1 Segmental Analysis
 2 Jackson National Life
 3 Investment Return
 4 Investment Income
 5 Policyholder Bonuses
 6 Net Operating Expenses
 7 Investment Expenses and Charges
 8 Tax
 9 Acquisitions and Disposals
 10 Information on Staff
 11 Directors’ Remuneration
 12 Fees Payable to Audit Firms
 13 Land and Buildings
 14 Investments in Participating Interests
 15 Other Financial Investments
 16 Assets Held to Cover Linked Liabilities
 17 Share Capital and Share Premium
 18 Group Profit and Loss Account Reserve
 19 Long-term Business Provision
 20 Borrowings
 21 Reclassification of Certain Liabilities
 22 Investments of the Company
 23 Profit of the Company
 24 Subsidiary Undertakings
 25 Contingent Liabilities
 26 Cash Flow
 27 Post Balance Sheet Event

 

 

 

 

1 Segmental Analysis

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(i) Results Summary Operating profit 1998 £m Items excluded from operating profit 1998 £m Total 1998 £m Operating profit 1997 £m Items excluded from operating profit 1997 £m Total 1997 £m
General business 39 – 39 38* – 38*
Long-term business 825 – 825 770 – 770
Other activities 4 273 277 56* 305* 361*
Profit before tax 868 273 1,141 864* 305* 1,169
Tax (214) (47) (261) (246)* (86)* (332)
Profit after tax 654 226 880 618* 219* 837

*Restated for altered basis of recognition of investment returns as explained in note 3.


 

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 Long-term new business   Operating profit (including longer term investment returns)
 Single Regular Gross premiums written
(ii) Analysis by Business Area1998 £m 1997 £m 1998 £m 1997 £m 1998 £m 1997 £m 1998 £m 1997 £m
UK operations
Prudential Retail Financial Services 1,821 1,819 192 245 3,236 3,233 333 323*
Retail IFA 1,875 1,346 132 33 2,880 1,759 92 72
Prudential Fund Management 544 475 37 52 1,434 1,310 50 49
Egg and Prudential Banking – – – – – – (77) (22)
Total 4,240 3,640 361 330 7,550 6,302 398 422*
Jackson National Life 2,835 2,914 28 37 3,237 3,340 411 367
Prudential Asia
Long-term business 114 226 79 120 532 653 23 20
Development expenses – – – – – – (10) (9)
Total 114 226 79 120 532 653 13 11
Shareholders’ other income (note (v)) – – – – – – 38 34*
Total continuing operations (note (iii)) 7,189 6,780 468 487 11,319 10,295 860 834*
Discontinued long-term business operations 276 497 46 61 456 788 8 30
Group total 7,465 7,277 514 548 11,775 11,083 868 864*

During 1998 the UK operations were reorganised into separate business units. The analysis shown above reflects this new structure.

*Restated for altered basis of recognition of investment returns as explained in note 3.

 

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(iii) Analysis of Continuing Operations by Activity
Long-term business 6,982 6,565 453 417 10,640 9,641 832 764
Investment products 207 215 15 70 369 348 (15) (24)
7,189 6,780 468 487 11,009 9,989 817 740
General business (note (iv)) – – – – 310 306 39 38*
Investment management – – – – – – 43 44
Banking – – – – – – (77) (22)
Shareholders’ other income (note (v)) – – – – – – 38 34*
Total continuing operations 7,189 6,780 468 487 11,319 10,295 860 834*

Single new business includes UK Department of Social Security rebates, increments under existing group pension schemes, and pensions vested into annuity contracts (at the annuity purchase price). Regular new business is determined on an annualised basis.

The geographical analyses of long-term business and general business premiums are based on the territory of the operating unit assuming the risk. Premiums by territory of risk are not materially different.

*Restated for altered basis of recognition of investment returns as explained in note 3.

 

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 Gross premiums written Underwriting result Investment returns Operating profit (including longer term investment returns)
(iv) General Business 1998 £m 1997 £m 1998 £m 1997 £m 1998 £m 1997 £m 1998 £m 1997 £m
Continuing operations
UK operations
Home 273 268 19 14 21 22* 40 36*
Motor 37 38 (7) (5) 6 7* (1) 2*
Total continuing operations 310 306 12 9 27 29* 39 38*
Discontinued operations – – (14) (20) 14 20 – –
Group total 310 306 (2) (11) 41 49* 39 38*

*Restated for altered basis of recognition of investment returns as explained in note 3.

    

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 Operating profit (including longer term investment returns)
(v) Shareholders’ Other Income 1998 £m 1997 £m
Investment return 189 141*
Corporate expenditure (46) (32)
Interest payable (105) (75)
Group total 38 34*
(vi) Items Excluded from Operating Profit
Short-term fluctuations in investment returns 24 83*
Profit on business disposals 249 18
Reclassification of shareholder reserves of Australian operation – 204
Group total 273 305*

*Restated for altered basis of recognition of investment returns as explained in note 3.

 

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(vii) Net Assets
A segmental analysis of the fund for future appropriations and the technical provisions net of reinsurance is set out below which, although liabilities, provide a more useful indication than net assets of the assets supporting the business.
 

Analysis of Fund for Future Appropriations and Net Technical Provisions 1998 £m 1997 £m
Fund for future appropriations:
  Scottish Amicable Insurance Fund of Prudential Assurance Company (closed to new business and wholly attributable, but not allocated, to policyholders) 2,478 2,248
Other Group companies (principally the with-profits fund of Prudential Assurance Company) 18,401 17,053
20,879 19,301
Technical provisions (net of reinsurance) 86,939 80,091
107,818 99,392
Comprising:
UK operations 86,780 76,985
Jackson National Life 19,423 18,032
Prudential Asia 1,615 1,314
Discontinued operations – 3,061
Group total 107,818 99,392


 

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Analysis of Shareholders’ Capital and Reserves 1998 £m 1997 £m
UK operations 562 427
Jackson National Life 1,547 1,300
Prudential Asia 123 46
Retained centrally 2,299 1,823
Discontinued operations – 223
 4,531 3,819
Central borrowings (1,282) (1,036)
Group total 3,249 2,783

In the analysis of shareholders’ capital and reserves, no interest is recognised in respect of the unattributed assets held within the main UK with-profits fund.

*Restated for altered basis of recognition of investment returns as explained in note 3.

 

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