L&G 2003 Final Results Pt 2
Legal & General Group PLC
26 February 2004
Part 2
Legal & General Group Plc P1
Consolidated Profit and Loss Account - Achieved Profits basis
Year ended 31 December 2003
--------------------------------------------------------------------------------
Notes 2003 2002
£m £m
Profit on continuing operations
Life and pensions 1 620 581
Institutional fund management 80 92
General insurance 5 41 46
Other operational income 6 18 (24)
----------- -----------
Operating profit on continuing operations 759 695
Profit on discontinued operations
Other operational income - Banking - 4
----------- -----------
Operating profit 759 699
Variation from longer term investment return 8 424 (1,174)
Change in equalisation provision (7) (5)
Effect of economic assumption changes 9 (32) (6)
Effect of UK Budget tax changes 10 (27) -
Profit on sale of Banking operations 11 - 36
----------- -----------
Profit/(loss) on ordinary activities before tax 1,117 (450)
*********** ***********
Tax charge on operating profit : (209): : (197):
Tax (charge)/credit on other profits/(losses) : (49): : 224 :
*********** ***********
Tax (charge)/credit on profit/(loss) on ordinary (258) 27
activities
----------- -----------
Profit/(loss) for the financial period 859 (423)
Dividends (318) (297)
----------- -----------
Retained profit/(loss) 541 (720)
================================================================================
Earnings per share p p
Based on operating profit after tax on continuing 8.47 8.50
operations
Based on profit/(loss) for the financial period 13.24 (7.21)
Diluted earnings per share
Based on operating profit after tax on continuing 8.26 8.28
operations
Based on profit/(loss) for the financial period 12.83 (7.21)
Dividend per share 4.90 4.78
================================================================================
These financial statements were approved by the Board on 25 February 2004 and
have been prepared for long term business using the Achieved Profits (AP) basis.
The Modified Statutory Solvency (MSS) results are included in Part 3. The
results constitute non-statutory accounts within the meaning of Section 240 of
the Companies Act 1985.
================================================================================
Legal & General Group Plc P2
Consolidated Balance Sheet - Achieved Profits basis
Year ended 31 December 2003
--------------------------------------------------------------------------------
Notes At 31.12.03 At 31.12.02
Restated *
£m £m
Assets
Investments 12 35,280 32,442
Assets held to cover linked liabilities 84,308 69,723
Long term in-force business asset 2,365 1,916
Other assets 5,320 4,489
----------- -----------
127,273 108,570
=========== ===========
Liabilities
Shareholders' funds 14 5,596 5,061
Fund for future appropriations 1,498 516
Technical provisions
*********** ***********
- Technical provisions for linked liabilities : 83,730 : : 67,834 :
- Long term business provisions : 33,206 : : 30,679 :
- General insurance provisions : 405 : : 345 :
*********** ***********
117,341 98,858
Borrowings 15 1,475 1,589
Other creditors 1,363 2,546
----------- -----------
127,273 108,570
=========== ===========
* Prior year comparative figures have been adjusted to reclassify
Institutional pension fund temporary monies as Other creditors rather than as
Technical provisions for linked liabilities. There is no adjustment to the
reported results.
--------------------------------------------------------------------------------
Statement of Total Recognised Gains and Losses
At 31.12.03 At 31.12.02
£m £m
Profit/(loss) for the financial period 859 (423)
Exchange losses (7) (5)
----------- -----------
Total recognised gains and losses 852 (428)
================================================================================
Legal & General Group Plc P3
Notes to Financial Statements - Achieved Profits basis
Year ended 31 December 2003
--------------------------------------------------------------------------------
1. Operating profit from long term business
Life and Managed
Inter- pensions pension
UK national Total funds* Total
£m £m £m £m £m
Year ended 31.12.03
Contribution from:
New business 271 34 305 31 336
In-force business
- expected return 215 45 260 13 273
- experience variances ** 9 (8) 1 5 6
- operating assumption (107) 1 (106) 20 (86)
changes **
Development costs (2) - (2) (1) (3)
Shareholder net worth 151 11 162 3 165
-------- -------- -------- -------- --------
Operating profit 537 83 620 71 691
======== ======== ======== ======== ========
Year ended 31.12.02
Contribution from:
New business 211 38 249 32 281
In-force business
- expected return 264 46 310 15 325
- experience variances ** (25) (18) (43) 14 (29)
- operating assumption (105) 1 (104) 16 (88)
changes **
Development costs (3) - (3) (1) (4)
Shareholder net worth 159 13 172 7 179
-------- -------- -------- -------- --------
Operating profit 501 80 581 83 664
======== ======== ======== ======== ========
* Included in the Institutional fund management result of £80m (2002: £92m).
