11 Group embedded value reconciliation – Summary.

(XLS:) Notes to the Supplementary Financial Statements – Group embedded value reconciliation 2012

 

Covered business

Non-covered business
£m

Total
£m

For the year ended 31 December 2012

UK business
£m

P&A overseas business
£m

US Protection
£m

At 1 January

 

 

 

 

 

Value of in-force business (VIF)

4,247

217

913

5,377

Shareholder net worth (SNW)

3,218

252

149

(388)

3,231

 

7,465

469

1,062

(388)

8,608

 

 

 

 

 

 

Exchange rate movements

(12)

(50)

40

(22)

 

 

 

 

 

 

Operating profit after tax for the year

653

19

77

71

820

Non-operating (loss)/profit for the year

(23)

(20)

(18)

(25)

(86)

Profit for the year

630

(1)

59

46

734

Capital movements

Intra-group distributions2

(473)

(14)

(40)

527

Dividends to equity holders of the Company

(394)

(394)

Transfer to non-covered business3

(22)

22

Other reserve movements including pension deficit4

(20)

(57)

51

(26)

Embedded value

7,580

442

974

(96)

8,900

Value of in-force business

4,402

146

735

5,283

Shareholder net worth

3,178

296

239

(96)

3,617

(XLS:) Notes to the Supplementary Financial Statements – Group embedded value reconciliation 2011

 

Covered business

Non-covered business
£m

Total
£m

For the year ended 31 December 2011

UK business
£m

P&A overseas business
£m

US Protection
£m

1.

The 2011 capital movement of £262m primarily reflects the capital contribution made to LGA to enable the repurchase of Potomac securities of £271m. There is no corresponding movement in 2012.

2.

UK intra-group distributions reflect a £525m (2011: £500m) dividend paid from Society to Group and dividends of £40m (2011: £20m) paid to Society from subsidiaries (primarily Nationwide Life). Dividends of $63m from LGA, €15m from LGN and €3m from LGF were also paid to the group (2011: $57m from LGA, €50m from LGN and €2m from LGF).

3.

The transfer to non-covered business represents the IFRS profits arising in the period from the provisions of investment management services by Legal & General Investment Management to the UK covered business, which have been included in the operating profit of the covered business on the look through basis.

4.

The other reserve movements reflects the pension deficit movement, the movement of investment project costs from covered to non-covered business and the effect of reinsurance arrangement transactions between UK and US covered business.

At 1 January

 

 

 

 

 

Value of in-force business (VIF)

3,886

253

762

4,901

Shareholder net worth (SNW)

3,035

290

458

(954)

2,829

 

6,921

543

1,220

(954)

7,730

 

 

 

 

 

 

Exchange rate movements

(13)

9

3

(1)

 

 

 

 

 

 

Operating profit after tax for the year

859

8

156

89

1,112

Non-operating profit/(loss) for the year

222

(33)

(15)

(55)

119

Profit for the year

1,081

(25)

141

34

1,231

Capital movements1

9

(271)

262

Intra-group distributions2

(437)

(45)

(37)

519

Dividends to equity holders of the Company

(298)

(298)

Transfer to non-covered business3

(19)

19

Other reserve movements including pension deficit4

(81)

27

(54)

Embedded value

7,465

469

1,062

(388)

8,608

Value of in-force business

4,247

217

913

5,377

Shareholder net worth

3,218

252

149

(388)

3,231

Further analysis of the Protection and Annuities and Savings UK covered business can be found in Note 12.