Contents of Participatory Reports

For AKG Company Profile & Financial Strength Reports

Issued before September 2017. Click here for newer reports.

The information included in each Participatory Report in AKG's series of Company Profile & Financial Strength Reports issued before September 2017 was structured as follows:

Note: Source references shown relate to where the relevant data items are located in a company's PRA Returns for UK long term insurers/friendly societies.

Brand-related information:

Index

Index showing the list of companies covered, and the page number of each section in the report.

Group Overview

A broad overview of the background to the group of companies covered by the report.

Corporate Structure (simplified)

A diagrammatic representation of the relationship between the key companies in the group.

Ratings

A summary of all of the AKG ratings shown elsewhere in the report. This comprises: product-specific (i.e. With Profits, Non Profit and Unit Linked) Financial Strength Ratings for the main compay in the report; an Overall Financial Strength Rating for each separate company covered by the report; Supporting Star Ratings (i.e. Service, Image and Strategy and Annual Review) for the brand (i.e. these ratings are the same for every company in the report). A  symbol is shown where a particular rating is not relevant, or not provided.

Summary Financial Data:

Key Financial Data

Three tables summarising data shown later in the report for each operating company separately:

  • Long Term Business Admissible Assets - By Company
  • Long Term Business Admissible Assets - By Asset Type
  • Long Term Business Liabilities and Margins - By Type

Net Inflow Data

Three tables summarising each company's Net Inflow/Outflow (i.e. Premiums less Claims) in respect of its Long Term Business operations. N.B. This data is not shown later in the report:

  • Net Inflow - By Company
  • Net Inflow - By Payment Type

    Inflow/outflow, split by: Premiums, Death/disability payments, Surrenders, Annuity payments, Maturities.

  • Net Inflow - By Business Type

    The aggregate totals, split by: UK Life, UK Pension, and Overseas.

New Business Data

Four tables summarising data shown later in the report for each operating company separately:

  • New Single Premiums - By Company
  • New Single Premiums - By Business Type

    The aggregate totals, split by: UK Life, UK Pension, and Overseas.

  • New Regular Premiums - By Company
  • New Regular Premiums - By Business Type

    The aggregate totals, split by: UK Life, UK Pension, and Overseas.

AKG Comment

 

Information on the main company:

For each report, detailed analysis is provided in respect of the company which is judged to be the primary operating entity within the group.

Corporate Data

  • Company Type

    The generic type of company. Options include: Life Insurer, Insurance Special Purpose Vehicle, Composite Insurer, General Insurer, Life Friendly Society, Composite Friendly Society, General Insurance Friendly Society, Non-insured SIPP Operator, Lloyd's Syndicate- Life.

  • Ownership

    The ultimate owner of the company (or the majority owner if there is more than one owner). For UK registered companies, this information is disclosed in the company’s statutory accounts. For overseas owners, the country of domicile is also shown. Shows ‘Mutual’ for a mutual company or for a friendly society.

  • Open to New Business?

    Whether the company is open to new long-term business or not. Companies that only write increments on existing policies and/or only accept new members on existing pension schemes are treated as ‘closed’ for this purpose.

  • Year Established

    The year that the current corporate entity started operating, which, for a company, is usually the year of incorporation.

  • Head Office

    The address and contact numbers of the Head Office (usually defined as the location of the company’s most senior management. Need not necessarily be the company’s registered office address.)

  • Website

    The URL of the brand's main website.

  • Key Personnel

    A short list of the senior individuals considered to be of most interest to readers, such as chief executive, finance director etc.

  • Company Background

    A broad overview of the general background of the company, including any significant historical changes such as predecessor companies, transfers/mergers, name changes etc.

Overall Financial Strength

A brief summary of the key factors that AKG feels are most pertinent to its assessment of the company’s Overall Financial Strength.

  • Overall Financial Strength Rating

    AKG’s assessment (on a scale of A, B+, B, B-, C, D) of the company’s Overall Financial Strength. See the ‘Guide to AKG Ratings’ for further details of the methodology used.

Reinsurance

  • Approach

    Brief details of the significance of reinsurance arrangements within the company, the scope of the major treaties in-force, the main reinsurers used, and whether or not the reinsurers are authorised to conduct business in the UK.

  • Analysis of Reserves

    A table showing reserves separately for the gross business, reinsurance ceded externally, reinsurance ceded intra-group and the net business.

    Source: Returns to the FSA: Form 50, lines 18, 28, 38 and 48, column 4.

Non Profit Business

  • General

    An overview of the relative volume and type of non profit business written by the company, in terms of both new business and the in-force portfolio.

  • Non Profit Reserves

    A table showing the net total non profit reserves separately for UK Life, UK Pensions, Overseas.

