9 Months Results 2000-Part 3
CGNU PLC
8 November 2000
UNAUDITED RESULTS - 9 MONTHS ENDED 30 SEPTEMBER 2000
PART 3
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Page 16
Summarised consolidated profit and loss account - modified statutory basis
For the 9 months to 30 September 2000
Restated Restated
9 9 9 full
months months months year
2000 2000 1999 1999
Em £m £m £m
Premium income after reinsurance
and investment sales
Ongoing business
17,695 Life premiums 10,794 9,918 13,470
1,816 Investment sales 1,108 1,008 1,347
931 Health premiums 568 237 402
------ ------ ------
20,442 12,470 11,163 15,219
11,310 General insurance premiums 6,899 6,389 8,373
------ ------ ------
31,752 Total ongoing business 19,369 17,552 23,592
Business to be discontinued
General insurance premiums
3,600 - United States 2,196 2,003 2,621
315 - London Market 192 182 233
------ ------ ------
35,667 Total 21,757 19,737 26,446
======= ======= ======
Operating profit
1,487 Modified statutory life profit 907 844 1,172
54 Health 33 20 24
67 Fund management 41 46 66
702 General insurance 428 375 459
(34) Non-insurance operations (21) (14) (30)
5 Associated Undertakings 3 11 10
(223) Corporate costs (136) (99) (162)
(430) Unallocated interest charges (262) (169) (240)
------ ------ ------
1,628 993 1,014 1,299
(156) Wealth management (95) - -
------ ------ ------
Operating profit - ongoing business
before tax, amortisation of
goodwill, amortisation of acquired
additional value of in-force long-
1,472 term business and exceptional items 898 1,014 1,299
Businesses to be discontinued
223 United States general insurance 136 139 176
(7) London Market (4) 13 25
------ ------ ------
1,688 1,030 1,166 1,500
(51) Amortisation of goodwill (31) (25) (34)
Amortisation of acquired additional
(33) value of in-force long-term business (20) (3) (22)
(332) Exceptional items (203) (100) (163)
------ ------ ------
1,272 Operating profit before tax 776 1,038 1,281
Short-term fluctuation in investment
359 returns 219 (680) 250
(20) Change in the equalisation provision (12) (47) (55)
Net loss arising on the sale
(44) of subsidiary undertakings (27) (9) (8)
Provision for loss on sale for
businesses to be sold
(2,418) - United States general insurance (1,475) - -
Provision for withdrawal from London
(734) Market operations (448) - -
(97) Merger transaction costs (59) - -
------ ------ ------
(Loss)/profit on ordinary activities
(1,682) before tax (1,026) 302 1,468
(372) Tax on profit on ordinary activities (227) (139) (382)
------ ------ ------
(Loss)/profit on ordinary activities
(2,054) after tax (1,253) 163 1,086
(71) Minority interests (43) (43) (66)
------ ------ ------
(Loss)/profit for the financial
(2,125) period (1,296) 120 1,020
(21) Preference dividends (13) (13) (17)
------ ------ ------
(Loss)/profit for the financial
period attributable to equity
(2,146) shareholders (1,309) 107 1,003
(525) Ordinary dividends (320) (278) (773)
------ ------ ------
Retained(loss)/profit transfer to
(2,671) reserves (1,629) (171) 230
====== ====== ======
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Page 17
Earnings per share-modified statutory basis
For the 9 months to 30 September 2000
Restated Restated
9 months 9 months full year
2000 1999 1999
Operating profit before amortisation of
goodwill, amortisation of acquired
additional value of in-force long term
business and exceptional items, after
taxation, attributable to equity
shareholders in respect of ongoing
business 26.6p 29.6p 39.2p
(Loss)/profit attributable to equity
shareholders (58.3)p 4.8p 44.8p
(Loss)/profit attributable to equity
shareholders - diluted (58.2)p 4.8p 44.7p
Consolidated statement of total recognised gains and losses
For the 9 months to 30 September 2000
Restated Restated
9 months 9 months full year
2000 1999 1999
£m £m £m
(Loss)/profit for the financial
period (1,296) 120 1,020
Movement in internally-generated
additional value of in-force
long-term business*
451 350 909
Foreign exchange gains/(losses) 27 (307) (389)
------- ------- -------
Total recognised gains and losses
arising in the period (818) 163 1,540
======= ======= =======
* Stated before the effect of foreign exchange movements which are
reported within the foreign exchange gains/(losses) line.
