Interim results for 6 months ended 30 June 2006
Segmental analysis of life and related businesses embedded value
| Net worth | Value of in-force covered business | Total | |||||
|---|---|---|---|---|---|---|---|
| 30 June 2006 | Required capital1 £m |
Free surplus £m |
Present value of in-force £m |
Cost of required capital £m |
Embedded value £m |
||
| France | 1,130 | 183 | 1,099 | (231) | 2,181 | ||
| Ireland | 266 | 193 | 543 | (46) | 956 | ||
| Italy | 314 | 309 | 205 | (63) | 765 | ||
| Netherlands (including Belgium, Germany and Luxembourg) | 1,074 | 1,213 | 1,377 | (321) | 3,343 | ||
| Poland | 98 | 69 | 461 | (29) | 599 | ||
| Spain | 268 | 7 | 533 | (59) | 749 | ||
| Other | 19 | 23 | 68 | (12) | 98 | ||
| Continental Europe | 3,169 | 1,997 | 4,286 | (761) | 8,691 | ||
| Rest of the World | 277 | 194 | 313 | (74) | 710 | ||
| International | 3,446 | 2,191 | 4,599 | (835) | 9,401 | ||
| United Kingdom | 1,170 | 491 | 4,906 | (436) | 6,131 | ||
| Total | 4,616 | 2,682 | 9,505 | (1,271) | 15,532 | ||
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 | ||||||
|---|---|---|---|---|---|---|---|---|
| 6 months 2006 £m |
6 months 2005 £m |
6 months 2006 £m |
6 months 2005 £m |
6 months 2006 £m |
6 months 2005 £m |
|||
| France | 1,313 | 1,156 | 868 | 716 | 2,181 | 1,872 | ||
| Ireland | 459 | 277 | 497 | 318 | 956 | 595 | ||
| Italy | 623 | 571 | 142 | 111 | 765 | 682 | ||
| Netherlands (including Belgium, Germany and Luxembourg) | 2,287 | 1,729 | 1,056 | 761 | 3,343 | 2,490 | ||
| Poland | 167 | 155 | 432 | 361 | 599 | 516 | ||
| Spain | 275 | 236 | 474 | 397 | 749 | 633 | ||
| Other | 42 | 38 | 56 | 55 | 98 | 93 | ||
| Continental Europe | 5,166 | 4,162 | 3,525 | 2,719 | 8,691 | 6,881 | ||
| Rest of the World | 471 | 488 | 239 | 125 | 710 | 613 | ||
| International | 5,637 | 4,650 | 3,764 | 2,844 | 9,401 | 7,494 | ||
| United Kingdom | 1,661 | 1,720 | 4,470 | 3,775 | 6,131 | 5,495 | ||
| Total | 7,298 | 6,370 | 8,234 | 6,619 | 15,532 | 12,989 | ||
Germany has been reclassified from Other Europe to the Netherlands, Lithuania has been reclassified from Other Europe to Poland and Norwich Union’s Dublin-based offshore life and savings business has been reclassified from Other Europe to the United Kingdom.
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 £4,616 million at 30 June 2006 (30 June 2005: £4,248 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 2006 by £1,271 million (30 June 2005: £1,178 million).
The embedded value at 30 June 2006 includes minority interests of £1,283 million (30 June 2005: £903 million). This comprises minority interests in France of £151 million (30 June 2005: £135 million), Ireland £232 million (30 June 2005: nil), Italy £396 million (30 June 2005: £347 million), Netherlands £73 million (30 June 2005: £62 million), Poland £98 million (30 June 2005: £84 million), Spain £322 million (30 June 2005: £267 million) and Other Europe nil (30 June 2005: £8 million), and Rest of the World £11 million (30 June 2005: nil).
