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Standard Life plc - Annual Report and Accounts 2007
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Europe - New business and performance

New business

Europe NBC: £8m in 05, £10m in 06, £26m in 07PVNBP sales in Europe increased by 35% in constant currency to £1,179m (2006: £866m). PVNBP new business in Germany increased by 34% in constant currency to £722m (2006: £536m). Our strong performance in Germany was driven by the success of Maxxellence, our unit linked product launched in the fourth quarter of 2006. In addition we improved our position in the employee benefit market, our products continued to be attractive to the German self-employed market segment and we enhanced ongoing initiatives to strengthen distribution. As a result, we have grown our German market share. In Ireland, new business increased by 38% in constant currency to £457m (2006: £330m) following the success of our new product range, including self investment options inspired by the UK SIPP platform, and our improved standing with financial advisers.

The new business margin for Europe increased to 2.2% (2006: 1.2%). This was due to increased cost efficiency and improved profitability of new products.

Performance

EEV operating profit before tax

EEV operating profit before tax reduced to £26m (2006: £45m). This was mainly due to a lapse assumption change in Ireland of £22m predominantly in relation to with profits products.

IFRS underlying profit before tax

IFRS underlying profit before tax was £63m (2006: £108m) with Germany contributing £56m (2006: £105m) and Ireland £7m (2006: £3m). The main driver of the fall in Germany was the decreasing transfer of profit to the shareholder from the HWPF. The amount of the profit transferred between the HWPF and the Proprietary Business Fund is determined by the Scheme of Demutualisation (the Scheme) and was expected to reduce in the short-term following the run-off of charges emerging on the exceptional level of sales in Germany in 2004 and early 2005 following changes in German tax legislation.