L&G Half-year Results Part 2

RNS Number : 6220A

Legal & General Group Plc

05 August 2008

 



New Business										Page 17
2.01  New business summary
					APE1	PVNBP2	Margin3	APE	PVNBP	Margin
					30.06.08	30.06.08	30.06.08	30.06.07	30.06.07	30.06.07
								Restated4
			Notes		£m	£m	%	£m	£m	%
UK life and pensions			2.02		629	4,836	3.7	598	4,472	3.7
International life and pensions			2.05		59	465	3.5	63	507	2.6
Total life and pensions					688	5,301	3.7	661	4,979	3.6
UK core retail investments4			2.08		115			86
International retail investments			2.08		3			2
Total core retail investments					118			88
Total					806			749
					30.06.08			30.06.07
			Notes		£m			£m
Institutional fund management			2.11		17,645			17,021
								APE	PVNBP	Margin
								Full year	Full year	Full year
								31.12.07	31.12.07	31.12.07
			Notes					£m	£m	%
UK life and pensions			2.02					1,160	8,892	3.6
International life and pensions			2.05					114	915	4.1
Total life and pensions								1,274	9,807	3.7
UK core retail investments4			2.08					161
International retail investments			2.08					2
Total core retail investments								163
Total								1,437
								31.12.07
			Notes					£m
Institutional fund management			2.11					54,431

1. Annual Premium Equivalent (APE) is calculated for total new business, including core retail investments 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. UK core retail investments excludes institutional investments in unit trust funds which are disclosed as part of institutional fund management new business in Note 2.11. H1 07 has been restated to reflect this change.

New Business																			Page 18
2.02  Analysis of UK life and pensions new business by product
													APE			Contri-		PVNBP		Margin
																bution
																from new
																business1
For the six months ended 30 June 2008													£m			£m		£m		%
Protection													110			38		553		6.9
Annuities2													178			135		1,776		7.6
Total risk													288			173		2,329		7.4
Unit linked bonds													75			(4)		749		(0.5)
Pensions, stakeholder and other non profit3													162			(2)		1,047		(0.2)
With-profits savings													104			11		711		1.5
Total savings													341			5		2,507		0.2
Total risk and savings													629			178		4,836		3.7
Cost of capital																12
Contribution from new business before cost of capital																190
For the six months ended 30 June 2007													Restated2			Restated2		Restated2		Restated2
Protection													111			51		563		9.1
Annuities2													89			88		895		9.8
Total risk													200			139		1,458		9.5
Unit linked bonds													136			21		1,355		1.5
Pensions, stakeholder and other non profit													133			(5)		920		(0.5)
With-profits savings													129			10		739		1.4
Total savings													398			26		3,014		0.9
Total risk and savings													598			165		4,472		3.7
Cost of capital																20
Contribution from new business before cost of capital																185
For the year ended 31 December 2007
Protection													223			108		1,161		9.3
Annuities2													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 capital																19
Contribution from new business before cost of capital																340

1. 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. With-profits annuity business has been categorised from 'with-profits' to 'annuities' and H1 07 comparatives restated. This business amounted to £15m (H1 07: £33m; FY 07: £47m) of PVNBP and £1m (H1 07: £1m; FY 07: £2m) of new business contribution.

3. On 6 May 2008 the Group acquired 100% of the shares of Suffolk Life. New business contribution of £3m earned since this date in respect of Suffolk Life's insured and non-insured Self Invested Personal Pension (SIPP) business is included under pensions, stakeholder and other non profit. Further information on this acquisition can be found in Note 4.09.

2.03  Internal rate of return on non profit business
													30.06.08		30.06.07		31.12.07
													%		%		%
Non profit internal rate of return (including solvency margin)													13		14		14
New Business																Page 19
2.04  Analysis of UK life and pensions PVNBP
				Annual				Present		Capital-	Single		PVNBP		PVNBP		PVNBP
				premiums				value		isation	premiums
								of annual		factor1
								premiums									Full year
				30.06.08				30.06.08		30.06.08	30.06.08		30.06.08		30.06.07		31.12.07
															Restated2
				£m				£m			£m		£m		£m		£m
Protection				110				553		5.0	-		553		563		1,161
Annuities2				-				-		-	1,776		1,776		895		2,045
Total risk				110				553		5.0	1,776		2,329		1,458		3,206
Unit linked bonds				-				-		-	749		749		1,355		2,512
Pensions, stakeholder and other non profit				94				368		3.9	679		1,047		920		1,674
With-profits savings				57				236		4.1	475		711		739		1,500
Total savings				151				604		4.0	1,903		2,507		3,014		5,686
Total risk and savings				261				1,157		4.4	3,679		4,836		4,472		8,892

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

2. With-profits annuity business has been categorised from 'with-profits' to 'annuities' and H1 07 comparatives restated. This business amounted to £15m (H1 07: £33m; FY 07: £47m) of PVNBP and £1m (H1 07: £1m; FY 07: £2m) of new business contribution.

2.05  Analysis of international life and pensions new business
						APE	Contri-	Cost of	PVNBP	Margin
							bution	capital
							from new
							business1
For the six months ended 30 June 2008						£m	£m	£m	£m	%
USA						24	12	3	166	7.0
Netherlands						16	2	2	138	1.7
France						19	2	3	161	1.5
Total						59	16	8	465	3.5
For the six months ended 30 June 2007
USA						22	2	3	149	1.5
Netherlands						14	6	2	124	4.7
France						27	5	5	234	2.2
Total						63	13	10	507	2.6
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. Contribution from new business is reported after the cost of capital.

