L&G Interim Results 2006 PT 2

Legal & General Group PLC
27 July 2006

                                                                                                                    P13
New Business
------------

2.1   New business summary

                                                  30.06.06   30.06.06    30.06.06      30.06.05    30.06.05    30.06.05
                                                    Annual   PVNBP(2)   Margin(3)        Annual    PVNBP(2)   Margin(3)
                                                   premium                              premium
                                             equivalent(1)                        equivalent(1)
                                      Notes             £m         £m           %            £m          £m           %
-----------------------------------------------------------------------------------------------------------------------
UK life and pensions                   2.2             496      3,613         4.9           426       3,141         4.1
International life and pensions        2.5              57        482         2.7            56         464         2.4
-----------------------------------------------------------------------------------------------------------------------
Total life and pensions                                553      4,095         4.7           482       3,605         3.9
=============================================                ======================                ====================
UK retail investments                  2.8             342                                  169                        
International retail investments       2.8               1                                    1                        
-----------------------------------------------------------------------------------------------------------------------
Total retail investments                               343                                  170                        
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                                                       896                                  652                        
=======================================================================================================================
                                                                                                                       
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Institutional fund management(4)       2.11         10,758                                6,875                        
=======================================================================================================================

                                                                                      Full year   Full year   Full year
                                                                                       31.12.05    31.12.05    31.12.05
                                                                                         Annual    PVNBP(2)   Margin(3)
                                                                                        premium
                                                                                  equivalent(1)
                                      Notes                                                  £m          £m           %
-----------------------------------------------------------------------------------------------------------------------
UK life and pensions                   2.2                                                  872       6,621         4.6
International life and pensions        2.5                                                  107         873         2.9
-----------------------------------------------------------------------------------------------------------------------
Total life and pensions                                                                     979       7,494         4.4
===================================================================================                ====================
UK retail investments                  2.8                                                  315
International retail investments       2.8                                                    2                        
-----------------------------------------------------------------------------------                --------------------
Total retail investments                                                                    317                        
-----------------------------------------------------------------------------------------------------------------------
                                                                                          1,296                        
=======================================================================================================================
                                                                                                                       
-----------------------------------------------------------------------------------------------------------------------
Institutional fund management(4)       2.11                                              17,134                        
=======================================================================================================================

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 £1.7bn (1H05: £1.8bn; FY05: £4.1bn) which were held through the period on a temporary 
   basis, generally as part of portfolio reconstructions.

=======================================================================================================================
                                                                                                                    P14
2.2   Analysis of UK life and pensions new business by product

                                                                            APE   Contribution        PVNBP      Margin
                                                                                      from new
                                                                                   business(1)
Six months ended 30 June 2006                                                £m             £m           £m           %
-----------------------------------------------------------------------------------------------------------------------
Protection                                                                  111             45          555         8.0
Annuities                                                                    71            100          708        14.1
Savings
 Unit linked bonds                                                          121             36        1,213         3.0
 Pensions - Stakeholder and other non profit                                 91             (8)         535        (1.5)
With-profits                                                                102              6          602         1.0
-----------------------------------------------------------------------------------------------------------------------
Total                                                                       496            179        3,613         4.9
Cost of capital                                                                              3                         
-----------------------------------------------------------------------------------------------------------------------
Contribution from new business before cost of capital                                      182                         
=======================================================================================================================

Six months ended 30 June 2005
-----------------------------------------------------------------------------------------------------------------------
Protection                                                                  109             29          478         6.1
Annuities                                                                    79             79          787        10.1
Savings
 Unit linked bonds                                                           94             20          939         2.2
 Pensions - Stakeholder and other non profit                                 72             (7)         471        (1.5)
With-profits                                                                 72              8          466         1.6
-----------------------------------------------------------------------------------------------------------------------
Total                                                                       426            129        3,141         4.1
Cost of capital                                                                              4
-----------------------------------------------------------------------------------------------------------------------
Contribution from new business before cost of capital                                      133
=======================================================================================================================

Full year ended 31 December 2005
-----------------------------------------------------------------------------------------------------------------------
Protection                                                                  208             82        1,051         7.8
Annuities                                                                   154            177        1,539        11.5
Savings
 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
-----------------------------------------------------------------------------------------------------------------------
Contribution from new business before cost of capital                                      314
=======================================================================================================================

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.


