hg0080.com皇冠We have made every effort to keep our website free of jargon, but realise that some expressions might need further explanation. This glossary is intended to help you understand some of the terms used in the insurance, investment and financial services business.
accidental death benefit
An extra payment made under a life insurance policy if death is caused by an accident. The additional amount is usually equal to the face value of the policy. Also known as "double indemnity".
The increase in value of an asset over a period of time in a predictable or pre-determined way. The opposite of amortisation.
Achieved profit is designed to recognise profit as it is earned over the lifetime of an insurance policy. Achieved profit is made up of operating profit plus investment variances, changes in economic assumptions and any exceptional items. It reflects the current value of in-force business and the net worth of long-term savings operations, adjusted for dividends paid out or capital reinvested. See also embedded value.
acquired value of in-force (AVIF)
The present value of future profits on a portfolio of long-term insurance and investment contracts, acquired either directly or through the purchase of, or investment in, a business.
Acquisition expenses include the initial expenses and commission incurred in writing new business less deferred costs.
active fund management
hg0080.com皇冠A style of investment management where the fund manger seeks to improve returns or reduce costs by using their expertise to choose which stocks or bonds to buy and sell. The opposite of passive management, where the manager aims to match the performance of a market or index by replicating the composition of that market or index in their fund.
Someone who uses applied mathematics (in particular, probability) to provide solutions to insurance-related problems. Actuarial techniques are used to design new insurance products and to assess the profitability of new and existing business.
adding shareholder value
Running a company in a way that seeks to increase the value of each shareholder's stake in the business.
See final bonus.
additional value of in-force long-term business
An estimate of future profits that will emerge over the remaining term of all existing life and pensions policies for which premiums are being paid or have been paid at the balance sheet date.
additional voluntary contributions (AVCs)
hg0080.com皇冠Extra contributions paid by a member of an occupational pension scheme to provide benefits in retirement, in addition to the main scheme benefits.
adjusted Solvency II value of new business (VNB)
Adjusted Solvency II VNB is the increase in Solvency II Own Funds resulting from business written in the period, adjusted to remove the impact of contract boundaries, to include look through profits in service companies (where not included in Solvency II) and any other business which is not included in the Solvency II valuation.
adjusted Solvency II present value of new business premiums (PVNBP)
Present value of new regular premiums plus 100% of single premiums from new business written at the point of sale and any changes to existing contracts, which were not anticipated at the outset of the contract that generates additional shareholder risk and associated premium income of the nature of a new policy. PVNBP is calculated using assumptions consistent with those used to determine the adjusted Solvency II value of new business.
Administration expenses are expenses and renewal commission incurred in managing existing business.
Buying and selling securities after the official close of business on the trading floor of a stock exchange. Such transactions were once reserved for institutional investors, but now private investors may also take part. Stocks are traded after hours on computer systems that match buyers and sellers to carry out the deals.
hg0080.com皇冠Stockbrokers who go into the stock market on behalf of clients to obtain the best possible price for the sale or purchase of shares. See also market-maker.
An individual or firm authorised to carry out transactions on behalf of another, such as the sale of insurance policies. Agents usually earn commission or a fee on the sale of a policy. They may be tied to a particular company and offer a limited selection of products
Alternative Investments Market (Aim)
Launched by the London Stock Exchange in 1995 as a market for smaller, growing companies not big enough to enter the Stock Exchange Official List (the main market).
alternative performance measures
Alternative performance measures (‘APMs’) are non-GAAP measures used by the Aviva Group within its financial publications to supplement disclosures prepared in accordance with other regulations such as International Financial Reporting Standards (IFRS) and Solvency II. We believe that these measures provide useful information to enhance the understanding of financial performance. The APMs should be viewed as complementary to, rather than a substitute for, the figures determined according to other regulatory measures.
American Depositary Receipt (ADR)
A negotiable instrument issued by a Depositary Bank that evidences ownership of shares in a corporation organised outside of the US. Each ADR represents a specific number of underlying ordinary shares in a Non-US company on deposit with a custodian in the applicable home market. ADRshg0080.com皇冠 are quoted and traded in US dollars on the US securities market and dividends are paid to holders in US dollars.
See American Depositaryhg0080.com皇冠 Share (ADS)
American Depositary Share (ADS)
Evidenced by an American Depositary Receipt (ADR), ADSs represent ordinary shares on deposit in the United Kingdom. An ADS share gives registered holders the right to receive dividends in US dollars, attend shareholders meetings and vote on important matters.
See American Depositary Receipt (ADR)
An accountancy term usually used to describe the systematic reduction in value of an intangible asset due to its use over time. If something is amortised, it is written off. If the cause is not solely related to time, the effect is described as depreciation.
