10th Aug 2005 07:02
Old Mutual PLC10 August 2005 Part 2 European Embedded Value Supplementary Information for the six months to 30 June 2005 1 SUMMARY INCOME STATEMENT ON A EUROPEAN EMBEDDED VALUE BASIS GBPm 6 months to 6 months to Year to 30 June 30 June 31 December 2005 2004 2004 Africa Covered business 261 281 652 Asset management 37 22 54 Banking 162 54 203 General insurance 49 52 101 509 409 1,010 North America Covered business 83 53 77 Asset management 51 47 87 134 100 164 United Kingdom & Rest of World Covered business 1 - 4 Asset management 7 7 (5) Banking 14 11 23 22 18 22 Debt service costs (19) (24) (49) Other shareholders' income / (expenses) (8) (6) (23) Adjusted operating profit* 638 497 1,124 Goodwill impairments (2) (33) (33) (Loss) / profit on disposal of investments in subsidiaries (4) 12 (27) Short term fluctuations in investment returns (including economic assumption changes) Covered business 210 (216) 271 Other 23 (16) 39 Other covered business changes** 49 - (230) Income from hedging activities that do not qualify for hedge - 5 31 accounting Investment return adjustment for Group equity and debt instruments (28) (26) (99) held in life funds Fines and penalties - (49) (49) Profit before tax 886 174 1,027 Income tax attributable to equity holders (218) (53) (271) Profit for the financial period 668 121 756 Minority interests - ordinary shares (78) (24) (74) - preferred securities (28) (27) (59) Profit for the financial period attributable to equity holders 562 70 623 * For life assurance and general insurance business, EEV adjusted operating profit is based on the expected investment return and includes investment returns on own shares held within policyholders' funds. For all businesses, adjusted operating profit excludes goodwill impairments, fines and penalties, income from hedging activities that do not qualify for hedge accounting, and (loss)/profit on disposal of subsidiaries. Adjusted operating earnings per share are similarly based, but are stated after tax and minority interests, with the calculation of the weighted average number of shares including own shares held in policyholders' funds. ** Refer to analysis of covered business embedded value results in Section 7. European Embedded Value Supplementary Information for the six months to 30 June 2005 1 SUMMARY INCOME STATEMENT ON A EUROPEAN EMBEDDED VALUE BASIS continued The adjusted operating profit after tax attributable to equity holders is determined as follows: GBPm 6 months to 6 months to Year to 30 June 30 June 31 December 2005 2004 2004 Adjusted operating profit 638 497 1,124 Tax on adjusted operating profit (154) (133) (230) 484 364 894 Minority interests - ordinary shares (76) (36) (94) - preferred securities (28) (27) (59) Adjusted operating profit after tax attributable to equity holders 380 301 741 p 6 months to 6 months to Year to 30 June 30 June 31 December Embedded value earnings per share attributable to equity holders 2005 2004 2004 Adjusted operating earnings per share 10.1 8.1 19.8 Basic earnings per share 16.2 2.0 18.2 Adjusted weighted average number of shares - millions 3,753 3,735 3,738 Weighted average number of shares - millions 3,467 3,419 3,422 European Embedded Value Supplementary Information for the six months to 30 June 2005 1 SUMMARY INCOME STATEMENT ON A EUROPEAN EMBEDDED VALUE BASIS continued GBPm 6 months to 6 months to Year to 30 June 30 June 31 December 2005 2004 2004 Adjusted operating profit for the covered business 345 334 733 Africa 261 281 652 North America 83 53 77 United Kingdom & Rest of World 1 - 4 Tax on adjusted operating profit for the covered business 99 101 203 Africa 75 85 180 North America 24 16 23 United Kingdom & Rest of World - - - Adjusted operating profit after tax for the covered business 246 233 530 Africa 186 196 472 North America 59 37 54 United Kingdom & Rest of World 1 - 4 Reconciliation of tax on adjusted operating profit Tax on adjusted operating profit for the covered business 99 101 203 Tax on adjusted operating profit for other business 55 32 27 Tax on adjusted operating profit 154 133 230 European Embedded Value Supplementary Information for the six months ended 30 June 2005 2 RECONCILIATION OF MOVEMENTS IN GROUP EMBEDDED VALUE GBPm 6 months to 6 months to Year to 30 June 30 June 31 December 2005 2004 2004 Group embedded value at the beginning of the year 4,407 3,641 3,641 Change in equity arising in the period Fair value gains / (losses) 23 40 64 Fair value of equity settled share options 4 