9 Months Results 2000-Part 4

CGNU PLC 8 November 2000 UNAUDITED RESULTS - 9 MONTHS ENDED 30 SEPTEMBER 2000 PART 4 --------------------------------------------------------------------------- Page 29 12. Dividends The dividends payable in the profit and loss account comprise: 9 9 Full months months year 2000 1999 1999 £m £m £m Preference dividends 13 13 17 ======= ======= ======= Ordinary dividends Interim - 14.25 pence (1999: 12.34 pence*) 320 278 278 Final - (1999: 21.96 pence*) - - 495 ------- ------- ------- Total ordinary dividends 320 278 773 ======= ======= ======= * Based on the weighted average dividends per share of CGU plc and Norwich Union plc. The 1999 interim and final dividends per share for CGU plc were 14.25p and 23.75p respectively. The preference dividends are in respect of the cumulative irredeemable preference shares of £1 each in issue, payable on 31 March, 30 June and 30 September 2000. -------------------------------------------------------------------------- Page 30 13. Earnings per share 9 months 2000 Net of tax, minorities and Before preference Per tax dividend share £m £m p Operating profit - ongoing business before amortisation of goodwill, amortisation of acquired additional value of in-force long-term business and exceptional items 898 598 26.6 Adjusted for the following items: - operating profit on business to be discontinued 132 124 5.5 - amortisation of goodwill (31) (31) (1.4) - amortisation of acquired additional value of in-force long-term business (20) (14) (0.6) - exceptional items (203) (203) (9.0) - short-term fluctuation in investment returns 219 18 0.8 - change in the equalisation provision (12) (9) (0.4) - net loss arising on the sale of subsidiary undertakings (27) (27) (1.2) - provision for loss on businesses to be sold (1,475) (1,393) (62.1) - provision for exit from London Market (448) (322) (14.3) - merger transaction costs (59) (50) (2.2) ------- ------- ------- Profit attributable to equity shareholders (1,026) (1,309) (58.3) ======= ======= ======= 9 months 1999 Full year 1999 Net of tax, Net of tax, minorities minorities and and preference Per preference Per dividend Share dividend share £m p £m p Operating profit- ongoing business before amortisation of goodwill, amortisation of acquired additional value of in-force long-term business and exceptional items 662 29.6 877 39.2 Adjusted for the following items: - operating profit on business to be discontinued 178 8.0 214 9.6 - amortisation of goodwill (25) (1.1) (34) (1.5) - amortisation of acquired additional value of in-force long-term business (2) (0.1) (15) (0.7) - exceptional items (77) (3.4) (124) (5.5) - short-term fluctuation in investment returns (587) (26.3) 133 5.9 - change in the equalisation provision (33) (1.5) (40) (1.8) - net loss arising on the sale of subsidiary undertakings (9) (0.4) (8) (0.4) - provision for loss on businesses - - - - to be sold - provision for exit from London Market - - - - - merger transaction costs - - - - ------- ------- ------- ------- Profit attributable to equity shareholders 107 4.8 1,003 44.8 ======= ======= ======= ======= Earnings per share has been calculated based on the operating profit - ongoing business before amortisation of goodwill, amortisation of acquired additional value of in-force long-term business and exceptional items, after taxation, attributable to equity shareholders, as well as on the profit attributable to equity shareholders, as the directors believe the former earnings per share figures provide a better indication of operating performance. The calculation of basic earnings per share uses a weighted average of 2,246 million (nine months to 30 September 1999: 2,234 million, full year 1999: 2,237 million) ordinary shares in issue. Diluted earnings per share is calculated by adjusting the weighted average number of shares for the effect of share options. Diluted earnings per share based on the profit attributable to equity shareholders for the period was (58.2)p (nine months to 30 September 1999: 4.8p, full year 1999: 44.7p). The actual number of shares in issue at 30 September 2000 was 2,250 million (30 September 1999: 2,240 million, 31 December 1999: 2,242 million). -------------------------------------------------------------------------- Page 31 14. Longer-term investment return The longer-term investment return is calculated separately for each principal country. In respect of equities and properties, the return is calculated by multiplying the opening market value of the investments, adjusted for sales and purchases during the year, by the longer-term rate of investment return. For other investments, the actual income receivable is included. The principal assumptions underlying the calculation of the longer-term investment return are: Longer-term rates of return Equities Properties 2000 1999 2000 1999 % % % % United Kingdom 8.1 