Principal activity and review of the business

The principal activity of the Society continues to be the transaction of various classes of long term and general insurance business in the United Kingdom, principally through the home service distribution channel. The Society and its subsidiaries also invest in and manage stocks, shares, loans and properties. Details of the financial results for the year are set out here.

General insurance premium income decreased from £648.2m in 2002 to £635.8m in 2003. After making provision for premium rebates to co-operative societies, £61.7m has been transferred to the non-technical account from the general business technical account (2002: £27.5m).

Long term business premium income decreased from £1,322.8m in 2002 to £1,147.7m in 2003. Reversionary bonuses have been declared for traditional with-profits policies as follows:

• Assurances (ordinary section): 0.4% of basic benefits and 0.5% of attaching normal reversionary bonuses granted since 31 December 1983.
• Personal and free-standing pensions: 0.5% of basic benefits and 0.6% of attaching bonuses.
• Series A Additional Voluntary Contributions (AVCs): 0.25% of basic benefits and 0.3% of attaching bonuses.
• Other annuities and retirement benefits: 2.0% of basic benefits.
• Assurances (industrial section): 0.2% of basic benefits and 0.25% of normal reversionary bonuses granted since 31 December 1983.

• Platinum Bond Plus and the Funeral Investment Plan: 3.25% of the Bond value.
• Platinum Plus (within an Individual Savings Account): 2.5% of the policy value.
• Platinum Plus (outside an Individual Savings Account): 2.0% of the policy value.
• Terminal bonuses have also been declared in both the ordinary and industrial sections.
  

A more detailed review of the business is contained in the Chief Executive's Report.

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