Highlights
Continuation of the strategy of value maximisation and cash generation
Successful refinancing of the deferred consideration notes further de-risking cash flow to shareholders
Final regulatory approval being sought for the intended sale of AmLife
Strong operational progress continues in the UK and clear direction identified from strategic review of International
Summary
New business profitability continues to improve
New business profitability has continued to improve as the Group makes good progress towards delivery of the 2013 new business financial targets. The value of new business ("VNB") for the nine months to 30 September 2012 increased to 138 million (30 September 2011: 95 million) and new business cash strain ("NBS") reduced to (172) million (30 September 2011: (239) million):
- Total UK VNB increased to 102 million (30 September 2011: 40 million) reflecting the step change made to new business profitability of the UK businesses. Total UK NBS of (87) million (30 September 2011: (143) million) continues the improving trend towards the targeted 200 million reduction by the end of 2013;
- FPI (International excluding Lombard) continues to reduce the risk profile of the business and remains focused on the generation of value rather than volume with VNB of 24 million (30 September 2011: 32 million) and NBS of (67) million (30 September 2011: (78) million); and
- Lombard delivered 12 million of VNB in the period to date (30 September 2011: 23 million) reflecting both the challenging markets and changes in underlying product mix. NBS at (18) million remains unchanged compared to the same period in 2011.
Friends Life Investments Limited ("FLI") added a further 3 billion of fixed income assets to the 6 billion already recaptured in July 2012.
