3 Analysis of shareholders’ equity

As at 31 December 2014

LGAS and LGR
£m

LGIM
£m

LGC and group expenses
£m

LGA
£m

Total
£m

1.

Shareholders’ equity supporting the UK non profit LGAS and LGR businesses is held within Legal & General Assurance Society Limited and Legal & General Pensions Limited and is managed on a groupwide basis within the LGC and group expenses segment.

2.

Free surplus is the value of any capital and surplus allocated to, but not required to support, the in-force covered business at the valuation date.

3.

Value of in-force business includes a deduction for the time value of options and guarantees of £43m (2013: £23m).

Analysed as:

 

 

 

 

 

IFRS basis shareholders’ equity1

847

541

3,770

870

6,028

Additional retained profit/(loss) on an EEV basis

6,227

(1,137)

(143)

4,947

Shareholders’ equity on an EEV basis

7,074

541

2,633

727

10,975

 

 

 

 

 

 

Comprising:

 

 

 

 

 

Business reported on an IFRS basis

484

541

(886)

139

Business reported on an EEV basis:

 

 

 

 

 

Shareholder net worth

 

 

 

 

 

– Free surplus2

90

 

887

161

1,138

– Required capital to cover solvency margin

235

 

2,632

48

2,915

Value of in-force

 

 

 

 

 

– Value of in-force business3

6,870

 

 

529

7,399

– Cost of capital

(605)

 

 

(11)

(616)

As at 31 December 2013

LGAS and LGR
£m

LGIM
£m

LGC and group expenses
£m

LGA
£m

Total
£m

1.

Shareholders’ equity supporting the UK non profit LGAS and LGR businesses is held within Legal & General Assurance Society Limited and Legal & General Pensions Limited and is managed on a groupwide basis within the LGC and group expenses segment.

2.

Free surplus is the value of any capital and surplus allocated to, but not required to support, the in-force covered business at the valuation date.

3.

Value of in-force business includes a deduction for the time value of options and guarantees of £23m.

Analysed as:

 

 

 

 

 

IFRS basis shareholders’ equity1

783

421

3,622

816

5,642

Additional retained profit/(loss) on an EEV basis

4,830

(1,003)

117

3,944

Shareholders’ equity on an EEV basis

5,613

421

2,619

933

9,586

 

 

 

 

 

 

Comprising:

 

 

 

 

 

Business reported on an IFRS basis

408

421

(630)

199

Business reported on an EEV basis:

 

 

 

 

 

Shareholder net worth

 

 

 

 

 

– Free surplus2

67

 

1,107

192

1,366

– Required capital to cover solvency margin

248

 

2,142

42

2,432

Value of in-force

 

 

 

 

 

– Value of in-force business3

5,398

 

 

711

6,109

– Cost of capital

(508)

 

 

(12)

(520)

Further analysis of shareholders’ equity is included in Note 4.