1 3 Currency translation differences / exchange differences on translating foreign operations (223) 171 138 Cash flow hedge amortisation 2 (2) (4) Aggregate tax effect of items taken directly to or transferred from equity - (6) - Other (168) (10) 68 Net income recognised (362) 194 269 Profit for the period 562 70 623 Total recognised income and expense for the period 200 264 892 Dividend for the period (118) (106) (166) Purchase / sale of treasury shares (7) (5) 25 Issue of perpetual preferred callable securities 347 - - Exercise of share options 3 8 15 Group embedded value at the end of the period 4,832 3,802 4,407 3 COMPONENTS OF GROUP EMBEDDED VALUE GBPm At At At 30 June 31 December 30 June 2005 2004 2004 Shareholders' adjusted net worth 3,180 2,933 2,573 Equity shareholders' funds 3,844 3,286 2,796 Adjustment to include life subsidiaries on a statutory solvency basis: Africa 79 216 156 North America (756) (577) (370) United Kingdom & Rest of World (8) (7) (13) Adjustment for discounting CGT 21 15 4 Value of in-force business 1,652 1,474 1,229 Value of in-force business before items listed below 2,032 1,918 1,482 Additional time-value reserves for financial options and guarantees (67) (74) (66) Cost of required capital (310) (368) (185) Minority interest in value of in-force (3) (2) (2) Group embedded value 4,832 4,407 3,802 European Embedded Value Supplementary Information for the six months to 30 June 2005 3 COMPONENTS OF GROUP EMBEDDED VALUE continued GBPm At At At 30 June 31 December 30 June 2005 2004 2004 Pro-forma adjustments to bring Group investments to market value Group embedded value 4,832 4,407 3,802 Adjustment to bring listed subsidiaries to market value 482 609 272 Adjustment for market value of Group equity and debt instruments held in life funds 339 368 312 Adjustment to remove perpetual preferred callable securities (350) - - Adjusted Group embedded value 5,303 5,384 4,386 p p p Adjusted Group embedded value per share 137.5 139.7 114.0 Return on adjusted Group embedded value (ROEV) % p.a. 15.4% 19.0% 15.3% Number of shares in issue at the end of the period including own shares held in policyholders' funds - millions 3,857 3,854 3,849 The adjustments to include life subsidiaries on a statutory solvency basis reflect the difference between the net worth of each life subsidiary on the statutory basis (as required by the local regulator) and their portion of the group's consolidated equity shareholders' funds. In Africa, these values exclude items that are eliminated or shown separately on consolidation (such as Nedbank, Mutual & Federal and inter-company loans). The ROEV is calculated as the adjusted operating profit after tax and minorities of GBP380 million together with an expected equity return on the pro-forma adjustment of GBP32 million divided by the opening adjusted embedded value increased / (reduced) by the weighted value of any capital raised / (dividends paid). European Embedded Value Supplementary Information for the six months to 30 June 2005 4 RECONCILIATION OF EMBEDDED VALUE OF THE COVERED BUSINESS WITH THE ADJUSTED EMBEDDED VALUE GBPm At At At 30 June 31 December 30 June 2005 2004 2004 Embedded value of the covered business 3,603 3,555 2,944 Adjusted net worth 1,951 2,081 1,715 Value of in-force business* 1,652 1,474 1,229 Adjusted net worth of asset management businesses 1,174 990 969 Africa 145 101 132 North America 1,029 889 837 Market value banking Africa 1,368 1,442 1,102 Market value general insurance Africa 414 486 405 Net other business 160 168 134 Preferred securities (458) (458) (458) Perpetual preferred callable securities (350) - - Debt (608) (799) (710) Rand denominated (46) (60) (59) US$ denominated (517) (687) (651) GBP denominated (45) (52) - Adjusted Group embedded value 5,303 5,384 4,386 * Net of minority interests European Embedded Value Supplementary Information for the six months to 30 June 2005 5 COMPONENTS OF EMBEDDED VALUE OF THE COVERED BUSINESS GBPm At At At 30 June 31 December 30 June 2005 2004 2004 Embedded value of the covered business 3,603 3,555 2,944 Adjusted net worth 1,951 2,081 1,715 Value of in-force business 1,652 1,474 1,229 Africa Adjusted net worth 1,407 1,537 1,224 Required capital (equivalent to 152% of statutory minimum capital at 30 June 2005) 1,395 1,595 1,480 Free surplus 12 (58) (256) Value of in-force business 1,014 1,005 852 Value of in-force business before items listed below 1,284 1,343 1,013 Additional time-value reserves for financial options and