** The largest impact on UK life and pensions business in 2003 was from the
tightening of future persistency assumptions and the strengthening of provisions
for claims on the endowment book, and in 2002, was from an improvement in
annuitant mortality and other related demographic assumption changes.
================================================================================
Legal & General Group Plc P4
Notes to Financial Statements - Achieved Profits basis
Year ended 31 December 2003
--------------------------------------------------------------------------------
2. Life and pensions gross premiums and operating profit
2003 2003 2002 2002
Premiums Operating Premiums Operating
written profit written profit
£m £m £m £m
UK 4,541 537 4,229 501
USA 292 50 285 50
Netherlands 155 24 137 23
France 171 9 153 7
--------- --------- --------- ---------
5,159 620 4,804 581
========= ========= ========= =========
International life and pensions gross premiums and operating profit for 2002
expressed at 31 December 2003 exchange rates are:
Premiums Operating
written profit
£m £m
USA 256 45
Netherlands 148 25
France 165 8
================================================================================
3. Sterling exchange rates used 31.12.03 31.12.02
United States dollar 1.79 1.61
Euro 1.42 1.53
================================================================================
4. Half yearly analysis of operating profit from continuing operations
2003 2003 2002 2002
Second half First half Second half First half
£m £m £m £m
Life and pensions 314 306 268 313
Institutional fund management 43 37 52 40
General insurance 22 19 24 22
Other operational income 15 3 (11) (13)
--------- --------- --------- ---------
Total 394 365 333 362
================================================================================
5. General insurance net premiums and operating profit
2003 2003 2002 2002
Premiums Operating Premiums Operating
written profit written profit
£m £m £m £m
Household 308 17 231 18
Other business 79 24 73 28
--------- --------- --------- ---------
Total 387 41 304 46
================================================================================
Legal & General Group Plc P5
Notes to Financial Statements - Achieved Profits basis
Year ended 31 December 2003
--------------------------------------------------------------------------------
6. Other operational income
2003 2002
£m £m
Shareholders' other income
- Investment return on shareholders' funds 100 54
- Interest expense (58) (52)
---------- ----------
42 2
Other operations (14) (14)
Unallocated corporate and development expenses (10) (12)
---------- ----------
18 (24)
================================================================================
7. General insurance and shareholders' investment return
2003 2002
£m £m
Investment income 82 57
Interest expense and charges (60) (52)
Realised investment losses (8) (6)
Unrealised investment appreciation/(depreciation) 104 (42)
---------- ----------
118 (43)
========== ==========
reported within:
General insurance 18 18
Other operational income 42 2
Variation from longer term investment return
********** **********
- General insurance : 5 : : (21):
- Other operational income : 53 : : (42):
********** **********
58 (63)
The investment return shown represents the return on the General insurance and
Corporate funds.
Shareholders' other income, reported within Other operational income, has been
allocated based on a longer term rate of investment return with the variation
from the actual return being reported as Variation from longer term investment
return.
================================================================================
Legal & General Group Plc P6
Notes to Financial Statements - Achieved Profits basis
Year ended 31 December 2003
--------------------------------------------------------------------------------
8. Variation from longer term investment return
2003 2002
£m £m
Life and pensions
- UK 346 (1,045)
- International 4 (18)
--------- ---------
Total life and pensions 350 (1,063)
Managed pension funds 16 (48)
--------- ---------
Total long term business 366 (1,111)
General insurance 5 (21)
Other operational income 53 (42)
--------- ---------
424 (1,174)
========= =========
For long term business, the variation from longer term investment return
represents the effect of the investment performance in respect of shareholder
net worth and in-force business, compared with embedded value assumptions at the
beginning of the period.
