7 New business by product1.

7 New business by product1.
(XLS:) European Embedded Value basis – New business by product 2013

For the year ended 31 December 2013

Annual
pre­miums

Present value of annual pre­miums

Capitali­sation factor2

Single pre­miums

PVNBP

Contri­bution from new busi­ness3

Margin

£m

£m

 

£m

£m

£m

%

UK Protection

218

1,141

5.2

1,141

101

8.9

Overseas business

30

229

7.6

371

600

5

0.8

UK Savings

724

2,516

3.5

2,495

5,011

2

Total LGAS

972

3,886

4.0

2,866

6,752

108

1.6

LGR4

n/a

939

n/a

4,089

5,028

436

8.7

LGA

99

926

9.4

926

107

11.6

Total new business

1,071

5,751

5.4

6,955

12,706

651

5.1

Cost of capital

 

 

 

 

 

72

 

Contribution from new business before cost of capital

 

 

 

 

 

723

 

(XLS:) European Embedded Value basis – New business by product 2012

For the year ended 31 December 2012

Annual
pre­miums

Present value of annual pre­miums

Capitali­sation factor2

Single pre­miums

PVNBP

Contri­bution from new busi­ness3

Margin

£m

£m

 

£m

£m

£m

%

1.

Covered business only.

2.

The capitalisation factor is the present value of annual premiums divided by the amount of annual premiums.

3.

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.

4.

LGR includes present value of annual premiums for longevity insurance on a net of reinsurance basis to enable a more representative margin figure. The gross of reinsurance longevity insurance annual premium is £270m (2012 : £nil). The LGR PVNBP contribution from new business and margin are also inclusive of longevity insurance.

UK Protection

221

1,176

5.3

1,176

139

11.8

Overseas business

51

409

8.0

315

724

5

0.7

UK Savings

577

2,117

3.7

3,002

5,119

27

0.5

Total LGAS

849

3,702

4.4

3,317

7,019

171

2.4

LGR4

n/a

n/a

2,339

2,339

206

8.8

LGA

90

830

9.2

830

98

11.8

Total new business

939

4,532

4.8

5,656

10,188

475

4.7

Cost of capital

 

 

 

 

 

60

 

Contribution from new business before cost of capital

 

 

 

 

 

535

 

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