3 New business1.

(XLS:) Notes to the Supplementary Financial Statements – new business 2012

For the year ended 31 December 2012

Annual premiums
£m

Present value of annual premiums
£m

Capitalisation factor2
 

Single premiums
£m

PVNBP3
£m

Contribution from new business4
£m

New business margin5
%

Protection and Annuities6

272

1,585

5.8

2,654

4,239

350

8.3

Savings

577

2,117

3.7

3,002

5,119

27

0.5

US Protection

90

830

9.2

830

98

11.8

 

939

4,532

4.8

5,656

10,188

475

4.7

(XLS:) Notes to the Supplementary Financial Statements – new business 2011

For the year ended 31 December 2011

Annual premiums
£m

Present value of annual premiums
£m

Capitalisation factor2
 

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 only been included in the contribution from new business and has been excluded from all other Protection and Annuities new business measures. See Note 1.

Protection and Annuities6

206

1,141

5.5

2,842

3,983

341

8.4

Savings

313

1,128

3.6

2,768

3,896

31

0.8

US Protection

69

637

9.3

637

69

10.7

 

588

2,906

4.9

5,610

8,516

441

5.1