Strong new business growth of 27% was driven by encouraging performances in our emerging markets joint ventures. Over 16% of total international sales now come from our share of new joint venture operations in India and the Middle East. [Net cash generation] for the international division was £44m (2009: £8m) including dividends of US$53m from Legal & General America and €10m from our Dutch business.

Our US operation generated a strong sales recovery in term assurance in the second half of the year, and L&G France made significant progress in developing its Group business during the year.

As recently announced, the first stage of work on capital restructuring in the US has been successfully completed, using an internal reinsurance solution. Over the last two years, this has generated £46m of US non-operating profits, an increase in the Group’s [EEV] of £100m and increased the Group’s regulatory surplus by £82m. Going forward, it will increase the Group’s profitability by £8m per year due to lower funding costs.

International operating profits were £102m (2009 £127m), taking into account increased investments in our emerging markets business. As expected, investment profits in the Netherlands have fallen as bond yields recovered later in the year.

New business margins rose in 2010, particularly in the US, as a consequence of increasing reinvestment yields and the impact of improving new business levels on expense recovery.

OPERATIONAL CASH GENERATION AND IFRS OPERATING PROFIT

In addition to the effects of capital restructuring, underlying dividend flows are expected to continue and grow.

US operating profits of £85m (2009: £86m) are marginally below last year in local currency terms, with good investment returns offsetting mortality experience which was not as strong as in 2009.

In Europe, profits were £26m (2009: £46m). Dutch profits in 2009 and early 2010 benefited significantly from falls in Dutch bond yields, an element of which was recorded in investment fluctuations and excluded from operating profit.

We have taken action to lock in a substantial element of the profit from these market movements and protect the strong solvency position and dividend paying capacity of the business. In the last three years alone, L&G Netherlands has contributed more in dividends than it has received in capital in its entire history.

Profits in France have improved. Investment margins on savings business doubled. Claims experience on the growing Group portfolio held steady, but profits were diluted by the adverse effects of the mix of claims on reinsurance recoveries and the effect of an increase in the state retirement age on disability reserving.

NEW BUSINESS

New business volumes in the US, principally high value term business supported by specialist underwriting techniques, were £52m (2009: £49m), 5% up on 2009 in local currency terms, reflecting a strong recovery in the second half of the year.

New business in France totalled £52m of [APE] (2009: £44m), representing 32% growth in local currency terms. This was principally driven by an increase of over 80% in the levels of Group new business, which consists of life, health and disability products.

New business in the Netherlands was £18m (2009: £22m), with sales of unit linked products slowing in line with the local market, although higher margin term business was less affected.

Our bancassurance joint venture in India, IndiaFirst, had a strong first full year of operation, selling over 130,000 policies during the year. These generated £53m APE, of which the Legal & General share was £14m.

OPPORTUNITIES

We continue to look for opportunities in selected new markets using our Indian joint venture as a preferred template. We have established a representative office in China, and also see opportunities in other markets which we believe have the potential to be large-scale insurance markets of the future.