Someone with expertise in researching stock markets, companies and financial investments who will analyse and interpret the results of that research to make recommendations to institutional and retail investors to buy, sell or hold their investments in stocks and shares. Most analysts specialisehg0080.com皇冠 in a single industry or business sector. See also buy-side analyst and sell-side analyst.
hg0080.com皇冠See regular bonus.
annual general meeting (AGM)
hg0080.com皇冠A meeting of shareholders that must be held once a year to approve the report and accounts and the final dividend per share, and to vote on any motions (such as the re-election of directors).
annual percentage rate (APR)
hg0080.com皇冠The true rate of interest paid on a loan. This is expressed as a yearly rate, although in practice is usually paid monthly.
annual premium equivalent (APE)
A measure of life sales. It is calculated as the sum of new regular premiums plus 10% of new single premiums written in the period.
hg0080.com皇冠A document issued once a year by a company to report its financial position. Annual reports normally include the company’s accounts, a statement of assets, liabilities and recent earnings, a description of business operations, and a comment on the outlook for the future. Publicly quoted companies are required to issue an annual report to all shareholders.
A type of policy that pays out regular amounts, for an agreed period of time or until death, in return for a cash lump sum.
American legislation to prevent monopolies and restraint of trade.
A technique used by investors to make a profit from small price or yield variations in different markets. It involves buying securities or products at a given price in one country, currency or market and selling in another at a higher price. Someone who practises arbitrage is an arbitrageur.
Anything of value owned by a business that can be set against its liabilities. Assets are usually divided into four types: fixed assets (typically land, buildings and machines); current assets (cash, stock, investments, work in progress and payments owing); liquid assets (cash or funds held in a form that can be quickly converted into cash); and intangible assets (goodwill, trademarks, patents, etc).
hg0080.com皇冠The process of dividing investments among different kinds of securities, such as stocks, bonds, property and cash. The choices made reflect investment aims and attitude to risk.
Investment management service provided by financial institutions on behalf of their clients.
asset share value
The value of a policyholder’s share in the assets of a life insurance company or investment fund. The calculation is based on the policyholder’s actual contributions and the actual costs, expenses, dividends and investment returns experienced by the company or fund, rather than the assumptions used to draw up the policy.
Selling off the assets of a business separately to make a profit.
Assets under administration (AUA)
Assets under administration comprise assets under management plus assets managed by third parties on platforms administered by Aviva Investors.
Assets under management (AUM)
Assets under management represent all assets managed or administered by or on behalf of the Group, including those assets managed by third parties. Assets under management include managed assets that are included within the Group’s statement of financial position and those assets belonging to external clients outside the Aviva Group which are therefore not included in the Group’s statement of financial position.
Association of British Insurers (ABI)
A major trade association for UK insurance companies, established July 1985.
hg0080.com皇冠A term sometimes used instead of "insurance", generally in connection with life business, since assurance implies the certainty of an event (such as death) and insurance only the probability.
hg0080.com皇冠A firm of accountants who check ("audit") a company’s accounts and decide whether the published report is accurate.
available for sale
Securities that have been acquired neither for short-term sale nor to be held to maturity and are not classified as other than trading. These are shown at fair value on the statement of financial position and changes in value are taken straight to equity instead of the income statement.
balance of payments
hg0080.com皇冠A country's net financial transactions with other countries showing the balance of imports versus exports.balance sheetA statement showing the financial position of a business on a specific date by listing its assets (what it owns) and its liabilities (the claims on its assets, or what it owes).
An arrangement whereby banks and building societies sell insurance and investment products to their customers.
Bank for International Settlements (BIS)
hg0080.com皇冠The central bankers' bank based in Basle, Switzerland.
Bank of England
The UK's central bank, founded in 1694 and based in London's Threadneedle Street since 1734. Nationalised in 1946, gained operational independence in 1997. Its key responsibilities are delivering monetary stability and price stability. As part of this role it sets the official interest rate. It is also now responsible for regulation of financial services.
A condition where a person or company that cannot meet their financial commitments are declared insolvent by a court. After surrendering all their assets to a court-appointed trustee, they are no longer expected to pay their debts.
hg0080.com皇冠The stock market term for a share sale or purchase. It does not necessarily mean that the deal was done at a favourable price.
These are recommendations on banking laws and regulations issued by the Basel Committee on Banking Supervision.
hg0080.com皇冠A basic rate of interest set by the Bank of England which determines the cost of borrowing money in the UK. Commercial banks use it as a reference point when calculating their own lending charges, mortgage rates and interest on savings accounts.
hg0080.com皇冠See also discount rate.
hg0080.com皇冠Sometimes called bps or “bips” basis points represents 1/100th of 1% - so for example, 250 basis points is 2.5%. This is a commonly used term in financial services for making financial calculations.
The risk resulting from the situation in which the exposure covered by the risk-mitigation technique does not correspond to the risk exposure of the insurance or reinsurance undertaking.
An investor who expects share prices to fall or, more generally, has a pessimistic outlook about the market. A bear market is a period of falling share prices.
See also bull.
hg0080.com皇冠Typically a stock market index (for example, the FTSE 100 index) against which an investment fund compares its performance and mix of assets.
A person, organisation or estate that receives, or may become eligible to receive, benefits from a will, insurance policy, retirement plan or other contract.
best estimate liabilities (BEL)
The expected present value of future cash flows for a company’s current insurance obligations, calculated using best estimate assumptions, projected over the contract’s run-off period, taking into account all up-to-date financial market and actuarial information.