New Business																	Page 20
2.06  Analysis of international life and pensions new business in local currency
										APE		Contri-		Cost of		PVNBP		Margin
												bution		capital
												from new
												business1
For the six months ended 30 June 2008										m		m		m		m		%
USA										$47		$23		$6		$327		7.0
Netherlands										€21		€3		€3		€181		1.7
France										€25		€3		€4		€209		1.5
For the six months ended 30 June 2007
USA										$44		$4		$7		$293		1.5
Netherlands										€21		€9		€2		€183		4.7
France										€39		€8		€7		€346		2.2
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. Contribution from new business is reported after the cost of capital.

2.07  Analysis of international life and pensions PVNBP in local currency
				Annual	Present	Capital-	Single	PVNBP		PVNBP		PVNBP
				premiums	value of	isation	premiums
					annual	factor
					premiums							Full year
				30.06.08	30.06.08	30.06.08	30.06.08	30.06.08		30.06.07		31.12.07
				m	m		m	m		m		m
USA				$47	$327	7.0	-	$327		$293		$637
Netherlands				€9	€57	6.4	€124	€181		€183		€331
France				€13	€90	6.9	€119	€209		€346		€539
2.08  Analysis of core retail investments new business
					Annual	Single	APE	Annual		Single		APE
					premiums	premiums		premiums		premiums
					30.06.08	30.06.08	30.06.08	30.06.07		30.06.07		30.06.07
								Restated1		Restated1		Restated1
					£m	£m	£m	£m		£m		£m
UK					19	953	115	11		759		86
France					-	26	3	-		15		2
Total					19	979	118	11		774		88
								Annual		Single		APE
								premiums		premiums
								Full year		Full year		Full year
								31.12.07		31.12.07		31.12.07
								£m		£m		£m
UK								21		1,399		161
France								-		24		2
Total								21		1,423		163

1. UK core retail investments excludes institutional investments in unit trust funds which are disclosed as part of institutional fund management new business in Note 2.11. H1 07 has been restated to reflect this change.

New Business																	Page 21
2.09  Analysis of UK risk and savings new business premiums
					Annual			Single		APE		Annual		Single		APE		APE
					premiums			premiums				premiums		premiums				Full year
					30.06.08			30.06.08		30.06.08		30.06.07		30.06.07		30.06.07		31.12.07
												Restated1		Restated1		Restated1
					£m			£m		£m		£m		£m		£m		£m
Protection
- Individual					73			-		73		82		-		82		160
- Group					37			-		37		29		-		29		63
Annuities
- Individual (non profit)					-			384		38		-		480		48		88
- Individual (with-profits)					-			15		2		-		33		3		5
- Bulk purchase					-			1,377		138		-		382		38		112
Total risk					110			1,776		288		111		895		200		428
Non profit savings
- Unit linked bonds					-			749		75		-		1,355		136		251
- Individual pensions					94			675		162		70		633		133		253
- DWP rebates					-			4		-		-		2		-		-
With-profits savings
- Bonds					-			112		11		-		48		5		10
- Individual pensions					56			290		85		74		367		111		199
- DWP rebates					-			71		7		-		72		7		12
- Group pensions					1			2		1		6		1		6		7
Total life and pensions savings					151			1,903		341		150		2,478		398		732
Core retail investments1
- Unit trusts					5			698		75		3		456		48		103
- ISAs					14			255		40		8		303		38		58
Total savings					170			2,856		456		161		3,237		484		893
Total risk and savings new business					280			4,632		744		272		4,132		684		1,321

1. Core retail investments excludes institutional investments in unit trust funds which are disclosed as part of institutional fund management new business in Note 2.11. H1 07 has been restated to reflect this change.

2.10  Analysis of total UK APE
								APE	APE	APE
										Full year
								30.06.08	30.06.07	31.12.07
									Restated1
								£m	£m	£m
Independent financial advisers								421	451	842
Tied								129	138	261
Direct								18	22	36
Total UK individual1								568	611	1,139
Individual life and pensions								453	525	978
Core retail investments1								115	86	161
Total UK individual								568	611	1,139
Group life and pensions								176	73	182
Total UK risk and savings new business premiums								744	684	1,321

1. Core retail investments excludes institutional investments in unit trust funds which are disclosed as part of institutional fund management new business in Note 2.11. H1 07 has been restated to reflect this change.

New Business																	Page 22
2.11  Analysis of institutional fund management new business
																		Full year
														30.06.08		30.06.07		31.12.07
																Restated1
														£m		£m		£m
Managed pension funds2
Pooled funds														13,562		15,568		49,460
Segregated funds														364		448		2,603
Total managed funds														13,926		16,016		52,063
Other funds3														3,719		1,005		2,368
Total														17,645		17,021		54,431
Attributable to:
Legal & General Investment Management														16,224		16,226		52,622
Legal & General Retail Investments1														1,421		795		1,809

1. Core retail investments excludes institutional investments in unit trust funds which are disclosed as part of institutional fund management new business in Note 2.11. H1 07 has been restated to reflect this change.

2. New monies from pension fund clients of Legal & General Assurance (Pensions Management) Limited exclude £4.6bn (H1 07: £7.8bn; FY 07: £19.4bn) held through the year on a temporary basis, generally as part of portfolio reconstructions.

3. 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
										Full year
								30.06.08	30.06.07	31.12.07
								%	%	%
Index equities								46.6	67.2	70.9
Index bonds (including index linked funds and cash)								39.2	24.9	21.1
Active bonds (including index linked funds and cash)								6.7	5.0	4.0
Structured solutions								7.4	2.4	3.6
Property								0.1	0.5	0.4
Private equity								-	-	-
Active equities								-	-	-
Total								100.0	100.0	100.0

 

END

 

 

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