================================================================================
9. Effect of economic assumption changes
2003 2002
£m £m
Life and pensions
- UK (16) (14)
- International (16) 8
--------- ---------
Total (32) (6)
================================================================================
10. Effect of UK Budget tax changes
Changes in the 2003 Budget to the corporation tax rates applicable to the
policyholders' share of certain income and gains reduced the UK life and
pensions embedded value by £19m. The effect has been reported as a charge before
tax of £27m.
================================================================================
11. Sale of Banking operations
The sale of Legal & General Bank Ltd and Legal & General Mortgage Services Ltd,
two wholly owned subsidiaries, to Northern Rock plc, was completed on 1 August
2002. The results to the date of sale have been reported as discontinued
business. This transaction resulted in an exceptional profit before tax in 2002
of £36m (£36m after tax) and generated net proceeds of £133m.
================================================================================
Legal & General Group Plc P7
Notes to Financial Statements - Achieved Profits basis
Year ended 31 December 2003
--------------------------------------------------------------------------------
12. Funds under management
At 31.12.03 At 31.12.02
£m £m
Land and buildings 4,228 3,589
Shares, variable yield securities and unit trusts 11,325 10,139
Debt and other fixed income securities 18,277 15,977
Loans secured by mortgages 183 204
Other loans and investments 86 144
Deposits with credit institutions 1,181 2,389
--------- ---------
Total investments 35,280 32,442
Assets held to cover linked liabilities 84,308 69,723
--------- ---------
Funds included in the consolidated balance sheet 119,588 102,165
Segregated funds 11,235 8,970
Unit trusts, ISAs and PEPs 6,975 5,117
--------- ---------
Total funds under management 137,798 116,252
========= =========
representing:
Managed in the UK
- Active 42,214 36,018
- Index tracking 92,047 76,855
- For overseas subsidiaries 1,076 1,119
--------- ---------
135,337 113,992
Other including managed overseas 2,461 2,260
--------- ---------
137,798 116,252
========= =========
including Institutional funds under management:
Managed pension funds
- Pooled 72,841 60,397
- Segregated 8,522 6,308
--------- ---------
81,363 66,705
Other funds 2,713 2,662
--------- ---------
84,076 69,367
========= =========
The reported asset mix shown above does not reflect the use of derivatives. The
effect of outstanding futures contracts is to change the mix as if the value
reported for shares, variable yield securities and unit trusts increased by £46m
(2002: £631m); deposits would be changed by corresponding amounts. The effect of
other derivatives is not considered significant enough to be disclosed.
================================================================================
Legal & General Group Plc P8
Notes to Financial Statements - Achieved Profits basis
Year ended 31 December 2003
--------------------------------------------------------------------------------
13. Embedded value
Life and Managed
Inter- pensions pension
UK national Total funds Total
£m £m £m £m £m
Year ended 31.12.03
At 1 January 3,876 641 4,517 262 4,779
Exchange rate movements - (37) (37) - (37)
-------- -------- -------- -------- --------
3,876 604 4,480 262 4,742
Profit after tax 636 47 683 61 744
Capital movements - 6 6 - 6
Distributions (259) - (259) (18) (277)
-------- -------- -------- -------- --------
At 31 December 4,253 657 4,910 305 5,215
======== ======== ======== ======== ========
comprising:
Value of in-force business 2,668 429 3,097 162 3,259
Shareholder net worth * 1,585 228 1,813 143 1,956
-------- -------- -------- -------- --------
4,253 657 4,910 305 5,215
======== ======== ======== ======== ========
Year ended 31.12.02
At 1 January 4,432 633 5,065 252 5,317
Exchange rate movements - (36) (36) - (36)
-------- -------- -------- -------- --------
4,432 597 5,029 252 5,281
(Loss)/profit after tax (502) 45 (457) 25 (432)
Capital movements ** 203 (1) 202 - 202
Distributions (257) - (257) (15) (272)
-------- -------- -------- -------- --------
At 31 December 3,876 641 4,517 262 4,779
======== ======== ======== ======== ========
comprising:
Value of in-force business 2,153 408 2,561 132 2,693
Shareholder net worth * 1,723 233 1,956 130 2,086
-------- -------- -------- -------- --------
3,876 641 4,517 262 4,779
======== ======== ======== ======== ========
* For the UK life and pensions business, shareholder net worth comprises the
shareholder retained capital (SRC) on the MSS basis, adjusted for deferred
acquisition costs, and the sub-fund, both net of an appropriate allowance for
tax. It also includes intra-group subordinated debt capital of £602m (2002:
£602m).
