8 VARIATION FROM LONGER TERM INVESTMENT RETURN.


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2011
£m

2010
£m

1.

The positive investment variance primarily reflects the annuity business. Contributing factors include: improved asset diversity which increased the risk adjusted yield, for example, sale and leaseback; no defaults in the portfolio; improved asset liability matching, for example, reinvestment into longer duration bonds; more efficient cash management and small one-off benefits from tax and interest rate movements.

2.

Group capital and financing investment returns primarily consists of negative debt and equity related investment variance. (See Note 2(vii) in the Group’s consolidated financial statements).

Business reported on an [EEV] basis:

 

 

Risk and Savings1

124

103

International

(6)

43

Group capital and financing2

(152)

82

 

(34)

228

Business reported on an [IFRS] basis:

 

 

Risk and Savings

12

Investment management

(7)

(8)

Group capital and financing2

(70)

(71)

 

(111)

161

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