2.3   Internal rate of return on non profit business

                                                                                       30.06.06    30.06.05   Full year
                                                                                                               31.12.05
                                                                                              %           %           %
-----------------------------------------------------------------------------------------------------------------------
Non profit internal rate of return (including solvency margin)                               16          13          15
=======================================================================================================================

=======================================================================================================================
                                                                                                                    P15

2.4   Analysis of UK life and pensions PVNBP

                                30.06.06       30.06.06        30.06.06    30.06.06    30.06.06    30.06.05   Full year
                                                                                                               31.12.05
                                  Annual  Present value         Capital      Single       PVNBP       PVNBP       PVNBP
                                premiums      of annual        -isation    premiums
                                               premiums       factor(1)
                                      £m             £m                          £m          £m          £m          £m
-----------------------------------------------------------------------------------------------------------------------
Protection                           111            555             5.0           -         555         478       1,051
Annuities                              -              -             N/A         708         708         787       1,539
Savings
 Unit linked bonds                     -              -             N/A       1,213       1,213         939       2,082
 Pensions - Stakeholder and other non
 profit                               63            255             4.1         280         535         471         935
With-profits                          63            213             3.4         389         602         466       1,014
-----------------------------------------------------------------------------------------------------------------------
Total                                237          1,023             4.3       2,590       3,613       3,141       6,621
=======================================================================================================================

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


2.5   Analysis of international life and pensions new business

                                                                        APE  Contribution     Cost of    PVNBP   Margin
                                                                                 from new     capital
                                                                              business(1)
Six months ended 30 June 2006                                            £m            £m          £m       £m        %
-----------------------------------------------------------------------------------------------------------------------
USA                                                                      21            (3)          4      145     (1.9)
Netherlands                                                              16            11           2      142      7.4
France                                                                   20             5           4      195      2.7
-----------------------------------------------------------------------------------------------------------------------
Total                                                                    57            13          10      482      2.7
=======================================================================================================================

Six months ended 30 June 2005
-----------------------------------------------------------------------------------------------------------------------
USA                                                                      19             3           2      137      2.2
Netherlands                                                              14             6           2      129      4.7
France                                                                   23             2           4      198      1.2
-----------------------------------------------------------------------------------------------------------------------
Total                                                                    56            11           8      464      2.4
=======================================================================================================================

Full year ended 31 December 2005
-----------------------------------------------------------------------------------------------------------------------
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
=======================================================================================================================
1. Contribution from new business is reported after the cost of capital.


=======================================================================================================================
                                                                                                                    P16
2.6 Analysis of international life and pensions new business in local currency

                                                                        APE  Contribution     Cost of    PVNBP   Margin
                                                                                 from new     capital
                                                                                 business
Six months ended 30 June 2006                                             m             m           m        m        %
-----------------------------------------------------------------------------------------------------------------------
USA                                                                     $38           ($5)         $7     $260     (1.9)
Netherlands                                                             €23           €15          €3     €207      7.4
France                                                                  €30            €8          €6     €285      2.7
=======================================================================================================================

Six months ended 30 June 2005
-----------------------------------------------------------------------------------------------------------------------
USA                                                                     $36            $6          $4     $245      2.2
Netherlands                                                             €20            €9          €2     €191      4.7
France                                                                  €32            €3          €7     €293      1.2
=======================================================================================================================

Full year ended 31 December 2005
-----------------------------------------------------------------------------------------------------------------------
USA                                                                     $75            $4         $10     $507      0.8
Netherlands                                                             €42           €23          €7     €377      6.1
France                                                                  €57           €10          €8     €467      2.1
=======================================================================================================================


2.7 Analysis of international life and pensions PVNBP

                                30.06.06       30.06.06        30.06.06    30.06.06    30.06.06    30.06.05   Full year
                                                                                                               31.12.05
                                  Annual  Present value  Capitalisation      Single       PVNBP       PVNBP       PVNBP
                                premiums      of annual          factor    premiums
                                               premiums
                                       m              m                           m           m           m           m
-----------------------------------------------------------------------------------------------------------------------
USA                                  $38           $260             6.8           -        $260        $245        $507
Netherlands                           €9            €67             7.4        €140        €207        €191        €377
France                               €14           €129             9.2        €156        €285        €293        €467
=======================================================================================================================


2.8 Analysis of retail investments new business

                                                   30.06.06    30.06.06    30.06.06    30.06.05    30.06.05    30.06.05
                                                     Annual      Single         APE      Annual      Single         APE
                                                   premiums    premiums                premiums    premiums
                                                         £m          £m          £m          £m          £m          £m
-----------------------------------------------------------------------------------------------------------------------
UK                                                       10       3,315         342          10       1,593         169
France                                                    -          10           1           -          10           1
-----------------------------------------------------------------------------------------------------------------------
Total                                                    10       3,325         343          10       1,603         170
=======================================================================================================================