** Capital movements for 2002 include the increase in subordinated debt of £100m
together with £114m representing proceeds from the sale of Legal & General Bank
Limited allocated to the SRC.
================================================================================
Legal & General Group Plc P9
Notes to Financial Statements - Achieved Profits basis
Year ended 31 December 2003
--------------------------------------------------------------------------------
13. Embedded value (continued)
Reconciliation of in-force business
At 31.12.03 At 31.12.02
£m £m
Long term in-force business asset included 2,365 1,916
in the balance sheet
Sub-fund (223) (189)
Deferred acquisition costs 709 613
Deferred tax on contribution * 366 323
Other miscellaneous adjustments 42 30
--------- ---------
Value of in-force business 3,259 2,693
========= =========
Reconciliation of shareholder net worth of long term business operations
- UK (SRC) ** 2,212 2,259
- USA 443 453
- Netherlands 36 24
- France 45 36
- Managed pension funds 143 130
--------- ---------
Shareholder net worth on the MSS basis 2,879 2,902
Purchased interests in long term business (29) (39)
Sub-fund 223 189
Deferred acquisition costs (709) (613)
Deferred tax on contribution * (366) (323)
Other miscellaneous adjustments (42) (30)
--------- ---------
Shareholder net worth on the AP basis 1,956 2,086
========= =========
The above reconciliations are provided in the spirit of the guidance provided by
the Auditing Practices Board to auditors. It has been concluded that the AP and
MSS accounting bases are so fundamentally different in the way that profits are
cast, particularly as to the timing of profit recognition, that it is not
meaningful to provide a reconciliation between them. Other than in respect of
long term business, shareholder net worth is identical for both AP and MSS
business.
* Deferred tax represents all tax which is expected to be paid under current
legislation, including tax which would arise if shareholders' backing assets
were eventually distributed.
** Including £602m (2002: £602m) of intra-group subordinated debt capital
attributed to the SRC.
================================================================================
Legal & General Group Plc P10
Notes to Financial Statements - Achieved Profits basis
Year ended 31 December 2003
--------------------------------------------------------------------------------
14. Shareholders' funds
Segmental analysis
At 31.12.03 At 31.12.02
£m £m
Embedded value of life and pensions businesses:
- UK * 4,253 3,876
- USA 460 486
- Netherlands 112 87
- France 85 68
--------- ---------
4,910 4,517
Institutional fund management ** 338 293
--------- ---------
5,248 4,810
General insurance 120 101
Corporate funds *** 228 150
--------- ---------
5,596 5,061
========= =========
Movement
At 1 January 5,061 4,994
Profit/(loss) for the financial period 859 (423)
Exchange movements (7) (5)
Dividends (318) (297)
Increase in share capital/share premium 1 792
--------- ---------
At 31 December 5,596 5,061
========= =========
* Includes £602m (2002: £602m) of intra-group subordinated debt capital
attributed to the SRC.
** Includes £305m (2002: £262m) net assets of managed pension funds business.
*** Includes £518m (2002: £516m) of convertible debt, £602m (2002: £602m) of
senior debt which has been onlent to the Long Term Fund (LTF) and £788m
representing the net proceeds from the 2002 Rights Issue.
================================================================================
15. Borrowings
At 31.12.03 At 31.12.02
£m £m
2.75% Convertible bond 2006 518 516
Medium Term Notes 2031-2041 597 597
Medium Term Notes 2004 6 369
Commercial paper 2004 352 89
Bank loans 2004 2 18
--------- ---------
Total borrowings 1,475 1,589
========= =========
The convertible bond matures in 2006 and is convertible into ordinary shares of
the Company at 184p per share. If converted, this bond would give rise to the
issue of 285.3m new ordinary shares which represents approximately 4.4% of the
current issued share capital.
================================================================================
Legal & General Group Plc P11
Notes to Financial Statements - Achieved Profits basis
Year ended 31 December 2003
--------------------------------------------------------------------------------
16. Embedded value assumptions UK life and pensions
i) The assumed future pre-tax returns on fixed interest and RPI linked
securities are set by reference to redemption yields available in the market at
the end of the reporting period. The corresponding return on equities and
property and the risk discount rate have been set by reference to the fixed
interest gilt assumption. The economic assumptions were:
At 31.12.03 At 31.12.02
% p.a. % p.a.
Investment return
- Gilts
- Fixed interest 4.7 4.5
- RPI linked 4.6 4.4
- Non-gilts
- Fixed interest 5.1 - 5.5 4.9 - 5.8
- RPI linked 5.1 - 5.4 4.8 - 5.3
- Equities and property 7.3 7.1
Risk discount rate (after tax) 7.2 7.0
Inflation
- Expenses/earnings 3.8 3.3
- Indexation 2.8 2.3
The assumed returns on non-gilt securities are net of an allowance for default
risk of 0.20% p.a. (2002: 0.20% p.a.), other than for certain
government-supported securities where no such allowance is made.
ii) Assets are valued at market value. For the projection of fixed interest and
RPI linked investment returns, asset values are adjusted to reflect the assumed
interest and inflation rates.
iii) Capital reported as transferred into the LTF since 1996, in the form of
subordinated debt and any remaining excess consideration over the net asset
value of subsidiaries transferred from the LTF in December 2001, is treated as
residual.
iv) The value of the sub-fund is the discounted value of projected investment
returns for a period of 20 years (2002: 20 years).
v) Development costs relate to the development of strategic administration
systems.
vi) Future bonus rates have been set at levels which would fully utilise the
assets supporting with-profits business. The proportion of profits derived from
with-profits business allocated to shareholders has been assumed to be 10%
throughout.
================================================================================
Legal & General Group Plc P12
Notes to Financial Statements - Achieved Profits basis
Year ended 31 December 2003
--------------------------------------------------------------------------------
16. Embedded value assumptions (continued)
vii) The value of in-force business reflects the cost of providing for benefit
enhancement or compensation in relation to certain products including
administration expenses.
viii) Other actuarial assumptions have been set at levels commensurate with
recent operating experience, including those for mortality, persistency and
maintenance expenses (excluding the development costs referred to above). These
assumptions are reviewed annually. An allowance is made for future improvements
in annuitant mortality based on externally published data. For end 2003, male
annuitant mortality is assumed to improve in accordance with CMI Working Paper
1, projection SC for experience and projection MC for statutory reserving.
Female annuitant mortality is assumed to improve in accordance with CMI Report
No. 17.
ix) Business in force comprises previously written single premium, regular
premium and recurrent single premium contracts. For this purpose, DWP rebates
have not been treated as recurrent and their value is included as premiums are
received.
x) Projected tax has been determined assuming current tax legislation and rates.
xi) AP results are computed on an after tax basis and are grossed up to the
pre-tax level for presentation in the profit and loss account. The tax rate used
for grossing up is the corporation tax rate of 30% (2002: 30%), except for the
profit attributable to shareholder net worth, where the rate used is derived
from the tax attributed to the contribution from shareholder net worth in the
MSS accounts. To arrive at operating profit, the contribution from shareholder
net worth is grossed up at a rate to reflect the tax associated with a longer
term investment return.
UK managed pension funds
The UK life and pensions economic assumptions are used. All contracts are
assumed to lapse after 10 years. Fees are projected on a basis which reflects
current charges or, if less, anticipated charges. New business consists of
monies received from new clients and incremental receipts from existing clients,
and excludes the roll-up of the investment returns. Development costs relate to
strategic systems.
International
Key assumptions are:
At 31.12.03 At 31.12.02
% p.a. % p.a.
USA
Reinvestment rate 4.8 4.8
Risk discount rate (after tax) 6.8 6.4
Europe
Government bond return 4.5 4.5
Risk discount rate (after tax) 8.0 8.0
================================================================================
Legal & General Group Plc P13
Notes to Financial Statements - Achieved Profits basis
Year ended 31 December 2003
--------------------------------------------------------------------------------
17. Alternative assumptions
The discount rate appropriate to any investor will depend on the investor's own
requirements, tax and perception of the risks associated with the anticipated
cash flows to shareholders. The table below shows the effect of alternative
discount rates and equity and property yields on the UK life and pensions
embedded value and new business contribution for the period.
1% lower 1% higher 1% higher
risk risk equities/
As discount discount property
published rate rate yields
£m £m £m £m
Effect on embedded value 4,253 +260 -230 +230
at 31 December 2003
Effect on new business 271 +37 -33 +20
contribution for the period
It should be noted that in calculating the alternative values all other
assumptions are left unchanged.
================================================================================
Legal & General Group Plc P14
Notes to Financial Statements - Achieved Profits Basis
Year ended 31 December 2003
--------------------------------------------------------------------------------
18. Contingent liabilities, guarantees and indemnities
Provision for the liabilities arising under contracts with policyholders is
based on certain assumptions. The variance of actual experience from that
assumed may result in such liabilities differing from the provisions made for
them. Liabilities may also arise in respect of claims relating to the
interpretation of such contracts, or the circumstances in which policyholders
have entered into them (together in this paragraph 'liabilities'). The extent of
such liabilities is influenced by a number of factors including the actions and
requirements of the FSA, by ombudsman rulings, by industry compensation schemes
and by court judgements. The continuing general profile and emphasis being given
by the FSA and other bodies to the suitability of the past sales of endowment
policies in the context of some mortgage transactions has led to the continuing
receipt of claims from holders of endowment policies.
On 27th November 2003, Legal & General Assurance Society Limited ('the Society')
referred to the Financial Services and Markets Tribunal ('Tribunal') a Decision
Notice issued by the FSA in relation to the sale of a small proportion of its
mortgage related endowment policies issued between 1997 and 1999 ('Notice'). The
matters contained in the Notice will be determined by the Tribunal later this
year.
Provision for liabilities continues to be made and is regularly reviewed.
However, it is not possible to predict, with certainty, the extent and the
timing of the financial impact to which these liabilities may give rise. The
relevant members of the Group nevertheless consider that each makes prudent
provision for such liabilities, as and when circumstances calling for such
provision become clear, and that each has adequate capital and reserves to meet
all reasonably foreseeable eventualities.
In 1975 the Society was required by the Institute of London Underwriters (ILU)
to execute the ILU form of guarantee in respect of policies issued through the
ILU's Policy Signing Office on behalf of NRG Victory Reinsurance Company Ltd
(Victory), a company which was then a subsidiary of the Society. In 1990,
Nederlandse Reassurantie Groep Holding nv (the assets and liabilities of which
have since been assumed by Nederlandse Reassurantie Groep NV under a statutory
merger in the Netherlands) acquired Victory and provided an indemnity to the
Society against any liability the Society may have as a result of the ILU's
requirement, and the ILU agreed that its requirement of the Society would not
apply to policies written or renewed after the acquisition. Whether the Society
has any liability as a result of the ILU's requirement and, if so, the amount of
its potential liability is uncertain. The Society has made no payment or
provision in respect of this matter.
Group companies have given indemnities and guarantees, including interest rate
guarantees, as a normal part of their operating activities or in relation to
capital market transactions.
================================================================================
Legal & General Group Plc P15
New business
Year ended 31 December 2003
--------------------------------------------------------------------------------
Life and pensions 2003 2003 2002 2002
Annual Single Annual Single
£m £m £m £m
Insurance business
Life 183 1,126 171 1,431
Pensions 118 1,783 169 1,249
--------- --------- --------- ---------
UK 301 2,909 340 2,680
********* ********* ********* *********
USA : 47: : 10: : 57: : 3:
Netherlands : 12: : 96: : 10: : 87:
France : 7: : 124: : 5: : 111:
********* ********* ********* *********
66 230 72 201
--------- --------- --------- ---------
Insurance total 367 3,139 412 2,881
Retail investment business
UK 33 1,689 51 1,522
France - 25 - 32
--------- --------- --------- ---------
Total new business 400 4,853 463 4,435
========= ========= ========= =========
International insurance new business for 2002 expressed at 31 December 2003
exchange rates
Annual Single
£m £m
USA 51 3
Netherlands 11 94
France 6 120
--------- ---------
68 217
========= =========
Annual Premium Equivalent (APE) is calculated for total new business, including
unit trusts and ISAs but excluding institutional fund management, and comprises
the new annual premiums together with 10% of single premiums.
APE from insurance business was £681m (2002: £700m); APE from total new business
in the same period has decreased to £886m (2002: £906m).
2003 2002
£m £m
Institutional fund management
Managed pension funds *
- Pooled funds 11,066 12,359
- Segregated funds 1,504 1,039
- Limited partnerships 242 167
--------- ---------
12,812 13,565
Other funds 240 402
--------- ---------
13,052 13,967
========= =========
* New monies from pension fund clients of Legal & General Assurance (Pensions
Management) Ltd.
Corporate pensions gross new business excludes £4.0bn (2002: £2.1bn) which was
held through the year on a temporary basis, generally as part of portfolio
reconstruction.
================================================================================
Legal & General Group Plc P16
New business
Year ended 31 December 2003
--------------------------------------------------------------------------------
2003 2002
Full Second First Full Second First
year half half year half half
UK annual premiums £m £m £m £m £m £m
Insurance business
Life
- Mortgage-related 103 55 48 96 47 49
- Protection 46 23 23 45 23 22
- Group risk 34 21 13 30 16 14
Pensions
- Individual pensions 114 57 57 162 69 93
- Group pensions 4 2 2 7 3 4
------- ------- ------- ------- ------- -------
301 158 143 340 158 182
Retail investment business
ISAs 27 12 15 44 18 26
Unit trusts 6 2 4 7 2 5
------- ------- ------ ------- ------- -------
Total 334 172 162 391 178 213
================================================================================
UK single premiums
Insurance business
Bonds
- With-profits 593 264 329 1,172 507 665
- Other 533 347 186 259 148 111
Pensions
- Individual pensions 274 109 165 283 133 150
- Annuities - individual 727 413 314 434 249 185
- Annuities - bulk purchase 598 231 367 307 132 175
- Other group business 5 2 3 66 38 28
- DWP rebates 179 142 37 159 116 43
------- ------- ------- ------- ------- -------
2,909 1,508 1,401 2,680 1,323 1,357
Retail investment business
ISAs 572 179 393 720 184 536
Unit trusts 1,117 485 632 802 333 469
------- ------- ------- ------- ------- -------
Total 4,598 2,172 2,426 4,202 1,840 2,362
================================================================================
UK APE
Individual life and pensions 494 263 231 534 255 279
Retail investments 202 80 122 203 72 131
by channel
******* ******* ******* ******* ******* *******
- Independent financial : 382: : 194: : 188: : 340: : 160: : 180:
advisers : : : : : : : : : : : :
- Business : 252: : 129: : 123: : 302: : 138: : 164:
partnerships : : : : : : : : : : : :
- Business : 27: : 8: : 19: : 44: : 15: : 29:
partnerships direct : : : : : : : : : : : :
- Direct : 35: : 12: : 23: : 51: : 14: : 37:
******* ******* ******* ******* ******* *******
Total UK individual 696 343 353 737 327 410
Group 98 46 52 74 35 39
------- ------- ------- ------- ------- -------
Total 794 389 405 811 362 449
================================================================================
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