REG - Legal & General Grp - L&G FY 2014 results part 3 <Origin Href="QuoteRef">LGEN.L</Origin> - Part 4

Legal & GeneralAnnouncement

04/03/2015 07:12

- Part 4: For the preceding part double click  ID:nRSD4570Gc 

                                                                                         1,026             76        46    151       1,299  
 Intra-group distributions1                                                                                                                                                                                                                                                                        (602)             (15)      (44)  661       -      
 Dividends to equity holders of the Company                                                                                                                                                                                                                                                        -                 -         -     (479)     (479)  
 Transfer to non-covered business2                                                                                                                                                                                                                                                                 (27)              -         -     27        -      
 Other reserve movements including pension deficit3                                                                                                                                                                                                                                                (35)              -         (29)  (55)      (119)  
                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                      
 Embedded value at 31 December 2013                                                                                                                                                                                                                                                                7,942             512       933   199       9,586  
                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                      
 Value of in-force business                                                                                                                                                                                                                                                                        4,693             197       699   -         5,589  
 Shareholder net worth                                                                                                                                                                                                                                                                             3,249             315       234   199       3,997  
                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                      
 Embedded value per share (p)4                                                                                                                                                                                                                                                                                                                 162    
                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                      
 1. UK intra-group distributions reflect a £625m dividend paid from LGAS to Group, and dividends of £10m paid to LGAS from subsidiaries (primarily Nationwide Life). Dividends of E16m from LGN were also paid to LGAS. Dividends of $69m from LGA and E2m from LGF were paid to the group.  
 2. The transfer to non-covered business represents the IFRS profits arising in the year from the provisions of investment management services by LGIM to the UK covered business, which have been included in the operating profit of the covered business on the look through basis.       
 3. The other reserve movements reflect the pension deficit movement, the movement of investment project costs from covered to non-covered business and the effect of reinsurance arrangement transactions between UK and US covered business.                                               
 4. The number of shares in issue at 31 December 2013 was 5,917,066,636.                                                                                                                                                                                                                     
                                                                                                                                                                                                                                                                                                                                                      
 Further analysis of the LGAS and LGR covered business can be found in Note 5.01.                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                             
 
 
European Embedded Value                                                                                                    
                                           81 
 
 5.01 LGAS and LGR embedded value reconciliation                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                            Shareholder net worth                     Total     
                                                                                                                                                                                                                                                                                                                                                                                                            Free                   Required           Value of    embedded  
                                                                                                                                                                                                                                                                                                                                                                                                            surplus                capital   Total    in-force    value     
 For the year ended 31 December 2014                                                                                                                                                                                                                                                                                                                                                                        £m                     £m        £m       £m          £m        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
 At 1 January 2014                                                                                                                                                                                                                                                                                                                                                                                          1,174                  2,390     3,564    4,890       8,454     
 Exchange movement                                                                                                                                                                                                                                                                                                                                                                                          (1)                    (16)      (17)     (13)        (30)      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
 Operating profit/(loss) after tax - UK business:                                                                                                                                                                                                                                                                                                                                                                                                                           
 Contribution from new risks after cost of capital                                                                                                                                                                                                                                                                                                                                                                                                                          
 - New business contribution1                                                                                                                                                                                                                                                                                                                                                                               (340)                  343       3        607         610       
 - Intragroup transfer from With-Profit to Non Profit Fund                                                                                                                                                                                                                                                                                                                                                  -                      -         -        80          80        
 - Expected return on VIF                                                                                                                                                                                                                                                                                                                                                                                   -                      -         -        317         317       
 - Expected transfer from VIF to SNW2                                                                                                                                                                                                                                                                                                                                                                       901                    (213)     688      (688)       -         
 - Expected return on SNW                                                                                                                                                                                                                                                                                                                                                                                   55                     116       171      -           171       
 Generation of embedded value                                                                                                                                                                                                                                                                                                                                                                               616                    246       862      316         1,178     
 - Experience variances                                                                                                                                                                                                                                                                                                                                                                                     175                    (83)      92       (6)         86        
 - Operating assumption changes                                                                                                                                                                                                                                                                                                                                                                             171                    (109)     62       (36)        26        
 - Development costs                                                                                                                                                                                                                                                                                                                                                                                        (26)                   -         (26)     -           (26)      
 Variances                                                                                                                                                                                                                                                                                                                                                                                                  320                    (192)