L&G 2008 Final Results Part 2

RNS Number : 4207P

Legal & General Group Plc

25 March 2009

 



New Business										Page 25
2.01  New business summary
					APE1	PVNBP2	Margin3	APE	PVNBP	Margin
					2008	2008	2008	2007	2007	2007
			Notes		£m	£m	%	£m	£m	%
Risk and savings4			2.02		1,138	8,533	3.1	1,160	8,892	3.6
International4			2.05		113	896	3.6	114	915	4.1
					1,251	9,429	3.1	1,274	9,807	3.7
UK core retail investments			2.08		229			161
International retail investments			2.08		6			2
Total core retail investments					235			163
Total					1,486			1,437
					2008			2007
			Notes		£m			£m
Investment management			2.11		33,091			54,431
1. Annual Premium Equivalent (APE) is calculated for total new business, including core retail investments, but excluding institutional fund management new business, and comprises the new annual premiums together with 10% of single premiums. 2. The present value of new business premiums (PVNBP) on the EEV basis is defined as the present value of annual premiums plus single premiums for any given period. It is calculated using the same assumptions as for the contribution from new business but determined as at the point of sale. 3. The new business margin is defined as the contribution from new business (including the cost of solvency capital) divided by the PVNBP. 4. Excludes core retail investments.
2.02  Analysis of Risk and Savings1 new business by product
							APE	Contri-	PVNBP	Margin
								bution
								from new
								business2
For the year ended 31 December 2008							£m	£m	£m	%
Protection							207	62	1,005	6.2
Annuities							281	209	2,806	7.4
Total Risk							488	271	3,811	7.1
Unit linked bonds							131	(13)	1,306	(1.0)
Pensions, stakeholder and other non profit							328	(8)	2,183	(0.4)
With-profits savings							191	15	1,233	1.2
Total Savings							650	(6)	4,722	(0.1)
Total Risk and Savings							1,138	265	8,533	3.1
Cost of capital3								65
Contribution from new business before cost of capital								330
For the year ended 31 December 2007
Protection							223	108	1,161	9.3
Annuities							205	187	2,045	9.1
Total Risk							428	295	3,206	9.2
Unit linked bonds							251	21	2,512	0.8
Pensions, stakeholder and other non profit							253	(14)	1,674	(0.8)
With-profits savings							228	19	1,500	1.3
Total Savings							732	26	5,686	0.5
Total Risk and Savings							1,160	321	8,892	3.6
Cost of capital3								19
Contribution from new business before cost of capital								340
1. Excludes core retail investments. 2. The contribution from new business is defined as the present value at point of sale of assumed profits from new business written in the period and then rolled forward to the end of the financial period using the risk discount rate applicable at the end of the reporting period. 3. For 2008 the cost of capital relating to new business reflects a risk margin of 4.5% in the risk discount rate and an equity backing ratio for the assets backing the solvency capital of 55% (2007 risk margin of 3.0% and equity backing ratio of 79%).
2.03  Internal rate of return on non profit business
									2008	2007
									%	%
Non profit internal rate of return (including solvency margin)									13	14
New Business										Page 26
2.04  Analysis of Risk and Savings1 PVNBP
					Annual	Present	Capital-	Single	PVNBP	PVNBP
					premiums	value	isation	premiums
						of annual	factor2
						premiums
					2008	2008	2008	2008	2008	2007
					£m	£m		£m	£m	£m
Protection					207	1,005	4.9	-	1,005	1,161
Annuities					-	-	-	2,806	2,806	2,045
Total Risk					207	1,005	4.9	2,806	3,811	3,206
Unit linked bonds					-	-	-	1,306	1,306	2,512
Pensions, stakeholder and other non profit					181	715	4.0	1,468	2,183	1,674
With-profits savings					108	395	3.7	838	1,233	1,500
Total Savings					289	1,110	3.8	3,612	4,722	5,686
Total Risk and Savings					496	2,115	4.3	6,418	8,533	8,892
1. Excludes core retail investments. 2. The capitalisation factor is the present value of annual premiums divided by the amount of new annual premiums.
2.05  Analysis of international1 new business
						APE	Contri-	Cost of	PVNBP	Margin
							bution	capital
							from new
							business2
For the year ended 31 December 2008						£m	£m	£m	£m	%
USA						51	24	6	372	6.3
Netherlands						29	7	4	241	3.1
France						33	1	4	283	0.5
Total						113	32	14	896	3.6
