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Supplement 3 - Detailed analysis of new business contribution

(a) Before the effect of required capital – PVNBP basis

	Present value of new business premiums1			New business contribution2, 3			New business margin4
	9 months 2005 £m	9 months 2004 £m		9 months 2005 £m	9 months 2004 £m		9 months 2005 %	9 months 2004 %	Full year 2004 %
Life and pensions business
United Kingdom	6,586	6,774		198	198		3.0%	2.9%	2.9%
France	2,593	1,937		98	64		3.8%	3.3%	3.4%
Ireland	504	392		13	18		2.6%	4.6%	3.4%
Italy	1,816	1,206		46	35		2.5%	2.9%	2.7%
Netherlands (including Belgium and Luxembourg)	1,742	1,449		55	57		3.2%	3.9%	3.7%
Poland	196	181		9	6		4.6%	3.3%	4.6%
Spain	1,353	1,539		116	97		8.6%	6.3%	6.8%
Other Europe	574	482		7	1		1.2%	0.2%	0.6%
Continental Europe	8,778	7,186		344	278		3.9%	3.9%	3.9%
International	896	737		33	29		3.7%	3.9%	3.4%
	16,260	14,697		575	505		3.5%	3.4%	3.4%
Present value of new business premiums (PVNBP) is the present value of new regular premiums plus 100% of single premiums, calculated using assumptions consistent with those used to determine new business contribution. Before effect of required capital. New business contribution before the effect of required capital includes minority interests in 2005 of £110 million (nine months to 30 September 2004: £80 million). This comprises minority interests in France of £15 million (nine months to 30 September 2004: £4 million), Italy £27 million (nine months to 30 September 2004: £19 million), Spain £59 million (nine months to 30 September 2004: £49 million), Poland £2 million (nine months to 30 September 2004: £1 million) and Netherlands £7 million (nine months to 30 September 2004: £7 million). New business margin represents the ratio of new business contribution to PVNBP, expressed as a percentage.

(b) Including the effect of required capital

	Present value of new business premiums1			New business contribution2,3			New business margin4
	9 months 2005 £m	9 months 2004 £m		9 months 2005 £m	9 months 2004 £m		9 months 2005 %	9 months 2004 %	Full year 2004 %
Life and pensions business
United Kingdom	6,586	6,774		162	162		2.5%	2.4%	2.3%
France	2,593	1,937		66	36		2.5%	1.9%	1.9%
Ireland	504	392		11	15		2.2%	3.8%	2.9%
Italy	1,816	1,206		28	23		1.5%	1.9%	1.9%
Netherlands (including Belgium and Luxembourg)	1,742	1,449		28	35		1.6%	2.4%	2.0%
Poland	196	181		8	7		4.1%	3.9%	3.7%
Spain	1,353	1,539		102	79		7.5%	5.1%	5.7%
Other Europe	574	482		4	1		0.7%	0.2%	-
Continental Europe	8,778	7,186		247	196		2.8%	2.7%	2.9%
International	896	737		20	22		2.2%	3.0%	2.3%
	16,260	14,697		429	380		2.6%	2.6%	2.5%
Present value of new business premiums (PVNBP) is the present value of new regular premiums plus 100% of single premiums, calculated using assumptions consistent with those used to determine new business contribution. New business contribution is after the effect of required capital.  The effect of required capital represents the impact of holding the required capital (expressed as a % of minimum European Union (EU) solvency margin or equivalent for non-EU operations) and discounting to present value the projected future releases from the required capital to shareholders. New business contribution after the effect of required capital includes minority interests in 2005 of £83 million (nine months to 30 September 2004: £61 million). This comprises minority interests in France of £8 million (nine months to 30 September 2004: nil), Italy £17 million (nine months to 30 September 2004: £13 million), Spain £52 million (nine months to 30 September 2004: £41 million), Poland £1 million (nine months to 30 September 2004: £1m) and Netherlands £5 million (nine months to 30 September 2004: £6 million). New business margin represents the ratio of new business contribution to PVNBP, expressed as a percentage

(c) New business contribution – before minority interest, cost of capital and tax

	Present value of new business premiums			New business contribution1			New business margin2
	9 months 2005 £m	9 months 2004 £m		9 months 2005 £m	9 months 2004 £m		9 months 2005 %	9 months 2004 %	Full year 2004 %
Analysed between:
- Bancassurance channels	4,531	3,497		219	167		4.8%	4.8%	4.9%
- Other distribution channels	11,729	11,200		356	338		3.0%	3.0%	3.0%
Attributable to equity shareholders	16,260	14,697		575	505		3.5%	3.4%	3.4%
Stated before the effect of required capital. New business margin represents the ratio of new business contribution before deducting cost of capital, tax and minority interest to PVNBP before deducting the minority share, expressed as a percentage.

(d) New business contribution – after minority interest, cost of capital and tax

	Present value of new business premiums1			New business contribution2			New business margin3
	9 months 2005 £m	9 months 2004 £m		9 months 2005 £m	9 months 2004 £m		9 months 2005 %	9 months 2004 %	Full year 2004 %
Analysed between:
- Bancassurance channels	2,382	1,956		64	50		2.7%	2.6%	2.7%
- Other distribution channels	11,461	10,892		174	173		1.5%	1.6%	1.5%
Attributable to equity shareholders	13,843	12,848		238	223		1.7%	1.7%	1.6%
Stated after deducting the minority interest of sales. Contribution stated after deducting cost of required capital, tax and minority interest. New business margin represents the ratio of new business contribution after deducting cost of required capital, tax and minority interest to PVNBP after deducting the minority share, expressed as a percentage.

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