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Interim results - 6 months ended 30 June 2007

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EEV Basis

4. Geographical analysis of the components of life EEV operating return

6 months 2007 £m

	UK	France	Ireland	Italy	Netherlands	Poland	Spain
New business contribution (after the effect of required capital)	143	54	12	37	24	15	79
Profit from existing business
- expected return	261	81	21	18	85	29	33
- experience variances:
Maintenance expenses1	4	2	1	(1)	(10)	1	(1)
Project and other related expenses2	(56)	(1)	(1)	-	(6)	-	-
Mortality/Morbidity3	3	11	-	-	2	6	(2)
Lapses4	(6)	5	(2)	(2)	(5)	11	(7)
Other5	18	19	(2)	4	(3)	4	(2)
	(37)	36	(4)	1	(22)	22	(12)
- operating assumption changes:
Maintenance expenses6	-	13	-	-	-	-	-
Project and other related expenses2	-	-	-	-	-	-	-
Mortality/Morbidity	-	-	-	-	-	-	-
Lapses	-	-	-	-	-	-	-
Other	-	-	-	-	-	-	-
Other	-	13	-	-	-	-	-
Expected return on shareholders' net worth	46	41	8	16	16	5	5
Life EEV operating return before tax	413	225	37	72	166	71	107

	Other Europe	Europe	North America	Asia	Australia	Asia Pacific	Total
New business contribution (after the effect of required capital)	(3)	218	35	16	7	23	419
Profit from existing business
- expected return	5	272	50	7	10	17	600
- experience variances:
Maintenance expenses1	(2)	(10)	2	-	(1)	(1)	(5)
Project and other related expenses2	(3)	(11)	-	-	-	-	(67)
Mortality/Morbidity3	2	19	(2)	2	2	4	24
Lapses4	(2)	(2)	-	(4)	(2)	(2)	(10)
Other5	3	23	(3)	-	1	1	39
	(2)	19	(3)	(2)	4	2	(19)
- operating assumption changes:
Maintenance expenses6	-	13	-	-	(2)	(2)	11
Project and other related expenses2	-	-	-	-	-	-	-
Mortality/Morbidity	-	-	-	-	-	-	-
Lapses	-	-	-	-	-	-	-
Other	-	-	-	-	-	-	-
	-	13	-	-	(2)	(2)	11
Expected return on shareholders' net worth	1	157	30	3	4	7	240
Life EEV operating return before tax	1	679	112	24	23	47	1,251

1. Maintenance expenses in Delta Lloyd reflect the impact of expense overruns in Belgium and ABN AMRO.
2. Project and other related expenses in the UK reflect project costs associated with strategic initiatives, including developments designed to offer simpler products to customers, and the simplification of systems and processes. In the Netherlands, these expenses reflect higher project costs compared to allowances.
3. Mortality experience continues to be better than the assumptions set across a number of our businesses.
4. Lapse experience in Poland continues to be better than the assumptions set for both Life and Pension products. This has been offset by small negative experience variances across a number of our other businesses.
5. In the UK, other experience profits include better than assumed default experience on corporate bonds and commercial mortgages. In France, positive experience includes the benefit of higher than assumed tax-free dividend income.
6. In France, the maintenance expenses assumption change relates to lower “look through” expenses in the holding company.

6 months 2007 £m

	UK	France	Ireland	Italy	Netherlands	Poland	Spain
New business contribution (after the effect of required capital)	135	64	8	26	17	12	80
Profit from existing business
- expected return	236	69	19	14	84	26	27
- experience variances:
Maintenance expenses1	(1)	4	-	(1)	(12)	4	(1)
Project and other related expenses2	(75)	-	(1)	-	(6)	-	-
Mortality/Morbidity3	20	14	(2)	-	20	8	-
Lapses4	(35)	5	(5)	(2)	4	6	-
Other5	24	6	(1)	2	9	5	-
	(67)	29	(9)	(1)	15	23	(1)
- operating assumption changes:
Maintenance expenses6	-	-	(10)	-	-	-	-
Project and other related expenses2	-	-	-	-	-	-	-
Mortality/Morbidity	-	-	-	-	-	-	-
Lapses7	-	-	(7)	-	-	-	-
Other8	-	-	-	-	20	-	-
	-	-	(17)	-	20	-	-
Expected return on shareholders' net worth	46	34	7	14	49	5	6
Life EEV operating return before tax	350	196	8	53	185	66	112

	Other Europe	Europe	North America	Asia	Australia	Asia Pacific	Total
New business contribution (after the effect of required capital)	(5)	202	2	10	3	13	352
Profit from existing business
- expected return	6	245	8	5	9	14	503
- experience variances:
Maintenance expenses1	-	(6)	-	-	-	-	(7)
Project and other related expenses2	(1)	(8)	-	-	-	-	(83)
Mortality/Morbidity3	2	42	-	3	3	6	68
Lapses4	(3)	5	-	(1)	1	-	(30)
Other5	(2)	19	-	-	-	-	43
Other5	(4)	52	-	2	Annual	4	(9)
- operating assumption changes:
Maintenance expenses6	-	(10)	-	-	-	-	(10)
Project and other related expenses	-	-	-	-	-	-	-
Mortality/Morbidity	-	-	-	-	-	-	-
Lapses7	-	(7)	-	-	-	-	(7)
Other8	-	20	-	-	-	-	20
	-	3	-	-	-	-	3
Expected return on shareholders' net worth	-	115	6	2	3	4	172
Life EEV operating return before tax	(3)	617	16	19	19	38	1,021

