31 Segmental analysis.

31 Segmental analysis.

The Group provides a segmental analysis to enhance the understanding of the financial statements.

Under the requirements of IFRS 8, ‘Operating segments’, operating and reportable segments are presented in a manner consistent with the internal reporting provided to the chief operating decision maker, which has been identified as the Board of Legal & General Group Plc.

Reportable segments

The Group has five reportable segments comprising LGAS, LGR, LGIM, LGC and group expenses and LGA.

LGAS represents Protection business (retail protection, group protection and general insurance) and Savings business (platforms, workplace, SIPPs, mature savings and with-profits). The LGAS segment also includes Legal & General France (LGF), Legal & General Netherlands (LGN) and emerging markets.

LGR represents Annuities, (both individual and bulk purchase) and longevity insurance.

The LGIM segment represents institutional and retail investment management businesses.

Shareholders’ equity supporting the non profit LGR and LGAS businesses is held within Legal & General Assurance Society Limited and Legal & General Pensions Limited and is managed on a groupwide basis within LGC and group expenses. This also includes capital within the Group’s treasury function, and unit trust funds and property partnerships, which are managed on behalf of clients but are required to be consolidated under IFRS, which do not constitute a separately reportable segment. The LGC and group expenses segment also includes inter-segmental elimination.

The LGA segment represents protection business written in the USA.

Transactions between reportable segments are on normal commercial terms, and are included within the reported segments.

(i) Operating profit/(loss)

(XLS:) Segmental analysis – Operating profit/(loss) 2013

For the year ended 31 December 2013

LGAS
£m

LGR
£m

LGIM
£m

LGC and group expenses1
£m

LGA
£m

Total
£m

Operating profit

444

310

304

8

92

1,158

Investment and other variances

(73)

63

(6)

2

(13)

(27)

Gains attributable on non-controlling interests

3

3

Profit from continuing operations before tax

371

373

298

13

79

1,134

Tax (expense)/credit attributable on equity holders of the Company

(83)

(83)

(65)

36

(43)

(238)

Profit for the year after tax

288

290

233

49

36

896

(XLS:) Segmental analysis – Operating profit/(loss) 2012

For the year ended 31 December 2012

LGAS
£m

LGR
£m

LGIM
£m

LGC and group expenses1
£m

LGA
£m

Total
£m

1.

For segmental purposes, investment projects of £25m (2012: £50m) have been included in LGC and group expenses.

Operating profit/(loss)

462

281

272

(27)

99

1,087

Investment and other variances

28

(42)

(5)

(23)

(42)

Losses attributable on non-controlling interests

(12)

(12)

Profit/(loss) from continuing operations before tax

490

239

267

(62)

99

1,033

Tax (expense)/credit attributable on equity holders of the Company

(118)

(58)

(51)

29

(37)

(235)

Profit/(loss) for the year after tax

372

181

216

(33)

62

798

The segmental analysis of operating profit/(loss) has been restated to reflect the adoption by the Group of amendments to IAS 19, ‘Employee Benefits.’ Further details are contained in Note 1. The impact is to reduce profit for the year by £3m for 2012.

(ii) Revenue

(XLS:) Segmental analysis – Revenue 2013

For the year ended 31 December 2013

LGAS
£m

LGR
£m

LGIM
£m

LGC and group expenses
£m

LGA
£m

Total
£m

Internal revenue

210

146

(285)

(71)

External revenue

6,600

4,468

27,173

550

460

39,251

Total revenue

6,810

4,468

27,319

265

389

39,251

(XLS:) Segmental analysis – Revenue 2012

For the year ended 31 December 2012

LGAS
£m

LGR
£m

LGIM
£m

LGC and group expenses
£m

LGA
£m

Total
£m

Internal revenue

69

149

(164)

(54)

External revenue

7,549

5,608

20,941

458

414

34,970

Total revenue

7,618

5,608

21,090

294

360

34,970

Total revenue includes investment return of £32,221m (2012: £28,828m).