Reconciliation of movements in consolidated shareholders' funds
For the 9 months to 30 September 2000
Restated Restated
9 months 9 months full year
2000 1999 1999
£m £m £m
Balance at the beginning of the period
As previously reported
- CGU plc 9,567 9,039 9,039
- Norwich Union plc 6,039 5,713 5,713
Merger adjustments arising from
alignment of accounting practices 67 141 141
------- ------- -------
Restated shareholders' funds at the
beginning of the period 15,673 14,893 14,893
------- ------- -------
Total recognised gains and losses
arising in the period (818) 163 1,540
Dividends (333) (291) (790)
Increase in capital 41 28 23
Merger reserve arising during the period 5 8 8
Other movements 94 (11) (1)
------- ------- -------
Balance at the end of the period 14,662 14,790 15,673
======= ======= =======
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Page 18
Summarised consolidated balance sheet
Restated Restated
30 Sept 30 Sept 31 Dec
2000 1999 1999
£m £m £m
Assets
Goodwill 704 490 452
------- ------- -------
Investments
Land and buildings 775 738 763
Participating interests 232 320 283
Variable yield securities 6,609 6,163 7,595
Fixed interest securities 14,077 12,607 12,421
Mortgages and loans 1,288 896 1,080
Deposits 1,063 1,078 1,057
Additional value of in-force
long-term business 6,915 5,927 6,425
------- ------- -------
30,959 27,729 29,624
Reinsurers' share of technical
provisions 2,635 2,540 2,638
Assets of the long-term business 145,545 131,417 140,798
Other assets 10,958 8,323 9,672
------- ------- -------
Total assets 190,801 170,499 183,184
======= ======= =======
Liabilities
Shareholders' funds
Equity 14,462 14,590 15,473
Non-equity 200 200 200
Minority interests 645 534 584
------- ------- -------
Total capital and reserves 15,307 15,324 16,257
Liabilities of the long-term
business 141,097 127,419 136,673
General insurance liabilities 23,455 21,658 22,036
Borrowings 3,283 1,905 2,101
Other creditors and provisions 7,659 4,193 6,117
------- ------- -------
Total liabilities 190,801 170,499 183,184
======= ======= =======
Approved by the Board on 7 November 2000.
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Page 19
Consolidated cash flow statement
For the 9 months to 30 September 2000
Restated Restated
9 9 Full
months months year
2000 1999 1999
£m £m £m
Net cash (outflow)/inflow from operating
activities excluding exceptional
items and merger transaction costs (82) 700 827
Exceptional items and merger
transaction costs paid (169) (64) (219)
Net cash outflow from servicing
of finance (169) (128) (156)
Corporation tax paid
(including advance corporation tax) (167) (115) (138)
Net purchases of tangible fixed assets (51) (75) (131)
Acquisitions and disposals of subsidiary
and associated undertakings (382) (91) (64)
Equity dividends paid (496) (451) (731)
Net cash inflow from financing activities 1,143 316 428
------- ------- -------
Net cash flows (373) 92 (184)
======= ======= =======
Cash flows were invested as follows:
(Decrease)/increase in cash holdings (21) 21 (18)
Net portfolio investment
Net (sales)/purchases of investments (217) 67 (226)
Non-trading cash flow (from)/to
long-term business operations (135) 4 60
------- ------- -------
Net investment of cash flows (373) 92 (184)
======= ======= =======
The cash flows presented in this statement relate to shareholder and general
business transactions only.
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Page 20
1. Basis of preparation
On 21 February 2000, CGU plc and Norwich Union plc announced plans to merge
their respective businesses to form CGNU plc. The merger was effected by way
of an exchange of shares in CGNU plc for the shares held in the CGU plc and
Norwich Union plc companies. The merger became effective on 30 May 2000 and
on that date 931 million new shares in CGNU, with a total market value of
£9,528 million, were issued to Norwich Union plc shareholders in return for
Norwich Union plc shares in a ratio of 48 CGNU shares for every 100 Norwich
Union plc shares.
The merger has been accounted for using the merger accounting principles set
out in Financial Reporting Standard 6 'Acquisitions and Mergers'.