guarantees* (37) (49) (44) Cost of required capital (230) (287) (115) Minority interest in value of in-force (3) (2) (2) North America Adjusted net worth 514 515 468 Required capital (equivalent to 282% of statutory minimum capital at 30 June 2005) 444 451 406 Free surplus 70 64 62 Value of in-force business 613 444 352 Value of in-force business before items listed below 720 547 441 Additional time-value reserves for financial options and guarantees (30) (25) (22) Cost of required capital (77) (78) (67) United Kingdom & Rest of World Adjusted net worth 30 29 23 Required capital 10 10 10 Free surplus 20 19 13 Value of in-force business 25 25 25 Value of in-force business before items listed below 28 28 28 Additional time-value reserves for financial options and guarantees - - - Cost of required capital (3) (3) (3) * These time-value reserves in respect of financial options and guarantees are in addition to those already held within the policyholder liabilities. The shareholders' adjusted net worth includes goodwill relating to the North American life subsidiaries of GBP63 million (December 2004: GBP59 million, June 2004: GBP62 million). European Embedded Value Supplementary Information for the six months to 30 June 2005 6 BASIS OF PREPARATION This supplementary information has been prepared in accordance with the European Embedded Value (EEV) Principles issued in May 2004 by the European Chief Financial Officers' Forum. The results for the six months to 30 June 2005 and the position at that date have been prepared on the same basis as that used in the Group's EEV press release dated 20 June 2005. There has been no change in the definition of business covered by the EEV Principles ("covered business") as compared with the 20 June 2005 press release. The treatment within this supplementary information of all business other than covered business is unchanged from the primary financial information. The comparative figures for the financial year ended 31 December 2004, and the results for the six months to 30 June 2004, were presented in the 20 June 2005 EEV press release. However, where necessary, certain comparatives have been corrected to ensure consistency in preparation and presentation of results. Note 13 to the primary financial information describes the post balance sheet event in respect of the issue of new shares in connection with Black Economic Empowerment. Such shares are subject to a deferred consideration, and the present value of the deferred consideration will be included within the adjusted Group embedded value at 31 December 2005. European Embedded Value Supplementary Information for the six months to 30 June 2005 7 ANALYSIS OF COVERED BUSINESS EMBEDDED VALUE RESULTS (after tax) GBPm 6 months to 30 June 2005 Value of Adjusted In-force Total covered business net worth business Total Embedded value of the covered business at the beginning of the period 2,081 1,474 3,555 New business contribution (55) 109 54 Expected return on existing business - return on VIF - 89 89 Expected return on existing business - transfer to net worth 101 (101) - Experience variances 4 22 26 Operating assumption changes (22) 29 7 Expected return on adjusted net worth 70 - 70 Adjusted operating profit after tax 98 148 246 Investment return variances on in-force business 19 32 51 Investment return variances on adjusted net worth 86 - 86 Effect of economic assumption changes - 26 26 Effect of changes in and cost of required capital - 32 32 Profit after tax 203 238 441 Exchange rate movements (108) (60) (168) Capital injected to covered business 14 - 14 Amounts released from covered business (119) - (119) Transfer from covered business to other segments (120) - (120) Embedded value of the covered business at the end of the period 1,951 1,652 3,603 GBPm 6 months to 30 June 2004 Value of Adjusted In-force Total covered business net worth business Total Embedded value of the covered business at the beginning of the period 1,832 1,232 3,064 New business contribution (47) 93 46 Expected return on existing business - return on VIF - 73 73 Expected return on existing business - transfer to net worth 126 (126) - Experience variances 25 14 39 Operating assumption changes - (6) (6) Expected return on adjusted net worth 81 - 81 Adjusted operating profit after tax 185 48 233 Investment return variances on in-force business 3 (28) (25) Investment return variances on adjusted net worth (66) - (66) Effect of economic assumption changes - (61) (61) Effect of changes in and cost