on reinsurance contracts held that reinsure against adverse development on incurred claims.
(ii) Contractual service margin
Determination of coverage units
The amount of CSM recognised in profit or loss to reflect services provided in each year is determined by considering, for each
group of contracts, coverage units that reflect the quantity of the benefits provided in each period and the expected coverage
period. The coverage units are reviewed and updated at each reporting date.
The coverage units used by major product lines are:
Product line
Coverage units
Immediate annuity
Annuity outgo
Deferred annuity
Annuity outgo for insurance service post retirement and weighted expected
investment return for the investment return service provided prior to retirement
Individual and Group Protection
Sum assured
Individual and Group Income Protection
Benefit amount payable
Unit linked insurance
Sum assured including unit value
With-profits
Cost of guarantees plus asset share
For deferred annuities, judgement has been applied in determining the appropriate method for measuring coverage units and the
weighting of those coverage units across the investment return service provided prior to retirement and the insurance service
provided post-retirement. That judgement was supported by evidence of market pricing of these services, resulting in an
approach that targets equivalence at retirement with the CSM for immediate annuities (when pricing in an active market) that
provide an insurance service equivalent to that provided by the deferred annuities post-retirement.
The coverage units for the investment return service combine the expected investment return with the weighting that produces
the target CSM after allowing for expected retirement date, transfers and commutations. There is limited estimation uncertainty
arising when applying this approach, not least because the weighting of services does not directly impact on the measurement of
the CSM, instead it impacts on the pattern of CSM release over the long life of these contracts. Expected investment return is
calculated using the locked in discount rate throughout the life of the contract, to represent the investment return that
policyholders benefit from through the pricing of their contract.
Expected rates of transfers taken by retirement date and take up rates for tax free cash (the main commutations taken at
retirement in the UK) are not typically subject to significant fluctuations.
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Coverage units for reinsurance contracts held are typically consistent with the underlying gross contracts, adjusted for
differences in the services provided.
Risk mitigation option
The Group uses derivatives and financial investments to mitigate the financial risk arising from equity and interest rate exposures
in UK with-profit funds, in accordance with its documented risk management objective and strategy for mitigating financial risk.
An economic offset exists between the insurance contracts and the risk-mitigating items (derivatives and financial investments
held at FVTPL), and credit risk does not dominate the economic offset.
For the with-profit sub-fund supported by the RIEESA, the Group has chosen to apply the risk mitigation option. Certain changes
in variable fee cash flows are recognised in profit or loss, and do not adjust the CSM, as they arise from changes in equity and
interest rate risks that are mitigated by the use of derivatives and financial investments held at FVTPL.
(iii) Investment components
The Group identifies the investment component of a contract by determining the amount that it would be required to repay to
the policyholder in all scenarios with commercial substance. These include circumstances in which an insured event occurs or
the contract matures or is terminated without an insured event occurring. Investment components and rights to withdraw are
both excluded from insurance revenue and insurance service expenses, and variances between actual and expected cash flows
adjust the CSM.
Participating and some non-participating whole-life contracts have explicit surrender values. The non-distinct investment
component excluded from insurance revenue and insurance service expenses is determined as the surrender value specified
in the contractual terms.
Immediate annuities with a guarantee period contain a non-distinct investment component equal to the value of those
guaranteed payments.
Deferred annuities include a non-distinct investment component if all of the following features are present:
• transfer value in the deferral period;
• death benefit in the deferral period; and
• guarantee period once the annuity is in payment.
The investment component excluded from insurance revenue and insurance service expenses is determined as the lower of the
present value of each of those possible payments. Any amounts in excess of the investment component, or any payments made
under those features that do not qualify as an investment component, are treated as rights to withdraw. In either case, transfer
values paid during the deferral period are presented as premium refunds.
(iv) Fair value of insurance contracts and measurement of contracts on transition to IFRS 17
When the Group acquires insurance contracts measured under the GMM or VFA in a business combination it measures the CSM
at acquisition by reference to the fair value of the contracts at the acquisition date less the fulfilment cash flows. The Group also
applied the fair value approach on transition to IFRS 17 to all life business written prior to 2016, including annuities, except for
groups to which the modified retrospective approach (MRA) was applied (as described below).
In this context fair value is derived in accordance with IFRS 13 Fair Value Measurement (except, where relevant, a demand
deposit floor is not applied) and represents the price a market participant would require to assume the insurance contract
liabilities in an orderly transaction. As quoted market prices are not available for groups of insurance contracts, valuation models
are used to calculate the fair value of each group at the transition or acquisition date. The choice of model and inputs to the
model involves judgement and this gives rise to a range of plausible fair values.
Whilst the fair value at acquisition or transition impacts the size of the CSM that will subsequently be recognised in profit over the
remaining life of the contracts applying the accounting policy set out in accounting policy M, the fair value model and inputs
to that model will not be applied to, or result in adjustment to, any subsequent measurement of the CSM.
The valuation models applied at transition and to subsequent acquisitions determined the fair value using a cost of capital
approach. Expected cash flows and the required capital to run the business were projected forward, applying an appropriate
weighted average cost of capital (WACC). Inputs were calibrated to those Aviva would expect market participants to have used
had they priced the insurance contracts for transfer to them at the transition or acquisition date.
The Group also applied the MRA to certain groups of UK individual protection business written in the period 2012-2015 and certain
groups of acquired UK unit-linked and with-profits business on transition to IFRS 17. Where information was not available to
undertake the fully retrospective approach (FRA) in relation to UK unit-linked and with-profit business, modifications were
applied in respect of: calculation of the CSM at the transition date and use of information available at the transition date for the
assessment of contracts within the scope of IFRS 17, eligibility for the VFA measurement model and grouping of contracts. The
aim was to achieve the closest possible outcome to the FRA.
(h) Financial guarantees and options
This note details the financial guarantees and options inherent in some of our insurance and participating investment contracts.
For insurance and participating investment contracts, the Group’s objective in estimating future cash flows is to determine the
expected value of a range of scenarios that reflects the full range of possible outcomes. For contracts with embedded options
and guarantees, in particular with-profits business, a stochastic approach based on the average of a number of scenarios is
typically used. Stochastic modelling involves projecting future cash flows under a large number of possible economic scenarios
for market variables such as interest rates and equity returns.
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Notes to the consolidated financial statements
(a) UK non-profit business
The material guarantees and options relating to non-profit business are:
(i) Guaranteed annuity options
The Group’s UK non-profit funds have written contracts which contain guaranteed annuity rate options (GAOs), where the
policyholder has the option to take the benefits from a policy in the form of an annuity based on guaranteed conversion rates.
Liabilities for these guarantees do not materially differ from a provision based on a market-consistent stochastic model, and
amount to £29 million at 31 December 2024 (2023: £24 million).
(ii) Guaranteed unit price on certain products
Certain pension products linked to long-term life insurance funds provide policyholders with guaranteed benefits at retirement
or death. No additional liability is held for this guarantee as the investment management strategy for these funds is designed to
ensure that the guarantee can be met from the fund, mitigating the impact of large falls in investment values and interest rates.
(iii) Return of Premium guarantees
German pension products sold in Friends Life between 2006 and 2014 are subject to a return of premium guarantee whereby
the product guarantees to return the maximum of the unit fund value or total premiums paid (before deductions). Liabilities for
this guarantee are calculated using a market-consistent stochastic model and amount to £77 million at 31 December 2024
(2023: £88 million).
(b) UK with-profits business
The material guarantees and options relating to with-profit business are:
(i) Maturity value and death benefit guarantees
Significant conventional and unitised with-profits business have minimum maturity (and in some cases death benefit) values
reflecting the sum assured plus declared annual bonus. For some unitised with-profits life contracts the amount paid after the
fifth policy anniversary is guaranteed to be at least as high as the premium paid increased in line with the rise in retail price
index (RPI) or consumer price index (CPI).
(ii) No market valuation reduction (MVR) guarantees
For unitised business, there are circumstances where a ‘no MVR’ guarantee is applied, for example on certain policy anniversaries,
guaranteeing that no market value reduction will be applied to reflect the difference between the accumulated value of units and
the market value of the underlying assets.
(iii) Guaranteed annuity options
The Group’s UK with-profits funds have written individual and group pension contracts which contain GAOs, where the policyholder
has the option to take the benefits from a policy in the form of an annuity based on guaranteed conversion rates. The Group also
has exposure to GAOs and similar options on deferred annuities.
Liabilities for the cost of guarantees in respect of GAOs in the UK with-profits funds were £439 million at 31 December 2024
(2023: £545 million). With the exception of the with-profits sub-fund supported by the RIEESA, movements in the GAO liabilities
in the with-profits funds are offset by a corresponding movement in the estate to be distributed between policyholders and
shareholders. The (immediate) impact on profit arises from the mismatch between the remeasurement of the variable fee
(using current market consistent financial assumptions) and remeasurement of the CSM (using locked-in financial assumptions),
together with the incremental amortisation of the change to the CSM. Liabilities for GAOs in the with-profits sub-fund supported
by the RIEESA were £32 million at 31 December 2024 (2023: £44 million).
(iv) Guaranteed minimum pension
The Group’s UK with-profits funds also have certain policies that contain a guaranteed minimum level of pension as part of the
condition of the original transfer from state benefits to the policy.
(v) Guaranteed minimum maturity payments on mortgage endowments
The with-profits funds made promises to certain policyholders in relation to their with-profits mortgage endowments. Top-up
payments will be made on these policies at maturity to meet the mortgage value up to a maximum of the 31 December 1999
illustrated shortfall.
(c) Ireland
(i) Guaranteed annuity options and guaranteed maturity values
Guarantees and options in Ireland include GAOs, minimum maturity values on conventional with-profits business, guaranteed
minimum bonus rates on unitised with profits business, and a ‘no MVR’ guarantee that may apply at certain policy anniversaries.
Guarantees and options are measured using stochastic methods, and for some smaller with-profit funds closed form solutions.
40 – Non-participating investment contracts
This note analyses our gross liabilities for non-participating investment contracts by type of product and describes the
calculation of these liabilities.
(a) Carrying amount
Non-participating investment contracts as at 31 December comprised:
2024
2023
£m
£m
Liabilities for non-participating investment contracts
179,142 158,588
Reinsurance assets for non-participating investment contracts
(5,280)
(4,713)
Net non-participating investment contracts
173,862 153,875
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Notes to the consolidated financial statements
(b) Group practice
Investment contracts are those that do not transfer significant insurance risk from the contract holder to the issuer and if they
do not contain a significant discretionary participation feature they are treated as financial instruments in scope of IFRS 9.
Many investment contracts contain a discretionary participation feature in which the contract holder has a contractual right to
receive additional benefits as a supplement to guaranteed benefits. These are referred to as participating contracts and are
measured according to the methodology as prescribed by IFRS 17 insurance contracts.
Investment contracts that do not contain a discretionary participation feature are referred to as non-participating contracts
and the liability is measured at fair value. For non-participating investment contracts designated at FVTPL, the Group elects to
present the change in fair value attributable to a change in the credit risk of the contracts in the income statement.
Of the non-participating investment contracts measured at fair value, £179,070 million at 31 December 2024
(2023: £158,498 million) are unit-linked in structure and the fair value liability is equal to the current unit fund value, including any
unfunded units, plus if required, additional non-unit reserves based on a discounted cash flow analysis.
These contracts are generally classified as Level 1 in the fair value hierarchy, as the unit reserve is calculated as the publicly
quoted unit price multiplied by the number of units in issue, and any non-unit reserve is insignificant.
For unit-linked business, a deferred acquisition cost asset and deferred income reserve liability are recognised in respect of
transaction costs and front-end fees respectively, that relate to the provision of investment management services, and which are
amortised on a systematic basis over the contract term. The amount of the related deferred acquisition cost asset is shown in
note 29 and the deferred income liability is shown in note 47.
For non-participating investment contracts acquired in a business combination, an acquired value of in-force business asset is
recognised in respect of the fair value of the investment management services component of the contracts, which is amortised
on a systematic basis over the useful lifetime of the related contracts. The amount of the acquired value of in-force business
asset is shown in note 17, which relates primarily to the acquisition of Friends Life in 2015 and Friends First in 2018.
(c) Movements in the year
The following movements have occurred in the gross provisions for non-participating investment contracts in the year:
Carrying amount
2024
2023
£m
£m
At 1 January
158,588
141,188
Liabilities in respect of new business
5,212
4,243
Expected change in existing business
(5,038)
(3,263)
Variance between actual and expected experience
20,802
16,589
Other movements recognised as an expense
—
40
Change in liability
20,976
17,609
Foreign exchange rate movements
(422)
(164)
Other movements1
—
(45)
At 31 December
179,142 158,588
1. Other movements in 2023 related to a reallocation between non-participating investment liabilities and non-participating reinsurance assets of £(45) million
For unit-linked investment contracts, movements in asset values are offset by corresponding changes in liabilities, limiting the net
impact on profit. The variance between actual and expected experience in 2024 of £20,802 million is primarily due to higher than
expected investment returns following material increases in global equity markets.
The following movements have occurred in the reinsurance asset for non-participating investment contracts in the year:
Carrying amount
2024
2023
£m
£m
At 1 January
4,713
5,290
Assets in respect of new business
84
88
Expected change in existing business assets
(120)
(261)
Variance between actual and expected experience
603
456
Other movements recognised as an expense1
—
(815)
Change in asset
567
(532)
Other movements2
—
(45)
At 31 December
5,280
4,713
1. £815 million of policyholder assets transferred from reinsured funds to non-reinsured funds during 2023
2. Other movements in 2023 related to a reallocation between non-participating investment liabilities and non-participating reinsurance assets of £(45) million
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Notes to the consolidated financial statements
41 – Effect of changes in non-financial assumptions and estimates during the year
This note analyses the impact of changes in estimates and assumptions from 2023 to 2024, on liabilities for insurance and
investment contracts, and related assets and liabilities, such as reinsurance, deferred acquisition costs and acquired value of in-
force business and does not allow for offsetting movements in the value of backing financial assets.
2024
2023
Assumptions
Fulfillment
Cash Flows
(FCF)
Change in
CSM
Effect on
profit
Fulfillment
Cash Flows
(FCF)
Change in
CSM
Effect on
profit
£m
£m
£m
£m
£m
£m
Expenses
95
(65)
(29)
59
(63)
4
Persistency rates
(2)
35
(33)
(9)
9
—
Mortality and morbidity for assurance contracts
(1)
20
(19)
18
(18)
—
Longevity for annuity contracts
(54)
21
33
(456)
528
(72)
Tax and other assumptions
(12)
7
5
(98)
108
(10)
Long-term insurance and participating investment business
26
18
(44)
(486)
564
(78)
Expenses
—
—
—
—
—
—
Long-term non-participating investment business
—
—
—
—
—
—
Total
26
18
(44)
(486)
564
(78)
Of the £29 million loss from expense assumption changes in 2024, £20 million profit arises from discount rate mismatches (lack
of full offset between FCF and CSM) and £49 million loss arises on onerous contracts, where the full impact from FCF is
recognised as loss.
The impact of change in mortality and morbidity assumptions for assurance contracts for both 2024 and 2023 relates mainly
to a review of recent experience. In 2023 business also moved onto the latest CMI series tables.
Longevity assumption changes during this year are valued at £54 million reduction in FCF (valued at opening market discount
rates) and £21 million increase in CSM (discount rates locked in at the time of business inception), giving a total profit of £33
million, mainly due to the mismatch between those discount rates. Updates have been made to mortality improvements and
reflecting recent experience in base mortality.
Longevity assumptions changes in 2023 were valued at £456 million reduction in FCF (valued at opening market discount rates)
and £528 million increase in CSM (discount rates locked in at the time of business inception), giving a total loss of
£72 million.
The three largest contributors were:
• introduction of an explicit adjustment for post-pandemic mortality,
• updates to the mortality improvement model moving onto the latest CMI_2022 model from CMI_2021, to incorporate revised
population data, and
• improved assumptions for the proportion of BPA customers that are married.
Tax and other assumption changes in 2023 were mainly comprised of changes in provisions for risk adjustment on annuities,
where the movements in FCF and CSM largely offset.
42 – Tax assets and liabilities
This note analyses the tax assets and liabilities that appear in the statement of financial position and explains the movements
in these balances in the year.
(a) Current tax
Current tax assets recoverable and liabilities payable in more than one year are £85 million and £0 million (2023: £85 million and
£1 million), respectively.
The Group is party to the CFC & Dividend Group Litigation Order, which challenged the tax treatment of dividends received from
non-UK entities before 2009. The Group is attempting to recover claims from HMRC covered by this judgement. A recoverable
balance of £85 million (2023: £85 million) is included within current tax assets. In addition, the Group estimates potential interest
recoverable of £48 million, which has not previously been recognised in investment return in the income statement and is not
currently reflected in the statement or financial position.
(b) Deferred tax
(i) The balances at 31 December comprise:
2024
2023
£m
£m
Deferred tax assets
614
958
Deferred tax liabilities
(345)
(453)
Net deferred tax asset
269
505
Deferred tax attributable to policyholder returns included above at 31 December 2024 was a liability of £89 million (2023: asset of
£89 million). Previously the Group recognised net deferred tax assets in respect of policyholder tax assets due to significant
market volatility. These positions have now reversed as the market has recovered.
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Notes to the consolidated financial statements
Where shareholder deferred tax assets are not supported by deferred tax liabilities, they are recognised to the extent that it is
probable that future taxable profits will be available against which the tax losses can be utilised. In assessing future profitability,
the directors have relied on board approved business plans and profit forecasts for up to five years and the Group's history of
taxable profits in the relevant jurisdictions.
(ii) The net deferred tax asset/(liability) arises on the following items:
2024
2023
£m
£m
Insurance and investment contract liabilities
287
500
Deferred acquisition costs
61
(6)
Unrealised gains on investments
(309)
(245)
Pensions and other post-retirement obligations
(17)
(145)
Unused losses and tax credits
288
267
Intangibles and additional value of in-force long-term business
(249)
(207)
Provisions and other temporary differences
208
341
Net deferred tax asset
269
505
(iii) The movement in the net deferred tax asset/(liability) was as follows:
Note
2024
2023
£m
£m
Net asset at 1 January
505
679
Acquisition and disposal of subsidiaries
7
—
Amounts charged to income statement
13(a)
(380)
(292)
Amounts credited to other comprehensive income
13(b)
137
119
Foreign exchange rate movements
—
(1)
Net asset at 31 December
269
505
The Group has unrecognised gross tax losses (excluding capital losses) and other temporary differences of £799 million
(2023: £347 million) to carry forward against future taxable income of the necessary category in the companies concerned.
Of these, trading losses of £44 million (2023: £44 million) will expire within the next eight years. The remaining losses have no
expiry date.
In addition, the Group has unrecognised gross capital losses of £566 million (2023: £577 million). These have no expiry date.
At 31 December 2024, a potential deferred tax liability of £32 million (2023: £22 million) is not recognised on temporary
differences relating to reserves of overseas subsidiaries which are not expected to be distributed.
43 – Pension deficits and other provisions
This note details the non-insurance provisions that the Group holds and shows the movements in these during the year.
(a) Carrying amounts
Note
2024
2023
£m
£m
Total IAS 19 obligations to main staff pension schemes
44(a)
372
410
Restructuring provisions
28
44
Other provisions
326
341
Total provisions
726
795
Restructuring provisions include lease termination penalties and costs relating to disposed entities. They comprise of only the
direct expenditures arising from the restructuring, which are those that are necessarily entailed by the restructuring; and not
associated with the ongoing activities of the entity.
Other provisions are measured based upon our expectation of the value and timing of future economic outflows. Other provisions
include a number of product governance provisions totalling £189 million (2023: £128 million), which are measured based upon
the amounts we expect to pay to policyholders and other costs arising directly from remediation.
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Notes to the consolidated financial statements
(b) Movements on restructuring and other provisions
2024
2023
Restructuring
provisions
Other
provisions
Total
Restructuring
provisions
Other
provisions
Total
£m
£m
£m
£m
£m
£m
At 1 January
44
341
385
70
293
363
Additional provisions
—
153
153
—
174
174
Provisions released during the year
(5)
(75)
(80)
(3)
(66)
(69)
Charge to income statement
(5)
78
73
(3)
108
105
Utilised during the year
(11)
(91)
(102)
(23)
(60)
(83)
Foreign exchange rate movements
—
(2)
(2)
—
—
—
At 31 December
28
326
354
44
341
385
Of the total restructuring and other provisions, £105 million (2023: £88 million) is expected to be settled more than one year after
the statement of financial position date.
44 – Pension obligations
(a) Introduction
The Group operates a number of defined benefit and defined contribution pension schemes. The material defined benefit
schemes are in the UK, Ireland and Canada. The assets and liabilities of these defined benefit schemes as at 31 December are
shown below.
2024
2023
Note
UK
Ireland
Canada
Total
UK
Ireland
Canada
Total
£m
£m
£m
£m
£m
£m
£m
£m
Total fair value of scheme assets
44(b)(ii)
8,972
621
171
9,764
10,678
678
190
11,546
Present value of defined benefit
obligation
(8,866)
(593)
(226)
(9,685)
(10,211)
(679)
(249)
(11,139)
Net IAS 19 surpluses in the schemes
106
28
(55)
79
467
(1)
(59)
407
Surpluses included in other assets
30
423
28
—
451
809
8
—
817
Deficits included in provisions
43
(317)
—
(55)
(372)
(342)
(9)
(59)
(410)
Net IAS 19 surpluses in the schemes
106
28
(55)
79
467
(1)
(59)
407
This note relates to the defined benefit pension schemes included in the table above. The charges to the income statement for the
main schemes are shown in section (b)(i) below, whilst the total charges for all pension schemes are disclosed in section (d) below.
Under the IAS 19 valuation basis, the Group applies the principles of IFRIC 14 IAS 19 – The Limit on a Defined Benefit Asset,
Minimum Funding Requirements and their Interaction, whereby a surplus is only recognised to the extent that the company is
able to access the surplus either through an unconditional right of refund to the surplus or through reduced future contributions
relating to ongoing service, which have been substantively enacted or contractually agreed.
The Group has determined that it can derive economic benefit from the surplus in the Aviva Staff Pension Scheme (ASPS) via
a reduction to future employer contributions for defined contribution (DC) members, which could theoretically be paid from the
surplus funds in the ASPS. In the RAC (2003) Pension Scheme (RAC Scheme) and Friends Provident Pension Scheme (FPPS), in
the UK and in the Aviva Ireland Staff Pension Fund (AISPF) and Friends First Group Retirement and Death Benefits Scheme (FFPS)
in Ireland, the Group has determined that the rules set out in the schemes’ governing documentation provide for an unconditional
right to a refund from any future surplus funds in the schemes.
The assets of the UK, Ireland and Canada schemes are held in separate trustee-administered funds to meet long-term pension
liabilities to past and present employees. In all schemes, the appointment of trustees of the funds is determined by their trust
documentation and they are required to act in the best interests of the schemes’ beneficiaries. The long-term investment
objectives of the trustees and the employers are to limit the risk of the assets failing to meet the liabilities of the schemes over
the long term, and to maximise returns consistent with an acceptable level of risk so as to control the long-term costs of these
schemes.
A funding actuarial valuation of each of the defined benefit schemes is carried out at least every three years for the benefit of
scheme trustees and members. Actuarial reports have been submitted for each scheme within this period, using appropriate
methods for the respective countries on local funding bases.
The number of scheme members was as follows:
2024
2023
Number
UK
Ireland
Canada
Total
UK
Ireland
Canada
Total
Deferred members
35,706
2,008
277
37,991
37,906
2,182
213
40,301
Pensioners
42,103
1,044
1,216 44,363
41,212
975
1,228
43,415
Total members
77,809
3,052
1,493 82,354
79,118
3,157
1,441
83,716
All schemes are closed to future accrual. Closure of the schemes has removed the volatility associated with additional future
accrual for active members.
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Notes to the consolidated financial statements
(i) UK schemes
In the UK, the Group operates three main pension schemes, the ASPS, the RAC Scheme which was retained after the sale of RAC
Limited in September 2011 and the FPPS, which was acquired as part of the Friends Life acquisition in 2015. As the defined benefit
sections of the UK schemes are now closed to both new members and future accrual, existing deferred members in active
service and new entrants participate principally in the defined contribution section of the ASPS. The UK schemes operate within
the UK pensions’ regulatory framework.
(ii) Other schemes
In Ireland, the Group operates two main pension schemes, the Aviva Ireland Staff Pension Fund (AISPF) and the Friends First
Group Retirement and Death Benefits Scheme (FFPS) which was acquired as part of the Friends First acquisition in June 2018.
Future accruals for the AISPF and FFPS schemes ceased with effect from 30 April 2013 and 1 April 2014 respectively. The Irish
schemes are regulated by the Pensions Authority in Ireland.
The Canadian defined benefit pension plan ceased accrual with effect from 31 December 2011. The Canadian pension plan
currently in force is a Defined Contribution Pension Plan that is subject to the Pensions Benefits Act (Ontario), Income Tax Act
(Canada), and oversight of the Financial Services Regulatory Authority of Ontario.
(b) IAS 19 disclosures
Disclosures under IAS 19 for the material defined benefit schemes in the UK, Ireland and Canada, are given below. Where
schemes provide both defined benefit and defined contribution pensions, the assets and liabilities shown exclude those relating
to defined contribution pensions.
(i) Movements in the scheme surpluses and deficits
Movements in the pension schemes’ surpluses and deficits comprise:
2024
2023
Fair value
of
Scheme
Assets
Present
value of
defined
benefit
obligation
IAS 19
Pensions
net
surplus/
(deficits)
Fair value
of Scheme
Assets
Present
value of
defined
benefit
obligation
IAS 19
Pensions
net
surplus/
(deficits)
£m
£m
£m
£m
£m
£m
Net IAS 19 surplus in the schemes at 1 January
11,546
(11,139)
407
11,763
(10,931)
832
Administrative expenses
—
(25)
(25)
—
(22)
(22)
Total pension cost charged to net operating expenses
—
(25)
(25)
—
(22)
(22)
Net interest credited to investment income1
498
(479)
19
544
(505)
39
Total recognised in income statement
498
(504)
(6)
544
(527)
17
Actual return on these assets
(1,214)
—
(1,214)
316
—
316
Less: Interest income on scheme assets
(498)
—
(498)
(544)
—
(544)
Return on scheme assets excluding amounts in interest income
(1,712)
—
(1,712)
(228)
—
(228)
Gains from change in financial assumptions
—
1,232
1,232
—
(333)
(333)
Gains from change in demographic assumptions
—
108
108
—
104
104
Experience losses
—
(14)
(14)
—
(38)
(38)
Total remeasurements recognised in other comprehensive income
(1,712)
1,326
(386)
(228)
(267)
(495)
Employer contributions
55
—
55
53
—
53
Plan participant contributions
2
(2)
—
2
(2)
—
Benefits paid
(559)
559
—
(546)
546
—
Administrative expenses paid from scheme assets
(25)
25
—
(22)
22
—
Foreign exchange rate movements
(41)
50
9
(20)
20
—
Net IAS 19 surplus in the schemes at 31 December
9,764
(9,685)
79
11,546
(11,139)
407
1. Net interest income of £42 million (2023: £64 million) has been credited to investment income and net interest expense of £23 million (2023: £25 million) has been charged to
finance costs (see note 8)
The present value of unfunded post-retirement benefit obligations included in the table above is £80 million at
31 December 2024 (2023: £85 million).
Remeasurement loss of £386 million (2023: loss of £495 million) recorded in the statement of comprehensive income for the
period are largely driven by:
• During the period the RAC Scheme completed a bulk annuity buy-in transaction with Aviva Life & Pensions UK Limited, a Group
Company. Due to different measurement bases applying for accounting purposes, the premium paid by the scheme exceeded
the valuation of the scheme asset recognised. In the table above, this has been recognised as a loss in the actual return on
assets (see note 55 for further information). The scheme asset recognised is transferable and so has not been subject to
consolidation within the Group’s financial statements.
• Economic movements, including increase in interest rates and widening spreads on UK government bonds, and movements
impacting other assets. This has resulted in a reduction in the fair value of fixed income securities and other assets not fully
offset by the decrease in the valuation of the defined benefit obligation (DBO).
• The losses were partially offset by actuarial gains relating to updated demographic assumptions.
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Notes to the consolidated financial statements
(ii) Scheme assets
Scheme assets are stated at their fair values at 31 December. Total scheme assets are comprised by country as follows:
2024
2023
UK
Ireland
Canada
Total
UK
Ireland
Canada
Total
£m
£m
£m
£m
£m
£m
£m
£m
Bonds
5,983
544
5
6,532
7,804
545
—
8,349
Equities
—
19
—
19
—
18
—
18
Property
—
—
—
—
14
—
—
14
Pooled investment vehicles
1,868
236
164
2,268
2,093
253
185
2,531
Derivatives
50
25
—
75
3
52
—
55
Insurance policies
4,316
—
—
4,316
3,992
—
—
3,992
Repurchase agreements
(2,423)
(215)
—
(2,638)
(2,436)
(203)
—
(2,639)
Cash and other1
(438)
12
2
(424)
(361)
13
5
(343)
Total fair value of scheme assets
9,356
621
171
10,148
11,109
678
190
11,977
Less: consolidation elimination for non-
transferable Group insurance policy2
(384)
—
—
(384)
(431)
—
—
(431)
Total IAS 19 fair value of scheme assets
8,972
621
171
9,764
10,678
678
190
11,546
1. Cash and other assets comprise cash at bank, receivables, payables, and longevity swaps
2. As at 31 December 2024, the FPPS asset includes an insurance policy of £384 million (2023: £431 million) issued by a Group company that is not transferable under IAS 19 and is
consequently eliminated from the Group’s IAS 19 scheme assets. Insurance policies issued by other Group companies of £3,932 million as at 31 December 2024
(2023: £3,561 million) included in the ASPS and RAC Scheme assets are transferable and so are not subject to consolidation.
Total scheme assets are analysed by those that have a quoted market price in an active market and other as follows:
2024
2023
Quoted in an
active market
Other
Total
Quoted in an
active market
Other
Total
£m
£m
£m
£m
£m
£m
Bonds
5,735
797
6,532
6,889
1,460
8,349
Equities
19
—
19
18
—
18
Property
—
—
—
—
14
14
Pooled investment vehicles
44
2,224
2,268
38
2,493
2,531
Derivatives
25
50
75
34
21
55
Insurance policies
—
4,316
4,316
—
3,992
3,992
Repurchase agreements
—
(2,638)
(2,638)
—
(2,639)
(2,639)
Cash and other1
90
(514)
(424)
489
(832)
(343)
Total fair value of scheme assets
5,913
4,235
10,148
7,468
4,509
11,977
Less: consolidation elimination for non-transferable Group
insurance policy2
—
(384)
(384)
—
(431)
(431)
Total IAS 19 fair value of scheme assets
5,913
3,851
9,764
7,468
4,078
11,546
1. Cash and other assets comprise cash at bank, receivables, payables, and longevity swaps
2. As at 31 December 2024, the FPPS asset includes an insurance policy of £384 million (2023: £431 million) issued by a Group company that is not transferable under IAS 19 and is
consequently eliminated from the Group’s IAS 19 scheme assets. Insurance policies issued by other Group companies of £3,932 million as at 31 December 2024
(2023: £3,561 million) included in the ASPS and RAC Scheme assets are transferable and so are not subject to consolidation.
IAS 19 plan assets include investments in Group-managed funds of £876 million (2023: £1,124 million) and transferable insurance
policies with other Group companies of £3,932 million (2023: £3,561 million) in the ASPS and RAC Scheme. Where the investments
are in segregated funds with specific asset allocations, they are included in the appropriate line in the table above, otherwise they
appear in ‘Cash and other’. There are no significant judgements involved in the valuation of the scheme assets. Insurance policies
are valued on the same basis as the pension scheme liabilities, as required by IAS 19.
(iii) Assumptions on scheme liabilities
The valuations used for accounting under IAS 19 have been based on the most recent funding actuarial valuations, updated to
take account of the standard’s requirements in order to assess the liabilities of the material schemes at 31 December 2024.
The projected unit credit method
The inherent uncertainties affecting the measurement of scheme liabilities require these to be measured on an actuarial basis.
This involves discounting the best estimate of future cash flows to be paid out by the scheme using the projected unit credit method.
This is an accrued benefits valuation method which calculates the past service liability to members and makes allowance for their
projected future earnings. It is based on a number of actuarial assumptions, which vary according to the economic conditions of
the countries in which the relevant businesses are situated, and changes in these assumptions can materially affect the measurement
of the pension obligations.
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Notes to the consolidated financial statements
Financial assumptions
The main financial assumptions used to calculate scheme liabilities under IAS 19 are:
2024
2023
UK
Ireland
Canada
UK
Ireland
Canada
Inflation rate1
3.2 %
2.05 %
2.75 %
3.1 %
2.1 %
2.75 %
General salary increases2
5.3 %
3.6 %
3.25 %
5.2 %
3.6 %
3.25 %
Pension increases3
3.2 % 0.55 %/0.65 %
— %
3.2 %
0.6 %/0.7 %
— %
Deferred pension increases3
2.8 %
2.05 %
— %
2.6 %
2.1 %
— %
Discount rate4, 5
5.48 %/5.68 % (non-
insured members) 3.45 %/3.50 %
4.57 %
4.49 %/4.50 %/
4.51 %
(non-insured
members)
3.15 %/3.10 %
4.62 %
5.63 %/5.56 %/5.41 %
(insured members)
4.51 %/4.48 %
(insured members)
Basis of discount rate
AA-rated corporate bonds
AA-rated corporate bonds
1. For the UK schemes relevant RPI/CPI swap curves are used in the calculation of the DBO; the rate shown is the equivalent single RPI rate for ASPS. In 2024, CPI is derived as RPI
less 100 bps pre 2030 and RPI less 0bps post 2030 (2023: RPI less 100 bps pre 2030 and RPI less 0bps post 2030).
2. In the UK, the only remaining linkage between pension benefits and general salary increases is in respect of a small amount of Guaranteed Minimum Pension benefits, in line with
National Average Earnings
3. For the UK schemes relevant RPI/CPI swap curves are used, adjusted to reflect the appropriate caps/floors and inflation volatility with full curves used in the calculation of the DBO.
The rates shown are the single equivalent rates for the biggest groups of pensions in payment and deferment respectively in the ASPS.
4. To calculate scheme liabilities in the UK, a discount rate of 5.48 % is used for ASPS, and 5.68 % for FPPS members not included in annuity policies held by the scheme. A discount
rate of 5.63 % is used for ASPS, 5.56 % fpr RAC and 5.41 % for FPPS members included in annuity policies held by the schemes. The different rates reflect the differences in the
duration of the liabilities between the schemes.
5. For the Irish schemes, a discount rate of 3.45 % and 3.50 % is used for AISPF and FFPS respectively, reflecting the differences in the duration of the liabilities between the
two schemes
The discount rate and pension increase rate are the two assumptions that have the largest impact on the value of the liabilities,
with the difference between them being known as the net discount rate. For each country, the discount rate is based on current
average yields of high-quality debt instruments taking account of the maturities of the defined benefit obligations.
Mortality assumptions
Mortality assumptions are material in measuring the Group’s obligations under its defined benefit schemes. The assumptions
used are summarised in the table below and have been selected to reflect the characteristics and experience of the membership
of these schemes.
The mortality tables, average life expectancy and pension duration used at 31 December 2024 for scheme members are
as follows:
Normal
retirement
age
(NRA)
Life expectancy/(pension
duration) at NRA of a male
Life expectancy/(pension
duration) at NRA of a female
Currently
aged
NRA
20 years
younger
than
NRA
Currently
aged
NRA
20 years
younger than
NRA
UK
ASPS
SAPS tables as a proxy for Club Vita pooled experience,
including an allowance for future improvements
60
88.1
89.3
89.8
91.6
(28.1)
(29.3)
(29.8)
(31.6)
RAC
SAPS, including allowances for future improvement
65
86.8
88.5
88.8
90.6
(21.8)
(23.5)
(23.8)
(25.6)
FPPS
SAPS, including allowances for future improvement
60
87.8
89.7
90.1
91.8
(27.8)
(29.7)
(30.1)
(31.8)
Ireland
AISPF
89% PNA00 with allowance for future improvements
61
89.0
90.7
91.8
93.4
(28.0)
(29.7)
(30.8)
(32.4)
FFPS
88%/91% ILT15 with allowance for future improvements
65
89.1
90.7
91.8
93.3
(24.1)
(25.7)
(26.8)
(28.3)
Canada Canadian Pensioners’ Mortality 2014 Private Table, including
allowance for future improvements
65
87.4
88.8
89.9
91.2
(22.4)
(23.8)
(24.9)
(26.2)
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Notes to the consolidated financial statements
The assumptions above are based on commonly used mortality tables. The tables make allowance for observed variations in
such factors as age, gender, pension amount, salary and postcode-based lifestyle group, and have been adjusted to reflect
recent research into mortality experience. However, the extent of future improvements in longevity is subject to considerable
uncertainty and judgement is required in setting this assumption. For the ASPS, which is the most material scheme to the Group,
the allowance for mortality improvement is per the actuarial profession’s CMI_2023 (S=7.25) Advanced with adjustments model
(2023: CMI_2022 (S=7.25) Advanced with adjustments) with zero weight on 2022 and 2023 data within the model. Instead of
placing weight on post-pandemic data within the CMI improvements model, a separate adjustment is made to reflect the impact
that the drivers of excess mortality post-pandemic are expected to have in future years. There is a long-term improvement rate
of 1.50% for both males and females (2023: 1.50% for both males and females). The CMI_2023 tables have been adjusted to allow
for greater mortality improvements in the annuitant population relative to the general population on which CMI_2023 is based,
using a parameter of 0.15% for males and 0.20% for females, tapering to zero between ages 90 and 110 (for 2023 the same
approach was taken with respect to CMI_2022). Long-term improvement rates are set to taper to zero between ages 85 and 110
(2023: long-term improvement rates taper to zero between ages 85 and 110).
