Segmental analysis of life and related businesses embedded value
| Net worth | Value of in-force covered business |
Total | |||||
|---|---|---|---|---|---|---|---|
| 30 June 2005 | Required capital1 £m |
Free surplus £m |
Present value of in-force £m |
Cost of required capital £m |
Embedded value £m |
||
| United Kingdom | 1,239 | 475 | 4,182 | (427) | 5,469 | ||
| Continental Europe | |||||||
| France | 1,072 | 84 | 909 | (193) | 1,872 | ||
| Ireland | 87 | 190 | 336 | (18) | 595 | ||
| Italy | 246 | 325 | 164 | (53) | 682 | ||
| Netherlands (including Belgium and Luxembourg) | 930 | 694 | 1,074 | (304) | 2,394 | ||
| Poland | 95 | 59 | 381 | (29) | 506 | ||
| Spain | 213 | 23 | 451 | (54) | 633 | ||
| Other | 70 | 80 | 101 | (26) | 225 | ||
| International | 296 | 192 | 199 | (74) | 613 | ||
| 4,248 | 2,122 | 7,797 | (1,178) | 12,989 | |||
| 1 Required capital is shown net of implicit items permitted by local regulators to cover minimum solvency margins. | |||||||
| Net worth | Value of in-force covered business |
Embedded value | ||||||
|---|---|---|---|---|---|---|---|---|
| 30 June 2005 £m |
Restated* 30 June 2004 £m |
30 June 2005 £m |
Restated* 30 June 2004 £m |
30 June 2005 £m |
Restated* 30 June 2004 £m |
|||
| United Kingdom | 1,714 | 1,622 | 3,755 | 3,414 | 5,469 | 5,036 | ||
| Continental Europe | ||||||||
| France | 1,156 | 1,049 | 716 | 571 | 1,872 | 1,620 | ||
| Ireland | 277 | 262 | 318 | 293 | 595 | 555 | ||
| Italy | 571 | 319 | 111 | 108 | 682 | 427 | ||
| Netherlands (including Belgium and Luxembourg) | 1,624 | 1,222 | 770 | 1,012 | 2,394 | 2,234 | ||
| Poland | 154 | 121 | 352 | 281 | 506 | 402 | ||
| Spain | 236 | 194 | 397 | 278 | 633 | 472 | ||
| Other | 150 | 137 | 75 | 52 | 225 | 189 | ||
| International | 488 | 453 | 125 | 85 | 613 | 538 | ||
| 6,370 | 5,379 | 6,619 | 6,094 | 12,989 | 11,473 | |||
| * Restated for the effect of implementing European Embedded Value Principles. | ||||||||
The shareholders’ net worth is the market value of the shareholders’ funds and the shareholders’ interest in the surplus held in the non-profit component of the long-term business funds, determined on a statutory solvency basis and adjusted to add back any non-admissible assets. Required capital, net of implicit items, of £4,248 million at 30 June 2005 (30 June 2004: £3,980 million) is included within the net worth.
The value of in-force covered business includes the effect of holding shareholders’ capital to support the level of required capital and allowing for projected future releases. This impact reduces the value of in-force covered business at 30 June 2005 by £1,178 million (30 June 2004: £1,120 million).
The embedded value at the end of the six month period 30 June 2005 includes minority interests of £903 million (30 June 2004: £589 million). This comprises minority interests in France of £135 million (30 June 2004: £55 million), Italy £347 million (30 June 2004: £224 million), Netherlands £62 million (30 June 2004: £52 million), Poland £83 million (30 June 2004: £65 million), Spain £267 million (30 June 2004: £191 million) and Other Europe £9 million (30 June 2004: £2 million).