The difference between the buying price (bid) and the selling price (offer) of units in an investment. The mid-price is the middle point between the two and is often the price quoted in newspapers. Also called the bid/ask spread.
hg0080.com皇冠What the market will pay, or what a seller will receive, for a particular share.
hg0080.com皇冠Deregulation of the London Stock Exchange which took place on 27 October 1986. Led to a complete alteration in the structure of the market and introduced an automated price quotation system. The changes ended fixed commission charges, allowed institutions such as banks and insurance companies to own stock exchange subsidiaries, and abolished the separation between "brokers" and "jobbers". Before Big Bang, markets were "made" by jobbers, who bought and sold shares on request only with agency brokers - stockbrokers who go into the market on behalf of clients to obtain the best possible price for the sale or purchase of shares. See market-maker.
hg0080.com皇冠The New York Stock Exchange's price display, sometimes used to mean the exchange itself.
Large volumes of data which are a valuable source of information used to identify customer behaviours.
In the UK, a name traditionally used to describe the four largest high street banks: HSBC, Lloyds, Barclays and Royal Bank of Scotland. Financial turmoil and changes of ownership since 2008 have made the term increasingly obsolete. In the US, the “Big Four” banks are Bank of America, Citigroup, JPMorgan Chase and Wells Fargo, but the name is more usually used to describe the four largest public accounting firms: PricewaterhouseCoopers, Deloitte Touche Tohmatsu, Ernst & Young and KPMG. In Japan, the term was used for the largest securities houses: Daiwa, Nikko, Nomura and Yamaichi.
There are two Black Mondays in stock market history. On Monday 28 October, 1929, The New York Stock Exchange fell by 13% as more than 9.25 million shares were traded. It was the trigger for Black Tuesday and the Great Crash, which heralded the start of the Great Depression. On Monday 19 October, 1987, the Dow Jones Industrial Average crashed by more than 500 points, or some 22%, the biggest one-day slide in the history of Wall Street. Other major stock markets also fell heavily. By the end of October 1987, the London Stock Exchange had lost over 26% of its value, and Hong Kong was down 45%.
On Tuesday 29 October, 1929, a record 16.4 million shares were traded on the New York Stock Exchange and the market suffered a loss of about 12%. By the end of November, investors had lost an estimated $100 billion in what was later called the Great Crash. Black Tuesday is sometimes taken as the point where the Great Depression started.
Wednesday 16 September, 1992, the date on which the UK withdrew from the European exchange rate mechanism (ERM). During the day, interest rates were raised from 10% to 15% and billions of pounds were spent in an attempt to support the value of sterling and keep it within ERM limits.
A description applied to the biggest and most highly regarded companies quoted on the stock market. Shares in such companies are usually considered a reliable and profitable investment.
board of directors
Decision-making body legally responsible for overseeing the management of a company. In a listed company the directors are elected by the shareholders. Executive directors are usually employees responsible for managing the day-to-day business. Non-executive directors are independent outsiders (not on the company payroll) and normally carry out their duties on a part-time basis.
These are accumulation products with single or regular premiums and unit-linked or guaranteed investment returns.
hg0080.com皇冠The rate of return on a with-profit policy set by an insurance company's actuary. The rate may vary from year to year.
hg0080.com皇冠Recording of a company's financial transactions. The two most common bookkeeping methods are single entry and double entry.
The main organiser of a new security or bond issue, usually an investment firm, bank or broker. Tasks include inviting subscribers, co-ordinating the allocations and maintaining the book of securities. Also known as the lead manager or sponsor.
hg0080.com皇冠An investment strategy in which companies are considered on their own merit, without regard for industry trends or economic conditions. This approach entails examination of a company's management, business model, growth prospects, history and other characteristics. Bottom-up investors believe that some companies will outperform their peer group regardless of industry and economic circumstances. Opposite of top down.
French term for stock exchange. German version is börse.
hg0080.com皇冠A combination of name, symbol, design, reputation and other features used to distinguish one company or product from its rivals. Usually brand names and logos are registered (trademarked) with a regulatory authority. Brands are regarded as important factors in establishing a presence in a market and creating a relationship with customers.
hg0080.com皇冠An international conference held in New Hampshire, USA, in 1944 which resulted in the establishment of the International Monetary Fund and the World Bank.
An individual or firm that acts as an intermediary between a buyer and seller, usually charging commission or a fee. Insurance brokers arrange cover on behalf of their clients and represent the interests of the policyholder.
hg0080.com皇冠The amount by which a government, company or individual’s spending exceeds its income over a particular period of time.
UK savings organisation that specialises in lending money to people for buying houses. See also savings and loan.
An investor who expects share prices to rise or, more generally, has an optimistic outlook. A bull market is a period of rising share prices. The opposite of bear.
Term used to describe a place on a website where private investors post comments and ask questions. Also known as a "message board" or "investors' forum".
hg0080.com皇冠Gold, silver, platinum or palladium, in the form of bars or ingots. Some central banks use bullion to settle international debt, and some investors buy bullion as a protection against inflation.
