APE (Annualised premium equivalent)

New annual business premium equivalent (APE)
(€ million) 31.12.2011 31.12.2010 Fourth quarter
Fourth quarter
New annual business premium equivalent (APE) 4,787.4 5,332.6 1,277.7 1,491.8
Italy 1,715.2 1,766.1 517.7 589.2
France 939.1 1,171.5 201.3 272.3
Germany 907.8 975.9 237.2 247.0
Central and Eastern Europe 146.7 171.7 38.4 50.9
Rest of Europe 657.1 792.3 168 195.0
of which Spain 125.7 118.4 37.0 34.0
of which Austria 104.1 97.4 19.1 23.4
of which Switzerland 85.1 95.5 26.4 30.4
of which Ireland 80.5 190.2 20.0 29.0
Rest of World 421.5 455.2 115.1 137.3

New annual business premium equivalent (APE), which totalled € 4,787.4 million, decreased by 9.0% (on equivalent exchange rates and share attributable to the Group), mainly due to the negative performance of single premium new business (down 24.8% on equivalent terms), primarily in France, Italy and Ireland. By contrast, annual premiums grew (up 2.7% on equivalent terms), representing 64.6% of new business (57.2% at 31 December 2010).

Breaking APE down by line of business, there were a decline in the traditional savings business (down 8.6% on equivalent terms) and the linked business (down 16.9% on equivalent terms), for which, however, the comparison was affected by the high levels of written premiums reported in Ireland, especially in the first few months of the previous year. In contrast, the protection business proved resilient (up 2.7% on equivalent terms).

In Italy, new business decreased by 2.9% on equivalent terms. Considering the strong performance of the more profitable annual premium business (up 7.7%), the decline may be attributed to the considerable decrease in single premiums (down 20.0%).

New business also fell in France (down 19.8%), where APE was affected by the severe contraction of single premiums (down 28.5%). Moreover, unit-linked business also continued to decrease (down 24.1%).

The decline in single premiums (down 12.8%) also influenced new business in Germany, which thus reported an overall reduction of 7%, attributable both to the decline in the Health line (down 25.1%) and the deterioration of the life business (down 3.6%).

The decrease of APE (down 8.9% on equivalent terms) in Central and Eastern Europe was mainly attributable to the drop in Poland due to a change in regulations of the welfare system. In contrast, the uptrend continued in the Czech Republic.

The negative performance by the single premium business also influenced the result for the Rest of Europe (down 17.4%), which was affected in particular by the comparison with the extraordinary levels of unit-linked business in the first quarter of 2010 in Ireland. The decrease in Switzerland (down 13.5% on equivalent terms) may be attributable to the lower attractiveness of the unit-linked products offered by the Group, in relation to which, considering the economic and financial context, the level of  minimum guaranteed has been reduced. Positive, in contrast, the trend of traditional business. That overall decline was only partially offset by the positive performances of APE in Austria (up 7.0%) and Spain (up 6.2%).

Finally, new business continued to develop in the Rest of World (up 7.0% on equivalent terms), attributable to the positive contribution by the Middle East and Latin America,and only partially offset by the decline witnessed in the Far East (down 17.6%), and in China in particular, for which the comparison with the same period of the previous year was affected, as mentioned, by the presence of a relevant single premium adjustment recognized in the first quarter of 2010.

New business value (NBV)
(€ million) 
31.12.2011 31.12.2010 Change Change like for like
New business value 975.7 1,050.1 -7.1% -5.6%
Italy 373.6 325.7 14.7% 14,8%
France 128.3 146.5 -12.4% -12.4%
Germany 165.9 172.6 -3.9% -3.9%
Central and Eastern Europe 52.5 55.5 -5.5% 0.0%
Rest of Europe 133.9 197.2 -32.1% -32.5%
of which Spain 20.9 27.6 -24.5% -24.5%
of which Austria 14.5 22.7 -36.0% -36.0%
of which Switzerland 16.1 40.9 -60.6% -61.8%
Rest of World 121.5 152.6 -20.4% -11.9%

At Group level the new business value (NBV) amounted to € 975.7 million, showing a decrease of 5.6% on equivalent terms. The reasons behind this reduciton had to be found entirely in the reduction of the production only partly offset both by the more favorable product mix and improved profitability. The internal rate of return, i.e. that is the rate which represents the investment yield that the shareholder makes in the new business net of the fiscal effect, remained at good level amounting to 12.6% (13.9% at December 31, 2010).

With regard to the Group’s main countries of operation, Italy reported a growth of 14.8% of the value of new business owing to the greater weight of the most profitable annual premium products and the improvement of the margin on single premium products, due to the reduction in the guarantee level offered.

In Gemany the value of new business slightly decreased (down 3.9%), owing to lower volumes only partially offset by higher profitability.

In France the value of new business amounted to € 128.3 million, the decrease of 12.4% was attributable to lower volumes whereas the profitability amounted to 13.7%, up 1.2 pp, also due to the higher incidence of the risk products.

In the of Central and Eastern Europe countries the value of new business remained stable on equivalent terms: the improvement in profitability (up by 3.4 pp due to the greater weight of annual premiums) offset the decline in volume mainly due to the reform of the welfare system in Poland.

The value of new business of the Rest of Europe amounted to € 133.9 million, down 32.5% on a equivalent terms, due to lower volumes and the decline of the profitability mainly attributable to the decrease in the interest rates.

The value of new business in the Rest of World amounted to € 121 million, down 11.9% on equivalent terms as a result of the decline in profitability in the Middle East.

Life new business value and profitability68.01 KB