    Source: Form 50, line 42.

  • Non Profit Financial Strength

    A brief summary of the key factors that AKG feels are most pertinent to its assessment of the company’s Non Profit Financial Strength.

  • Non Profit Financial Strength Rating

    AKG’s assessment - on a scale from Star   (lowest) to Star Star Star StarStar(highest) - of the company’s financial strength in respect of non profit business. See the ‘Guide to AKG Ratings’ for further details of the methodology used.

Unit Linked Business

  • Approach

    An overview of the relative volume and type of unit linked business written by the company, in terms of both new business and the in-force portfolio.

  • Linked Reserves

    A table showing the net total property linked and index linked reserves, split by UK Life, UK Pensions, Overseas.

    Source: Form 50, lines 44-47.

  • Unit Linked Financial Strength

    A brief summary of the key factors that AKG feels are most pertinent to its assessment of the company’s Unit Linked Financial Strength.

  • Unit Linked Financial Strength Rating

    AKG’s assessment - on a scale from Star   (lowest) to Star Star Star StarStar(highest) - of the company’s financial strength in respect of unit linked business. See the ‘Guide to AKG Ratings’ for further details of the methodology used.

With Profits Business

  • Approach

    An overview of how the company operates its with profits business, including key issues such as how many with profits funds it maintains.

  • With Profits Reserves

    A table showing the net total with profits reserves separately for UK Life, UK Pensions, Overseas.

    Source: Form 50, lines 41 and 43.

  • Profit Sharing Philosophy

    The broad principles on which profits are shared between the company's with profits policyholders and its shareholders.

  • Asset Allocation

    An indication of the investment mix of the with profits funds, drawing attention to any significant changes therein in recent years.

  • Distribution of Surplus

    A table showing the total amounts distributed to with profits policyholders and other transfers out of funds containing with profits business.

    Source: Form 58, lines 46 and 47 for policyholders and other transfers respectively.

  • Realistic Balance Sheet

    Where available, a table showing, at a total company level, key elements of the company's With Profits Realistic Balance Sheets. The table is followed by comments on the company's with profits realistic balance sheet position.

    Source: Form 19; Working Capital from line 68, Risk Capital Margin from line 65 and Realistic Excess Available Capital from line 67. Each item is also expressed as a % of the Assets Available, line 29.

  • With Profits Financial Strength

    A brief summary of the key factors that AKG feels are most pertinent to its assessment of the company’s With Profits Financial Strength.

  • With Profits Financial Strength Rating

    AKG’s assessment - on a scale from Star   (lowest) to Star Star Star StarStar(highest) - of the company’s financial strength in respect of with profits business. See the ‘Guide to AKG Ratings’ for further details of the methodology used.

Key Financial Data - UK Long-Term Insurers

  • Long Term Business Admissible Assets

    A table showing the breakdown of the company’s long-term business assets over the company’s last three accounting periods, excluding any which are inadmissible. Explanatory comments from AKG are included immediately below the table.

    Source: Form 13: Linked from lines 58 and 59, Total from line 89; Form 48 column 2: Fixed Interest from lines 12, 13, 22 and 23, Equities from lines 15, 16, 17, 25, 26, and 27, Property from lines 11 and 21; Other calculated as the balancing item.

  • LT Capital Resources

    A table showing the makeup of the capital resources available to support the long-term business separated into Tier One and Tier Two classifications. It also indicates the extent to which supporting capital resides outside the long term fund. Explanatory comments from AKG are included immediately below the table.

    Source: Form 3: Core tier one capital from line 19, Tier one waivers from line 24, Other tier one from lines 25 to 28, Tier one deductions from line 37, Total tier one capital from line 39, Tier two capital from line 69, Adjustments and deductions from line 71, less lines 73 to 77, Total Capital Resources from line 79, CR outside fund from Form 2, line 12.

  • LT Free Assets

    A table showing the makeup of the company’s free assets. The ‘published free assets’ is defined as ‘the excess of available capital resources over the capital resources requirement’. The published free assets can include elements of financial engineering (such as implicit items, financial reinsurance and contingent loans), so AKG shows also the amount of free assets with financial engineering excluded.

    Source: Published Free Assets from Form 2, line 42, Financial Engineering from Form 3, line 96.

  • LT Free Asset Ratios

    A table showing the makeup of the company’s free asset ratio. The free asset ratio components are the amounts shown as making up the published free assets in the preceding table, in each case expressed as a percentage of the company’s total long-term admissible assets.

    Source: The Free Asset amounts described above, expressed as a percentage of the total long-term admissible assets from Form 13, line 89.