The central bank of Germany, based in Frankfurt, and an integral part of the European system of central banks. Its primary objective is to maintain price stability, ensure the orderly execution of domestic and cross-border payments, and contribute to the stability of banking systems.
Companies with spare cash to invest can offer to buy back shares from shareholders, effectively investing in themselves.
hg0080.com皇冠Companies with spare cash to invest can offer to buy back shares from shareholders, effectively investing in themselves.
A financial analyst, typically employed by one of the larger money management firms that purchases securities on its own account rather than for clients.
The purchase of a residential property to rent out for investment purposes.
hg0080.com皇冠Money invested typically in buildings and machinery.
capital and interest mortgage
See repayment mortgage.
The profit made on the sale of investments, such as shares or property.
capital gains tax
hg0080.com皇冠The tax paid on any profit or gain made by selling something for more than it was bought.
Increase in the value of an investment reflected in the higher selling price.
hg0080.com皇冠See scrip issue.
hg0080.com皇冠The way in which a company finances itself, including issuing shares, long-term borrowings and retained earnings.
A business or product that generates a steady, reliable flow of profitable income - supposedly like milking a cow. A cash cow is a valuable part of a diversified company because it can produce the money needed to finance other areas of the organisation.
Cash paid by our businesses to Group typically in the form of dividends. Not to be confused with the IFRS measure of cash flow as reported in the Annual Report and Accounts.
Amounts paid by our operating businesses to the Group which includes dividends and interest on internal loans.
hg0080.com皇冠See property and casualty insurance.
hg0080.com皇冠Cover for specified disastrous events, such as hurricanes, hailstorms, earthquakes, fires and floods, that can potentially cause severe losses to large numbers of people or businesses.
A term used in connection with individual savings accounts (Isas) to show whether a product meets UK government benchmarks for reasonable charges, easy access and fair terms.
The major regulatory bank in a country, usually controlled by the government. Its role can include setting interest rates, note issue, supervision of commercial banks, management of exchange reserves and the national currency's value, as well as acting as the government banker. Examples include the Bank of England, the Deutsche Bundesbank, the European Central Bank, and the Federal Reserve in the US.
Abbreviation for chief executive officer. The CEO is the head of a company and oversees strategic planning and operational activities.
Abbreviation for chief financial officer. The CFO is responsible for a company's accounting and financial activities, and usually reports to the chief executive officer.
hg0080.com皇冠An illegal practice whereby a sales agent persuades a client to cash in an insurance policy after a short time and replace it with another, thereby earning commission on the new policy.
In the UK, the financial community in the City of London.
Notification to an insurance company of a call by a policyholder to the benefits due under the terms of an insurance policy or scheme.
Expenses incurred while investigating and settling an insurance claim, over and above the cost of the claim itself. Can include legal and other professional fees. Also known as loss adjustment expenses.
The total of all claims sustained during an accounting period, whether paid or not. Also known as losses incurred.
Claims incurred, adjusted for any reinsurance, expressed as a percentage of net premiums earned. Sometimes referred to as loss ratio.
collateralised debt obligation (CDO)
A CDO is a financial product that brings together assets into a collective arrangement known as an asset pool. These assets provide a cash flow that is passed on to the investor. It is called a debt obligation because the assets in the pool are debt obligations such as bonds and loans as well as different types of mortgages. These provide collateral or in other words can be used as a way to reduce the risk of investment by there being an asset or obligation to protect the investor (e.g. a house is the asset behind the mortgage that could be sold to compensate investors if repayments aren’t kept up). CDOs pay a coupon like a bond to investors and typically the CDO is structured into tranches which are layers of different risk that are sold to investors. The tranches with the highest risk (junior tranches) give the highest returns, but are also most likely to penalise the investor if the pool of assets begins to default. The lower risk tranches (senior tranches) get smaller coupons but equally are only affected when the best quality assets in the pool start defaulting which is less likely.
collective investment scheme
This is an open-ended investment fund, structured as a legally independent joint stock company, whose units are issued in the form of shares.
combined operating ratio
A financial measurement of general insurance underwriting profitability calculated as the ratio of net underwriting costs (claims incurred, earned commission and earned expenses) to net earned premiums. A COR below 100% indicates profitable underwriting.
hg0080.com皇冠Payment made to a salesman, agent or other intermediary, normally in return for selling an insurance or investment policy.
Commission Delegated Regulation
The Commission Delegated Regulation (EU) 2015/35 supplementing Directive 2009/138/EC of the European Parliament and of the Council on the taking up and pursuit of the business of Insurance and Reinsurance (Solvency II) (“the Delegated Acts”).
hg0080.com皇冠US term for ordinary shares or equities.
A business organisation which has a separate legal existence from its owners. Such a company, or corporation, may be "incorporated", giving it the right to own assets and behave as if it were a person. If the owners have limited liability, it is known as a limited company. If it is listed on a stock exchange, shares in it may be bought and sold by the public. If ownership is restricted, it is usually known as a private company.
