Worldwide long-term savings new business – Three months to 31 March 2006
Supplement 1
Present value of life new business premiums
The present value of new business premiums (PVNBP) is derived from the single premiums and regular premiums of the products sold during the financial period and is expressed at the point of sale.
The PVNBP calculation is equal to total single premium sales received in the year plus the discounted value of regular premiums expected to be received over the term of the new contracts. The premium volumes and projection assumptions used to calculate the present value of regular premiums for each product are the same as those used to calculate new business contribution, so the components of the new business margin are on a consistent basis.
The discounted value of regular premiums is also expressed as annualised regular premiums multiplied by a Weighted Average Capitalisation Factor (WACF). The WACF will vary over time depending on the mix of new products sold, the average outstanding term of the new contracts and the projection assumptions. The table below sets out the factors required to derive the present value of regular premiums by business units, and combined with single premium sales derives the present value of future new business premiums.
| 31 March 2006 | 31 March 2005 | ||||||
|---|---|---|---|---|---|---|---|
| Regular pre- miums £m |
Weighted average capital- isation factor |
Present value of regular pre- miums £m |
Single pre- miums £m |
Present value of new business pre- miums £m |
Present value of new business pre- miums £m |
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| France | |||||||
| Euro funds1 | 4 | 5.3 | 21 | 565 | 586 | 562 | |
| Unit-linked funds | 12 | 6.2 | 74 | 427 | 501 | 411 | |
| Protection business | 7 | 6.6 | 46 | 1 | 47 | 47 | |
| Total life and pensions | 23 | 6.1 | 141 | 993 | 1,134 | 1,020 | |
| Ireland | |||||||
| Life and savings | 7 | 5.0 | 35 | 92 | 127 | 53 | |
| Pensions | 15 | 4.7 | 70 | 61 | 131 | 132 | |
| Total life and pensions | 22 | 4.8 | 105 | 153 | 258 | 185 | |
| Italy | |||||||
| Life and savings | 30 | 6.2 | 187 | 658 | 845 | 601 | |
| Total life and pensions | 30 | 6.2 | 187 | 658 | 845 | 601 | |
| Netherlands (including Belgium and Luxembourg) | |||||||
| Life | 26 | 6.8 | 176 | 123 | 299 | 389 | |
| Pensions | 17 | 8.6 | 147 | 276 | 423 | 444 | |
| Total life and pensions | 43 | 7.5 | 323 | 399 | 722 | 833 | |
| Poland | |||||||
| Life and savings | 8 | 5.0 | 40 | 49 | 89 | 34 | |
| Pensions | 6 | 7.5 | 45 | 26 | 71 | 33 | |
| Total life and pensions | 14 | 6.1 | 85 | 75 | 160 | 67 | |
| Spain | |||||||
| Life and savings | 19 | 5.9 | 112 | 270 | 382 | 354 | |
| Pensions | 9 | 5.8 | 52 | 61 | 113 | 107 | |
| Total life and pensions | 28 | 5.9 | 164 | 331 | 495 | 461 | |
| Other Europe | |||||||
| Life and pensions | 12 | 3.8 | 45 | 15 | 60 | 60 | |
| Total life and pensions | 12 | 3.8 | 45 | 15 | 60 | 60 | |
| Rest of the World | |||||||
| Asia | 19 | 4.5 | 86 | 43 | 129 | 85 | |
| Australia | 9 | 3.3 | 30 | 40 | 70 | 74 | |
| United States | 2 | 4.0 | 8 | 144 | 152 | 90 | |
| Life and pensions | 30 | 4.1 | 124 | 227 | 351 | 249 | |
| International total life and pensions | 202 | 5.8 | 1,174 | 2,851 | 4,025 | 3,476 | |
| United Kingdom | |||||||
| Individual pensions | 87 | 5.3 | 461 | 540 | 1,001 | 607 | |
| Group pensions | 26 | 5.6 | 146 | 125 | 271 | 224 | |
| Annuities | - | - | - | 347 | 347 | 413 | |
| Bonds | - | - | - | 787 | 787 | 620 | |
| Protection | 42 | 5.1 | 215 | 57 | 272 | 236 | |
| Equity release | - | - | - | 85 | 85 | 83 | |
| United Kingdom total life and pensions | 155 | 5.3 | 822 | 1,941 | 2,763 | 2,183 | |
| Total | 357 | 5.6 | 1,996 | 4,792 | 6,788 | 5,659 | |
