7. Time value of options and guarantees
The following table sets out the time value of options and guarantees relating to covered business by territory.
| 2007 | 2006 | |
|---|---|---|
| £m | £m | |
| United Kingdom | 50 | 50 |
| France | 89 | 77 |
| Ireland | 2 | 2 |
| Italy | 22 | 17 |
| Netherlands (including Belgium and Germany) | 129 | 146 |
| Poland | 4 | 4 |
| Spain | 4 | 4 |
| Other Europe | 1 | - |
| Europe | 251 | 250 |
| North America | 85 | 68 |
| Asia Pacific | 6 | 4 |
| Total | 392 | 372 |
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 guarantees on life business.
The TVOG has increased by £20 million to £392 million reflecting the impact of adverse investment variances.
