Half Year Results - 4 of 4
Standard Life plc
Half Year Results 2010
11 August 2010
Part 4 of 4
5 Independent auditors' review report
Introduction
We have been engaged by Standard Life plc (the Company) to review the financial information in the Half Year Results for the six months ended 30 June 2010, which comprises:
· The International Financial Reporting Standards (IFRS) condensed consolidated income statement, the IFRS consolidated statement of comprehensive income, the IFRS condensed consolidated statement of financial position, the IFRS consolidated statement of changes in equity, the IFRS condensed consolidated statement of cash flows and associated notes prepared in accordance with the IFRS accounting policies set out in Note 3.1 (the 'IFRS financial information'); and
· The European Embedded Value (EEV) consolidated income statement, the EEV earnings per share statement, the EEV consolidated statement of comprehensive income, the EEV consolidated statement of financial position, and associated notes prepared on the EEV basis set out in Note 4.1 (the 'EEV financial information').
We have read the other information contained in the Half Year Results and considered whether it contains any apparent misstatements or material inconsistencies with the financial information in the Half Year Results.
Directors' responsibilities
The Half Year Results, including the financial information contained therein, is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the Half Year Results in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.
As disclosed in Note 3.1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in the Half Year Results has been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting, as adopted by the European Union. The Directors are responsible for preparing the EEV financial information in accordance with the EEV basis set out in Note 4.1.
Our responsibility
Our responsibility is to express to the Company a conclusion on the IFRS financial information included in the Half Year Results based on our review. This report, including the conclusion, has been prepared for and only for the Company for the purpose of the Disclosure and Transparency Rules of the Financial Services Authority and for no other purpose.
Our responsibility on the EEV financial information in the Half Year Results is to express to the Company a conclusion based on our review. This report on the EEV financial information, including the conclusion, has been prepared for and only for the Company in accordance with our engagement letter dated 26 April 2010 and for no other purpose.
We do not, in producing this report, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that:
· the IFRS financial information in the Half Year Results for the six months ended 30 June 2010 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority; and
· the EEV financial information in the Half Year Results report for the six months ended 30 June 2010 is not prepared, in all material respects, in accordance with the EEV basis set out in Note 4.1.
PricewaterhouseCoopers LLP
Chartered Accountants
Edinburgh
11 August 2010
|
(a) |
The maintenance and integrity of the Standard Life website is the responsibility of the Directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website.
|
|
(b) |
Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. |
6 Supplementary information
6.1 Group assets under administration and net flows
Group assets under administration (AUA) represent the IFRS gross assets of the Group adjusted to include third party AUA, which are not included in the statement of financial position. In addition, certain assets are excluded from the definition, for example deferred acquisition costs, intangibles and reinsurance assets.
Group assets under administration
Six months ended 30 June 2010
|
|
Opening AUA at 1 Jan 2010 |
Gross inflows |
Redemptions |
Net flows |
Market and other movements |
Closing AUA at 30 Jun 2010 |
|
|
£bn |
£bn |
£bn |
£bn |
£bn |
£bn |
|
UK |
|
|
|
|
|
|
|
Individual SIPP1 |
11.8 |
1.9 |
(0.8) |
1.1 |
0.1 |
13.0 |
|
Individual pensions |
22.3 |
0.5 |
(1.4) |
(0.9) |
0.4 |
21.8 |
|
Investment bonds |
8.7 |
0.1 |
(0.5) |
(0.4) |
(0.1) |
8.2 |
|
Mutual funds2 |
3.7 |
0.8 |
(0.2) |
0.6 |
- |
4.3 |
|
Annuities3 |
13.1 |
0.3 |
(0.6) |
(0.3) |
0.8 |
13.6 |
|
Legacy life |
9.1 |
0.2 |
(0.7) |
(0.5) |
0.2 |
8.8 |
|
UK retail |
68.7 |
3.8 |
(4.2) |
(0.4) |
1.4 |
69.7 |
|
Corporate pensions1 |
17.9 |
1.4 |
(0.6) |
0.8 |
(0.6) |
18.1 |
|
Institutional pensions |
12.0 |
1.9 |
(0.6) |
1.3 |
0.1 |
13.4 |
|
UK corporate |
29.9 |
3.3 |
(1.2) |
2.1 |
(0.5) |
31.5 |
|
Assets not backing products |
7.0 |
- |
- |
- |
0.6 |
7.6 |
|
UK long-term savings |
105.6 |
7.1 |
(5.4) |
1.7 |
1.5 |
108.8 |
|
|
|
|
|
|
|
|
|
Canada |
|
|
|
|
|
|
|
Group savings and retirement |
11.9 |
0.8 |
(0.6) |
0.2 |
0.7 |
12.8 |
|
Individual insurance, savings and retirement |
6.7 |
0.4 |
(0.5) |
(0.1) |
0.7 |
7.3 |
|
Group insurance |
0.5 |
0.2 |
(0.2) |
- |
- |
0.5 |
|
Mutual funds2 |
1.4 |
0.2 |
(0.2) |
- |
0.1 |
1.5 |
|
Assets not backing products |
0.8 |
- |
- |
- |
- |
0.8 |
|
Canada long-term savings |
21.3 |
1.6 |
(1.5) |
0.1 |
1.5 |
22.9 |
|
|
|
|
|
|
|
|
|
International |
|
|
|
|
|
|
|
Ireland |
4.9 |
0.5 |
(0.2) |
0.3 |
(0.1) |
5.1 |
|
Germany |
4.2 |
0.4 |
(0.1) |
0.3 |
(0.1) |
4.4 |
|
Hong Kong |
- |
- |
- |
- |
0.1 |
0.1 |
|
Wholly owned long-term savings |
9.1 |
0.9 |
(0.3) |
0.6 |
(0.1) |
9.6 |
|
Joint ventures long-term savings4 |
0.8 |
0.2 |
(0.1) |
0.1 |
0.1 |
1.0 |
|
International long-term savings |
9.9 |
1.1 |
(0.4) |
0.7 |
- |
10.6 |
|
|
|
|
|
|
|
|
|
Total worldwide long-term savings |
136.8 |
9.8 |
(7.3) |
2.5 |
3.0 |
142.3 |
|
|
|
|
|
|
|
|
|
Non-life business5 |
1.6 |
- |
- |
- |
- |
1.6 |
|
|
|
|
|
|
|
|
|
Standard Life Investments third party assets under management1 |
56.9 |
7.3 |
(2.6) |
4.7 |
1.4 |
63.0 |
|
Consolidation and elimination adjustments5,6 |
(25.2) |
(2.9) |
1.0 |
(1.9) |
(0.7) |
(27.8) |
|
Group assets under administration |
170.1 |
14.2 |
(8.9) |
5.3 |
3.7 |
179.1 |
|
|
|
|
|
|
|
|
|
Group assets under administration managed by: |
|
|
|
|
|
|
|
Standard Life Group entities5 |
144.9 |
|
|
|
|
151.8 |
|
Other third party managers |
25.2 |
|
|
|
|
27.3 |
|
Total |
170.1 |
|
|
|
|
179.1 |
1 Included within non-insured SIPP is an element which is also included within UK mutual funds net flows in the third party Investment operations figures.
2 The mutual funds net flows are also included within mutual funds net flows in the third party Investment operations figures.
3 Annuities include assets deposited back with the Group as a result of the reinsurance of certain annuity contracts.
4 Includes our China and India joint ventures.
5 Opening balances have been restated to exclude discontinued banking operations.
6 In order to be consistent with the presentation of new business information, certain products are included in both life and pensions AUA and Investment operations. Therefore, at a Group level an elimination adjustment is required to remove any duplication, in addition to other necessary consolidation adjustments.
Group assets under administration
Six months ended 30 June 2009
|
|
Opening AUA at 1 Jan 2009 |
Gross inflows |
Redemptions |
Net flows |
Market and other movements |
Closing AUA at 30 Jun 2009 |
|
|
£bn |
£bn |
£bn |
£bn |
£bn |
£bn |
|
UK |
|
|
|
|
|
|
|
Individual SIPP1 |
8.7 |
1.5 |
(0.5) |
1.0 |
- |
9.7 |
|
Individual pensions |
20.7 |
0.5 |
(1.2) |
(0.7) |
- |
20.0 |
|
Investment bonds |
8.9 |
0.2 |
(1.0) |
(0.8) |
(0.1) |
8.0 |
|
Mutual funds2 |
2.4 |
0.4 |
(0.1) |
0.3 |
- |
2.7 |
|
Annuities3 |
11.9 |
0.4 |
(0.6) |
(0.2) |
0.2 |
11.9 |
|
Legacy life |
10.2 |
0.2 |
(1.0) |
(0.8) |
(0.2) |
9.2 |
|
UK retail |
62.8 |
3.2 |
(4.4) |
(1.2) |
(0.1) |
61.5 |
|
Corporate pensions1 |
14.4 |
1.2 |
(0.5) |
0.7 |
(0.4) |
14.7 |
|
Institutional pensions |
8.6 |
1.0 |
(0.4) |
0.6 |
0.1 |
9.3 |
|
UK corporate |
23.0 |
2.2 |
(0.9) |
1.3 |
(0.3) |
24.0 |
|
Assets not backing products |
9.0 |
- |
- |
- |
(1.6) |
7.4 |
|
UK long-term savings |
94.8 |
5.4 |
(5.3) |
0.1 |
(2.0) |
92.9 |
|
|
|
|
|
|
|
|
|
Canada |
|
|
|
|
|
|
|
Group savings and retirement |
9.8 |
0.6 |
(0.5) |
0.1 |
(0.2) |
9.7 |
|
Individual insurance, savings and retirement |
5.9 |
0.3 |
(0.3) |
- |
(0.1) |
5.8 |
|
Group insurance |
0.4 |
0.2 |
(0.1) |
0.1 |
- |
0.5 |
|
Mutual funds2 |
1.2 |
0.1 |
(0.1) |
- |
- |
1.2 |
|
Assets not backing products |
0.7 |
- |
- |
- |
(0.2) |
0.5 |
|
Canada long-term savings |
18.0 |
1.2 |
(1.0) |
0.2 |
(0.5) |
17.7 |
|
|
|
|
|
|
|
|
|
International |
|
|
|
|
|
|
|
Ireland |
4.7 |
0.4 |
(0.3) |
0.1 |
(0.5) |
4.3 |
|
Germany |
3.6 |
0.4 |
(0.1) |
0.3 |
(0.5) |
3.4 |
|
Hong Kong |
- |
- |
- |
- |
- |
- |
|
Wholly owned long-term savings |
8.3 |
0.8 |
(0.4) |
0.4 |
(1.0) |
7.7 |
|
Joint ventures long-term savings4 |
0.5 |
0.2 |
(0.1) |
0.1 |
(0.1) |
0.5 |
|
International long-term savings |
8.8 |
1.0 |
(0.5) |
0.5 |
(1.1) |
8.2 |
|
Total worldwide long-term savings |
121.6 |
7.6 |
(6.8) |
0.8 |
(3.6) |
118.8 |
|
|
|
|
|
|
|
|
|
Non-life business5 |
1.7 |
- |
- |
- |
0.1 |
1.8 |
|
|
|
|
|
|
|
|
|
Standard Life Investments third party assets under management1 |
45.5 |
5.2 |
(2.1) |
3.1 |
(1.3) |
47.3 |
|
Consolidation and elimination adjustments5,6 |
(20.9) |
(1.7) |
0.9 |
(0.8) |
1.6 |
(20.1) |
|
Group assets under administration |
147.9 |
11.1 |
(8.0) |
3.1 |
(3.2) |
147.8 |
|
|
|
|
|
|
|
|
|
Group assets under administration managed by: |
|
|
|
|
|
|
|
Standard Life Group entities5 |
129.6 |
|
|
|
|
127.2 |
|
Other third party managers |
18.3 |
|
|
|
|
20.6 |
|
Total |
147.9 |
|
|
|
|
147.8 |
1 Included within non-insured SIPP is an element which is also included within UK mutual funds net flows in the third party Investment operations figures.
