REG - Legal & General Grp - L&G FY 2014 results part 3 <Origin Href="QuoteRef">LGEN.L</Origin> - Part 2

Legal & GeneralAnnouncement

04/03/2015 07:12

- Part 2: For the preceding part double click  ID:nRSD4570Ga 

timeframe as required by Solvency II. 
 
 (d) Analysis of change                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                           
 The table below shows the movement (net of tax) during the financial year in the Group's Economic Capital surplus.                                                                                                                                                                                                                                                                                       
                                                                                                                                                                                                                                                                                                                                                                                                                                           
                                                                                                                                                                                                                                                                                                                                                                                                                                           
                                                                                                                                                                                                                                                                                                                                                                                                                                 Economic  
                                                                                                                                                                                                                                                                                                                                                                                                                                 Capital   
                                                                                                                                                                                                                                                                                                                                                                                                                                 surplus   
 Analysis of movement from 1 January to 31 December 2014                                                                                                                                                                                                                                                                                                                                                  £bn  
                                                                                                                                                                                                                                                                                                                                                                                                                                           
                                                                                                                                                                                                                                                                                                                                                                                                                                           
 Economic solvency position as at 1 January 2014                                                                                                                                                                                                                                                                                                                                                                 6.9  
 Operating experience1                                                                                                                                                                                                                                                                                                                                                                                                    0.5    
 New business strain2                                                                                                                                                                                                                                                                                                                                                                                                     -      
 Non-operating experience3                                                                                                                                                                                                                                                                                                                                                                                                (0.4)  
 Other capital movements:                                                                                                                                                                                                                                                                                                                                                                                                                  
 Subordinated debt issuance                                                                                                                                                                                                                                                                                                                                                                                                      0.6       
 Dividends paid in the period                                                                                                                                                                                                                                                                                                                                                                                                    (0.6)     
                                                                                                                                                                                                                                                                                                                                                                                                                                           
                                                                                                                                                                                                                                                                                                                                                                                                                                           
 Economic solvency position as at 31 December 2014                                                                                                                                                                                                                                                                                                                                                        7.0  
                                                                                                                                                                                                                                                                                                                                                                                                                                           
                                                                                                                                                                                                                                                                                                                                                                                                                                           
 1. Release of surplus generated by in-force business, model and assumption changes. 2. New business written in 2014 is broadly neutral on surplus. 3. Non-operating experience: changes in asset mix across the Group (with corresponding increase in Economic Capital Requirement), changes in pension scheme deficit (following completion of the triennial valuation) and other market movements.  
 
 
Capital and Investments                                                                                                    
                                                   71 
 
 4.02 Group Economic Capital (continued)                                                                                                                                                                                                                                                                                                                                                                                           
 (e) Reconciliation of IFRS Shareholders' Equity to Economic Capital Eligible Own Funds                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                   
 The table below gives a reconciliation of the Eligible own funds on an Economic Capital basis and the Group's IFRS shareholders' equity.                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                   
                                                                                                                                                                                                                                                                                                                                                                                                                     2014   2013   
                                                                                                                                                                                                                                                                                                                                                                                                                     £bn    £bn    
                                                                                                                                                                                                                                                                                                                                                                                                                                   
                                                                                                                                                                                                                                                                                                                                                                                                                                   
 IFRS shareholders' equity at 31 December                                                                                                                                                                                                                                                                                                                                                                            6.0    5.6    
 Remove DAC, goodwill and other intangible assets and liabilities                                                                                                                                                                                                                                                                                                                                                    (2.0)  (1.7)  
 Add subordinated debt treated as economic available capital1                                                                                                                                                                                                                                                                                                                              2.4    1.9    
 Insurance contract valuation differences2                                                                                                                                                                                                                                                                                                                                                 6.6    6.2    
 Add value of shareholder transfers                                                                                                                                                                                                                                                                                                                                                                                  0.3    0.3    
 Increase in value of net deferred tax liabilities (resulting from valuation differences)                                                                                                                                                                                                                                                                                                  (0.6)  (0.7)  
 Other                                                                                                                                                                                                                                                                                                                                                                                                               0.1    0.4    
 Adjustment - Basic own funds to Eligible own funds3                                                                                                                                                                                                                                                                                                                                       (0.3)  (0.6)  
                                                                                                                                                                                                                                                                                                                                                                                                                                   
                                                                                                                                                                                                                                                                                                                                                                                                                                   
 Eligible own funds at 31 December                                                                                                                                                                                                                                                                                                                                                                       12.5  11.4