(iii) Consolidated balance sheet

(XLS:) Segmental analysis – Consolidated balance sheet 2013

As at 31 December 2013

LGAS
£m

LGR
£m

LGIM
£m

LGC and group expenses1
£m

LGA
£m

Total
£m

1.

LGC and group expenses includes inter-segmental eliminations.

2.

Includes non recourse financing.

Assets

 

 

 

 

 

 

Investments

52,619

33,974

249,396

17,383

1,998

355,370

Other assets

9,891

2,491

1,335

(8,316)

2,393

7,794

Total assets

62,510

36,465

250,731

9,067

4,391

363,164

 

 

 

 

 

 

 

Shareholders’ equity

783

421

3,622

816

5,642

Non-controlling interests

58

58

Total equity

783

421

3,680

816

5,700

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

Core borrowings

2,453

2,453

Operational borrowings2

252

2

8

174

268

704

Participating contract liabilities

15,438

15,438

Non-participating contract liabilities

42,939

32,218

243,009

(847)

1,708

319,027

Other liabilities

3,098

4,245

7,293

3,607

1,599

19,842

Total liabilities

61,727

36,465

250,310

5,387

3,575

357,464

 

 

 

 

 

 

 

Total equity and liabilities

62,510

36,465

250,731

9,067

4,391

363,164

(XLS:) Segmental analysis – Consolidated balance sheet 2012

As at 31 December 2012

LGAS
£m

LGR
£m

LGIM
£m

LGC and group expenses1
£m

LGA
£m

Total
£m

1.

LGC and group expenses includes inter-segmental eliminations.

2.

Includes non recourse financing.

Assets

 

 

 

 

 

 

Investments

51,846

33,199

238,571

12,863

2,151

338,630

Other assets

7,555

1,210

1,449

(4,823)

2,280

7,671

Total assets

59,401

34,409

240,020

8,040

4,431

346,301

 

 

 

 

 

 

 

Shareholders’ equity

685

423

3,414

919

5,441

Non-controlling interests

39

39

Total equity

685

423

3,453

919

5,480

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

Core borrowings

2,445

2,445

Operational borrowings2

251

2

2

393

272

920

Participating contract liabilities

16,430

16,430

Non-participating contract liabilities

38,977

29,826

233,069

(830)

1,644

302,686

Other liabilities

3,058

4,581

6,526

2,579

1,596

18,340

Total liabilities

58,716

34,409

239,597

4,587

3,512

340,821

 

 

 

 

 

 

 

Total equity and liabilities

59,401

34,409

240,020

8,040

4,431

346,301

(iv) Gross written premiums on insurance contracts

Gross written premium is the total written by the Group before deductions for reinsurance.

Long term insurance premiums are recognised as revenue when due for payment. General insurance premiums are accounted for in the period in which the risk commences. Estimates are included for premiums not notified by the year end and provision is made for the anticipated lapse of renewals not yet confirmed. Those proportions of premiums written in a year which relate to periods of risk extending beyond the end of the year are carried forward as unearned premiums.

Premiums received relating to investment contracts are not recognised as revenue, but are included in the balance sheet investment contract liability.

Outward reinsurance premiums of £874m (2012: £718m) are accounted for in the same accounting period as the related premiums for the direct or inwards reinsurance business being reinsured.

(XLS:) Segmental analysis – Gross written premiums on insurance contracts

 

2013
£m

2012
£m

From continuing operations

 

 

LGAS

 

 

Non-participating UK Protection business

1,326

1,267

Non-participating UK Savings business

36

39

Participating UK Savings business

116

336

Netherlands (LGN)

200

172

France (LGF)

444

406

General insurance

 

 

– Household

352

327

– Other business

23

22

Total LGAS

2,497

2,569

LGR

 

 

Non-participating UK Annuity business

3,011

2,515

LGA

654

584

Total gross written premiums

6,162

5,668

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