Distributable Profits Generation

Distributable profits are defined as the sum of the profit released by the business and the release of the required capital set aside to support the business.

The following table (extract from the EV movement table in Section 4.2) shows the generation of distributable profits during 2011, stemming from the new business written during the year and the portfolio already in force at the beginning of 2011. The table reports both the expected amount of 2011 distributable profit (calculated at the beginning of the year using “real-world” best estimate assumptions – see Annex B1) and its actual realisation, strongly impacted by the financial crisis both in terms of profit and required capital release.

Generation of distributable profit during 2011 (€ mln)
Profit Req. Capital
New business contribution -987 -760 -1,746
Expected existing business contribution 2,151 629 2,781
Total expected distributable profit 1,165 -130 1,034
Operating variance on existing business -44 -164 -208
Economic variance on existing business -583 -1,936 -2,519
Total actual distributable profit 538 -2,231 -1,693

The following tables show the expected future emergence of undiscounted distributable profits stemming from the portfolio in force at year-end 2011 (i.e. excluding future new business) and from the new business written in 2011, again estimated using “real-world” best estimate assumptions.

VIF - expected undiscounted distributable profits (€ mln)
Undiscounted distr.profits
Years 1-5 11,843
Years 6-10 9,615
Years 11-15 7,580
Years 16-206,118
Years 21-254,561
Years 26-303,574
Years 31-onwards 5,427
NBV - expected undiscounted distributable profits (€ mln)
Undiscounted distr.profits
Years 0–1,746
Years 1-5 1,362
Years 6-10 1,046
Years 11-15 811
Years 16-20776
Years 21-25604
Years 26-30533
Years 31-onwards 838