European Embedded Value Supplementary Information
for the six months ended 30 June 2006
8 Value of new business (after tax)
The tables below set out the geographic analysis of the value of new business (VNB) after tax for the six months ended 30 June 2006 and 30 June 2005 and the year ended 31 December 2005. Annual premium equivalent (APE) is calculated as recurring premiums plus 10% of single premiums. New business profitability is measured by both the ratio of the VNB to the APE as well as to the present value of new business premiums (PVNBP), and shown under 'Margin' below. PVNBP is defined as the present value of regular premiums plus single premiums for any given period and is calculated on the same assumptions as for the value of new business.
|
£m
|
|||
|
6 months ended
30 June 2006 |
6 months ended
30 June 2005 |
Year ended
31 December 2005 |
|
| Recurring premiums |
|
|
|
| South Africa* |
114
|
118
|
239
|
| United States |
33
|
39
|
81
|
| Europe** |
166
|
-
|
-
|
|
313
|
157
|
320
|
|
| Single premiums | |||
| South Africa* |
685
|
531
|
1,183
|
| United States |
957
|
1,081
|
2,086
|
| Europe** |
2,537
|
-
|
-
|
|
4,179
|
1,612
|
3,269
|
|
| APE | |||
| South Africa* |
183
|
171
|
358
|
| United States |
129
|
147
|
290
|
| Europe** |
420
|
-
|
-
|
|
732
|
318
|
648
|
|
| PVNBP | |||
| South Africa* |
1,234
|
1,108
|
2,380
|
| United States |
1,115
|
1,269
|
2,477
|
| Europe** |
3,484
|
-
|
-
|
|
5,833
|
2,377
|
4,857
|
|
| VNB | |||
| South Africa* |
27
|
25
|
62
|
| United States |
22
|
29
|
51
|
| Europe** |
62
|
-
|
-
|
|
111
|
54
|
113
|
|
| APE margin | |||
| South Africa* |
15%
|
15%
|
17%
|
| United States |
17%
|
20%
|
18%
|
| Europe** |
15%
|
-
|
-
|
|
15%
|
17%
|
17%
|
|
| PVNBP margin | |||
| South Africa* |
2.2%
|
2.3%
|
2.6%
|
| United States |
2.0%
|
2.3%
|
2.1%
|
| Europe** |
1.8%
|
-
|
-
|
|
1.9%
|
2.3%
|
2.3%
|
* Gross of minority interests.
** For the period from 1 February 2006.
The value of new unit trust linked retirement annuities and pension fund asset management business written by the South African long-term business, which amounted to £255 million in the six months ended 30 June 2006, is excluded as the profits on this business arise in the asset management business. The value of new business also excludes premium increases arising from indexation arrangements in respect of exiting business, as these are already included in the value of in-force business.