Illustrative sensitivity analysis
Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, inflation rate and
mortality. Movements in the defined benefit obligation are mitigated by the impact on the assets from economic movements
including interest rates and price inflation, as well as the longevity sensitivity impact due to the insurance policy and longevity
swap assets held by the UK pension schemes. The sensitivity analysis below has been determined by changing the respective
assumptions while holding all other assumptions constant.
The following table illustrates how the IAS 19 surplus would have increased/(decreased) as a result of changes in interest rates,
price inflation and mortality:
2024
2023
Increase
in interest
rates +1%
Decrease
in interest
rates -1%
Increase
in inflation
rate +1%
Decrease
in inflation
rate -1%
1 year
younger1
Increase in
interest
rates +1%
Decrease
in interest
rates -1%
Increase in
inflation
rate +1%
Decrease
in inflation
rate -1%
1 year
younger1
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
Impact on present value of
defined benefit obligation
1,001
(1,215)
(901)
751
(256)
1,301
(1,612)
(1,189)
977
(314)
Impact on fair value of scheme
assets
(1,075)
1,312
956
(800)
261
(1,448)
1,828
1,255
(1,086)
312
Impact on IAS 19 surplus
(74)
97
55
(49)
5
(147)
216
66
(109)
(2)
1. The effect of assuming all members in the schemes were one year younger
It is unlikely that the changes in assumptions would occur in isolation of one another as some of the assumptions may
be correlated. It should also be noted that these sensitivities are non-linear, and larger or smaller impacts should not be
interpolated or extrapolated from these results.
Maturity profile of the defined benefit obligation
The discounted scheme liabilities have an average duration of 12 years (2023: 13 years) in ASPS, 13 years (2023: 15 years) in FPPS,
12 years (2023: 13 years) in the RAC scheme, 14 years (2023: 15 years) in AISPF, 22 years (2023: 22 years) in FFPS and 9 years
(2023: 9 years) in the Canadian scheme.
The expected undiscounted benefits payable from the main UK defined benefit scheme, ASPS, is shown in the chart below:
Undiscounted benefit payments (£m)
(iv) Risk management and asset allocation strategy
The investment objectives of the trustees and the employers are to limit the risk of the assets failing to meet the liabilities of the
schemes over the long-term, and to maximise returns consistent with an acceptable level of risk so as to control the long-term
costs of these schemes. To meet these objectives, the schemes’ assets are invested in a portfolio, consisting primarily of debt
securities as detailed in section (b)(ii). The investment strategy continues to evolve over time and is expected to match the
liability profile closely with swap overlays to improve interest rate and inflation matching. The schemes are generally matched to
interest rate and inflation risk relative to the funding bases.
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Notes to the consolidated financial statements
Pensioner cashflows
Deferred member cashflows
2025
2040
2055
2070
2085
0
100
200
300
400
500
The High Court ruling in June 2023, along with the subsequent appeal in July 2024, ruled that certain past amendments made to
the rules of defined benefit schemes that contracted out of the state second pension are invalid without an actuarial confirmation
under the Pension Schemes Act 1993. The Group commenced work to determine the impact of the court rulings on its main UK
defined benefit pension schemes (and any predecessor schemes) and has identified the relevant amendments between 6 April
1997 and 5 April 2016. For some of the more material amendments impacting the Group's main schemes, initial analysis suggests
appropriate actuarial engagement took place and therefore the current carrying value of the defined benefit obligation in the
financial statements remains appropriate. It is not possible to quantify the impact of the ruling, if any, at this stage; however,
further work will be performed following the outcome of the Verity Trustees Ltd v Wood hearing, which is expected to commence
during 2025 and will provide further legal clarity on the level of actuarial engagement necessary to evidence validation of
amendments during the contracted out period. The Group continues to monitor the legal proceedings of related cases. The
calculation of the defined benefit obligation for UK schemes presented in section (a) is based on the pension benefits currently
being administered.
Main UK scheme
The Company works closely with the trustee, who is required to consult with the Company on the investment strategy.
Interest rate and inflation rate risks are managed using a combination of liability-matching assets and swaps. Exposure to equity
and property risk has been reducing over time and credit risk is managed within risk appetite. Currency risk is relatively small and
is largely hedged. The other principal risk is longevity risk. This risk has reduced due to the ASPS entering into a longevity swap in
2014 covering approximately £3.0 billion of pensioner in payment scheme liabilities.
Since October 2019 the ASPS has completed multiple bulk annuity buy-in transactions with Aviva Life & Pensions UK Limited,
a Group Company. These transactions have covered approximately £2.9 billion of liabilities related to deferred pensioners and
current pensioners, removing the investment and longevity risk for these members from the scheme.
Other schemes
The other schemes are considerably less material but their risks are managed in a similar way to those in the main UK scheme.
During 2024, the RAC pension scheme completed a bulk annuity buy-in with Aviva Life & Pensions UK Limited, a Group Company
covering the liabilities of all scheme members.
(v) Funding
Formal actuarial valuations normally take place every three years and where there is a technical provisions deficit, the Group and
the trustees would agree a deficit recovery plan. The assumptions adopted for triennial actuarial valuations are determined by
the trustees and agreed with the Group and are normally more prudent than the assumptions adopted for IAS 19 purposes, which
are best estimate.
For the ASPS, the latest formal actuarial valuation was completed with an effective date of 31 March 2021 and showed that
the ASPS was fully funded on its technical provisions basis consistent with the requirements of the UK pension regulations.
The 31 March 2024 actuarial valuation is currently in progress.
Contributions of around £60 million are expected to be paid during 2025. This includes cash settlements from the
FPPS non-transferable annuity policy, as well as deficit reduction contributions to the FPPS, AISPF and Canadian scheme and
contributions relating to scheme expenses.
(c) Defined contribution (money purchase) section of the ASPS
The trustees have responsibility for selecting a range of suitable funds in which the members can choose to invest and for
monitoring the performance of the available investment funds. Members are responsible for reviewing the level of contributions
they pay and the choice of investment fund to ensure these are appropriate to their risk appetite and their retirement plans.
Members of this section contribute at least 2% of their pensionable salaries, and depending on the percentage chosen up to 8%,
the Group contributes up to 14%, together with the cost of the death-in-service benefits. In addition, for every 1% additional
employee contribution over 8% of pensionable salaries, the Group contributes an additional 0.1% employer contribution.
The amount recognised as an expense for defined contribution schemes is shown in section (d) below.
(d) Charge to staff costs in the income statement
The total pension charge to staff costs for all of the Group’s defined benefit and defined contribution schemes were:
Note
2024
2023
£m
£m
UK defined benefit schemes
28
26
Overseas defined benefit schemes
1
1
Total defined benefit schemes
10(b)
29
27
UK defined contribution schemes
199
171
Overseas defined contribution schemes
26
19
Total defined contribution schemes
10(b)
225
190
Total charge for pension schemes
254
217
There were no significant contributions payable or prepaid in the consolidated statement of financial position as at either
31 December 2024 or 2023.
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Notes to the consolidated financial statements
45 – Borrowings
Our borrowings are classified as either core structural borrowings, which are included within the Group’s capital employed, or
operational borrowings drawn by operating subsidiaries. This note shows the carrying values of each type.
(a) Analysis of total borrowings
Total borrowings comprise:
Note
2024
2023
£m
£m
Core structural borrowings at amortised cost
45(b)
4,496
5,174
Operational borrowings at amortised cost
229
259
Operational borrowings designated at fair value
887
941
Operational borrowings
45(c)
1,116
1,200
Total borrowings
5,612
6,374
(b) Core structural borrowings
(i) Carrying amount
The carrying amounts of these borrowings are:
2024
2023
£m
£m
6.125% £700 million subordinated notes 2036
200
697
6.875% £600 million subordinated notes 2058
595
595
3.875% €700 million subordinated notes 2044
—
607
5.125% £400 million subordinated notes 2050
397
397
3.375% €900 million subordinated notes 2045
745
778
4.375% £400 million subordinated notes 2049
397
396
4.000% £500 million subordinated notes 2055
494
494
4.000% $CAD450 million subordinated notes 2030
248
265
6.875% £500 million subordinated notes 2053
493
493
6.125% £500 million subordinated notes 2054
494
—
Subordinated debt
4,063
4,722
1.875% €750 million senior notes 2027
383
401
Senior notes
383
401
Commercial paper
50
51
Total core structural borrowings
4,496
5,174
On 3 July 2024 the Group redeemed its 3.875% €700 million Dated Tier 2 Reset Notes in full at their optional first call date.
On 12 September 2024 the Group issued £500 million of Fixed Rate Reset Tier 2 Notes at 6.125%, with final maturity in September
2054 and first call in March 2034.
On 16 September 2024 the Group completed a tender offer and redeemed £500 million of its 6.125% £700 million Fixed Rate
Reset Tier 2 Notes due in 2036.
All borrowings are stated at amortised cost, with the exception of commercial paper.
(ii) Contractual undiscounted cash flows
The contractual maturity dates of undiscounted cash flows for these borrowings are:
2024
2023
Principal
Interest
Total
Principal
Interest
Total
£m
£m
£m
£m
£m
£m
Within one year
50
218
268
51
245
296
1 to 5 years
385
861
1,246
402
972
1,374
5 to 10 years
249
1,016
1,265
267
1,151
1,418
10 to 15 years
200
970
1,170
700
1,041
1,741
Over 15 years
3,646
2,530
6,176
3,787
2,376
6,163
Total contractual undiscounted cash flows
4,530
5,595
10,125
5,207
5,785
10,992
Borrowings are considered current if the contractual maturity dates are within a year. Where subordinated debt is undated or
loan notes are perpetual, the interest payments have not been included beyond 15 years.
Contractual undiscounted interest payments are calculated based on underlying fixed interest rates or prevailing market floating
rates as applicable. Year-end exchange rates have been used for interest projections on loans in foreign currencies.
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Notes to the consolidated financial statements
(c) Operational borrowings
(i) The carrying amounts of these borrowings are:
2024
2023
Note
£m
£m
Amounts owed to financial institutions
Loans
229
259
Securitised mortgage loan notes
UK lifetime mortgage business
25(b)
887
941
Total operational borrowings
1,116
1,200
Loans owed to financial institutions are stated at amortised cost and loan notes issued in connection with the IWR lifetime
mortgage business are stated at fair value. The Group designates these loan notes at FVTPL to eliminate an accounting mismatch,
as the relevant mortgages and derivatives are managed as a portfolio on a fair value basis.
The Group elects to present the change in fair value attributable to a change in the credit risk of the loan notes in the income
statement and the impacts are presented in note 23.
The fair values of the loan notes are modelled on risk-adjusted cash flows for defaults discounted at a risk-free rate plus a
market-determined liquidity premium, and are therefore classified as ‘Level 3’ in the fair value hierarchy. The risk allowances are
consistent with those used in the fair value asset methodology, as described in note 23.
The securitised mortgage loan notes are at various fixed, floating and index-linked rates. Further details about these notes are
given in note 25.
(ii) The contractual maturity dates of undiscounted cash flows for these borrowings are:
2024
2023
Principal
Interest
Total
Principal
Interest
Total
£m
£m
£m
£m
£m
£m
Within one year
247
41
288
331
42
373
1 to 5 years
358
166
524
314
138
452
5 to 10 years
291
156
447
350
133
483
10 to 15 years
87
38
125
125
66
191
Over 15 years
9
10
19
20
19
39
Total contractual undiscounted cash flows
992
411
1,403
1,140
398
1,538
The carrying value of the loan notes issued in connection with IWR lifetime mortgages is £309 million lower (2023: £345 million
lower) than the anticipated payment at maturity. The payment mirrors the repayment of the lifetime mortgages and is based on
the current modelling assumptions.
Contractual undiscounted interest payments are calculated based on underlying fixed interest rates or prevailing market floating
rates as applicable. Year-end exchange rates have been used for interest projections on loans in foreign currencies.
(d) Description and features
(i) Subordinated debt
A description of each of the subordinated notes is set out in the table below:
Notional amount
Issue date
Redemption date
Callable at par at option
of the Company from
In the event the Company does not call the notes, the
coupon will reset at each applicable reset date to
£200 million
14 Nov 2001
14 Nov 2036
16 Nov 2026
5 year Benchmark Gilt + 2.85%
£600 million
20 May 2008
20 May 2058
20 May 2038
Daily Compounded SONIA + 0.1193% + 3.26%
£400 million
4 June 2015
4 June 2050
4 June 2030
Daily Compounded SONIA + 0.1193% + 4.022%
€900 million
4 June 2015
4 December 2045
4 December 2025
3 month Euribor + 3.55%
£400 million
12 September 2016
12 September 2049
12 September 2029
Daily Compounded SONIA + 0.1193% + 4.721%
£500 million
3 June 2020
3 June 2055
3 March 2035
5 year Benchmark Gilt Rate + 4.70%
$CAD450 million
2 October 2020
2 October 2030
N/A
N/A
£500 million
27 November 2023
27 November 2053
27 May 2033
5 year Benchmark Gilt Rate + 3.85%
£500 million
12 September 2024
12 September 2054
12 March 2034
5 year Benchmark Gilt Rate + 3.30%
Subordinated notes issued by the Company rank below its senior obligations and ahead of its preference shares and ordinary
share capital. The fair value of notes at 31 December 2024 was £3,999 million (2023: £4,658 million), calculated with reference
to quoted prices.
(ii) Senior notes
All senior notes are at fixed rates and their total fair value at 31 December 2024 was £377 million (2023: £395 million).
(iii) Commercial paper
The commercial paper consists of £50 million issued by the Company (2023: £51 million) and is considered core structural
funding. The fair value of the commercial paper is considered to be the same as its carrying value and all issuances are repayable
within one year.
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Notes to the consolidated financial statements
(iv) Loans
Loans owed to financial institutions comprise:
2024
2023
£m
£m
Loans to property partnerships
128
207
Other non-recourse loans
101
52
Total non-recourse loans owed to financial institutions
229
259
As explained in accounting policy D, the UK long-term business policyholder funds have invested in a number of property funds
and structures (the ‘Property Funds’), some of which have raised external debt, secured on the relevant Property Fund’s property
portfolio. The lenders are only entitled to obtain payment of interest and principal to the extent there are sufficient resources in
the relevant Property Fund and they have no recourse whatsoever to the policyholder or shareholders’ funds of any companies
in the Group. Loans of £128 million (2023: £207 million) included in the table above relate to Property Funds.
Other non-recourse loans include external debt raised by special purpose vehicles in the IWR long-term business and a bank
credit facility as part of the acquisition of Optiom on 5 January 2024. The lenders have no recourse whatsoever to the
shareholders’ funds of any companies in the Group. The outstanding balance of these loans at 31 December 2024 was £101 million
(2023: £52 million).
(v) Securitised mortgage loan notes
Loan notes have been issued by special purpose securitisation companies in the UK. Details are given in note 25.
(e) Movements during the year
Movements in borrowings during the year were:
2024
2023
Core
Structural
Operational
Total
Core
Structural
Operational
Total
£m
£m
£m
£m
£m
£m
At 1 January
5,174
1,200
6,374
5,469
1,286
6,755
New borrowings drawn down, excluding commercial paper,
net of expenses
494
33
527
493
71
564
Repayment of borrowings, excluding commercial paper
(1,095)
(192)
(1,287)
(531)
(84)
(615)
Movement in commercial paper1
—
—
—
(189)
—
(189)
Net cash (outflow)/inflow
(601)
(159)
(760)
(227)
(13)
(240)
Borrowings acquired in business combinations2
—
33
33
—
—
—
Foreign exchange rate movements
(82)
(2)
(84)
(72)
(2)
(74)
Fair value movements
—
44
44
—
(74)
(74)
Amortisation of discounts and other non-cash items
5
—
5
4
3
7
At 31 December
4,496
1,116
5,612
5,174
1,200
6,374
1. Gross issuances of commercial paper were £113 million (2023: £377 million), offset by repayments of £113 million (2023: £566 million)
2. Borrowings acquired in business combinations relate to the acquisition of Optiom on 5 January 2024 and relate to a bank credit facility
All movements in fair value in 2024 and 2023 on securitised mortgage loan notes designated as fair value through profit or loss
were attributable to changes in market conditions.
(f) Undrawn borrowings
The Group has the following undrawn committed central borrowing facilities:
2024
2023
£m
£m
Expiring within one year
—
—
Expiring beyond one year
3,550
1,700
Total undrawn borrowings
3,550
1,700
Of the Group's undrawn borrowings, £1,700 million (2023: £1,700 million) relates to borrowing facilities which are used to support
the commercial paper programme. As outlined in note 2 (a)(v), on 23 December 2024, Aviva plc and Direct Line announced that
they had reached agreement on the terms of a recommended cash and share offer for Direct Line. The cash consideration
payable under the terms of the acquisition will be funded from Aviva's existing cash resources. In addition, to satisfy Takeover
Code requirements, Aviva entered into a bridge facility agreement in an amount of up to £1,850 million.
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Notes to the consolidated financial statements
46 – Payables and other financial liabilities
This note analyses our payables and other financial liabilities at the end of the year.
2024
2023
Note
£m
£m
Payables arising out of direct insurance due from intermediaries
859
987
Payables arising out of reinsurance operations due from intermediaries
137
56
Deposits and advances received from reinsurers
—
3
Bank customer accounts liability
2
2
Bank overdrafts1
52(e)
928
621
Derivative liabilities
53
8,271
7,426
Amounts due to brokers for investment purchases
513
912
Obligations for repayment of cash collateral received
732
1,435
Lease liabilities
22
346
372
Other financial liabilities
2,867
1,856
Total payables and other financial liabilities
14,655
13,670
Expected to be settled within one year
7,345
7,142
Expected to be settled in more than one year
7,310
6,528
Total payables and other financial liabilities
14,655
13,670
1. Bank overdrafts amount to £263 million (2023: £202 million) in life business operations and £665 million (2023: £419 million) in general insurance business and other operations
All payables and other financial liabilities are carried at cost, which approximates to fair value, except for derivative liabilities,
which are carried at their fair values and lease liabilities which are carried at the present value of the outstanding lease payments.
47 – Other liabilities
This note analyses our other liabilities at the end of the year.
2024
2023
£m
£m
Deferred income
41
78
Accruals
845
820
Interest payable on borrowings
1,125
1,246
Other liabilities
1,286
1,145
Total other liabilities
3,297
3,289
Expected to be settled within one year
3,024
3,062
Expected to be settled in more than one year
273
227
Total other liabilities
3,297
3,289
48 – Contingent liabilities and other risk factors
This note sets out the main areas of uncertainty over the calculation of our liabilities.
(a) Uncertainty over claims provisions
Note 39 gives details of the estimation techniques used by the Group to determine the non-life business liability for incurred
claims provisions and of the methodology and assumptions used in determining the long-term business provisions. These
approaches are designed to produce a best estimate of the cost of settling liabilities, with a risk adjustment reflecting the
uncertainty associated with these liabilities. The actual cost of settling these liabilities may differ, for example because
experience may be worse than that assumed, or future non-life business claims inflation may differ from that expected, and
hence there is uncertainty in respect of these liabilities.
Business Interruption
There continues to be a degree of uncertainty in relation to business interruption claims arising from COVID-19 and on-going test
case litigation, including where we are party to a number of litigation proceedings in Canada. In the opinion of management,
adequate liabilities have been established for such claims based on information available at the reporting date. The Group
purchases reinsurance protection that includes coverage for business interruption and is collecting or seeking reinsurance
recoveries of business interruption losses that are covered by reinsurance.
For further information see note 52(f).
(b) Asbestos, pollution and social environmental hazards
In the course of conducting insurance business, various companies within the Group receive general insurance liability claims,
and become involved in actual or threatened related litigation arising therefrom, including claims in respect of pollution and other
environmental hazards. Amongst these are claims in respect of asbestos production and handling in the UK, Ireland and Canada.
Given the significant delays that are experienced in the notification of these claims, the potential number of incidents they cover
and the uncertainties associated with establishing liability, the ultimate cost cannot be determined with certainty. However, on
the basis of current information having regard to the level of provisions made for general insurance claims and substantial
reinsurance cover now in place, the directors consider that any additional costs arising are not likely to have a material impact on
the financial position of the Group.
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Notes to the consolidated financial statements
(c) Guarantees on long-term savings products
As a normal part of their operating activities, various Group companies have given guarantees and options, including interest rate
guarantees, in respect of certain long-term insurance and investment products. Note 39(h) gives details of these guarantees and
options. Interest rate guaranteed returns, such as those available on guaranteed annuity options, are sensitive to interest rates
falling below the guaranteed level. The directors continue to believe that the existing IFRS 17 provisions for such guarantees and
options are sufficient.
(d) Regulatory compliance
The Group’s insurance and investment business is subject to local regulation in each of the countries in which it operates.
A number of the Group’s UK subsidiaries are dual regulated (directly authorised by both the PRA (for prudential regulation) and
the FCA (for conduct regulation)) while others are solo regulated (regulated solely by the FCA for both prudential and conduct
regulation). Between them, the PRA and FCA have broad powers including the authority to grant, vary the terms of, or cancel a
regulated firm’s authorisation; to investigate marketing and sales practices; and to require the maintenance of adequate financial
resources.
The Group’s regulated businesses have compliance resources to respond to regulatory enquiries in a constructive way, and take
corrective action when warranted. However, all regulated financial services companies face the risk that their regulator could
find that they have failed to comply with applicable regulations or have not undertaken corrective action as required.
The impact of any such finding (whether in the UK or overseas) could have a negative impact on the Group’s reported results or
on its relations with current and potential customers. Regulatory action against a member of the Group could result in adverse
publicity for, or negative perceptions regarding, the Group, or could have a material adverse effect on the business of the Group,
its results, operations and/or financial condition and divert management’s attention from the day-to-day management of the
business.
(e) Structured settlements
The Group has purchased annuities from licensed Canadian life insurers to provide for fixed and recurring payments to claimants.
As a result of these arrangements, the Group is exposed to credit risk to the extent that any of the life insurers fail to fulfil their
obligations. The Group’s maximum exposure to credit risk for these types of arrangements is approximately £510 million as at
31 December 2024 (2023: £537 million). Credit risk is managed by acquiring annuities from a diverse portfolio of life insurers with
proven financial stability. This risk is reduced to the extent of coverage provided by Assuris, the Canadian life insurance industry
compensation plan. As at 31 December 2024, no information has come to the Group’s attention that would suggest any weakness
or failure in life insurers from which it has purchased annuities and consequently no provision for credit risk is required.
(f) Other
In the course of conducting insurance and investment business, various Group companies receive liability claims, and become
involved in actual or threatened related litigation. In the opinion of the directors, adequate provisions have been established for
such claims and no material loss will arise in this respect.
In addition, in line with standard business practice, various Group companies have given guarantees, indemnities and warranties
in connection with disposals in recent years of subsidiaries and associates to parties outside the Aviva Group which can give rise
to contingent liabilities. In the opinion of the directors, no material unprovisioned loss will arise in respect of these guarantees,
indemnities and warranties.
There are a number of charges registered over the assets of Group companies in favour of other Group companies or third
parties. In addition, certain of the Company’s assets are charged in favour of certain of its subsidiaries as security for intra-
Group loans.
49 – Commitments
This note gives details of our commitments to capital expenditure. See note 22 for further information on lease commitments.
Contractual commitments for acquisitions or capital expenditures of infrastructure loans, equity funds and investment property
which have not been recognised in the financial statements are as follows:
2024
2023
£m
£m
Infrastructure loan advances
215
104
Investment property
234
191
Other investment vehicles¹
536
193
Total commitments
985
488
1. Represents commitments for further investment in certain private equity vehicles. Such commitments do not expose the Group to the risk of future losses in excess of its
investment.
Notes 18 and 19 set out the commitments the Group has to its joint ventures and associates.
50 – Group capital management
(a) Group capital
The Group is required to measure and monitor its capital resources on a regulatory basis and to comply with minimum capital
requirements of regulators in each territory it operates in. At a Group level, we have to comply with the requirements established
by the PRA.
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Notes to the consolidated financial statements
The Group solvency capital requirement is calculated using a Partial Internal Model (PIM) approved by the PRA. The Solvency II
capital regime requires insurers to calculate regulatory capital adequacy at both individual regulated subsidiaries and an
aggregate Group level. Non-UK entities have been included in Group solvency in line with Solvency II requirements. Other
financial sector entities (including fund management) are included at their proportional share of the capital requirement according
to the relevant sectoral values. In addition, non-UK businesses including Canada, are subject to the locally applicable capital
requirements in the jurisdictions in which they operate.
Group capital is represented by Solvency II own funds. The Solvency II position disclosed is based on 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 Solvency Capital Requirement (SCR) with eligible own funds and aligns with management’s approach to
dynamically manage its capital position.
In arriving at the shareholder position, the contribution to the Group’s SCR and own funds of the most material fully ring fenced
with-profits funds of £1,387 million at 31 December 2024 (2023: £1,408 million) and staff pension schemes in surplus of
£297 million at 31 December 2024 (2023: £397 million) 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.
2024
2023
£m
£m
Solvency II regulatory own funds as at 31 December
17,323
18,824
Adjustments for:
Fully ring-fenced with-profit funds
(1,387)
(1,408)
Staff pension schemes in surplus
(297)
(397)
Solvency II shareholder own funds as at 31 December
15,639
17,019
Solvency II own funds are comprised of a combination of shareholders’ funds, preference share capital, subordinated debt, and
deferred tax assets measured on a Solvency II basis. During the year, the Group redeemed £1.1 billion of Tier 2 subordinated debt
and issued £0.5 billion of Tier 2 subordinated debt (see note 45).
Solvency II surplus at the Group level represents the excess of eligible Solvency II own funds over the Group’s solvency capital
requirements calculated in accordance with Solvency II requirements. The Group maintained capital in excess of the SCR at all
times during 2024. All regulated subsidiaries complied with their capital requirements throughout the year.
Further information on the Group’s Solvency II position, including a reconciliation between IFRS equity and own funds can be
found in the Other information section. This information is estimated and is therefore subject to change. It is also unaudited.
(b) Risks and capital management objectives
Optimal deployment of capital is a key driver in our strategic decision making, including product mix, pricing, hedging,
reinsurance, investments, transformation programmes, acquisitions and disposals. Capital and liquidity management is
embedded in our businesses and supported by group-wide policies. A Capital Management Standard sets out minimum standards
and guidelines over responsibility for capital management including considerations for capital management decisions and
requirements for management information, capital monitoring, reporting, forecasting, planning and overall governance.
The Group manages capital in conjunction with solvency capital requirements and in line with the dividend policy and capital
management framework.
• We aim to deliver sustainable dividends at a level that is resilient in times of stress and is covered by the capital and cash
generated from our businesses. We also expect to make regular and sustainable returns of capital;
• At the core of our capital management framework is financial strength in accordance with risk appetite and efficient
deployment of capital. See note 52 for more information about the Group’s risk management approach;
• Key elements of our capital management framework are as follows:
– Solvency II shareholder cover ratio working range of 160%-180% with opportunities for the deployment of any excess capital
considered as part of the framework (see below).
– Centre liquid assets of at least £1 billion
– Solvency II debt leverage ratio below 30% (other than for temporary periods)
– To maintain our AA credit rating metrics;
• In addition to regular capital returns any excess capital is available for deploying in the business to support growth and top
quartile efficiency objectives, M&A where this delivers attractive risk adjusted returns and the opportunity is in line with our
strategy, thereafter, additional distributions to shareholders will be considered;
• The Group seeks to retain financial flexibility by maintaining strong liquidity, access to a range of capital markets and significant
unutilised committed credit lines; and
• Our businesses are capitalised based on buffers above their regulatory minimum levels, which are specific to each entity.
Subsidiary capital and liquidity risk appetites are reviewed regularly by subsidiary boards.
Intra-group capital arrangements
Consistent with our capital management framework, the Group has in place intra-group arrangements to provide additional
capital support to its regulated subsidiaries. In the normal course of business, the Group will provide additional capital support to
its regulated subsidiaries in certain circumstances. While the Group considers it unlikely that such support will be required, the
arrangements are intended to provide additional comfort to its regulated subsidiaries and its policyholders.
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Notes to the consolidated financial statements
51 – Statement of cash flows
This note gives further detail behind the figures in the statement of cash flows.
(a) The reconciliation of profit/(loss) before tax to the net cash inflow from operating activities is:
2024
2023
£m
£m
Profit before tax
1,267
1,690
Adjustments for:
Share of (profit)/loss of joint ventures and associates
(136)
71
Dividends received from joint ventures and associates
29
81
(Profit)/loss on sale of:
Investment property
4
10
Subsidiaries, joint ventures and associates
(195)
—
Investments
(1,816)
(3,374)
Fair value (gains)/losses on:
Investment property
13
301
Investments
(10,250)
(8,852)
Borrowings
44
(74)
Depreciation of property and equipment
62
67
Equity compensation plans, equity settled expense
61
61
Impairment and expensing of:
18
3
Financial investments, loans and other assets
2
3
Acquired value of in-force business and intangibles
16
—
Amortisation of:
696
489
Premium/discount on fixed maturity securities
509
306
Premium/discount on borrowings
5
6
Premium/discount on non-participating investment contracts
52
59
Acquired value of in-force business and intangibles
130
118
Interest expense on borrowings
339
335
Net finance income on pension schemes
(19)
(39)
Foreign currency exchange gains
181
(50)
Increase in reinsurance assets
(1,505)
(424)
(Increase)/decrease in deferred acquisition costs
(41)
70
Increase in insurance liabilities and investment contracts
22,503
22,222
Decrease/(increase) in other assets
3,038
(854)
Changes in working capital
23,995
21,014
Net purchases of investment property
(494)
(1,016)
Net proceeds on sale of investment property
382
317
Net purchase of financial investments
(5,493)
(13,698)
Net purchases of operating assets
(5,605)
(14,397)
Total cash generated from/(used in) operating activities
8,688
(2,664)
The cash flows presented in this statement cover all the Group’s activities and include flows from both policyholder and
shareholder activities. Operating cash flows reflect the movement in both policyholder and shareholder controlled cash and
cash equivalent balances.
During the year the net operating cash inflow reflects a number of factors, including the level of premium income, payments of
claims, creditors and surrenders and purchases and sales of operating assets including financial investments. It also includes
changes in the size and value of consolidated cash investment funds and changes in the Group participation in these funds.
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Notes to the consolidated financial statements
(b) Liabilities arising from financing activities:
Borrowings
Tier 1 notes
Leases
Total
Borrowings
Tier 1 notes
Leases
Total
£m
£m
£m
£m
£m
£m
£m
£m
Opening balance of liabilities arising from
financing activities
6,374
496
372
7,242
6,755
496
386
7,637
Cash movements
Repayment of leases
—
—
(60)
(60)
—
—
(63)
(63)
New borrowings
640
—
—
640
941
—
—
941
Repayment of borrowings
(1,400)
—
—
(1,400)
(1,181)
—
—
(1,181)
Non-cash movements
Foreign exchange movements
(84)
—
(2)
(86)
(74)
—
(2)
(76)
Fair value gains/losses
44
—
—
44
(74)
—
—
(74)
Other
38
—
36
74
7
—
51
58
Closing balance of liabilities arising from
financing activities
5,612
496
346
6,454
6,374
496
372
7,242
2024
2023
(c) Cash flows in respect of the acquisition of, and additions to, subsidiaries, joint ventures and associates
comprised:
2024
2023
£m
£m
Cash consideration for subsidiaries, joint ventures and associates acquired and additions1
(856)
—
Less: Cash and cash equivalents acquired with subsidiaries
96
—
Total cash flow on acquisitions and additions
(760)
—
1. Cash consideration for subsidiaries, joint ventures and associates acquired and additions relates to the acquisition of AIG Life Limited, Optiom 02 Holdings Inc, Probitas Holdings
(Bermuda) Limited and its subsidiaries, Succession Wealth Acquisitions and Level Health Limited
(d) Cash flows in respect of the disposal of subsidiaries, joint ventures and associates comprised:
2024
2023
£m
£m
Cash proceeds from disposal of subsidiaries, joint ventures and associates1
1,095
—
Less: Net cash and cash equivalents divested with subsidiaries
—
—
Total cash flow on disposals
1,095
—
1. Cash proceeds from disposal of subsidiaries, joint ventures and associates are net of £5 million (2023: £nil) transaction costs paid during the year. These relate to the disposal of
Aviva SingLife Holdings Ptd Ltd and Balanced Commercial Property Trust Ltd.
The above figures form part of cash flows from investing activities.
(e) Cash and cash equivalents in the statement of cash flows and statement of financial position comprised:
2024
2023
Note
£m
£m
Cash at bank and in hand
5,055
6,138
Cash equivalents
18,426
11,135
Cash and cash equivalents per the statement of financial position
23,481
17,273
Bank overdrafts
46
(928)
(621)
Cash and cash equivalents
22,553
16,652
52 – Risk management
Risk management is key to Aviva’s success. We accept the risks inherent to our core business lines of life, general insurance and
health, and asset management. We diversify these risks through our scale, geographic spread, the variety of the products and
services we offer and the channels through which we sell them. We receive premiums which we invest to maximise risk-adjusted
returns, so that we can fulfil our promises to customers while providing a return to our shareholders. We identify risks to the
business and, depending on our risk appetite, prefer, accept or avoid those risks. In doing so we prefer retaining those risks we
believe we are capable of managing to generate a return.
Our sustainability and financial strength are underpinned by an effective risk management process and risk intelligent culture.
This helps us identify major risks to which we may be exposed, establish appropriate controls and take mitigating actions for the
benefit of our customers and investors. The Group’s risk strategy is to invest its available capital to optimise the balance between
return and risk while maintaining an appropriate level of economic (i.e. risk-based) and regulatory capital.
The key elements of our risk management framework comprise: our risk strategy and risk management forward plans; risk
governance, including risk policies and business standards, risk oversight committees and roles and responsibilities; and the
processes we use to identify, measure, manage, monitor and report risks, including the use of our risk models, Operational Risk
and Control Management system (ORCM) and stress and scenario testing.
Risk Environment
Macroeconomic risk has been elevated throughout 2024 and the uncertainties around the global macroeconomic growth
prospects are reflected in cost of living challenges and high interest rates.
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Notes to the consolidated financial statements
The global growth forecasts for 2025 have lost momentum with the possibility of US policy changes such as global trade
restrictions, higher inflationary impulses and heightened geo-political tensions. Analysts continue to comment on the impact to
global trade prices and supply, global energy and financial markets including the increased level of gearing present across
industries. Affordability remains a concern because of the global economic climate and will continue to impact all customers,
including relatively affluent customers. Customer experience and retention will continue to require close monitoring.
While the high inflationary environment has eased within the UK and globally, sterling weakness, tariffs, global growth and trade
deteriorations, together with government policy changes, may exacerbate pressure on consumers.
We expect continued regulatory change in 2025 and beyond. There are a significant number of ongoing regulatory developments
that will create a high level of regulatory scrutiny on the fair value of products provided by the insurance industry.
The Group continues to maintain strong solvency and liquidity positions through a range of scenarios and stress testing. Our
capital and liquidity positions have been tested by recent market conditions and have been shown to be robust and resilient.
There remains an increased threat of malware and ransomware attacks across the world. In response we have increased the
protection level of anti-malware and cyber incident security controls. We continue to monitor threat intelligence data and update
our controls to maintain protection against new and emerging ransomware variants, including in respect of our suppliers.
Aviva remains committed to supporting an economy wide transition to a low carbon, climate resilient, nature positive and socially
just future. In March 2021, we set an ambition to become a Net Zero company by 2040. Through our Risk Management
Framework, we continue to identify, measure, monitor, manage and report on the risks to which our business, customers and
wider society are, or could be, exposed to.
We have defined our climate risk appetite framework (including climate statements and preferences) to enable confident, risk-
based decisions. We report progress quarterly to enable the Board and senior management to oversee and monitor the financial
impact of climate change and ensure this is in line with our risk appetite and risk profile.
We use a variety of historical and forward-looking metrics to monitor and manage the delivery of our sustainability ambition over
the short, medium and long term. For example, we have built the possibility of extreme weather events into our general insurance
pricing and reinsurance programme design, and monitor actual weather-related losses versus expected weather losses by
business. We have defined financed greenhouse gas emissions metrics to track our 2030 interim investment ambition, and we
calculate temperature alignment and Climate Value at Risk (VaR) to assess the climate-related risks and opportunities under
different emission projections and associated temperature pathways.