2 The mutual funds net flows are also included within mutual funds net flows in the third party Investment operations figures.
3 Annuities include assets deposited back with the Group as a result of the reinsurance of certain annuity contracts.
4 Includes our China and India joint ventures.
5 Balances have been restated to exclude discontinued banking operations.
6 In order to be consistent with the presentation of new business information, certain products are included in both life and pensions AUA and Investment operations. Therefore, at a Group level an elimination adjustment is required to remove any duplication, in addition to other necessary consolidation adjustments.
6.1 Group assets under administration and net flows continued
Group assets under administration
For the year ended 31 December 2009
|
|
Opening AUA at 1 Jan 2009 |
Gross inflows |
Redemptions |
Net flows |
Market and other movements |
Closing AUA at 31 Dec 2009 |
|
|
£bn |
£bn |
£bn |
£bn |
£bn |
£bn |
|
UK |
|
|
|
|
|
|
|
Individual SIPP1 |
8.7 |
2.9 |
(1.1) |
1.8 |
1.3 |
11.8 |
|
Individual pensions |
20.7 |
0.9 |
(2.3) |
(1.4) |
3.0 |
22.3 |
|
Investment bonds |
8.9 |
0.3 |
(1.6) |
(1.3) |
1.1 |
8.7 |
|
Mutual funds2 |
2.4 |
1.0 |
(0.2) |
0.8 |
0.5 |
3.7 |
|
Annuities3 |
11.9 |
0.6 |
(1.1) |
(0.5) |
1.7 |
13.1 |
|
Legacy life |
10.2 |
0.5 |
(1.8) |
(1.3) |
0.2 |
9.1 |
|
UK retail |
62.8 |
6.2 |
(8.1) |
(1.9) |
7.8 |
68.7 |
|
Corporate pensions1 |
14.4 |
2.6 |
(1.1) |
1.5 |
2.0 |
17.9 |
|
Institutional pensions |
8.6 |
2.5 |
(0.9) |
1.6 |
1.8 |
12.0 |
|
UK corporate |
23.0 |
5.1 |
(2.0) |
3.1 |
3.8 |
29.9 |
|
Assets not backing products |
9.0 |
- |
- |
- |
(2.0) |
7.0 |
|
UK long-term savings |
94.8 |
11.3 |
(10.1) |
1.2 |
9.6 |
105.6 |
|
|
|
|
|
|
|
|
|
Canada |
|
|
|
|
|
|
|
Group savings and retirement |
9.8 |
1.3 |
(1.0) |
0.3 |
1.8 |
11.9 |
|
Individual insurance, savings and retirement |
5.9 |
0.7 |
(0.7) |
- |
0.8 |
6.7 |
|
Group insurance |
0.4 |
0.4 |
(0.3) |
0.1 |
- |
0.5 |
|
Mutual funds2 |
1.2 |
0.2 |
(0.2) |
- |
0.2 |
1.4 |
|
Assets not backing products |
0.7 |
- |
- |
- |
0.1 |
0.8 |
|
Canada long-term savings |
18.0 |
2.6 |
(2.2) |
0.4 |
2.9 |
21.3 |
|
|
|
|
|
|
|
|
|
International |
|
|
|
|
|
|
|
Ireland |
4.7 |
1.0 |
(0.8) |
0.2 |
- |
4.9 |
|
Germany |
3.6 |
0.8 |
(0.1) |
0.7 |
(0.1) |
4.2 |
|
Hong Kong |
- |
- |
- |
- |
- |
- |
|
Wholly owned long-term savings |
8.3 |
1.8 |
(0.9) |
0.9 |
(0.1) |
9.1 |
|
Joint ventures long-term savings4 |
0.5 |
0.3 |
(0.1) |
0.2 |
0.1 |
0.8 |
|
International long-term savings |
8.8 |
2.1 |
(1.0) |
1.1 |
- |
9.9 |
|
Total worldwide long-term savings |
121.6 |
16.0 |
(13.3) |
2.7 |
12.5 |
136.8 |
|
|
|
|
|
|
|
|
|
Non-life business5 |
1.7 |
- |
- |
- |
(0.1) |
1.6 |
|
|
|
|
|
|
|
|
|
Standard Life Investments third party assets under management1 |
45.5 |
9.7 |
(4.0) |
5.7 |
5.7 |
56.9 |
|
Consolidation and elimination adjustments5,6 |
(20.9) |
(3.8) |
1.9 |
(1.9) |
(2.4) |
(25.2) |
|
Group assets under administration |
147.9 |
21.9 |
(15.4) |
6.5 |
15.7 |
170.1 |
|
|
|
|
|
|
|
|
|
Group assets under administration managed by: |
|
|
|
|
|
|
|
Standard Life Group entities5 |
129.6 |
|
|
|
|
144.9 |
|
Other third party managers |
18.3 |
|
|
|
|
25.2 |
|
Total |
147.9 |
|
|
|
|
170.1 |
1 Included within non-insured SIPP is an element which is also included within UK mutual funds net flows in the third party Investment operations figures.
2 The mutual funds net flows are also included within mutual funds net flows in the third party Investment operations figures.
3 Annuities include assets deposited back with the Group as a result of the reinsurance of certain annuity contracts.
4 Includes our China and India joint ventures.
5 Balances have been restated to exclude discontinued banking operations.
6 In order to be consistent with the presentation of new business information, certain products are included in both life and pensions AUA and Investment operations. Therefore, at a Group level an elimination adjustment is required to remove any duplication, in addition to other necessary consolidation adjustments.
Long-term savings operations net flows (regulatory basis)
Six months ended 30 June 2010
|
|
Gross inflows |
Redemptions |
Net inflows |
Gross inflows |
Redemptions |
Net inflows |
|
|
6 months to 30 Jun 2010 |
6 months to 30 Jun 2010 |
6 months to 30 Jun 2010 |
6 months to 30 Jun 2009 |
6 months to 30 Jun 2009 |
6 months to 30 Jun 2009 |
|
|
£m |
£m |
£m |
£m |
£m |
£m |
|
UK |
|
|
|
|
|
|
|
Individual SIPP1 |
1,868 |
(810) |
1,058 |
1,464 |
(505) |
959 |
|
Individual pensions2 |
495 |
(1,368) |
(873) |
541 |
(1,150) |
(609) |
|
Investment bonds |
115 |
(527) |
(412) |
183 |
(1,008) |
(825) |
|
Mutual funds3 |
769 |
(208) |
561 |
438 |
(102) |
336 |
|
Annuities |
287 |
(572) |
(285) |
353 |
(578) |
(225) |
|
Protection |
42 |
(29) |
13 |
49 |
(31) |
18 |
|
Legacy life |
178 |
(644) |
(466) |
206 |
(967) |
(761) |
|
UK retail |
3,754 |
(4,158) |
(404) |
3,234 |
(4,341) |
(1,107) |
|
Corporate pensions1,2 |
1,463 |
(690) |
773 |
1,210 |
(528) |
682 |
|
Institutional pensions |
1,893 |
(627) |
1,266 |
953 |
(393) |
560 |
|
UK corporate |
3,356 |
(1,317) |
2,039 |
2,163 |
(921) |
1,242 |
|
UK long-term savings4 |
7,110 |
(5,475) |
1,635 |
5,397 |
(5,262) |
135 |
|
|
|
|
|
|
|
|
|
Canada |
|
|
|
|
|
|
|
Group savings and retirement |
841 |
(672) |
169 |
676 |
(513) |
163 |
|
Individual insurance, savings and retirement |
352 |
(456) |
(104) |
277 |
(347) |
(70) |
|
Group insurance |
205 |
(165) |
40 |
173 |
(142) |
31 |
|
Mutual funds3 |
182 |
(195) |
(13) |
102 |
(87) |
15 |
|
Canada long-term savings |
1,580 |
(1,488) |
92 |
1,228 |
(1,089) |
139 |
|
|
|
|
|
|
|
|
|
International |
|
|
|
|
|
|
|
Ireland |
562 |
(298) |
264 |
391 |
(329) |
62 |
|
Germany |
376 |
(59) |
317 |
395 |
(69) |
326 |
|
Hong Kong |
15 |
(4) |
11 |
5 |
(1) |
4 |
|
Wholly owned long-term savings |
953 |
(361) |
592 |
791 |
(399) |
392 |
|
Joint ventures long-term savings5 |
183 |
(50) |
133 |
139 |
(38) |
101 |
|
International long-term savings |
1,136 |
(411) |
725 |
930 |
(437) |
493 |
|
|
|
|
|
|
|
|
|
Total worldwide long-term savings |
9,826 |
(7,374) |
2,452 |
7,555 |
(6,788) |
767 |
1 Included within non-insured SIPP is an element which is also included within UK mutual funds net flows in the third party Investment operations figures.
2 Individual pensions include Retail Trustee Investment Plan. This was previously included in Corporate pensions. The total 2010 net inflow is £2m (2009: net outflow £11m).
3 The mutual funds net flows are also included within mutual fund net flows in the third party Investment operations figures.
4 UK long-term savings include a total net outflow of £862m in relation to conventional with profits business (2009: net outflow £1,159m).
