Canada - Performance
EEV operating profit before tax
EEV operating profit before tax increased by 14%
in constant currency to £178m (2006: £163m). Core accounted for £126m compared
to £118m in 2006, an increase of 11% in
constant currency. This increase was driven
by an improvement in NBC of £9m to £37m
(2006: £28m). A further increase of £1m in
expected return was offset by a £2m increase
in development expenses. Efficiency gains
from continued cost control were £25m (2006:
£53m). Back book management operating
profit was £27m (2006: loss £8m), from positive
lapse assumptions and tax management. These
positive movements in 2007 were partially offset
by adverse annuitant mortality and morbidity
assumption changes.
IFRS underlying profit before tax
IFRS underlying profit before tax increased
by 4% in constant currency to £168m (2006:
£168m), excluding volatility relating to differing
asset and liability valuation bases for nonlinked
business. Underlying profit was driven
by improvements in new business profitability
and continued expense reductions, which were
largely offset by lower bond and equity returns
in line with rising interest rates and the recent
market volatility. Underlying profit also excluded
the £144m impact of changes in Canadian
regulations. The impact on local Canadian GAAP
distributable profits was neutral. Further details
explaining the impact of these changes on
IFRS profit are disclosed in Note 29 of the Group IFRS consolidated
financial statements.
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