Risk Management Framework (RMF)
The Group’s RMF is at the heart of every business decision and is key to a robust control environment and the Group’s
sustainable success. The key components of our RMF are risk appetite; risk governance, including risk policies and business
standards, risk oversight committees and roles and responsibilities; and the processes we use to identify, measure, manage,
monitor and report risks, including the use of our risk models and stress and scenario testing. A risk taxonomy is maintained for a
consistent approach to risk identification, measurement and reporting, and to determine application of the Group Risk Appetite
Framework and the risks for which a risk policy is required. The taxonomy is arranged in a hierarchy with more granular risk
types grouped into the following principal risk categories: credit and market, liquidity, life insurance, general insurance (including
health), operational and strategic risk. Risks falling within these types may affect a number of outcomes including those relating to
solvency, liquidity, profit, reputation and conduct.
To promote a consistent and rigorous approach to risk management across all businesses we have a set of risk policies, business
standards and associated guidance which set out the risk strategy/forward plan, appetite, framework, key controls, and minimum
requirements for the Group’s worldwide operations. The business unit’s Chief Executive Officers make an annual declaration,
supported by an opinion from the business unit Chief Risk Officers, that the system of governance and internal controls was
effective and fit for purpose for their business throughout the year.
The Group’s Risk Appetite Framework was refreshed during the year, with revised risk appetites, preferences and tolerances
considered and approved by the Risk Committee, and the addition of four new risk preferences to help the business make day-
to-day decisions in the development and use of artificial intelligence.
A regular top-down key risk identification and assessment process is carried out by the Risk function in collaboration with the
business. This includes the consideration of emerging risks and is supported by deeper thematic reviews. This process is
replicated at the business unit level. The risk assessment processes are used to generate risk reports which are shared with the
relevant risk committees.
Risk models are an important tool in our measurement of risks and are used to support the monitoring and reporting of the risk
profile and in the consideration of the risk management actions available. We carry out a range of stress (where one risk factor,
such as equity returns, is assumed to vary) and scenario (where combinations of risk factors are assumed to vary) tests to
evaluate their impact on the business and the management actions available to respond to the conditions envisaged. For those
risk types managed through the holding of capital, being our principal risk types except for liquidity risk, we measure and monitor
our risk profile based on the Solvency Capital Requirement (SCR).
Roles and responsibilities for risk management in the Group are based around the ‘three lines of defence’ risk governance model
where ownership for risk is taken at all levels in the Group. Line management in the business is accountable for risk ownership
and management, including the implementation and embedding of the RMF. The Risk Function is accountable for quantitative and
qualitative oversight and challenge of the risk identification, measurement, monitoring, management, and reporting processes
and for developing the RMF, as well as providing advisory support to the business on risk innovation. Internal audit provides an
independent assessment of the risk management framework and internal control processes.
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Notes to the consolidated financial statements
Board oversight of risk and its management across the Group is maintained on a roughly quarterly basis through its Risk
Committee and Customer and Sustainability Committee. The Board has overall responsibility for determining risk appetite, which
is an expression of the risk the business is willing to take. Three Group-level management Committees (Group Executive Risk
Committee, Group Asset Liability Committee and the Disclosure Committee) exist to assist members of the Aviva Executive
Committee in the discharge of their delegated authorities and their accountabilities within the Aviva governance framework and in
relation to their defined regulatory responsibilities.
Where the Group has entered into joint venture arrangements without a controlling interest, we work with our joint venture
partners to align the joint venture’s RMF, where possible, with Aviva’s RMF so not to unduly increase the overall risk exposure of
the Group. Upon acquiring a new subsidiary, we work with these entities to understand how their risks are managed and apply the
Group’s RMF to the acquired entity in a manner appropriate for the scale and nature of their operations.
The types of risks to which the Group is exposed have not changed significantly during the year and remain credit, market,
liquidity, life insurance, general insurance and health, asset management and operational risks. These risks are described below.
(a) Credit risk
Credit risk is the risk of financial loss as a result of the default or failure of third parties to meet their payment obligations to the
Group, or variations in market values as a result of changes in expectations related to these risks. Credit risk is taken so that the
Group can provide the returns required to satisfy policyholder liabilities and to generate returns for our shareholders. In general
we prefer to take credit risk over equity and property risks, because of the better expected risk-adjusted return, our credit risk
analysis capability and the structural investment advantages conferred to insurers with long-dated, relatively illiquid liabilities.
Our approach to managing credit risk recognises that there is a risk of adverse financial impact resulting from fluctuations in
credit quality of third parties including default, rating transition and credit spread movements. Our credit risks arise principally
through exposures to debt security investments, structured asset investments, bank deposits, derivative counterparties,
mortgage lending and reinsurance counterparties.
The Group manages its credit risk at business unit and Group level. All business units are required to implement credit risk
management processes (including limits frameworks), operate specific risk management committees and report and monitor
their exposures against detailed pre-established risk criteria. At Group level, we manage and monitor all exposures across our
business units on a consolidated basis and operate a Group limit framework that must be adhered to by all.
We did not experience a material increase in credit defaults in 2024, with pro-active management of the credit portfolio in a
challenging macroeconomic environment. We continue to monitor closely any deterioration in the credit markets. Our capital
position includes an allowance for the expected potential impacts from downgrades and defaults.
A detailed breakdown of the Group’s current credit exposure by credit quality is shown below.
(i) Financial exposures by credit ratings
Financial assets are graded according to current external credit ratings issued. AAA is the highest possible rating. Investment
grade financial assets are classified within the range of AAA to BBB ratings. Financial assets with ratings outside this range are
classified as sub-investment grade. The following table provides information regarding the aggregated credit risk exposure of the
Group for financial and reinsurance contract assets with external credit ratings. ‘Not rated’ assets capture assets not rated by
external ratings agencies.
2024
2023
AAA
AA
A
BBB
Below
BBB
Not
rated
Maximum
exposure
AAA
AA
A
BBB
Below
BBB
Not
rated
Maximum
exposure
%
%
%
%
%
%
£m
%
%
%
%
%
%
£m
Fixed maturity
securities
10.6 % 44.2 % 20.1 % 13.3 %
3.7 %
8.1 % 115,539
11.7 % 39.0 % 24.2 % 13.4 %
4.7 %
7.0 % 113,889
Reinsurance contract
assets
— % 74.2 % 25.3 % (1.0) %
— %
1.5 % 7,742
— % 76.0 % 23.1 %
— %
— %
0.9 %
6,534
Reinsurance assets
for non-participating
investment contracts
— % 48.8 % 50.5 % 0.7 %
— %
— % 5,280
— % 50.7 % 45.6 %
3.7 %
— %
— %
4,713
Other investments
1.5 %
0.2 %
0.2 %
0.1 %
— % 98.0 % 52,400
0.8 %
0.2 %
0.6 %
0.2 %
— % 98.2 % 39,370
Loans
13.0 %
— %
— %
0.4 %
— % 86.6 % 30,553
— %
— %
0.2 %
0.5 %
— % 99.3 % 31,685
Total
211,514
196,191
The majority of non-rated fixed maturity securities within shareholder assets are private placements and other corporate bonds
held by our UK IWR business, amounting to £5.6 billion (2023: £4.9 billion). Of these securities most are allocated an investment
grade internal rating using a methodology largely consistent with that adopted by an external rating agency.
The Group’s maximum exposure to credit risk of financial assets, without taking collateral or these hedges into account, is
represented by the carrying value of the financial instruments in the Statement of Financial Position. For reinsurance contract
assets the maximum exposure reflects the carrying value less the value of CSM.
The financial assets comprise debt securities, reinsurance assets, derivative assets, loans and receivables. The carrying values
of these assets are disclosed in the relevant notes: financial investments (note 27), reinsurance assets (note 39), loans (note 24)
and receivables (note 28). The collateral in place for these credit exposures is disclosed in note 54.
(ii) Other investments
Other investments include: unit trusts and other investment vehicles; derivative financial instruments, representing positions
to mitigate the impact of adverse market movements; and other assets, including deposits with credit institutions and minority
holdings in property management undertakings.
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Notes to the consolidated financial statements
The credit quality of the underlying debt securities within investment vehicles is managed by the safeguards built into the
investment mandates for these funds which determine the funds’ risk profiles. At the Group level, we also monitor the asset
quality of unit trusts and other investment vehicles against Group set limits.
A proportion of the assets underlying these investments are represented by equities and so credit ratings are not generally
applicable. Equity exposures are managed against agreed benchmarks that are set with reference to overall appetite for
market risk.
(iii) Loans
The Group loan portfolio principally comprises:
• Policy loans which are generally collateralised by a lien or charge over the underlying policy;
• Loans and advances to banks which primarily relate to loans of cash collateral received in stock lending transactions.
These loans are fully collateralised by other securities;
• Healthcare, infrastructure and private finance initiative loans secured against healthcare, education, social housing and
emergency services related premises; and
• Mortgage loans collateralised by property assets.
We use loan to value, interest and debt service cover and diversity and quality of the tenant base metrics to internally monitor
our exposures to mortgage loans. We use credit quality, based on dynamic market measures, and collateralisation rules to
manage our stock lending activities. Policy loans are loans and advances made to policyholders and are collateralised by the
underlying policies.
(iv) Credit concentration risk
The long-term and general insurance and health businesses are generally not individually exposed to significant concentrations
of credit risk due to the regulations applicable in most markets and the Group credit policy and limits framework, which limit
investments in individual assets and asset classes. Credit concentrations are monitored as part of the regular credit monitoring
process and are reported to the Group Asset Liability Committee (ALCO).
(v) Reinsurance credit exposures
The Group is exposed to concentrations of risk with individual reinsurers due to the nature of the reinsurance market and the
restricted range of reinsurers that have acceptable credit ratings. The Group operates a policy to manage its reinsurance
counterparty exposures, by limiting the reinsurers that may be used and applying strict limits to each reinsurer. The largest
aggregated counterparty exposure within shareholder assets is to the Swiss Reinsurance Company Limited (including
subsidiaries), representing approximately 1.1% of the total shareholder assets. Reinsurance exposures are aggregated with other
exposures to ensure that the overall risk is within appetite. The Group Capital and Group Risk teams have an active monitoring
role with escalation to the Chief Financial Officer (CFO), Chief Risk Officer (CRO), Group ALCO and the Board Risk Committee as
appropriate.
(vi) Securities finance
The Group has significant securities financing operations within the UK and smaller operations in some other businesses.
The risks within this activity are mitigated by collateralisation and minimum counterparty credit quality requirements.
(vii) Derivative credit exposures
The Group is exposed to counterparty credit risk through derivative trades. This risk is generally mitigated through holding
collateral for most trades. Residual exposures are captured within the Group’s credit management framework.
(viii) Unit-linked business
In unit-linked business the policyholder bears the direct market risk and credit risk on investment assets in the unit funds and
the shareholders’ exposure to credit risk is limited to the extent of the income arising from asset management charges based
on the value of assets in the fund.
(ix) Impairment of financial assets
Impairment is calculated using an expected credit loss model for financial assets measured at amortised cost and lease
receivables, with reference to historical experience of losses adjusted for forward-looking information, as discussed in
accounting policy U.
(b) Market risk
Market risk is the risk of adverse financial impact resulting, directly or indirectly, from fluctuations in interest rates, inflation,
foreign currency exchange rates, equity and property prices. Market risk arises in business units because of fluctuations in both
the value of liabilities and the value of investments held. At Group level, it also arises in relation to foreign currency exchange risk
from our international businesses and market risk from the value of investment assets held at Plc level. We actively seek some
market risks as part of our strategy and in accordance to our risk preferences set out in our Risk Appetite Framework.
The management of market risk is undertaken at business unit and at Group level. Businesses manage market risks locally using
the Group market risk framework and within local regulatory constraints. Group Capital is responsible for monitoring and
managing market risk at Group level, limiting the impact of mismatches through monitoring of sensitivities and the application of
our Asset Liability Management Business Standard.
In addition, where the Group’s long-term savings businesses have written insurance and investment products where most
investment risks are borne by its policyholders, these risks are managed in line with local regulations and marketing literature,
so to satisfy the policyholders’ risk and reward objectives. The Group writes unit-linked business, primarily in the UK.
The shareholders’ exposure to market risk on this business is limited to the extent that income arising from asset management
charges is based on the value of assets in the fund.
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Notes to the consolidated financial statements
The Group has transitioned away from GBP London Interbank Offered Rate (LIBOR), USD LIBOR and Canadian Dollar Offered Rate
(CDOR) with the only remaining exposure being a small number of currently fixed-rate public bonds that would revert to GBP
LIBOR-referencing floating rates in the event of a non-call by the issuer at the next call date. We continue to assess the likelihood
of this event.
The most material types of market risk that the Group is exposed to are described below.
(i) Equity price risk
The Group is subject to direct equity price risk arising from changes in the market values of its equity securities portfolio.
Our most material indirect equity price risk exposures are to policyholder unit-linked funds, which are exposed to a fall in
the value of the fund thereby reducing the fees we earn on those funds, and participating contracts, which are exposed to
a fall in the value of the funds thereby increasing our costs for policyholder guarantees. We have some equity exposure
in shareholder funds thereby increasing our costs for policyholder guarantees. We also have some equity exposure in
shareholder funds through equities held to match inflation-linked liabilities as part of general insurance investment optimisation.
We continue to limit our direct equity exposure in line with our risk preferences. At a business unit level, investment limits and
local investment regulations require that business units hold diversified portfolios of assets thereby reducing exposure to
individual equities. The Group does not have material holdings of unquoted equity securities.
Equity risk is also managed using a variety of derivative instruments, including futures and options. Businesses actively model
the performance of equities through the use of risk models, in particular to understand the impact of equity performance on
guarantees, options and bonus rates. An equity hedging strategy remains in place to help control the Group’s overall direct
and indirect exposure to equities.
Sensitivity to changes in equity prices is given in section (h) Risk and capital management, below.
(ii) Property price risk
The Group is subject to property price risk directly because of holdings of investment properties in a variety of locations
worldwide and indirectly through investments in mortgages and mortgage backed securities. Investment in property is managed
at business unit level, and is subject to local regulations on investments, liquidity requirements and the expectations of
policyholders.
As at 31 December 2024, no material derivative contracts had been entered into to mitigate the effects of changes in property
prices. We maintain a conservative loan-to-value ratio on our commercial mortgage portfolio. Exposure to property risk on
equity release mortgages from sustained underperformance in the UK House Price Index (HPI) is mitigated by capping loan to
value on origination at low levels and regularly monitoring the performance of the mortgage portfolio.
Sensitivity to changes in property prices is given in section (h) Risk and capital management, below.
(iii) Interest rate risk
Interest rate risk arises primarily from the Group’s investments in long-term debt and fixed income securities and their
movement relative to the value placed on the insurance liabilities. A number of policyholder product features contain interest rate
risk. The major features include guaranteed surrender values, guaranteed annuity options, and minimum surrender and maturity
values. Details of material guarantees and options are given in note 39(h).
We have limited appetite for interest rate risk as we do not believe it is adequately rewarded. We manage our overall exposure to
interest rate risk via setting a risk tolerance on a Solvency II cover ratio basis. Exposure to interest rate risk is monitored through
several measures that include duration, capital modelling, sensitivity testing and stress and scenario testing.
While interest rate risk is well managed, the Group’s regulatory capital cover ratio is sensitive to interest rates movements with
the cover ratio increasing with rate rises and decreasing with rate falls. Interest rates are highly dependent on the macro-
economic outlook and wider geopolitical environment which has a high degree of uncertainty at this time.
The Group typically manages interest rate risk by investing in fixed interest securities which closely match the interest rate
sensitivity of the liabilities where such investments are available. Per matching adjustment criteria, our annuity liabilities are
matched with assets of the same duration, and in some cases where appropriate cash flow matching has been used. These
assets include corporate bonds, residential mortgages and commercial mortgages. Should they default before maturity, it is
assumed that the Group can reinvest in assets of a similar risk and return profile, which is subject to market conditions. Interest
rate risk is also managed using a variety of derivative instruments, including futures, options, swaps, caps and floors.
Other product lines of the Group, such as protection, are not significantly sensitive to interest rate or market movements. For
unit-linked business, the shareholder margins emerging are typically a mixture of annual management fees and risk/expense
charges. Risk and expense margins are largely unaffected by low interest rates. Annual management fees could increase if there
was a move towards low interest rates which increases the value of fixed interest unit funds.
The UK participating business includes contracts with features such as guaranteed surrender values, guaranteed annuity options
and minimum surrender and maturity values. These liabilities are managed through duration matching of assets and liabilities and
the use of derivatives, including swaptions. As a result, the Group’s exposure to sustained low interest rates on this portfolio is
not material. Details of material guarantees and options are given in note 39(h).
Sensitivity to changes in interest rates is given in section (h) Risk and capital management.
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Notes to the consolidated financial statements
(iv) Inflation risk
Inflation risk arises primarily from the Group’s exposure to general insurance claims inflation, to inflation linked benefits within
the defined benefit staff pension schemes and within the UK annuity portfolio and to expense inflation. Increases in long-term
inflation expectations are closely linked to long-term interest rates and so are frequently considered with interest rate risk.
Exposure to inflation risk is monitored through capital modelling, sensitivity testing and stress and scenario testing. The Group
typically manages inflation risk through its investment strategy and, in particular, by investing in inflation linked securities and
through a variety of derivative instruments, including inflation linked swaps. Inflation risk is an ongoing concern in the current
macroeconomic environment and, in particular, in the context of the possibility of tariffs being applied on Canadian imports. We
are monitoring the potential impact of inflation on the profits and margins of the Group and our counterparties, which could
impact their credit quality.
(v) Currency risk
In the Group, we actively seek to manage currency risk primarily by matching assets and liabilities in functional currencies at
the business unit level. The Group has minimal exposure to currency risk from financial instruments held by business units in
currencies other than their functional currencies, as nearly all such holdings are backing either unit-linked or with-profits
contract liabilities or are hedged. As a result, the foreign exchange gains and losses on investments are largely offset by changes
in unit-linked and with-profits liabilities and fair value changes in derivatives attributable to changes in foreign exchange rates
recognised in the income statement.
At 31 December, the Group’s net assets by currency was:
2024
2023
£m
£m
Sterling
8,428
9,821
Euro
363
324
$CAD
669
565
Other
(840)
(1,110)
Total
8,620
9,600
A 10% change in sterling to euro/$CAD period-end foreign exchange rates would have had the following impact on net assets
and a 10% change in sterling to euro/$CAD average foreign exchange rates applied to translate foreign currency profits would
have had the following impact on profit before tax, including resulting gains and losses on foreign exchange hedges.
2024
2023
Impact on
net assets
Impact on
profit before
tax
Impact on
net assets
Impact on
profit before
tax
£m
£m
£m
£m
10% increase in sterling/euro
(36)
24
(32)
22
10% decrease in sterling/euro
36
(29)
32
(26)
10% increase in sterling/$CAD
(67)
(27)
(57)
(39)
10% decrease in sterling/$CAD
67
34
57
48
The balance sheet changes arise from retranslation of business unit statements of financial position from their functional
currencies into sterling, with above movements being taken through the currency translation reserve. These balance sheet
movements in exchange rates therefore have no impact on profit. Net asset and profit before tax sensitivities are stated after
taking account of the effect of currency hedging activities.
(vi) Derivatives risk
Derivatives are used by a number of the business units. Derivatives are primarily used for efficient investment management,
risk hedging purposes, or to structure specific retail savings products. Activity is overseen by the Group Capital and Group Risk
teams, which monitor exposure levels and approve large or complex transactions.
The Group applies strict requirements to the administration and valuation processes it uses, and has a control framework that
is consistent with market and industry practice for the activity that is undertaken.
(vii) Correlation risk
The Group recognises that lapse behaviour and potential increases in consumer expectations are sensitive to and interdependent
with market movements and interest rates. These interdependencies are taken into consideration in the internal capital model
and in scenario analysis.
(c) Liquidity risk
Liquidity risk arises from the risk of not being able to make payments as they become due because there are insufficient assets
in cash (or permissible collateral) form. At a business unit level, the key liquidity risks relate to deviations in expected insurance
cashflows and collateral calls on derivative contracts to manage interest rate, inflation and foreign-exchange risks.
The Group manages liquidity risk through use of a Centre Assets Liquidity Risk Appetite (LRA), and the businesses adopt their
own LRAs under guidance from the Group. The Group LRA ensures we maintain sufficient financial resources at the centre
to meet its (largely external) obligations as they fall due. The business unit LRAs consider both short and longer-term stressed
liquidity requirements. In the short term the source of liquidity is restricted, with a wider pool of liquidity (with appropriate
haircuts) available in the longer term. These LRAs in combination with business unit liquidity risk management plans,
which identify available liquidity generating actions, and ongoing monitoring against financial market triggers ensure that liquidity
risk is managed.
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Notes to the consolidated financial statements
Maturity analysis
The following tables show the maturities of our insurance and investment contract liabilities, and of the financial assets held
to meet them. A maturity analysis of the contractual amounts payable for borrowings and derivative liabilities is given in notes
45 and 53(b)(ii), respectively. Contractual obligations under leases and capital commitments are given in note 22 and note 49.
(i) Analysis of maturity of insurance and investment contract liabilities
For insurance and participating investment contract liabilities, including reinsurance contract liabilities, the following table shows
the estimates of the present value of future cash flows at 31 December 2024 and 2023 analysed by estimated timing.
For non-participating investment contracts, almost all may be surrendered or transferred on demand. The earliest contractual
maturity date is therefore the 2024 statement of financial position date, for a surrender amount approximately equal to the
current statement of financial position liability.
However, we expect surrenders, transfers and maturities to occur over many years, and therefore the table below reflects the
expected cash flows for these contracts, rather than their contractual maturity date.
2024
Within 1
year
One to
Two
years
Two to
Three
years
Three to
Four
years
Four to
Five Years
Five to 15
years
Over 15
years
Total
£m
£m
£m
£m
£m
£m
£m
£m
Life risk
3,593
2,259
2,059
2,109
2,207
21,470
27,868
61,565
Participating
3,434
2,025
1,913
1,824
1,896
14,674
10,281
36,047
Non-life
5,251
3,134
1,936
1,360
928
2,122
407
15,138
Insurance contract and participating
investment contract liabilities
12,278
7,418
5,908
5,293
5,031
38,266
38,556 112,750
Non-participating investment contract
liabilities
648
1,712
3,015
4,082
4,885 55,440 109,360 179,142
Total contract liabilities
12,926
9,130
8,923
9,375
9,916
93,706 147,916 291,892
2023
Within 1
year
One to
Two years
Two to
Three
years
Three to
Four years
Four to
Five Years
Five to 15
years
Over 15
years
Total
£m
£m
£m
£m
£m
£m
£m
£m
Life risk
3,751
2,302
2,230
2,226
2,252
20,623
26,009
59,393
Participating
3,650
2,087
1,998
1,923
2,006
15,612
11,163
38,439
Non-life
4,803
2,748
1,747
1,206
828
2,048
469
13,849
Insurance contract and participating
investment contract liabilities
12,204
7,137
5,975
5,355
5,086
38,283
37,641
111,681
Non-participating investment contract
liabilities
1,543
1,259
2,908
4,109
4,833
52,385
91,551 158,588
Total contract liabilities
13,747
8,396
8,883
9,464
9,919
90,668
129,192 270,269
The amounts from insurance and investment contract liabilities that are payable on demand are set out below.
2024
2023
Amount
payable on
demand
Carrying
value
Amount
payable on
demand
Carrying
value
£m
£m
£m
£m
Insurance contracts - Life risk
11,759
12,018
11,378
11,324
Insurance contracts - Participating
35,973
35,915
38,246
38,131
Non-participating investment contract liabilities
179,044 179,142
158,514 158,588
226,776 227,075
208,138 208,043
(ii) Analysis of maturity of financial assets
The following table provides an analysis, by maturity date of the principal, of the carrying value of financial assets which are
available to fund the repayment of liabilities as they crystallise.
2024
2023
demand
or within
1 year
One to five
years
Over five
years
No
fixed
term
Total
demand
or within 1
year
One to
five years
Over five
years
No
fixed
term
Total
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
Fixed maturity securities
20,137
34,886 60,233
283 115,539 23,667
32,154
58,067
— 113,888
Equity securities
—
—
— 96,040 96,040
—
—
— 92,572 92,572
Other investments
48,724
566
2,418
692 52,400 36,076
429
2,383
482 39,370
Loans
5,423
5,844 19,286
— 30,553
6,270
5,205
20,390
19
31,884
Cash and cash equivalents
23,481
—
—
— 23,481
17,273
—
—
—
17,273
Total financial assets
97,765
41,296 81,937 97,015 318,013 83,286 37,788
80,840 93,073 294,987
The assets above are analysed in accordance with the earliest possible redemption date of the instrument at the initiation of the
Group. Where an instrument is transferable back to the issuer on demand, such as most unit trusts or similar types of investment
vehicle, it is included in the ‘On demand or within 1 year’ column. Debt securities with no fixed contractual maturity date are
generally callable at the option of the issuer at the date the coupon rate is reset under the contractual terms of the instrument.
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The terms for resetting the coupon are such that we expect the securities to be redeemed at this date, as it would be uneconomic
for the issuer not to do so, and for liquidity management purposes we manage these securities on this basis. The first repricing
and call date is normally ten years or more after the date of issuance. Most of the Group’s investments in equity securities and
fixed maturity securities are market traded and therefore, if required, can be liquidated for cash at short notice.
(d) Life insurance risk
Life insurance risk in the Group arises through its exposure to mortality, morbidity and longevity risk and exposure to worse than
anticipated operating experience on factors such as persistency levels, exercising of policyholder options and management and
administration expenses.
The Group chooses to take measured amounts of life insurance risk provided that the relevant business has the appropriate core
skills to assess and price the risk and adequate returns are available. The Group’s underwriting strategy and appetite is
communicated via specific policy statements, related business standards and guidelines. Life insurance risk is managed primarily
at business unit level with oversight at the Group level.
The Group's life insurance risk continues to be dominated by exposure from our UK business. Longevity risk remains the most
significant life insurance risk due to the Group’s annuity portfolio. We are also exposed to longevity risk through the Aviva staff
pension schemes, to which our economic exposure has been reduced since 2014 by entering into a longevity swap covering the
majority of pensioner in-payment scheme liabilities in force at the time. We purchase reinsurance for some of the longevity risk
relating to our annuity business and this also includes the bulk annuity transactions with the Aviva staff pension schemes that
have been carried out since 2019, including a further tranche in 2024.
We have reinsurance in place across all our businesses to reduce our net exposure to potential losses. In the UK we have
extensive quota share reinsurance in place on Individual Life Protection business and for UK Group Life Protection we use
surplus reinsurance for very large individual claims as well as excess-of-loss reinsurance for large concentrations of risk in
single geographical locations.
More generally, life insurance risks are believed to provide a significant diversification against other risks in the portfolio. Life
insurance risks are modelled within the internal capital model and are subject to sensitivity and stress and scenario testing.
COVID-19 is now expected to present limited future impact to our business, and this is allowed for in assumptions for pricing and
reporting. However, there remains the potential for other future pandemics.
Recent persistency experience has been generally resilient to cost of living pressures and has not shown significant deterioration
in the short term. There remains some uncertainty about the potential for this to continue, which is being monitored closely.
External factors that may impact future persistency experience include prolonged high inflation and interest rates, increased
stock-market volatility and changes in legislation.
The assumption setting and management of life insurance risks is governed by the Group-wide business standards covering
underwriting, pricing, product design and management, in-force management, claims handling and reinsurance. The individual life
insurance risks are managed as follows:
• Mortality and morbidity risks are managed through comprehensive medical underwriting, input and advice from medical
experts, as well as frequent monitoring and analysis of company experience. Reinsurance treaties are in place to provide
further mitigation.
• Longevity risk is managed through monitoring and analysis of the Group’s experience, as well as considering the latest external
industry data and emerging trends. While individual businesses are responsible for reserving and pricing for annuity business,
the Group monitors the exposure to this risk and any associated capital implications. The Group has used reinsurance solutions
to reduce the risks from longevity and continually monitors and evaluates emerging market solutions to mitigate this risk
further.
• Persistency risk is managed at a business unit level through frequent monitoring of company experience and benchmarking
against local market information. Generally, persistency risk arises from customers lapsing their policies earlier than has been
assumed. Lapses and their associated financial impact are reduced through appropriate design of products to meet current
and, where possible, future customer needs. Businesses also implement specific initiatives to improve the retention of policies
which may otherwise lapse.
• Expense risk is primarily managed by the business units through robust cost controls and efficiency targets, together with
frequent monitoring of expense levels.
Embedded derivatives
The Group is exposed to the risk of changes in policyholder behaviour due to the exercise of options, guarantees and other
product features embedded in its long-term savings products. These product features offer policyholders varying degrees of
guaranteed benefits at maturity or on early surrender, along with options to convert their benefits into different products on pre-
agreed terms. The extent of the impact of these embedded derivatives differs considerably between business units and exposes
Aviva to changes in policyholder behaviour in the exercise of options as well as market risk.
Examples of each type of embedded derivative affecting the Group are:
• Options: call, put, surrender and maturity options, guaranteed annuity options, options to cease premium payment, options for
withdrawals free of market value adjustment, annuity options and guaranteed insurability options.
• Guarantees: embedded floor (guaranteed return), maturity guarantee, guaranteed death benefit, guaranteed minimum rate of
annuity payment and the 'no negative equity' guarantee associated with the Equity Release business; and
• Other: indexed interest or principal payments, maturity value.
The impact of these is reflected in the capital model and managed as part of the asset liability framework. Further disclosure on
financial guarantees and options embedded in contracts and their inclusion in insurance and investment contract liabilities is
provided in note 39(h).
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(e) General insurance risk and health risk
The Group writes a balanced portfolio of general insurance risk (including personal motor, household, commercial motor,
property and liability), as well as global exposure to corporate specialty risks. This risk is taken on, in line with our underwriting
and pricing expertise, to provide an appropriate level of return for an acceptable level of risk. Underwriting discipline and a
robust governance process is at the core of the Group’s underwriting strategy.
The Group’s health insurance risks (including risks associated with private health insurance, critical illness cover, income
protection and personal accident insurance, as well as a range of corporate healthcare products) exposes the Group to morbidity
risk (the proportion of our customers falling sick) and medical expense inflation.
Provisions made for insurance liabilities are inherently uncertain. Due to this uncertainty, general and health insurance reserves
are regularly reviewed by qualified and experienced actuaries at the business unit and Group level in accordance with the
Group’s reserving framework. These and other key risks, including the occurrence of unexpected claims from a single source or
cause and inadequate reinsurance protection/risk transfer, are subject to an overarching risk management framework and
various mechanisms to govern and control our risks and exposures.
We recognise that the severity and frequency of weather-related events has the potential to adversely impact provisions for
insurance liabilities and our earnings, with the result that there is some seasonality in our results from period to period. Large
catastrophic (CAT) losses arising as a result of these events are explicitly considered in our economic capital modelling to ensure
we are resilient to such CAT scenarios, and this modelling considers the impact of climate change on the frequency and severity
of potential future events. The impact of actual weather-related losses compared to the expected losses based on the long-term
average was 7% worse (2023: 2% worse) for UK & Ireland General Insurance and 104% worse (2023: 17% worse) for Canada
General Insurance.
More broadly, the materiality and time horizon over which climate-related risks and opportunities affect our business depend on
the specific insurance products, geographies and investments being considered. Notwithstanding that the impact on general
insurance liabilities is mitigated by the short-term nature of the business, the ability to re-price annually, and by the Company’s
reinsurance programmes, the physical effects of climate change will most likely result in more risks and perils becoming either
uninsurable or unaffordable over the longer term and the need for more urgent action increases.
In the UK, legal rulings related to business interruption coverage due to COVID-19 restrictions continue to be issued, with ongoing
proceedings and appeals taking place. Consequently there continues to be a degree of uncertainty in relation to business
interruption claims arising from COVID-19.
In Canada we are party to a number of litigation proceedings, including class actions that challenge coverage under our
commercial property policies, however, we believe we have a strong argument that there is no pandemic coverage under these
policies. We anticipate the main class action trial to determine if any coverage exists will be heard by mid 2026.
The Group purchases reinsurance protection that includes coverage for business interruption and is collecting or seeking
reinsurance recoveries of business interruption losses that are covered by reinsurance. The Group's general insurance business
does not have material underwriting exposure to Israel, Palestine, Russia or Ukraine, and does not conduct operations in the
affected regions.
The current geopolitical landscape and rising protectionist measures have the potential to lead to disruption to global supply
chains and heightened claims inflation in 2025, and may increase the uncertainty associated with the cost of settling general
insurance claims. While the impacts of heightened claims inflation can be mitigated via new business pricing actions, our ability to
price for inflation is dependent on market, competitor and customer behaviour. The time lag between premium earning and claims
emergence means that some adverse impact on profitability could be expected.
Reinsurance strategy
Significant reinsurance purchases are reviewed annually at both business unit and Group level to verify that the levels of
protection being bought reflect any developments in exposure and the risk appetite of the Group. The basis of these purchases
is underpinned by analysis of capital, earnings and capital volatility, cash flow and liquidity and the Group’s franchise value.
Detailed actuarial analysis is used to calculate the Group’s extreme risk profile and then design cost and capital efficient
reinsurance programmes to mitigate these risks to within agreed appetites. For businesses writing general insurance we analyse
the natural catastrophe exposure using various probabilistic catastrophe models which are benchmarked against external
catastrophe models widely used by the rest of the (re)insurance industry.
The Group cedes much of its worldwide catastrophe risk to third-party reinsurers. The Group purchases a Group-wide
catastrophe reinsurance programme to protect against its peak catastrophe losses in excess of a 1 in 250 year return period
(1 in 500 year return period in Canada). The total Group potential retained loss from its most concentrated catastrophe exposure
peril (Northern Europe Windstorm) is approximately £200 million on a per occurrence basis. The Group purchases a number
of general insurance business line specific reinsurance programmes with various retention levels to protect both capital and
earnings, and has reinsured 100% of its latent exposures to its historic UK employers’ liability and public liability business written
prior to 31 December 2000.
(f) Operational risk
Operational risk is the risk of direct or indirect loss, arising from inadequate or failed internal processes, people and systems, or
external events including changes in the regulatory environment. We have limited appetite for operational risk and aim to reduce
these risks as far as is commercially sensible.
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Notes to the consolidated financial statements
The Group continues to operate, validate and enhance its key operational controls and purchase insurance to minimise losses
arising from inadequate or ineffective internal processes, people and systems or from external events. The Group maintains
constructive relationships with its regulators around the world and responds appropriately to developments in relation to key
regulatory changes. The Operational Risk Appetite framework enables management and the Board to assess the overall quality
of the operational risk environment relative to risk appetite and where a business unit (or the Group) are outside of appetite,
require clear and robust plans to be put in place in order to return to appetite. As part of our continual improvements of our risk
management approach to keep pace with the business, increasing regulatory expectations, and the macroeconomic and geo-
political environment, we continue to implement risk and control improvements throughout the organisation and across all three
lines of defence. Those improvements continue to strengthen and enhance our risk management capabilities and enable us to
operate a stronger control environment, improve understanding and accountabilities of risks, reduce the complexity of how the
business thinks about and manages risks and create greater collaboration across the first and second lines of defence to provide
higher quality advice and challenge.
(i) IT and cyber security risk
We have implemented measures and will continue to embed the Group's operational resilience in response to applicable
operational resilience regulations (including outsourcing and critical third-party risk management). Digital Operational Resilience
Act (DORA) regulations come into effect for entities operating in the EU on 17 January 2025 and UK regulations on 31 March 2025.
This includes a programme of resilience and crisis response testing to ensure customer harm is minimised and the continued
financial safety and soundness of Aviva’s business. Operational resilience disciplines and assessments have been used in
response to global and regional material events, including changes to the geo-political environment and financial market
instability. We invoked crisis response and managed the CrowdStrike incident (which affected our third parties and not our own
internal systems) with no breach of impact tolerance for our core services and followed this with a full lessons learned exercise.
We rely on several outsourcing providers for critical business processes, customer servicing, investment operations and IT
support. To manage the risk of failure of a critical outsourcing provider, businesses are required to identify business critical
outsourced functions (internal and external) and for each to have exit and termination plans, and business continuity and disaster
recovery plans in place in the event of supplier failure, which are reviewed annually. We also carry out supplier financial stability
reviews at least annually.
Increasing geo-political tensions more generally have heightened the risk of cyber security attacks on the Group or its suppliers,
with the potential to cause business service interruption and/or data or intellectual property theft. In response Aviva continues to
actively monitor the threat environment and enhance its IT infrastructure and cyber controls to identify, detect and prevent attacks.
Aviva’s cyber defences are regularly tested using our own ‘ethical hacking’ team and we have engaged our suppliers to put in
place all reasonable measures so that services to Aviva and our customers are protected.
We oversee the management of controls for the current risks generative artificial intelligence presents to ensure these remain
effective as well as exploit the opportunities for process efficiency, better pricing and underwriting, product personalisation and
improved customer service.
Overall, Aviva services have remained stable in 2024 with no material disruption to customer journeys.