Accordingly, the financial information for the nine months to 30 September
2000, and that for the nine months to 30 September 1999 and the full year
results, has been presented as if CGU plc and Norwich Union plc had been
combined throughout the current and comparative accounting periods. Merger
accounting principles have given rise to a merger reserve.
Costs of integrating and re-organising the business are included within
operating profit. Merger transaction costs of £59 million have been incurred
and are disclosed separately after operating profit before taxation.
The results of the two periods disclosed are unaudited. The accounts do not
constitute statutory accounts as defined in section 240 of the Companies Act
1985. The results for the full year 1999 are based on the statutory Group
accounts of CGU plc and Norwich Union plc, both of which received unqualified
audit opinions and have been filed with the Registrar of Companies.
'Businesses to be discontinued' represent:
(i) material discrete operations where sales contracts have been exchanged
with prospective purchasers but all conditions of sale have not been
achieved, and sales proceeds have not yet been received by the
Group; or
(ii) material markets from which the Group is in the process of
withdrawing.
These disclosures relate to the general insurance business in the United
States and the London Market business in the United Kingdom respectively.
The results of all other operations are entitled 'Ongoing business' and are
purely the results from such operations. They do not incorporate the use of
the expected proceeds from businesses sold or sales of businesses to be
completed.
In instances where the carrying value of businesses to be disposed of is less
than the likely sales proceeds, a provision for loss on sale has been included
in the results for the nine months to 30 September 2000.
2. Basis of accounts
The unaudited accounts for the nine months to 30 September 2000 have been
prepared on the basis of the accounting policies used to prepare the CGU plc
and Norwich Union plc 1999 Annual Report and Accounts, as modified to align
differences in the accounting policies used by the two companies. The
accounting policies aligned were such that:
(i) certain general business fixed income and debt securities held by
Norwich Union plc were revalued from an amortised cost basis to a
market value basis;
(ii) project costs which had formerly been capitalised by Norwich Union
plc have been eliminated; and
(iii) embedded value assumptions used by both companies have been brought
onto a common basis.
The impact of these changes was to increase profit before tax by £7 million
(30 September 1999: reduce by £64 million, full year 1999: reduce by
£91 million) and increase shareholders' funds by £99 million (30 September
1999: increase by £166 million, full year 1999: increase by £67 million).
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Page 21
3. Principal exchange rates
Published results have been translated at average rates of exchange, while
assets and liabilities have been translated at closing rates of exchange.
The principal average rates were:
9 months 9 months Full year
2000 1999 1999
Canada - dollars 2.26 2.40 2.40
France - francs 10.73 9.87 9.99
Netherlands - guilders 3.60 3.31 3.35
United States - dollars 1.53 1.61 1.62
The results have been translated into euros using the average rate for the
nine months to 30 September 2000 of 1 euro = £0.61.
The principal closing rates were:
30 30 31
Sept Sept Dec
2000 1999 1999
Canada - dollars 2.22 2.42 2.34
France - francs 10.99 10.14 10.55
Netherlands - guilders 3.69 3.41 3.54
United States - dollars 1.48 1.65 1.61
4. Change in accounting policy - dividend income
Financial Reporting Standard 16 'Current Tax' was published by the Accounting
Standards Board on 16 December 1999 following recent changes in the United
Kingdom tax system. The principal requirement of this standard is that
dividends should be recognised at the amount receivable without any
attributable tax credit.
In presenting the results for the nine months to 30 September 2000 the CGNU
plc Group has complied with Financial Reporting Standard 16. Norwich Union plc
adopted FRS16 in its full year 1999 accounts. Accordingly, dividend income
within the comparative results for the nine months to 30 September 1999 for
both CGU plc and Norwich Union plc, and the full year to 31 December 1999 for
CGU plc only, has been restated to a net of tax basis.
UITF abstract 14 'Disclosure of Changes in Accounting Policy' requires the
effect of changes in accounting policy to be disclosed in relation to both the
reported results in 2000 and 1999.
The change in accounting policy has a purely presentational effect and does
not alter the profit of the Group after taxation. Accordingly, shareholders'
reserves at 30 September 2000, 31 December 1999 and 30 September 1999 remain
at the same level before and after the change in accounting for dividend
income.