The requirement to operate in accordance with statutory or regulatory guidelines. In the financial services industry, the most important compliance rules come from the Prudential Regulation Authority and the Financial Conduct Authority (PRA and FCA) in the UK and the Securities and Exchange Commission in the US. Most financial services companies have compliance teams whose role is to ensure that the company follows all the necessary rules and regulations.
All risk exposures with a loss potential which is large enough to threaten the solvency or the financial position of the insurance and reinsurance undertaking.
consumer prices index
An indicator of inflation that measures the percentage change in the cost of a representative "basket" of products and services bought by the average household. Sometimes known as the cost of living index. See harmonised index of consumer prices.
The common name for a scheme or policy.
A contract boundary is the first point in time in the lifetime of an insurance policy at which the insurer has the ability to review the premiums charged at the individual policy level, without any contractual constraints. For policies in which such a point does not exist, the contract boundary is the same as the full term of the contract. Under Solvency II, if a contract boundary on an insurance contract is less than the full term of the contract the expected future premiums and obligations that relate to cover which may be provided after that date are not recognised in the measurement of the insurance liabilities.
Refers to an arrangement in the UK where people contribute to the state earnings-related pension scheme (Serpshg0080.com皇冠) by paying the full rate of national insurance.
Describes an employee or employer in the UK who chooses to make alternative pension provision in a personal or company plan rather than using the state earnings-related pension scheme (Serps).
hg0080.com皇冠A security paying a fixed rate of interest issued by a company, and convertible at certain times and under certain conditions into shares in that company.
A term used to describe the way in which rights and responsibilities are shared in the business world. In particular, how companies are managed, including the structure of boards, the duties of directors, executive remuneration, and how and when important information is shared with the market. Standards may be set by statutory bodies, self-regulation and codes of best practice.
corporate responsibility (CR)
A term used to describe how companies measure up to standards of business conduct and deal with issues such as sustainability, environmental management, human rights, relations with local communities, customers, suppliers, employees and health and safety at work. Also known as corporate social responsibility (CSR), corporate citizenship, responsible business and corporate social performance.
A sudden collapse in the market price of stocks and shares, currencies or commodities. See Great Crash.
hg0080.com皇冠Credit is the ability (often legally captured in a contract) that allows a person or business to obtain a good or service now with a promise to pay for that good or service at a later date.
credit default swap (CDS)
A tradable financial instrument which insures against payment default. The buyer of a credit default swap pays a premium for effectively insuring against a debt payment default.
A measure of the ability of an individual, organisation or country to repay debt. The highest rating is normally AAA, and the lowest D. These are normally issued by a credit rating agency or credit bureau.
hg0080.com皇冠The difference in the yield between two bonds of similar maturity but different credit quality. An example would be the difference between a German government bond trading at a yield of 2% and a Swedish government bond trading at a yield of 5%. The Swedish bond would be offering a credit spread of 300 basis points.
hg0080.com皇冠A method used by governments to limit the amount of credit (or the amount of borrowing) in the economy, designed to reduce inflation by controlling growth in the money supply. One example is an increase in interest rates.
Centralised settlement system for securities traded on the London Stock Exchange. You can choose to hold your money in notes and coins or as an electronic record in a bank account. Similarly, you can hold your stocks and shares in an electronic account in Crest rather than in physical form with certificates.
critical illness cover
Pays out a lump sum if the insured person is diagnosed with a serious illness that is specified within the insurance policy.
When funds are invested in overseas currencies or stock markets, the value of the investment can go up and down in line with movements in currency exchange rates. This risk is an extra factor for investors to consider.
death in service
Death of a member of a company pension scheme before their retirement date, while still employed by the company.
hg0080.com皇冠A fixed interest security issued by a company or government agency, usually secured on its assets, with a long-term redemption (repayment) date between 10 and 40 years ahead. If a company goes bust, debenture stockholders are first in line to be repaid before the other stockholders and shareholders.
An annuity (or pension) due to be paid from a future date or when the policyholder reaches a specified age. A deferred annuity may be funded by the policyholder by payment of a series of regular contributions or by a capital sum.
deferred acquisition costs (DAC)
These costs are directly attributable to the acquisition of new business for insurance and investment contracts may be deferred to the extent that they are expected to be recoverable out of future margins in revenue on these contracts.
defined benefit scheme
hg0080.com皇冠A pension scheme that set out the benefits payable to members irrespective of any contributions paid or investment gains made. An example is a final salary pension scheme, where payments are calculated as a proportion of the member's earnings at or near the date of retirement.
defined contribution scheme
A pension plan where the benefits depend on the amount and frequency of contributions paid into the scheme, the investment gain on those contributions, and annuity rates at the time of retirement. The exact amount of pension will not be known until retirement. Also known as a money purchase scheme.
A general fall in price levels. Often caused by a reduction in the supply of money or credit, or by a reduction in spending by government or consumers. A fall in the price of one particular type of good is not deflation. Opposite of inflation.
hg0080.com皇冠The process by which a mutual organisation owned by its members, such as a building society or insurance company, converts to a public limited company owned by its shareholders. For example, Norwich Union demutualised and floated on the London Stock Exchange in 1997.
