L&G FY 2005 Results Part 2

Legal & General Group PLC
17 March 2006

Part 2

New Business                                                                                                       
============

2.1   New business summary
--------------------------
                                                              2005      2005       2005          2004     2004    2004
                                                            Annual  PVNBP(2)  Margin(3)        Annual    PVNBP  Margin
                                                           premium                            premium
                                                     equivalent(1)                         equivalent
                                              Notes             £m        £m          %            £m       £m       %
----------------------------------------------------------------------------------------------------------------------
UK life and pensions                           2.2             872     6,621        4.6           722    5,255     4.6
International life and pensions                2.4             107       873        2.9           105      802     4.4
----------------------------------------------------------------------------------------------------------------------
Total life and pensions                                        979     7,494        4.4           827    6,057     4.6
====================================================               =====================              ================
UK retail investments                          2.7             315                                179
International retail investments               2.7               2                                  2                 
----------------------------------------------------------------------------------------------------------------------
Total retail investments                                       317                                181                 
----------------------------------------------------------------------------------------------------------------------
                                                             1,296                              1,008                 
======================================================================================================================
                                                                                                                      
----------------------------------------------------------------------------------------------------------------------
Institutional fund management(4)               2.9          17,134                             15,547                 
======================================================================================================================


2.2   Analysis of UK life and pensions new business by product
--------------------------------------------------------------
                                                                                    APE  Contribution    PVNBP  Margin
                                                                                             from new
                                                                                          business(5)
Year ended 31 December 2005                                                          £m            £m       £m       %
----------------------------------------------------------------------------------------------------------------------
Protection                                                                          208            82    1,051     7.8
Annuities                                                                           154           177    1,539    11.5
Investments
         Unit linked bonds                                                          208            49    2,082     2.3
         Pensions - Stakeholder and other non profit                                152           (18)     935    (1.9)
With-profits                                                                        150            16    1,014     1.6
----------------------------------------------------------------------------------------------------------------------
Total                                                                               872           306    6,621     4.6
Cost of capital                                                                                     8                 
----------------------------------------------------------------------------------------------------------------------
NBVA before cost of capital                                                                       314                 
======================================================================================================================
Non profit return on capital (including solvency margin)                                          15%                 
======================================================================================================================

Year ended 31 December 2004                                                                                           
----------------------------------------------------------------------------------------------------------------------
Protection                                                                          219            71    1,016     7.0
Annuities                                                                           126           135    1,265    10.7
Investments
         Unit linked bonds                                                          142            26    1,418     1.9
         Pensions - Stakeholder and other non profit                                 82           (20)     465    (4.2)
With-profits                                                                        153            29    1,091     2.7
----------------------------------------------------------------------------------------------------------------------
Total                                                                               722           241    5,255     4.6
Cost of capital                                                                                     8                 
----------------------------------------------------------------------------------------------------------------------
NBVA before cost of capital                                                                       249                 
======================================================================================================================
Non profit return on capital (including solvency margin)                                          14%                 
======================================================================================================================


1. Annual Premium Equivalent (APE) is calculated for total new business, including unit trusts and ISAs but excluding
   institutional fund management, 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. New monies from pension fund clients of Legal & General Assurance (Pensions Management) Ltd. Corporate pensions 
   gross new business excludes £4.1bn (2004: £5.0bn) which were held through the year on a temporary basis, generally 
   as part of portfolio reconstructions.
5. 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.


2.3   Analysis of UK life and pensions PVNBP
--------------------------------------------
                                                       2005           2005            2005      2005     2005     2004
                                                     Annual  Present value  Capitalisation    Single    PVNBP    PVNBP
                                                   premiums      of annual       factor(1)  premiums
                                                                  premiums
                                                         £m             £m                        £m       £m       £m
----------------------------------------------------------------------------------------------------------------------
Protection                                              208          1,051             5.1         -    1,051    1,016
Annuities                                                 -              -               -     1,539    1,539    1,265
Investments
         Unit linked bonds                                -              -               -     2,082    2,082    1,418
         Pensions - Stakeholder and other non profit     97            386             4.0       549      935      465
With-profits                                             77            285             3.7       729    1,014    1,091
----------------------------------------------------------------------------------------------------------------------
Total                                                   382          1,722             4.5     4,899    6,621    5,255
======================================================================================================================


2.4   Analysis of international life and pensions new business
--------------------------------------------------------------
                                                                       APE    Contribution   Cost of    PVNBP   Margin
                                                                                  from new   capital
                                                                                  business
Year ended 31 December 2005                                             £m              £m        £m       £m        %
----------------------------------------------------------------------------------------------------------------------
USA                                                                     42               2         6      295      0.8
Netherlands                                                             29              16         5      258      6.1
France                                                                  36               7         6      320      2.1
----------------------------------------------------------------------------------------------------------------------
Total                                                                  107              25        17      873      2.9
======================================================================================================================