of required capital - - - Profit after tax 122 (41) 81 Exchange rate movements 53 38 91 Capital injected to covered business 9 - 9 Amounts released from covered business (30) - (30) Transfer from covered business to other segments (271) - (271) Embedded value of the covered business at the end of the period 1,715 1,229 2,944 GBPm Year to 31 December 2004 Value of Adjusted In-force Total covered business net worth business Total Embedded value of the covered business at the beginning of the period 1,832 1,232 3,064 New business contribution (103) 211 108 Expected return on existing business - return on VIF - 148 148 Expected return on existing business - transfer to net worth 194 (194) - Experience variances 13 35 48 Operating assumption changes 15 48 63 Expected return on adjusted net worth 163 - 163 Adjusted operating profit after tax 282 248 530 Investment return variances on in-force business 30 25 55 Investment return variances on adjusted net worth 72 - 72 Effect of economic assumption changes - 51 51 Effect of changes in and cost of required capital - (143) (143) Profit after tax 384 181 565 Exchange rate movements 104 61 165 Capital injected to covered business 164 - 164 Amounts released from covered business (122) - (122) Transfer from covered business to other segments (281) - (281) Embedded value of the covered business at the end of the period 2,081 1,474 3,555 European Embedded Value Supplementary Information for the six months to 30 June 2005 7 ANALYSIS OF COVERED BUSINESS EMBEDDED VALUE RESULTS (after tax) continued GBPm 6 months to 30 June 2005 Adjusted Value of net In-force business Africa covered business worth Individual Group Total Embedded value of the covered business at the beginning of the period 1,537 676 329 2,542 New business contribution (16) 31 10 25 Expected return on existing business - return on VIF - 40 25 65 Expected return on existing business - transfer to net worth 91 (64) (27) - Experience variances 28 1 (2) 27 Operating assumption changes (12) 13 9 10 Expected return on adjusted net worth 59 - - 59 Adjusted operating profit after tax 150 21 15 186 Investment return variances on in-force business 12 26 13 51 Investment return variances on adjusted net worth 90 - - 90 Effect of economic assumption changes - - - - Effect of changes in and cost of required capital - (4) 36 32 Profit after tax 252 43 64 359 Exchange rate movements (142) (64) (34) (240) Amounts released from covered business (119) - - (119) Transfer from covered business to other segments* (121) - - (121) Embedded value of the covered business at the end of the period 1,407 655 359 2,421 GBPm 6 months to 30 June 2004 Adjusted Value of net in-force business Africa covered business worth Individual Group Total Embedded value of the covered business at the beginning of the period 1,355 512 355 2,222 New business contribution (8) 26 8 26 Expected return on existing business - return on VIF - 32 24 56 Expected return on existing business - transfer to net worth 70 (49) (21) - Experience variances 28 1 11 40 Operating assumption changes - 1 - 1 Expected return on adjusted net worth 73 - - 73 Adjusted operating profit after tax 163 11 22 196 Investment return variances on in-force business 3 (8) (27) (32) Investment return variances on adjusted net worth (56) - - (56) Effect of economic assumption changes - (35) (22) (57) Effect of changes in and cost of required capital - - - - Profit after tax 110 (32) (27) 51 Exchange rate movements 61 26 18 105 Amounts released from covered business (30) - - (30) Transfer from covered business to other segments* (272) - - (272) Embedded value of the covered business at the end of the period 1,224 506 346 2,076 GBPm Year to 31 December 2004 Adjusted Value of net In-force business Africa covered business worth Individual Group Total Embedded value of the covered business at the beginning of the period 1,355 512 355 2,222 New business contribution (16) 66 14 64 Expected return on existing business - return on VIF - 68 50 118 Expected return on existing business - transfer to net worth 147 (102) (45) - Experience variances 75 9 (19) 65 Operating assumption changes 10 70 (1) 79 Expected return on adjusted net worth 146 - - 146 Adjusted operating profit after tax 362 111 (1) 472 Investment return variances on in-force business 6 16 13 35 Investment return variances on adjusted net worth 78 - - 78 Effect of economic assumption changes - 41 10 51 Effect of changes in and cost of required capital - (63) (80) (143) Profit