5 Includes net flows in respect of Standard Life's share of the Asia joint ventures.
6.1 Group assets under administration and net flows continued
Long-term savings operations net flows (regulatory basis)
Three months ended 30 June 2010
|
|
Gross inflows |
Redemptions |
Net inflows |
Gross inflows |
Redemptions |
Net inflows |
|
|
3 months to 30 Jun 2010 |
3 months to 30 Jun 2010 |
3 months to 30 Jun 2010 |
3 months to 30 Jun 2009 |
3 months to 30 Jun 2009 |
3 months to 30 Jun 2009 |
|
|
£m |
£m |
£m |
£m |
£m |
£m |
|
UK |
|
|
|
|
|
|
|
Individual SIPP1 |
868 |
(376) |
492 |
772 |
(254) |
518 |
|
Individual pensions2 |
270 |
(638) |
(368) |
315 |
(545) |
(230) |
|
Investment bonds |
53 |
(251) |
(198) |
78 |
(387) |
(309) |
|
Mutual funds3 |
346 |
(101) |
245 |
228 |
(56) |
172 |
|
Annuities |
122 |
(288) |
(166) |
154 |
(290) |
(136) |
|
Protection |
21 |
(14) |
7 |
24 |
(13) |
11 |
|
Legacy life |
87 |
(340) |
(253) |
101 |
(393) |
(292) |
|
UK retail |
1,767 |
(2,008) |
(241) |
1,672 |
(1,938) |
(266) |
|
Corporate pensions1,2 |
787 |
(316) |
471 |
647 |
(267) |
380 |
|
Institutional pensions |
1,046 |
(254) |
792 |
502 |
(223) |
279 |
|
UK corporate |
1,833 |
(570) |
1,263 |
1,149 |
(490) |
659 |
|
UK long-term savings4 |
3,600 |
(2,578) |
1,022 |
2,821 |
(2,428) |
393 |
|
|
|
|
|
|
|
|
|
Canada |
|
|
|
|
|
|
|
Group savings and retirement |
440 |
(325) |
115 |
320 |
(237) |
83 |
|
Individual insurance, savings and retirement |
160 |
(223) |
(63) |
147 |
(174) |
(27) |
|
Group insurance |
108 |
(86) |
22 |
87 |
(72) |
15 |
|
Mutual funds3 |
81 |
(93) |
(12) |
49 |
(38) |
11 |
|
Canada long-term savings |
789 |
(727) |
62 |
603 |
(521) |
82 |
|
|
|
|
|
|
|
|
|
International |
|
|
|
|
|
|
|
Ireland |
302 |
(148) |
154 |
217 |
(164) |
53 |
|
Germany |
183 |
(32) |
151 |
187 |
(25) |
162 |
|
Hong Kong |
9 |
(3) |
6 |
3 |
- |
3 |
|
Wholly owned long-term savings |
494 |
(183) |
311 |
407 |
(189) |
218 |
|
Joint ventures long-term savings5 |
72 |
(28) |
44 |
45 |
(20) |
25 |
|
International long-term savings |
566 |
(211) |
355 |
452 |
(209) |
243 |
|
|
|
|
|
|
|
|
|
Total worldwide long-term savings |
4,955 |
(3,516) |
1,439 |
3,876 |
(3,158) |
718 |
1 Included within non-insured SIPP is an element which is also included within UK mutual funds net flows in the third party Investment operations figures.
2 Individual pensions include Retail Trustee Investment Plan. This was previously included in Corporate pensions. The total 2010 net inflow is £2m (2009: net outflow £2m).
3 The mutual funds net flows are also included within mutual fund net flows in the third party Investment operations figures.
4 UK long-term savings include a total net outflow of £452m in relation to conventional with profits business (2009: net outflow £503m).
5 Includes net flows in respect of Standard Life's share of the Asia joint ventures.
15 months ended 30 June 2010
|
|
Net flows |
||||
|
|
3 months to 30 Jun 2010 |
3 months to 31 Mar 2010 |
3 months to 31 Dec 2009 |
3 months to 30 Sep 2009 |
3 months to 30 Jun 2009 |
|
|
£m |
£m |
£m |
£m |
£m |
|
UK |
|
|
|
|
|
|
Individual SIPP |
492 |
566 |
438 |
364 |
518 |
|
Individual pensions |
(368) |
(505) |
(451) |
(332) |
(230) |
|
Investment bonds |
(198) |
(214) |
(193) |
(215) |
(309) |
|
Mutual funds |
245 |
316 |
257 |
202 |
172 |
|
Annuities |
(166) |
(119) |
(147) |
(149) |
(136) |
|
Protection |
7 |
6 |
9 |
10 |
11 |
|
Legacy life |
(253) |
(213) |
(235) |
(293) |
(292) |
|
UK retail |
(241) |
(163) |
(322) |
(413) |
(266) |
|
Corporate pensions |
471 |
302 |
535 |
292 |
380 |
|
Institutional pensions |
792 |
474 |
645 |
342 |
279 |
|
UK corporate |
1,263 |
776 |
1,180 |
634 |
659 |
|
UK long-term savings |
1,022 |
613 |
858 |
221 |
393 |
|
|
|
|
|
|
|
|
Canada |
|
|
|
|
|
|
Group savings and retirement |
115 |
54 |
20 |
104 |
83 |
|
Individual insurance, savings and retirement |
(63) |
(41) |
(22) |
55 |
(27) |
|
Group insurance |
22 |
18 |
16 |
18 |
15 |
|
Mutual funds |
(12) |
(1) |
19 |
12 |
11 |
|
Canada long-term savings |
62 |
30 |
33 |
189 |
82 |
|
|
|
|
|
|
|
|
International |
|
|
|
|
|
|
Ireland |
154 |
110 |
96 |
10 |
53 |
|
Germany |
151 |
166 |
209 |
166 |
162 |
|
Hong Kong |
6 |
5 |
5 |
3 |
3 |
|
Wholly owned long-term savings |
311 |
281 |
310 |
179 |
218 |
|
Joint ventures long-term savings1 |
44 |
89 |
61 |
49 |
25 |
|
International long-term savings |
355 |
370 |
371 |
228 |
243 |
|
|
|
|
|
|
|
|
Total worldwide long-term savings |
1,439 |
1,013 |
1,262 |
638 |
718 |
1 Includes net flows in respect of Standard Life's share of the Asia joint ventures.
6.2 Analysis of new business
Long-term savings operations new business
Six months ended 30 June 2010
|
|
Single premiums |
New regular premiums |
PVNBP |
|||||
|
|
6 months to 30 Jun 2010 |
6 months to 30 Jun 2009 |
6 months to 30 Jun 2010 |
6 months to 30 Jun 2009 |
6 months to 30 Jun 2010 |
6 months to 30 Jun 2009 |
Change6 |
Change in constant currency6,7 |
|
|
£m |
£m |
£m |
£m |
£m |
£m |
% |
% |
|
UK |
|
|
|
|
|
|
|
|
|
Individual SIPP1 |
1,774 |
1,389 |
39 |
33 |
1,907 |
1,537 |
24% |
24% |
|
Individual pensions2,3 |
232 |
258 |
13 |
14 |
266 |
292 |
(9%) |
(9%) |
|
Investment bonds |
91 |
154 |
- |
- |
91 |
154 |
(41%) |
(41%) |
|
Mutual funds |
754 |
423 |
15 |
15 |
863 |
542 |
59% |
59% |
|
Annuities |
209 |
258 |
- |
- |
209 |
258 |
(19%) |
(19%) |
|
Protection |
- |
- |
- |
1 |
1 |
2 |
(50%) |
(50%) |
|
Legacy life |
- |
- |
- |
- |
- |
- |
- |
- |
|
UK retail |
3,060 |
2,482 |
67 |
63 |
3,337 |
2,785 |
20% |
20% |
|
Corporate pensions1,2,3 |
609 |
394 |
295 |
287 |
1,751 |
1,517 |
15% |
15% |
|
Institutional pensions |
1,835 |
907 |
3 |
18 |
1,842 |
944 |
95% |
95% |
|
UK corporate |
2,444 |
1,301 |
298 |
305 |
3,593 |
2,461 |
46% |
46% |
|
UK long-term savings |
5,504 |
3,783 |
365 |
368 |
6,930 |
5,246 |
32% |
32% |
|
|
|
|
|
|
|
|
|
|
|
Canada |
|
|
|
|
|
|
|
|
|
Group savings and retirement |
268 |
208 |
45 |
37 |
773 |
750 |
3% |
(8%) |
|
Individual insurance, savings and retirement |
297 |
226 |
2 |
1 |
318 |
240 |
33% |
18% |
|
Group insurance4 |
1 |
1 |
19 |
15 |
308 |
260 |
18% |
6% |
|
Mutual funds |
182 |
102 |
- |
- |
182 |
102 |
78% |
59% |
|
Canada long-term savings |
748 |
537 |
66 |
53 |
1,581 |
1,352 |
17% |
4% |
|
|
|
|
|
|
|
|
|
|
|
International |
|
|
|
|
|
|
|
|
|
Ireland |
530 |
350 |
4 |
5 |
545 |
372 |
47% |
50% |
|
Germany |
12 |
10 |
11 |
14 |
154 |
185 |
(17%) |
(14%) |
|
Hong Kong |
5 |
1 |
18 |
6 |
133 |
37 |
259% |
266% |
|
Wholly owned long-term savings |
547 |
361 |
33 |
25 |
832 |
594 |
40% |
43% |
|
India5 |
19 |
11 8 |
55 |
408 |
233 |
2048 |
14% |
9% |
|
China5 |
19 |
29 |
7 |
6 |
55 |
56 |
(2%) |
(1%) |
|
Joint ventures long-term savings |
38 |
40 |
62 |
46 |
288 |
260 |
11% |
7% |
|
International long-term savings |
585 |
401 |
95 |
71 |
1,120 |
854 |
31% |
32% |
|
|
|
|
|
|
|
|
|
|
|
Total worldwide long-term savings |
6,837 |
4,721 |
526 |
492 |
9,631 |
7,452 |
29% |
26% |
1 Included within non-insured SIPP is an element which is also included within UK mutual funds net flows in the third party Investment operations figures.
2 Single premiums include Department of Work and Pensions rebate premiums of £158m (2009: £171m), comprising Individual pension rebates of £86m (2009: £93m) and Corporate pensions rebates of £72m (2009: £78m).
3 Individual pensions include Retail Trustee Investment Plan. This was previously included in Corporate pensions. The 2010 impact on PVNBP is £15m (2009: £10m).
4 Canada Group insurance includes £0.5m (2009: £1.0m) of new regular premiums in respect of Consultaction policies, representing the comparable full premium for £0.1m (2009: £0.1m) of new annualised fee income.
5 Standard Life's share of the joint venture company's new business.
6 % change is calculated on the figures rounded to millions.
7 Calculated using constant rates of exchange.
8 Single premiums in India have been restated by £5m to reflect the reclassification of regular premiums to single premiums. There is no impact on regular premiums. The impact on PVNBP for the six months to 30 June 2009 is £1m.
9 New business gross sales for overseas operations are calculated using average exchange rates. The principal average rates for the six months to 30 June 2010 were £1: C$1.60 (2009: £1: C$1.80) and £1: €1.15 (2009: £1: €1.11).
