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.