Year ended 31 December 2004                                                                                           
----------------------------------------------------------------------------------------------------------------------
USA                                                                     54              18         5      320      5.5
Netherlands                                                             23              16         3      223      7.2
France                                                                  28               1         7      259      0.4
----------------------------------------------------------------------------------------------------------------------
Total                                                                  105              35        15      802      4.4
======================================================================================================================


2.5   Analysis of international life and pensions new business in local currency
--------------------------------------------------------------------------------

                                                                       APE    Contribution   Cost of    PVNBP   Margin
                                                                                  from new   capital
                                                                                  business
Year ended 31 December 2005                                              m               m         m        m        %
----------------------------------------------------------------------------------------------------------------------
USA                                                                    $75              $4       $10     $507      0.8
Netherlands                                                            €42             €23        €7     €377      6.1
France                                                                 €57             €10        €8     €467      2.1
======================================================================================================================

Year ended 31 December 2004                                                                                           
----------------------------------------------------------------------------------------------------------------------
USA                                                                    $98             $34        $9     $615      5.5
Netherlands                                                            €35             €23        €4     €314      7.2
France                                                                 €40              €1       €10     €365      0.4
======================================================================================================================


2.6   Analysis of international life and pensions PVNBP
-------------------------------------------------------
                                                       2005           2005            2005      2005     2005     2004
                                                     Annual  Present value  Capitalisation    Single    PVNBP    PVNBP
                                                   premiums      of annual          factor  premiums
                                                                  premiums
                                                          m              m                         m        m        m
----------------------------------------------------------------------------------------------------------------------
USA                                                     $75           $507             6.7         -     $507     $615
Netherlands                                             €19           €146             7.7      €231     $377     €314
France                                                  €25           €189             7.7      €278     $467     €365
======================================================================================================================


1. The capitalisation factor is the present value of annual premiums divided by the amount of new annual premiums.


2.7   Analysis of retail investments new business
-------------------------------------------------
                                                             2005      2005      2005         2004      2004      2004
                                                           Annual    Single       APE       Annual    Single       APE
                                                         premiums  premiums               premiums  premiums
                                                               £m        £m        £m           £m        £m        £m
----------------------------------------------------------------------------------------------------------------------
UK                                                             15     2,999       315           22     1,565       179
France                                                          -        25         2            -        22         2
----------------------------------------------------------------------------------------------------------------------
Total                                                          15     3,024       317           22     1,587       181
======================================================================================================================


2.8   Analysis of the distribution of UK life and pensions individual products
------------------------------------------------------------------------------
                                                                                                        2005      2004
                                                                                                         APE       APE
                                                                                                          £m        £m
----------------------------------------------------------------------------------------------------------------------
Independent financial advisers                                                                           667       505
Tied                                                                                                     327       253
Direct                                                                                                    31        35
----------------------------------------------------------------------------------------------------------------------
Total UK individual                                                                                    1,025       793
======================================================================================================================

Individual life and pensions                                                                             710       614
Retail investments                                                                                       315       179
----------------------------------------------------------------------------------------------------------------------
Total UK individual                                                                                    1,025       793
Group life and pensions                                                                                  162       108
----------------------------------------------------------------------------------------------------------------------
Total UK                                                                                               1,187       901
======================================================================================================================


2.9   Analysis of institutional fund management new business
------------------------------------------------------------
                                                                                                        2005      2004
                                                                                                          £m        £m
----------------------------------------------------------------------------------------------------------------------
Managed pension funds(1)
Pooled funds                                                                                          14,778    13,951
Segregated funds                                                                                         240     1,228
----------------------------------------------------------------------------------------------------------------------
Total managed funds                                                                                   15,018    15,179
Other funds(2)                                                                                         2,116       368
----------------------------------------------------------------------------------------------------------------------
Total                                                                                                 17,134    15,547
======================================================================================================================


2.10   Institutional fund management new business by investment approach
------------------------------------------------------------------------
                                                                                                        2005      2004
                                                                                                           %         %
----------------------------------------------------------------------------------------------------------------------
Indexed equities                                                                                        50.6      47.9
Indexed bonds (including indexed linked funds and cash)                                                 37.6      34.8
Active bonds (including indexed linked funds and cash)                                                  10.6      16.2
Property                                                                                                 0.7       0.6
Private equity                                                                                           0.3       0.4
Active equities                                                                                          0.2       0.1
----------------------------------------------------------------------------------------------------------------------
Total                                                                                                  100.0     100.0
======================================================================================================================


1. New monies from pension fund clients of Legal & General Assurance (Pensions Management) Ltd. Corporate pensions 
   gross new business excludes £4.1bn (2004: £5.0bn) which were held through the year on a temporary basis, generally 
   as part of portfolio reconstructions.
2. Includes segregated property, property partnerships, ventures and institutional clients excluding institutional
   trusts.










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