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Standard Life plc - Annual Report and Accounts 2007
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Group embedded value

Our Group embedded value increased by £603m or 11% in 2007. Before taking into account dividends paid to shareholders, the increase was £800m, of which £600m was from capital and cash generation. Our capital and cash generation from the core elements rose £213m to £334m, mainly due to improvements in new business strain and expected return. Back book management was the other main contributor to our capital and cash generation with a return of £209m, £137m higher than 2006. Efficiency profits and non-operating items also made small positive contributions to capital and cash generation. This is discussed in more detail in the capital and cash generation section. The net worth of our Group has increased from £2,391m to £2,884m and the present value of the in-force business (PVIF) rose from £3,217m to £3,327m, reflecting our growth.

Reconciliation of EEV

12 months to
31 December 2007		 Free
surplus
£m		 Required
capital
£m		 Net
worth
£m		 PVIF net
of cost
of capital
£m		 Group
EEV
£m
Opening 1,829 562 2,391 3,217 5,608
Capital and cash generation 566 34 600 - 600
PVIF income statement - - - (13) (13)
Profit after tax 566 34 600 (13) 587
Dividends (197) - (197) - (197)
Other non-trading movements 6 84 90 123 213
Closing 2,204 680 2,884 3,327 6,211