A person who depends upon another for financial support. A child is normally a dependant at least until reaching the age of 18.
UK regulatory change in the long-term savings market by which financial advisers have greater freedom to sell products from a wider choice of suppliers. The previous “polarisation” between independent financial advisers (no tie-in with a preferred supplier) and tied financial advisers (selling products from only one supplier) was eased to create a category of multi-tied advisers, who can select products from a set of preferred suppliers.
Another word for cash.
A bank that holds American depositary shares and sells them to US investors. Four major commercial banks provide depositary bank services in the US: JPMorgan, Citibank, Deutsche Bank and the Bank of New York Mellon. Aviva’s depositary bank is Citibank.
Reduction in the worth of an asset in a company's accounts to reflect its loss of value through age and use. See also amortisation.
A period during which business activity drops significantly. High unemployment rates and deflation often accompany a depression. See also recession.
sA derivative is a contract whose value is a function of some other instrument (known as the ‘underlying’). The instrument could be an asset such as equity or commodity prices, could be a financial variable such as interest rates or a non-financial variable such as temperature or the price of orange juice. Insurance companies will typically deal with financial underlyings like equities or interest rates and use derivatives to ‘hedge’ (reduce) the financial risks inherent in their liabilities (through the policies that they write to customers).
Fixed or variable amounts collected automatically from a bank account for premiums, investment contributions and other regular payments.
hg0080.com皇冠When the market price of a newly issued share is lower than its issue price it is said to be trading at a discount. The opposite of premium.
The rate at which the US Federal Reserve will lend short-term funds. The bank rates of most countries are known as the discount rate. In the UK it is known as the base rate.
For an investor, a method of reducing exposure to risk by investing in a range of sectors and financial products. For an insurer, it involves offsetting or counterbalancing risks across business lines, geographies, etc. This can free up some of the capital reserves that would otherwise be necessary to cover the insurer's individual commitments.
The reduction in the risk exposure of insurance and reinsurance undertakings and groups related to the diversification of their business, resulting from the fact that the adverse outcome from one risk can be offset by a more favourable outcome from another risk, where those risks are not fully correlated.
An amount based on a company's profits paid out to shareholders for each share they hold. Usually paid as cash, but they can also take the form of stock or other property. UK dividends are usually paid twice a year: interim dividends based on half-year results and final dividends based on full-year results. US dividends are paid quarterly.
An accounting technique that records each transaction as both a credit and a debit. The credit entries show the source of the financing, and the debit entries represent the use of that finance. Since each credit has one or more corresponding debits (and vice versa), double-entry bookkeeping always results in a set of "balanced ledger" accounts.
See accidental death benefit.
Dow Jones Industrial Average
hg0080.com皇冠The Dow Jones Industrial Average index covers 30 of the biggest blue chip stocks quoted on the New York Stock Exchange. Established in 1897, it is the oldest and most widely quoted of US stock market indicators. The constituent companies, which change from time to time, represent about 15-20% of the NYSE market value.
The withdrawal of money from an account or fund established for a specific purpose. See income drawdown.
A type of auction where the asking price of an item is gradually lowered until the first bid is made. The item is sold to the first bidder at that price. The name comes from 17th century flower auctions in the Netherlands.
hg0080.com皇冠Stopping work and beginning to draw a pension before normal retirement date. An early retirement pension is usually lower than the pension payable at normal retirement date because it is expected to be paid for longer.
Premium payments received by an insurer for cover provided during the current accounting period. Premiums received for future insurance coverage are known as unearned premiums.
Another word for profit. Broadly calculated as revenues minus costs, operating expenses and taxes, minority interests, extraordinary items and dividends on preference stock.
earnings per share (EPS)
A performance measure which shows the amount of profit a company is making on a ‘per share’ basis. It is calculated by taking net profits and dividing them by the total number of shares in issue.
economic and monetary union (EMU)
Alignment of economic and monetary systems among European Union member countries to enable the introduction of a single currency, the euro.
The assets that a company needs to ensure that its realistic balance sheet stays solvent, over a certain period of time.
economic value added
A financial performance measure used to evaluate a company's true profit and the creation of wealth for shareholders.
economies of scale
The reduction in cost per unit that results from increased production, achieved through operational efficiencies.
hg0080.com皇冠A way of measuring the current value of future profits. Embedded value represents the total of the profits expected to emerge in the future and the net assets already invested in the business. See also European embedded value.
Developing economies such as those in Latin America and Asia that do not have a long history of equity investment and stable, reliable returns. Speculative investors prepared to accept a higher level of risk see such markets as having attractive potential for rapid growth. See also mature markets.
A policy combining life assurance and investment under which the sum assured is paid at a prehg0080.com皇冠-agreed date, or on the death of the policyholder if earlier. A common use for this type of policy is the repayment of a mortgage loan.
Another word for "share". A shareholder’s equity is the value of the shares they hold. Also, a house owner’s equity is the value of their home minus the unpaid mortgage – so negative equity occurs if the house is worth less than the outstanding loan.
hg0080.com皇冠Equity release mortgages allow a homeowner to receive a lump sum in return for a mortgage secured on their house. No interest is payable on the loan; instead, interest is rolled-up on the loan and the loan and accrued interest are repayable at redemption (upon death or moving into long-term care).
