3 NEW BUSINESS1.


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For the year ended 31 December 2011

Annual premiums
£m

Present value of annual premiums
£m

Capital-
isation
factor2
£m

Single premiums
£m

PVNBP3
£m

Contribution from new business4
£m

New business margin5
%

Risk6

247

931

5.3

2,515

3,446

345

9.8

Savings

313

1,128

3.6

2,768

3,896

31

0.8

International

98

847

8.6

327

1,174

65

5.5

 

658

2,906

4.9

5,610

8,516

441

5.1

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For the year ended 31 December 2010

Annual premiums
£m

Present value of annual premiums
£m

Capital-
isation
factor2
£m

Single premiums
£m

PVNBP3
£m

Contribution from new business4
£m

New business margin5
%

1.

Covered business only.

2.

The capitalisation factor is the present value of annual premiums divided by the amount of annual premiums.

3.

The [present value of new business premiums (PVNBP)] on the [EEV] basis is defined as the present value of annual premiums plus single premiums for any given period. It is calculated using the same assumptions as for the contribution from new business but determined as at the point of sale.

4.

The contribution from new business is defined as the present value at point of sale of assumed profits from new business written in the period and then rolled forward to the end of the financial period using the risk discount rate applicable at the end of the reporting period.

5.

The new business margin is defined as the contribution from new business (including the cost of solvency capital) divided by the PVNBP.

6.

Longevity insurance has been excluded from the Risk present value of annual premiums, capitalisation factor, PVNBP and new business margin measures. See Note 1.

Risk

175

860

4.9

2,065

2,925

300

10.3

Savings

371

1,367

3.7

2,567

3,934

33

0.8

International

80

656

8.2

361

1,017

44

4.3

 

626

2,883

4.6

4,993

7,876

377

4.8

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