Interim results - 6 months ended 30 June 2007
Operating and financial review
Overview
Detailed worldwide investment sales analysis
The present value of new business premiums (PVNBP) is derived from the single 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 projection assumptions used to calculate PVNBP for each product are the same as those used to calculate new business contribution. 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 PVNBP by business units.
| Single | Regular | Present | |||||
|---|---|---|---|---|---|---|---|
| 6 months 2007 £m | 6 months 2006 £m | Local currency growth1 | 6 months 2007 £m | 6 months 2006 £m | Local currency growth1 | Local currency growth1 | |
| United Kingdom | |||||||
| Peps/Isas/UTs/Oeics/SIPPs | 1,475 | 1,065 | 38% | 442 | 18 | 144% | 47%2 |
| Kingdom | |||||||
| UNITED KINGDOM | 1,475 | 1,065 | 38% | 44 | 18 | 144% | 47% |
| Netherlands (including Belgium and Germany) | |||||||
| Unit trusts | 365 | 211 | 75% | - | - | - | 75% |
| Poland | |||||||
| Mutual funds | 139 | 60 | 132% | 2 | 2 | - | 127% |
| Other Europe | |||||||
| UCITS | 272 | 309 | (11)% | - | - | - | (11)% |
| EUROPE | 776 | 580 | 34% | 2 | 2 | - | 35% |
| Asia Pacific | |||||||
| Unit trusts | 80 | 96 | (5)% | - | - | - | (5)% |
| Navigator | 1,298 | 723 | 83% | - | - | - | 83% |
| ASIA PACIFIC | 1,378 | 819 | 71% | - | - | - | 71% |
| Total investment sales | 3,629 | 2,464 | 48% | 46 | 20 | 130% | 52% |
- Growth rates are calculated based on constant rates of exchange.
- UK regular premium investment sales include SIPP products. These are similar in nature to pension products and their payment pattern is stable and predictable and accordingly they have been capitalised. Regular premium SIPP sales for the 6 months to 30 June 2007 totalled £19 million and have been multiplied using a weighted average capitalisation factor of 5.0. As such, regular premium SIPP sales have produced an overall contribution to investment sales of £95 million out of the total UK investment sales of £1,595 million. The 2006 comparatives have not been restated as the level of regular premium SIPP sales was immaterial to the group's sales.
