AVIVA PLC

Implication of International Financial Management of Aviva PLC

Implication of International Financial Management of Aviva PLC

Introduction

The study is related to the implications of international financial management which particularly focuses on Aviva plc. Aviva is an insurance group based in the United Kingdom. Company's business is managed based on four regions, the U.K., Europe, North America and Asia Pacific. The UK region is split into the U.K. Life and U.K. General Insurance segments, which undertake long-term insurance and savings business and general insurance respectively. In Europe, the region is split into Aviva Europe and Delta Lloyd operating segments. Aviva Investors, company's fund management business and sixth operating segment, operates across all four regions providing fund management services to third party investors and to company's long-term insurance business and general insurance operations.

The merger of CGU and Norwich Union created CGNU in May 2000. CGU came from the merger of Commercial Union and General Accident in 1998. Aviva became the new name for CGNU in July 2002. The change represented part of the group's planned journey towards being recognized as a world-class financial services provider. The Aviva brand brought together more than 40 different trading names around the world and created opportunities for the group to harness the benefits of its size and international capabilities.

Aviva is the world's fifth-largest insurance group and the largest insurance services provider in the United Kingdom. The company is one of the leading providers of life and pension products in Europe. The company is also actively growing long-term savings businesses in Asian markets, Australia and the United States. Aviva has 59,000 employees serving more than 40 million customers. Moreover, the international financial management of Aviva plc is discussed in context of multinational working capital management and the measurement and management of political risk.

Multinational Working Capital Management of Aviva plc

It is essential and imperative for Aviva plc to effecrivly manage the cash as having a good cash management for Aviva plc is the cornerstone of good business management. You have to manage its cash flow growth as a recession, in times as fast-growing stable. At each stage, management resources are available to leaders. The basis of cash management is the management of working capital needs. The working capital used to finance the operating cycle of the company, that is to say its daily operations outside investment. During its operating cycle, the company incurs costs and recovers revenue related to sales or service provision (Lawrence, 2008, 32-47).

The management of cash is of paramount importance in any business it is the means to obtain goods and services. It requires a careful accounting of transactions with cash because this area can be quickly reversed. The management of cash is usually centered on two areas: the budget of cash and the control internal accounting.

Cash is the most liquid asset of a business. We need a system of internal control adequate to prevent theft and employees from using the money for use of the company staff. The purposes of internal control mechanisms in the ...