Results by Geographical Area
The following table shows the development of NBV, APE and new business profitability in the main geographic areas (represented by Italy, Germany, France, Central and Eastern Europe, Rest of Europe and Rest of World).
Breakdown of New Business Value results by geographic area (€ mln)
NBV
APE
Profitability on APE
2011
2010
change
2011
2010
change
2011
2010
change
Italy
374
326
14.7%
1,715
1,766
-2.9%
21.8%
18.4%
+3.3 pts
Germany
166
173
-3.9%
908
976
-7.0%
18.3%
17.7%
+0.6 pts
France
128
146
-12.4%
939
1,172
-19.8%
13.7%
12.5%
+1.2 pts
Central Eastern Europe
52
56
-5.5%
147
172
-14.5%
35.8%
32.3%
+3.4 pts
Rest of Europe
134
197
-32.1%
657
792
-17.1%
20.4%
24.9%
-4.5 pts
Rest of World
121
153
-20.4%
421
455
-7.4%
28.8%
33.5%
-4.7 pts
Total
976
1,050
-7.1%
4,787
5,333
-10.2%
20.4%
19.7%
+0.7 pts
On a like for like basis, APE decrease (-9.0% at Group level) affects substantially France (-19.8%, driven by the -28.5% drop of single premiums) and the Rest of Europe (‑17.4%, with a -35.7% decrease of single premiums). The slowdown in Central and Eastern Europe (-8.9%) is mainly due to the new pension rules strongly penalising the production in Poland (excluding such aspect, CEE would report a 0.4% increase of APE), whilst the decrease in Germany (-7.0%) is the result of stable production in the life segment (-3.6%) and the drop of the health business (-25.1%). In Italy the slight reduction of APE (-2.9%) is mainly driven by the drop of single premiums (-20.0%), particularly evident in the fourth quarter of the year. The increase of APE in the Rest of World (+7.0%, after neutralising the exit of Afore Banorte) mainly comes from Israel and Mexico.
As already mentioned, new business margin on APE increases at Group level by 0.7 percentage points to 20.4%, with improved profitability in all main areas but the Rest of Europe (mainly as a consequence of the drop in Spain and Switzerland) and the Rest of World (mainly as a consequence of the drop in Israel).
The table below illustrates the development of EV (and its components) and the return on EV in the main areas.
Breakdown of Embedded Value results by geographic area (€ mln)
| |
|
Return on EV | |
EV | |
ANAV | |
VIF | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| |
|
|
|
2011 | 2010 | Change | |
2011 | 2010 | Change | |
2011 | 2010 | Change |
| Italy | |
-50.6% | |
3,729 | 7,877 | -52.7% | |
4,517 | 4,589 | -1.6% | |
-789 | 3,287 | -124.0% |
| Germany | |
-8.2% | |
3,743 | 4,106 | -8.8% | |
1,103 | 1,116 | -1.2% | |
2,641 | 2,990 | -11.7% |
| France | |
-2.8% | |
3,828 | 4,045 | -5.4% | |
2,616 | 2,592 | 0.9% | |
1,212 | 1,453 | -16.6% |
| Central Eastern Europe | |
4.7% | |
1,002 | 1,098 | -8.7% | |
178 | 252 | -29.4% | |
823 | 845 | -2.6% |
| Rest of Europe | |
-4.3% | |
4,177 | 3,963 | 5.4% | |
1,809 | 1,561 | 16.0% | |
2,367 | 2,403 | -1.5% |
| Rest of World | |
5.2% | |
2,893 | 2,838 | 1.9% | |
914 | 865 | 5.7% | |
1,978 | 1,973 | 0.3% |
| Total | |
-18.1% | |
19,372 | 23,927 | -19.0% | |
11,138 | 10,976 | 1.5% | |
8,233 | 12,951 | -36.4% |
The returns on EV in Europe suffer the poor economic framework and the sovereign debt crisis in particular, with Italy being hit more on account of its exposure to Italian government bonds.