(ii) Reputational Risk
The Group actively monitors social and other media in order to manage misinformation about our business, products, colleagues
and customers should we be targeted by a hostile actor, taking corrective media action if necessary.
We are exposed to the risk that litigation, employee misconduct, operational failures, the outcome of regulatory investigations,
media speculation and negative publicity, disclosure of confidential client information, inadequate services, whether or not
founded, as well as wider geo-political and economic external events or trends, could impact our brands or reputation. Any of
our brands or our reputation could also be affected if products or services recommended by us (or any of our intermediaries)
do not perform as expected (whether or not the expectations are founded) or customers’ expectations of the product change.
(iii) Conduct Risk
A robust Compliance and Conduct Risk framework is in place across the Group, designed to facilitate adherence to local
regulatory requirements and provide good conduct outcomes for our customers, and other stakeholders. The Framework
supports relevant policies and standards. Compliance and conduct risks are reported, in line with risk appetite, to appropriate
governance forums.
We have designed our products and business processes so that we treat our customers fairly and we make use of various
metrics to assess our own performance, including customer advocacy, retention and complaints. Failure to treat our customers
fairly is counter to our purpose, values and culture and could result in regulatory action and penalties, as well as impact our
brands and/or reputation.
The FCA Consumer Duty ("the Duty") requires firms to ‘act to deliver good customer outcomes’ by managing the risks posed to
those good outcomes; these are our customer conduct risks. Achieving the expectations of the Duty aligns with our strategic
priority of becoming the go-to customer brand for Insurance, Wealth and Retirement. We have enhanced our Group-wide
Compliance and Conduct risk policy to strengthen the definition and scope to reflect the Duty. We refreshed the compliance and
conduct risk appetite and sharpened guidance around good customer outcomes and foreseeable harm. Senior Manager role
profiles and their statements of responsibility have been refreshed and we revised strategy agendas to enhance the focus on
customer outcomes and reviewed coverage of customer outcomes in monitoring. We have updated our policies and business
standards (including those relating to people and reward) where needed.
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Notes to the consolidated financial statements
(iv) Asset Management Risk
The Group is directly exposed to the risks associated with operating an asset management business through its ownership of
Aviva Investors. The underlying risk profile of our asset management risk is derived from investment performance, specialist
investment professionals and leadership, product development capabilities, fund liquidity, margin, client retention, regulatory
developments, fiduciary and contractual responsibilities. Funds invested in illiquid assets such as commercial property are
particularly exposed to liquidity risk. The risk profile is regularly monitored.
A client relationship team is in place to manage client retention risk, while all new asset management products undergo a
review and approval process at each stage of the product development process, including approvals from legal, compliance
and risk functions. Investment performance against client objectives relative to agreed benchmarks is monitored as part of
our investment performance and risk management process, and subject to further independent oversight and challenge by
a specialist risk team, reporting directly to the Aviva Investors’ Chief Risk Officer.
(g) Risk and capital management
(i) Sensitivity test analysis
The Group uses a number of sensitivity tests to understand the volatility of earnings, the volatility of its capital requirements, and
to manage its capital more efficiently. Sensitivities to economic and operating experience are regularly produced on the Group’s
key financial performance metrics to inform the Group’s decision making and planning processes, and as part of the framework
for identifying and quantifying the risks to which each of its business units, and the Group as a whole, are exposed.
(ii) Life insurance and investment contracts
The nature of long-term business is such that a number of assumptions are made in compiling these financial statements.
Assumptions are made about investment returns, expenses, mortality rates and persistency in connection with the in-force
policies for each business unit. Assumptions are best estimates based on historic and expected experience of the business.
A number of the key assumptions for the Group’s central scenario are disclosed elsewhere in these statements.
(iii) General insurance and health business
General insurance and health claim liabilities are estimated by using standard actuarial claims projection techniques. These methods
extrapolate the claims development for each accident year based on the observed development of earlier years. In most cases,
no explicit assumptions are made as projections are based on assumptions implicit in the historic claims.
(iv) Sensitivity test results
Illustrative results of sensitivity testing for long-term business, general insurance and health business and the fund management
and non-insurance business are set out below. For each sensitivity test the impact of a reasonably possible change in a single
factor is shown, with other assumptions left unchanged. See below for further details on the limitations of the sensitivity analysis.
The sensitivity of the net IAS 19 surplus to discount rates is provided in note 44(b)(iii).
Sensitivity factor
Description of sensitivity factor applied
Market risk variables
Interest rate and investment return
The impact of a change in market interest rates by a 1% increase or decrease. The test allows
consistently for similar changes to investment returns and movements in the market value of
backing fixed interest securities.
Credit spreads
The impact of a 0.5% increase or decrease in credit spreads over risk-free interest rates on
corporate bonds and other non-sovereign credit assets, also allowing for the consequential
impact on liability valuations.
Equity market values
The impact of a 10% increase or decrease in equity market values.
Property market values
The impact of a 10% increase or decrease in commercial and residential property values. The
indirect impact of property values on the value of commercial mortgage loans and equity
release mortgage loans are included in this sensitivity.
Underwriting risk variables
Expenses
The impact of an increase in maintenance expenses by 10%.
Lapses/surrenders
The impact of an increase in lapse or surrender rates by 10%.
Assurance mortality/morbidity
The impact of an increase in mortality/morbidity rates for assurance contracts by 2%.
Annuitant mortality
The impact of a reduction in mortality rates for annuity contracts by 2%.
Gross loss ratios
The impact of an increase in gross loss ratios for general insurance and health business by 5%.
Market risk variables
For business where the change in market risk variables could impact on profit, the following table presents how a possible shift in
those variables might impact insurance and investment contract balances, the corresponding investment assets, profit before tax
and shareholders' equity after tax, all net of reinsurance.
In general, a beneficial impact under the sensitivity (i.e. reduction in liability/increase in assets) should be displayed as a positive
as this denotes an increase in immediate profit or to shareholder equity. For CSM impact an increase in CSM under the sensitivity
should be displayed as a negative as this locks away more profit for future release thereby offsetting some of the immediate profit.
The net of reinsurance liability impact, investment asset impact and impact on shareholder equity are shown as positives where
profit/shareholder equity increase and a negative where they decrease.
For business (including with-profits funds and unit-linked contracts) where changes in the market risk variables result in
movements that offset to nil, having no overall impact on profit or shareholders' equity, the offsetting movements in the insurance
and investment contract balances and investment assets are now included in this sensitivity analysis. The 2023 comparatives
have been updated to include these offsetting movements. Impacts on the Group's pension schemes are excluded from the
analysis.
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Notes to the consolidated financial statements
2024
2023
Net insurance/
investment
contracts balances Investment
assets
profit or
loss
Total
profit
before
tax
Shareholder’s
equity after
tax
Net insurance/
investment contracts
balances
Investment
assets
profit or
loss
Total
profit
before
tax
Shareholder’s
equity after
tax
CSM
Profit or
loss
CSM
Profit or
loss
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
100 bps increase in
interest rate
3
8,524
(9,278)
(754)
(569)
—
8,265
(9,385) (1,120)
(843)
100 bps decrease in
interest rate
(1)
(9,861)
10,707
846
639
—
(9,580)
10,902 1,322
996
50 bps increase in
corporate bond spread
12
1,826
(2,171)
(345)
(258)
8
1,859
(2,260)
(401)
(299)
50 bps decrease in
corporate bond spread
(14) (2,269)
2,639
370
276
(9)
(2,413)
2,846
433
319
10% increase in market
value of equity
(52) (13,880)
13,669
(211)
(160)
(39) (12,233)
12,047
(186)
(135)
10% decrease in market
value of equity
51 13,870
(13,654)
216
163
39
12,223
(12,033)
190
142
10% increase in value of
property
(17)
(609)
770
161
121
(17)
(625)
831
206
155
10% decrease in value of
property
16
611
(821)
(210)
(158)
18
625
(894)
(269)
(203)
Underwriting risk variables
The following table presents information on how reasonably possible changes in assumptions made by the Group with regard to
underwriting risk variables impact insurance and reinsurance contract balances, profit before tax and shareholders’ equity after
tax. The affected underlying insurance contracts and related reinsurance contracts are measured under IFRS 17 and the impacts
on fulfilment cash flows (FCF) and on the CSM are shown separately as these components are not fully symmetrically impacted
by possible changes in assumptions. The ultimate profit or loss arising will depend on the level of offset seen between CSM and
FCF movements in the sensitivity, which in turn is impacted by whether locked-in rates within the CSM are higher or lower than
the current market rates which drive the FCF movements.
Insurance contracts balances
Reinsurance contracts balances
Total profit
before tax
Shareholder’s
equity after tax
2024
FCF
CSM
Profit or
loss
FCF
CSM
Profit or
loss
£m
£m
£m
£m
£m
£m
£m
£m
Life insurance business
10% increase in expenses
(330)
284
(46)
18
(20)
(2)
(48)
(36)
10% increase in lapse rates
(41)
44
3
(35)
17
(18)
(15)
(11)
2% increase in assurance mortality
(286)
171
(115)
210
(115)
95
(20)
(15)
2% decrease in annuitant mortality
(377)
455
78
176
(231)
(55)
23
17
General insurance and health business
10% increase in expenses
(142)
—
(142)
—
—
—
(142)
(55)
5% increase in gross loss ratios
(350)
—
(350)
26
—
26
(324)
(243)
Insurance contracts balances
Reinsurance contracts balances
Total profit
before tax
Shareholder’s
equity after tax
FCF
CSM
Profit or
loss
FCF
CSM
Profit or
loss
2023
£m
£m
£m
£m
£m
£m
£m
£m
Life insurance business
10% increase in expenses
(243)
273
30
3
(6)
(3)
27
21
10% increase in lapse rates
(16)
(13)
(29)
(38)
56
18
(11)
(8)
2% increase in assurance mortality
(212)
243
31
138
(164)
(26)
5
4
2% decrease in annuitant mortality
(357)
461
104
169
(258)
(89)
15
11
General insurance and health business
10% increase in expenses
(126)
—
(126)
—
—
—
(126)
(53)
5% increase in gross loss ratios
(300)
—
(300)
14
—
14
(286)
(217)
For general insurance and health, the impact of the expense sensitivity on profit also includes the increase in ongoing
administration expenses, in addition to the increase in the claims handling expense provision.
Limitations of sensitivity analysis
The tables above demonstrate the effect of an instantaneous change in a key assumption while other assumptions remain
unchanged. In reality, changes may occur over a period of time and there is a correlation between the assumptions and other
factors. It should also be noted that these sensitivities are non-linear, and larger or smaller impacts should not be interpolated or
extrapolated from these results.
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Notes to the consolidated financial statements
The sensitivity analysis does not take into consideration that the Group’s assets and liabilities are actively managed. Additionally,
the financial position of the Group may vary at the time that any actual market movement occurs. For example, the Group’s
financial risk management strategy aims to manage the exposure to market fluctuations.
As investment markets move past various trigger levels, management actions could include selling investments, changing
investment portfolio allocations and taking other protective action.
Other limitations in the above sensitivity analysis include the use of hypothetical market movements to demonstrate potential
risks that only represent the Group’s view of possible near-term market changes that cannot be predicted with any certainty
and the assumption that all parameters move in an identical fashion.
Specific examples:
a. The sensitivity analysis assumes a parallel shift in interest rates at all terms. These results should not be used to calculate the
impact of non-parallel yield movements.
b.The sensitivity analysis assumes equivalent assumption changes across all markets i.e. UK and non-UK yield curves move by
the same amounts, equity markets across the world rise or fall identically.
Additionally, the movements observed by assets held by Aviva will not be identical to market indices so caution is required when
applying the sensitivities to observed index movements.
53 – Derivative financial instruments and hedging
This note gives details of the various financial instruments the Group uses to mitigate risk.
The Group uses a variety of derivative financial instruments, including both exchange traded and over-the-counter instruments,
in line with the Group’s overall risk management strategy. The objectives include managing exposure to market, foreign currency
and/or interest rate risk on existing assets or liabilities, as well as planned or anticipated investment purchases.
In the narrative and tables below, figures are given for both the notional amounts and fair values of these instruments. The notional
amounts reflect the aggregate of individual derivative positions on a gross basis and so give an indication of the overall scale of
the derivative transaction. The fair values represent the gross carrying values at the year end for each class of derivative contract
held (or issued) by the Group.
The fair values do not provide an indication of credit risk, as many over-the-counter transactions are contracted and documented
under ISDA (International Swaps and Derivatives Association, Inc.) master agreements or their equivalent. Such agreements are
designed to provide a legally enforceable set-off in the event of default, which reduces credit exposure. In addition, the Group
has collateral agreements in place between the individual Group entities and relevant counterparties. See note 54 for further
information on collateral and net credit risk of derivative instruments.
(a) Instruments qualifying for hedge accounting
The Group has formally assessed and documented the hedge effectiveness for financial instruments designated as hedge
instruments in accordance with IFRS 9.
(i) Net investment hedges
To reduce its exposure to foreign currency risk, the Group has designated a portion of its Euro and Canadian dollar denominated
debt as hedging instruments to hedge the currency components of its net investments in foreign subsidiaries. The matching
currency denomination of the assets and liabilities of the subsidiaries and the loan liabilities in the Group leads to an economic
relationship, where a change in the value of the asset as a result of changes in the foreign exchange rate will be offset directly
by an opposite change in the value of the liability. The maturity analysis of the liabilities is presented in note 45. The Group’s net
investments are designated into a hedge relationship in Canada such that the value hedged matches exactly the nominal amounts
of the hedging instrument being used. The Group has applied a hedge ratio of 1:1 (2023: 1:1) for the net investment hedge in Canada
and a hedge ratio of 0.66:1 (2023: 0.54:1) for the net investment hedge for Ireland.
At inception, the nature of the economic relationship is such that the net investment hedge is expected to be highly effective,
however, ineffectiveness or discontinuation of the hedging relationship may arise should a disposal of a foreign subsidiary
included in the net investment hedge occur during the period.
Other risks except for currency risk associated with the Group's net investments in its foreign subsidiaries are not covered
by these hedging arrangements.
(ii) Cash flow hedges
The Group applied hedge accounting to mitigate currency risks arising from the expected $SGD 1.4 billion sales proceeds of
the disposal of Aviva Singapore by designating the currency component of the derivatives in a cash flow hedge. The currency
derivatives converted the $SGD proceeds to Sterling at predetermined rate at maturity, and there was an economic relationship
between the hedged item and the hedging instruments due to the matching currency. The amounts previously recognised in
the hedging instruments reserve were recycled to the income statement on completion of the disposal (see note 37).
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(iii) Financial impacts of hedge accounting
The following hedging instruments for the net investment hedges and cash flow hedge are included within borrowings and
financial investments respectively in the statement of financial position.
2024
2023
Carrying
amount
Change as a
result of
foreign
currency
movement
Carrying
amount
Change as a
result of
foreign
currency
movement
Note
£m
£m
£m
£m
Net investment hedges
1.875% €750 million senior notes 20271
45
383
(13)
401
(6)
3.375% €900 million subordinated notes 20452
45
361
(13)
378
(6)
4.000% C$450 million subordinated notes 2030
45
248
(13)
265
(6)
992
(39)
1,044
(18)
Cash flow hedge
SGD1,444 million currency derivatives3
—
—
(4)
(4)
Total hedging instruments
992
(39)
1,040
(22)
1. Of the €750 million senior notes, a nominal amount of €464 million has been placed in a net investment hedge
2. Of the €900 million subordinated notes, a nominal amount of €436 million has been placed in a net investment hedge
3. The maturity date of the currency derivatives was 27 March 2024, with an average forward of 1.66. The change as a result of foreign currency movement in 2023 includes £0.7
million for the forward element of the currency derivatives.
The following hedged items were placed in a net investment hedges and cash flow hedge as at the year end:
2024
2023
Carrying
amount
Cumulative
foreign
currency
movement
Change as a
result of
foreign
currency
movement
Carrying
amount
Cumulative
foreign
currency
movement
Change as a
result of
foreign
currency
movement
Currency
£m
£m
£m
£m
£m
£m
Net investment hedges
Ireland
EUR
744
(214)
26
779
(237)
12
Canada
CAD
248
6
13
265
(7)
6
992
(208)
39
1,044
(244)
18
Cash flow hedge
SGD
—
—
—
(4)
4
4
Total hedged items
992
(208)
39
1,040
(240)
22
The effects of hedge accounting on the Group's financial performance can be summarised as follows:
2024
2023
Currency
Translation
gain/(loss)
recognised in
currency
translation
reserve
Change in
value of
hedging
instrument
recognised in
OCI
Hedge
ineffectiveness
recognised in
profit or loss
Amount
reclassified
from hedging
instrument
reserve to
profit or loss
Translation
gain/(loss)
recognised in
currency
translation
reserve
Change in
value of
hedging
instrument
recognised in
OCI
Hedge
ineffectiveness
recognised in
profit or loss
Amount
reclassified
from hedging
instrument
reserve to
profit or loss
£m
£m
£m
£m
£m
£m
£m
£m
Net investment hedges
Ireland
EUR
(26)
26
—
—
(12)
12
—
—
Canada
CAD
(13)
13
—
—
(6)
6
—
—
(39)
39
—
—
(18)
18
—
—
Cash flow hedge
SGD
—
—
—
4
(4)
4
—
—
Total hedged items
(39)
39
—
4
(22)
22
—
—
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Notes to the consolidated financial statements
(b) Derivatives
Except for the currency derivatives described in note 55(a), the Group did not apply hedge accounting to derivatives at
31 December 2024 or 2023.
(i) The Group’s derivatives at 31 December were as follows:
2024
2023
Contract/
notional
amount
Fair value
asset
Fair value
liability
Contract/
notional
amount
Fair value
asset
Fair value
liability
£m
£m
£m
£m
£m
£m
OTC Forwards
14,044
291
(331)
53,262
465
(341)
OTC Interest rate and currency swaps
18,393
250
(1,035)
11,894
369
(694)
Foreign exchange contracts
32,437
541
(1,366)
65,156
834
(1,035)
OTC Swaps
61,845
2,086
(5,318)
50,647
2,129
(4,618)
OTC Options
152
2
—
142
—
—
Exchange traded Futures
4,994
9
(74)
9,643
219
(40)
Interest rate contracts
66,991
2,097
(5,392)
60,432
2,348
(4,658)
OTC Options
1,976
69
(34)
2,222
82
(39)
Exchange traded Futures
6,852
48
(139)
9,708
150
(68)
Exchange traded Options
902
119
—
1,391
137
(10)
Equity/Index contracts
9,730
236
(173)
13,321
369
(117)
Credit contracts
1,535
38
(20)
1,158
39
(29)
Other
20,570
423
(1,320)
16,405
402
(1,587)
Total derivatives
131,263
3,335
(8,271) 156,472
3,992
(7,426)
Fair value assets of £3,335 million (2023: £3,992 million) are recognised as ‘Derivative financial instruments’ in note 27(a),
while fair value liabilities of £8,271 million (2023: £7,426 million) are recognised as ‘Derivative liabilities’ in note 46.
The Group’s derivative risk management policies are outlined in note 52.
(ii) The contractual undiscounted cash flows in relation to derivative liabilities have the following maturities:
2024
2023
Within
one year
One to
two
years
Two to
three
years
Three to
four
years
Four to
five
years
After
five
years
Within
one year
One to
two
years
Two to
three
years
Three to
four
years
Four to
five
years
After five
years
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
Derivative liabilities
1,015
680
636
539
484 6,705
1,046
631
597
569
567
5,721
(c) Collateral
Certain derivative contracts, primarily interest rate and currency swaps, involve the receipt or pledging of cash and non-cash
collateral. The amounts of cash collateral receivable or repayable are included in notes 28 and 46 respectively. Collateral
received and pledged by the Group is detailed in note 54.
54 – Financial assets and liabilities subject to offsetting, enforceable master netting agreements and
similar arrangements
(a) Offsetting arrangements
Financial assets and liabilities are offset in the statement of financial position when the Group has a legally enforceable right to
offset and has the intention to settle the asset and liability on a net basis, or to realise the asset and settle the liability
simultaneously.
Aviva mitigates credit risk in derivative contracts by entering into collateral agreements, where practical, and into ISDA master
netting agreements for each of the legal entities to facilitate its right to offset credit risk exposure. The credit support agreement
will normally dictate the threshold over which collateral needs to be pledged by Aviva or its counterparty.
Derivative transactions requiring Aviva or its counterparty to post collateral are typically the result of over-the-counter
derivative trades, comprised mostly of interest rate swaps, currency swaps and credit default swaps. These transactions are
conducted under terms that are usual and customary to standard long-term borrowing, derivative, securities lending and
securities borrowing activities. The derivative assets and liabilities in the table below are made up of the contracts described
in detail in note 53.
Aviva participates in a number of stock lending and repurchase arrangements. In some of these arrangements cash is exchanged
by Aviva for securities and a related receivable is recognised within Loans to banks in note 24. These arrangements are reflected
in the tables below. In instances where the collateral is recognised in the statement of financial position, the obligation for its
return is included within Payables and other financial liabilities in note 46.
In other arrangements, securities are exchanged for other securities. The collateral received must be in a readily realisable form,
such as listed securities, and is held in segregated accounts. Transfer of title always occurs for the collateral received. In many
instances, however, no market risk or economic benefit is exchanged and these transactions are not recognised in the statement
of financial position in accordance with our accounting policies, and accordingly not included in the following tables.
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Notes to the consolidated financial statements
2024
Offset under IAS 32
Amounts under a master netting agreement
but not offset under IAS 32
Amounts subject to enforceable netting arrangements
Gross
amounts
Amounts
offset
Net amounts
reported in
the statement
of financial
position
Financial
instruments
Cash
collateral
Securities
collateral
received/
pledged
Net
amount
£m
£m
£m
£m
£m
£m
£m
Derivative financial assets
2,295
—
2,295
(1,623)
(85)
(25)
562
Loans to banks and repurchase arrangements
4,486
—
4,486
—
(300)
(3,850)
336
Total financial assets
6,781
—
6,781
(1,623)
(385)
(3,875)
898
Derivative financial liabilities
(6,099)
—
(6,099)
2,175
36
3,136
(752)
Other financial liabilities
(1,753)
—
(1,753)
—
—
—
(1,753)
Total financial liabilities
(7,852)
—
(7,852)
2,175
36
3,136
(2,505)
2023
Offset under IAS 32
Amounts under a master netting agreement
but not offset under IAS 32
Amounts subject to enforceable netting arrangements
Gross
amounts
Amounts
offset
Net amounts
reported in the
statement of
financial
position
Financial
instruments
Cash
collateral
Securities
collateral
received/
pledged
Net amount
£m
£m
£m
£m
£m
£m
£m
Derivative financial assets
2,618
—
2,618
(1,505)
(173)
(82)
858
Loans to banks and repurchase arrangements
4,850
—
4,850
—
(300)
(4,550)
—
Total financial assets
7,468
—
7,468
(1,505)
(473)
(4,632)
858
Derivative financial liabilities
(5,428)
—
(5,428)
2,078
68
2,477
(805)
Other financial liabilities
—
—
—
—
—
—
—
Total financial liabilities
(5,428)
—
(5,428)
2,078
68
2,477
(805)
Derivative assets are recognised as Derivative financial instruments in note 27(a), while fair value liabilities are recognised as
Derivative liabilities in note 46. £1,040 million (2023: £1,374 million) of derivative assets and £2,172 million (2023: £1,998 million) of
derivative liabilities are not subject to master netting agreements and are therefore excluded from the table above.
Amounts receivable related to securities lending and reverse-repurchase arrangements totalling £4,486 million
(2023: £4,865 million) are recognised within Loans to banks in note 24.
Other financial liabilities presented above represent liabilities related to repurchase arrangements recognised within Obligations
for repayment of cash collateral received in note 46.
(b) Collateral
In the tables above, the amounts of assets or liabilities presented in the consolidated statement of financial position are offset
first by financial instruments that have the right to offset under master netting or similar arrangements with any remaining amount
reduced by the amount of cash and securities collateral. The actual amount of collateral may be greater than amounts presented
in the tables above in the case of over-collateralisation.
The total amount of collateral received which the Group is permitted to sell or repledge in the absence of default, excluding
collateral related to balances recognised within Loans to banks disclosed in note 24, was £5,648 million (2023: £6,827 million), all
of which other than £138 million (2023: £245 million) is related to securities lending arrangements. Collateral of £459 million
(2023: £1,050 million) has been received related to balances recognised within Loans to banks in note 24. £85 million
(2023: £77 million) included within cash and cash equivalents has been pledged as collateral in respect of the Group’s UK pension
schemes. Under the agreements, cash is only transferred to the pension schemes to fund bulk annuity buy-in transactions with
Aviva Life & Pensions UK Limited or in the event of the Group defaulting on its pension obligations. The value of collateral that
was actually sold or repledged in the absence of default was £nil (2023: £nil).
The level of collateral held is monitored regularly, with further collateral obtained where this is considered necessary to manage
the Group’s risk exposure. The fair values of collateral received approximate to their carrying amounts.
55 – Related party transactions
This note gives details of the transactions between Group companies and related parties which comprises our joint ventures,
associates and staff pension schemes.
The Group undertakes transactions with related parties in the normal course of business. Loans to related parties are made on
normal arm’s-length commercial terms.
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Notes to the consolidated financial statements
(a) Services provided to, and by related parties
2024
2023
Income
earned in
the year
Expenses
incurred in
the year
Payable
at year
end
Receivable
at year end
Income
earned in
the year
Expenses
incurred in
the year
Payable at
year end
Receivable
at year
end
£m
£m
£m
£m
£m
£m
£m
£m
Associates
35
—
—
4
59
—
—
3
Joint ventures
24
—
—
—
56
—
—
137
Employee pension schemes
9
—
—
1
15
—
—
4
Total services
68
—
—
5
130
—
—
144
Transactions with joint ventures in the UK relate to the property management undertakings, the most material of which are listed
in note 18(a)(iii). The Group has equity interests in these joint ventures, together with the provision of administration services and
financial management to many of them. Our fund management companies also charge fees to these joint ventures for
administration services and for arranging external finance.
Key management personnel of the Company may from time to time purchase insurance, savings, asset management or annuity
products marketed by group companies on equivalent terms to those available to all employees of the Group. In 2024, other
transactions with key management personnel were not deemed to be significant either by size or in the context of their individual
financial positions.
Our UK fund management companies manage most of the assets held by the Group’s main UK staff pension scheme, for which
they charge fees based on the level of funds under management. The main UK scheme holds investments in Group-managed
funds and insurance policies with other group companies, as explained in note 44(i). As at 31 December 2024, the Friends
Provident Pension Scheme (FPPS), acquired in 2015 as part of the acquisition of the Friends Life business, held an insurance
policy of £384 million (2023: £431 million) issued by a group company, which eliminates on consolidation.
The related parties’ receivables are not secured and no guarantees were received in respect thereof. The receivables will be
settled in accordance with normal credit terms.
During the year, Aviva Group defined benefit staff pension schemes completed one (2023: two) bulk annuity buy-in transaction
with Aviva Life & Pensions UK Limited (AVLAP), a group company. Total premiums of £1,323 millions (2023: £482 million) were
paid by the schemes to AVLAP, with total transferable plan assets of £1,018 million (2023: £368 million) being recognised, and the
difference being recognised as an actuarial loss through Other Comprehensive Income. No profit or loss (2023: £nil) was
recognised by AVLAP on initial recognition as a CSM liability equal and opposite to the fulfilment cash flows was recognised.
As at 31 December 2024, AVLAP recognised cumulative best estimate liabilities of £4,154 million (2023: £3,535 million) in relation
to buy-in transactions with Aviva Group defined benefit staff pension schemes which have been included within the Group's
insurance contract liabilities, and the defined benefit staff pension schemes held transferable plan assets of £3,932 million
(2023: £3,448 million) which do not eliminate on consolidation.
(b) Key management compensation
The total compensation to those employees classified as key management, being those having authority and responsibility for
planning, directing and controlling the activities of the Group, including the executive and non-executive directors is as follows:
2024
2023
£m
£m
Salary and other short-term benefits
12.6
10.8
Post-employment benefits
0.1
—
Equity compensation plans1
10.3
13.7
Total key management compensation
23.0
24.5
1. The 2023 comparative has been re-presented to align with the 2024 presentation. The LTIP amounts shown in last year’s report in respect of the LTIPs awarded in 2021 were
calculated with an assumed vesting share price of 413.49 pence. The actual share price at vesting was 494.50 pence, and the table has been updated to reflect this change.
Information concerning individual directors’ emoluments, interests and transactions is given in the Directors’ Remuneration Report.
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56 – Organisational structure
The following chart shows a simplified form of the organisational structure of the Group as at 31 December 2024. Aviva plc is the
holding company of the Group.
Parent company
Aviva plc
Subsidiaries
The principal subsidiaries of the Company as at 31 December 2024 are listed below by country of incorporation.
A complete list of the Group’s related undertakings. which comprises of subsidiaries, joint ventures and associates and other
significant holdings is contained within note 57.
Aviva plc
Aviva – COFCO
Life Insurance
Company Ltd1
Aviva Group
Holdings Ltd2
General
Accident plc3
Aviva Life
Holdings
UK Ltd2
Aviva
Investors
Holdings Ltd2
Aviva
Central
Services
UK Ltd2
Aviva
International
Holdings Ltd2
Aviva Insurance
Ltd3
Aviva
International
Insurance Ltd2
UK &
Ireland IWR
subsidiaries
Global
Investment
Management
subsidiaries
Aviva
Employment
Services Ltd2
Aviva Life
Insurance
Company
India Ltd4
UK & Ireland
General
Insurance
subsidiaries
Canada General
Insurance
subsidiaries
1. Incorporated in People's Republic of China
2. Incorporated in England and Wales
3. Incorporated in Scotland
4. Incorporated in India
United Kingdom
Aviva Administration Limited
Aviva Central Services UK Limited
Aviva Employment Services Limited
Aviva Equity Release UK Limited
Aviva Health UK Limited
Aviva Insurance Limited
Aviva International Insurance Limited
Aviva Investment Solutions UK Limited
Aviva Investors Global Services Limited
Aviva Investors UK Fund Services Limited
Aviva Life & Pensions UK Limited
Aviva Life Services UK Limited
Aviva Pension Trustees UK Limited
Aviva Protection UK Limited (formerly AIG Life Limited)
Aviva UK Digital Limited
Aviva Wrap UK Limited
Gresham Insurance Company Limited
Probitas Corporate Capital Limited
Probitas Holdings (UK) Limited
United Kingdom continued
Sesame Bankhall Group Limited
Solus (London) Limited
Succession Holdings Limited
The Ocean Marine Insurance Company Limited
Wealthify Group Limited
Canada
Aviva Canada Inc. and its principal subsidiaries:
Aviva Insurance Company of Canada
Aviva General Insurance Company
Elite Insurance Company
Pilot Insurance Company
Scottish & York Insurance Co. Limited
S&Y Insurance Company
Traders General Insurance Company
Ireland
Aviva Life and Pensions Ireland Designated Activity Company
Aviva Insurance Ireland Designated Activity Company
Luxembourg
Aviva Investors Luxembourg
Associates and Joint Ventures
The Group has ongoing interests in the following operations
that are classified as joint ventures or associates, as a
complete list of the Group’s related undertakings comprising
of subsidiaries, joint ventures, associates and other significant
holdings is contained within note 57. Further details of those
operations that were most significant in 2024 are set out in
notes 18 and 19 to the financial statements.
China
Aviva-COFCO Life Insurance Company Limited 50%
United Kingdom
The Group has interests in several property limited
partnerships. Further details are provided in notes 18,
19 and 26 to the financial statements.
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Notes to the consolidated financial statements
57 – Related undertakings
We are required to disclose certain information about the Group’s related undertakings which is set out in this note.
The definition of a subsidiary undertaking in accordance with the Companies Act 2006 is different from the definition under IFRS.
As a result, the related undertakings included within the list below may not be the same as the undertakings consolidated in the
Group IFRS financial statements. See accounting policies (D) Consolidation principles for further detail on principles of
consolidation and definition of joint ventures.
This note contains certain fund entities that are beneficially owned by external parties and managed by Aviva Investors. Although
legally owned by the Group, Aviva plc may not have a beneficial interest in these entities. Also, where the Group does not own
equity in entities that are managed by Aviva Investors, a share class and ownership percentage will be disclosed.
The Group’s related undertakings along with the country of incorporation, the registered address, the classes of shares held and
the effective percentage of total equity owned as at 31 December 2024 are disclosed below.
(a) Direct
The direct related undertakings of the Company as at 31 December 2024 are listed below:
Name of undertaking
Country of
incorporation
Registered address
Share class
held
% of
total
equity
Aviva-COFCO Life Insurance Co. Ltd China
12/F & 15/F & 01, 06-09 Unit of 10F of Building No.20, 27/F
of Building No.24, Middle East Third Ring Road, Chaoyang
District, Beijing, 100022, China
Ordinary
50%
Aviva Group Holdings Limited
United Kingdom
80 Fenchurch Street, London, EC3M 4AE, United Kingdom
Ordinary
100%
General Accident plc1
United Kingdom
Pitheavlis, Perth, PH2 0NH, United Kingdom
Ordinary
95%
1. Aviva plc holds 100% of the ordinary share capital of General Accident plc. In addition to its ordinary share capital, General Accident plc has classes of preference shares in
issuance which are publicly listed and represent approximately 5% of General Accident plc’s total equity.
(b) Indirect
The indirect related undertakings of the Company as at 31 December 2024 are listed below:
Australia
c/o
TMF Corporate Services (Aust) Pty Limited, Suite 1 Level 11, 66
Goulburn Street, Sydney NSW 2000, Australia
Aviva Investors Pacific Pty Ltd
Ordinary
100%
Level 1, 44 Martin Place, Sydney, NSW, 2000, Australia
Probitas 1492 (Pacific) Pty Ltd
Ordinary
100%
Barbados
c/o USA Risk Group (Barbados) Limited, 6th Floor, CGI Tower,
Warrens, St. Michael, BB22026, Barbados
Victoria Reinsurance Company Ltd.
Common
100%
Belgium
Rue Picard 7, Box 100, 1000 Brussels, Belgium
Probitas 1492 (Europe) BV/SRL
Ordinary
100%
Canada
10 Aviva Way, Suite 100, Markham, ON, L6G 0G1, Canada
1000930077 Ontario Inc.
Common
100%
1000962293 Ontario Inc.
Common
100%
1001045689 Ontario Inc.
Common
100%
2161605 Ontario Inc.
Common
100%
9543864 Canada Inc.
Common
100%
Aviva Canada Inc.
Common
100%
Aviva General Insurance Company
Common
100%
Aviva Insurance Company of Canada
Common
100%
Aviva Partner Insurance Services Inc.
Common
100%
Aviva Warranty Services Inc.
Common
100%
Bamboo Premium Financing Inc.
Common
100%
Company name
Share Class
held
% of
total
equity
Bay-Mill Specialty Insurance Adjusters
Inc.
Common
100%
Elite Insurance Company
Common
100%
Insurance Agent Service Inc.
Common
100%
Nautimax Ltd.
Ordinary
100%
O2 Insurance Services Inc.
Ordinary
100%
OIS Ontario Insurance Service Limited
Common
100%
Optiom Holdings Inc.
Common
100%
Optiom Inc.
Common
100%
Pilot Insurance Company
Common
100%
S&Y Insurance Company
Common
100%
Scottish & York Insurance Co. Limited
Common
100%
Traders General Insurance Company
Common
100%
22 Adelaide St. W., Suite 3400, Toronto, Ontario, M5H 4E3,
Canada
Probitas 1492 (Canada) Inc.
Common
100%
100 King Street West, Floor 49, Toronto, ON, M5X 2A2, Canada
Aviva Investors Canada Inc.
Common
100%
150 King Street West, Suite #2401, P.O. Box 16, Toronto, ON,
M5H 1J9, Canada
Prolink Insurance Inc.
A Common
34%
555 Chabanel Ouest, Bureau 900, Montreal, QC, H2N 2H8,
Canada
Aviva Agency Services Inc.
Common
100%
Suite 1600, 925 W Georgia St, Vancouver, BC, V6C 3L2, Canada
Westmount West Services Inc.
B Ordinary
20%
China
Company name
Share Class
held
% of
total
equity
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Notes to the consolidated financial statements
Units 1805-1807, 18th Floor, Block H Office Building, Phoenix
Land Plaza, No. A5 Yard, Shuguangxili, Chaoyang District,
Beijing, China
Aviva-COFCO Yi Li Asset Management
Co., Ltd.
