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

















 

 

 

 

 

 

 

 

 

 

 

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 

372 

6.3 

Netherlands





29 

241 

3.1 

France





33 

283 

0.5 












 

 

 

 

 

 

 

 

 

 

 

Total






113 

32 

14 

896 

3.6 

 

 

 

 

 

 

 

 

 

 

 























For the year ended 31 December 2007









 

 

 

 

 

 

 

 

 

 

 












USA






45 

23 

319 

7.3 

Netherlands





27 

227 

2.5 

France





42 

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 

24 












 

 

 

 

 

 

 

 

 

 

 

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 

47 

- 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




With-profits savings










- Bonds




283 

28 

102 

10 

- Individual pensions




106 

434 

149 

124 

752 

199 

- DWP rebates




118 

12 

124 

12 

- Group pensions




 

 

 

 

 

 

 

 

 

 

 

















289 

3,612 

650 

271 

4,617 

732 























Core retail investments










- Unit trusts




12 

1,466 

159 

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 

 

 

 

 

 

 

 

 

 

 

 

























This information is provided by RNS
The company news service from the London Stock Exchange
 
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