  • LT CRR Coverage Ratios

    A table showing the degree to which available capital resources cover the company’s capital resources requirement (CRR), both including and excluding any financial engineering. Explanatory comments from AKG on free assets, free asset ratios and CRR ratios are included after this table.

    Source: The Coverage Ratio (Published) is calculated as Form 2 line 13 divided by Form 2 line 41. The Coverage Ratio (Excl Fin Eng) is calculated as Form 2 line 13 less Form 3 line 96, all divided by Form 2 line 41.

  • Long Term Business Liabilities & Margins

    A table showing the breakdown of the company’s long-term business liabilities and margins over the company’s last three accounting periods. The concept of ‘liabilities and margins’ is effectively defined by the regulatory disclosure requirements. The usual position is that a company’s total long-term assets (as shown in the earlier table) equals its liabilities plus any ‘margins’ it holds (such as investment reserves, and any surplus amounts carried forward inside its long-term funds). Explanatory comments from AKG are included immediately below the table.

    Source: Non Linked Non Profit from Form 50, line 42; Non Linked With Profits from Form 50, line 41, plus any amounts included in Form 58, lines 43, 44 and 45 which relate to Non Linked With Profits business; Accumulating With Profits from Form 50, line 43, plus any amounts included in Form 58, lines 43, 44 and 45 which relate to Accumulating With Profits business; Linked from Form 50, lines 44 to 47; Surplus c/f from Form 14, line 13; Other Liabilities from Form 14, line 49 plus line 12; Investment Reserves from Form 14, line 51; Total Liabilities & Margins from Form 14, line 59.

  • Key Revenue Items

    A table showing key lines from the company’s long-term business revenue accounts over its last three accounting periods. Explanatory comments from AKG are included immediately below the table.

    Source: Mainly Form 40. Premiums taken from line 11, Investment Income from line 12, Investment Increase from lines 13 and 14, Commissions from lines 41 and 42 of Form 43, Policy Claims from line 21, Expenses from lines 43, 44 and 45 of Form 43, Transfer to P&L from line 26, Increase in Fund from line 39.

  • Expense Ratios

    A table showing AKG’s calculation of key expense ratios on a consistent basis over the company’s last three accounting periods. These ratios are necessarily calculated in a simplistic way, designed to be appropriate to permit useful comparisons between different companies, as well as highlighting trends within companies over the three year period. Note that distortions can occur for companies with unusual product mixes, or high volumes of reinsurance, so care is needed in the interpretation of these ratios. Explanatory comments from AKG are included immediately below the table. The table includes three expense ratios, namely: New Business Ratio (% of APE) - gross commissions and acquisition expenses expressed as a percentage of gross New APE (New Regular Premiums + 10% of New Single Premiums).

    Renewal Ratio (% of Regular Premiums) - gross renewal commissions, maintenance expenses and other management expenses expressed as a percentage of gross regular premiums. The methodology employed is not suitable for calculating renewal expense ratios for companies which write only, or predominantly, single premium business, so ‘n/a’ is shown on the renewal expense ratio line for such companies.

    Renewal Ratio (% p.a. of Mean Fund) - renewal commissions, maintenance expenses and other management expenses (net of reinsurance) expressed as a percentage of the mean long term fund assets over the year.

    Source: New Business Ratio (% of APE) is the total of Form 43, lines 11 and 13, as a percentage of the annual premium equivalent (AP + 10% SP) of the new business from Form 46 (lines 21, 22, 25 and 26). Renewal Ratio (% of Regular Premiums) is calculated from the total of lines 12, 14 and 15 in Form 43 as a percentage of Form 41, line 11. Renewal Ratio (% p.a. of Mean Fund) is calculated from the total of lines 42, 44 and 45 in Form 43 as a percentage of the average of Form 13, Line 89, Column 1 and Form 13, Line 89, Column 2, divided by the length of the accounting period in years.

Key Financial Data - Other types of company

  • Shareholder Funds

    A table showing the make-up of shareholder funds in each of the last three accounting periods.

  • Capital Resources

    A table showing, if known, the available capital resources, capital resources requirement (CRR) and excess capital resources at the end of the last three accounting periods.

  • CRR Coverage Ratio

    A table showing, if known, the available capital resources expressed as a percentage of the capital resources requirement at the end of the last three accounting periods.

  • Profit & Loss

    A table analysing the company's profits in each of the last three accounting periods, showing, if known: turnover/revenue, expenses, profit/loss before tax, tax, profit/loss after tax, dividends, retained profit/loss and EBITDA.

  • Financial Ratios

    A table analysing several key financial ratios in each of the last three accounting periods, where available: operating margin, pre-tax profit margin, EBITDA margin, interest cover, current ratio and gearing.

  • AKG Comments

    Explanatory comments from AKG in respect of the tables and any other relevant financial information.