Ordinary
21%
Denmark
c/o TMF Denmark, H.C. Andersens Boulevard 38, 3. th, 1553,
Copenhagen V, Denmark
AICT EUR Real Estate (DS) GP ApS
Ordinary
100%
AICT EUR Real Estate (DS) LP K/S
Partnership
100%
France
3, rue Saint Georges, 75009 Paris, France
Aviva Investors Perpetual Ruby GP SAS
Ordinary
16%
Aviva Investors Perpetual Ruby SAS
Partnership
16%
20 PL Vendôme, Paris 75001, France
AXA LBO Fund IV Feeder
Private Equity
Fund
39%
47 Rue du Faubourg Saint-Honoré,75008, France
CGU Equilibre
FCP
81%
Germany
c/o
TMF Deutschland AG, Wiesenhüttenstrasse 11, 60329, Frankfurt
am Main, Germany
Reschop Carré Hattingen GmbH
Ordinary
100%
c/o WSWP Weinert GmbH, Theatinerstr. 31, 80333, Munich,
Germany
FPB Holdings GmbH
Ordinary
100%
Lyoner Strasse 13, 60528 Frankfurt am Main, Germany
Haspa TrendKonzept
SICAV
99%
Guernsey
PO Box 155 Mill Court, La Charroterie, St Peter Port, GY1 4ET,
Guernsey
Paragon Insurance Company Guernsey
Limited
Ordinary
49%
India
2nd floor, Prakash Deep Building, 7 Tolstoy Marg, New Delhi, 110
001, India
Aviva Life Insurance Company India
Limited
Ordinary
74%
A-47 (L.G.F), Hauz Khas, New Delhi, Delhi, India
Sesame Group India Private Limited
Ordinary
100%
Pune Office Addresses 103/P3, Pentagon, Magarpatta City,
Hadapsar, Pune - 411013, India
A.G.S. Customer Services (India) Private
Limited
Ordinary
100%
Ireland
13-18 City Quay, Dublin 2, Ireland
Atrium Nominees Limited
Ordinary
100%
35 Merrion Square, Dublin 2, Ireland
Fairstone Market 75 Fund
ICAV
95%
70 Sir John Rogerson's Quay, Dublin 2, D02 R296, Dublin,
Ireland
Mercer Diversified Retirement Fund
OEIC
28%
Mercer Long Term Growth Fund
OEIC
70%
Company name
Share Class
held
% of
total
equity
Mercer Multi Asset Growth Fund
OEIC
29%
MGI UK Equity
OEIC
54%
Bishopsgate, Henry Street, Limerick, V94 K5R6, Ireland
Ashtown Management Company Limited
Ordinary
50%
Building 12, Cherrywood Business Park, Loughlinstown, Co
Dublin, D18 W2P5, Ireland
Aviva Direct Ireland Limited
Ordinary
100%
Aviva Driving School Ireland Limited
Ordinary
100%
Aviva Group Protection Master Trust
Ireland Designated Activity Company
Ordinary
100%
Aviva Group Services Ireland Limited
Ordinary
100%
Aviva Insurance Ireland Designated
Activity Company
Ordinary
100%
Aviva Life & Pensions Ireland Designated
Activity Company
Ordinary
100%
Aviva Master Trust Ireland Designated
Activity Company
Ordinary
100%
Aviva Retail Master Trust Ireland
Designated Activity Company
Ordinary
100%
Aviva Trustee Company Ireland
Designated Activity Company
Ordinary
100%
Aviva Undershaft Six Designated Activity
Company
Ordinary
100%
Peak Re Designated Activity Company
Ordinary
100%
Georges Court, 54-62 Townsend Street, Dublin 2, DO2 R156,
Ireland
FPPE Fund Public Limited Company
Ordinary
100%
IFSC House, Custom House Quay, International Financial
Services Centre, Dublin, D01 R2P9, Ireland
Aviva Investors Euro Liquidity Fund
Liquidity Fund
78%
Aviva Investors Sterling Government
Liquidity Fund
Liquidity Fund
95%
Aviva Investors Sterling Liquidity Fund
Liquidity Fund
60%
Aviva Investors Sterling Liquidity Plus
Fund
Liquidity Fund
83%
Aviva Investors Sterling Standard
Liquidity Fund
Liquidity Fund
65%
Aviva Investors US Dollar Liquidity Fund
Liquidity Fund
77%
International House, 3 Habourmaster Place, Dublin 1, Ireland
Merrion Multi-Asset 30 Fund
Unit Trust
100%
Merrion Multi-Asset 50 Fund
Unit Trust
100%
Merrion Multi-Asset 70 Fund
Unit Trust
91%
Thomas Clarke & Co., 1 McElwain Terrace, Station Road,
Newbridge, Co. Kildare, W12 C434, Ireland
Erapid Charger Company Limited
Ordinary
100%
Unit H6, Maynooth Business Campus, Straffan Road, Maynooth,
Kildare, W23 X2F4, Ireland
Carcharger EV Limited
Ordinary
25%
Workways, Level Health, Block 5 High Street, Tallaght, Dublin
24, D24 YK8N, Ireland
Level Health Limited
Ordinary
38%
Isle of Man
Royal Court, Castletown, IM9 1RA, Isle of Man
Friends Provident International Limited
Ordinary
24%
Company name
Share Class
held
% of
total
equity
Aviva plc
Annual Report and Accounts 2024
Strategic
Report
Governance
Report
IFRS Financial
Statements
Other
Information
288
Notes to the consolidated financial statements
Italy
Corse Vercelli, 40 - 20145, Milan, Italy
AICT EUR Infra Swift S.R.L.
Ordinary
100%
Piazza della Repubblica 32, Milan, 20124 Italy
Innovo Renewables S.p.A.
Ordinary
50%
Via L. Ariosto 32, 20145, Milan, Italy
Aviva Italia Holding S.p.A
Ordinary
100%
Jersey
11–15 Seaton Place, St Helier, JE4 0QH Jersey
101 Moorgate Unit Trust
Unit Trust
100%
1 Liverpool Street Unit Trust
Unit Trust
100%
22 Grenville Street, St Helier, JE4 8PX, Jersey
ASL Caravel LP
Partnership
100%
ASL Clipper LP
Partnership
100%
ASL Mainsail LP
Partnership
100%
ASL Schooner LP
Partnership
100%
ASL/SLAS Xebec LP
Partnership
100%
AXA Sun Life Private Equity (No1) LP
Partnership
100%
Lekker Bolt UT
Unit Trust
100%
SLAS Topsail LP
Partnership
100%
TopHat Enterprises Limited
Ordinary
7%
28 Esplanade, St Helier, JE4 2QP, Jersey
Aviva Investors Infrastructure Income
Unit Trust
Unit Trust
100%
Aztec Group House, 11-15 Seaton Place, St Helier, JE4 0QH,
Jersey
Midlands Regen I Unit Trust
Unit Trust
95%
Gaspé House, 66-72 Esplanade, St Helier, E1 3PB, Jersey
1 Fitzroy Place Unit Trust
Unit Trust
50%
2 Fitzroy Place Jersey Unit Trust
Unit Trust
50%
10 Station Road Unit Trust
Unit Trust
50%
11-12 Hanover Square Unit Trust
Unit Trust
50%
20 Gracechurch Unit Trust
Unit Trust
25%
20 Station Road Unit Trust
Unit Trust
50%
30 Station Road Unit Trust
Unit Trust
50%
50-60 Station Road Unit Trust
Unit Trust
50%
130 Fenchurch Street Unit Trust
Unit Trust
100%
Aviva Investors Jersey Unit Trusts
Management Limited
Ordinary
100%
Bermondsey Yards Unit Trust
Unit Trust
100%
CCPF No.4 Unit Trust
Unit Trust
100%
Gracechurch Investment Unit Trust
Unit Trust
25%
Hams Hall Unit Trust
Unit Trust
100%
Irongate House Unit Trust
Unit Trust
50%
Lime Mayfair Unit Trust
Unit Trust
1%
Lime Property Fund Unit Trust
Unit Trust
1%
Longcross Jersey Unit Trust
Unit Trust
100%
New Broad Street House Unit Trust
Unit Trust
50%
Pegasus House and Nuffield House Unit
Trust
Unit Trust
50%
Company name
Share Class
held
% of
total
equity
Southgate Property Unit Trust
Unit Trust
50%
The Designer Retail Outlet Centres
(Mansfield) Unit Trust
Unit Trust
100%
The Designer Retail Outlet Centres (York)
Unit Trust
Unit Trust
100%
The Designer Retail Outlet Centres Unit
Trust
Unit Trust
100%
IFC 5, St Helier, JF1 1ST, Jersey
Aviva Investors REaLM Social Housing
Unit Trust
Unit Trust
86%
Cannock Designer Outlet Unit Trust
Unit Trust
37%
PO Box 1075, 28 Esplanade, St Helier, JE4 2QP, Jersey
Aviva Investors REaLM Commercial
Assets Unit Trust
Unit Trust
100%
Aviva Investors REaLM Ground Rent Unit
Trust
Unit Trust
100%
Aviva Investors REaLM Multi-Sector Unit
Trust
Unit Trust
0%
Luxembourg
1c Rue Gabriel Lippmann l-5365, Munsbach, Luxembourg
Patriarch Classic B&W Global Freestyle
FCP
52%
2 Rue du Fort Bourbon, L1249, Luxembourg
AICT EUR Real Estate (DS) Sarl
Ordinary
100%
AICT EUR Real Estate (Foz) Sarl
Ordinary
100%
Aviva Infrastructure Debt Europe I S.A.
Ordinary
100%
Aviva Investors Alternative Income
Solutions Investments S.A.
Ordinary
100%
Aviva Investors Alternative Income
Solutions SCSp
Fund
100%
Aviva Investors Alternatives, FCP-RAIF
Fund
0%
Aviva Investors Alternatives S.A.
Ordinary
0%
Aviva Investors Climate Transition EUR
Infra SARL
Ordinary
100%
Aviva Investors Climate Transition EUR
Infrastructure Fund
Fund
100%
Aviva Investors Climate Transition EUR
Real Estate Fund
Fund
100%
Aviva Investors Climate Transition EUR
Real Estate SARL
Ordinary
100%
Aviva Investors Climate Transition GBP
Infrastructure Fund
Fund
100%
Aviva Investors Climate Transition GBP
Real Estate Fund
Fund
100%
Aviva Investors Climate Transition
Global Credit Fund
SICAV
73%
Aviva Investors Climate Transition
Global Equity Fund
SICAV
98%
Aviva Investors E-RELI Danone Sarl
Ordinary
17%
Aviva Investors E-RELI Dublin Sarl
Ordinary
17%
Aviva Investors E-RELI Duisburg Sarl
Ordinary
17%
Aviva Investors E-RELI Holdings Sarl
Ordinary
17%
Aviva Investors E-RELI SCSp
Fund
17%
Aviva Investors E-RELI Stern Sarl
Ordinary
17%
Aviva Investors Emerging Markets Bond
Fund
SICAV
73%
Company name
Share Class
held
% of
total
equity
Aviva plc
Annual Report and Accounts 2024
Strategic
Report
Governance
Report
IFRS Financial
Statements
Other
Information
289
Notes to the consolidated financial statements
Aviva Investors Emerging Markets
Corporate Bond Fund
SICAV
72%
Aviva Investors Emerging Markets Local
Currency Bond Fund
SICAV
98%
Aviva Investors Eur Returnplus Fund
SICAV
86%
Aviva Investors Gbp Returnplus Fund
SICAV
96%
Aviva Investors Global Emerging
Markets Core Fund
SICAV
100%
Aviva Investors Global Emerging
Markets Equity Unconstrained Fund
SICAV
62%
Aviva Investors Global Emerging
Markets Index Fund
SICAV
91%
Aviva Investors Global Equity Endurance
Fund
SICAV
95%
Aviva Investors Global Equity Income
Fund
SICAV
78%
Aviva Investors Global High Yield Bond
Fund
SICAV
81%
Aviva Investors Global Investment Grade
Corporate Bond Fund
SICAV
88%
Aviva Investors Global Sovereign Bond
Fund
SICAV
89%
Aviva Investors Investment Solutions
Emerging Markets Debt Fund
SICAV
0%
Aviva Investors Luxembourg
Ordinary
100%
Aviva Investors Multi-Asset Alternative
Income S.A.
Ordinary
100%
Aviva Investors Multi Strategy Target
Return Fund
SICAV
73%
Aviva Investors Natural Capital
Transition Global Equity Fund
SICAV
26%
Aviva Investors Perpetual Acht 2 NL
SARL
Ordinary
16%
Aviva Investors Perpetual Acht NL SARL
Ordinary
16%
Aviva Investors Perpetual Capital SCSp
SICAV RAIF
Fund
16%
Aviva Investors Perpetual E20 Sarl
Ordinary
16%
Aviva Investors Perpetual Holdings Sarl
Ordinary
16%
Aviva Investors Perpetual Hoxton Sarl
Ordinary
16%
Aviva Investors Perpetual Kitzingen Sarl
Ordinary
16%
Aviva Investors Perpetual Ruby Sarl
Ordinary
16%
Aviva Investors Perpetual Vondel 1 Sarl
Ordinary
16%
Aviva Investors Perpetual Vondel 2 Sarl
Ordinary
16%
Aviva Investors Perpetual Zuiderhof NL
Sarl
Ordinary
16%
Aviva Investors Perpetual Zuiderhof
PropCo Sarl
Ordinary
16%
Aviva Investors Social Transition Global
Equity Fund
SICAV
32%
Aviva Investors UK Equity Unconstrained
Fund
SICAV
85%
E20 Phase 1 SARL
Ordinary
16%
2, boulevard Konrad Adenauer, L-1115 Luxembourg
Aviva Investors European Secondary
Infrastructure Credit SV S.A.
Ordinary
0%
16 Avenue de la Gare, L-1610, Luxembourg
Company name
Share Class
held
% of
total
equity
Aviva Investors Alternative Income
Solutions General Partner S.à r.l.
Ordinary
100%
Aviva Investors Carbon Removal (GP)
SARL
Ordinary
100%
Aviva Investors E-RELI (GP) SARL
Ordinary
100%
Aviva Investors EBC S.à r.l.
Ordinary
100%
Aviva Investors Luxembourg Services
S.à r.l.
Ordinary
100%
Aviva Investors Perpetual Capital (GP)
SARL
Ordinary
100%
Victor Hugo 1 S.à r.l.
Ordinary
100%
24-26, Avenue de la Liberte, L1930 Luxembourg
Greenman Open Fund
SICAV
59%
35A, Avenue John F Kennedy, L-1855, Luxembourg
abrdn SICAV II Global Smaller
Companies Fund
SICAV
37%
37A, Avenue John F Kennedy, L-1855, Luxembourg
Invesco Global Direct Property Fund
RAIF
66%
46a, Avenue John F Kennedy, L-1855, Luxembourg
Aviva Investors Polish Retail S.à r.l.
Ordinary
100%
80, route d'Esch, L-1470, Luxembourg
Allspring (Lux) Worldwide Fund
SICAV
47%
Vertigo Building - Polaris, 2-4 rue Eugene Ruppert, L-2453
Luxembourg
Invesco Sustainable Global Structure
Equity Fund
SICAV
59%
Mauritius
Les Cascades, Edith Cavell Street, Port Louis, Mauritius
Actis China Investment Company Limited Ordinary
50%
Mexico
Av. Insurgentes Sur 1898, Piso 1, Oficina 1418, Col. Florida, C.P.
01020, Alvaro Obregon, CDMX, Mexico
Probitas 1492 Services Mexico S.A. de
C.V.
Ordinary
100%
Netherlands
ASR Vermogensbeheer N.V., Archimedeslaan 10, 3584 BA
Utrecht, Netherlands
ASR Separate Mortgage Account Fund
Mutual fund
20%
Norway
c/o TMF Norway AS, Hagalokkveien 26, 1383 Asker, Norway
Aviva Investors E-RELI Norway Holding
AS
Ordinary
17%
Kongsgard Alle 20 AS
Ordinary
17%
Poland
AI Jana Pawla II 25, 00-854, Warsaw, Poland
Focus Mall Zielona Gora
Ordinary
100%
Focus Park Piotrków Trybunalski
sp.z o.o.
Ordinary
100%
Wroclaw BC sp. z.o.o
Ordinary
100%
Inflancka 4b, 00-189, Warsaw, Poland
Aviva Services Spółka z ograniczoną
odpowiedzialnością
Ordinary
100%
Plac Piłsudskiego 1 Warsaw, Mazowieckie, 00-078, Poland
Company name
Share Class
held
% of
total
equity
Aviva plc
Annual Report and Accounts 2024
Strategic
Report
Governance
Report
IFRS Financial
Statements
Other
Information
290
Notes to the consolidated financial statements
PBC Lodz SP zoo
Unit Trust
100%
Singapore
1 Harbourfront Avenue, #14-08 Keppel Bay Tower, 098632,
Singapore
Aviva Asia Management Pte. Ltd.
Ordinary
100%
Aviva Global Services (Management
Services) Private Ltd.
Ordinary
100%
138 Market Street, #05-01 CapitaGreen, 048946, Singapore
Aviva Investors Asia Pte. Limited
Ordinary
100%
Spain
1D, 13 Edificio América Av. de Bruselas, 28108, Alcobendas,
Madrid, Spain
Eólica Almatret S.L.
Ordinary
100%
calle Príncipe de Vergara 112, 28002 Madrid, Spain
Banbury Invest SL
Ordinary
66%
Berryway Invest SL
Ordinary
66%
Browhead Invest SL
Ordinary
66%
Kansville Spain S.L.
Ordinary
66%
Propia Sants SLU
Ordinary
66%
Propia Terrassa SLU
Ordinary
66%
Swalinbar S.L.
Ordinary
66%
Willingden Spain SLU
Ordinary
66%
Sweden
c/o TMF Sweden AB, Vasagatan 38, 111 20, Stockholm, Sweden
AICT EUR RE PropCo AB
Ordinary
100%
AICT EUR Real Estate Holding AB
Ordinary
100%
Switzerland
Leutschenbachstrasse 45, 8050 Zurich, Switzerland
Aviva Investors Schweiz GmbH
Ordinary
100%
United Kingdom
1 Filament Walk, Suite 203, London, SW18 4GQ, United Kingdom
Freetricity South East Limited
Ordinary
100%
1 London Wall Place, London, EC2Y 5AU, United Kingdom
Schroder QEP US Core Fund
Unit Trust
27%
1 More London Place, London, SE1 2AF, United Kingdom
IFA Services Holdings Company Limited
Ordinary
0%
1st Floor, Avenue House, 42-44 Rosemary Street, Belfast, BT1
1QE, United Kingdom
Destination Financial Planning Limited
Ordinary
100%
Navigator Financial Planning Limited
Ordinary
100%
Watson Laird Limited
Ordinary
100%
1st Floor Finlay House, 10-14 West Nile Street, Glasgow, G1 2PP,
United Kingdom
MacKenzie Investment Strategies Ltd
Ordinary
100%
Spence and Spence (Scotland) Limited
Ordinary
100%
1-2 Morston Court, Blakeney Way, Cannock, WS11 8JB, United
Kingdom
New Homes Mortgage Services LLP
Partnership
29%
2 Communications Road, Greenham Business Park, Newbury,
RG19 6AB, United Kingdom
Connected Kerb Limited
Ordinary
94%
Company name
Share Class
held
% of
total
equity
2 Savoy Court, London, WC2R 0EZ, United Kingdom
Liontrust Sustainable Future Corporate
Bond Fund
OEIC
29%
Liontrust Sustainable Future European
Growth Fund
OEIC
47%
Liontrust Sustainable Future Global
Growth Fund
OEIC
25%
Liontrust Sustainable Future Managed
Fund
OEIC
43%
Liontrust Sustainable Future Managed
Growth Fund
OEIC
28%
Liontrust Sustainable Future UK Growth
Fund
OEIC
30%
Liontrust UK Ethical Fund
OEIC
58%
2nd Floor Stratus House, Emperor Way, Exeter Business Park,
Exeter, EX1 3QS, United Kingdom
A P Associates Financial Services
Limited
Ordinary
100%
G&E Private Wealth Limited
Ordinary
100%
Investors Planning Associates Limited
Ordinary
100%
KF Consulting UK Ltd
Ordinary
100%
Oaklea Wealth Management Ltd
Ordinary
100%
Pannells Financial Planning Ltd
Ordinary
100%
The Oxford Advisory Partnership Limited
Ordinary
100%
2nd Floor, 110 Cannon Street, London, EC4N 6EU, United
Kingdom
Biomass UK No. 3 Limited
Ordinary
100%
Biomass UK No.2 Limited
Ordinary
100%
RDF Energy No.1 Limited
Ordinary
57%
3a Dublin Meuse, Edinburgh, EH3 6NW, United Kingdom
Par Forestry IV Holdco Limited
Ordinary
100%
PAR Forestry IV L.P.
Partnership
100%
4th Floor, 95 Chancery Lane, London, WC2A 1DT, United
Kingdom
Broadwood LLSCF Management Limited
Ordinary
25%
4th Floor, Millbank Tower, London, SW1P 4QP, United Kingdom
Friends SL Nominees Limited
Ordinary
0%
4th Floor, New London House, 6 London Street, London, EC3R
7LP, United Kingdom
Polaris U.K. Limited
Ordinary
39%
4th Floor, Pountney Hill House, 6 Laurence Pountney Hill,
London, EC4R 0BL, United Kingdom
ES AllianceBerstein Low Volatility Global
Equity Fund
OEIC
100%
5-11 Worship Street, 3rd Floor, London, EC2A 2BH, United
Kingdom
Acre Platforms Limited
Preferred A2
37%
8 Surrey Street, Norwich, NR1 3NG, United Kingdom
Aviva Central Services UK Limited
Ordinary
100%
Aviva Credit Services UK Limited
Ordinary
100%
Aviva Health UK Limited
Ordinary
100%
Aviva Insurance UK Limited
Ordinary
100%
Aviva UK Digital Limited
Ordinary
100%
Company name
Share Class
held
% of
total
equity
Aviva plc
Annual Report and Accounts 2024
Strategic
Report
Governance
Report
IFRS Financial
Statements
Other
Information
291
Notes to the consolidated financial statements
Aviva UKGI Investments Limited
(formerly Aviva Protection UK Limited)
Ordinary
100%
Commercial Union Corporate Member
Limited
Ordinary
100%
Gresham Insurance Company Limited
Ordinary
100%
London and Edinburgh Insurance
Company Limited
Ordinary
100%
RAC Pension Trustees Limited
Ordinary
100%
Solus (London) Limited
Ordinary
100%
The Ocean Marine Insurance Company
Limited
Ordinary
100%
12 Throgmorton Avenue, London, EC2N 2DL, United Kingdom
ACS Europe ex UK ESG Insights Equity
Fund
ACS
31%
ACS Japan ESG Insights Equity Fund
ACS
33%
ACS North America ESG Insights Equity
Fund
ACS
41%
ACS UK ESG Insights Equity Fund
ACS
60%
ACS World ESG Insights Equity Fund
ACS
81%
BlackRock Global Corporate ESG
Insights Bond Fund
Unit Trust
22%
BlackRock Growth Allocation Fund
ACS
100%
BlackRock Market Advantage Fund
Unit Trust
48%
BlackRock Retirement Allocation Fund
ACS
100%
14 Albany Street, Edinburgh, EH1 3QB, United Kingdom
Criterion Tec Holdings Ltd
Ordinary
24%
Criterion Tec Ltd
Ordinary
24%
22 Bishopsgate, London, EC2N 4BQ, United Kingdom
AXA Ethical Distribution Fund
OEIC
44%
30 Finsbury Square, London, EC2A 1AG, United Kingdom
Aviva Insurance Services UK Limited
Ordinary
100%
Boston Biomass Limited
Ordinary
100%
Boston Wood Recovery Limited
Ordinary
100%
FF Fabric Limited
Ordinary
100%
Friends AELRIS Limited
Ordinary
100%
Gobafoss Partnership Nominee No 1 Ltd
Ordinary
100%
Group Risk Technologies Limited
Ordinary
100%
Healthcare Purchasing Alliance Limited
Ordinary
50%
Irongate House Nominee 1 Limited
Ordinary
50%
Irongate House Nominee 2 Limited
Ordinary
50%
Sesame Regulatory Services Limited
Ordinary
100%
Synergy Sunrise (Broadlands) Limited
Ordinary
100%
42-44 Rosemary Street, Belfast, BT1 1QE, United Kingdom
Law Society (NI) Financial Advice Limited Ordinary
100%
50 Stratton Street, London, W1J 8LT, United Kingdom
Lazard Multicap UK Income Fund
OEIC
53%
57-59 St James’s Street, London, SW1A 1LD, United Kingdom
Artemis UK Special Situations Fund
Unit Trust
24%
80 Fenchurch Street, London, EC3M 4AE, United Kingdom
1 Fitzroy Place Limited Partnership
Partnership
50%
2 Fitzroy Place Limited Partnership
Partnership
50%
Company name
Share Class
held
% of
total
equity
2-10 Mortimer Street (GP No 1) Limited
Ordinary
50%
2-10 Mortimer Street GP Limited
Ordinary
50%
2-10 Mortimer Street Limited Partnership
Partnership
50%
6-10 Lowndes Square Management
Company Limited
Ordinary
0%
10 Station Road LP
Partnership
50%
10 Station Road Nominee 1 Limited
Ordinary
50%
10 Station Road Nominee 2 Limited
Ordinary
50%
10-11 GNS Limited
Ordinary
100%
11-12 Hanover Square LP
Partnership
50%
11-12 Hanover Square Nominee 1 Limited
Ordinary
50%
11-12 Hanover Square Nominee 2 Limited
Ordinary
50%
20 Gracechurch (General Partner)
Limited
Ordinary
50%
20 Gracechurch Limited Partnership
Partnership
25%
20 Station Road LP
Partnership
50%
20 Station Road Nominee 1 Limited
Ordinary
50%
20 Station Road Nominee 2 Limited
Ordinary
50%
30 Station Road LP
Partnership
50%
30 Station Road Nominee 1 Limited
Ordinary
50%
30 Station Road Nominee 2 Limited
Ordinary
50%
41-42 Lowndes Square Management
Company Limited
Ordinary
0%
43 Lowndes Square Management
Company Limited
Ordinary
0%
50-60 Station Road LP
Partnership
50%
50-60 Station Road Nominee 1 Limited
Ordinary
50%
50-60 Station Road Nominee 2 Limited
Ordinary
50%
130 Fenchurch Street General Partner
Limited
Ordinary
100%
130 Fenchurch Street LP
Partnership
100%
130 Fenchurch Street Nominee 1 Limited
Ordinary
100%
130 Fenchurch Street Nominee 2 Limited
Ordinary
100%
2015 Sunbeam Limited
Ordinary
100%
AI Special PFI SPV Limited
Ordinary
0%
ALPF Single Family Homes General
Partner Ltd
Ordinary
100%
ALPF Single Family Homes LP
Partnership
100%
Ascot Real Estate Investments GP LLP
Partnership
50%
Ascot Real Estate Investments LP
Partnership
50%
Atlas Park Management Company
Limited
Company
Limited by
guarantee
100%
Aviva Brands Limited
Ordinary
100%
Aviva Capital Partners Limited
Ordinary
100%
Aviva Commercial Finance Limited
Ordinary
100%
Aviva Company Secretarial Services
Limited
Ordinary
100%
Aviva Employment Services Limited
Ordinary
100%
Aviva Europe UK Societas
Ordinary
100%
Aviva International Holdings Limited
Ordinary
100%
Aviva International Insurance Limited
Ordinary
100%
Company name
Share Class
held
% of
total
equity
Aviva plc
Annual Report and Accounts 2024
Strategic
Report
Governance
Report
IFRS Financial
Statements
Other
Information
292
Notes to the consolidated financial statements
Aviva Investors 30:70 Global Equity
(Currency Hedged) Index (Custom
Screened) Fund
TTF
100%
Aviva Investors 40 Spring Gardens
(General Partner) Limited
Ordinary
100%
Aviva Investors 40:60 Global Equity
Index Fund
TTF
100%
Aviva Investors 50:50 Global Equity
Index (Custom Screened) Fund
TTF
100%
Aviva Investors 60:40 Global Equity
Index (Custom Screened) Fund
TTF
100%
Aviva Investors Asia Pacific ex Japan
Fund
TTF
100%
Aviva Investors Balanced Life Fund
TTF
100%
Aviva Investors Balanced Pension Fund
TTF
100%
Aviva Investors Cautious Pension Fund
TTF
100%
Aviva Investors Climate Transition
Global Equity Fund
OEIC
99%
Aviva Investors Climate Transition Real
Assets Fund
TTF
100%
Aviva Investors Climate Transition Real
Assets LTAF
Fund
100%
Aviva Investors Commercial Assets GP
Limited
Ordinary
100%
Aviva Investors Commercial Assets
Nominee Limited
Ordinary
100%
Aviva Investors Continental European
Equity Fund
OEIC
7%
Aviva Investors Continental European
Equity Index (Custom Screened) Fund
TTF
100%
Aviva Investors CTF Holdco1 Limited
Ordinary
100%
Aviva Investors CTF Infrastructure
Midco 1 Limited
Ordinary
100%
Aviva Investors Developed Asia Pacific
ex Japan Equity Index (Custom
Screened) Fund
TTF
100%
Aviva Investors Developed European ex
UK Equity Index (Custom Screened) Fund
TTF
100%
Aviva Investors Developed Overseas
Government Bond (ex UK) Index Fund
TTF
100%
Aviva Investors Developed World ex UK
Equity Index (Custom Screened) Fund
TTF
100%
Aviva Investors Distribution Fund
OEIC
0%
Aviva Investors Distribution Life Fund
TTF
100%
Aviva Investors EBC GP Limited
Ordinary
100%
Aviva Investors EBC Limited Partnership
Partnership
100%
Aviva Investors Emerging Market Equity
Core Fund
TTF
65%
Aviva Investors Energy Centres No.1 GP
Limited
Ordinary
100%
Aviva Investors Energy Centres No.1
Limited Partnership
Partnership
100%
Aviva Investors EPF ICVC
Fund
73%
Aviva Investors Europe Equity ex UK
Core Fund
TTF
68%
Aviva Investors Europe Equity ex UK
Fund
TTF
100%
Company name
Share Class
held
% of
total
equity
Aviva Investors Global Equity Endurance
Fund
OEIC
98%
Aviva Investors Global Equity Fund
TTF
100%
Aviva Investors Global Equity Growth
Fund
TTF
100%
Aviva Investors Global Equity Income
Fund
OEIC
23%
Aviva Investors Global Services Limited
Ordinary
100%
Aviva Investors GR SPV1 Limited
Ordinary
100%
Aviva Investors GR SPV3 Limited
Ordinary
100%
Aviva Investors GR SPV 4 Limited
Ordinary
100%
Aviva Investors GR SPV 5 Limited
Ordinary
100%
Aviva Investors GR SPV 6 Limited
Ordinary
100%
Aviva Investors GR SPV 7 Limited
Ordinary
100%
Aviva Investors GR SPV 8 Limited
Ordinary
100%
Aviva Investors GR SPV 9 Limited
Ordinary
100%
Aviva Investors GR SPV10 Limited
Ordinary
100%
Aviva Investors GR SPV 11 Limited
Ordinary
100%
Aviva Investors GR SPV 12 Limited
Ordinary
100%
Aviva Investors GR SPV 13 Limited
Ordinary
100%
Aviva Investors GR SPV 14 Limited
Ordinary
100%
Aviva Investors GR SPV 15 Limited
Ordinary
100%
Aviva Investors GR SPV16 Limited
Ordinary
100%
Aviva Investors GR SPV17 Limited
Ordinary
100%
Aviva Investors Ground Rent GP Limited
Ordinary
100%
Aviva Investors Ground Rent Holdco
Limited
Ordinary
100%
Aviva Investors Higher Income Plus
Fund
OEIC
14%
Aviva Investors Holdings Limited
Ordinary
100%
Aviva Investors Index Linked Gilt Fund
TTF
100%
Aviva Investors Index-Linked Gilts Over
5 Years Index Fund
TTF
100%
Aviva Investors Infrastructure GP
Limited
Ordinary
100%
Aviva Investors Infrastructure Income B
Limited
Ordinary
100%
Aviva Investors Infrastructure Income C
Limited
Ordinary
100%
Aviva Investors Infrastructure Income C
No.4E Limited
Ordinary
100%
Aviva Investors Infrastructure Income C
No.4F Limited
Ordinary
100%
Aviva Investors Infrastructure Income
Limited Partnership
Partnership
100%
Aviva Investors Infrastructure Income M
Limited
Ordinary
100%
Aviva Investors Infrastructure Income M
No.4C Limited
Ordinary
100%
Aviva Investors Infrastructure Income M
No.4D Limited
Ordinary
100%
Aviva Investors Infrastructure Income
No.1 Limited
Ordinary
100%
Company name
Share Class
held
% of
total
equity
Aviva plc
Annual Report and Accounts 2024
Strategic
Report
Governance
Report
IFRS Financial
Statements
Other
Information
293
Notes to the consolidated financial statements
Aviva Investors Infrastructure Income
No.2 Limited
Ordinary
100%
Aviva Investors Infrastructure Income
No.2B Limited
Ordinary
100%
Aviva Investors Infrastructure Income
No.3 Limited
Ordinary
100%
Aviva Investors Infrastructure Income
No.3B Limited
Ordinary
0%
Aviva Investors Infrastructure Income
No.4A Limited
Ordinary
100%
Aviva Investors Infrastructure Income
No.4B Limited
Ordinary
100%
Aviva Investors Infrastructure Income
No.5 Limited
Ordinary
100%
Aviva Investors Infrastructure Income
No.6 Limited
Ordinary
37%
Aviva Investors Infrastructure Income
No.6a1 Limited
Ordinary
59%
Aviva Investors Infrastructure Income
No.6B Limited
Ordinary
29%
Aviva Investors Infrastructure Income
No.6B1 Limited
Ordinary
40%
Aviva Investors Infrastructure Income
No.6c Limited
Ordinary
58%
Aviva Investors Infrastructure Income
No.6c1 Limited
Ordinary
34%
Aviva Investors Infrastructure Income
No.6D Limited
Ordinary
100%
Aviva Investors Infrastructure Income
No.7 Limited
Ordinary
64%
Aviva Investors Infrastructure Income
No.8 Limited
Ordinary
100%
Aviva Investors International Index
Tracking Fund
OEIC
82%
Aviva Investors Japan Equity Core Fund
TTF
69%
Aviva Investors Japan Equity Fund
TTF
100%
Aviva Investors Japan Equity Growth
Fund
OEIC
100%
Aviva Investors Japanese Equity Index
(Custom Screened) Fund
TTF
100%
Aviva Investors Managed High Income
Fund
OEIC
72%
Aviva Investors Money Market VNAV
Fund
TTF
100%
Aviva Investors Monthly Income Plus
Fund
OEIC
0%
Aviva Investors Multi-Asset (40-85%
Shares) Index Fund
TTF
100%
Aviva Investors Multi-Asset Core Fund I
OEIC
28%
Aviva Investors Multi-Asset Core Fund II OEIC
35%
Aviva Investors Multi-Asset Core Fund
III
OEIC
35%
Aviva Investors Multi-Asset Core Fund
IV
OEIC
27%
Aviva Investors Multi-Asset Core Fund V
OEIC
22%
Aviva Investors Multi-asset Plus I Fund
OEIC
16%
Aviva Investors Multi-asset Plus II Fund
OEIC
26%
Company name
Share Class
held
% of
total
equity
Aviva Investors Multi-asset Plus III Fund
OEIC
44%
Aviva Investors Multi-asset Plus IV Fund
OEIC
30%
Aviva Investors Multi-asset Plus V Fund
OEIC
30%
Aviva Investors Multi-asset Sustainable
Stewardship Fund I
OEIC
100%
Aviva Investors Multi-asset Sustainable
Stewardship Fund II
OEIC
100%
Aviva Investors Multi-asset Sustainable
Stewardship Fund III
OEIC
100%
Aviva Investors Multi-asset Sustainable
Stewardship Fund IV
OEIC
97%
Aviva Investors Multi-Manager 20-60%
Shares Fund
OEIC
80%
Aviva Investors Multi-Manager 40-85%
Shares Fund
OEIC
79%
Aviva Investors Multi-Manager Flexible
Fund
OEIC
90%
Aviva Investors Multi-Strategy Target
Return Fund
OEIC
90%
Aviva Investors Non-Gilt Bond All Stocks
Index Fund
TTF
100%
Aviva Investors Non-Gilt Bond Over 15
Years Index Fund
TTF
100%
Aviva Investors Non-Gilt Bond Up To 5
Years Index Fund
TTF
100%
Aviva Investors North American Equity
Core Fund
TTF
68%
Aviva Investors North American Equity
Fund
TTF
100%
Aviva Investors North American Equity
Index (Custom Screened) Fund
TTF
100%
Aviva Investors Pacific Equity ex Japan
Core Fund
TTF
70%
Aviva Investors Pacific ex Japan Equity
Index Fund
TTF
100%
Aviva Investors Pensions Limited
Ordinary
100%
Aviva Investors PIP Solar PV (General
Partner) Limited
Ordinary
100%
Aviva Investors PIP Solar PV Limited
Partnership
Partnership
100%
Aviva Investors PIP Solar PV No.1
Limited
Ordinary
100%
Aviva Investors Polish EBC LP
Partnership
100%
Aviva Investors Polish Retail GP Limited
Ordinary
100%
Aviva Investors Polish Retail Limited
Partnership
Partnership
100%
Aviva Investors Pre-Annuity Fixed
Interest Fund
TTF
100%
Aviva Investors Property Fund
Management Limited
Ordinary
100%
Aviva Investors Real Estate Active LTAF
Fund
100%
Aviva Investors Real Estate Limited
Ordinary
100%
Aviva Investors REALM Commercial
Assets Limited Partnership
Partnership
100%
Aviva Investors REALM Ground Rent
Limited Partnership
Partnership
100%
Company name
Share Class
held
% of
total
equity
Aviva plc
Annual Report and Accounts 2024
Strategic
Report
Governance
Report
IFRS Financial
Statements
Other
Information
294
Notes to the consolidated financial statements
Aviva Investors REALM Social Housing
Limited Partnership
Partnership
86%
Aviva Investors REALTAF Holdco Limited Ordinary
100%
Aviva Investors Secure Income REIT
Limited
Ordinary
100%
Aviva Investors Social Housing GP
Limited
Ordinary
100%
Aviva Investors Social Housing Limited
Company
Limited by
guarantee
100%
Aviva Investors Sterling Corporate Bond
Fund
TTF
100%
Aviva Investors Sterling Gilt Fund
TTF
100%
Aviva Investors Strategic Bond Fund
OEIC
81%
Aviva Investors Strategic Global Equity
Fund
TTF
100%