6.9 6.6 5.4 France 7.5 5.9 6.5 4.9 Ireland 8.7 7.0 6.7 5.0 Netherlands 8.4 6.8 6.5 4.9 Australia and New Zealand 10.0 8.0 8.0 6.0 Canada 9.3 7.9 7.3 5.9 United States 9.3 7.7 7.3 5.7 -------------------------------------------------------------------------- Page 32 Statistical Supplement Segmental analysis of group operating profit at constant currency 9 months 1999 9 at 2000 9 months exchange months 2000 rates 1999 Ongoing business £m £m £m Life achieved operating profit United Kingdom 690 591 591 France 161 95 103 Ireland 47 34 38 Netherlands 129 87 95 Poland life and pensions 62 62 65 Spain 12 - - Other Europe 6 15 16 International 40 43 42 ------- ------- ------- 1,147 927 950 Health ======= ======= ======= United Kingdom 4 - - France 8 8 9 Netherlands 21 10 11 ------- ------- ------- 33 18 20 ======= ======= ======= Fund management United Kingdom 14 26 26 France 7 4 4 Netherlands 3 2 2 Other Europe 2 1 1 Australia and New Zealand 11 11 11 United States 4 2 2 ------- ------- ------- 41 46 46 ======= ======= ======= General insurance United Kingdom 341 187 187 France (120) 28 30 Ireland 17 5 6 Netherlands 12 13 14 Other Europe 19 10 9 Australia and New Zealand 48 12 13 Canada 64 75 71 Other 47 43 45 ------- ------- ------- 428 373 375 ======= ======= ======= Non-insurance operations (21) (14) (14) Associated undertakings 3 10 11 Corporate costs (136) (99) (99) Unallocated interest charges - external (106) (66) (66) - intra-group (156) (102) (103) ------- ------- ------- 1,233 1,093 1,120 Wealth management (95) - - ------- ------- ------- Group operating profit before tax* - ongoing business 1,138 1,093 1,120 ======= ======= ======= * Group operating profit before tax, change in risk margin, amortisation of goodwill and exceptional items. Restating modified statutory life profits for the nine months to 30 September 1999 to account for the impact of exchange rate movements in the nine months to 30 September 2000 would result in modified statutory life profits being restated from £844 million to £825 million. -------------------------------------------------------------------------- Page 33 Supplementary analyses (a) Non-insurance operations - operating profit 9 9 Full months months year 2000 1999 1999 £m £m £m United Kingdom Hill House Hammond 13 12 13 Norwich Union Direct Financial Services (7) (8) (12) Norwich Union Equity Release and other personal finance subsidiaries (6) (18) (23) YourMove (30) (5) (13) Other (5) - (1) Europe (excluding UK) 14 5 6 ------- ------- ------- Total (21) (14) (30) ======= ======= ======= (b) Wealth management - operating result 9 9 Full months months year 2000 1999 1999 £m £m £m United Kingdom Assertahome (20) - - Other wealth management (75) - - ------- ------- ------- Total (95) - - ======= ======= ======= (c) General business information - adverse weather/catastrophe claims costs 9 9 Full months months year 2000 1999 1999 £m £m £m United Kingdom 149 165 216 Europe (excluding UK) France 90 - 38 Ireland - - - Netherlands - - - Other - 1 4 International Australia and New Zealand 4 20 24 Canada 8 7 9 Other 16 10 45 ------- ------- ------- Ongoing business 267 203 336 Businesses to be discontinued United States 46 80 83 London Market - 1 1 ------- ------- ------- Total 313 284 420 ======= ======= ======= -------------------------------------------------------------------------- Page 34 Supplementary analyses (continued) (d) General business - investment return information Longer-term investment Actual investment return return 9 9 Full 9 9 Full months months year months months year 2000 1999 1999 2000 1999 1999 £m £m £m £m £m £m United Kingdom 497 419 574 400 351 486 Europe (excluding UK) France 69 54 72 43 32 43 Ireland 36 14 20 30 14 17 Netherlands 50 32 39 21 18 22 Other 58 62 74 45 49 58 International Australia and New Zealand 68 57 72 62 51 69 Canada 96 89 118 80 78 104 Other 62 61 83 42 54 72 ------- ------- ------- ------- ------- ------- Total longer-term investment return - ongoing business 936 788 1,052 Total actual investment income 723 647 871 Realised gains 484 290 371 Unrealised gains/(losses) (8) (497) 293 ------- ------- ------- Total actual investment return - ongoing business 1,199 440 1,535 Businesses to be discontinued United States 311 287 380 303 (33) 143 London Market 55 50 69 45 43 59 ------- ------- ------- ------- ------- ------- Total 1,302 1,125 1,501 1,547 450 1,737 ======= ======= ======= ======= ======= ======= -------------------------------------------------------------------------- Page 35 General insurance - geographical ratio analysis Claims Expense Combined ratio ratio operating (excluding ratio commission) 9 9 9 9 9 9 months months months months months months 2000 1999 2000 1999 2000 1999 % % % % % % United Kingdom 74.2% 75.8% 10.8% 11.9% 104% 107% France 106.0% 69.6% 13.6% 15.0% 139% 104% Ireland 85.0% 84.4% 11.0% 12.3% 107% 