3 Segmental analysis.

The Group has five reporting segments comprising Risk, Savings, Investment management, International, and Group capital and financing.

The Risk segment comprises individual and group protection, individual and bulk purchase annuities, and general insurance, together with estate agencies and the housing related business conducted through our regulated mortgage network.

The Savings segment comprises non profit investment bonds, non profit pensions (including SIPPs), [ISAs], retail unit trusts, and all with-profits products.

The Investment management segment comprises institutional fund management and institutional unit trust business.

The International segment comprises businesses in the United States, France, the Netherlands and emerging markets.

Shareholders’ equity supporting the non profit Risk and Savings businesses is held within Legal & General Assurance Society Limited and Legal & General Pensions Limited and is managed on a groupwide basis within Group capital and financing. This also includes capital within the Group’s treasury function, and unit trust funds and property partnerships, which are managed on behalf of clients but are required to be consolidated under [IFRS], which do not constitute a separately reportable segment.

Transactions between reportable segments are on normal commercial terms, and are included within the reported segments.

The Group assesses performance and allocates resources on the basis of IFRS operating profit before tax (set out in Note 2). Segmental IFRS operating profit before tax is reconciled to the consolidated profit from continuing operations before tax attributable to equity holders and consolidated profit from ordinary activities after income tax.

(i) Operating profit

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For the year ended 31 December 2009	Risk £m	Savings £m	Investment management £m	International £m	Group capital and financing1 £m	Total £m
1. For segmental purposes, the Investment projects have been included in Group capital and financing. 2. At half-year 2009, non profit Risk business reflected a small reduction in yield from action taken to sell some of the Group’s holdings of tier 1 and upper tier 2 bank securities. These actions have contributed £75m to the negative investment variance. The cash and overlay strategy executed on the portfolio resulted in adverse effects on the assumed yields at the half-year which are reflected within [IFRS] profit. As expected, these half-year yield impacts have been reversed by action taken in further diversifying the credit portfolio in the second half of the year. The impact of strengthening assumptions for reinvestment of cashflows, variability in currency hedging costs and inflation is also reflected here, in addition to the negative impact from default provisioning of £50m. The 2008 Risk investment return variance includes £(650)m relating to the increase in the non profit annuity credit default reserve. 3. Savings investment variances reflect management action taken in the second half of the year to optimise the tax position of unit linked business.
Operating profit	735	55	167	127	25	1,109
Variation from longer term investment return2,3	(218)	127	(4)	26	53	(16)
Property losses attributable to minority interests	–	–	–	–	(19)	(19)
Profit from continuing operations before tax attributable to equity holders of the Company	517	182	163	153	59	1,074
Tax (expense)/credit attributable to equity holders of the Company	(142)	(49)	(45)	(49)	55	(230)
Profit for the year	375	133	118	104	114	844

For the year ended 31 December 2008	Risk Restated £m	Savings Restated £m	Investment management £m	International £m	Group capital and financing Restated £m	Total Restated £m
Operating profit	222	7	165	59	139	592
Variation from longer term investment return	(854)	59	7	4	(1,236)	(2,020)
Property losses attributable to minority interests	–	–	–	–	(63)	(63)
(Loss)/profit from continuing operations before tax attributable to equity holders of the Company	(632)	66	172	63	(1,160)	(1,491)
Tax credit/(expense) attributable to equity holders of the Company	172	(7)	(52)	(21)	269	361
(Loss)/profit for the year	(460)	59	120	42	(891)	(1,130)

(ii) Revenue

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For the year ended 31 December 2009	Risk £m	Savings £m	Investment management £m	International £m	Group capital and financing £m	Total £m
Internal revenue	117	136	103	–	(356)	–
External revenue	5,809	7,200	28,992	1,527	262	43,790
Total revenue	5,926	7,336	29,095	1,527	(94)	43,790
For the year ended 31 December 2008	Risk £m	Savings £m	Investment management £m	International £m	Group capital and financing £m	Total £m
Internal revenue	132	133	119	–	(384)	–
External revenue	2,648	(6,008)	(28,229)	741	(796)	(31,644)
Total revenue	2,780	(5,875)	(28,110)	741	(1,180)	(31,644)

Total revenue includes investment gains of £38,201m (2008: losses of £37,749m).

(iii) Consolidated balance sheet

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As at 31 December 2009	Risk £m	Savings £m	Investment management £m	International £m	Group capital and financing £m	Total £m
1. Includes non recourse financing.
Assets
Investment in associates	–	14	–	31	–	45
Investment property	–	1,965	497	7	1,370	3,839
Financial investments	22,416	40,857	206,753	6,400	(410)	276,016
Reinsurers’ share of contract liabilities	1,558	687	–	272	(424)	2,093
Deferred acquisition costs	45	999	16	984	(87)	1,957
Other assets	1,380	477	956	1,453	(1,822)	2,444
Cash and cash equivalents	568	2,619	3,314	516	3,633	10,650
Total assets	25,967	47,618	211,536	9,663	2,260	297,044
Shareholders’ equity	120	79	339	1,372	2,286	4,196
Minority interests	–	–	–	–	2	2
Total equity	120	79	339	1,372	2,288	4,198
Liabilities
Subordinated borrowings	–	–	–	–	1,870	1,870
Participating contract liabilities	–	15,084	–	2,376	–	17,460
Non-participating contract liabilities	22,102	30,078	207,963	3,523	(581)	263,085
Senior borrowings1	9	199	2	535	662	1,407
Other liabilities	3,736	2,178	3,232	1,857	(1,979)	9,024
Total liabilities	25,847	47,539	211,197	8,291	(28)	292,846
Total equity and liabilities	25,967	47,618	211,536	9,663	2,260	297,044

As at 31 December 2008	Risk £m	Savings £m	Investment management £m	International £m	Group capital and financing £m	Total £m
1. Includes non recourse financing.
Assets
Investment in associates	–	14	–	–	–	14
Investment property	–	2,866	273	7	823	3,969
Financial investments	19,119	34,160	173,255	6,250	1,730	234,514
Reinsurers’ share of contract liabilities	1,479	474	–	302	(258)	1,997
Deferred acquisition costs	51	1,018	18	1,100	(75)	2,112
Other assets	2,199	518	1,471	1,427	(2,182)	3,433
Cash and cash equivalents	412	3,941	3,376	618	2,341	10,688
Total assets	23,260	42,991	178,393	9,704	2,379	256,727
Shareholders’ equity	101	73	322	1,272	1,820	3,588
Minority interests	–	–	–	–	144	144
Total equity	101	73	322	1,272	1,964	3,732
Liabilities
Subordinated borrowings	–	–	–	–	1,657	1,657
Participating contract liabilities	–	14,829	–	2,289	–	17,118
Non-participating contract liabilities	19,001	25,917	174,469	3,691	(539)	222,539
Senior borrowings1	–	161	9	676	1,468	2,314
Other liabilities	4,158	2,011	3,593	1,776	(2,171)	9,367
Total liabilities	23,159	42,918	178,071	8,432	415	252,995
Total equity and liabilities	23,260	42,991	178,393	9,704	2,379	256,727

(iv) Gross written premiums on insurance contracts

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	2009 £m	2008 £m
From continuing operations
Risk
Non-participating Risk business	3,057	4,038
General insurance
– Household	247	267
– Other business	26	29
Total Risk	3,330	4,334
Savings
Non-participating Savings business	45	49
Participating business	772	551
Total Savings	817	600
International
USA	487	397
Netherlands	270	278
France	371	286
Total International	1,128	961
Total gross written premiums	5,275	5,895