Aviva Investors Sustainable Stewardship
Fixed Interest Feeder Fund
OEIC
97%
Aviva Investors Sustainable Stewardship
Fixed Interest Fund
TTF
100%
Aviva Investors Sustainable Stewardship
Fund UK Equity Income Fund
TTF
100%
Aviva Investors Sustainable Stewardship
International Equity Feeder Fund
OEIC
95%
Aviva Investors Sustainable Stewardship
UK Equity Fund
TTF
100%
Aviva Investors Sustainable Stewardship
International Equity Fund
TTF
100%
Aviva Investors UK Commercial Real
Estate Senior Debt LP
Partnership
21%
Aviva Investors UK CRESD GP Limited
Ordinary
100%
Aviva Investors UK Equity (ex Aviva,
Investment Trusts) Index (Custom
Screened) Fund
TTF
100%
Aviva Investors UK Equity Alpha Fund
TTF
97%
Aviva Investors UK Equity Core Fund
TTF
100%
Aviva Investors UK Equity Dividend Fund
TTF
100%
Aviva Investors UK Equity Index (Custom
Screened) Fund
TTF
100%
Aviva Investors UK Fund Services
Limited
Ordinary
100%
Aviva Investors UK Gilts All Stocks Index
Fund
TTF
100%
Aviva Investors UK Gilts Over 15 Years
Index Fund
TTF
100%
Aviva Investors UK Gilts Up To 5 Years
Index Fund
TTF
100%
Aviva Investors UK Index Tracking Fund
OEIC
83%
Aviva Investors UK Listed Equity ex
Tobacco Fund
TTF
100%
Aviva Investors UK Listed Equity Fund
OEIC
100%
Aviva Investors UK Listed Equity Fund
TTF
100%
Aviva Investors UK Listed Equity Income
Fund
OEIC
49%
Aviva Investors UK Listed Equity Income
Fund
TTF
100%
Company name
Share Class
held
% of
total
equity
Aviva Investors UK Listed Equity
Unconstrained Fund
OEIC
1%
Aviva Investors UK Listed Small and
Mid-Cap Fund
OEIC
10%
Aviva Investors UK Property Feeder Acc
Fund
OEIC
22%
Aviva Investors UK Property Feeder Inc
Fund
OEIC
8%
Aviva Investors UK Property Fund
OEIC
16%
Aviva Investors US Equity Income Fund
OEIC
0%
Aviva Investors US Equity Income II
Fund
OEIC
0%
Aviva Investors US Equity Index (Custom
Screened) Fund
TTF
100%
Aviva Investors US Large Cap Equity
Fund
TTF
100%
Aviva Overseas Holdings Limited
Ordinary
100%
Aviva Public Private Finance Limited
Ordinary
100%
Aviva RELI 1 GP Limited
Ordinary
100%
Aviva RELI 1 LP
Partnership
100%
Aviva RELI 1 Nominee Limited
Ordinary
100%
Aviva RELI 1 Unit Trust
Unit Trust
100%
Aviva RELI 2 GP Limited
Ordinary
100%
Aviva RELI 2 LP
Partnership
100%
Aviva RELI 3 GP Limited
Ordinary
100%
Aviva RELI 3 LP
Partnership
100%
Aviva RELI 3 Nominee A Limited
Ordinary
100%
Aviva RELI 3 Nominee B Limited
Ordinary
100%
Aviva RELI 4 GP Limited
Ordinary
100%
Aviva RELI 4 LP
Partnership
100%
Aviva RELI 4 Nominee A Limited
Ordinary
100%
Aviva RELI 4 Nominee B Limited
Ordinary
100%
Aviva Special PFI GP Limited
Ordinary
100%
Aviva Special PFI Limited Partnership
Partnership
50%
Aviva Staff Pension Trustee Limited
Ordinary
100%
Barwell Business Park Nominee Limited
Ordinary
100%
Bermondsey Yards General Partner
Limited
Ordinary
100%
Bermondsey Yards Limited Partnership
Partnership
100%
Bermondsey Yards Nominee 1 Limited
Ordinary
100%
Bermondsey Yards Nominee 2 Limited
Ordinary
100%
Bersey Warehouse Nominee 1 Limited
Ordinary
8%
Bersey Warehouse Nominee 2 Limited
Ordinary
8%
Biomass UK No.1 LLP
Partnership
100%
Biomass UK No.4 Limited
Ordinary
100%
Building a Future (Newham Schools)
Limited
Ordinary
100%
Bunns Lane Development Limited
Ordinary
98%
Cara Renewables Limited
Ordinary
100%
CCPF No.4 LP
Partnership
100%
CGU International Holdings BV
Ordinary
100%
Company name
Share Class
held
% of
total
equity
Aviva plc
Annual Report and Accounts 2024
Strategic
Report
Governance
Report
IFRS Financial
Statements
Other
Information
295
Notes to the consolidated financial statements
Chesterford Park (General Partner)
Limited
Ordinary
50%
Chesterford Park (Nominee) Limited
Ordinary
50%
Chesterford Park Limited Partnership
Partnership
50%
Commercial Union Life Assurance
Company Limited
Ordinary
100%
Digital Garage Nominee 1 Limited
Ordinary
8%
Digital Garage Nominee 2 Limited
Ordinary
8%
EES Operations 1 Limited
Ordinary
100%
Electric Avenue Ltd
Ordinary
100%
Elms Road Wokingham Ltd
Ordinary
100%
Fitzroy Place GP 2 Limited
Ordinary
50%
Fitzroy Place Management Co Limited
Ordinary
50%
Fitzroy Place Residential Limited
Ordinary
50%
Free Solar (Stage 2) Limited
Ordinary
100%
Gobafoss General Partner Limited
Ordinary
100%
Heritage FL Single Family Homes Limited
Ordinary
100%
Heritage FL Single Family Homes LP
Partnership
100%
Hooton Bio Power Limited
Ordinary
56%
Houlton Commercial Management
Company 2 Limited
Company
Limited by
guarantee
50%
Houlton Commercial Management
Company Limited
Company
Limited by
guarantee
50%
Houlton Community Management
Company Limited
Company
Limited by
guarantee
50%
Igloo Regeneration (General Partner)
Limited
Ordinary
50%
Igloo Regeneration (Nominee) Limited
Ordinary
50%
Igloo Regeneration Developments
(General Partner) Limited
Ordinary
50%
Igloo Regeneration Developments LP
Partnership
20%
Igloo Regeneration Partnership
Partnership
100%
Igloo Regeneration Property Unit Trust
Unit Trust
50%
Lime Property Fund (General Partner)
Limited
Ordinary
100%
Lime Property Fund (Nominee) Limited
Ordinary
100%
Lime Property Fund Limited Partnership
Partnership
1%
Lombard (London) 1 Limited
Ordinary
100%
Lombard (London) 2 Limited
Ordinary
100%
Longcross General Partner Limited
Ordinary
100%
Longcross Limited Partnership
Partnership
100%
Longcross Nominee 1 Limited
Ordinary
100%
Longcross Nominee 2 Limited
Ordinary
100%
Mortimer Street Associated Co 1 Limited
Ordinary
50%
Mortimer Street Associated Co 2 Limited
Ordinary
50%
Mortimer Street Nominee 1 Limited
Ordinary
50%
Mortimer Street Nominee 2 Limited
Ordinary
50%
Mortimer Street Nominee 3 Limited
Ordinary
50%
New Broad Street House LP
Partnership
50%
Company name
Share Class
held
% of
total
equity
New Broad Street House Nominee 1
Limited
Ordinary
50%
New Broad Street House Nominee 2
Limited
Ordinary
50%
Norwich Union (Shareholder GP) Limited
Ordinary
100%
Norwich Union Public Private Partnership
Fund
Partnership
100%
NU 3PS Limited
Ordinary
100%
NU Developments (Brighton) Limited
Ordinary
100%
NU Library For Brighton Limited
Ordinary
100%
NU Local Care Centres (Bradford)
Limited
Ordinary
100%
NU Local Care Centres (Chichester No.1)
Limited
Ordinary
100%
NU Local Care Centres (Chichester No.2)
Limited
Ordinary
100%
NU Local Care Centres (Chichester No.3)
Limited
Ordinary
100%
NU Local Care Centres (Chichester No.4)
Limited
Ordinary
100%
NU Local Care Centres (Chichester No.5)
Limited
Ordinary
100%
NU Local Care Centres (Chichester No.6)
Limited
Ordinary
100%
NU Local Care Centres (Farnham)
Limited
Ordinary
100%
NU Offices for Redcar Limited
Ordinary
100%
NU Schools for Redbridge Limited
Ordinary
100%
NU Technology and Learning Centres
(Hackney) Limited
Ordinary
100%
NUPPP (Care Technology and Learning
Centres) Limited
Ordinary
100%
NUPPP (GP) Limited
Ordinary
100%
NUPPP Nominees Limited
Ordinary
100%
Opus Park Management Limited
Company
Limited by
guarantee
100%
Pegasus House and Nuffield House LP
Partnership
50%
Pegasus House and Nuffield House
Nominee 1 Limited
Ordinary
50%
Pegasus House and Nuffield House
Nominee 2 Limited
Ordinary
50%
Porth Teigr Management Company
Limited
Ordinary
50%
Quarryvale One Limited
Ordinary
100%
REALTAF Cambridge GP Limited
Ordinary
100%
REALTAF Cambridge LP
Partnership
100%
REALTAF Ebbsfleet GP Limited
Ordinary
100%
REALTAF Ebbsfleet LP
Partnership
100%
REALTAF Whitehouse GP Limited
Ordinary
100%
REALTAF Whitehouse LP
Partnership
100%
REALTAF Wixams GP Limited
Ordinary
100%
Renewable Clean Energy 3 Limited
Ordinary
100%
Renewable Clean Energy Limited
Ordinary
100%
Riley Factory Nominee 1 Limited
Ordinary
8%
Company name
Share Class
held
% of
total
equity
Aviva plc
Annual Report and Accounts 2024
Strategic
Report
Governance
Report
IFRS Financial
Statements
Other
Information
296
Notes to the consolidated financial statements
Riley Factory Nominee 2 Limited
Ordinary
8%
Rugby Radio Station (General Partner)
Limited
Ordinary
50%
Rugby Radio Station (Nominee) Limited
Ordinary
50%
Rugby Radio Station Limited Partnership
Partnership
50%
SHR Bordon Limited
Ordinary
100%
SHR Coventry Limited
Ordinary
100%
SHR Ipswich Limited
Ordinary
100%
SHR Ipswich OpCo Limited
Ordinary
100%
SHR Linmere Limited
Ordinary
100%
SHR Swindon Limited
Ordinary
100%
SHR Telford Limited
Ordinary
100%
SHR Telford OpCO Limited
Ordinary
100%
Solar Clean Energy Limited
Ordinary
100%
Southgate General Partner Limited
Ordinary
50%
Southgate LP (Nominee 1) Limited
Ordinary
50%
Southgate LP (Nominee 2) Limited
Ordinary
50%
Spire Energy Ltd
Ordinary
100%
Station Road Cambridge LP
Partnership
50%
Station Road General Partner LLP
Partnership
50%
Station Road GP Limited
Ordinary
100%
Stonebridge Cross Management Limited
Company
Limited by
guarantee
100%
Stoney Wood Property Developments
Limited
Ordinary
100%
SUE Developments LP
Partnership
50%
SUE GP LLP
Partnership
50%
SUE GP Nominee Limited
Ordinary
50%
Sustainable Housing Holdco Limited
Ordinary
100%
Sustainable Housing Topco Limited
Ordinary
100%
Sustainable Storage HoldCo Limited
Ordinary
100%
Sustainable Storage Portfolio SPV
Limited
Ordinary
100%
Sustainable Storage Topco Limited
Ordinary
100%
Swan Valley Management Limited
Ordinary
0%
The Designer Retail Outlet Centres
(Mansfield) General Partner Limited
Ordinary
100%
The Designer Retail Outlet Centres
(Mansfield) Limited Partnership
Partnership
97%
The Designer Retail Outlet Centres (York)
General Partner Limited
Ordinary
100%
The Designer Retail Outlet Centres (York)
Limited Partnership
Partnership
97%
The Rutherford Nominee 1 Limited
Ordinary
8%
The Rutherford Nominee 2 Limited
Ordinary
8%
The Square Brighton Limited
Ordinary
100%
The Southgate Limited Partnership
Partnership
50%
Tyne Assets (No 2) Limited
Ordinary
100%
Tyne Assets Limited
Ordinary
100%
Undershaft Limited
Ordinary
100%
Welsh Insurance Corporation Limited
Ordinary
100%
Company name
Share Class
held
% of
total
equity
Westcountry Solar Solutions Limited
Ordinary
100%
Yorkshire Insurance Company Limited
Ordinary
100%
88 Leadenhall Street, London, EC3A 3BP, United Kingdom
AdA Risk Holding Co Limited
Ordinary
25%
AdA Underwriters Limited
Ordinary
25%
Probitas 1492 Services Limited
Ordinary
100%
Probitas Corporate Capital Limited
Ordinary
100%
Probitas Holdings (UK) Limited
Ordinary
100%
Probitas Managing Agency Limited
Ordinary
100%
124 City Road, London, EC1V 2NX, United Kingdom
Astute Financial Advisers Limited
Ordinary
49%
Tenet Business Solutions Limited
Ordinary
49%
Tenet Client Services Limited
Ordinary
49%
180 Great Portland Street, London, W1W 5QZ, United Kingdom
Quantum Property Partnership (General
Partner) Limited
Ordinary
50%
Quantum Property Partnership
(Nominee) Limited
Ordinary
50%
6600 Cinnabar Court Daresbury Park, Daresbury, Warrington,
WA4 4GE, United Kingdom
BNET Ultra Limited
Ordinary
19%
ITS (Holdco) Limited
Ordinary
19%
ITS (Midco) Limited
Ordinary
19%
ITS Hammersmith & Fulham Limited
Ordinary
19%
ITS Nottingham Limited
Ordinary
19%
ITS Technology Group Limited
Ordinary
19%
ITS Telecom Solutions Limited
Ordinary
19%
Liverpool City Region Digital Limited
Ordinary
5%
NextGenAccess Limited
Ordinary
19%
Building 1063, Cornforth Drive, Kent Science Park, Sittingbourne,
ME9 8PX, United Kingdom
Digital Greenwich Connect Limited
Ordinary
10%
c/o Interpath Ltd 4th Floor, Tailor's Corner, Thirsk Row, Leeds,
LS1 4DP, United Kingdom
Tenet Financial Services Limited
Ordinary
49%
Tenet Mortgage Solutions Limited
Ordinary
49%
c/o Interpath Ltd, 10 Fleet Place, London, EC4M 7RB, United
Kingdom
Tenet Group Limited
Ordinary
49%
Tenet Limited
Ordinary
49%
TenetConnect Limited
Ordinary
49%
TenetConnect Services Limited
Ordinary
49%
c/o Wilmington Trust SP Services (London) Limited, Third Floor,
1 King’s Arms Yard, London, EC2R 7AF, United Kingdom
Equity Release Funding (No.1) plc
Ordinary
0%
Equity Release Funding (No.2) plc
Ordinary
0%
Equity Release Funding (No.3) plc
Ordinary
0%
Equity Release Funding (No.4) plc
Ordinary
0%
Equity Release Funding (No.5) plc
Ordinary
0%
ERF Trustee (No.4) Limited
Ordinary
0%
ERF Trustee (No.5) Limited
Ordinary
0%
Company name
Share Class
held
% of
total
equity
Aviva plc
Annual Report and Accounts 2024
Strategic
Report
Governance
Report
IFRS Financial
Statements
Other
Information
297
Notes to the consolidated financial statements
Calton Square, 1 Greenside Row, Edinburgh, EH1 3AN, United
Kingdom
Baillie Gifford International Fund
OEIC
29%
Baillie Gifford UK Equity Core Fund
OEIC
25%
Capital Tower, 91 Waterloo Road, London, SE1 8RT,
United Kingdom
Rock Road Devco Limited
Ordinary
49%
Exchange House, Primrose Street, London, EC2A 2HS, United
Kingdom
CT (Lux) Diversified Growth Fund
SICAV
98%
CT (Lux) European Growth & Income
Fund
SICAV
75%
CT Global Total Return Bond Fund
OEIC
27%
Exchange Tower, 19 Canning Street, Edinburgh, EH3 8EH, United
Kingdom
Hoxton Campus LP
Partnership
8%
Hoxton General Partner LLP
Partnership
8%
Forum 4, Solent Business Park, Parkway South, Whitley,
Fareham, PO15 7AD, United Kingdom
1 Liverpool Street GP Limited
Ordinary
50%
1 Liverpool Street Limited Partnership
Partnership
30%
1 Liverpool Street Nominee 1 Limited
Ordinary
50%
1 Liverpool Street Nominee 2 Limited
Ordinary
50%
101 Moorgate GP Limited
Ordinary
50%
101 Moorgate Limited Partnership
Partnership
30%
101 Moorgate Nominee 1 Limited
Ordinary
50%
101 Moorgate Nominee 2 Limited
Ordinary
50%
Midlands Regen I GP Limited
Ordinary
95%
Midlands Regen I Limited Partnership
Partnership
95%
Midlands Regen I Nominee Limited
Ordinary
95%
Founders Factory (Level 7) Arundel Street Building, 180 Strand, 2
Arundel Street, London, WC2R 3DA, United Kingdom
FF AV JV Limited
Preference
17%
Grant Thornton UK LLP, 30 Finsbury Square, London, EC2P 2YU,
United Kingdom
Defined Returns Limited
Ordinary
29%
NDF Administration Limited
Ordinary
33%
Legal & General (Unit Trust Managers) Limited, PO Box 6080,
Wolverhampton, WV1 9RB, United Kingdom
L&G Multi-Index Eur III-NEA
OEIC
86%
L&G Multi-Index Eur IV-NEA
OEIC
100%
L&G Multi-Index Eur V-NEA
OEIC
100%
Level 16, 5 Aldermanbury Square, London, EC2V 7HR, United
Kingdom
Houghton Regis Management Company
Limited
Ordinary
33%
Nations House, 3rd Floor, 103 Wigmore Street, London, W1U 1QS,
United Kingdom
Cannock Consortium Holdings Limited
Ordinary
43%
Cannock Consortium LLP
Partnership
43%
Cannock Designer Outlet (GP Holdings)
Limited
Ordinary
43%
Cannock Designer Outlet (GP) Limited
Ordinary
43%
Company name
Share Class
held
% of
total
equity
Cannock Designer Outlet (Nominee 1)
Limited
Ordinary
43%
Cannock Designer Outlet (Nominee 2)
Limited
Ordinary
43%
Cannock Designer Outlet Limited
Partnership
Partnership
37%
Old Bourchiers Hall, New Road, Aldham, Colchester, C06 3QU,
United Kingdom
County Broadband Holdings Limited
Ordinary
61%
County Broadband Ltd
Ordinary
61%
One Coleman Street, London, EC2R 5AA, United Kingdom
L&G Diversified Fund
Unit Trust
74%
Pennine Place, 2a Charing Cross Road, London, WC2H 0HF,
United Kingdom
Clean Growth Fund
Partnership
100%
Perpetual Park, Perpetual Park Drive, Henley-on-Thames, RG9
1HH, United Kingdom
Invesco Summit Responsible 2 Fund (UK) OEIC
42%
Invesco Summit Responsible 5 Fund (UK) OEIC
41%
Pinesgate West, Lower Bristol Road, Bath, BA2 3DP, United
Kingdom
Truespeed Communications Ltd
Ordinary
17%
Pitheavlis, Perth, PH2 0NH, United Kingdom
AICT GBP Real Estate (Curtain House)
General Partner Limited
Ordinary
100%
AICT GBP Real Estate (Curtain House)
Limited Partnership
Partnership
100%
Aviva (Peak No.1) UK Limited
Ordinary
100%
Aviva Insurance Limited
Ordinary
100%
Aviva Investors (FP) Limited
Ordinary
100%
Aviva Investors (FP) LP
Partnership
100%
Aviva Investors (GP) Scotland Limited
Ordinary
100%
Aviva Investors Climate Transition GBP
Real Estate General Partner Limited
Ordinary
100%
Aviva Investors Climate Transition GBP
Real Estate Limited Partnership
Partnership
100%
Aviva Investors Private Equity
Programme 2008 Partnership
Partnership
40%
Salisbury House, London Wall, London, EC2M 5QQ, United
Kingdom
London Wall Partners LLP
Partnership
100%
Stonyroyd House, 8 Cumberland Road, Leeds, LS6 2EF, United
Kingdom
Cutter & Co Financial Planning Limited
Ordinary
100%
Flowers McEwan Limited
Ordinary
100%
Lee Strathy Limited
Ordinary
100%
Tag Financial Planning Limited
Ordinary
100%
True Financial Partnerships Limited
Ordinary
100%
True Wealth Management Limited
Ordinary
100%
True Wealth Planning Solutions Limited
Ordinary
100%
Veracity Asset Transformation Service
Limited
Ordinary
100%
Swan Court Waterman's Business Park, Kingsbury Crescent,
Staines, TW18 3BA, United Kingdom
Company name
Share Class
held
% of
total
equity
Aviva plc
Annual Report and Accounts 2024
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Other
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Notes to the consolidated financial statements
Healthcode Limited
Ordinary C, E
20%
Tec Marina Terra Nova Way, Penarth, Cardiff, CF64 1SA, United
Kingdom
Wealthify Group Limited
Ordinary
100%
Wealthify Limited
Ordinary
100%
The Apex, Brest Road, Derriford Business Park, Derriford,
Plymouth, PL6 5FL, United Kingdom
DFP Health & Wealth Management
Limited
Ordinary
100%
DFP Wealth Management Ltd
Ordinary
100%
G&E Wealth Management (Holdings) Ltd
Ordinary
100%
G&E Wealth Management Limited
Ordinary
100%
HKA (F S) Limited
Ordinary
100%
HKA Holdings Limited
Ordinary
100%
JCF Financial Services Limited
Ordinary
100%
Succession Advisory Services Limited
Ordinary
100%
Succession Employee Benefit Solutions
Limited
Ordinary
100%
Succession Financial Management
Limited
Ordinary
100%
Succession Group Ltd
Ordinary
100%
Succession Holdings Ltd
Ordinary
100%
Succession Wealth Management Limited
Ordinary
100%
The Green, Easter Park, Benyon Road, Reading, RG7 2PQ, United
Kingdom
Anesco Mid Devon Limited
Ordinary
100%
Anesco South West Limited
Ordinary
100%
Free Solar (Stage 1) Limited
Ordinary
100%
Homesun 2 Limited
Ordinary
100%
Homesun 3 Limited
Ordinary
100%
Homesun 4 Limited
Ordinary
100%
Homesun 5 Limited
Ordinary
100%
Homesun Limited
Ordinary
100%
New Energy Residential Solar Limited
Ordinary
100%
Norton Energy SLS Limited
Ordinary
100%
TGHC Limited
Ordinary
100%
Third Floor, Queensberry House, 3 Old Burlington Street,
London, W1S 3AE, United Kingdom
Manse Opus Management Company
Limited
Company
Limited by
Guarantee
20%
Unit 13 Piano Work, 113-117 Farringdon Road, London, EC1R 3BX,
United Kingdom
Eligible Limited
Ordinary
6%
Wellington Row, York, YO90 1WR, United Kingdom
Aviva (Peak No.2) UK Limited
Ordinary
100%
Aviva Administration Limited
Ordinary
100%
Aviva Client Nominees UK Limited
Ordinary
100%
Aviva Equity Release UK Limited
Ordinary
100%
Aviva ERFA 15 UK Limited
Ordinary
100%
Aviva Investment Solutions UK Limited
Ordinary
100%
Aviva Life & Pensions UK Limited
Ordinary
100%
Company name
Share Class
held
% of
total
equity
Aviva Life Holdings UK Limited
Ordinary
100%
Aviva Life Investments International
(General Partner) Limited
Ordinary
100%
Aviva Life Investments International
(Recovery) Limited
Ordinary
100%
Aviva Life Investments International L.P.
Partnership
100%
Aviva Life Services UK Limited
Ordinary
100%
Aviva Management Services UK Limited
Ordinary
100%
Aviva Master Trust Trustees UK Limited
Ordinary
100%
Aviva Pension Trustees UK Limited
Ordinary
100%
Aviva Protection UK Limited (formerly
AIG Life Limited)
Ordinary
100%
Aviva Savings Limited
Ordinary
100%
Aviva Trustees UK Limited
Ordinary
100%
Aviva UKLAP De-risking Limited
Ordinary
100%
Aviva Wealth Holdings UK Limited
Ordinary
100%
Aviva Wrap UK Limited
Ordinary
100%
Bankhall Support Services Limited
Ordinary
100%
CGNU Life Assurance Limited
Ordinary
100%
Friends AEL Trustees Limited
Ordinary
100%
Friends AELLAS Limited
Ordinary
100%
Friends Life and Pensions Limited
Ordinary
100%
Friends Life Assurance Society Limited
Ordinary
100%
Friends Life Company Limited
Ordinary
100%
Friends Life FPLMA Limited
Ordinary
100%
Friends Life Limited
Ordinary
100%
Friends Life WL Limited
Ordinary
100%
Friends Provident Investment Holdings
Limited
Ordinary
100%
Friends Provident Life Assurance Limited Ordinary
100%
Friends' Provident Life Office
Company
Limited by
guarantee
0%
Friends' Provident Managed Pension
Funds Limited
Ordinary
100%
Friends Provident Pension Scheme
Trustees Limited
Ordinary
100%
Friends SLUA Limited
Ordinary
100%
Gateway Specialist Advice Services
Limited
Ordinary
100%
Group Risk Services Limited
Ordinary
100%
Heritage friends life institutional (SLPM)
Ordinary
100%
Lancashire and Yorkshire Reversionary
Interest Company Limited /The
Ordinary
100%
London and Manchester Group Limited
Ordinary
100%
Premier Mortgage Service Limited
Ordinary
100%
Sesame Bankhall Group Limited
Ordinary
100%
Sesame Bankhall Valuation Services
Limited
Ordinary
75%
Sesame General Insurance Services
Limited
Ordinary
100%
Sesame Limited
Ordinary
100%
Sesame Services Limited
Ordinary
100%
Company name
Share Class
held
% of
total
equity
Aviva plc
Annual Report and Accounts 2024
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Notes to the consolidated financial statements
Suntrust Limited
Ordinary
100%
Undershaft (NULLA) Limited
Ordinary
100%
Undershaft FAL Limited
Ordinary
100%
Undershaft FPLLA Limited
Ordinary
100%
Undershaft SLPM Limited
Ordinary
100%
Voyager Park South Management
Company Limited
Ordinary
52%
Wealth Limited
Ordinary
100%
United States
100 Wilshire Boulevard, Santa Monica, California Suite 2060,
90401, United States
Fifth Wall Accelerate (Late-Stage), L.P.
Partnership
100%
1209 Orange Street, Wilmington, DE, 19801, United States
Aviva Investors Americas LLC
Sole Member
100%
2222 Grand Avenue, Des Moines, IA, 50312, United States
Aviva Investors North America Holdings,
Inc
Common
100%
251 Little Falls Drive, Wilmington, DE, 19808, United States
AI-RECAP GP I, LLC
Sole Member
100%
UKP Holdings Inc.
Common
100%
Cogency Global Inc., 850 New Burton Road, Suite 201, Dover, De
laware, Kent County, 19904, United States
Exeter Properties Inc.
Common
95%
Winslade Investments Inc.
Common
100%
Company name
Share Class
held
% of
total
equity
Definitions
Authorised Contractual Scheme ('ACS')
Fond common de Placement ('FCP')
Irish Collective Asset-management Vehicle ('ICAV')
Open Ended Investment Companies ('OEIC')
Société d'Investment à Capital Variable ('SICAV')
Tax Transparent Fund ('TTF')
Audit exemptions
The subsidiary undertakings of the Company listed below are
to take advantage of s479A Companies Act 2006 (s479A) audit
exemption for the year ended 31 December 2024. Aviva plc
will issue a guarantee pursuant to s479A in relation to the
liabilities of the entity:
Aviva Management Services UK Limited
983330
Aviva Savings Limited
4384512
Aviva Wealth Holdings UK Limited
6861305
Bunns Lane Development Limited
15399360
Group Risk Services Limited
6744393
Lancashire and Yorkshire Reversionary
Interest Company Limited /The
19770
London Wall Partners LLP
OC375373
Midlands Regen I GP Limited
14885856
Stoney Wood Property
Developments Limited
13161720
Succession Employee Benefit
Solutions Limited
8146349
Succession Financial Management Limited
4454027
Succession Holdings Limited
8148663
Suntrust Limited
1460956
Undershaft Limited
4075935
Company name
Company number
Aviva ERFA 15 UK Limited
6518135
Aviva Europe UK Societas
SE000031
58 – Subsequent events
On 10 February 2025, Direct Line Insurance Group plc (Direct Line) published a circular in relation to the Scheme Document
pertaining to the notices of the Court Meeting and the General Meeting and the details of the actions to be taken by Direct Line
Shareholders on the proposed acquisition by Aviva plc. As required by Rule 28 of the Takeover Code, the Aviva 2025 and 2026
Profit Forecasts were included in the Scheme Document. For further details relating to the proposed acquisition of Direct Line,
see note 2 (a)(v).
Aviva plc
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Notes to the consolidated financial statements
Income statement
For the year ended 31 December 2024
2024
2023
Note
£m
£m
Income
Net investment income
A
2,063
2,518
2,063
2,518
Expenses
Operating expenses
B
(289)
(366)
Finance and other costs
C
(820)
(792)
(1,109)
(1,158)
Profit for the year before tax
954
1,360
Tax credit
D
152
137
Profit for the year after tax
1,106
1,497
Statement of comprehensive income
For the year ended 31 December 2024
2024
2023
£m
£m
Profit for the year
1,106
1,497
Items that will not be reclassified to income statement
Remeasurements of pension schemes
1
—
Other comprehensive income, net of tax
1
—
Total comprehensive income for the year
1,107
1,497
Where applicable, the accounting policies of the Company are the same as those of the Group. The Company notes identified
alphabetically are an integral part of these separate financial statements. Where the same items appear in the Group financial
statements, reference is made to the Group notes identified numerically.
Aviva plc
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Company financial statements
Statement of changes in equity
For the year ended 31 December 2024
Ordinary
share
capital
Preference
share
capital
Share
premium
Capital
redemption
reserve
Merger
reserve
Equity
compensation
reserve
Retained
earnings
Tier 1
notes
Total
equity
Note
£m
£m
£m
£m
£m
£m
£m
£m
£m
Balance at 1 January
901
200
17
24
2,688
122 10,589
496 15,037
Profit for the year
—
—
—
—
—
—
1,106
—
1,106
Other comprehensive
income
—
—
—
—
—
—
1
—
1
Total comprehensive income
for the year
—
—
—
—
—
—
1,107
—
1,107
Dividends and appropriations
15
—
—
—
—
—
—
(972)
—
(972)
Shares purchased in buyback1
31(b)(i)
(20)
—
—
20
—
—
(300)
—
(300)
Capital reductions
—
—
—
—
—
—
—
—
—
Reserves credit for equity
compensation plans
32(d)
—
—
—
—
—
61
—
—
61
Shares issued under equity
compensation plans
36
—
—
—
—
—
(48)
(27)
—
(75)
Issue of tier 1 notes
35
—
—
—
—
—
—
—
—
—
Return of capital to ordinary
shareholders via B share
scheme
31
—
—
—
—
—
—
—
—
—
Balance at 31 December
881
200
17
44
2,688
135 10,397
496 14,858
1. In the year ended 31 December 2024, £300 million of shares were purchased and shares with a nominal value of £20 million have been cancelled as part of the share buyback
programme
For the year ended 31 December 2023
Ordinary
share
capital
Preference
share
capital
Share
premium
Capital
redemption
reserve
Merger
reserve
Equity
compensation
reserve
Retained
earnings
Tier 1
notes
Total
equity
Note
£m
£m
£m
£m
£m
£m
£m
£m
£m
Balance at 1 January
924
200
1,263
3,855
2,688
113
5,248
496
14,787
Profit for the year
—
—
—
—
—
—
1,497
—
1,497
Other comprehensive
income
—
—
—
—
—
—
—
—
—
Total comprehensive income
for the year
—
—
—
—
—
—
1,497
—
1,497
Dividends and appropriations
15
—
—
—
—
—
—
(929)
—
(929)
Shares purchased in buyback1
31
(24)
—
—
24
—
—
(300)
—
(300)
Capital reductions2
—
—
(1,253)
(3,855)
—
—
5,108
—
—
Reserves credit for equity
compensation plans
32
—
—
—
—
—
61
—
—
61
Shares issued under equity
compensation plans
36
1
—
7
—
—
(52)
(35)
—
(79)
Issue of tier 1 notes
35
—
—
—
—
—
—
—
—
—
Return of capital to ordinary
shareholders via B share
scheme
31
—
—
—
—
—
—
—
—
—
Balance at 31 December
901
200
17
24
2,688
122
10,589
496
15,037
1. In the year ended 31 December 2023, £300 million of shares were purchased and shares with a nominal value of £24 million have been cancelled as part of the share buyback
programme
2. In the year ended 31 December 2023, a capital reduction took place which reduced share premium by £1,253 million and the capital redemption reserve by £3,855 million. These
amounts were reclassified as retained earnings.
Where applicable, the accounting policies of the Company are the same as those of the Group. The Company notes identified
alphabetically are an integral part of these separate financial statements. Where the same items appear in the Group financial
statements, reference is made to the Group notes identified numerically.
Aviva plc
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Company financial statements
Statement of financial position
As at 31 December 2024
2024
2023
Note
£m
£m
Assets
Non-current assets
Investments in subsidiaries
E
31,808
31,801
Investment in joint venture
E
123
123
Receivables and other financial assets
F
656
1,473
Deferred tax assets
G
122
114
Current tax assets
G
146
167
32,855
33,678
Current assets
Receivables and other financial assets
F
952
779
Prepayments and accrued income
110
114
Cash and cash equivalents
50
48
Current tax assets
G
165
—
Total assets
34,132
34,619
Equity
Ordinary share capital
31
881
901
Preference share capital
34
200
200
Called up capital
1,081
1,101
Share premium
36
17
17
Capital redemption reserve
36
44
24
Merger reserve
H
2,688
2,688
Equity compensation reserve
135
122
Retained earnings
H
10,397
10,589
Tier 1 notes
L
496
496
Total equity
14,858
15,037
Liabilities
Non-current liabilities
Borrowings
J
4,446
5,123
Payables and other financial liabilities
K
14,541
9,695
Pension deficits and other provisions
I
31
33
19,018
14,851
Current liabilities
Borrowings
J
50
51
Payables and other financial liabilities
K
127
4,581
Other liabilities
79
99
Total liabilities
19,274
19,582
Total equity and liabilities
34,132
34,619
Approved by the Board on 26 February 2025
Charlotte Jones
Chief Financial Officer
Company number: 02468686
Where applicable, the accounting policies of the Company are the same as those of the Group. The Company notes identified
alphabetically are an integral part of these separate financial statements. Where the same items appear in the Group financial
statements, reference is made to the Group notes identified numerically.
Aviva plc
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Company financial statements
Statement of cash flows
For the year ended 31 December 2024
All the Company’s operating cash requirements are met by subsidiary companies and settled through intercompany loan
accounts. As the direct method of presentation has been adopted for these activities, no further disclosure is required. In respect
of financing and investing activities, the following items pass through the Company’s own bank accounts.