Investment operations
Six months ended 30 June 2010
|
|
|
Opening AUM at 1 Jan 2010 |
Gross inflows |
Redemptions |
Net inflows |
Market and other movements |
Net movement in AUM |
Closing AUM at 30 Jun 2010 |
||
|
|
|
£m |
£m |
£m |
£m |
£m |
£m |
£m |
||
|
UK |
Mutual funds1 |
5,818 |
1,457 2 |
(744) |
713 |
119 |
832 |
6,650 |
||
|
|
Private equity |
3,547 |
54 |
(24) |
30 |
(233) |
(203) |
3,344 |
||
|
|
Segregated funds |
12,754 |
961 |
(285) |
676 |
334 |
1,010 |
13,764 |
||
|
|
Pooled property funds |
1,417 |
177 |
- |
177 |
40 |
217 |
1,634 |
||
|
Total UK |
|
23,536 |
2,649 |
(1,053) |
1,596 |
260 |
1,856 |
25,392 |
||
|
Canada |
Mutual funds1 |
1,562 |
178 3 |
(191) |
(13) |
64 |
51 |
1,613 |
||
|
|
Separate mandates4 |
3,004 |
193 |
(439) |
(246) |
264 |
18 |
3,022 |
||
|
Total Canada |
|
4,566 |
371 |
(630) |
(259) |
328 |
69 |
4,635 |
||
|
International |
Europe |
2,136 |
875 |
(65) |
810 |
- |
810 |
2,946 |
||
|
|
India5 |
2,096 |
620 |
- |
620 |
368 |
988 |
3,084 |
||
|
|
Other |
142 |
6 |
(6) |
- |
(15) |
(15) |
127 |
||
|
Total International |
4,374 |
1,501 |
(71) |
1,430 |
353 |
1,783 |
6,157 |
|||
|
|
|
|
|
|
|
|
|
|
||
|
Total worldwide investment products excluding money market and related funds |
32,476 |
4,521 |
(1,754) |
2,767 |
941 |
3,708 |
36,184 |
|||
|
|
UK money market funds6 |
3,625 |
1,275 |
- |
1,275 |
(60) |
1,215 |
4,840 |
||
|
|
India cash funds6 |
2,458 |
(1,032) |
- |
(1,032) |
148 |
(884) |
1,574 |
||
|
Total worldwide investment products |
38,559 |
4,764 |
(1,754) |
3,010 |
1,029 |
4,039 |
42,598 |
|||
Total third party assets under management comprise the investment business noted above together with third party insurance contracts. New business relating to third party insurance contracts is disclosed as insurance business for reporting purposes. An analysis of total third party assets under management is shown below.
|
|
Opening AUM at 1 Jan 2010 |
Gross inflows |
Redemptions |
Net inflows |
Market and other movements |
Net movement in AUM |
Closing AUM at 30 Jun 2010 |
|
|
£m |
£m |
£m |
£m |
£m |
£m |
£m |
|
Third party investment products |
38,559 |
4,764 |
(1,754) |
3,010 |
1,029 |
4,039 |
42,598 |
|
Third party insurance contracts (new business classified as insurance products) |
18,370 |
2,577 |
(842) |
1,735 |
294 |
2,029 |
20,399 |
|
Total third party assets under management |
56,929 |
7,341 |
(2,596) |
4,745 |
1,323 |
6,068 |
62,997 |
|
|
|
|
|
|
|
|
|
|
Standard Life Investments - total assets under management |
138,724 |
|
|
|
|
|
143,002 |
1 Included within mutual funds are cash inflows which have also been reflected in UK and Canada mutual funds new business sales.
2 In the six months to 30 June 2009 UK mutual funds gross inflows were £744m and net inflows were £313m.
3 In the six months to 30 June 2009 Canada mutual funds gross inflows were £99m and net inflows were £14m.
4 Separate mandates refers to investment funds products sold in Canada exclusively to institutional customers. These products contain no insurance risk and consist primarily of defined benefit pension plan assets for which Standard Life Investments exclusively provides portfolio advisory services.
5 International gross inflows include India where, due to the nature of the Indian investment sales market, the new business is shown as the net of sales less redemptions. India cash funds are included as money market and related funds in the table.
6 Due to the nature of the UK money market funds and India cash funds, the flows are calculated using average net client balances. Other movements are derived as the difference between these average net inflows and the movement in the opening and closing AUM.
7 Funds denominated in foreign currencies have been translated to Sterling using the closing exchange rates at 30 June 2010. Investment fund flows are translated at average exchange rates. Gains and losses arising from the translation of funds denominated in foreign currencies are included in the market and other movements column. The principal closing exchange rates used as at 30 June 2010 were £1: C$1.59 (31 December 2009: £1: C$1.69) and £1:€1.22 (31 December 2009: £1: €1.13). The principal average exchange rates for the six months to 30 June 2010 were £1: C$1.60 (2009: £1: C$1.80) and £1: €1.15 (2009: £1: €1.11).
6.2 Analysis of new business continued
Long-term savings operations new business
Three months ended 30 June 2010
|
|
Single premiums |
New regular premiums |
PVNBP |
|||||
|
|
3 months to 30 Jun 2010 |
3 months to 30 Jun 2009 |
3 months to 30 Jun 2010 |
3 months to 30 Jun 2009 |
3 months to 30 Jun 2010 |
3 months to 30 Jun 2009 |
Change6 |
Change in constant currency6,7 |
|
|
£m |
£m |
£m |
£m |
£m |
£m |
% |
% |
|
UK |
|
|
|
|
|
|
|
|
|
Individual SIPP1 |
815 |
695 |
21 |
2 |
878 |
696 |
26% |
26% |
|
Individual pensions2,3 |
134 |
178 |
7 |
8 |
152 |
196 |
(22%) |
(22%) |
|
Investment bonds |
45 |
70 |
- |
- |
45 |
70 |
(36%) |
(36%) |
|
Mutual funds |
339 |
223 |
7 |
5 |
383 |
266 |
44% |
44% |
|
Annuities |
82 |
110 |
- |
- |
82 |
110 |
(25%) |
(25%) |
|
Protection |
- |
- |
- |
1 |
1 |
1 |
- |
- |
|
Legacy life |
- |
- |
- |
- |
- |
- |
- |
- |
|
UK retail |
1,415 |
1,276 |
35 |
16 |
1,541 |
1,339 |
15% |
15% |
|
Corporate pensions1,2,3 |
356 |
230 |
174 |
175 |
1,024 |
906 |
13% |
13% |
|
Institutional pensions |
1,012 |
503 |
- |
12 |
1,012 |
525 |
93% |
93% |
|
UK corporate |
1,368 |
733 |
174 |
187 |
2,036 |
1,431 |
42% |
42% |
|
UK long-term savings |
2,783 |
2,009 |
209 |
203 |
3,577 |
2,770 |
29% |
29% |
|
|
|
|
|
|
|
|
|
|
|
Canada |
|
|
|
|
|
|
|
|
|
Group savings and retirement |
166 |
105 |
28 |
20 |
483 |
393 |
23% |
7% |
|
Individual insurance, savings and retirement |
132 |
122 |
1 |
- |
144 |
130 |
11% |
(5%) |
|
Group insurance4 |
1 |
1 |
8 |
9 |
140 |
145 |
(3%) |
(17%) |
|
Mutual funds |
81 |
49 |
- |
- |
81 |
49 |
65% |
44% |
|
Canada long-term savings |
380 |
277 |
37 |
29 |
848 |
717 |
18% |
3% |
|
|
|
|
|
|
|
|
|
|
|
International |
|
|
|
|
|
|
|
|
|
Ireland |
284 |
199 |
2 |
2 |
292 |
208 |
40% |
44% |
|
Germany |
5 |
3 |
5 |
7 |
76 |
86 |
(12%) |
(10%) |
|
Hong Kong |
3 |
1 |
9 |
4 |
69 |
23 |
200% |
192% |
|
Wholly owned long-term savings |
292 |
203 |
16 |
13 |
437 |
317 |
38% |
40% |
|
India5 |
5 |
4 8 |
22 |
12 8 |
93 |
59 8 |
58% |
35% |
|
China5 |
9 |
8 |
4 |
4 |
29 |
23 |
26% |
15% |
|
Joint ventures long-term savings |
14 |
12 |
26 |
16 |
122 |
82 |
49% |
31% |
|
International long-term savings |
306 |
215 |
42 |
29 |
559 |
399 |
40% |
38% |
|
|
|
|
|
|
|
|
|
|
|
Total worldwide long-term savings |
3,469 |
2,501 |
288 |
261 |
4,984 |
3,886 |
28% |
25% |
1 Included within non-insured SIPP is an element which is also included within UK mutual funds net flows in the third party Investment operations figures.
2 Single premiums include Department of Work and Pensions rebate premiums of £155m (2009: £167m), comprising Individual pension rebates of £84m (2009: £91m) and Corporate pensions rebates of £71m (2009: £76m).
3 Individual pensions include Retail Trustee Investment Plan. This was previously included in Corporate pensions. The 2010 impact on PVNBP is negative £2m (2009: positive £5m).
4 Canada Group insurance includes £0.5m (2009: £1.0m) of new regular premiums in respect of Consultaction policies, representing the comparable full premium for £0.1m (2009: £0.1m) of new annualised fee income.
5 Standard Life's share of the joint venture company's new business.
6 % change is calculated on the figures rounded to millions.
7 Calculated using constant rates of exchange.
8 Single premiums in India have been restated by £3m to reflect the reclassification of regular premiums to single premiums. The impact on regular premiums is £1m. The impact on PVNBP for the three months to 30 June 2009 is £1m.
9 New business gross sales for overseas operations are calculated using average exchange rates. The principal average rates for the six months to 30 June 2010 were £1: C$1.60 (2009: £1: C$1.80) and £1: €1.15 (2009: £1: €1.11).
Investment operations
Three months ended 30 June 2010
|
|
|
Opening AUM at 1 Apr 2010 |
Gross inflows |
Redemptions |
Net inflows |
Market and other movements |
Net movement in AUM |
Closing AUM at 30 Jun 2010 |
||
|
|
|
£m |
£m |
£m |
£m |
£m |
£m |
£m |
||
|
UK |
Mutual funds1 |
6,461 |
869 2 |
(379) |
490 |
(301) |
189 |
6,650 |
||
|
|
Private equity |
3,595 |
29 |
(18) |
11 |
(262) |
(251) |
3,344 |
||
|
|
Segregated funds |
14,046 |
262 |
(181) |
81 |
(363) |
(282) |
13,764 |
||
|
|
Pooled property funds |
1,584 |
177 |
- |
177 |
(127) |
50 |
1,634 |
||
|
Total UK |
|
25,686 |
1,337 |
(578) |
759 |
(1,053) |
(294) |
25,392 |
||
|
Canada |
Mutual funds1 |
1,757 |
76 3 |
(89) |
(13) |
(131) |
(144) |
1,613 |
||
|
|
Separate mandates4 |
3,440 |
83 |
(393) |
(310) |
(108) |
(418) |
3,022 |
||
|
Total Canada |
|
5,197 |
159 |
(482) |
(323) |
(239) |
(562) |
4,635 |
||
|
International |
Europe |
2,449 |
666 |
(31) |
635 |
(138) |
497 |
2,946 |
||
|
|
India5 |
2,607 |
379 |
- |
379 |
98 |
477 |
3,084 |
||
|
|
Other |
165 |
3 |
(6) |
(3) |
(35) |
(38) |
127 |
||
|
Total International |
5,221 |
1,048 |
(37) |
1,011 |
(75) |
936 |
6,157 |
|||
|
|
|
|
|
|
|
|
|
|
||
|
Total worldwide investment products excluding money market and related funds |
36,104 |
2,544 |
(1,097) |
1,447 |
(1,367) |
80 |
36,184 |
|||
|
|
UK money market funds6 |
4,139 |
1,086 |
- |
1,086 |
(385) |
701 |
4,840 |
||
|
|
India cash funds6 |
1,669 |
(652) |
- |
(652) |
557 |
(95) |
1,574 |
||
|
Total worldwide investment products |
41,912 |
2,978 |
(1,097) |
1,881 |
(1,195) |
686 |
42,598 |
|||
Total third party assets under management comprise the investment business noted above together with third party insurance contracts. New business relating to third party insurance contracts is disclosed as insurance business for reporting purposes. An analysis of total third party assets under management is shown below.
|
|
Opening AUM at 1 Apr 2010 |
Gross inflows |
Redemptions |
Net inflows |
Market and other movements |
Net movement in AUM |
Closing AUM at 30 Jun 2010 |
|
|
£m |
£m |
£m |
£m |
£m |
£m |
£m |
|
Third party investment products |
41,912 |
2,978 |
(1,097) |
1,881 |
(1,195) |
686 |
42,598 |
|
Third party insurance contracts (new business classified as insurance products) |
20,318 |
1,374 |
(305) |
1,069 |
(988) |
81 |
20,399 |
|
Total third party assets under management |
62,230 |
4,352 |
(1,402) |
2,950 |
(2,183) |
767 |
62,997 |
|
|
|
|
|
|
|
|
|
|
Standard Life Investments - total assets under management |
145,839 |
|
|
|
|
|
143,002 |
1 Included within mutual funds are cash inflows which have also been reflected in UK and Canada mutual funds new business sales.