107% Netherlands 75.9% 69.0% 15.4% 13.1% 110% 106% Australia and New Zealand 74.0% 79.7% 17.5% 17.5% 104% 109% Canada 74.6% 72.4% 12.2% 12.6% 104% 103% ------- ------- ------- ------- ------- ------- Group - Ongoing business 76.9% 75.2% 12.5% 13.6% 108% 107% - Businesses to be discontinued United States (statutory basis) 77.3% 76.3% 13.1% 13.6% 106% 106% London Market 98.2% 87.6% 9.8% 7.5% 134% 117% ------- ------- ------- ------- ------- ------- Total 77.5% 75.8% 12.9% 13.4% 108% 107% ======= ======= ======= ======= ======= ======= Ratios are measured in local currency. The total Group ratios are based on average exchange rates applying to the respective periods. Definitions: Claims ratio - Incurred claims expressed as a percentage of net earned premiums. Expense ratio - Written expenses excluding commissions expressed as a percentage of net written premiums. Commission ratio - Written commissions expressed as a percentage of net written premiums. Combined ratio - Aggregate of claims ratio, expense ratio and commission ratio. -------------------------------------------------------------------------- Page 36 General insurance - class of business analysis (a) United Kingdom Net written Underwriting Combined premiums result operating ratio 9 9 9 9 9 9 months months months months months months 2000 1999 2000 1999 2000 1999 £m £m £m £m % % Personal Motor 1,111 966 (51) (92) 106% 111% Homeowner 940 903 37 7 96% 99% Creditor 363 257 16 22 97% 103% Other 82 98 (1) (2) 104% 92% ------- ------- ------- ------- ------- ------- 2,496 2,224 1 (65) 100% 103% ------- ------- ------- ------- ------- ------- Commercial Motor 533 497 (71) (92) 114% 119% Property 503 522 (43) (26) 108% 104% Liability 166 204 (57) (61) 132% 129% Other 74 79 14 12 80% 87% ------- ------- ------- ------- ------- ------- 1,276 1,302 (157) (167) 112% 113% ------- ------- ------- ------- ------ ------ Total - ongoing business 3,772 3,526 (156) (232) 104% 107% ======= ======= ======= ======= ====== ====== Certain reclassifications have taken place since the publication of the CGU plc and Norwich Union plc 1999 Annual Report and Accounts and the joint merger announcement issued on 21 February 2000. Details of the reclassifications are: (i) Global Risks has been reclassified from the Commercial classes to London Market; (ii) London & Edinburgh marine business has been reclassified to London Market; (iii) Small business vehicles have been reclassified as Commercial; (iv) Part of Commercial Other has been reclassified to Commercial Property; and (v) Personal Accident has been reclassified as Personal Other. The 1999 figures have been restated for the above. (b) France Net written Underwriting Combined premiums result operating ratio 9 9 9 9 9 9 months months months months months months 2000 1999 2000 1999 2000 1999 Em Em Em Em % % Agents/brokers Motor 289 275 (58) (14) 120% 105% Property 349 325 (219) 13 163% 94% Other 154 144 (15) (13) 110% 109% Direct 41 48 (16) (22) 138% 148% ------- ------- ------- ------- ------- ------- Total 833 792 (308) (36) 139% 104% ======= ======= ======= ======= ======= ======= The information in the above table has been translated using the rate of 1 euro = 6.56 FFr. -------------------------------------------------------------------------- Page 37 General insurance - class of business analysis (continued) (c) Netherlands Net written Underwriting Combined premiums result operating ratio 9 9 9 9 9 9 months months months months months months 2000 1999 2000 1999 2000 1999 Em Em Em Em % % Domestic 98 55 1 2 97% 97% Motor 191 140 (21) (29) 111% 121% Commercial fire 163 80 (9) 8 103% 87% Liability 39 37 (15) (10) 146% 130% Inward reinsurance 6 11 (3) (2) 143% 114% Other 78 56 (15) 3 120% 90% ------- ------- ------- ------- ------- ------- Total 575 379 (62) (28) 110% 106% ======= ======= ======= ======= ======= ======= The information in the above table has been translated using the rate of 1 euro = 2.20 NLG. (d) Canada Net written Underwriting Combined premiums result operating ratio 9 9 9 9 9 9 months months months months months months 2000 1999 2000 1999 2000 1999 C$m C$m C$m C$m % % Automobile 969 850 (21) (4) 102% 100% Property 482 441 (54) (23) 111% 105% Liability 120 109 (4) (21) 103% 119% Other 22 23 6 4 68% 79% ------- ------- ------- ------- ------- ------- Total 1,593 1,423 (73) (44) 104% 103% ======= ======= ======= ======= ======= ======= -------------------------------------------------------------------------- Page 38 Assets under management General Long-term business business and other Group Group 30 30 30 31 September September September December 2000 2000 2000 1999 £m £m £m £m Financial investments Shares, other variable yield securities and units in unit trusts 46,658 6,609 53,267 54,736 Debt and fixed income securities at market value 12,249 14,077 26,326 24,893 Debt and fixed income securities at amortised