The impact of the change in accounting policy on operating profit before
taxation is a reduction of £4 million (nine months to
30 September 1999: £7 million, full year 1999: £13 million). The impact on
profit on ordinary activities before tax is a reduction of £9 million (nine
months to 30 September 1999: £11 million, full year 1999: £17 million).
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5. Acquisitions and disposals in the nine months to 30 September 2000
(a) Acquisitions
On 18 January 2000, the Group acquired the remaining 72% of the share
capital of Hibernian Group plc, formerly an associate of CGU plc, for a cash
consideration of £254 million giving rise to goodwill of £107 million.
Hibernian Group plc transacts general insurance in the Republic of Ireland and
the United Kingdom, life insurance business in the Republic of Ireland and
international reinsurance. The transaction was accounted for as an
acquisition. Compliance with Financial Reporting Standard 2 'Subsidiary
undertakings' requires a departure from the Companies Act 1985 relating to the
calculation of goodwill on Hibernian. In the opinion of the directors, in
order to give a true and fair view, goodwill has to take account of the share
of net assets purchased when Hibernian became an associate. If the provisions
of the Companies Act had been followed, goodwill would have been £47 million
lower.
On 31 July 2000, the Group entered into a bancassurance partnership with
Bancaja, a leading savings bank in Spain. As part of this alliance, the Group
purchased 50% of the issued share capital of Aseval, Bancaja's life insurance
subsidiary, for a cash consideration of £205 million (including transaction
costs), with further amounts payable if Aseval achieves certain performance
targets. The Group's share of Aseval's embedded value amounted to
£47 million, giving rise to goodwill of £193 million after taking into account
the estimated value of the deferred consideration. The transaction has been
accounted for as an acquisition and, in view of the management control
exercised by the Group, the results of Aseval have been consolidated with
those of other Group operations from the date of the purchase.
(b) Disposals
On 31 July 2000, the Group disposed of its wholly-owned general insurance
business General Accident Versicherungs AG for a cash consideration of £41
million. The consideration is subject to the net asset value at completion,
which to date has not been finalised. Net assets at the date of the disposal,
subject to any adjustments yet to be finalised, amounted to £27 million.
Under the terms of the sale, the Group has retained some exposure to certain
types of run-off losses and is currently in the process of securing
reinsurance for the residual risk. A loss on disposal of £31 million has been
recorded after allowing for transaction costs and the likely cost of
reinsurance and after writing back £31 million of goodwill previously written
off against reserves.
During July 2000, the Group disposed of its 50.1% holding of First Australian
Property Group Holdings Pty Limited ('Paladin') for a consideration of £16
million. The net assets disposed of, comprising unamortised goodwill, amounted
to £12 million, generating a profit on disposal of £4 million.
In addition, during the course of 2000, the Group announced its intention to
dispose of its general business operations in South Africa and New Zealand,
life operations in Poland, Canada and Greece and stockbroking operations in
the United Kingdom. These disposals were not completed by 30 September 2000.
(c) Impact on operating profit
With the exception of the disposal of the Group's United States general
insurance operations and the Group's withdrawal from London Market business,
the various other acquisitions, disposals and businesses in the process of
being sold are not considered sufficiently material to merit the separate
disclosures under Financial Reporting Standard 3 'Reporting Financial
Performance'. The following table summarises the contribution to the Group's
operating profit from these operations.
Full
9 months 9 months Year
2000 1999 1999
£m £m £m
Acquisitions
Spain - life (achieved profit basis) 3 - -
Ireland - life (achieved profit basis) 7 - -
- General 13 - -
- Fund management 1 - -
------- ------- -------
24 - -
------- ------- -------
Disposals
Australia - asset management - - -
Other Europe - general 5 5 7
Businesses being disposed of
Poland - life (achieved profit basis) (6) (3) -
Other Europe - life (achieved profit basis) 1 (1) (5)
Other International - life
(achieved profit basis) 11 12 10
United Kingdom - fund management 8 4 7
New Zealand - general 5 9 12
Other International - general 7 7 10
------- ------- -------
31 33 41
------- ------- -------
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Page 23
5. Acquisitions and disposals in the nine months to 30 September 2000
(continued)
(d) Businesses to be discontinued
(i) United States general insurance
On 25 September 2000, the Group announced that it had entered into a
definitive agreement to sell its US general insurance operations for
US$2,063 million. In addition, an inter-company loan of US$1,100 million will
be repaid to Group through a combination of US$470 million in cash and the
transfer to CGNU of certain assets not related to the operations of the US
general business with a value of US$630 million. These assets consisted of
Pilot, a Canadian general insurance company, the Group's US life insurance
operations and a European listed investment. This sale is subject to the
satisfaction of certain conditions, including US regulatory approval, and is
expected to be completed in early 2001.
