Preliminary results - 12 months ended 31 December 2006 01 March 2007
Time value of options and guarantees
The following table sets out the time value of options and guarantees relating to covered business by territory at 31 December 2006 and 31 December 2005.
| 2006 £m | 2005 £m | |
|---|---|---|
| France | 77 | 84 |
| Ireland | 2 | 3 |
| Italy | 17 | 19 |
| Netherlands (including Belgium, Germany and Luxembourg) | 146 | 118 |
| Poland | 4 | 5 |
| Spain | 4 | 8 |
| Other Europe | - | 2 |
| Continental Europe | 250 | 239 |
| United States | 68 | 11 |
| Other | 4 | 5 |
| Rest of the World | 72 | 16 |
| International | 322 | 255 |
| United Kingdom | 50 | 48 |
| Total | 372 | 303 |
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 time value of options and guarantees (TVOG) is most significant in the United Kingdom, France, the Netherlands and the United States. In the United Kingdom, this relates mainly to non-market value adjustment (MVA) guarantees on unitised with-profit business and guaranteed annuity rates. In France, this relates mainly to guaranteed crediting rates and surrender values on traditional business including the AFER fund. In the Netherlands, this relates mainly to maturity guarantees on unit-linked products and interest rate guarantees on traditional individual and group profit sharing business. In the United States, this relates to crediting rate, death benefit and surrender on life business.
The TVOG has increased to £372 million reflecting acquired TVOG from AmerUs of £56 million.