after tax 446 105 (58) 493 Exchange rate movements 140 59 32 231 Amounts released from covered business (122) - - (122) Transfer from covered business to other segments* (282) - - (282) Embedded value of the covered business at the end of the period 1,537 676 329 2,542 * The transfer from covered business to other segments includes the purchase of additional shares in Nedbank Group Limited, as well as head office expenses. The effect of changes in and cost of required capital for Africa reflects changes in the amount of required capital and in the mix of assets backing the capital. European Embedded Value Supplementary Information for the six months to 30 June 2005 7 ANALYSIS OF COVERED BUSINESS EMBEDDED VALUE RESULTS (after tax) continued GBPm 6 months to 30 June 2005 Value of Adjusted In-force North America covered business net worth business Total Embedded value of the covered business at the beginning of the period 515 444 959 New business contribution (38) 67 29 Expected return on existing business - return on VIF - 23 23 Expected return on existing business - transfer to net worth 9 (9) - Experience variances (24) 23 (1) Operating assumption changes (10) 8 (2) Expected return on adjusted net worth 10 - 10 Adjusted operating profit after tax (53) 112 59 Investment return variances on in-force business 7 (7) - Investment return variances on adjusted net worth (4) - (4) Effect of economic assumption changes 26 26 Profit after tax (50) 131 81 Exchange rate movements 34 38 72 Capital injected to covered business 14 - 14 Transfer from covered business to other segments* 1 - 1 Embedded value of the covered business at the end of the period 514 613 1,127 GBPm 6 months to 30 June 2004 Value of Adjusted In-force North America covered business net worth business Total Embedded value of the covered business at the beginning of the period 454 340 794 New business contribution (39) 60 21 Expected return on existing business - return on VIF - 16 16 Expected return on existing business - transfer to net worth 54 (54) - Experience variances (1) - (1) Operating assumption changes - (7) (7) Expected return on adjusted net worth 8 - 8 Adjusted operating profit after tax 22 15 37 Investment return variances on in-force business - 7 7 Investment return variances on adjusted net worth (10) - (10) Effect of economic assumption changes - (4) (4) Profit after tax 12 18 30 Exchange rate movements (8) (6) (14) Capital injected to covered business 9 - 9 Transfer from covered business to other segments* 1 - 1 Embedded value of the covered business at the end of the period 468 352 820 GBPm Year to 31 December 2004 Value of Adjusted In-force North America covered business net worth business Total Embedded value of the covered business at the beginning of the period 454 340 794 New business contribution (86) 131 45 Expected return on existing business - return on VIF - 28 28 Expected return on existing business - transfer to net worth 44 (44) - Experience variances (58) 43 (15) Operating assumption changes - (20) (20) Expected return on adjusted net worth 16 - 16 Adjusted operating profit after tax (84) 138 54 Investment return variances on in-force business 22 (4) 18 Investment return variances on adjusted net worth (6) - (6) Effect of economic assumption changes - - - Profit after tax (68) 134 66 Exchange rate movements (36) (30) (66) Capital injected to covered business 164 - 164 Transfer from covered business to other segments* 1 - 1 Embedded value of the covered business at the end of the period 515 444 959 * The transfer from covered business to other segments is head office expenses. The segmental results of North America include the operating profit generated by Old Mutual Reassurance (Ireland) Limited (OMRe), which provides reinsurance to the North American life companies, and in OMNIA Life (Bermuda) Limited. European Embedded Value Supplementary Information for the six months to 30 June 2005 7 ANALYSIS OF COVERED BUSINESS EMBEDDED VALUE RESULTS (after tax) continued GBPm 6 months to 30 June 2005 United Kingdom & Rest of World Value of Adjusted In-force covered business net worth business Total Embedded value of the covered business at the beginning of the period 29 25 54 New business contribution (1) 1 - Expected return on existing business - return on VIF - 1 1 Expected return on existing business - transfer to net worth 1 (1) - Experience variances - - - Operating assumption changes - (1) (1) Expected return on adjusted net worth 1 - 1 Adjusted operating