2 In the three months to 30 June 2009 UK mutual funds gross inflows were £359m and net inflows were £129m.
3 In the three months to 30 June 2009 Canada mutual funds gross inflows were £45m and net inflows were £10m.
4 Separate mandates refers to investment funds products sold in Canada exclusively to institutional customers. These products contain no insurance risk and consist primarily of defined benefit pension plan assets for which Standard Life Investments exclusively provides portfolio advisory services.
5 International gross inflows include India where, due to the nature of the Indian investment sales market, the new business is shown as the net of sales less redemptions. India cash funds are included as money market and related funds in the table.
6 Due to the nature of the UK money market funds and India cash funds, the flows are calculated using average net client balances. Other movements are derived as the difference between these average net inflows and the movement in the opening and closing AUM.
7 Funds denominated in foreign currencies have been translated to Sterling using the closing exchange rates at 30 June 2010. Investment fund flows are translated at average exchange rates. Gains and losses arising from the translation of funds denominated in foreign currencies are included in the market and other movements column. The principal closing exchange rates used as at 30 June 2010 were £1: C$1.59 (31 March 2010: £1: C$1.54) and £1:€1.22 (31 March 2010: £1: €1.12). The principal average exchange rates for the six months to 30 June 2010 were £1: C$1.60 (2009: £1: C$1.80) and £1: €1.15 (2009: £1: €1.11).
15 months ended 30 June 2010
|
|
PVNBP |
||||
|
|
3 months to 30 Jun 2010 |
3 months to 31 Mar 2010 |
3 months to 31 Dec 20092 |
3 months to 30 Sep 2009 |
3 months to 30 Jun 2009 |
|
|
£m |
£m |
£m |
£m |
£m |
|
UK |
|
|
|
|
|
|
Individual SIPP |
878 |
1,029 |
761 |
642 |
696 |
|
Individual pensions |
152 |
114 |
64 |
100 |
196 |
|
Investment bonds |
45 |
46 |
42 |
40 |
70 |
|
Mutual funds |
383 |
480 |
337 |
288 |
266 |
|
Annuities |
82 |
127 |
95 |
95 |
110 |
|
Protection |
1 |
- |
- |
- |
1 |
|
Legacy life |
- |
- |
- |
- |
- |
|
UK retail |
1,541 |
1,796 |
1,299 |
1,165 |
1,339 |
|
Corporate pensions |
1,024 |
727 |
704 |
375 |
906 |
|
Institutional pensions |
1,012 |
830 |
875 |
470 |
525 |
|
UK corporate |
2,036 |
1,557 |
1,579 |
845 |
1,431 |
|
UK long-term savings |
3,577 |
3,353 |
2,878 |
2,010 |
2,770 |
|
|
|
|
|
|
|
|
Canada |
|
|
|
|
|
|
Group savings and retirement |
483 |
290 |
145 |
214 |
393 |
|
Individual insurance, savings and retirement |
144 |
174 |
181 |
202 |
130 |
|
Group insurance |
140 |
168 |
264 |
117 |
145 |
|
Mutual funds |
81 |
101 |
70 |
53 |
49 |
|
Canada long-term savings |
848 |
733 |
660 |
586 |
717 |
|
|
|
|
|
|
|
|
International |
|
|
|
|
|
|
Ireland |
292 |
253 |
297 |
217 |
208 |
|
Germany |
76 |
78 |
129 |
80 |
86 |
|
Hong Kong |
69 |
64 |
48 |
32 |
23 |
|
Wholly owned long-term savings |
437 |
395 |
474 |
329 |
317 |
|
India1 |
93 |
140 |
111 3 |
98 |
59 3 |
|
China1 |
29 |
26 |
38 |
22 |
23 |
|
Joint ventures long-term savings |
122 |
166 |
149 |
120 |
82 |
|
International long-term savings |
559 |
561 |
623 |
449 |
399 |
|
|
|
|
|
|
|
|
Total worldwide long-term savings |
4,984 |
4,647 |
4,161 |
3,045 |
3,886 |
1 Amounts shown reflect Standard Life's share of the joint venture company's new business.
2 The three month period to 31 December 2009 excludes the full impact of 2009 year end changes to non-economic assumptions. The effect of changes to year end non-economic assumptions was a decrease in total PVNBP of £110m in the final PVNBP results published in the 2009 Preliminary results.
3 PVNBP for India has been restated to reflect the reclassification from regular premiums to single premiums.
6.3 Exposure to investment property and financial assets
Group exposure to investment property and financial assets
The total Group external exposure to investment property and financial assets including discontinued operations has been segmented below based on the stakeholder sub-group with which the market and credit risk relating to those assets lies.
|
|
Exposure |
|
|||
|
|
Shareholder |
Policyholder (participating) |
Policyholder (unit linked) |
TPICF and NCI1 |
Total |
|
30 June 2010 |
£m |
£m |
£m |
£m |
£m |
|
Investments in associates and joint ventures |
174 |
1,578 |
991 |
153 |
2,896 |
|
Investment property |
843 |
2,295 |
3,771 |
998 |
7,907 |
|
Equity securities |
478 |
7,761 |
40,305 |
1,578 |
50,122 |
|
Debt securities |
10,274 |
30,482 |
16,362 |
1,219 |
58,337 |
|
Loans and receivables |
2,627 |
196 |
123 |
- |
2,946 |
|
Other financial assets |
1,266 |
8,294 |
1,235 |
199 |
10,994 |
|
Cash and cash equivalents |
2,034 |
592 |
3,708 |
314 |
6,648 |
|
Total |
17,696 |
51,198 |
66,495 |
4,461 |
139,850 |
1 Third party interest in consolidated funds and non-controlling interests.
|
|
Exposure |
|
|||
|
|
Shareholder |
Policyholder (participating) |
Policyholder (unit linked) |
TPICF and NCI1 |
Total |
|
30 June 2009 |
£m |
£m |
£m |
£m |
£m |
|
Investments in associates and joint ventures |
54 |
433 |
941 |
58 |
1,486 |
|
Investment property |
713 |
2,866 |
2,982 |
376 |
6,937 |
|
Equity securities |
433 |
6,457 |
31,833 |
1,077 |
39,800 |
|
Debt securities |
8,817 |
29,183 |
12,902 |
376 |
51,278 |
|
Loans and receivables |
10,644 |
228 |
155 |
- |
11,027 |
|
Other financial assets |
1,486 |
6,981 |
846 |
97 |
9,410 |
|
Cash and cash equivalents |
3,297 |
3,556 |
3,663 |
128 |
10,644 |
|
Total |
25,444 |
49,704 |
53,322 |
2,112 |
130,582 |
1 Third party interest in consolidated funds and non-controlling interests.
|
|
Exposure |
|
|||
|
|
Shareholder |
Policyholder (participating) |
Policyholder (unit linked) |
TPICF and NCI1 |
Total |
|
31 December 2009 |
£m |
£m |
£m |
£m |
£m |
|
Investments in associates and joint ventures |
47 |
1,138 |
686 |
72 |
1,943 |
|
Investment property |
776 |
2,314 |
3,279 |
742 |
7,111 |
|
Equity securities |
479 |
8,151 |
40,759 |
1,469 |
50,858 |
|
Debt securities |
9,339 |
30,208 |
15,095 |
876 |
55,518 |
|
Loans and receivables |
9,876 |
211 |
146 |
- |
10,233 |
|
Other financial assets |
1,533 |
7,657 |
668 |
112 |
9,970 |
|
Cash and cash equivalents |
4,106 |
904 |
3,727 |
190 |
8,927 |
|
Total |
26,156 |
50,583 |
64,360 |
3,461 |
144,560 |
1 Third party interest in consolidated funds and non-controlling interests.
6.3 Exposure to investment property and financial assets continued
Shareholder exposure to investment property and financial assets
The total shareholder exposure to investment property and financial assets of £17.7bn (30 June 2009: £25.4bn; 31 December 2009: £26.2bn) includes £10.8bn (30 June 2009: £8.8bn; 31 December 2009: £10.1bn) of assets held by non-segregated funds of the Group's Canadian operations. The effective exposure of shareholders to assets of the non-segregated funds in Canada was significantly lower than the nominal level of exposure presented below because changes in the value of assets are typically accompanied by offsetting changes in the value of related liabilities. The shareholder exposure is limited to the net impact on the shareholder surplus and the value of any guarantees which may be triggered.
|
|
Canada non-segregated funds exposure |
Standard Life Bank exposure |
Other shareholder exposure |
Total shareholder exposure |
||||||||
|
|
30 Jun 2010 |
30 Jun 2009 |
31 Dec 2009 |
30 Jun 2010 |
30 Jun 2009 |
31 Dec 2009 |
30 Jun 2010 |
30 Jun 2009 |
31 Dec 2009 |
30 Jun 2010 |
30 Jun 2009 |
31 Dec 2009 |
|
|
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
|
Investments in associates and joint ventures |
21 |
16 |
17 |
- |
- |
- |
153 |
38 |
30 |
174 |
54 |
47 |
|
Investment property |
843 |
713 |
776 |
- |
- |
- |
- |
- |
- |
843 |
713 |
776 |
|
Equity securities |
382 |
350 |
372 |
- |
- |
- |
96 |
83 |
107 |
478 |
433 |
479 |
|
Debt securities |
6,334 |
5,170 |
5,989 |
- |
662 |
195 |
3,940 |
2,985 |
3,155 |
10,274 |
8,817 |
9,339 |
|
Loans and receivables |
2,587 |
2,018 |
2,374 |
- |
8,599 |
7,464 |
40 |
27 |
38 |
2,627 |
10,644 |
9,876 |
|
Other financial assets |
497 |
520 |
458 |
- |
238 |
194 |
769 |
728 |
881 |
1,266 |
1,486 |
1,533 |
|
Cash and cash equivalents |
139 |
20 |
68 |
- |
1,071 |
1,491 |
1,895 |
2,206 |
2,547 |
2,034 |
3,297 |
4,106 |
|
Total |
10,803 |
8,807 |
10,054 |
- |
10,570 |
9,344 |
6,893 |
6,067 |
6,758 |
17,696 |
25,444 |
26,156 |
Shareholder exposure to debt securities excluding Canada non-segregated funds consists primarily of debt securities backing annuity liabilities, subordinated debt liabilities and the stock lending programme. The increase in exposure can be attributed to new annuity business written in the period as well as a change in the shareholder asset mix.
Standard Life Bank was sold on 1 January 2010 and therefore the Group has no exposure to Standard Life Bank assets after that date.
