INTERNATIONAL. OVERVIEW.

Gareth Hoskin, Chief Executive Officer (Group International) (photo)

“We have continued to strengthen our international businesses in 2011 whilst also increasing the dividends paid back to the Group.”

GARETH HOSKIN
CHIEF EXECUTIVE OFFICER (GROUP INTERNATIONAL)


HIGHLIGHTS

  • 34% INCREASE IN OPERATING PROFIT.

  • 16% GROWTH IN [NET CASH GENERATION].

  • 5% GROWTH IN NEW BUSINESS.

  • ONE-OFF CAPITAL RETURNS OF £81M.

  • CONTINUED PROGRESS IN US CAPITAL PROGRAMME.

OPERATING PROFIT

£137m

(2010: £102m)

  • US operating profits grew by 22%, from £85m to £104m.

  • French results benefited from higher realised investment gains.

NET CASH GENERATION

£51m

(2010: £44m)

  • Dividends from US grew by 9%, from $53m to $58m.

  • Our Dutch dividend increased from €10m to €15m.

  • A further £81m of one-off capital was returned to the Group from US and Dutch businesses.

IFRS PROFIT BEFORE TAX

£116m

(2010: £137m)

  • 2010 included £28m one-off profit on redemption of Potomac bonds, as part of capital restructuring programme.

  • 2011 included £(20m) investment fluctuations in the Netherlands due to movements in bond markets (2010: £7m).

USA

£69m

NEW BUSINESS [APE]

(2010: £52m)

  • New business increase of 39% to a high of $111m APE. This is a result of a new distribution strategy targeted at LGA’s core Broker General Agent market.

  • We maintained our competitive, low-cost operating model with further expense efficiencies, whilst growing new business volume.

  • The capital programme is on track with £52m of capital returned to the Group in early 2011.

  • $100m of additional capital was generated by the second phase of the capital programme.

NETHERLANDS

£15m

NEW BUSINESS APE

(2010: £18m)

  • Operating profits were steady in a shrinking retail savings market.

  • New product launches have led to strongly improved protection sales at the end of 2011.

  • Meanwhile, our strong solvency position has permitted a return of capital in addition to the increased dividend.

FRANCE

£52m

NEW BUSINESS APE

(2010: £52m)

  • Individual retail sales fell by 3%, outperforming the market by 11%.

  • Group risk sales increased by 6% on 2010.

  • Profits benefited from higher investment gains, which offset increased Group risk claims experience.

EMERGING MARKETS

£18m

NEW BUSINESS APE

(2010: £24m)

  • While [APE] in India was lower than in 2010, a market shift to single premiums led to an 89% increase in premium income.

  • Egypt sales are recovering well post the revolution and core retail savings reached record levels in the second half of 2011.

  • Legal & General Gulf continues its planned regional expansion, opening in Kuwait during the year and achieving APE of $8m.

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