Financial review - Chief Financial Officer's report

George Culmer Chief Financial Officer

Through our actions, we have a healthy capital position, a strong balance sheet and a Core Group delivering sustainable performance.

The purpose of this section of the report is to provide an overview of the financial performance of the business in 2005.

Analysis of result*
	2005 £m	2004 £m	Movement %
Net written premiums	5,400	5,082	6

Underwriting result	118	(277)	–
Investment result¹	696	591	18
Insurance result	814	314	159
Other activities²	(116)	(56)	(107)
Operating result	698	258	171
Other movements³	(210)	(215)	2
Benefit from change in pension scheme design	180	–	–
Profit/(loss) on disposals	197	(109)	–
Discontinued life	–	104	–
Profit before tax⁴	865	38	–
Tax	(260)	(118)	(120)
Profit/(loss) after tax	605	(80)	–
Combined operating ratio
Ongoing business	93.8%	93.8%	–
Core Group	94.1%	96.1%	+2pts
For full details please see note 30 – Segment reporting. Guide to terms* 1. Investment result Comprises investment income, realised gains, unrealised gains/(losses), impairments, foreign exchange and the unwind of discount. 2. Other activities The result for other activities comprised a number of elements: • The operating result from non insurance activities, • The change in the value of non insurance derivatives, • Income from associates, • Central Group expenses, • Investment expenses and charges. 3. Other movements Other movements include interest charge on debt, amortisation and reorganisation costs. 4. Profit before tax Profit before tax is shown on a management basis. Profit before tax on a statutory basis is shown in the Consolidated Income Statement.