2024
2023
£m
£m
Cash flows from investing activities
Dividends received from joint venture
—
14
Net cash from investing activities
—
14
Cash flows from financing activities
Proceeds from issue of ordinary shares
—
8
Shares purchased in buyback
(300)
(300)
Treasury shares purchased for employee trusts
(53)
(76)
New borrowings drawn down, net of expenses
607
870
Repayment of borrowings
(1,209)
(1,097)
Net repayment of borrowings
(602)
(227)
Interest paid on borrowings
(243)
(230)
Preference dividends paid
(17)
(17)
Ordinary dividends paid
(921)
(878)
Coupon payments on tier 1 notes
(34)
(34)
Funding provided from subsidiaries
2,203
1,508
Other1
(31)
(40)
Net cash generated from/(used in) financing activities
2
(286)
Total net drawn down/(decrease) in cash and cash equivalents
2
(272)
Cash and cash equivalents at 1 January
48
320
Cash and cash equivalents 31 December
50
48
1. 2024 includes £35 million (2023: £32 million) in respect of payments relating to equity compensation plans
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Company financial statements
A – Net investment income
2024
2023
£m
£m
Dividends received from subsidiaries1
2,000
2,425
Dividends received from joint venture
—
15
Interest receivable from group company loans held at amortised cost
61
73
Net foreign exchange gains
2
5
Net investment income
2,063
2,518
1. Includes £2,000 million (2023: £2,000 million) dividend income from Aviva Group Holdings Limited and £nil million (2023: £425 million) dividend income from General Accident plc
B – Operating expenses
(a) Operating expenses
Operating expenses comprise:
Note
2024
2023
£m
£m
Equity compensation plans
B(b)
16
16
Other operating costs
271
348
Realised loss on foreign exchange contracts
2
2
Operating expenses
289
366
(b) Equity compensation plans
All transactions in the Group’s equity compensation plans, which involve options and awards for ordinary shares of the Company,
are included in other operating costs. Full disclosure of these plans is given in the Group consolidated financial statements, note
32. The cost of such options and awards is borne by all participating businesses and, where relevant, the Company bears an
appropriate charge. As the majority of the charge to the Company relates to directors’ options and awards, for which full
disclosure is made in the directors’ remuneration report, no further disclosure is given here.
C – Finance and other costs
2024
2023
Note
£m
£m
Interest payable on borrowings
243
237
Interest payable on group loans held at amortised cost
O(b)
534
460
Premium payments and other costs on external borrowings
19
92
Other costs
24
3
Finance and other costs
820
792
D – Tax
(a) Tax credited/(charged) to the income statement
The total tax credit comprises:
2024
2023
£m
£m
For the period
146
167
Prior year adjustments
(2)
(2)
Current tax
144
165
Origination and reversal of temporary differences
8
(28)
Deferred tax
8
(28)
Total tax credited to income statement
152
137
The tax credit above, comprising current and deferred tax, can be analysed as follows:
2024
2023
£m
£m
UK tax
152
138
Overseas tax
—
(1)
Total
152
137
The Company (as part of Aviva Group) is subject to the reform of the international tax system proposed by The Organisation for
Economic Co-operation and Development (OECD), which introduces a global minimum effective rate of corporation tax of 15%
and took effect in the current period. No current tax charge is included in respect of these provisions. No amount is recorded in
2023 as the tax had not been introduced in this period.
(b) Tax charged to other comprehensive income
Tax charged to other comprehensive income in the year amounted to £nil million (2023: £nil million) in respect of obligations
under pension and post-retirement benefit schemes.
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Notes to the Company’s financial statements
(c) The total tax (credit)/charge comprises:
2024
2023
£m
£m
Deferred tax :
Pensions and other post retirement obligations
1
—
Unused losses and tax credits
(9)
28
Total tax (credited)/charged to equity
(8)
28
(d) Tax reconciliation
The tax on the Company’s profit before tax differs from the theoretical amount that would arise using the tax rate in the United
Kingdom as follows:
2024
2023
£m
£m
Total profit before tax
954
1,360
Tax calculated at standard UK corporation tax rate of 25% (2023: 23.5% )
(239)
(320)
Reconciling items
Adjustment to tax charge in respect of prior years
7
(8)
Non-assessable dividend income
500
573
Disallowable expenses
(2)
(3)
Movement in valuation of deferred tax
—
(1)
Different local basis of tax on overseas profits
—
(1)
Losses surrendered intra-group for nil value
(123)
(111)
Tax on interest amounts charged directly to equity
9
8
Total tax credited to income statement
152
137
In accordance with the amendments to IAS 12, endorsed in the UK on 19 July 2023, the Company has applied the exemption and
not provided for deferred tax in respect of the global minimum tax reforms.
E – Investments in subsidiaries and joint venture
(a) Subsidiaries
At 31 December 2024, the Company has two wholly owned subsidiaries, both incorporated in the UK. These are General Accident
plc and Aviva Group Holdings Limited. Aviva Group Holdings Limited is an intermediate holding company, while General Accident
plc has preference shares listed on the London Stock Exchange. At 31 December 2024 the Company’s investments in subsidiaries
have a cost of £31,808 million (2023: £31,801 million). The principal subsidiaries of the Aviva Group at 31 December 2024 are set
out in note 56 to the Group consolidated financial statements.
(b) Joint venture
At 31 December 2024 the Company’s investment in the joint venture, Aviva-COFCO Life Insurance Co. Limited has a cost of
£123 million (2023: £123 million).
F – Receivables and other financial assets
2024
2023
Note
£m
£m
Loans due from subsidiaries held at amortised cost
O(a)
1,402
2,080
Amounts due from subsidiaries held at amortised cost
O(c)(i)
206
172
Total receivables and other financial assets
1,608
2,252
Expected to be recovered in less than one year
952
779
Expected to be recovered in more than one year
656
1,473
Total receivables and other financial assets
1,608
2,252
Fair value of these assets approximate to their carrying amounts.
G – Tax assets and liabilities
(a) Current tax
Current tax assets recoverable in more than one year are £146 million (2023: £167 million).
Current tax assets for prior years’ tax of £165 million (2023: £nil million) are expected to be settled by group relief, and are
recoverable in less than one year.
(b) Deferred tax
(i) The net deferred tax asset arises on the following items:
2024
2023
£m
£m
Pensions and other post retirement obligations
8
9
Unused losses and tax credits
114
105
Net deferred tax assets
122
114
Aviva plc
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Notes to the company financial statements
(ii) The movement in the net deferred tax asset was as follows:
2024
2023
Note
£m
£m
Net deferred tax assets at 1 January
114
142
Amounts credited/(charged) to income statement
D(a)
8
(28)
Net deferred tax assets at 31 December
122
114
Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which the
temporary differences can be utilised. In assessing future profitability, the directors have relied on board approved business
plans and profit forecasts for the UK Group for up to 5 years. In entities where there is a history of tax losses, deferred tax assets
are only recognised in excess of deferred tax liabilities if there is convincing evidence that future taxable profits will be available.
H – Reserves
2024
2023
Merger
reserve
Retained
earnings
Merger
reserve
Retained
earnings
£m
£m
£m
£m
At 1 January
2,688
10,589
2,688
5,248
Profit for the year
—
1,106
—
1,497
Remeasurement of pension schemes
—
1
—
—
Dividends and appropriations
—
(972)
—
(929)
Capital reductions1
—
—
—
5,108
Shares purchased in buyback
—
(300)
—
(300)
Issue of share capital under equity compensation scheme
—
(27)
—
(35)
At 31 December
2,688
10,397
2,688
10,589
1. At a General Meeting of Aviva held on 4 May 2023, Aviva received shareholder approval to a reduction of £1,253 million in its share premium account and to a reduction of £3,855
million in its capital redemption reserve (the Capital Reductions). The Capital Reductions received Court approval on 23 May 2023 and were effected on 25 May 2023.
The vast majority of the retained earnings of the Company are distributable.
I – Pension deficits and other provisions
2024
2023
£m
£m
Total IAS 19 obligations to staff pension schemes
31
33
Total pension deficits and other provisions
31
33
J – Borrowings
The Company’s borrowings comprise:
2024
2023
£m
£m
Subordinated debt
4,063
4,722
Senior notes
383
401
Commercial paper
50
51
Total borrowings
4,496
5,174
Expected to be paid in less than one year
50
51
Expected to be paid in more than one year
4,446
5,123
Total borrowings
4,496
5,174
All the above borrowings are stated at amortised cost with the exception of commercial paper.
Maturity analysis of contractual undiscounted cash flows:
2024
2023
Principal
Interest
Total
Principal
Interest
Total
£m
£m
£m
£m
£m
£m
Within one year
50
218
268
51
245
296
One to five years
385
861
1,246
402
972
1,374
Five to ten years
249
1,016
1,265
267
1,151
1,418
10 to 15 years
200
970
1,170
700
1,041
1,741
Over 15 years
3,646
2,530
6,176
3,787
2,376
6,163
Total contractual undiscounted cash flows
4,530
5,595
10,125
5,207
5,785
10,992
Where subordinated debt is undated, the interest payments have not been included beyond 15 years.
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Notes to the company financial statements
The fair value of the subordinated debt at 31 December 2024 was £3,999 million (2023: £4,658 million), calculated with reference
to quoted prices. The fair value of the senior debt as at 31 December 2024 was £377 million (2023: £395 million), calculated with
reference to quoted prices. The fair value of the commercial paper is considered to be the same as its carrying value.
Further details of these borrowings and undrawn committed facilities can be found in the Group consolidated financial statements
in note 45 with the details of the fair value hierarchy in relation to these borrowings in note 23.
K – Payables and other financial liabilities
2024
2023
Note
£m
£m
Loans due to subsidiaries held at amortised cost
O(b)
9,597
9,695
Amounts due to subsidiaries held at amortised cost
O(c)(ii)
5,071
4,581
Total payables and other financial liabilities
14,668
14,276
Expected to be paid in less than one year
127
4,581
Expected to be paid in more than one year
14,541
9,695
Total payables and other financial liabilities
14,668
14,276
L – Tier 1 notes
On 15 June 2022, the Company issued £500 million of 6.875% fixed rate reset perpetual Restricted Tier 1 contingent convertible
notes (the RT1 Notes), see details in note 35. During the year coupon payments of £34 million were made (2023: £34 million).
M – Contingent liabilities
Details of the Company’s contingent liabilities are given in the Group consolidated financial statements, note 48.
N – Risk management
Risk and capital management in the context of the Group is considered in the Group consolidated financial statements, notes 50
and 52.
The business of the Company is managing its investments in subsidiaries and joint venture operations. Its risks are considered
to be the same as those in the operations themselves, and full details of the major risks and the Group’s approach to managing
these are given in the Group consolidated financial statements, note 52. Such investments are held by the Company at cost in
accordance with accounting policy D.
Financial assets, other than investments in subsidiaries and joint ventures, largely consist of amounts due from subsidiaries. As at
the balance sheet date, these receivable amounts were neither past due nor impaired. The credit quality of receivables and other
financial assets is monitored by the Company and provisions are made for expected credit losses. There are no material
expected credit losses over the lifetime of the financial assets.
Financial liabilities owed by the Company as at the balance sheet date are largely in respect of borrowings (details of which are
provided in note J and the Group consolidated financial statements, note 45) and loans owed to subsidiaries. Loans owed to
subsidiaries were within agreed credit terms as at the balance sheet date.
(a) Interest rate risk
Loans to and from subsidiaries are at either fixed or floating rates of interest, depending on the preferences of the lending
entities, with the latter being exposed to fluctuations in these rates.
All of the Company’s long-term external borrowings are at fixed rates of interest and are therefore not exposed to changes in
these rates. However, for short-term commercial papers, the Company is affected by changes in these rates to the extent the
redemption of these borrowings is funded by the issuance of new commercial papers or other borrowings. Further details of the
Company’s borrowings are provided in note J and the Group consolidated financial statements, note 45.
The effect of a 100 basis point increase/decrease in interest rates on floating rate loans due to and from subsidiaries
and on refinancing the short-term commercial paper as it matures would be a decrease/increase in profit before
tax of £90 million (2023: decrease/increase of £90 million). We manage and hedge our interest rate exposure through setting risk
tolerance levels on a Solvency II cover ratio basis. Exposure to interest rate risk is monitored through several measures that
include duration, capital modelling, sensitivity testing and stress and scenario testing.
(b) Currency risk
The Company’s direct subsidiaries are exposed to foreign currency risk arising from fluctuations in exchange rates during the
course of providing insurance and asset management services around the world. The exposure of the subsidiaries to currency
risk is considered from a Group perspective in the Group consolidated financial statements, note 52(b)(v).
The Company faces exposure to foreign currency risk through some of its borrowings which are denominated in Euros and
Canadian dollars.
(c) Liquidity risk
Liquidity risk is the risk of not being able to make payments as they become due because there are insufficient assets in cash
form. The Company’s main sources of liquidity are liquid assets held within the Company and its subsidiary Aviva Group Holdings
Limited and dividends received from the Group’s insurance and asset management businesses.
Sources of liquidity in normal markets also include a variety of short and long-term instruments including commercial paper and
medium and long-term debt.
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Notes to the company financial statements
In addition to the existing liquid resources and expected inflows, the Company maintains significant undrawn committed
borrowing facilities from a range of leading international banks to further mitigate this risk.
Maturity analysis of external borrowings and amounts due to and by subsidiaries are provided in notes J, K and F respectively.
(d) Intra-group capital arrangement
Consistent with our capital management framework, the Group has in place intra-group arrangements to provide additional
capital support to its regulated subsidiaries. In the normal course of business, the Group will provide additional capital support to
its regulated subsidiaries in certain circumstances. While the Group considers it unlikely that any material support will be
required, the arrangements are intended to provide additional comfort to its regulated subsidiaries and its policyholders. See note
50 for more detail on risks and capital management objectives.
O – Related party transactions
The Company had the following related party transactions.
Loans to and from subsidiaries are made on normal arm’s-length commercial terms. The maturity analysis of the related party
loans is as follows:
(a) Loans owed by subsidiaries
2024
2023
£m
£m
Within one year
746
607
One - five years
202
992
Over five years
454
481
Total loans owed by subsidiaries
1,402
2,080
The interest received on these loans is £61 million (2023: £73 million). See note A.
On 1 January 2013, Aviva International Holdings Limited, an indirect subsidiary, transferred an unsecured loan with the Company
of €250 million to Aviva Group Holdings Limited, its direct subsidiary. The loan, originally entered into on 7 May 2003, accrues
interest at a fixed rate of 5.5% with settlement to be paid at maturity in May 2033. As at the statement of financial position date,
the total amount drawn down on the loan was £207 million (2023: £217 million).
On 23 December 2014, the Company provided an unsecured revolving credit facility of £2,000 million to Aviva Group Holdings
Limited, its subsidiary, with an initial maturity date of 3 September 2018, which was subsequently extended to 31 December 2028.
The loan accrued interest at a fixed rate of 0.895% to 31 December 2023, and then from 1 January 2024 accrued interest at the
GBP Sonia Swap Rate plus the Five Year Credit Default Swap Spread. As at the statement of financial position date, the total
amount drawn down on the facility was £nil (2023: £nil).
On 27 June 2016, the Company provided an unsecured loan of $CAD446 million to Aviva Group Holdings Limited, its subsidiary,
with a maturity date of 27 June 2046. The loan accrues interest at 348 basis points above 6 month CORRA with a basis
compensation adjustment of 49 basis points. As at the statement of financial position date, the total amount drawn on the loan
was £247 million (2023: £264 million).
On 30 September 2016, the Company provided the following loans to Aviva Group Holdings Limited, its subsidiary:
• An unsecured loan of €850 million with a maturity date of 30 September 2021 which was subsequently extended to
30 September 2026. The loan accrues interest at 49 basis points above 12 month EURIBOR with settlement to be
paid at maturity. As at the statement of financial position date, the total amount drawn on the loan was £202 million (2023: £212
million).
• An unsecured loan of €700 million with a maturity date of 3 July 2024. The loan was redeemed in full on its maturity date of 3
July 2024 and therefore at the statement of financial position date, the total amount drawn down on the loan was £nil million
(2023: £607 million). The loan accrued interest at a fixed rate of 1.64% with settlement paid at maturity.
• An unsecured loan of €900 million with a maturity date of 4 December 2025. The loan accrues interest at a fixed rate of 1.74%
with settlement to be paid at maturity. As at the statement of financial position date, the total amount drawn down on the loan
was £746 million (2023: £780 million).
(b) Loans owed to subsidiaries
Maturity analysis of contractual undiscounted cash flows:
2024
2023
Principal
Interest
Total
Principal
Interest
Total
£m
£m
£m
£m
£m
£m
Within one year
—
478
478
—
446
446
One to five years
9,597
1,911
11,508
9,695
1,784
11,479
Over five years
—
—
—
—
—
—
Total contractual undiscounted cash flows
9,597
2,389
11,986
9,695
2,230
11,925
The interest paid on these loans is £534 million (2023: £460 million). See note C.
On 3 September 2013 Aviva Group Holdings Limited, its subsidiary, provided an unsecured rolling credit facility of £1,000 million
to the Company. On 6 October 2016, the facility increased to £5,000 million. This facility had a maturity date of 31 December 2023
and the Company renewed this facility on 1 January 2024 to further extend the maturity date to 31 December 2028. The loan
accrued interest at a fixed rate of 0.895% to 31 December 2023, and from 1 January 2024 accrued interest at the 12 month SONIA
Swap Rate plus 0.648%. The total amount drawn down on the facility at 31 December 2024 was £158 million (2023: £256 million).
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Notes to the company financial statements
On 14 December 2017, the Company renewed its facility with General Accident plc, its subsidiary, of £9,990 million and the Board
approved the extension of the maturity of the loan by five years from 31 December 2017 to 31 December 2022. A subsequent loan
amendment in December 2022 extended the loan maturity to 31 December 2027 and changed the interest rate to a floating rate
based on the 12 month SONIA swap rate effective from 1 January 2023. As at 31 December 2024, the loan balance outstanding
was £9,439 million (2023: £9,439 million). This loan is secured against the ordinary share capital of Aviva Group Holdings Limited.
(c) Other transactions
(i) Services provided to related parties
2024
2023
Income
earned
in year
Receivable
at year end
Income
earned
in year
Receivable
at year end
£m
£m
£m
£m
Subsidiaries and joint ventures
2,000
206
2,440
172
Income earned relates to dividends. The Company incurred expenses in the year of £0.5 million (2023: £0.8 million) representing
audit fees paid by the Company on behalf of subsidiaries. The Company did not recharge subsidiaries for these expenses.
The related parties’ receivables are not secured and no guarantees were received in respect thereof. The receivables will be
settled in accordance with normal credit terms.
(ii) Services provided by related parties
2024
2023
Expense
incurred
in year
Payable
at year end
Expense
incurred
in year
Payable
at year end
£m
£m
£m
£m
Subsidiaries
311
5,071
348
4,581
Expenses incurred relates to operating expenses. All the Company’s operating cash requirements are met by subsidiary
companies and settled through intercompany loans.
The Company has a prepayment of £81 million (2023: £87 million) relating to shares owned by an employee share trust to satisfy
the Company’s share awards.
The related parties’ payables and receivables are not secured and no guarantees were given or received in respect thereof. The
payables will be settled in accordance with normal credit terms. Details of guarantees, indemnities and warranties given by the
Company on behalf of related parties are given in note 48(f).
(d) Key management
The directors and key management of the Company are considered to be the same as for the Group. Information on both the
Company and Group key management compensation can be found in note 55.
P – Subsequent events
For Group subsequent events please see note 58.
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Notes to the company financial statements
Other
Information
In this section
312
Alternative performance measures
327
Shareholder services
328
Cautionary Statement
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Overview
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 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 useful information to enhance the understanding of our financial
performance. However, APMs should be viewed as complementary to, rather than as a substitute for, the amounts 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. The calculation of
APMs is consistent with previous periods unless otherwise stated.
In the UK the final Prudential Regulation Authority (PRA) rules for Solvency UK became effective from 31 December 2024. The
new regime has been referred to as "Solvency II" in this section, unless otherwise stated, as this is in line with the current PRA
guidance and consistent with the name of the prudential regime in PRA policy material.
Further details on APMs derived from IFRS measures and APMs derived from Solvency II measures are provided in the following
sections. A further section describes other APMs.
Changes in APMs:
Following achievement in 2023, one year early, of the Group's cost savings target of £750 million by 2024 as outlined in the
Annual Report & Accounts 2023, Baseline Controllable costs have been retired as a separately defined sub-set of Controllable
costs. Baseline Controllable costs excluded cost reduction implementation and IFRS 17 costs, strategic investment and certain
other costs related to recently acquired entities which were not included in the 2018 cost savings target baseline. Controllable
costs remains as a useful measure of the controllable operational overheads associated with maintaining and growing our
businesses.
As a result of the retirement of Baseline Controllable costs, the definition of the Cost Income Ratio APM has been updated to use
Controllable costs as the numerator, with comparatives re-presented to reflect this change.
A new subtotal labelled "Underlying" has been added to the Solvency II operating own funds generation (Solvency II OFG) and
Solvency II operating capital generation (Solvency II OCG) metrics. These subtotals will be used to discuss the performance of
the APMs without items which, in the directors view, should be excluded in order to understand the Group's performance during
the period. Further details on these exclusions are provided in the relevant sections below.
The Group has introduced an additional APM, Health In-Force Premiums, for the Health business. This measure provides useful
information on the sales and renewals taking place within the Health business.
APMs derived from IFRS measures
A number of APMs relating to IFRS are utilised to measure and monitor the Group’s performance.
• Group adjusted operating profit
• Operating value added
• Stock of future profit
• Gross written premiums (GWP)
• Combined operating ratio (COR)
• Claims, commission, expense and distribution ratios
• Operating earnings per share (Operating EPS)
• Controllable costs
• IFRS return on equity (RoE)
• IFRS Shareholders' equity per share
• Adjusted IFRS Shareholders' equity per share
• Assets Under Management (AUM) and Assets Under Administration (AUA)
• Net flows
• Aviva Investors revenue
• Cost income ratio (CIR)
• Cost asset ratio
Definitions and additional information, including reconciliation to the relevant amounts in the IFRS financial statements and,
where appropriate, commentary on the material reconciling items are included within this section.
Group adjusted operating profit
Group adjusted operating profit is an APM that supports decision making and internal performance management of the Group’s
operating segments that incorporates an expected return on investments supporting the life and non-life insurance businesses.
The Group considers this measure meaningful to stakeholders as it enhances the understanding of the Group’s operating
performance over time by separately identifying non-operating items. The various items excluded from Group adjusted operating
profit, but included in IFRS profit before tax, are:
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Alternative performance measures
(a) Investment variances and economic assumption changes
Group adjusted operating profit for life and non-life 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. This includes movements in the liabilities to with-profit policyholders that offset the operating result of
non-profit contracts written in the with-profit funds. Group adjusted operating profit also includes the effect of the mismatch
between movements in expected future insurance contract cash flows measured at current discount rates and the corresponding
adjustment to the contractual service margin (CSM) measured at locked in rates. 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 risk. The expected return on equities and properties is
calculated using the appropriate risk-free rate in the relevant currency plus a risk premium.
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 such as changes in expected cashflows for
non-life claims. Changes due to economic items such as market value movements 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.
The exclusion of short-term investment variances from this APM reflects 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 variances to provide a comparable measure year-on-year.
(b) 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 intangible assets acquired in business combinations; amortisation and impairment of acquired value of in-force business
on non-participating investment contracts; 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.
(c) Integration and restructuring costs
Group adjusted operating profit excludes integration and restructuring (I&R) costs that relate to a well-defined programme that
materially changes the scope of our business or the manner in which it is conducted, with the exception of expected future I&R
costs directly attributable to insurance contracts. Directly attributable I&R costs will be reflected in the CSM and the impact
recognised in Group adjusted operating profit as CSM is amortised.
(d) Other items
Other items are those items that, in the directors’ view, are required to be separately disclosed by virtue of their nature or
incidence to enable a full understanding of the Group’s financial performance. At 31 December 2024, other items are a net gain of
£31 million (2023: charge of £176 million) which comprises:
• A gain of £68 million relating to a revision to the 2023 restatement in respect of accounting processes for with-profit funds;
• A charge of £19 million (2023: £92 million) relating to the redemption payment in excess of carrying value for £500 million of the
Group's £700 million Tier 2 Fixed Rate Reset Notes due in 2036 (2023: £600 million Tier 2 Fixed to Floating Notes due in 2038).
This is disclosed outside of Group adjusted operating profit as the costs arise from a strategic decision relating to the financing
of the group as a whole and not to the operating performance of the Group or its operating segments;
• A gain of £19 million (2023: charge of £71 million) related to provisions for indemnities entered into through acquisition and
disposal activity, and fair value adjustments on contingent consideration associated with Succession Wealth acquisitions;
• A charge of £24 million (2023: £2 million) relating to costs associated with acquisitions completed in the period;
• Charges totalling £13 million (2023: £11 million)relating to the cost of the employee free share award, fees and charges
associated with the share buyback programme, and costs to equalise Guaranteed Minimum Pension benefits.
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Alternative performance measures
The table below presents a reconciliation between our consolidated Group adjusted operating profit and profit before tax
attributable to shareholders’ profits.
2024
2023
£m
£m
Insurance, Wealth & Retirement (IWR)
1,071
994
UK & Ireland General Insurance
708
452
Canada General Insurance
288
399
Aviva Investors
40
21
International investments (India, China and Singapore)
48
63
Business unit operating profit
2,155
1,929
Corporate centre costs and Other operations
(115)
(215)
Group debt costs and other interest
(273)
(247)
Group adjusted operating profit before tax attributable to shareholders' profits
1,767
1,467
Adjusted for the following:
Investment variances and economic assumption changes
(666)
322
Amortisation of intangibles acquired in business combinations
(61)
(52)
Amortisation of acquired value of in-force business
(52)
(59)
Profit on disposal and remeasurement of subsidiaries, joint ventures and associates
195
—
Integration and restructuring costs
(217)
(61)
Other
31
(176)
Adjusting items before tax
(770)
(26)
Tax on Group adjusted operating profit
(407)
(289)
Tax on other activities
115
(46)
Tax attributable to shareholders' profits
(292)
(335)
Profit for the year
705
1,106
Operating value added
Operating value added represents the increase in "value" in the period on an IFRS 17 basis. This is defined as the operating profit
in the period plus the operating change in the contractual service margin (CSM) (gross of tax). Operating changes in the CSM
include new business, interest accretion, expected return, experience variances, assumption changes and release of CSM and
exclude economic variances and economic assumption changes.
Non-operating changes in the CSM consist of investment variances, economic assumption changes, and integration and
restructuring costs that are directly attributable to insurance contracts.
For business measured using the general measurement model (GMM) the CSM is calculated using locked-in rates, so investment
variances and economic assumption changes will be limited to changes in expenses due to inflation. For contracts measured
under the variable fee approach (VFA), variance between the expected return on the shareholder share of underlying assets and
the actual return are reported as non-operating changes in CSM.
This APM is relevant mainly for the life business and is a more complete and useful measure of the value generated in the period,
reflecting the benefit of writing new business and assumption changes in the period. No adjustment is made for the future value
of the businesses for which no CSM liability has been established and operating value added is equal to operating profit.
2024
2023
£m
£m
Group adjusted operating profit before tax attributable to shareholders’ profits
1,767
1,467
Operating changes in CSM
200
851
Operating value added
1,967
2,318
2024
2023
£m
£m
Insurance, Wealth & Retirement (IWR)1
1,268
1,849
UK & Ireland General Insurance
712
452
Canada General Insurance
288
399
Aviva Investors
40
21
International investments (India, China and Singapore)
48
63
Business unit operating value added
2,356
2,784
Corporate centre costs and Other operations1
(116)
(219)
Group debt costs and other interest
(273)
(247)
Group operating value added
1,967
2,318
1. IWR operating value added excludes the impact of intra-group reinsurance of Periodic Payment Orders (PPOs). This intra-group reinsurance is reported under ‘Other operations’.
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Alternative performance measures
2024
2023
Note
£m
£m
Opening CSM
39(b)
7,248
6,480
New business
589
437
Interest accretion and expected return
290
257
Experience variance and other
173
393
Assumption changes
18
564
Release of CSM
(870)
(800)
Operating changes in CSM
200
851
Non-operating changes
324
(83)
Closing CSM1
39(b)
7,772
7,248
1. The CSM is included within Insurance contract and participating investment contract liabilities on the Consolidated statement of financial position. See note 39 for more detailed
information on these balances.
Stock of future profit
Stock of future profit is the addition of the CSM and the risk adjustment, which represents the future profit recognised in the
statement of financial position to unwind into profit over time. It is presented at the Group total. The releases from the stock of
future profit are a key driver of profit for our life insurance business and these releases are provided for our IWR Protection,
Annuities, Heritage and Ireland businesses.
Gross written premiums (GWP)
GWP is a measure of volumes written in the period for the General Insurance (GI) business. GWP is useful for understanding
the growth of the business. Reconciliations of GWP to insurance revenue is set out below. Reconciling items arise from
presentational and timing differences between writing premiums and recognising insurance revenue.
Note
2024
2023
£m
£m
Gross written premiums
12,204
10,888
Movement in unearned premiums on contracts measured under the premium allocation approach (PAA)
(576)
(668)
Instalment income
86
69
Insurance revenue from general insurance business
3(a)
11,714
10,289
Insurance revenue from other segments
3(a)
9,033
8,208
Insurance revenue
4
20,747
18,497
Combined operating ratio (COR)
COR is a useful financial measure of GI underwriting profitability calculated as total underwriting costs in our insurance entities
expressed as a percentage of net insurance revenue. It is used to monitor the profitability of lines of business. A COR below 100%
indicates profitable underwriting.
COR continues to be presented on a net of reinsurance basis and includes the impact of discounting (discounted COR).
The Group considers COR with claims measured on an undiscounted basis (undiscounted COR) to align more closely to the way
in which the business is managed, and undiscounted COR is disclosed alongside discounted COR.
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The Group discounted and undiscounted COR are shown below.
2024
2023
Note
£m
£m
Total claims and benefits – GI and Health
7
(7,537)
(6,557)
Adjusted for the following:
Claims and benefits – Health
510
454
Claims recoverable from reinsurers
593
474
Losses on onerous contracts (including recoveries) and other
(40)
(16)
Total incurred claims (included in COR)
(6,474)
(5,645)
Insurance service expense – GI and Health
3(b)
(11,026)
(9,664)
Adjusted for the following:
Insurance service expenses- Health
656
582
Insurance service expenses recoverable from reinsurers
585
473
Remove incurred claims
6,474
5,645
Include non attributable expenses and other
(32)
(35)
Total commission and expenses (included in COR)1
(3,343)
(2,999)
Total underwriting costs - discounted
(9,817)
(8,644)
Remove discounting benefit
(428)
(327)
Underwriting costs - undiscounted
(10,245)
(8,971)
Insurance Revenue – GI and Health
3(b)
12,426
10,925
Adjusted for the following:
Insurance Revenue – Health
(712)
(637)
Allocation of reinsurance premiums
(1,064)
(963)
Net insurance revenue (included in COR)
10,650
9,325
Discounted Combined operating ratio (COR)
92.2 %
92.7 %
Undiscounted Combined operating ratio (COR)
96.3 %
96.2 %
1. Commission and expenses (included in COR) is comprised of £(2,045) million incurred commission (2023: £(1,857) million) and £(1,298) million incurred expenses
(2023: £(1,142) million)
Claims, commission, expense and distribution ratios
Financial measures of the performance of our general insurance business which are calculated as incurred claims, earned
commission or earned expenses expressed as a percentage of net insurance revenue, which can be derived from the COR table
above. The ratios are meaningful to stakeholders because they enhance understanding of the profitability of the business sold.
The commission ratio and expense ratio are aggregated together to calculate the distribution ratio, which is the key efficiency
metric for the general insurance business.
Operating earnings per share (Operating 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 direct capital instrument coupons divided by the weighted average
number of ordinary shares in issue, after deducting treasury shares. Operating EPS is considered meaningful to stakeholders
because it enhances the understanding of the Group’s operating performance over time by adjusting for the effects of non-
operating items. A reconciliation between operating EPS and basic EPS can be found in note 14.
Controllable costs
Controllable costs is a useful measure of the controllable operational overheads associated with maintaining our businesses.
These predominantly consist of staff costs, central costs, property costs, IT related costs and other expenses. Controllable costs
also include indirect acquisition costs, such as underwriting overheads, and claims handling costs. These are considered to be
controllable by the operating segments.
Controllable costs excludes:
• Impairment of goodwill, associates and joint ventures; amortisation and impairment of other intangible assets acquired in
business combinations; and amortisation and impairment of acquired value of in-force business. These items relate to merger,
acquisition and disposal activity which we view as strategic in nature, hence they are excluded from controllable costs which is
principally used to manage the performance of our operating segments;
• Costs in relation to product governance and mis-selling. These costs represent compensation and redress payments made to
policyholders and are excluded from controllable costs because they have characteristics of claims payments;
• Premium based taxes, fees and levies that vary directly with premiums. These costs are by their nature a direct cost incurred
as a result of generating premium income, and therefore not a controllable operational overhead;
• Integration and restructuring costs recognised in 'other expenses' that relate to a well-defined programme that materially
changes the scope of our business or the manner in which it is conducted; and
• Other amounts that, in management’s view, are not representative of underlying day-to-day expenses involved in running the
business, and that would distort the year-on-year controllable costs trend. In 2024 these primarily include;
– The employee free share award, fees and charges associated with the share buyback programme, and costs to equalise
Guaranteed Minimum Pension benefits;
– Certain investment management costs included within other expenses but not deemed to be controllable costs which are
directly attributable to insurance and investment contracts; and
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– Instances where IFRS 17 required a change in income statement classification but not within the boundary of controllable
costs.
A reconciliation of other expenses in the IFRS consolidated income statement to controllable costs is set out below:
2024
2023
Note
£m
£m
Other expenses
7
2,757
2,443
Add: other acquisition costs
7
1,218
1,055
Add: claims handling costs
271
239
Less: amortisation of intangibles acquired in business combinations
(61)
(52)
Less: amortisation of acquired value of in-force business on investment contracts
7
(52)
(59)
Add: foreign exchange gains
7
109
146
Less: product governance and mis-selling costs
(74)
(63)
Less: integration and restructuring costs
(217)
(61)
Less: premium based income taxes, fees and levies
(239)
(220)
Less: other costs
(213)
(256)
Controllable costs
3,499
3,172
IFRS return on equity (RoE)
IFRS RoE shows how efficiently we are using our financial resources to generate a return for shareholders on an IFRS basis. The
IFRS 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 preference share capital, tier 1 notes and non-
controlling interests).
For the full year reporting period, the weighted average is calculated as 25% weighting to closing equity, 25% weighting to
opening equity and 50% weighting to equity as at the half year reporting date. For the half year reporting period, the weighted
average is calculated as 50% weighting to opening equity and 50% weighting to closing equity.
2024
2023
Group adjusted operating
profit
Group adjusted operating
profit
Before tax
attributable to
shareholders'
profits
After tax
attributable to
shareholders'
profits
Weighted
average
shareholders'
funds
including
non-
controlling
Return on
equity
Before tax
attributable to
shareholders'
profits
After tax
attributable to
shareholders'
profits
Weighted
average
shareholders'
funds
including
non-
controlling
Return on
equity
£m
£m
£m
%
£m
£m
£m
%
Insurance, Wealth &
Retirement (IWR)
1,071
810
7,509
10.8 %
994
794
7,845
10.1 %
General insurance
996
782
3,215
24.3 %
851
677
2,722
24.9 %
Aviva Investors
40
34
418
8.1 %
21
21
424
4.9 %
International investments
(India, China and Singapore)
48
44
671
6.6 %
63
63
919
6.9 %
Other Group activities1
(149)
(131)
2,452
N/A
(229)
(199)
3,108
N/A
Return on total capital
employed
2,006
1,539
14,265
10.8 %
1,700
1,356
15,018
9.0 %
Group external debt costs
(239)
(179)
(4,982)
3.6 %
(233)
(178)
(5,303)
3.4 %
Return on total equity
1,767
1,360
9,283
14.7 %
1,467
1,178
9,715
12.1 %
Less: Non-controlling interests
(21)
(316)
6.6 %
(21)
(314)
6.7 %
Less: Tier 1 notes
(34)
(496)
6.9 %
(34)
(496)
6.9 %
Less: Preference shares
(17)
(200)
8.5 %
(17)
(200)
8.5 %
Return on equity shareholders' funds
1,288
8,271
15.6 %
1,106
8,705
12.7 %
IFRS Shareholders' equity per share
IFRS Shareholders' equity 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 at the
balance sheet date. IFRS Shareholders' equity per share is meaningful as a measure of the value generated by the Group in terms
of the equity shareholders’ face value per share investment.
Note
2024
2023
IFRS Shareholders' equity1 at 31 December (£m)
7,609
8,586
Number of shares in issue at 31 December (in millions)
31
2,678
2,739
IFRS Shareholders' equity per share
284 p
313 p
1. Excluding preference shares of £200 million (2023: £200 million).
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Adjusted IFRS Shareholders' equity per share
Adjusted IFRS Shareholders' equity 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), plus CSM (see note 39(b)) net of tax, divided by the
actual number of shares in issue at the balance sheet date. Adjusted IFRS Shareholders' equity per share is meaningful as a
measure of the value generated by the Group, including the value held in CSM, in terms of the equity shareholders’ face value per
share investment.