profit after tax 1 - 1 Investment return variances on in-force business - - - Investment return variances on adjusted net worth - - - Profit after tax 1 - 1 Exchange rate movements - - - Amounts released from covered business - - - Embedded value of the covered business at the end of the period 30 25 55 GBPm 6 months to 30 June 2004 United Kingdom & Rest of World Value of Adjusted In-force covered business net worth business Total Embedded value of the covered business at the beginning of the period 23 25 48 New business contribution - (1) (1) Expected return on existing business - return on VIF - 1 1 Expected return on existing business - transfer to net worth 2 (2) - Experience variances (2) 2 - Operating assumption changes - - - Expected return on adjusted net worth - - - Adjusted operating profit after tax - - - Investment return variances on in-force business - - - Investment return variances on adjusted net worth - - - Profit after tax - - - Exchange rate movements - - - Amounts released from covered business - - - Embedded value of the covered business at the end of the period 23 25 48 GBPm Year to 31 December 2004 United Kingdom & Rest of World Value of Adjusted In-force covered business net worth business Total Embedded value of the covered business at the beginning of the period 23 25 48 New business contribution (1) - (1) Expected return on existing business - return on VIF - 2 2 Expected return on existing business - transfer to net worth 3 (3) - Experience variances (4) 2 (2) Operating assumption changes 5 (1) 4 Expected return on adjusted net worth 1 - 1 Adjusted operating profit after tax 4 - 4 Investment return variances on in-force business 2 - 2 Investment return variances on adjusted net worth - - - Profit after tax 6 - 6 Exchange rate movements - - - Amounts released from covered business - - - Embedded value of the covered business at the end of the period 29 25 54 European Embedded Value Supplementary Information for the six months to 30 June 2005 8 VALUE OF NEW BUSINESS (after tax) The tables below set out a geographical analysis of the value of new business (VNB) after tax for the six months to 30 June 2005, six months to 30 June 2004 and the year to 31 December 2004. Annual Premium Equivalent (APE) is calculated as recurring premiums plus 10% of single premiums. New business profitability is measured by both the ratio of the VNB to the APE as well as to the Present Value of new business premiums (PVNBP), and shown under "Margin" below. PVNBP is defined as the present value of regular premiums plus single premiums for any given period. It is calculated using the same assumptions as for the new business contribution. Individual Group business business Africa 6 months to 30 June 2005 Recurring premiums 85 33 118 Single premiums 291 162 453 Annual premium equivalent 114 49 163 Present value of future new business premiums 702 327 1,029 Value of new business after tax and cost of required capital 15 10 25 APE Margin 13% 20% 15% PVNBP Margin 2.1% 3.1% 2.4% 6 months to 30 June 2004 Recurring premiums 73 32 105 Single premiums 260 90 350 Annual premium equivalent 99 41 140 Present value of future new business premiums 617 246 863 Value of new business after tax and cost of required capital 17 9 26 APE Margin 17% 22% 19% PVNBP Margin 2.8% 3.7% 3.0% Year to 31 December 2004 Recurring premiums 164 58 222 Single premiums 556 214 770 Annual premium equivalent 220 79 299 Present value of future new business premiums 1,384 526 1,910 Value of new business after tax and cost of required capital 51 13 64 APE Margin 23% 16% 21% PVNBP Margin 3.7% 2.5% 3.4% GBPm North UK & Recurring America Rest of World premiums 6 months to 30 June 2005 Recurring premiums 39 0.2 157 Single premiums 1,081 78 1,612 Annual premium equivalent 147 8 318 Present value of future new business premiums 1,269 79 2,377 Value of new business after tax and cost of required capital 29 0.4 54 APE Margin 20% 5% 17% PVNBP Margin 2.3% 0.5% 2.3% 6 months to 30 June 2004 Recurring premiums 25 1 131 Single premiums 1,127 53 1,530 Annual premium equivalent 138 6 284 Present value of future new business premiums 1,249 55 2,167 Value of new business after tax and cost of required capital 21 (1) 46 APE Margin 15% (16%) 16% PVNBP Margin 1.7% (1.8%) 2.1% Year to 31 December 2004 Recurring premiums 58 1 281 Single premiums 2,157 125 3,052 Annual premium equivalent 274 14 587 Present value of future new business premiums 2,433 127 4,470 Value of new business after tax and cost