6 - Segmental analysis of life and related businesses embedded value
| Net worth | Value of in-force covered business | Total | |||||
|---|---|---|---|---|---|---|---|
| 30 June 2008 | Required capital1 £m |
Free surplus £m |
Present value of in-force £m |
Cost of required capital £m |
Embedded value £m |
||
|
|||||||
| United Kingdom | 1,329 | 998 | 4,569 | (349) | 6,547 | ||
| France | 1,495 | 22 | 1,422 | (337) | 2,602 | ||
| Ireland | 285 | 215 | 584 | (48) | 1,036 | ||
| Italy | 391 | 514 | 338 | (72) | 1,171 | ||
| Netherlands (including Belgium and Germany) | 1,649 | 910 | 1,789 | (589) | 3,759 | ||
| Poland | 150 | 80 | 832 | (48) | 1,014 | ||
| Spain | 341 | 130 | 790 | (79) | 1,182 | ||
| Other Europe | 25 | 44 | 127 | (11) | 185 | ||
| Europe | 4,336 | 1,915 | 5,882 | (1,184) | 10,949 | ||
| North America2,3 | 804 | (82) | 1,159 | (167) | 1,714 | ||
| Asia Pacific | 282 | 148 | 310 | (83) | 657 | ||
| Total | 6,751 | 2,979 | 11,920 | (1,783) | 19,867 | ||
| Net worth | Value of in-force covered business | Total | |||||
|---|---|---|---|---|---|---|---|
| 31 December 2007 | Required capital1 £m |
Free surplus £m |
Present value of in-force £m |
Cost of required capital £m |
Embedded value £m |
||
|
|||||||
| United Kingdom | 1,307 | 1,338 | 4,816 | (355) | 7,106 | ||
| France | 1,510 | 74 | 1,416 | (340) | 2,660 | ||
| Ireland | 267 | 213 | 564 | (45) | 999 | ||
| Italy | 305 | 464 | 299 | (61) | 1,007 | ||
| Netherlands (including Belgium and Germany) | 1,456 | 1,557 | 1,605 | (442) | 4,176 | ||
| Poland | 129 | 128 | 726 | (41) | 942 | ||
| Spain | 316 | 87 | 714 | (69) | 1,048 | ||
| Other Europe | 24 | 33 | 110 | (11) | 156 | ||
| Europe | 4,007 | 2,556 | 5,434 | (1,009) | 10,988 | ||
| North America | 776 | 46 | 918 | (152) | 1,588 | ||
| Asia Pacific | 241 | 187 | 281 | (72) | 637 | ||
| Total | 6,331 | 4,127 | 11,449 | (1,588) | 20,319 | ||
The shareholders’ net worth is the market value of the shareholders’ funds and the shareholders’ interest in the surplus held in the non-profit component of the long-term business funds, determined on a statutory solvency basis and adjusted to add back any non-admissible assets. Required capital, net of implicit items, is included within the net worth.
The value of in-force covered business includes “cost of required capital” – the effect of holding shareholders’ capital to support the level of required capital and allowing for projected future releases.