Note
2024
2023
IFRS Shareholders' equity1 at 31 December (£m)
7,609
8,586
Add: CSM (£m)
39(c)
7,772
7,248
Less: Tax on CSM (£m)
(1,910)
(1,779)
Adjusted IFRS Shareholders’ equity1
13,471
14,055
Number of shares in issue at 31 December (in millions)
31
2,678
2,739
Adjusted IFRS Shareholders' equity per share
503 p
513 p
1. Excluding preference shares of £200 million (2023: £200 million).
Assets Under Management (AUM) and Assets Under Administration (AUA)
AUM represent all assets managed or administered by or on behalf of the Group's subsidiaries, including those assets managed
by Aviva Investors and 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, Aviva Investors AUA comprises AUM plus £35,965 million (2023: £40,628 million) of 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 amounts appearing in the Group’s statement of financial position to AUM is shown below:
2024
2023
£m
£m
Financial investments
263,979 245,831
Investment property
6,313
6,232
Loans
30,553
31,884
Cash and cash equivalents
23,481
17,273
Other
6,194
5,678
Assets included in statement of financial position
330,520 306,898
Less: third-party funds and UK Platform included above
(23,502)
(19,821)
Assets managed on behalf of the Group's subsidiaries1
307,018 287,077
Aviva Investors external AUM
39,696
38,191
UK Platform2
59,129
50,555
Other
1,008
637
Assets managed on behalf of third parties3
99,833
89,383
Total AUM4
406,851 376,460
1. Includes investments in sustainable assets, capturing green assets, sustainability assets, social bonds, and transition and climate-related funds. Definitions for this Climate-related
measure can be found within the Reporting Criteria section of the Aviva plc Climate-related Financial Disclosure 2024.
2. UK Platform relates to the assets under management in the UK Wealth business
3. AUM managed on behalf of third parties cannot be directly reconciled to the financial statements
4. Includes AUM of £238,196 million (2023: £227,022 million) managed by Aviva Investors
Net flows
Net flows is used by management as a key measure of growth in AUM, from which income is generated through asset
management charges (AMCs). This measure is predominantly used in Aviva Investors and the Wealth business within Insurance,
Wealth and Retirement (IWR).
It is the net position of inflows and outflows. Inflows include net premiums received for insurance and participating investment
contracts, deposits made under non-participating investment contracts, and other funds received from customers included in
AUM. Outflows include net claims paid for insurance and participating investment contracts, redemptions and surrenders under
non-participating investment contracts, and other funds withdrawn by customers from AUM.
Aviva Investors net flows includes flows on internal assets which are managed on behalf of Group companies, and external flows
on assets belonging to clients outside the Group which are not included in the Group's statement of financial position.
Net flows excludes market and other movements. Net flows when positive in the period can be referred to as net inflows and
when negative as net outflows.
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Aviva Investors revenue
Aviva Investors revenue includes AMCs received, plus transaction fees and other related income, and is stated net of fees and
commissions paid. It is a useful measure of revenue earned from fund management activities. Aviva Investors recognises fee
income in the segmental income statement within both fee and commission income and inter-segment revenue. Fees and
commissions paid are classified in other operating expenses.
Cost income ratio (CIR)
Cost income ratio is used to monitor profitable growth in Aviva Investors and is useful as it gives a simple view of how efficiently
the business is being run, allowing management to clearly see how costs are moving in relation to income.
Cost income ratio is calculated as Aviva Investors' controllable costs divided by Aviva Investors revenue.
2024
2023
£m
£m
Aviva Investors revenue
374
346
Aviva Investors controllable costs
(334)
(325)
Cost income ratio1
89 %
94 %
1. The 2023 comparative amounts for the cost income ratio have been re-presented to calculate the ratio using total Controllable costs
Cost asset ratio
Cost asset ratio is used to monitor efficiency in the Insurance, Wealth & Retirement (IWR) and Aviva Investors businesses and is
calculated in basis points (bps) as controllable costs divided by average assets under management (AUM). It is a useful measure
as it allows management to see the trend of costs compared with business volumes.
2024
2023
£m
£m
Insurance, Wealth & Retirement (IWR) controllable costs
1,425
1,259
Insurance, Wealth & Retirement (IWR) average AUM
329,136 304,363
Insurance, Wealth & Retirement (IWR) cost asset ratio
43.3 bps 41.4 bps
2024
2023
£m
£m
Aviva Investors controllable costs
334
325
Aviva Investors average AUM
232,609 224,847
Aviva Investors cost asset ratio
14.4 bps 14.5 bps
There is significant overlap between the AUM balances of the Insurance, Wealth & Retirement and the Aviva Investors
businesses, while some of the Group’s AUM is attributable to other business units. The internal allocation of AUM and AUA
to Insurance, Wealth & Retirement and Aviva Investors provides the most relevant information to assess the efficiency of
these businesses.
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APMs derived from Solvency II measures
The Group is a regulated entity under the Solvency II regulatory framework and therefore uses a number of APMs that are
derived from Solvency II measures in addition to those that are derived from IFRS based measures.
A number of key performance measures 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)
• Solvency II Present Value of New Business Premium (PVNBP)
• Annual premium equivalent (APE)
• Health In-Force Premiums
• Solvency II operating own funds generation (Solvency II OFG)
• Solvency II operating capital generation (Solvency II OCG)
• Solvency II future surplus emergence
• Solvency II return on equity (Solvency II RoE)
• Solvency II return on capital (Solvency II RoC)
• Solvency II net asset value per share (Solvency II NAV per share)
• Solvency II debt leverage ratio
The Solvency II regulatory framework requires insurers to hold own funds in excess of the Solvency Capital Requirement (SCR).
Own funds are available capital resources determined under Solvency II. This includes the excess of assets over liabilities in the
Solvency II balance sheet, calculated on best estimate, market consistent assumptions and includes transitional measures on
technical provisions (TMTP), subordinated liabilities that qualify as capital under Solvency II, and off-balance sheet own funds.
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 ‘shareholder view’ of Solvency II 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 view, the following adjustments may be 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.
• Adjustments for future regulatory changes that are finalised but not yet implemented at the reporting date in order to show a
more representative view of the Group’s solvency position.
The reconciliation presented below shows the key differences between Group equity on an IFRS basis and Solvency II own funds
on a shareholder view. Additional items bridging from Solvency II shareholder own funds to Solvency II regulatory own funds are
presented subsequently.
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2024
2023
Note
£m
£m
Total Group equity on an IFRS basis
8,621
9,600
Exclude preference shares and tier 1 notes
(696)
(696)
Exclude non-controlling interests
38
(316)
(318)
Add back CSM
39(b)
7,772
7,248
Exclude tax on CSM
(1,910)
(1,779)
IFRS adjusted shareholders' equity
13,471
14,055
Goodwill
16
(2,584)
(2,100)
Acquired value of in-force business
17
(408)
(461)
Deferred acquisition costs (net of deferred income)
29, 47
(780)
(710)
Other intangibles
17
(723)
(507)
Elimination of goodwill and other intangible assets
(4,495)
(3,778)
Removal of IFRS risk adjustment
39(b)
1,118
1,162
Inclusion of Solvency II risk margin
(1,298)
(1,278)
TMTP
1,377
1,407
Revaluation of subordinated liabilities
312
196
Asset, liability and other accounting valuation differences
838
682
Tax differences
(98)
(403)
Exclude staff pension schemes in surplus (net of tax)
(417)
(669)
Solvency II unrestricted shareholder tier 1 own funds
10,808
11,374
Restricted tier 1
946
946
Tier 2
3,751
4,526
Tier 3
134
173
Solvency II shareholder own funds
15,639
17,019
Adjustments for:
Fully ring-fenced with-profit funds
50
1,387
1,408
Staff pension schemes in surplus
50
297
397
Solvency II regulatory own funds
17,323
18,824
Estimated Solvency II regulatory own funds of £17,323 million (2023: £18,824 million) is £1,644 million (2023: £2,016 million)
greater than estimated Solvency II regulatory net assets of £15,679 million (2023: £16,808 million), primarily due to recognition
of eligible subordinated debt capital less adjustments for ring-fenced funds restrictions.
Solvency II shareholder cover ratio
The estimated Solvency II shareholder cover ratio, which is derived from own funds divided by the SCR using the ‘shareholder
view’, is one of the indicators of the Group’s balance sheet strength.
A reconciliation of the Solvency II regulatory position to the Solvency II shareholder position is provided below:
2024
2023
Own funds
SCR
Surplus
Own funds
SCR
Surplus
£m
£m
£m
£m
£m
£m
Solvency II regulatory position
17,323
(9,402)
7,921
18,824
(10,011)
8,813
Adjustments for:
Fully ring-fenced with-profit funds
(1,387)
1,387
—
(1,408)
1,408
—
Staff pension schemes in surplus
(297)
297
—
(397)
397
—
Solvency II shareholder position
15,639
(7,718)
7,921
17,019
(8,206)
8,813
A summary of the shareholder view of the Group’s Solvency II position is shown in the table below:
2024
2023
£m
£m
Own funds
15,639
17,019
Solvency capital requirement
(7,718)
(8,206)
Solvency II shareholder surplus
7,921
8,813
Solvency II shareholder cover ratio
203 %
207 %
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 to:
• Remove the impact of the contract boundary restrictions under Solvency II;
• Include businesses which are not within the scope of Solvency II own funds (e.g. UK non-life Retail business and UK Equity
Release); and
• Reflect a gross of tax and non-controlling interests basis, and other differences as set out in the footnote to the table.
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• Reflect the VNB methodology for annuities, which uses pricing target asset mix and target reinsurance (where actual
reinsurance is not in place rather than the actual asset mix and reinsurance). This is considered more useful as it avoids
distortions in the value of new business due to timing differences in asset origination or temporary reinsurance gaps.
2024
2023
£m
£m
Insurance (Protection and Health)
250
214
Wealth & Other
245
239
Retirement (Annuities and Equity Release)
300
286
Ireland
44
42
Insurance, Wealth & Retirement (IWR)
839
781
International investments (India, China and Singapore)
51
93
Group value of new business on an adjusted Solvency II basis (VNB)
890
874
A reconciliation between VNB and the Solvency II own funds impact of new business is provided below:
2024
2023
Insurance,
Wealth &
Retirement
(IWR)
International
investments
(India, China
and
Singapore)
Total
Insurance,
Wealth &
Retirement
(IWR)
International
investments
(India, China
and
Singapore)
Total
£m
£m
£m
£m
£m
£m
VNB (gross of tax and non-controlling interests)
839
51
890
781
93
874
Solvency II contract boundary restrictions – new business
(77)
—
(77)
(90)
—
(90)
Solvency II contract boundary restrictions – increments /
renewals on in-force business
124
—
124
115
—
115
Businesses which are not in the scope of Solvency II own
funds
(210)
—
(210)
(182)
—
(182)
Actual vs target asset mix/expected reinsurance
16
—
16
23
—
23
Tax and other1
(257)
(11)
(268)
(259)
(20)
(279)
Solvency II own funds impact of life new business
435
40
475
388
73
461
1. Other includes the impact of 'look through profits’ in service companies (where not included in Solvency II) of £(24) million (2023: £(29) million) and the surplus from members
options including transfers, early/late retirement and take up of tax-free lump sum payments at retirement (not included in Solvency II Own Funds) on BPAs of £(87) million (2023:
£(90) million)
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. The economic
assumptions follow Solvency II rules for risk-free rates, volatility adjustment and matching adjustment.
The operating assumptions are consistent with the Solvency II balance sheet. When these assumptions are updated, the year-to-
date VNB will capture the impact of the assumption change on all business sold that year.
Aviva applies a Matching Adjustment (MA) to certain obligations in IWR, using methodology which is set out in the Solvency and
Financial Condition Report (SFCR). The MA used for 2024 UK new business (where applicable) was 122 bps (2023: 133 bps). The
MA is an addition to the rate used to discount Solvency II best-estimate liabilities, to reflect the return on the matching assets
used. In the calculation of VNB, an MA is applied based on the target allocation of assets backing new business. This allocation
will be different to the MA applied at the portfolio level.
New business margin
New business margin (VNB 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.
Present value of new business premiums (PVNBP)
PVNBP measures sales in the Group’s life insurance business. 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 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.
2024
2023
£m
£m
Insurance (Protection and Health)
3,586
3,006
Wealth & Other
27,847
23,470
Retirement (Annuities and Equity Release)
9,408
7,088
Ireland
2,614
1,934
Insurance, Wealth & Retirement (IWR)
43,455
35,498
International investments (India, China and Singapore)
1,507
2,048
Group present value of new business premiums (PVNBP)
44,962
37,546
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The table below presents a reconciliation of IFRS expected premiums from new insurance contracts to PVNBP:
Note
2024
2023
£m
£m
Expected premiums (including investment components) from new insurance contracts
39(d)
11,576
8,439
Contract boundary and other measurement differences between IFRS 17 and PVNBP
83
(18)
Expected premiums from new non-participating investment contracts, other retail business, equity
release loans and increments on existing policies
30,266
25,409
Expected premiums from insurance contracts not in scope of Insurance and reinsurance contracts1
1,530
1,668
Additions
31,796
27,077
Premiums from share of joint ventures, associates and other
1,507
2,048
Present value of new business premiums (PVNBP)
44,962
37,546
1. Includes premiums from Health business measured under PAA and the cash flows arising from guaranteed annuity options which are within the contract boundary of existing
contracts under IFRS, whilst the non-GAAP measure of PVNBP recognises a contract boundary at the date of vesting and therefore includes the premium paid by with profit funds to
shareholder owned funds to establish the annuities at vesting
Annual premium equivalent (APE)
APE is calculated as the sum of new regular premiums plus 10% of new single premiums written in the period (where relevant). APE
is used as a new business measure, in particular for Protection and Health, part of our Insurance, Wealth & Retirement business.
This provides useful information on sales and new business when considered alongside VNB.
Protection and Health
2024
2023
£m
£m
Present value of new business premiums (PVNBP)
3,586
3,006
Remove capitalised value of future regular premiums
(3,073)
(2,591)
Annual premium equivalent (APE)
513
415
Health In-Force Premiums
Health In-Force Premiums is calculated as the sum of regular premiums which are in-force as at the reporting date. Health In-Force
Premiums is used as a primary trading metric for reporting the Health business. This provides useful information on sales and
renewals.
Health
2024
2023
£m
£m
Annual premium equivalent (APE)
138
151
Add value of renewal premiums in the period
810
710
Health In-Force Premiums
948
861
Solvency II operating own funds generation (Solvency II OFG)
Solvency II operating own funds generation measures the amount of Solvency II own funds generated from operating activities and
incorporates an expected return on investments supporting the life and non-life insurance businesses. Solvency II operating own
funds generation is used to assess sustainable growth. The Group considers this measure meaningful to stakeholders as it
enhances the understanding of the Group’s operating performance over time by separately identifying non-operating items.
The expected investment returns assumed within Solvency II OFG are consistent with the returns used for Group adjusted
operating profit. Solvency II OFG includes the effect of variances in experience for non-economic items, such as mortality,
persistency and expenses, the effect of changes in non-economic assumptions (for example, longevity) and model changes that
are non-economic in nature.
Consistent with the Group adjusted operating profit APM, Solvency II OFG and Solvency II OCG exclude investment variances,
economic assumption changes, and integration and restructuring costs.
Solvency II operating own funds generation is the own funds component of Solvency II OCG (see next section).
Underlying Solvency II operating own funds generation consists of Solvency II operating own funds generation excluding items
that meet the definition of Management Actions and Other. Management Actions and Other primarily includes the impact of
capital actions, non-economic assumption changes and other items which, in the directors view, should be excluded in order to
understand the Group’s performance during the period and only applies to the life business units.
Solvency II operating capital generation (Solvency II OCG)
Solvency II operating capital generation (Solvency II OCG) measures the amount of Solvency II capital the Group generates from
operating activities. Capital generated enhances Solvency II surplus which can be used to support sustainable cash remittances
from our businesses, which in turn, supports the Group’s dividend as well as funding further investment to provide sustainable growth.
Solvency II OCG reflects Solvency II OFG and operating movements in the SCR including the impact of capital actions, for example,
strategic changes in asset mix including changes in hedging exposure.
Underlying Solvency II operating capital generation consists of Solvency II operating capital generation excluding items that meet
the definition of Management Actions and other. Management Actions and Other primarily includes the impact of capital actions,
non-economic assumption changes and other items which, in the directors view, should be excluded in order to understand the
Group’s performance during the period and only applies to the life business units.
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An analysis of the components of Solvency II OCG is presented below:
2024
2023
£m
£m
Solvency II own funds impact of life new business
475
461
Operating own funds generation from life existing business
519
541
Operating own funds generation from non-life
824
673
Corporate centre costs and Other
(136)
(219)
Group external debt costs
(179)
(178)
Underlying own funds generation
1,503
1,278
Operating own funds generation from life management actions and other 1
152
451
Solvency II OFG
1,655
1,729
Solvency II operating SCR impact
(187)
(274)
Solvency II OCG
1,468
1,455
Less: Solvency II OCG from life management actions and other
(224)
(392)
Underlying Solvency II OCG
1,244
1,063
1. Management actions and other includes the impact of capital actions, non-economic assumption changes and other non-recurring items
Solvency II OCG is a key component of the movement in Solvency II shareholder surplus. The tables below provide an analysis
of the change in Solvency II shareholder position.
2024
2023
Shareholder view
Own funds
SCR
Surplus
Own funds
SCR
Surplus
£m
£m
£m
£m
£m
£m
Solvency II position at 1 January
17,019
(8,206)
8,813
16,468
(7,774)
8,694
Operating capital generation1
1,655
(187)
1,468
1,729
(274)
1,455
Non-operating capital generation1,2,3
(785)
674
(111)
(214)
(158)
(372)
Dividends4
(959)
—
(959)
(917)
—
(917)
Debt (repayment) / issue
(599)
—
(599)
241
—
241
Share buyback / capital return
(300)
—
(300)
(300)
—
(300)
Acquisitions and disposals
(392)
1
(391)
12
—
12
Solvency II position at 31 December
15,639
(7,718)
7,921
17,019
(8,206)
8,813
1. Non-operating capital generation includes integration and restructuring costs on a Solvency II basis (net of tax) of £(106) million (2023: £(356) million). In 2023 £(47) million was
incurred during the year, with the remaining £(309) million representing the present value of the costs expected to be incurred over the period 2024-2028 in relation to the
extension of two key strategic partnerships. Within 2023, £208 million was recognised in operating own funds generation reflecting lower expense assumptions. Additional benefits
significantly in excess of the costs are expected to be recognised in future years as contracts are migrated and the programme delivers the expected efficiencies.
2. Non-operating capital generation includes £51 million (2023: £(241) million) for the correction in respect of the review of accounting processes for with-profits funds
3. Non-operating capital generation also includes £34 million (2023: £34 million) of RT1 note coupons
4. Dividends includes £17 million (2023: £17 million) of Aviva plc preference dividends and £21 million (2023: £21 million) of General Accident plc preference dividends
Solvency II future surplus emergence
Solvency II future surplus emergence is a projection of the capital generation from existing long-term in-force IWR business
(excluding Health) and provides an indication of our expected Solvency II OCG from this business in future periods.
The projection is a static analysis as at a point in time and hence it does not include the potential impact of future new business or
the potential impact of active management of the business (for example, active management of market, demographic and
expense risk through investment, hedging, risk transfer, operational risk and expense management). It excludes investment
return on surplus assets (i.e. own funds in excess of SCR). These items may affect the actual amount of Solvency II OCG earned
from existing business in future periods.
For business subject to short contract boundaries under Solvency II, allowance has been made for the impact of renewal
premiums as and when they are expected to occur.
The projected surplus, which is primarily expected to arise from the release of risk margin (including transitional measures) and
solvency capital requirement as the business runs off over time, is expected to emerge through Solvency II OCG in future years.
The cash flows are real-world cash flows, i.e. they are based on best estimate non-economic assumptions used in the Solvency
II valuation and real-world investment returns rather than risk-free. The expected investment returns are consistent with the
methodology used in the Group adjusted operating profit.
Solvency II return on equity (Solvency II RoE)
Solvency II RoE is used as an economic value measure by the Group to assess growth and performance.
Solvency II RoE is calculated as:
• Operating own funds generation less preference dividends and equity RT1 note coupons, adjusted to replace the run-off of
TMTP with the economic cost of holding TMTP (calculated as Group Weighted Average Cost of Capital plus 1-yr swap rate,
multiplied by the opening TMTP on a shareholder basis), divided by:
• Opening unrestricted tier 1 shareholder Solvency II own funds.
To remove distortions in the evaluation of growth and performance whilst we temporarily held excess capital an adjustment was
made to exclude excess capital from the denominator (and the return on excess capital from Solvency II operating own funds
generation). Excess capital is derived as Solvency II shareholder own funds in excess of our target shareholder cover ratio
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(currently 180%). Now that we have completed our capital return initiatives, we have reported Solvency II RoE with and without
adjustment for excess capital.
Solvency II RoE is calculated on an annualised basis and is shown below:
2024
2023
£m
£m
Solvency II operating own funds generation (Solvency II OFG)
1,655
1,729
Adjustment to replace TMTP run-off with economic cost of TMTP
(31)
(41)
Less preference share dividends
(38)
(38)
Less RT1 notes coupons
(34)
(34)
Adjusted Solvency II OFG (less preference share dividends & RT1 note coupons)
1,552
1,616
Opening unrestricted tier 1 shareholder Solvency II own funds
11,374
10,962
Solvency II return on equity
13.6 %
14.7 %
Solvency II RoE (adjusted for excess capital) has decreased by 2.0pp to 16.3% (2023: 18.3%). The excess capital (above 180% of
SCR) at 1 January 2024 was £2,248 million (1 January 2023: £2,474 million).
Solvency II return on capital (Solvency II RoC)
Solvency II return on capital is an unlevered economic value measure as it is used to assess growth and performance in our
businesses before taking debt into account. It is calculated on an annualised basis.
Solvency II RoC is calculated as:
• Operating own funds generation adjusted to replace the run-off of TMTP with the economic cost of holding TMTP (calculated
as Group Weighted Average Cost of Capital plus 1-yr swap rate multiplied by the opening TMTP on a shareholder basis),
divided by:
• Opening shareholder Solvency II own funds.
For UK general insurance only, capital held for internal risk appetite purposes is used instead of opening shareholder Solvency II
own funds. This removes any distortions arising from our general insurance legal entity structure and therefore ensures
consistency in measuring performance across markets. This is only applicable to UK general insurance Solvency II return on
capital and not to the aggregated Group Solvency II return on equity measure.
A reconciliation of Solvency II return on capital by market to Group return on equity is provided below.
2024
Re-presented1 2023
Solvency II
OFG
(post TMTP
adjustment)
Opening
shareholder
own funds
Solvency II
return on
capital/
equity
Solvency II
OFG
(post TMTP
adjustment)
Opening
shareholder
own funds
Solvency II
return on
capital/equity
£m
£m
%
£m
£m
%
Insurance, Wealth & Retirement (IWR)
998
10,595
9.4 %
1,256
10,729
11.7 %
UK & Ireland General Insurance2
572
2,385
24.0 %
315
2,418
13.0 %
Canada General Insurance
223
1,637
13.6 %
339
1,590
21.3 %
Aviva Investors
29
392
7.4 %
19
387
4.9 %
International investments (India, China and Singapore)
117
1,082
10.8 %
156
1,187
13.1 %
Corporate centre costs and Other2
(136)
928
N/A
(219)
157
N/A
Less: Senior and subordinated debt
(179)
(4,526)
N/A
(178)
(4,264)
N/A
Less: RT1 coupon and preference shares3
(72)
(946)
N/A
(72)
(946)
N/A
Less: Net deferred tax assets
—
(173)
N/A
—
(296)
N/A
Solvency II return on equity at 31 December
1,552
11,374
13.6 %
1,616
10,962
14.7 %
1. The 2023 comparatives for opening shareholder own funds and Solvency II return on capital have been re-presented for IWR, Canada General Insurance and Ireland General
Insurance as a result of a revised approach to allocate capital in our internal reinsurance vehicle. This better reflects the capital supporting IWR, Canada General Insurance and
Ireland General Insurance performance. There is no impact on Group opening own funds or Group return on equity.
2. For UK general insurance only, capital held for internal risk appetite purposes is used instead of opening shareholder Solvency II own funds to ensure consistency in measuring
performance across markets. This is only applicable to UK general insurance Solvency II return on capital and not to the aggregated Group Solvency II return on equity measure,
with the reversal of the impact included in Corporate centre costs and Other opening own funds.
3. Preference dividends includes £17 million (2023: £17 million) of Aviva plc preference dividends and £21 million (2023: £21 million) of General Accident plc preference dividends
Solvency II net asset value per share (Solvency II NAV per share)
Solvency II NAV per share is used to monitor the value generated by the Group in terms of the equity shareholders’ face value
per share investment. This is calculated as the closing unrestricted Tier 1 Solvency II shareholder own funds, divided by the
actual number of shares in issue as at the balance sheet date. Consistent with Solvency II RoE, it is an economic value measure
used by the Group to assess growth.
The Solvency II NAV per share is shown below:
Note
2024
2023
Unrestricted tier 1 shareholder Solvency II own funds (£m)
10,808
11,374
Number of shares in issue at 31 December (in millions)
31
2,678
2,739
Solvency II NAV per share
404 p
415 p
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Solvency II debt leverage ratio
Solvency II debt leverage ratio is calculated as total debt expressed as a percentage of Solvency II regulatory own funds
plus senior debt and commercial paper. Solvency II regulatory debt includes subordinated debt and preference share capital.
The Solvency II debt leverage ratio provides a measure of the Group’s financial strength. The Solvency II debt leverage ratio is as
follows:
2024
2023
£m
£m
Solvency II regulatory debt
4,697
5,472
Senior notes
383
401
Commercial paper
50
51
Total debt
5,130
5,924
Solvency II regulatory own funds, senior debt and commercial paper
17,756
19,276
Solvency II debt leverage ratio
28.9 %
30.7 %
A reconciliation from IFRS subordinated debt to Solvency II regulatory debt is provided below:
2024
2023
Note
£m
£m
IFRS borrowings
45
5,612
6,374
Senior notes
(383)
(401)
Commercial paper
(50)
(51)
Operational borrowings
(1,116)
(1,200)
Less: Borrowings not classified as Solvency II regulatory debt
(1,549)
(1,652)
IFRS subordinated debt
4,063
4,722
Revaluation of subordinated liabilities
(312)
(196)
Solvency II subordinated debt
3,751
4,526
Preference share capital and tier 1 notes
946
946
Solvency II regulatory debt
4,697
5,472
Other APMs
Cash remittances
Cash paid by our operating businesses to the Group, for the period between March and the end of the month preceding the
results announcement 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 businesses. On occasion, cash may be moved around the Group via remittances to the centre and
back to other business units in the same period. Such movements of cash around the Group are excluded from Cash remittances.
Cash remittances are considered a useful measure as they support the payments of external dividends. Cash remittances
eliminate on consolidation and hence are not directly reconcilable to the Group’s IFRS consolidated statement of cash flows.
Excess centre cash flow
This represents the cash remitted by business units to the Group centre less central operating expenses and debt financing
costs. Excess centre cash flow is a measure of the cash available to pay dividends, reduce debt or invest back into our business.
Excess centre cash flow does not include cash movements such as disposal proceeds or capital injections. Excess centre cash
flow when positive in the period can be referred to as excess centre cash inflows and when negative as excess centre cash outflows.
Centre liquidity
Centre liquidity comprises cash and liquid assets and represents amounts as at the end of the month preceding results
announcements. It provides meaningful information because it shows the liquidity at the Group centre available to meet debt
interest and central costs and to pay dividends to shareholders.
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2025 Financial Calendar
Ordinary dividend timetable:
Final
Interim2
Ex-dividend date
10 April 2025
28 August 2025
Record date
11 April 2025
29 August 2025
Last day for Dividend
Reinvestment Plan and
currency election
30 April 2025 25 September 2025
Dividend payment date1
22 May 2025
16 October 2025
Other key dates:
Annual General Meeting
9am on 30 April 2025
Q1 Trading Update2
15 May 2025
Interim Results
Announcement2
14 August 2025
Q3 Trading Update2
13 November 2025
1. Please note that the ADR local payment date will be approximately four business days
after the proposed dividend date for ordinary shares
2. These dates are provisional and subject to change
Dividend payment options
Shareholders can receive their dividends in the
following ways:
• Directly into a nominated UK bank account
• Directly into a nominated Eurozone bank account
• Shareholders living outside of the UK and the Single Euro
Payments Area can elect to receive their dividends or
interest payments in over 200 jurisdictions around the
world via our Registrar, Computershare; or
• The Dividend Reinvestment Plan enables eligible
shareholders to reinvest their cash dividend 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.investorcentre.co.uk or by returning a dividend
mandate form. You must register for one of these payment
options to receive any dividend payments from Aviva.
Manage your shareholding online
www.aviva.com/shareholders:
General information for shareholders
www.investorcentre.co.uk:
• Change your address
• Change payment options
• Buy or sell Aviva shares
• Switch to electronic communications
• View your shareholding
• View any outstanding payments
Annual General Meeting (AGM)
The 2025 AGM will be held at the Aviva Centre, Brierly
Furlong, Stoke Gifford, Bristol, BS34 8SW, on Wednesday,
30 April 2025, at 9am with facilities to attend electronically.
Details of each resolution to be considered at the meeting and
voting instructions are provided in the Notice of AGM, which
will be made available on the Company’s website at
www.aviva.com/agm in March 2025.
The voting results of the 2025 AGM will be accessible on
the Company’s website at www.aviva.com/agm shortly
after the meeting.
Shareholder contacts:
Ordinary and preference shares
For any queries regarding your shareholding, please contact
Computershare:
By telephone: 0371 495 0105
We’re open Monday to Friday, 8.30am to 5.30pm UK
time, excluding public holidays. Please call +44 117 378
8361 if calling from outside of the UK
By email:
Avivashares@computershare.co.uk
In writing: Computershare Investor Services PLC,
The Pavilions, Bridgwater Road, Bristol, BS99 6ZZ
American Depositary Receipts (ADRs)
For any queries regarding Aviva ADRs, please contact
Citibank Shareholder Services (Citibank):
By telephone: 1 877 248 4237 (1 877-CITI-ADR)
We are open Monday to Friday, 8.30am to 6pm US
Eastern Standard Time, excluding public holidays.
Please call +1 781 575 4555 if calling from outside of
the US
By email:
Citibank@shareholders-online.com
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:
Aviva.shareholders@aviva.com
In writing: Susan Adams, Group Company Secretary,
80 Fenchurch Street, London, EC3M 4AE
By telephone:
+44 (0)20 7283 2000
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Shareholder services
This report should be read in conjunction with the documents
distributed by Aviva plc (the ‘Company’ or ‘Aviva’) through The
Regulatory News Service (RNS).This report contains, and we
may make other verbal or written ‘forward-looking
statements’ with respect to certain of Aviva’s plans and
current goals and expectations relating to future financial
condition, performance, results, strategic initiatives and
objectives and other future events and circumstances
(including, climate and other sustainability-related plans and
goals). Statements including those containing the words
‘believes’, ‘intends’, ‘expects’, ‘projects’, ‘plans’, ‘will’, ‘seeks’,
‘aims’, ‘may’, 'might', ‘could’, 'should', ‘outlook’, ‘likely’, ‘target’,
‘goal’, ‘guidance’, ‘trends’, ‘future’, ‘estimates’, ‘potential’,
'possible', ‘objective’, ‘predicts’, ‘ambition’ and ‘anticipates’,
and words of similar meaning, are forward-looking. By their
nature, all forward-looking statements are subject to known
and unknown risks and uncertainty. Accordingly, there are or
will be important factors that could cause actual results - and
Aviva's related plans, expectations and targets - to differ
materially from those indicated in these statements. Factors
that could cause actual results to differ materially from those
indicated in forward-looking statements in the report include:
the impact of ongoing uncertain conditions in the global
financial markets and the national and international political
and economic situation generally (including those arising from
the current geopolitical landscape and rising protectionist
measures); market developments and government actions; the
effect of credit spread volatility on the net unrealised value of
the investment portfolio; the effect of losses due to defaults by
counterparties, including potential sovereign debt defaults or
restructurings, on the value of our investments; the impact of
changes in short or long-term interest rates and inflation
reduce the value or yield of our investment portfolio and
impact our asset and liability matching; the impact of changes
in equity or property prices on our investment portfolio;
fluctuations in currency exchange rates; the effect of market
fluctuations on the value of options and guarantees embedded
in some of our life insurance products and the value of the
assets backing their reserves; the amount of allowances and
impairments taken on our investments; the effect of adverse
capital and credit market conditions on our ability to meet
liquidity needs and our access to capital; changes in, or
restrictions on, our ability to commence capital management
initiatives; changes in or inaccuracy of assumptions in pricing
and reserving for insurance business (particularly with regard
to mortality and morbidity trends, lapse rates and policy
renewal rates), longevity and endowments; a cyclical
downturn of the insurance industry; the impact of natural and
man-made catastrophic events (including pandemics) on our
business activities and results of operations; the transitional,
litigation and physical risks associated with climate change;
failure to understand and respond effectively to the risks
associated with sustainability; our reliance on information and
technology and third-party service providers for our
operations and systems; technological developments; the
impact of the Group’s risk mitigation strategies proving less
effective than anticipated, including the inability of reinsurers
to meet obligations or unavailability of reinsurance coverage;
poor investment performance of the Group’s asset
management business; the withdrawal by customers at short
notice of assets under the Group’s management; failure to
manage risks in operating securities lending of Group and
third-party client assets; increased competition in the UK and
in other countries where we have significant operations;
regulatory approval of changes to the Group’s internal model
for calculation of regulatory capital under the UK’s version of
Solvency II rules; the impact of recognising an impairment of
our goodwill or intangibles with indefinite lives; changes in
valuation methodologies, estimates and assumptions used in
the valuation of investment securities; the effect of legal
proceedings and regulatory investigations; the impact of
operational risks, including inadequate or failed internal and
external processes, systems and human error or from external
events and malicious acts (including cyber attack and theft,
loss or misuse of customer data); risks associated with
arrangements with third parties, including joint ventures; our
reliance on third-party distribution channels to deliver our
products; funding risks associated with our participation in
defined benefit staff pension schemes; the failure to attract or
retain the necessary key personnel, including quality financial
advisers; the failure to act in good faith, resulting in customers
not achieving good outcomes and avoiding foreseeable harm;
the effect of systems errors or regulatory changes on the
calculation of unit prices or deduction of charges for our unit-
linked products that may require retrospective compensation
to our customers; the effect of a decline in any of our ratings
by rating agencies on our standing among customers, broker-
dealers, agents, wholesalers and other distributors of our
products and services; changes to our brand and reputation
and the potential loss of or damage to customer relationships,
whether related to changes in customer habits or not; changes
in laws and legal or public policy, in particular; changes in tax
law and interpretation of existing tax laws in jurisdictions
where we conduct business; changes to International Financial
Reporting Standards relevant to insurance companies and
their interpretation; the inability to protect our intellectual
property; the effect of undisclosed liabilities and other risks
associated with our business disposals; uncertainties relating
to announced and future acquisitions (in particular, the
proposed acquisition of Direct Line), combinations or disposals
within relevant industries including regulatory approvals,
timing for completion, diversion of management attention and
other resources and the Group's ability to integrate; the impact
of exposure to Lloyd's related risks following the acquisition of
Probitas, including dependence on Lloyd’s credit rating,
solvency position and the maintenance of Lloyd’s own licence
and approvals to underwrite business and commitment to
certain financial and operational obligations, including to make
contributions to funds at Lloyd’s; the policies, decisions and
actions of government or regulatory authorities in the UK, the
EU, the US, Canada or elsewhere, including changes to and the
implementation of key legislation and regulation (for example,
FCA Consumer Duty and Solvency II). Please see Aviva's most
recent Annual Report and Accounts for further details of risks,
uncertainties and other factors relevant to the business and its
securities. Forward looking statements should therefore be
construed in light of such aforementioned factors.
Aviva undertakes no obligation to update the forward looking
statements in this report or any other forward-looking
statements we may make. Forward-looking statements in this
report are current only as of the date on which such
statements are made and readers are cautioned not to place
undue reliance on such forward-looking statements. Such
statements should be regarded as indicative and illustrative
only, and Aviva does not provide any representation,
assurance or guarantee that the occurrence of the events
expressed or implied in any forward-looking statements in this
presentation will actually occur. The climate metrics,
projections, forecasts and other forward-looking statements
used in this report should be treated with special caution, as
they are more uncertain than historical financial information
and given the wider uncertainty around the evolution and
impact of climate change. Climate metrics include estimates of
historical emissions and historical climate change; forward-
looking climate metrics (such as ambitions, targets, climate
scenarios and climate projections and forecasts); and metrics
used to assess climate-related risks and opportunities in
funds/investment strategies. Our understanding of climate
change effects, data metrics and methodologies and its impact
continue to evolve. Accordingly, both historical and forward-
looking climate metrics are inherently uncertain and,
therefore, could be less decision-useful than metrics based on
historical financial statements. The information in this report
does not constitute an offer to sell or an invitation to buy
shares in Aviva plc or an invitation or inducement to engage in
any other investment activities.
Aviva plc is a company registered in England No. 2468686.
Registered office
80 Fenchurch Street
London
EC3M 4AE
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Aviva plc
80 Fenchurch Street,
London, EC3M 4AE
+44 (0)20 7283 2000
www.aviva.com
Registered in England
Number 2468686
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