Group Capital

Introduction

As stated, one of our strategic imperatives is Financial Strength. Achieving profitable growth for shareholders and security for customers requires a robust, well-designed capital structure. We aim to have the right amount of capital, of the right type, deployed in the right places. Our capital strength is evidenced by our financial strength rating, which we regard as a strategic differentiator.

“Getting it right for our customers means getting it right for our shareholders.”

Andrew Palmer
Group Director (Finance)

Fig 3. Balanced scorecard for capital management
	2007	Target operating range
* Figures extracted from the unaudited draft regulatory terms.
IGD surplus capital *	£4.1bn	£3bn–£4bn
Society surplus capital *	£4.4bn	£2.5bn–£3.5bn
Economic capital	Very strong AA	Strong AA
Return on EV	8.0%	Increase over medium term

Fig 4. Regulatory surplus capital
As at 31 December 2007	IGD1 £bn	Society1,2 £bn
1 Figures extracted from unaudited draft regulatory terms. 2 Long term business only.
Available capital resources	8.3	8.4
Capital resources requirement	4.2	4.0
Surplus capital	4.1	4.4