For the year ended 31 December 2007
USA						45	23	5	319	7.3
Netherlands						27	6	3	227	2.5
France						42	9	8	369	2.4
Total						114	38	16	915	4.1
1. Excludes retail investments. 2. Contribution from new business is reported after the cost of capital.
2.06  Analysis of international1 new business in local currency
						APE	Contri-	Cost of	PVNBP	Margin
							bution	capital
							from new
							business2
For the year ended 31 December 2008						m	m	m	m	%
USA						$94	$44	$11	$691	6.3
Netherlands						€36	€9	€6	€305	3.1
France						€42	€2	€5	€354	0.5
For the year ended 31 December 2007
USA						$90	$46	$11	$637	7.3
Netherlands						€38	€8	€5	€331	2.5
France						€60	€13	€11	€539	2.4
1. Excludes retail investments. 2. Contribution from new business is reported after the cost of capital.
2.07  Analysis of international1 PVNBP in local currency
					Annual	Present	Capital-	Single	PVNBP	PVNBP
					premiums	value of	isation	premiums
						annual	factor
						premiums
					2008	2008	2008	2008	2008	2007
					m	m		m	m	m
USA					$94	$691	7.4	-	$691	$637
Netherlands					€16	€106	6.6	€199	€305	€331
France					€21	€148	7.1	€206	€354	€539
1. Excludes retail investments.
New Business										Page 27
2.08  Analysis of core retail investments new business
					Annual	Single	APE	Annual	Single	APE
					premiums	premiums		premiums	premiums
					2008	2008	2008	2007	2007	2007
					£m	£m	£m	£m	£m	£m
UK					41	1,879	229	21	1,399	161
France					-	63	6	-	24	2
Total					41	1,942	235	21	1,423	163
2.09  Analysis of Risk and Savings new business premiums
					Annual	Single	APE	Annual	Single	APE
					premiums	premiums		premiums	premiums
					2008	2008	2008	2007	2007	2007
					£m	£m	£m	£m	£m	£m
Protection
- Individual					140	-	140	160	-	160
- Group					67	-	67	63	-	63
Annuities
- Individual (non profit)					-	841	84	-	875	88
- Individual (with-profits)					-	27	3	-	47	5
- Bulk purchase					-	1,938	194	-	1,123	112
Total Risk					207	2,806	488	223	2,045	428
Non profit savings
- Unit linked bonds					-	1,306	131	-	2,512	251
- Individual pensions					181	1,460	327	141	1,118	253
- DWP rebates					-	8	1	-	4	-
With-profits savings
- Bonds					-	283	28	-	102	10
- Individual pensions					106	434	149	124	752	199
- DWP rebates					-	118	12	-	124	12
- Group pensions					2	3	2	6	5	7
					289	3,612	650	271	4,617	732
Core retail investments
- Unit trusts					12	1,466	159	7	962	103
- ISAs					29	413	70	14	437	58
Total Savings					330	5,491	879	292	6,016	893
Total Risk and Savings new business					537	8,297	1,367	515	8,061	1,321
New Business										Page 28
2.10  Analysis of total UK APE
									2008	2007
									£m	£m
Independent financial advisers									827	842
Tied									243	261
Direct									34	36
Total Individual Risk and Savings									1,104	1,139
Individual Risk and Savings1									875	978
Core retail investments									229	161
Total Individual Risk and Savings									1,104	1,139
Group Risk and Savings									263	182
Total Risk and Savings new business premiums									1,367	1,321
1. Excludes core retail investments.
2.11  Analysis of Investment management new business
									2008	2007
									£m	£m
Managed pension funds1
Pooled funds									26,733	49,460
Segregated funds									841	2,603
Total managed funds									27,574	52,063
Other funds2									5,517	2,368
Total									33,091	54,431
Attributable to:
Legal & General Investment Management									30,873	52,622
Legal & General Retail Investments									2,218	1,809
1. New monies from pension fund clients of Legal & General Assurance (Pensions Management) exclude £7.4bn (2007: £19.4bn) held through the year on a temporary basis, generally as part of portfolio reconstructions. 2. Includes segregated property, property partnerships, ventures partnerships and institutional clients funds managed by Legal & General Investment Management and institutional investments in unit trust funds managed by Legal & General Retail Investments.
2.12  Legal & General Investment Management new business by investment approach
									2008	2007
									%	%
Indexed equities									45.2	70.9
Indexed bonds (including index linked funds and cash)									41.2	21.1
Active bonds (including index linked funds and cash)									7.2	4.0
Structured solutions									6.2	3.6
Property									0.2	0.4
Total									100.0	100.0

 

END

 

 

FR PUUCPWUPBGBC