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 it.

The following table (extract from the EV movement table) shows the generation of distributable profits during 2012, stemming from the new business written during the year and the portfolio already in force at the end of 2011. The table reports both the expected amount of 2012 distributable profit (calculated at the beginning of the year using “real-world” best estimate assumptions) and its actual realisation, where the positive impact on the profit of the year is only partially offset by the lower than expected release of required capital from the existing business.

Generation of distributable profit during 2012 (€ mln)
  Profit Req. Capital release  Distributable profit 
New business contribution -945
-678
-1,624
Expected existing business contribution 1,8886
 862  2,748
Total expected distributable profit  941  184  1,124
Operating variance on existing business  1,196  -697  499
Total actual distributable profit  2,137  -513  1,623

The following tables show the expected future emergence of undiscounted distributable profits stemming from the portfolio in force at year-end 2012 (i.e. excluding future new business) and from the new business written in 2012, again estimated using “real-world” best estimate assumptions.

VIF - expected undiscounted distributable profits (€ mln)
  Undiscounted distr.profits
Years 1-5 12,532
Years 6-10  9,349
Years 11-15  6,723
Years 16-20  4,918
Years 21-25  3,559
Years 26-30 2,474
Years 31-onwards  3,292
NBV - expected undiscounted distributable profits (€ mln)
  Undiscounted distr.profits
Years 0 -1,624
Years 1-5  1,183
Years 6-10 1,040
Years 11-15  848
Years 16-20  772
Years 21-25  590
Years 26-30  487
Years 31-onwards  473