The total proceeds for the sale of the US general business of
US$3,163 million have been fixed by reference to the operation's net assets as
at 31 August 2000 and will not be adjusted to reflect the business's results
in the period from 1 September 2000 to completion. Subject to the completion
of the transaction, the Group will not bear any continuing operating risk from
31 August 2000 nor provide any guarantees in respect of its claims reserves or
balance sheet beyond this date. Had the transaction been completed on 31
August 2000, the post-tax loss on sale would have been US$2,007 million.
Financial Reporting Standard 2 'Accounting for subsidiary undertakings'
requires the results of the US general business to be consolidated with those
of the Group's ongoing operations until the completion of the transaction.
However, given that, subject to completion, the Group has retained no economic
interest in this business beyond 31 August 2000, the US general business's
post-tax operating and investment gains incorporated in the Group's
consolidated profit and loss account from 1 September 2000 to completion will
be offset by a corresponding change to the loss on sale calculated at 31
August 2000. The loss on sale recorded in these financial statements also
reflects goodwill previously written off against reserves but which needs to
be reinstated and charged in the profit and loss account.
The provision for the loss on the sale recorded in the Group's consolidated
profit and loss account at 30 September 2000 is US$2,060 million or £1,393
million retranslated at the exchange rate prevailing at 30 September 2000.
The calculation of the loss is summarised below:
Exchange
rate
£m US$m $:£
Net assets at 31 December 1999
(including intercompany loan and
excluding Pilot and US Life) 2,831 4,563 1.6117
Add Pilot and US Life 302 487
------- -------
3,133 5,050
Exchange rate movements 283 1.4785
-------
3,416
Actual operating and investment gains
1 January - 31 August 137 203
1 September - 30 September (34) (50)
------- -------
3,519 5,203
------- -------
Proceeds 2,139 3,163 1.4785
Less: Net assets to which proceeds apply (3,519) (5,203)
Less: Transaction costs (25) (38)
------- -------
Provision for loss on sale before
tax and goodwill write back (1,405) (2,078)
Goodwill write back (70) (103)
Pre-tax provision for loss on sale (1,475) (2,181)
Tax on provision for loss on sale 82 121
------- ------
Loss on sale after tax and goodwill
write back (1,393) (2,060)
------- -------
The final accounting loss on completion will differ from the post-tax loss of
£1,393 million above. This is due to profits or losses of this business from 1
October 2000 to the date of completion, despite there being no economic effect
on the Group, and fluctuations in the $:£ exchange rate.
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Page 24
5. Acquisitions and disposals in the nine months to 30 September 2000
(continued)
(d) Businesses to be discontinued
(i) United States general insurance (continued)
The Group's consolidated profit and loss account and balance sheet
incorporates the following financial information in respect of the US general
insurance business:
Abridged statement of operating and
investment gains 9 9 Full
months months year
2000 1999 1999
£m £m £m
Underwriting result (175) (148) (204)
Longer term investment return 311 287 380
------- ------- -------
General insurance operating profit 136 139 176
Unallocated interest charges* (36) (33) 45
------- ------- -------
Operating profit 100 106 131
Amortisation of goodwill (2) (2) (3)
Exceptional items - (12) (32)
Short-term fluctuation in investment returns (8) (320) (237)
------- ------- -------
Profit on ordinary activities before tax 90 (228) (141)
Tax on profit on ordinary activities 8 91 34
------- ------- -------
Profit for the financial period 98 (137) (107)
Retranslation to closing rate 5 3 (1)
------- ------- -------
Retained earnings 103 (134) (108)
------- ------- -------
* Unallocated interest charges are eliminated at Group level.
