In accordance with the guidance issued by the European Insurance CFO Forum in October 2005 the table below shows the effect of alternative assumptions on the long term embedded value and new business contribution.
(Download XLS:)  |
|
Effect on embedded value as at 31 December 2010 |
As published |
1% lower risk discount rate |
1% higher risk discount rate |
1% lower interest rate |
1% higher interest rate |
1% higher equity/ property yields |
|---|---|---|---|---|---|---|
|
UK |
6,921 |
426 |
(368) |
186 |
(169) |
96 |
|
International |
1,763 |
130 |
(111) |
23 |
(37) |
5 |
|
Total covered business |
8,684 |
556 |
(479) |
209 |
(206) |
101 |
|
|
|
|
|
|
|
|
|
|
As published |
10% lower equity/ property values |
10% lower maintenance expenses |
10% lower lapse rates |
5% lower mortality (UK annuities) |
5% lower mortality (other business) |
|
UK |
6,921 |
(183) |
87 |
86 |
(166) |
43 |
|
International |
1,763 |
(6) |
16 |
20 |
n/a |
100 |
|
Total covered business |
8,684 |
(189) |
103 |
106 |
(166) |
143 |
| (Download XLS:) |
|
Effect on new business contribution for the year |
As published |
1% lower risk discount rate |
1% higher risk discount rate |
1% lower interest rate |
1% higher interest rate |
1% higher equity/ property yields |
|---|---|---|---|---|---|---|
|
UK |
333 |
52 |
(44) |
26 |
(23) |
12 |
|
International |
44 |
15 |
(13) |
(1) |
1 |
– |
|
Total covered business |
377 |
67 |
(57) |
25 |
(22) |
12 |
|
|
|
|
|
|
|
|
|
|
As published |
10% lower equity/ property values |
10% lower maintenance expenses |
10% lower lapse rates |
5% lower mortality (UK annuities) |
5% lower mortality (other business) |
|
UK |
333 |
(18) |
12 |
16 |
(14) |
6 |
|
International |
44 |
– |
2 |
1 |
n/a |
12 |
|
Total covered business |
377 |
(18) |
14 |
17 |
(14) |
18 |
Opposite sensitivities are broadly symmetrical.
