Financial Statements

Consolidated income statement

For the year ended 31 December 2007

	Notes	2007 £m	2006 £m
Revenue
Gross earned premiums	4	994	980
Premiums ceded to reinsurers	4	(1,780)	(84)
Net earned premiums	4	(786)	896
Fee and commission income and income from service activities		719	565
Investment income	5	2,573	3,697
Total revenue		2,506	5,158
Other income	3	49	-
Claims, benefits and expenses
Gross claims and benefits paid	6	1,582	1,587
Amounts receivable from reinsurers	6	(175)	(43)
Net claims and benefits paid		1,407	1,544
Change in insurance contracts liabilities	28	(1,983)	(764)
Change in investment contracts liabilities	32	1,617	2,682
Transfer to fund for future appropriations		42	19
Movement in net assets attributable to unit holders	34	42	131
Movement in policyholder liabilities		(282)	2,068
Acquisition expenses	7	822	412
Administrative and other expenses	8	581	556
Finance costs	12	141	88
Total claims, benefits and expenses		2,669	4,668
Share of profit of associates and joint venture	20	1	1
(Loss)/profit before tax from continuing operations		(113)	491
Policyholder tax	13	(23)	(124)
(Loss)/profit before shareholder tax from continuing operations		(136)	367
Total tax credit/(charge)	13	43	(70)
Policyholder tax	13	23	124
Shareholder tax	13	66	54
(Loss)/profit for the year		(70)	421
Attributable to:
Equity holders of the parent: (i)
Ordinary shareholders		(108)	276
Other equity holders		52	52
		(56)	328
Minority interest		(14)	93
(Loss)/profit for the year		(70)	421

Earnings per share	Notes	2007 pence	2006 pence
Basic (loss)/earnings per share from continuing operations	15	(5.0)	13.1
Diluted basic (loss)/earnings per share from continuing operations	15	(5.1)	12.8

All profit attributable to equity holders of the parent is from continuing operations