of required capital 45 (1) 108 APE Margin 16% (7%) 18% PVNBP Margin 1.8% (0.8%) 2.4% European Embedded Value Supplementary Information for the six months to 30 June 2005 8 VALUE OF NEW BUSINESS (after tax) continued The value of new individual unit trust and some group market-linked business written by the life companies is excluded, as the profits on this business arise in the asset management subsidiaries. The value of new business also excludes premium increases arising from indexation arrangements in respect of existing business, as these are already included in the value of in-force business. The premiums shown for the United States exclude reinsurance ceded externally. A reconciliation of the new business premiums shown in the notes to the primary financial information to those shown above, for the six months to 30 June 2005, is set out below. GBPm Recurring Single 6 months to 30 June 2005 premiums premiums New business premiums in the notes to the primary financial information 112 1,098 Add: Healthcare business 24 - Other Investment contracts 21 728 Less: North America reinsurance ceded externally - (4) Group market-linked business not valued - (142) Unit trust business not valued - (66) OMART business not valued - (2) New business premiums as per European Embedded Value supplementary information 157 1,612 European Embedded Value Supplementary Information for the six months to 30 June 2005 9 PRODUCT ANALYSIS OF NEW COVERED BUSINESS PREMIUMS GBPm 6 months to 30 June 2005 Africa Recurring Single Total business 118 453 Individual business 85 291 Saving 30 216 Protection 27 3 Annuity - 71 Group schemes 28 1 Group business 33 162 Saving 2 115 Protection 7 - Annuity - 47 Healthcare 24 - Total business* 118 453 Individual business 85 291 Insurance contracts 42 75 Investment contracts with discretionary participating features 22 7 Other investment contracts 21 209 Group business 33 162 Insurance contracts 31 47 Investment contracts with discretionary participating features 2 67 Other investment contracts - 48 GBPm 6 months to 30 June 2004 Africa Recurring Single Total business 105 350 Individual business 73 260 Saving 25 192 Protection 22 4 Annuity - 64 Group schemes 26 - Group business 32 90 Saving 2 77 Protection 7 - Annuity - 13 Healthcare 23 - Total business* 105 350 Individual business 73 260 Insurance contracts 40 62 Investment contracts with discretionary participating features 21 11 Other investment contracts 12 187 Group business 32 90 Insurance contracts 29 13 Investment contracts with discretionary participating features 3 52 Other investment contracts - 25 GBPm Year to 31 December 2004 Africa Recurring Single Total business 222 770 Individual business 164 556 Saving 53 406 Protection 57 7 Annuity - 142 Group schemes 54 1 Group business 58 214 Saving 5 181 Protection 12 Annuity - 33 Healthcare 41 - Total business* 222 770 Individual business 164 556 Insurance contracts 89 145 Investment contracts with discretionary participating features 48 22 Other investment contracts 27 389 Group business 58 214 Insurance contracts 52 31 Investment contracts with discretionary participating features 6 105 Other investment contracts - 78 European Embedded Value Supplementary Information for the six months to 30 June 2005 9 PRODUCT ANALYSIS OF NEW COVERED BUSINESS PREMIUMS continued GBPm 6 months to 30 June 2005 North America Recurring Single Total business 39 1,081 Fixed deferred annuity - - Equity indexed annuity - 654 Variable annuity - 189 Life 39 - Immediate annuity - 166 Other (corporate) - 72 Total business* 39 1,081 Insurance contracts 39 895 Investment contracts with discretionary participating features - - Other investment contracts - 186 GBPm 6 months to 30 June 2004 North America Recurring Single Total business 25 1,127 Fixed deferred annuity - 120 Equity indexed annuity - 549 Variable annuity - 99 Life 25 - Immediate annuity - 274 Other (corporate) - 85 Total business* 25 1,127 Insurance contracts 25 928 Investment contracts with discretionary participating features - - Other investment contracts - 199 GBPm Year to 31 December 2004 North America Recurring Single Total business 58 2,157 Fixed deferred annuity - 239 Equity indexed annuity - 1,157 Variable annuity - 213 Life 58 - Immediate annuity - 442 Other (corporate) - 106 Total business* 58 2,157 Insurance contracts 58 1,808 Investment contracts with discretionary participating features - - Other investment contracts - 349 GBPm 6 months to 30 June 2005Related Shares:
Old Mutual PLC