Analysis of investments 30 30 31
Sept Sept Dec
2000 1999 1999
£m £m £m
Land and buildings 73 68 69
Variable yield securities 1,188 1,230 1,538
Fixed interest securities 4,661 4,068 3,933
Mortgages and loans 1 1 1
Deposits - - 5
------- ------- -------
5,923 5,367 5,546
------- ------- -------
(ii) London Market
Since the merger the Group has taken a series of actions to withdraw from
London Market operations. These actions have resulted in the announcements in
May, July and August respectively, that non-Marine Syndicate 1242, Marine
Syndicate 744 and our Global Risks business would cease accepting new business
with immediate effect.
On 1 November 2000, the Group announced that it has reached agreement in
principle for the sale of Marlborough Underwriting Agency Limited, its wholly
owned Lloyd's managing agency, to the Berkshire Hathaway Group. Under the
terms of the agreement, the Berkshire Hathaway Group will also undertake,
subject to Lloyd's approval, to replace CGNU as the provider of capacity to
the Marlborough managed syndicates. This agreement brings to an end the
Group's involvement in the London Market.
CGNU has also reached an agreement in principle for the purchase of
reinsurance with the Berkshire Hathaway Group. In order to secure protection
against any adverse impact of the run-off of claims reserves held by CGNU in
respect of business written prior to 1 October 2000, the date of exit, both in
respect of historic business through the ILU and other London Market
operations, and, more recently, Lloyd's. This will provide cover of £1
billion in excess of CGNU's claims reserves of £1.2 billion.
The provision for withdrawal from London Market operations of £448 million
includes the cost of the associated reinsurance protection.
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Page 25
6. Exceptional items
Exceptional items comprise:
9 9 Full
months months year
2000 1999 1999
£m £m £m
Merger integration costs 203 100 120
Integration incentive plans - - 31
Other integration costs - - 12
------- ------- -------
Total 203 100 163
======= ======= =======
Merger integration costs for the nine months to 30 September 2000 comprise the
costs of integrating and reorganising the businesses of the former CGU and
Norwich Union. For prior periods, these relate to the businesses of the former
Commercial Union and General Accident.
The 1999 figures for integration incentive plans, which related to the
integration of the former Commercial Union and General Accident businesses,
comprised the costs of incentive plans payable to staff in certain business
units and the costs of cash and share awards to senior management of the
Group, which were conditional upon the performance of the Group against pre-
defined targets.
Other integration costs related to the integration of the long-term business
of Norwich Union's Spanish operation with its acquisition of British Life in
1999.
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Page 26
7. Geographical analysis of life and pensions and investment sales - new
business and total income
New business sales Premium income after
reinsurance and
investment sales
New single New regular
premiums premiums
9 9 9 9 9 9 Full
months months months months months months year
2000 1999 2000 1999 2000 1999 1999
£m £m £m £m £m £m £m
Life and pensions
sales
United Kingdom 4,557 3,667 270 232 6,358 5,242 7,405
Europe (excluding UK)
France 1,380 1,079 30 31 1,584 1,939 2,420
Ireland 299 241 34 15 416 282 375
Netherlands 313 244 46 57 739 560 837
Poland
- Life 8 9 31 44 181 158 216
- Pensions - - 125 203 275 44 118
Spain 71 21 10 9 126 58 104
Other 283 781 61 84 609 1,203 1,348
International 354 343 37 37 506 432 647
------ ------ ------ ------ ------ ------ ------
Total life and
pensions 7,265 6,385 644 712 10,794 9,918 13,470
Investment sales
United Kingdom 692 624 17 10 709 634 806
Europe (excluding UK) 157 86 - - 157 87 130
International 242 287 - - 242 287 411
------ ------ ------ ------ ------ ------ ------
Total long-term
business 8,356 7,382 661 722 11,902 10,926 14,817
====== ====== ====== ====== ====== ====== ======
Single premiums are defined as premiums arising on contracts where there is no
expectation of future premiums. Additional single premiums are permitted on
most contracts of this type and are also classified as single premiums. All
premiums are written by way of direct insurance and the directors consider
that premiums written on the destination basis are not materially different
from premiums written on an origin basis.
New business premiums from Europe and International businesses have been
translated at the average exchange rates applying for the period. Restating
new business sales for the nine months to 30 September 1999 to account for the
impact of exchange rate movements in the nine months to 30 September 2000
would result in total regular premiums being restated from £722 million to
£695 million and from £7,382 million to £7,187 million for total single
premiums.
