Notes on the EEV basis results
4. Margins on new business premiums
| Half year 2007 | New business premiums |
Annual premium equivalent (APE) £m |
Present value of new business premiums (PVNBP) £m |
Pre-tax new business contribution £m |
New business margin |
||
|---|---|---|---|---|---|---|---|
| Single £m |
Regular £m |
||||||
| (APE) % |
(PVNBP) % |
||||||
| UK insurance operations | 2,441 | 119 | 363 | 2,905 | 108 | 30 | 3.7 |
| US operations | 3,425 | 9 | 352 | 3,490 | 144 | 41 | 4.1 |
| Asian operations | 784 | 541 | 619 | 3,286 | 282 | 46 | 8.6 |
| Total | 6,650 | 669 | 1,334 | 9,681 | 534 | 40 | 5.5 |
| Half year 2006 | New business premiums |
Annual premium equivalent (APE) £m |
Present value of new business premiums (PVNBP) £m |
Pre-tax new business contribution £m |
New business margin |
||
|---|---|---|---|---|---|---|---|
| Single £m |
Regular £m |
||||||
| (APE) % |
(PVNBP) % |
||||||
| UK insurance operations | 3,890 | 95 | 484 | 4,224 | 138 | 29 | 3.3 |
| US operations | 3,146 | 8 | 323 | 3,209 | 134 | 41 | 4.2 |
| Asian operations | 519 | 396 | 448 | 2,328 | 232 | 52 | 10.0 |
| Total | 7,555 | 499 | 1,255 | 9,761 | 504 | 40 | 5.2 |
| Full year 2006 | New business premiums |
Annual premium equivalent (APE) £m |
Present value of new business premiums (PVNBP) £m |
Pre-tax new business contribution £m |
New business margin |
||
|---|---|---|---|---|---|---|---|
| Single £m |
Regular £m |
||||||
| (APE) % |
(PVNBP) % |
||||||
| UK insurance operations | 6,991 | 201 | 900 | 7,712 | 266 | 30 | 3.4 |
| US operations | 5,964 | 17 | 614 | 6,103 | 259 | 42 | 4.2 |
| Asian operations | 1,072 | 849 | 956 | 5,132 | 514 | 54 | 10.0 |
| Total | 14,027 | 1,067 | 2,470 | 18,947 | 1,039 | 42 | 5.5 |
New business margins are shown on two bases, namely the margins by reference to Annual Premium Equivalents (APE) and the Present
Value of New Business Premiums (PVNBP). APEs are calculated as the aggregate of regular new business premiums on an annualised
basis and one-tenth of single new business premiums. PVNBPs are calculated as equalling single premiums plus the present value of
expected premiums of new regular premium business allowing for lapses and other assumptions made in determining the EEV new
business contribution.
In determining the EEV basis value of new business written in the period the policies incept, premiums are included in projected cash
flows on the same basis of distinguishing annual and single premium business as set out for statutory basis reporting.
New business contributions represent profits determined by applying the economic and non-economic assumptions applying at the end
of the reporting period.
