Preliminary results - 12 months ended 31 December 2006 01 March 2007
9. Geographical analysis of general insurance and health
(a) Operating result
| Operating profit | Underwriting result | |||
|---|---|---|---|---|
| 2006 £m | 2005 £m | 2006 £m | 2005 £m | |
| France | 63 | 35 | 6 | (21) |
| Ireland | 172 | 171 | 121 | 116 |
| Netherlands | 139 | 137 | 50 | 54 |
| Other | 43 | 47 | 12 | 15 |
| Continental Europe | 417 | 390 | 189 | 164 |
| Canada | 148 | 147 | 27 | 35 |
| Other | 40 | 40 | 11 | 3 |
| Rest of the World | 188 | 187 | 38 | 38 |
| International | 605 | 577 | 227 | 202 |
| United Kingdom | 1,075 | 974 | 380 | 303 |
| Total | 1,680 | 1,551 | 607 | 505 |
| Analysed by: | ||||
| General insurance | 1,652 | 1,496 | 639 | 507 |
| Health | 28 | 55 | (32) | (2) |
| Total | 1,680 | 1,551 | 607 | 505 |
(b) Investment return information
| Actual investment return credited to income | Longer-term investment return | |||
|---|---|---|---|---|
| 2006 £m | 2005 £m | 2006 £m | 2005 £m | |
| France | 35 | 54 | 57 | 56 |
| Ireland | 41 | 43 | 51 | 55 |
| Netherlands | 72 | 88 | 89 | 83 |
| Other | 17 | 17 | 31 | 32 |
| Continental Europe | 165 | 202 | 228 | 226 |
| Canada | 98 | 95 | 121 | 112 |
| Other | 27 | 27 | 29 | 37 |
| Rest of the World | 125 | 122 | 150 | 149 |
| International | 290 | 324 | 378 | 375 |
| United Kingdom | 625 | 646 | 695 | 671 |
| Total longer-term investment return | 1,073 | 1,046 | ||
| Total actual investment income | 915 | 970 | ||
| Realised gains | 281 | 216 | ||
| Unrealised gains | 26 | 377 | ||
| Total actual investment return | 1,222 | 1,563 | ||
The total short-term fluctuation in investment return of £149 million (2005: £517 million) is the difference between the total actual investment return of £1,222 million (2005: £1,563 million) and the total longer-term investment return of £1,073 million (2005: £1,046 million).
Actual income and longer-term investment return both contain the amortisation of the discount/premium arising on the acquisition of fixed income securities.
The longer-term investment return is calculated separately for each principal general insurance and health business unit. In respect of equities and properties, the return is calculated by multiplying the opening market value of the investments, adjusted for sales and purchases during the period, by the longer-term rate of investment return. The longer-term rate of investment return is determined using consistent assumptions between operations, having regard to local economic and market forecasts of investment return. The allocated longer-term return for other investments is the actual income receivable for the period.
The Group has calculated the longer-term investment return for its general insurance and health business using the same start of year economic assumptions for equities and properties as those used for EEV reporting as shown in the Principle economic assumptions – deterministic calculations.
The principal assumptions underlying the calculation of the longer-term investment return are:
