Group Finance Director's Report
Balance Sheet Information
The total net of tax embedded value of UK Investment Business on the Full EV basis is as follows:
| As at 31.12.2007 | As at 31.12.2006 | |||||||
| Life & Pensions Insurance Contracts £m |
Life & Pensions Investment Contracts £m |
Mutual Funds Investment Contracts £m |
Total £m |
Life & Pensions Insurance Contracts £m |
Life & Pensions Investment Contracts £m |
Mutual Funds Investment Contracts £m |
Total £m |
|
| Shareholder funds | 2,573 | 500 | 238 | 3,311 | 2,315 | 469 | 230 | 3,014 |
| Value of in-force business (net of tax) | 1,497 | 1,376 | 610 | 3,483 | 1,544 | 1,249 | 577 | 3,370 |
| Total embedded value (net of tax)* | 4,070 | 1,876 | 848 | 6,794 | 3,859 | 1,718 | 807 | 6,384 |
* Total embedded value excludes subordinated debt liabilities for the UK Investment Business of £1,014m (2006 £987m).
The table below analyses the movement in embedded value of our UK Investment Business on the Full EV basis:
| Year ended 31.12.07 | ||||
| Life & Pensions Insurance Contracts £m |
Life & Pensions Investment Contracts £m |
Mutual Funds Investment Contracts £m |
Total £m |
|
| Opening embedded value | 3,859 | 1,718 | 807 | 6,384 |
| Contribution from Investment business | 579 | 238 | 69 | 886 |
| Development costs, associated overheads and financing costs * | (234) | (234) | ||
| Underlying profit before tax | 345 | 238 | 69 | 652 |
| Short term investment fluctuations | (111) | (36) | (22) | (169) |
| Underlying tax charge | 113 | (57) | (13) | 43 |
| Shareholder tax rate change | 60 | 26 | 17 | 103 |
| Dividends paid | (200) | (37) | (10) | (247) |
| Other capital movements | 4 | 24 | 28 | |
| Movement in embedded value for the year | 211 | 158 | 41 | 410 |
| Closing embedded value | 4,070 | 1,876 | 848 | 6,794 |
* Development costs, overheads and financing costs have been attributed to Life & Pensions Insurance Contracts business for presentational purposes only.