"2008 presented major challenges for the Group. The rapid deterioration combined with volatility in global financial markets, most notably in the fourth quarter, gave rise to an extremely difficult operating environment, while we faced a number of specific issues in our US Life business. Nevertheless, many parts of the Group delivered strong performances, especially in the markets where we have scale and strong market positions.
"As a Group we remain well capitalised with strong surpluses over required capital levels in each of our business units, but due to the very uncertain market conditions, we have decided to conserve capital and cash levels despite our ability to withstand significant further deterioration in market conditions.
"Going forward, I am determined to rigorously drive performance improvement and strengthen governance, while at the same time reshaping the Group."
Julian Roberts - Chief Executive
View the full Preliminary Results press release
Highlights
Solid performance in SA and Europe with challenges in US Life
- OMSA and Nordic: excellent growth in sales; adjusted operating profits up 14% and 23% (in local currency) respectively
- UK: sales impacted by equity market decline although strong unit-linked market position maintained
- US Asset Management: diversified asset mix provided resilience
- US Life: disappointing result although management actions to de-risk and return to profitability
The Group and its businesses remain well capitalised
- Group pro-forma FGD surplus at 31 December in excess of £0.7 billion, 1.2 times coverage ratio
- Available cash and facilities of over £600 million
- Strong capital surpluses in individual business units
- UK: 2.6 times required capital
- Nordic: 9.9 times required capital
- OMLACSA: 3.8 times required capital
- Nedbank: Tier 1 capital at 9.6%
- US Life: RBC ratio of 305% in onshore and significant excess capital in offshore
- Board decision not to pay dividends in 2009 to give further buffer on cash and capital position
Improved business structure, risk management and governance
- New Long-Term Savings division
- Risk appetite agreed for major subsidiary companies
- Enhanced governance and operational oversight from the centre
- Simplification of business will take place as global financial climate allows