cost 32,037 - 32,037 29,757 Loans secured by mortgages and other loans 10,707 1,288 11,995 11,404 Deposits with credit institutions 2,042 1,063 3,105 2,588 ------- ------ ------- ------- Total financial investments 103,693 23,037 126,730 123,378 Investments in participating interests 448 232 680 434 Land and buildings 7,516 775 8,291 7,847 ------- ------ ------- ------- Total investments 111,657 24,044 135,701 131,659 Assets held to cover linked liabilities 26,138 - 26,138 24,626 Other assets included in the balance sheet 7,750 21,212 28,962 26,899 ------- ------ ------- ------- Total assets included in the balance sheet 145,545 45,256 190,801 183,184 ------- ------- ------- ------- Third party funds under management Unit trusts, Oeics, PEPs and Isas 6,843 5,596 Segregated funds 18,457 19,691 ------- ------- Total assets under management 216,101 208,471 ======= ======= ------------------------------------------------------------------------------ CGNU plc UK GENERAL INSURANCE TRADING CONDITIONS 9 MONTHS ENDED 30 SEPTEMBER 2000 SUMMARY On 2 October, the new Norwich Union Insurance (NUI) brand was launched. The launch has established NUI in the minds of our customers and business partners as the market leader in an increasingly competitive market place. Excellent integration progress has been made whilst maintaining business as usual. Major milestones achieved in addition to launching the combined business include establishment of a single sales force and launch of a comprehensive set of single new business products. The nine months underwriting loss on continuing operations(1) has improved to £156 million (1999: £232 million), reflecting a combination of strong rating action, improved claims experience and handling efficiency together with a continued unwillingness to write unprofitable business. An excellent expense performance on continuing operations produced an expense ratio of 10.8% compared with 11.9% last year. NUI continues to lead the market with rate increases, particularly in both personal and commercial motor, and success has also been achieved during the third quarter in increasing liability rates. Comments on premium rates and claim trends are set out below. PREMIUMS Personal motor: Annualised rating increases of circa 13% are being applied. The private motor market remains hard but the portfolio is no longer being reduced to the same extent as previously. Vehicle exposure in the quarter is stable. Homeowners: Market-leading rating increases in 1999, with the rest of the market following in 2000, mean that rates have increased on average by 4% over the same period last year. The account is displaying satisfactory profitability, further enhanced by the absence of any exceptional weather-related incidents in the period to September 2000. Personal creditor: Creditor margins are coming under increasing pressure as more competitors enter the market. NUI continues to develop new products and this has secured new corporate partnerships business. Commercial motor: Rates have been increased on average by 20% over the same period last year, with particular focus on the fleet and motor trade sector. Commercial motor trading conditions are similar to the private motor market. The number of vehicles insured remained stable over the quarter. Commercial property: Rates have increased on average by 4% compared to the same period last year. Implementation of rating increases has resulted in reduced exposure in some classes and NUI is prepared to lose business rather than sacrifice profitability. The year to date result has been impacted by large losses. NUI is concentrating on refining risk selection and remains focused on small/medium commercial business. Commercial liability: Average rating increases in the third quarter reached 13% and, as a result of the increasingly litigious environment, it is anticipated that this average will increase further in the fourth quarter. Trading conditions remain very competitive, although there are signs that the market is beginning to harden. CLAIMS TRENDS Theft: There has been an overall reduction in theft loss ratios compared to the same period last year, reflecting reduced exposures and stability in current economic conditions. Subsidence: The number and cost of notified subsidence claims remains comparable with the previous year. The total recorded claims cost is £96 million (1999: £92 million). Severe weather: Weather losses to 30 September 2000 of £149 million were lower than the previous year (£165 million(1)) with no exceptional weather events being recorded. The recent storms and flooding will impact our fourth quarter results but at this stage it is too early to assess the cost of these events with reasonable certainty. (1) Excluding London Market business END OF PART 4 of 4

Companies

Aviva (AV.)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today