Group results

International Financial Reporting Standards (IFRS) basis unaudited financial information

Total insurance and investment products new business

Insurance products - new business premiums and contributions*

	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	Half year 2007 £m	Half year 2006 £m	Full year 2006 £m
	Single			Regular			Annual premium and contribution equivalents			Present value of new business premiums
UK operations
Product summary
Internal vesting annuities	687	615	1,341	–	–	–	69	62	134	687	615	1,341
Direct and partnership annuities	431	273	780	–	–	–	43	27	78	431	273	780
Intermediated annuities	282	247	592	–	–	–	28	25	59	282	247	592
*Total individual annuities*	1,400	1,135	2,713	–	–	–	140	114	271	1,400	1,135	2,713
Equity release	67	30	89	–	–	–	7	3	9	67	30	89
Individual pensions	18	10	21	–	–	–	2	1	2	20	10	21
Corporate pensions	107	35	318	42	32	66	53	36	98	296	124	490
Unit-linked bonds	138	213	388	–	–	–	14	21	39	138	213	388
With-profit bonds	114	54	139	–	–	–	11	5	14	114	54	139
Protection	–	2	11	2	6	9	2	6	10	14	21	63
Offshore products	205	361	540	2	–	–	22	36	54	215	361	540
Total retail retirement	2,049	1,840	4,219	46	38	75	251	222	497	2,264	1,948	4,443
Corporate pensions	110	165	261	60	44	100	71	61	126	314	350	643
Other products	100	134	232	13	13	26	23	26	49	145	175	347
DWP rebates	129	161	161	–	–	–	13	16	16	129	161	161
Total mature life and pensions	339	460	654	73	57	126	107	103	191	588	686	1,151
Total retail	2,388	2,300	4,873	119	95	201	358	325	688	2,852	2,634	5,594
Wholesale annuities	38	1,278	1,431	–	–	–	4	128	143	38	1,278	1,431
Credit life	15	312	687	–	–	–	1	31	69	15	312	687
Total UK operations	2,441	3,890	6,991	119	95	201	363	484	900	2,905	4,224	7,712

Channel Summary
Direct and partnership	1,151	993	2,543	106	81	174	221	180	428	1,567	1,288	3,133
Intermediated	1,108	1,146	2,169	13	14	27	124	129	244	1,156	1,185	2,300
Wholesale	53	1,590	2,118	–	–	–	5	159	212	53	1,590	2,118
Sub-total	2,312	3,729	6,830	119	95	201	350	468	884	2,776	4,063	7,551
DWP rebates	129	161	161	–	–	–	13	16	16	129	161	161
Total UK operations	2,441	3,890	6,991	119	95	201	363	484	900	2,905	4,224	7,712

US operations
Fixed annuities	291	313	688	–	–	–	29	31	69	291	313	688
Fixed index annuities	220	293	554	–	–	–	22	29	55	220	293	554
Variable annuities	2,243	1,888	3,819	–	–	–	224	189	382	2,243	1,888	3,819
Life	3	4	8	9	8	17	10	9	18	68	67	147
Guaranteed investment contracts	133	310	458	–	–	–	13	31	46	133	310	458
GIC – medium term notes	535	338	437	–	–	–	54	34	44	535	338	437
Total US operations	3,425	3,146	5,964	9	8	17	352	323	614	3,490	3,209	6,103

Asian operations
China	19	17	27	20	13	36	22	15	39	112	88	198
Hong Kong	199	139	355	54	42	103	74	56	139	493	360	933
India (Group’s 26% interest)	16	11	20	81	55	105	83	56	107	340	177	411
Indonesia	35	11	31	43	31	71	46	32	74	178	117	269
Japan	52	23	68	11	1	7	16	3	14	97	30	97
Korea	72	58	103	113	103	208	120	109	218	608	492	1,130
Malaysia	9	2	4	32	31	72	33	31	72	186	185	418
Singapore	306	205	357	30	29	72	61	49	108	484	391	803
Taiwan	63	47	92	136	74	139	142	79	148	711	421	743
Other	13	6	15	21	17	36	22	18	37	77	67	130
Total Asian operations	784	519	1,072	541	396	849	619	448	956	3,286	2,328	5,132
Group total	6,650	7,555	14,027	669	499	1,067	1,334	1,255	2,470	9,681	9,761	18,947

* 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.