L&G HY 09 Results Part 2

RNS Number : 8043W

Legal & General Group Plc

04 August 2009

 



New Business										Page 27
2.01	New business summary
					APE1	PVNBP2	Margin3	APE	PVNBP	Margin
					30.06.09	30.06.09	30.06.09	30.06.08	30.06.08	30.06.08
			Notes		£m	£m	%	£m	£m	%
Risk			2.02		223	1,755	10.1	288	2,329	7.4
Savings4			2.02		297	2,060	0.3	341	2,507	0.2
International4			2.04		72	551	2.0	59	465	3.5
					592	4,366	4.5	688	5,301	3.7
UK core retail investments			2.07		151			115
International retail investments			2.07		3			3
Total core retail investments					154			118
Total					746			806
					30.06.09			30.06.08
			Notes		£m			£m
Investment management			2.10		15,137			17,645
								APE	PVNBP	Margin
								Full year	Full year	Full year
								31.12.08	31.12.08	31.12.08
			Notes					£m	£m	%
Risk			2.02					488	3,811	7.1
Savings4			2.02					650	4,722	(0.1)
International4			2.04					113	896	3.6
								1,251	9,429	3.1
UK core retail investments			2.07					229
International retail investments			2.07					6
Total core retail investments								235
Total								1,486
								31.12.08
			Notes					£m
Investment management			2.10					33,091
1. Annual Premium Equivalent (APE) is calculated for total new business, including core retail investments but excluding investment 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.
New Business										Page 28
2.02	Analysis of Risk and Savings1 new business by product
							APE	Contri-	PVNBP	Margin
								bution
								from new
								business2
For the six months ended 30 June 2009							£m	£m	£m	%
Protection							90	30	427	7.0
Annuities							133	148	1,328	11.1
Total Risk							223	178	1,755	10.1
Unit linked bonds							32	(5)	319	(1.6)
Pensions, stakeholder and other non profit							147	(4)	1,007	(0.4)
With-profits							118	16	734	2.2
Total Savings							297	7	2,060	0.3
Total Risk and Savings							520	185	3,815	4.8
Cost of capital3								32
Contribution from new business before cost of capital								217
For the six months ended 30 June 2008
Protection							110	38	553	6.9
Annuities							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 profit							162	(2)	1,047	(0.2)
With-profits							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 capital3								12
Contribution from new business before cost of capital								190
For the year ended 31 December 2008
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							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
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 H1 09, 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 41% (H1 08: risk margin of 3.0% and equity backing ratio of 77%; FY 08: risk margin of 4.5% and equity backing ratio of 55%).
New Business										Page 29
2.03	Analysis of Risk and Savings1 PVNBP
				Annual	Present	Capital-	Single	PVNBP	PVNBP	PVNBP
				premiums	value	isation	premiums
					of annual	factor2
					premiums					Full year
				30.06.09	30.06.09	30.06.09	30.06.09	30.06.09	30.06.08	31.12.08
				£m	£m		£m	£m	£m	£m
Protection				90	427	4.7	-	427	553	1,005
Annuities				-	-	-	1,328	1,328	1,776	2,806
Total Risk				90	427	4.7	1,328	1,755	2,329	3,811
Unit linked bonds				-	-	-	319	319	749	1,306
Pensions, stakeholder and other non profit				77	304	3.9	703	1,007	1,047	2,183
With-profits				68	241	3.5	493	734	711	1,233
Total Savings				145	545	3.8	1,515	2,060	2,507	4,722
Total Risk and Savings				235	972	4.1	2,843	3,815	4,836	8,533
1. Excludes core retail investments.
2. The capitalisation factor is the present value of annual premiums divided by the amount of new annual premiums.
2.04	Analysis of International1 new business
						APE	Contri-	Cost of	PVNBP	Margin
							bution	capital
							from new
							business2
For the six months ended 30 June 2009						£m	£m	£m	£m	%
USA						29	8	4	204	4.2
Netherlands						13	1	2	113	0.6
France						30	2	3	234	0.9
Total						72	11	9	551	2.0
For the six months ended 30 June 2008
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 year ended 31 December 2008
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
1. Excludes core retail investments.
2. Contribution from new business is reported after the cost of capital.
New Business										Page 30
2.05	Analysis of International1 new business in local currency
						APE	Contri-	Cost of	PVNBP	Margin
							bution	capital
							from new
							business2
For the six months ended 30 June 2009						m	m	m	m	%
USA						$43	$13	$6	$301	4.2
Netherlands						€15	€1	€2	€128	0.6
France						€33	€2	€3	€264	0.9
For the six months ended 30 June 2008
USA						$47	$23	$6	$327	7.0
Netherlands						€21	€3	€3	€181	1.7
France						€25	€3	€4	€209	1.5
For the year ended 31 December 2008
USA						$94	$44	$11	$691	6.3
Netherlands						€36	€9	€6	€305	3.1
France						€42	€2	€5	€354	0.5
1. Excludes core retail investments.
2. Contribution from new business is reported after the cost of capital.
2.06	Analysis of International1 PVNBP in local currency
				Annual	Present	Capital-	Single	PVNBP	PVNBP	PVNBP
				premiums	value of	isation	premiums
					annual	factor
					premiums					Full year
				30.06.09	30.06.09	30.06.09	30.06.09	30.06.09	30.06.08	31.12.08
				m	m		m	m	m	m
USA				$43	$301	7.0	-	$301	$327	$691
Netherlands				€5	€32	6.5	€96	€128	€181	€305
France				€21	€142	6.7	€122	€264	€209	€354
1. Excludes core retail investments.
2.07	Analysis of core retail investments new business
					Annual	Single	APE	Annual	Single	APE
					premiums	premiums		premiums	premiums
					30.06.09	30.06.09	30.06.09	30.06.08	30.06.08	30.06.08
					£m	£m	£m	£m	£m	£m
UK					18	1,331	151	19	953	115
France					-	32	3	-	26	3
Total					18	1,363	154	19	979	118
								Annual	Single	APE
								premiums	premiums
								Full year	Full year	Full year
								31.12.08	31.12.08	31.12.08
								£m	£m	£m
UK								41	1,879	229
France								-	63	6
Total								41	1,942	235
New Business										Page 31
2.08	Analysis of UK Risk and Savings new business premiums
				Annual	Single	APE	Annual	Single	APE	APE
				premiums	premiums		premiums	premiums		Full year
				30.06.09	30.06.09	30.06.09	30.06.08	30.06.08	30.06.08	31.12.08
				£m	£m	£m	£m	£m	£m	£m
Protection
- Individual				60	-	60	73	-	73	140
- Group				30	-	30	37	-	37	67
Annuities
- Individual (non profit)				-	583	58	-	384	38	84
- Individual (with-profits)				-	7	1	-	15	2	3
- Bulk purchase				-	738	74	-	1,377	138	194
Total Risk				90	1,328	223	110	1,776	288	488
Non profit savings
- Unit linked bonds				-	319	32	-	749	75	131
- Individual pensions				77	699	147	94	675	162	327
- DWP rebates				-	4	-	-	4	-	1
With-profits savings
- Bonds				-	305	31	-	112	11	28
- Individual pensions				67	123	79	56	290	85	149
- DWP rebates				-	65	7	-	71	7	12
- Group pensions				1	-	1	1	2	1	2
				145	1,515	297	151	1,903	341	650
Core retail investments
- Unit trusts				5	1,061	111	5	698	75	159
- ISAs				13	270	40	14	255	40	70
Total Savings				163	2,846	448	170	2,856	456	879
Total Risk and Savings new business				253	4,174	671	280	4,632	744	1,367
2.09	Analysis of total UK Risk and Savings APE
								APE	APE	APE
										Full year
								30.06.09	30.06.08	31.12.08
								£m	£m	£m
Independent financial advisers								377	421	827
Tied								137	129	243
Direct								52	18	34
Total Individual Risk and Savings								566	568	1,104
Individual Risk and Savings1								415	453	875
Core retail investments								151	115	229
Total Individual Risk and Savings								566	568	1,104
Group Risk and Savings								105	176	263
Total Risk and Savings new business premiums								671	744	1,367
1. Excludes core retail investments.
New Business										Page 32
2.10	Analysis of Investment management new business
										Full year
								30.06.09	30.06.08	31.12.08
								£m	£m	£m
Managed pension funds1
Pooled funds								11,788	13,562	26,733
Segregated funds								1,247	364	841
Total managed funds								13,035	13,926	27,574
Other funds2								2,102	3,719	5,517
Total								15,137	17,645	33,091
Attributable to:
Legal & General Investment Management								14,182	16,224	30,873
Legal & General Retail Investments								955	1,421	2,218
1. New monies from pension fund clients of Legal & General Assurance (Pensions Management) exclude £2.4bn (H1 08: £4.6bn; FY 08: £7.4bn) held through the period on a temporary basis, generally as part of portfolio reconstructions.
2. Includes segregated property, property partnerships, private equity partnerships and institutional clients funds managed by Legal & General Investment Management and institutional investments in unit trust funds managed by Legal & General Retail Investments.
2.11	Legal & General Investment Management new business by investment approach
										Full year
								30.06.09	30.06.08	31.12.08
								%	%	%
Index equities								51.9	46.6	45.2
Index bonds (including index linked funds and cash)								27.4	39.2	41.2
Active bonds (including index linked funds and cash)								15.5	6.7	7.2
Structured solutions								5.0	7.4	6.2
Property								0.2	0.1	0.2
Total								100.0	100.0	100.0

 

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