Group exposure to debt securities
The Group's exposure to debt securities has been further analysed in the tables below. The high quality of the debt security portfolio has been maintained, with 55% of debt securities rated AAA (30 June 2009: 61%; 31 December 2009: 57%) and 95% (30 June 2009: 96%; 31 December 2009: 95%) being rated as investment grade.
|
|
Exposure |
|
|||
|
|
Shareholder |
Policyholder (participating) |
Policyholder (unit linked) |
TPICF and NCI1 |
Total |
|
30 June 2010 |
£m |
£m |
£m |
£m |
£m |
|
Government |
4,438 |
18,978 |
7,710 |
634 |
31,760 |
|
Corporate - financial institutions |
2,844 |
7,792 |
5,251 |
301 |
16,188 |
|
Corporate - other |
2,753 |
3,400 |
3,047 |
274 |
9,474 |
|
Other |
239 |
312 |
354 |
10 |
915 |
|
Total |
10,274 |
30,482 |
16,362 |
1,219 |
58,337 |
1 Third party interest in consolidated funds and non-controlling interests.
|
|
Exposure |
|
|||
|
|
Shareholder |
Policyholder (participating) |
Policyholder (unit linked) |
TPICF and NCI1 |
Total |
|
30 June 2009 |
£m |
£m |
£m |
£m |
£m |
|
Government |
3,717 |
18,845 |
6,604 |
225 |
29,391 |
|
Corporate - financial institutions |
2,735 |
7,253 |
3,881 |
114 |
13,983 |
|
Corporate - other |
2,110 |
2,571 |
1,975 |
30 |
6,686 |
|
Other |
255 |
514 |
442 |
7 |
1,218 |
|
Total |
8,817 |
29,183 |
12,902 |
376 |
51,278 |
1 Third party interest in consolidated funds and non-controlling interests.
|
|
Exposure |
|
|||
|
|
Shareholder |
Policyholder (participating) |
Policyholder (unit linked) |
TPICF and NCI1 |
Total |
|
31 December 2009 |
£m |
£m |
£m |
£m |
£m |
|
Government |
4,231 |
18,679 |
7,285 |
478 |
30,673 |
|
Corporate - financial institutions |
2,484 |
7,929 |
4,824 |
220 |
15,457 |
|
Corporate - other |
2,374 |
3,228 |
2,552 |
173 |
8,327 |
|
Other |
250 |
372 |
434 |
5 |
1,061 |
|
Total |
9,339 |
30,208 |
15,095 |
876 |
55,518 |
1 Third party interest in consolidated funds and non-controlling interests.
Shareholder exposure to debt securities
Further details of the shareholder exposure to debt securities, including credit ratings, are presented below.
|
|
Credit rating |
|
||||
|
|
AAA |
AA |
A |
BBB |
Below BBB or not rated |
Total |
|
30 June 2010 |
£m |
£m |
£m |
£m |
£m |
£m |
|
Government |
1,578 |
1,518 |
1,342 |
- |
- |
4,438 |
|
Corporate - financial institutions |
761 |
841 |
759 |
62 |
421 |
2,844 |
|
Corporate - other |
300 |
232 |
1,632 |
506 |
83 |
2,753 |
|
Other |
158 |
- |
1 |
7 |
73 |
239 |
|
Total |
2,797 |
2,591 |
3,734 |
575 |
577 |
10,274 |
|
|
Credit rating |
|
||||
|
|
AAA |
AA |
A |
BBB |
Below BBB or not rated |
Total |
|
30 June 2009 |
£m |
£m |
£m |
£m |
£m |
£m |
|
Government |
1,545 |
1,149 |
1,023 |
- |
- |
3,717 |
|
Corporate - financial institutions |
934 |
665 |
971 |
96 |
69 |
2,735 |
|
Corporate - other |
315 |
150 |
1,113 |
378 |
154 |
2,110 |
|
Other |
242 |
- |
4 |
9 |
- |
255 |
|
Total |
3,036 |
1,964 |
3,111 |
483 |
223 |
8,817 |
6.3 Exposure to investment property and financial assets continued
Shareholder exposure to debt securities continued
|
|
Credit rating |
|
||||
|
|
AAA |
AA |
A |
BBB |
Below BBB or not rated |
Total |
|
31 December 2009 |
£m |
£m |
£m |
£m |
£m |
£m |
|
Government |
1,596 |
1,419 |
1,216 |
- |
- |
4,231 |
|
Corporate - financial institutions |
787 |
532 |
679 |
70 |
416 |
2,484 |
|
Corporate - other |
236 |
200 |
1,371 |
434 |
133 |
2,374 |
|
Other |
155 |
- |
11 |
11 |
73 |
250 |
|
Total |
2,774 |
2,151 |
3,277 |
515 |
622 |
9,339 |
Debt securities classified as corporate include securities issued by corporate entities which carry government guarantees. Debt securities classified as other consist primarily of securities issued by supranational institutions.
Shareholder exposure to loans and receivables
Shareholders are directly exposed to loans and receivables of £2.6bn (30 June 2009: £10.6bn; 31 December 2009: £9.9bn) which, in 2010, primarily comprise the Canadian non-segregated funds commercial mortgage book. This mortgage book is deemed to be of very high quality. In 2009, loans and receivables also included Standard Life Bank's retail mortgage book.
|
|
30 Jun 2010 |
30 Jun 2009 |
31 Dec 2009 |
|
|
£m |
£m |
£m |
|
Canada non-segregated funds commercial mortgage book |
2,587 |
2,018 |
2,374 |
|
Standard Life Bank retail mortgage book |
- |
8,599 |
7,464 |
|
Other |
40 |
27 |
38 |
|
Total |
2,627 |
10,644 |
9,876 |
The Canadian mortgage book has an average loan to value of 46% (30 June 2009: 44%; 31 December 2009: 46%).
6.4 Fair value hierarchy of financial instruments
To provide further information on the approach used to determine the fair value of certain financial assets and derivative financial liabilities measured as at fair value on the Group's IFRS statement of financial position, the fair value of these financial instruments has been categorised below to reflect the following fair value hierarchy:
Level 1: Fair values measured using quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2: Fair values measured using inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)
Level 3: Fair values measured using inputs that are not based on observable market data (unobservable inputs)
The amendment to IFRS 7 Financial Instruments: Disclosures which requires the presentation of a fair value hierarchy analysis and related disclosures was issued in March 2009. The implementation of these requirements has resulted in some reclassifications compared to the indicative fair value hierarchy information presented in the Interim Results 2009. The most significant reclassifications resulted in some government bonds being classified as level 2 rather than level 1 and some corporate bonds being classified as level 3 rather than level 2 on the basis that their valuation is based on a single broker indicative quote. The comparative figures for 30 June 2009 in the following tables have been restated to reflect these revised classifications.
Total
|
|
Fair value hierarchy |
|
|
|
|||||||||
|
|
Level 1 |
Level 2 |
Level 3 |
Total |
|||||||||
|
|
30 Jun 2010 |
Restated 30 Jun 2009 |
31 Dec 2009 |
30 Jun 2010 |
Restated 30 Jun 2009 |
31 Dec 2009 |
30 Jun 2010 |
Restated 30 Jun 2009 |
31 Dec 2009 |
30 Jun 2010 |
30 Jun 2009 |
31 Dec 2009 |
|
|
|
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
|
|
Equity securities |
48,963 |
38,611 |
49,621 |
28 |
16 |
17 |
1,131 |
1,173 |
1,220 |
50,122 |
39,800 |
50,858 |
|
|
Debt securities |
26,911 |
25,856 |
26,158 |
29,943 |
24,017 |
27,845 |
1,483 |
1,405 |
1,515 |
58,337 |
51,278 |
55,518 |
|
|
Derivative financial assets |
604 |
468 |
398 |
1,094 |
1,006 |
970 |
- |
- |
- |
1,698 |
1,474 |
1,368 |
|
|
Derivative financial liabilities |
(68) |
(23) |
(81) |
(440) |
(964) |
(818) |
- |
- |
- |
(508) |
(987) |
(899) |
|
|
Total |
76,410 |
64,912 |
76,096 |
30,625 |
24,075 |
28,014 |
2,614 |
2,578 |
2,735 |
109,649 |
91,565 |
106,845 |
|
Level 1 financial instruments principally include equity securities listed on a recognised exchange, certain government and supranational institution bonds and exchange traded futures and options.
Level 2 financial instruments principally include certain government bonds, listed or publicly quoted corporate bonds, commercial paper, certificates of deposit and derivative instruments which are not exchange traded. Corporate bonds have generally been classified as level 2 as the composite price provided by external pricing providers may include, as an input, quotes provided by some banks that are not based on actual transaction prices.
Level 3 financial instruments principally include unlisted equity securities, being predominantly interests in private equity funds, listed or publicly quoted corporate bonds for which prices are not available from external pricing providers or where such prices are considered to be stale (including some asset backed securities) or are based on single broker indicative quotes and unquoted bonds where credit spreads, being a significant input to the valuation technique, are obtained from a broker or estimated internally.