                                                                                      Full year   Full year   Full year
                                                                                       31.12.05    31.12.05    31.12.05
                                                                                         Annual      Single         APE
                                                                                                   premiums    premiums
                                                                                             £m          £m          £m
-----------------------------------------------------------------------------------------------------------------------
UK                                                                                           15       2,999         315
France                                                                                        -          25           2
-----------------------------------------------------------------------------------------------------------------------
Total                                                                                        15       3,024         317
=======================================================================================================================

=======================================================================================================================
                                                                                                                    P17
2.9 Analysis of UK APE new business premiums

                                       30.06.06    30.06.06    30.06.06    30.06.05    30.06.05    30.06.05   Full year
                                                                                                               31.12.05
                                         Annual      Single         APE      Annual      Single         APE         APE
                                       premiums    premiums                premiums    premiums
                                             £m          £m          £m          £m          £m          £m          £m
-----------------------------------------------------------------------------------------------------------------------
Protection
 - Mortgage related                          52           -          52          43           -          43          90
 - Other                                     26           -          26          24           -          24          47
 - Group risk                                33           -          33          42           -          42          71
-----------------------------------------------------------------------------------------------------------------------
Annuities
 - Individual                                 -         209          21           -         458          46          66
 - Bulk purchase                              -         499          50           -         329          33          88
-----------------------------------------------------------------------------------------------------------------------
Savings
 - Unit linked bonds                          -       1,213         121           -         939          94         208
 - Individual pensions                       63         280          91          45         274          72         152
-----------------------------------------------------------------------------------------------------------------------
With-profits
 - Annuities                                  -          39           4           -          24           2           6
 - Individual pensions                       62         266          89          38         185          57         110
 - DWP rebates                                -          41           4           -           7           1          12
 - Group pensions                             1           1           1           2           4           2           5
 - Bonds                                      -          42           4           -         103          10          17
=======================================================================================================================
Total UK life and pensions business         237       2,590         496         194       2,323         426         872

 - Unit trusts                                1       3,000         301           1       1,304         131         259
 - ISAs                                       9         315          41           9         289          38          56
=======================================================================================================================
Total UK retail investment business          10       3,315         342          10       1,593         169         315
=======================================================================================================================
Total UK new business                       247       5,905         838         204       3,916         595       1,187
=======================================================================================================================


2.10 Analysis of the total UK APE

                                                                                       30.06.06    30.06.05   Full year
                                                                                                               31.12.05
                                                                                            APE         APE         APE
                                                                                             £m          £m          £m
-----------------------------------------------------------------------------------------------------------------------
Independent financial advisers                                                              418         317         667
Tied                                                                                        311         182         327
Direct                                                                                       25          19          31
-----------------------------------------------------------------------------------------------------------------------
Total UK individual                                                                         754         518       1,025
=======================================================================================================================

Individual life and pensions                                                                412         349         710
Retail investments                                                                          342         169         315
-----------------------------------------------------------------------------------------------------------------------
Total UK individual                                                                         754         518       1,025
Group life and pensions                                                                      84          77         162
-----------------------------------------------------------------------------------------------------------------------
Total UK                                                                                    838         595       1,187
=======================================================================================================================

=======================================================================================================================
                                                                                                                    P18
2.11 Analysis of institutional fund management new business

                                                                                       30.06.06    30.06.05   Full year
                                                                                                               31.12.05
                                                                                             £m          £m          £m
-----------------------------------------------------------------------------------------------------------------------
Managed pension funds(1)
Pooled funds                                                                              8,263       6,710      14,778
Segregated funds                                                                            599         105         240
-----------------------------------------------------------------------------------------------------------------------
Total managed funds                                                                       8,862       6,815      15,018
Other funds(2)                                                                            1,896          60       2,116
-----------------------------------------------------------------------------------------------------------------------
Total                                                                                    10,758       6,875      17,134
=======================================================================================================================

1. New monies from pension fund clients of Legal & General Assurance (Pensions Management) Ltd. Corporate pensions 
   gross new business excludes £1.7bn (1H05: £1.8bn; FY05: £4.1bn) which were held through the period on a temporary 
   basis, generally as part of portfolio reconstructions.
2. Includes segregated property, property partnerships, ventures and institutional clients excluding institutional 
   trusts.


2.12   Institutional fund management new business by investment approach

                                                                                     30.06.06    30.06.05     Full year
                                                                                                               31.12.05
                                                                                              %           %           %
Indexed equities                                                                           34.0        46.7        50.6
Indexed bonds (including indexed linked funds and cash)                                    46.7        41.7        37.6
Active bonds (including indexed linked funds and cash)                                     17.8        11.1        10.6
Property                                                                                    0.7           -         0.7
Private equity                                                                              0.3         0.5         0.3
Active equities                                                                             0.5           -         0.2
-----------------------------------------------------------------------------------------------------------------------
Total                                                                                     100.0       100.0       100.0
=======================================================================================================================





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