1. Maintenance expenses in the Netherlands reflect the impact of expense overruns in Belgium.
2. Project and other related expenses in the UK reflect £18 million relating to the ongoing transformation of the life business and £57 million of other project and related costs associated with strategic initiatives, regulatory change and developments designed to increase future new business volumes such as those relating to pensions simplification.
3. Mortality experience continues to be better than the assumptions set across many of our businesses, notably for term and protection business in the UK and AFER in France. In addition there is a one-off reserve release associated with the review of a large group pension scheme in the Netherlands.
4. Lapse experience in the UK has been worse than assumed and primarily relates to bonds and pensions.
5. In the UK, other experience profits include better than assumed default experience on corporate bonds and commercial mortgages.
6. Maintenance expenses in Ireland relate to a change in assumptions regarding the future attribution of investment income and expenses between policyholders and shareholders.
7. In Ireland, the lapse assumption change relates to the Celebration Bond and life linked bonds.
8. In the Netherlands, the assumption changes relate to reduced asset management fees and a change in the asset mix in Belgium.

Year ended 31 December 2006 £m

	UK	France	Ireland	Italy	Netherlands	Poland	Spain
New business contribution (after the effect of required capital)	263	110	9	50	25	25	168
Profit from existing business
- expected return	474	142	41	26	158	52	53
- experience variances:
Maintenance expenses	13	9	4	(1)	(11)	5	(2)
Project and other related expenses1	(149)	1	(4)	-	(23)	-	(1)
Mortality/Morbidity2	(13)	33	(2)	4	3	16	1
Lapses3	(66)	8	(9)	(8)	2	21	(1)
Other4	75	20	(9)	6	20	3	11
	(140)	71	(20)	1	(9)	45	8
- operating assumption changes:
Maintenance expenses5	58	-	(3)	-	60	(3)	-
Project and other related expenses6	(46)	(2)	(22)	-	(9)	-	-
Mortality/Morbidity7	57	45	(13)	-	-	17	-
Lapses8	(224)	(41)	(47)	-	(14)	17	(21)
Other9	215	9	-	2	19	1	2
	60	11	(85)	2	56	32	(19)
Expected return on shareholders' net worth	87	68	15	31	99	8	11
Life EEV operating return before tax	744	402	(40)	110	329	162	221

	Other Europe	Europe	North America	Asia	Australia	Asia Pacific	Total
New business contribution (after the effect of required capital)	(6)	381	8	22	9	31	683
Profit from existing business
- expected return	9	481	29	10	17	27	1,011
- experience variances:
Maintenance expenses	(2)	2	-	-	(2)	(2)	13
Project and other related expenses1	(2)	(29)	-	-	-	-	(178)
Mortality/Morbidity2	2	57	-	8	7	15	59
Lapses3	(2)	11	(9)	(6)	3	(3)	(67)
Other4	(1)	50	(2)	(2)	2	-	123
	(5)	91	(11)	-	10	10	(50)
- operating assumption changes:
Maintenance expenses5	(11)	(11)	(12)	(1)	(5)	(6)	83
Project and other related expenses6	(3)	(36)	-	-	-	-	(82)
Mortality/Morbidity7	(1)	48	3	4	7	11	119
Lapses8	(1)	(107)	-	-	2	2	329
Other9	3	36	-	(1)	3	2	253
Expected return on shareholders' net worth	(13)	(16)	(9)	2	7	9	44
Life EEV operating return before tax	2	234	15	3	6	9	345
Life EEV operating return before tax	(13)	1,171	32	37	49	86	2,033

1. Project and other related expenses in the UK reflect £32 million relating to the ongoing transformation of the life business and £117 million of other exceptional and project costs associated with strategic initiatives, including developments designed to improve the future new business volumes, and regulatory changes. In the Netherlands, these expenses reflect higher project costs compared to allowances as well as the payment to ABN AMRO in respect of the joint venture operations.
2. Mortality experience continues to be better than the assumptions set across many of our businesses.
3. Lapse experience in the UK has been worse than assumed and primarily relates to bonds and pensions. In Poland, lapses for both life and pension products have been lower than assumed resulting in the favourable experience variance.
4. In the UK, other experience profits include better than assumed default experience on corporate bonds and mortgages, and the benefit of higher than expected performance fees in Morley.
5. Maintenance expenses in the UK relate to Morley's change in profit margin. The change in Delta Lloyd is also driven by improved asset management profitability. The adverse movement in North America is due to a reassessment of expenses in our Boston-based operations.
6. In the UK, exceptional expenses relate to short-term project costs and capitalisation of reorganisation costs. Ireland reflects changes in expense assumptions regarding the future attribution of investment income and expenses between policyholders and shareholders.
7. The change in mortality assumptions in the UK includes an alignment in the basis for internal business. Mortality assumptions in France were changed following improvements in mortality experience over the last few years.
8. In the UK, the lapse assumption change relates to bonds and pension business while the change in Ireland relates to the Celebration Bond and unit-linked bonds. In France, lapse assumptions have been changed for non-AFER business in Aviva Vie. In Spain, lapse assumptions have been changed for risk business and some savings products.
9. In the UK, the assumption changes reflect the beneficial impact of the with-profit funds sharing the pension scheme deficit funding (£126 million) and the impact of PS06/14, primarily in reducing the non-profit reserves (£50 million). In Delta Lloyd the impact is due to changes to management fee rebates.