Total insurance and investment products new business
Insurance products and investment products*
| Insurance products* | Investment products* | Total | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Half year 2007 £m |
Half year 2006 £m |
Full year 2006 £m |
Half year 2007 £m |
Half year 2006 £m |
Full year 2006 £m |
Half year 2007 £m |
Half year 2006 £m |
Full year 2006 £m |
|||
| UK operations | 2,560 | 3,985 | 7,192 | 7,519 | 6,795 | 13,486 | 10,079 | 10,780 | 20,678 | ||
| US operations | 3,434 | 3,154 | 5,981 | 19 | – | – | 3,453 | 3,154 | 5,981 | ||
| Asian operations | 1,325 | 915 | 1,921 | 17,471 | 10,027 | 20,408 | 18,796 | 10,942 | 22,329 | ||
| Group total | 7,319 | 8,054 | 15,094 | 25,009 | 16,822 | 33,894 | 32,328 | 24,876 | 48,988 | ||
* The tables shown above are provided as an indicative volume measure of transactions undertaken in the reporting period that have the potential to generate profits for
shareholders. The amounts shown are not, and are not intended to be, reflective of premium income recorded in the IFRS income statement.
Annual premium and contribution equivalents are calculated as the aggregate of regular new business amounts and one tenth of single new business amounts. New business
premiums for regular premium products are shown on an annualised basis. Department of Work and Pensions rebate business is classified as single recurrent business. Internal
vesting business is classified as new business where the contracts include an open market option.
The format of the tables shown above is consistent with the distinction between insurance and investment products as applied for previous financial reporting periods. Products
categorised as ‘insurance’ refer to those classified as contracts of long-term insurance business for regulatory reporting purposes, i.e. falling within one of the classes of insurance
specified in part II of Schedule 1 to the Regulated Activities Order under FSA regulations.
The details shown above for insurance products include contributions for contracts that are classified under IFRS 4 ‘Insurance Contracts’ as not containing significant insurance
risk. These products are described as investment contracts or other financial instruments under IFRS. Contracts included in this category are primarily certain unit-linked and
similar contracts written in UK operations and Guaranteed Investment Contracts and similar funding agreements written in US operations.
Investment products referred to in the table for funds under management above are unit trusts, mutual funds and similar types of retail fund management arrangements. These
are unrelated to insurance products that are classified as ‘investment contracts’ under IFRS 4, as described in the preceding paragraph, although similar IFRS recognition and
measurement principles apply to the acquisition costs and fees attaching to this type of business.
The premiums for half year and full year 2006 for wholesale annuities for UK operations include £592 million and £560 million for a bulk annuity transaction with the Scottish Amicable
Insurance Fund (SAIF). SAIF is a closed ring-fenced sub-fund of the PAC long-term fund established by a Court approved Scheme of Arrangement in October 1997, which is
solely for the benefit of SAIF policyholders. Shareholders have no interest in the profits of this fund, although they are entitled to investment management fees on this business.
The full year 2006 amount is £32 million different from the half year 2006 estimate due to refinements to calculations under the reassurance arrangement between the internal funds.