New Business Data

  • Detailed Analysis by Product Line

    A table showing a detailed analysis of the make up of new business during the company’s last accounting period, using a standardised AKG list of product types, and split by single and regular premium contracts.

    Source: Form 47, columns 4 and 6, total direct insurance business, analysed by product type. The volumes of external and intra-group reinsurance accepted and Industrial Branch business written are also identified.

  • New Single Premiums

    A table and graph showing the mix of the company’s new single premium business over the last three accounting periods.

    Source: Form 46, lines 25 and 26, column 4, total business, including both direct insurance business and external reinsurance accepted.

  • New Regular Premiums

    A table and graph showing the mix of the company’s new regular premium business over the last three accounting periods. Explanatory comments from AKG about the new business product mix and trends therein are included immediately below the table.

    Source: Form 46, lines 21 and 22, column 4, total business, including both direct insurance business and external reinsurance accepted.

Information on each additional company covered by the report:

In addition to detailed coverage on the main company, FULL reports include a one page analysis in respect of each additional long-term insurer within the group which is relevant to that brand.

A multitude of different circumstances and relationships are encountered in practice. An additional company may be a sister company, a subsidiary company, or even, in some circumstances, the parent company, of the main company. It may be open or closed to new business. It may write business directly in its own right; it may be a reinsurance vehicle for business written elsewhere in the group, or it may operate in both ways.

The following items are shown for each additional company included in the report, in each case defined in exactly the same way as for the main company (as described above):

Corporate Data

  • Company Type
  • Ownership
  • Open to New Business?
  • Year Established
  • Key Personnel
  • Company Background

Overall Financial Strength

  • Overall Financial Strength Rating

Key Financial Data - UK Long Term Insurers

  • Long Term Business Admissible Assets
  • Free Assets
  • Free Asset Ratios
  • CRR Coverage Ratios
  • Long Term Business Liabilities & Margins

Key Financial Data - Other Companies

  • Shareholder Funds
  • Capital Resources
  • CRR Coverage Ratios
  • Profit & Loss
  • Financial Ratios

New Business Data

  • New Single Premiums
  • New Regular Premiums

Further brand-related information:

Distribution

  • Method

    An overview of the methods by which the organisation distributes its products for the brand concerned.

  • Distribution Split

    A table showing the current approximate split of new business by distribution channel, split by single premium and regular premium new business.

  • Image and Strategy

    AKG’s views on how the brand is perceived in the marketplace and the current strategy adopted.

  • Image and Strategy Star Rating

    AKG’s assessment - on a scale from Star   (lowest) to Star Star Star StarStar(highest) - of the brand’s current performance in the area of its image and strategy. See the ‘Guide to AKG Ratings’ for further details of the methodology used.

Products/Proposition

  • Overall Product Philosophy

    The organisation’s outlook as to the range of products it offers under the brand name.

  • Products Currently Marketed

    A summary of the types of products currently marketed under the brand name by the companies covered in the report, using generic product names wherever possible, rather than company-specific product names. The list is subdivided into Investment Products, Protection Products, Pension Products and Group Products, and split by issuing company in each case.

  • Product Awards and Benchmarks

    Details of any product-related awards etc.

Service

  • Service Star Rating

    AKG’s assessment - on a scale from Star   (lowest) to Star Star Star StarStar(highest) - of the brand’s current performance in the area of customer service. See the ‘Guide to AKG Ratings’ for further details of the methodology used.

  • Approach

    An overview of the organisation’s approach to servicing business under the brand name.

  • e-Business

    Details of the organisation’s approach to conducting business electronically, either direct with policyholders or via advisers. Particular emphasis is given to the extent of on-line submission systems etc.

  • Service Standards & Awards

    The organisation’s approach to setting tangible service standards, together with details of any service-related awards. Performance and trends in industry-wide service awards are particularly relevant.

  • Outsourcing

    Details of any relevant outsourcing arrangements in respect of policy administration for the brand.

Investment

  • Overall Approach

    An overview of the organisation’s approach to managing the investments of the long-term funds. The names of any investment management firms used are shown wherever possible, together with details of any relevant investment principles followed.

  • Funds Under Management

    The current amount of funds under management within the life operation, any larger group that it is a part of, and/or the primary fund managers. The objective is to put the scale of the operations of the respective parties into perspective.

Annual Review

AKG's comments on how the brand has performed during the year under review, particularly relative to its peers.

  • Annual Review Star Rating

    AKG’s assessment - on a scale from Star   (lowest) to Star Star Star StarStar(highest) - of the brand’s performance, relative to others in the market, during the year under review. See the ‘Guide to AKG Ratings’ for further details of the methodology used.