Funds that invest in companies that are environmentally friendly or are not connected with the tobacco, alcohol or arms industries.
The European Union's single currency. Introduced in 1999 and went into general circulation on 1 January 2002 in 12 out of 15 member countries of the EU as part of economic and monetary union. These countries form the eurozone.
hg0080.com皇冠This is an international bond that is issued and traded outside the country of the bonds currency denomination.
hg0080.com皇冠A short-term promissory note issued by borrowers to support a debt, generally with a maturity period of three or six months, and negotiable like a certificate of deposit. A promissory note is an unconditional undertaking made by the borrower to pay a certain sum on demand or at a fixed date in the future.
European Central Bank
Bank which sets monetary policy for the eurozone. Founded in 1998 and based in Frankfurt, Germany.
European embedded value (EEV)
Embedded value is a way of measuring the current value to shareholders of the future profits from a life and pensions business. EEV was launched in May 2004 by the CFO Forum (which represents chief financial officers of the biggest European insurers) as an improvement on the achieved profit method used to calculate embedded value results. EEV reports the value of business written based on a set of realistic assumptions, allowing for the impact of uncertainty in future investment returns, and so is designed to provide a more accurate reflection of the performance of long-term savings business.
Eurpoean Insurance and Occupational Pensions Authority (EIOPA)
The EIOPA is an independent advisory body to the European Parliament, the European Commission and the Council of the European Union. The core responsibilities are to support the stability of the financial system, transparency of markets and financial products, ensure consistent level of regulation as well as the protection of policyholders, pension scheme members and beneficiaries.
European supervisory authorities (ESAs)
The collective name for the European-wide financial services regulators – the European Banking Authority, European Insurance and Occupational Pensions Authority.
European systemic risk board (ESRB)
Established in 2010, provides oversight of risks to the financial system of the European Union.
European Union (EU)
hg0080.com皇冠Economic association of 25 European countries aiming to create a single free-trade market for products and services across national borders. Fifteen existing members - Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden and the UK - were joined by another 10 states in May 2004: Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia. See also economic and monetary union.
Common name for the European single currency area created in 2002.
A transaction shown in a company's profit and loss account that is not expected to happen again.
excess centre cash flow
hg0080.com皇冠A measure of excess cash flow, calculated by deducting central operating expenses and debt financing costs from cash remittances by business units. It is a measure of the cash available to pay dividends, reduce debt, pay exceptional charges or invest back into our business. The cash remittances from business units eliminate on consolidation and hence the excess centre cash flow is not directly reconcilable to the Group’s IFRS consolidated statement of cash flows.
See stock exchange.
hg0080.com皇冠The rate at which one currency may be converted into another. Often quoted as an indicator of the relative strength of a currency or the attractiveness of the market in which it is used.
exchange rate mechanism (ERM)
hg0080.com皇冠Forerunner of the European Union's single currency, the euro, by which member countries committed to maintain the value of their currencies within agreed limits in relation to other currencies.
exchange traded fund (ETF)
These are investment funds that are listed can be traded on stock exchanges. They are bought and sold during any given trading day.
The ex-dividend date is the time when the registrar of a company draws up the list of shareholders who qualify for a dividend payment. To receive the dividend you must hold a share before it goes ex-dividend. For a period before the dividend is paid, usually about six weeks, the share price is quoted as "ex-dividend" or "xd". If you sell your shares in this period you will still be entitled to the dividend payment, but the buyer will not.
Where a customer has either received no financial advice, or has received financial advice but has decided to ignore it, and wishes to take out a policy on their own instruction.
expected profit included in future premium (EPIFP)
The expected present value of future cash flows which result from the inclusion in technical provisions of premiums relating to existing insurance and reinsurance contracts that are expected to be received in the future, but that may not be received for any reason, other than because the insured event has occurred, regardless of the legal or contractual rights of the policyholder to discontinue the policy.
hg0080.com皇冠Expenses associated with running an insurance business, such as commission, professional fees and other administrative costs, expressed as a percentage of premiums. Also the annual operating costs of an investment fund, expressed as a percentage of assets.
expensing stock options
Showing or accounting for the value of share options, distributed as incentives to employees, within the profit and loss account of a business. Regarded by some as a way of improving transparency and accountability.
extraordinary general meeting (EGM)
A meeting of shareholders, called to seek their approval for exceptional action on the part of the company or affecting their interest as shareholders.
A non-recurring event that materially affects a company’s finances in a reporting period. It must be explained in the quarterly or annual report.extraordinary itemsGainshg0080.com皇冠 and losses in a company's accounts resulting from one-off or unusual events.
fair market value
hg0080.com皇冠The price that a reasonable buyer would be willing to pay and a reasonable seller would be willing to accept for a product on the open market.
The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e. an exit price).
hg0080.com皇冠Commonly known as "the Fed". Central banking system of the United States. It comprises 12 Federal Reserve banks under the control of the Federal Reserve Board. The Fed is involved in setting monetary policy (including interest rates), maintains reserves, issues bank notes, lends money to member banks, and monitors the economic health of the country.