Investment sales include Isas, PEPs, unit trusts and UCITS (collective
investments sold throughout Europe).
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Page 27
8. Geographical analysis of modified statutory life profit
Full
9 months 9 months year
2000 1999 1999
£m £m £m
United Kingdom
With-profit 190 189 244
Non-profit 423 401 556
Europe (excluding UK)
France 103 80 103
Ireland 29 25 47
Netherlands 108 100 140
Poland
- Life 23 18 31
- Pensions (7) (20) (28)
Spain 9 5 11
Other (3) 10 22
International 32 36 46
------- ------- -------
Total modified statutory life profit 907 844 1,172
======= ======= =======
9. Geographical analysis of health premiums after reinsurance and operating
result
(a) Premiums after reinsurance:
9 9 Full
months months year
2000 1999 1999
£m £m £m
United Kingdom 154 134 177
France 71 74 97
Netherlands 343 29 128
------- ------- -------
Total 568 237 402
======= ======= =======
(b) Operating result:
Health operating Underwriting result
profit
9 9 Full 9 9 Full
months months year months months year
2000 1999 1999 2000 1999 1999
£m £m £m £m £m £m
United Kingdom 4 - - 1 (3) (4)
France 8 9 13 (1) 1 2
Netherlands 21 11 11 (14) 1 (3)
------- ------- ------- ------- ------- -------
Total 33 20 24 (14) (1) (5)
======= ======= ======= ======= ======= =======
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Page 28
10. Geographical analysis of general insurance premiums after reinsurance
and operating result
(a) General insurance premiums after reinsurance:
9 9 Full
months months year
2000 1999 1999
£m £m £m
United Kingdom 3,772 3,526 4,635
Europe (excluding UK)
France 510 526 657
Ireland 283 117 151
Netherlands 351 258 339
Other 480 518 659
International
Australia and New Zealand 485 512 674
Canada 699 593 788
Other 319 339 470
------- ------- -------
Ongoing business 6,899 6,389 8,373
Businesses to be discontinued
United States 2,196 2,003 2,621
London Market 192 182 233
------- ------- -------
9,287 8,574 11,227
======== ======= =======
(b) Operating result:
General insurance Underwriting result*
operating profit*
9 9 Full 9 9 Full
months months year months months year
2000 1999 1999 2000 1999 1999
£m £m £m £m £m £m
United Kingdom 341 187 290 (156) (232) (284)
Europe (excluding UK)
France (120) 30 (8) (189) (24) (80)
Ireland 17 6 15 (19) (8) (5)
Netherlands 12 14 7 (38) (18) (32)
Other 19 9 22 (39) (53) (52)
International
Australia and
New Zealand 48 13 15 (20) (44) (57)
Canada 64 71 93 (32) (18) (25)
Other 47 45 25 (15) (16) (58)
------- ------- ------- ------- ------- -------
Ongoing business 428 375 459 (508) (413) (593)
Businesses to be
discontinued
United States 136 139 176 (175) (148) (204)
London Market (4) 13 25 (59) (37) (44)
------- ------- ------ ------- ------- -------
560 527 660 (742) (598) (841)
======= ======= ======= ======= ======= ======
* The general insurance operating profit and underwriting result are
stated before the change in the equalisation provision of £12
million(nine months to 30 September 1999: £47 million, full year 1999:
£55 million)
--------------------------------------------------------------------------
Page 29
11. Taxation
The tax charge in the profit and loss account comprises:
9 9 Full
months months year
2000 1999 1999
£m £m £m
United Kingdom corporation tax (133) 25 32
Overseas tax 172 (5) 62
Other (109) (128) (42)
------- ------- ------
Total taxation charge for the period (70) (108) 52
Tax attributable to the long-term
business technical result 297 247 330
------- ------- -------
Charge to profit and loss account 227 139 382
======= ======= =======
Tax charge analysed between:
Operating profit before tax, amortisation
of goodwill, amortisation of acquired additional
value of in-force long-term business and
exceptional items
- ongoing business 248 304 348
- businesses to be discontinued 8 (26) (13)
(Loss)/profit on other ordinary activities (29) (139) 47
------- ------- ------
227 139 382
======= ======= =======
END OF PART 3 0f 4
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