Shareholder exposure
|
|
Fair value hierarchy |
|
|
|
||||||||||
|
|
Level 1 |
Level 2 |
Level 3 |
Total |
||||||||||
|
|
30 Jun 2010 |
Restated 30 Jun 2009 |
31 Dec 2009 |
30 Jun 2010 |
Restated 30 Jun 2009 |
31 Dec 2009 |
30 Jun 2010 |
Restated 30 Jun 2009 |
31 Dec 2009 |
30 Jun 2010 |
30 Jun 2009 |
31 Dec 2009 |
||
|
|
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
||
|
Equity securities |
469 |
423 |
469 |
- |
- |
- |
9 |
10 |
10 |
478 |
433 |
479 |
||
|
Debt securities |
891 |
854 |
747 |
8,531 |
7,408 |
7,843 |
852 |
555 |
749 |
10,274 |
8,817 |
9,339 |
||
|
Derivative financial assets |
- |
- |
- |
336 |
439 |
455 |
- |
- |
- |
336 |
439 |
455 |
||
|
Derivative financial liabilities |
- |
- |
- |
(29) |
(180) |
(151) |
- |
- |
- |
(29) |
(180) |
(151) |
||
|
Total |
1,360 |
1,277 |
1,216 |
8,838 |
7,667 |
8,147 |
861 |
565 |
759 |
11,059 |
9,509 |
10,122 |
||
6.4 Fair value hierarchy of financial instruments continued
Policyholder (participating) exposure
|
|
Fair value hierarchy |
|
|
|
||||||||
|
|
Level 1 |
Level 2 |
Level 3 |
Total |
||||||||
|
|
30 June 2010 |
Restated 30 Jun 2009 |
31 Dec 2009 |
30 Jun 2010 |
Restated 30 Jun 2009 |
31 Dec 2009 |
30 Jun 2010 |
Restated 30 Jun 2009 |
31 Dec 2009 |
30 Jun 2010 |
30 Jun 2009 |
31 Dec 2009 |
|
|
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
|
Equity securities |
7,106 |
5,853 |
7,527 |
- |
- |
- |
655 |
604 |
624 |
7,761 |
6,457 |
8,151 |
|
Debt securities |
19,314 |
19,340 |
19,029 |
10,730 |
9,324 |
10,729 |
438 |
519 |
450 |
30,482 |
29,183 |
30,208 |
|
Derivative financial assets |
506 |
453 |
391 |
461 |
320 |
327 |
- |
- |
- |
967 |
773 |
718 |
|
Derivative financial liabilities |
(18) |
(19) |
(16) |
(57) |
(544) |
(446) |
- |
- |
- |
(75) |
(563) |
(462) |
|
Total |
26,908 |
25,627 |
26,931 |
11,134 |
9,100 |
10,610 |
1,093 |
1,123 |
1,074 |
39,135 |
35,850 |
38,615 |
Policyholder (unit linked) exposure
|
|
Fair value hierarchy |
|
|
|
||||||||
|
|
Level 1 |
Level 2 |
Level 3 |
Total |
||||||||
|
|
30 Jun 2010 |
Restated 30 Jun 2009 |
31 Dec 2009 |
30 Jun 2010 |
Restated 30 Jun 2009 |
31 Dec 2009 |
30 Jun 2010 |
Restated 30 Jun 2009 |
31 Dec 2009 |
30 Jun 2010 |
30 Jun 2009 |
31 Dec 2009 |
|
|
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
|
Equity securities |
40,177 |
31,749 |
40,679 |
28 |
16 |
17 |
100 |
68 |
63 |
40,305 |
31,833 |
40,759 |
|
Debt securities |
6,076 |
5,433 |
5,899 |
10,102 |
7,162 |
8,893 |
184 |
307 |
303 |
16,362 |
12,902 |
15,095 |
|
Derivative financial assets |
79 |
13 |
6 |
252 |
214 |
159 |
- |
- |
- |
331 |
227 |
165 |
|
Derivative financial liabilities |
(41) |
(4) |
(54) |
(304) |
(217) |
(193) |
- |
- |
- |
(345) |
(221) |
(247) |
|
Total |
46,291 |
37,191 |
46,530 |
10,078 |
7,175 |
8,876 |
284 |
375 |
366 |
56,653 |
44,741 |
55,772 |
Third party interest in consolidated funds and non-controlling interests exposure
|
|
Fair value hierarchy |
|
|
|
||||||||
|
|
Level 1 |
Level 2 |
Level 3 |
Total |
||||||||
|
|
30 Jun 2010 |
Restated 30 Jun 2009 |
31 Dec 2009 |
30 June 2010 |
Restated 30 Jun 2009 |
31 Dec 2009 |
30 Jun 2010 |
Restated 30 Jun 2009 |
31 Dec 2009 |
30 Jun 2010 |
30 Jun 2009 |
31 Dec 2009 |
|
|
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
|
Equity securities |
1,211 |
586 |
946 |
- |
- |
- |
367 |
491 |
523 |
1,578 |
1,077 |
1,469 |
|
Debt securities |
630 |
229 |
483 |
580 |
123 |
380 |
9 |
24 |
13 |
1,219 |
376 |
876 |
|
Derivative financial assets |
19 |
2 |
1 |
45 |
33 |
29 |
- |
- |
- |
64 |
35 |
30 |
|
Derivative financial liabilities |
(9) |
- |
(11) |
(50) |
(23) |
(28) |
- |
- |
- |
(59) |
(23) |
(39) |
|
Total |
1,851 |
817 |
1,419 |
575 |
133 |
381 |
376 |
515 |
536 |
2,802 |
1,465 |
2,336 |
7 Glossary
Acquisition costs
Expenses related to the procurement and processing of new business written including a share of overheads.
Annuity
A periodic payment made for an agreed period of time (usually up to the death of the recipient) in return for a cash sum. The cash sum can be paid as one amount or as a series of premiums. If the annuity commences immediately after the payment of the sum, it is termed an immediate annuity. If it commences at some future date, it is termed a deferred annuity.
Assets under administration (AUA)
A measure of the total assets that the Group administers on behalf of customers and institutional clients, it includes those assets for which the Group provides investment management services, as well as those assets that the Group administers where the customer has made a choice to select an external third party investment manager. Assets under administration reflect the value of the IFRS gross assets of the Group adjusted, where appropriate, for consolidation adjustments, inter-company assets and intangible assets. In addition, the definition includes third party assets administered by the Group which are not included in the consolidated statement of financial position.
Assumptions
Variables applied to data used to project expected outcomes.
Back book management
We choose to analyse our EEV operating profit before tax in the three components which reflect the focus of our business effort - core, efficiency and back book management. Back book management includes all non-expense related operating variances and assumption changes for covered business plus those development costs directly related to back book management initiatives and, for non-covered business, specific costs attributed to back book management.
Board
The board of Directors of the Company.
Capital resources (CR)
Capital resources include the assets in excess of liabilities, valued on a regulatory basis, and certain other components of capital.
Capital resources requirement (CRR)
A company must hold capital resources in excess of the capital resources requirement. The CRR represents the total of the individual capital resources requirements (ICRR) of each regulated company in the Group.
CFO Forum
A high-level discussion group formed and attended by the Chief Financial Officers of major European listed, and some non-listed, insurance companies.
Company
Standard Life plc.
Constant currency
Eliminates the effects of exchange rate fluctuations and is used when calculating financial performance on a range of measures.
Core
We choose to analyse our EEV operating profit before tax in the three components which reflect the focus of our business effort - core, efficiency and back book management. Core includes new business contribution, expected return and development costs for covered business excluding those development costs directly related to back book management initiatives and, for non-covered business, IFRS operating profit excluding specific costs attributable to back book management.
Covered business
The business covered by the EEV methodology. This should include any contracts that are regarded by local insurance supervisors as long-term or life insurance business and may cover other long-term life insurance, short-term life insurance such as group risk business and long-term accident and health business. Where short-term healthcare is regarded as part of or ancillary to a company's long-term life insurance business, then it may be regarded as long-term business. For covered business within the Standard Life Group please refer to the EEV methodology within the EEV supplementary information
Deferred acquisition costs (DAC)
The method of accounting whereby acquisition costs on long-term business are deferred in the statement of financial position as an asset and amortised over the life of those contracts. This leads to a smoothed recognition of up front expenses instead of the full cost in the year of sale.
Deferred income reserve (DIR)
The method of accounting whereby front end fees that relate to services to be provided in future periods are deferred in the statement of financial position as a liability and amortised over the life of those contracts. This leads to a smoothed recognition of up front income instead of the full income in the year of sale.
Development costs
Costs that are considered to be non-recurring and are reported separately from other expenses in the EEV movement analysis.
Director
A director of the Company.
Discounting
The reduction to present value at a given date of a future cash transaction at an assumed rate, using a discount factor reflecting the time value of money. The choice of a discount rate will usually greatly influence the value of insurance provisions, and may give indications on the conservatism of provisioning methods.
Dividend cover
This is a measure of how easily a company can pay its dividend from profit. It is calculated as IFRS operating profit after tax and minority interest divided by the total dividend for that financial period.
Earnings before interest and tax (EBIT)
EBIT is defined as earnings before interest, taxation, foreign exchange gains and losses, profit on partial disposal of investments in associates, divergence on financial guarantee costs, movement on contract for differences and restructuring costs. This KPI measures directly the underlying operating profitability.
EBIT margin
This is an industry measure of performance for investment management companies. It is calculated as EBIT divided by total revenue.
Earnings per share (EPS)
EPS is a commonly used financial metric which can be used to measure the profitability and strength of a company over time. EPS is calculated by dividing profit by the number of ordinary shares. Basic EPS uses the weighted average number of ordinary shares outstanding during the year. Diluted EPS adjusts the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares, for example share awards and share options awarded to employees.
Economic assumptions
Assumptions in relation to future interest rates, investment returns, inflation and tax. These assumptions and variances in relation to these assumptions are treated as non-operating profits/(losses) under EEV.
Efficiency
We choose to analyse our EEV operating profit before tax in the three components which reflect the focus of our business effort - core, efficiency and back book management. Efficiency includes covered business maintenance expense variances and assumption changes.
European Embedded Value (EEV)
The value to equity shareholders of the net assets plus the expected future profits on in-force business from a life assurance and pensions business. Prepared in accordance with the EEV Principles and Guidance issued in May 2004 by the CFO Forum and the Additional Guidance issued in October 2005. EEV reports the value of business in-force based on a set of best estimate assumptions, allowing for the impact of uncertainty inherent in future assumptions, the costs of holding required capital, the value of free surplus and TVOG.
EEV operating profit
Covered business EEV operating profit represents profit generated from new business sales and the in-force book of business, based on closing non-economic and opening economic assumptions. Covered business is defined above.
Non-covered business EEV operating profit generally represents IFRS operating profit. Non-covered business is defined below.
EEV operating profit capital and cash generation
This is a measure of the underlying shareholder capital and cash flow of the Group.
Covered business EEV operating capital and cash generation represents the EEV operating profit net worth (free surplus and required capital) on an after-tax basis.
Non-covered business EEV operating capital and cash generation represents EEV operating profit after tax (as defined above).
Expected return on EEV
Anticipated results based on applying opening assumptions to the opening EEV.
Experience variances
Current period differences between the actual experience incurred over the period and the assumptions used in the calculation of the embedded value, excluding new business non-economic experience variances which are captured in new business contribution.
Financial options and guarantees
Terms relating to covered business conferring potentially valuable guarantees underlying, or options to change, the level and nature of policyholder benefits and exercisable at the discretion of the policyholder, whose potential value is impacted by the behaviour of financial variables.
Free surplus
The amount of capital and any surplus allocated to, but not required to support, the in-force business covered by the EEV.
Group capital surplus
This is a regulatory measure of our financial strength and compares the Group's capital resources to its capital resource requirements in accordance with the Insurance Groups Directive.
Group, Standard Life Group or Standard Life
Prior to demutualisation on 10 July 2006, SLAC and its subsidiaries and, from demutualisation on 10 July 2006, the Company and its subsidiaries.
Heritage With Profits Fund (HWPF)
The Heritage With Profits Fund contains all existing business - both with profits and non profit - written before demutualisation in the UK, Irish or German branches, with the exception of the classes of business which the Scheme of Demutualisation allocated to the Proprietary Business Fund. This HWPF also contains increments to existing business.
Individual Capital Assessment (ICA)
The process by which the Financial Services Authority (FSA) requires insurance companies to make an assessment of the regulated company's own capital requirements, which is then reviewed and agreed by the FSA.
In-force
Long-term business which has been written before the period end and which has not terminated before the period end.
Interest margin
Net interest income for the year as a percentage of average total assets during the year disclosed in basis points (1/100th of 1%). This is a measure of how much margin the Group is making on its banking assets and measures the driver of income generation for this business.
Internal rate of return (IRR)
A measure of rate of return on an investment and so an indicator of capital efficiency. The IRR is equivalent to the discount rate at which the present value of the after-tax cash flows expected to be earned over the lifetime of new business written is equal to the capital invested to support the writing of the business.
International Financial Reporting Standards (IFRS)
International Financial Reporting Standards are accounting standards issued by the International Accounting Standards Board (IASB). The Group's consolidated financial statements are required to be prepared in accordance with IFRS.
IFRS operating profit
IFRS operating profit is calculated by adjusting profit attributable to equity holders before tax for the impact of short-term economic changes to asset and liability values. The Directors believe that by removing this volatility from operating profit, they are presenting a more meaningful indication of the long-term performance of the Group.
IFRS tangible equity per share
Total IFRS equity, less non-controlling interests and intangible assets, divided by the diluted number of issued shares at the end of the period.
IFRS underlying profit
Underlying profit is calculated by adjusting profit attributable to equity holders before tax for items such as volatility arising from accounting mismatches, impairment of intangibles and certain restructuring expenses.
Key performance indicators (KPI)
This is a measure by reference to which the development, performance or position of the business can be measured effectively.
Maintenance expenses
Expenses related to the servicing of the in-force book of business (including investment and termination expenses and a share of overheads).
Market Consistent Embedded Value (MCEV)
The European Insurance CFO Forum Market Consistent Embedded Value Principles©1 (MCEV Principles) were issued by the CFO Forum on 4 June 2008 to replace the current EEV Principles and Additional Guidance and were designed to improve the transparency and comparability of embedded value reporting. On 19 December 2008, the CFO Forum announced that it would undertake further work to seek to improve the consistency of certain MCEV Principles, particularly in light of volatile economic markets.
In light of these developments, which may result in significant amendments to MCEV, the CFO Forum announced on 22 May 2009 that it believed that it was sensible to defer the mandatory MCEV reporting for all member firms until 2011. A further update on the work of the CFO Forum will be provided later this year.
1 © Stichting CFO Forum Foundation 2008
Mutual fund
A collective investment vehicle enabling investors to pool their money, which is then invested in a diverse portfolio of stocks or bonds, enabling investors to achieve a more diversified portfolio than they otherwise might have done by making an individual investment.
Net flows
Life and pensions net flows represent gross inflows less redemptions. Gross inflows are premiums and deposits recognised in the period on a regulatory basis (excluding any switches between funds). Redemptions are claims and annuity payments (excluding any reinsurance transactions and switches between funds).
Net worth
The market value of equity holders' funds and the shareholders' interest in the surplus held in the non profit component of the long-term business funds, determined on a statutory solvency basis and adjusted to add back any non-admissible assets per regulatory returns.
New business contribution (NBC)
The expected present value of all future cash flows attributable to the equity holder from new business, as included within EEV operating profit.
New business strain (NBS)
Costs involved in acquiring new business (such as commission payments to intermediaries, expenses, reserves) affecting the insurance company's financial position at that point and where all of the income from that new business (including premiums and investment income) has not yet been received and will not be received until a point in the future. To begin with, therefore, a strain may be created where cash outflows exceed inflows.
NBS margin
New business strain as a percentage of PVNBP sales (see PVNBP below).
Non-covered business
Mainly includes third party global investment management, banking, healthcare and other businesses not associated with the life assurance and pensions business. Non-covered business excludes the global investment management look through profits and the return on mutual funds which are recognised in covered business. Non-covered business is excluded from the EEV methodology and is included within the Group EEV on an IFRS basis.
Non-economic assumptions
Assumptions in relation to future levels of mortality, morbidity, persistency and expenses. These assumptions, and variances in relation to these assumptions, are included as operating profits/(losses) under EEV.
Non profit policy
A policy, including a unit linked policy, which is not a with profits policy.
Personal pension plan
An individual pension arrangement with particular tax advantages whereby individuals who are self-employed or those who are not members of employer-sponsored pension scheme arrangements can make provision for retirement or provide benefits for their dependents in a tax efficient manner.
Present value of in-force business (PVIF)
The present value of the projected future distributable profits after tax attributable to equity holders from the covered business in-force at the valuation date, adjusted where appropriate, to take account of TVOG.
Present value of new business premiums (PVNBP)
The industry measure of insurance new business sales under the EEV methodology. It is calculated as 100% of single premiums plus the expected present value of new regular premiums.
Proprietary Business Fund
The Proprietary Business Fund in SLAL contains, among other things, certain classes of business - pension contribution insurance policies, income protection plan policies and a number of SIPP policies written before demutualisation, as well as most new insurance business written after demutualisation in the UK, Ireland and Germany.
PVNBP margin
PVNBP margin is NBC expressed as a percentage of PVNBP. This measures whether new business written is adding value or eroding value.
Recourse cash flow (RCF)
Certain cash flows arising in the HWPF on specified blocks of UK and Irish business, which are transferred out of the fund on a monthly basis and accrue to the ultimate benefit of equity holders, as determined by the Scheme of Demutualisation.
Regular premium
A regular premium contract (as opposed to a single premium contract), is one where the policyholder agrees at inception to make regular payments throughout the term of the contract.
Required capital
The amount of assets, over and above the value placed on liabilities in respect of covered business, whose distribution to equity holders is restricted.
Return on EEV (RoEV)
The annualised post-tax operating profit on an EEV basis expressed as a percentage of the opening embedded value, adjusted for dividends paid to equity holders.
Return on equity (RoE)
Calculated as IFRS operating profit after tax divided by opening net assets.
Scheme of Demutualisation (the Scheme)
The scheme pursuant to Part VII of, and Schedule 12 to, the Financial Services and Markets Act 2000, under which substantially all of the long-term business of SLAC was transferred to Standard Life Assurance Limited on 10 July 2006.
SICAV
A SICAV (société d'investissement à capital variable) is an open-ended collective investment scheme common in Western Europe. SICAVs can be cross-border marketed in the EU under the UCITS directive.
Single premium
A single premium contract (as opposed to a regular premium contract (see above)), involves the payment of one premium at inception with no obligation for the policyholder to make subsequent additional payments.
SIPP
A self invested personal pension which provides the policyholder with greater choice and flexibility as to the range of investments made, how those investments are managed, the administration of those assets and how retirement benefits are taken.
SLAC
The Standard Life Assurance Company (renamed The Standard Life Assurance Company 2006 on 10 July 2006).
Third party investment management net new business
Represents investment management third party investment and insurance gross inflows less redemptions.
Time value of options and guarantees (TVOG)
Represents the potential additional cost to equity holders where a financial option or guarantee exists which affects policyholder benefits and is exercisable at the option of the policyholder.
Total shareholder return
This is a measure of the overall return to shareholders and includes the movement in the share price and any dividends paid and reinvested.
Underwriting profit
The earned premium remaining after losses have been paid and administrative expenses have been deducted. It does not include any investment income earned on held premiums.
Undiscounted payback period
A measure of capital efficiency that measures the time at which the value of expected undiscounted cash flows (after tax) is sufficient to recover the capital invested to support the writing of new business.
Unit linked policy
A policy where the benefits are determined by reference to the investment performance of a specified pool of assets referred to as the unit linked fund.
With profits policy
A policy where, in addition to guaranteed benefits specified in the policy, additional bonuses may be payable from relevant surplus. The declaration of such bonuses (usually annually) reflects, amongst other things, the overall investment performance of the fund of which the policy forms part. Also known as a 'participating' policy.
Wrap platform
An investment platform which is essentially a trading platform enabling investment funds, pensions, direct equity holdings and some life assurance contracts to be held in the same administrative account rather than as separate holdings.
8 Shareholder information
Registered office
Company registration number: SC286832
Standard Life House
30 Lothian Road
Edinburgh
EH1 2DH
Scotland
|
Phone: |
0845 60 60 100 or +44 (0)131 246 1843 For shareholder services call 0845 113 0045 |
|
Registrar: |
Capita Registrars Limited |
|
Auditors: |
PricewaterhouseCoopers LLP |
|
Solicitors: |
Slaughter and May |
|
Brokers: |
UBS |
|
|
Merrill Lynch |
Shareholder services
We offer a wide range of shareholder services, some details of which are set out below. If you need any further information about any of these services, please:
· Contact our registrar, Capita on 0845 113 0045 if calling from the UK. International numbers for Capita can be found on the last page of this report
· Visit our shareportal at www.standardlifeshareportal.com
Sign up for ecommunications
You can choose to receive your shareholder communications electronically - registering is easy and free. Just go to www.standardlifeshareportal.comto find out how. Signing up means:
· You'll receive an email when documents like the Annual Report and Accounts, Summary Financial Report and AGM guide are available on our website. You can then read these online in an easy to use, searchable format instead of receiving paper copies in the post
· Voting instructions for the Annual General Meeting will be sent to you electronically
· You can download your dividend tax vouchers when you need them
· You can view your Standard Life Share Account statement online
Any information you receive electronically will be the same as the paper version - but you'll help us save money, and conserve natural resources.
Preventing unsolicited mail
By law, Standard Life has to make certain details from its share register publicly available. Because of this, it is possible that some registered shareholders could receive unsolicited mail. You could also be targeted by fraudulent 'investment specialists' using high-pressure cold-calling sales techniques - these are sometimes called 'boiler room scams'. You can find more information about this at the Financial Services Authority website www.moneymadeclear.fsa.gov.uk
If you are a certificated shareholder, your name and address may appear on a public register. Using a nominee company to hold your shares can help protect your privacy. You can transfer your shares into the Company-sponsored nominee - the Standard Life Share Account - by contacting Capita, or you could get in touch with your broker to find out about their nominee services.
If you want to limit the amount of unsolicited mail you receive generally, please contact:
The Mailing Preference Service (MPS), DMA House, 70 Margaret Street, London W1W 8SS - or register online at www.mpsonline.org.uk
Analysis of registered shareholdings as at 30 June 2010
|
Range of shares |
Number of holders |
% of total holders |
Number of shares |
% of total shares |
|
1-1,000 |
66,625 |
54.77% |
31,873,397 |
1.41% |
|
1,001-5,000 |
48,495 |
39.86% |
101,724,833 |
4.50% |
|
5,001-10,000 |
3,720 |
3.06% |
25,581,502 |
1.13% |
|
10,001-100,000 |
2,310 |
1.90% |
50,547,559 |
2.24% |
|
*100,001+ |
503 |
0.41% |
2,050,162,137 |
90.72% |
|
Totals |
121,653 |
100.00% |
2,259,889,428 |
100.00% |
* These figures include the Company-sponsored nominee - the Standard Life Share Account - which had 1,317,973 participants holding 1,062,985,669 shares, and the Unclaimed Asset Trust, which had 78,103 participants holding 27,860,090 shares.
|
Financial calendar for 2010 |
|
|
Ex-dividend date for 2010 interim dividend |
18 August 2010 |
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Record date for 2010 interim dividend |
20 August 2010 |
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Scrip reference price set for 2010 interim dividend |
25 August 2010 |
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2010 Q3 trading results and interim management statement |
3 November 2010 |
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Interim dividend payment date |
19 November 2010 |
|
2010 Preliminary results |
8 March 2011 |
Directors
* Executive Director
|
Gerry Grimstone (Chairman) David Nish* (Chief Executive) Kent Atkinson Lord Blackwell Colin Buchan |
David Grigson Jackie Hunt* Baroness McDonagh |
Contact details
We want to make sure you have answers to all your questions.
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|
Web |
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Phone |
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UK and Ireland |
www.standardlifeshareportal.com |
questions@standardlifeshares.com
Address: Standard Life Shareholder Services 34 Beckenham Road Beckenham, Kent BR3 4TU |
0845 113 0045 +44 (0)20 3367 8224 (01) 431 9829 |
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Germany and Austria |
www.standardlifeshareportal.com/de |
fragen@standardlifeshares.de
Address: Standard Life Aktionärsservice Posta 20 01 43 60605 Frankfurt am Main Germany |
+49 (0)6196 7693130 |
|
Canada |
www.standardlifeshareportal.com (English)
www.standardlifeshareportal.com/fr (French Canadian) |
questions@standardlifeshares.ca
Address: Standard Life Shareholder Services PO Box 4636, Station A Toronto M5W 7A4 |
1-866-982-9939 |
This information is provided by RNS
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