A bonus payable under with-profit policies at the time of a claim. It can be altered according to investment conditions at the time. Also called "additional" or "terminal" bonus.
hg0080.com皇冠The dividend paid by a company to shareholders at the end of the financial year. Normally added to the interim dividend to produce the total dividend for the year.
final salary pension scheme
hg0080.com皇冠A pension scheme where the benefit (pension) is calculated according to the member's earnings at or near the date of their retirement, or at the time of leaving service. The amount of pension will be a proportion of the member's final salary, depending on their length of service. Also known as a defined benefit scheme.
Financial Conduct Authority (FCA)
The FCA was created by the Financial Services Act (2012) and is directly accountable to HM treasury. The FCA is an independent public body and is independent of the Bank of England. It is responsible for the conduct business regulation of financial services firms (including those firms subject to prudential regulation by the PRA) and the prudential regulation of firms not regulated by the PRA. The FCA has three statutory objectives: securing an appropriate degree of protection for consumers, protecting and enhancing the integrity of the UK financial system and promoting effective competition in the interests of consumers.
Financial Reporting Council Guidance on Internal Control
The Guidance on Risk Management, Internal Control and Related Financial and Business Reporting sets out best practice on risk management and internal controls for UK listed companies, and provides additional guidance on applying certain sections of the UK Corporate Governance Code.
Financial Stability Board (FSB)
The FSB has been established to coordinate at the international level the work of national financial authorities and international standard setting bodies and to develop and promote the implementation of effective regulatory, supervisory and other financial sector policies.
hg0080.com皇冠A written report that describes the financial health of a company.
Refers to partnerships, such as accountants and stockbrokers, and small privately owned companies.
hg0080.com皇冠Means by which a government can influence the national economy through changes in tax and public spending.
hg0080.com皇冠A guaranteed rate of interest paid over the term of an investment or loan. A fixed interest security is an investment such as a government bond that provides a set level of income and usually has a redemption value, paid at maturity.
hg0080.com皇冠When a company's shares are sold to investors and quoted on the stock market for the first time. Sometimes known as an initial public offering (IPO).
foreign direct investment
This is the investment by a company based in one country into a company or investment project in another country.
hg0080.com皇冠Abbreviation of foreign exchange.
forward interest rate
hg0080.com皇冠An interest rate specified now for a loan that will occur at a future date.
hg0080.com皇冠An arrangement through which a company with a successful product or service agrees to allow other organisations to manufacture, distribute or sell that product or service, usually in exchange for a fee.
free asset ratio
The assets held by a company over and above those it is required by law to maintain to meet its liabilities to policyholders.
free-standing additional voluntary contributions (FSAVCs)
hg0080.com皇冠Contributions to a pension contract separate from a company pension scheme but paid by a member of that scheme. This gives the individual the opportunity to save more for their retirement and choose where the contributions are invested.
When all or most of the charges and commissions on an insurance policy or loan become payable when the contract is first taken out.
hg0080.com皇冠The FT Index is the Financial Times Ordinary Share Index,also known as the 30 Share Index. It began in 1935 and is based on the prices of 30 leading industrial and commercial shares. Its equivalent in the US is the Dow Jones Industrial Average.
FTSE 100 index
hg0080.com皇冠The benchmark index for share prices in London, the "Footsie" is based on the price of the 100 largest companies by market capitalisation quoted on the Stock Exchange. Represents about 70% of market turnover. Introduced in 1984 to fill the need for a constantly updated index, it is calculated once a minute during trading hours.
hg0080.com皇冠Measures the performance of the 250 biggest companies ranking just below the FTSE 100. This index can vary markedly from the FTSE 100 since mid-sized companies are more directly exposed to changes in the UK economy than the larger, international blue chips in the FTSE 100.
hg0080.com皇冠The FTSE 100 plus the FTSE 250. This is used for calculating FTSE 350 industry baskets, which allow investors to assess how individual industry sectors are doing during the day.
FTSE Aim index
The Alternative Investments Market (Aim) index consists of about 700 young and growing companies - worth about £1 billion - not big enough for the main market.
FTSE All-Share index
The most comprehensive of all the UK stock market indices. The Financial Times-Stock Exchange All-Share index comprises more than 700 companies and accounts for about 99% of the UK stock market by value. Calculated once a day. Regarded as the main yardstick for professional investors, and widely used for index tracking purposes. Introduced in 1962.
FTSE Fledgling index
hg0080.com皇冠Covers about 560 companies - worth about £9 billion - that are too small for the FTSE All-Share.
FTSE share indices
Share price indicators from the UK and world stock markets complied by the Financial Times in conjunction with the Faculty and Institute of Actuaries and the London Stock Exchange. Among the most important FTSE indices are the FTSE 100 and the FTSE All-Share.
FTSE Small Cap
hg0080.com皇冠Contains FTSE All-Share companies that are too small to qualify for the FTSE 350.
A pool of financial assets into which premiums are invested to produce an investment return. Examples include property funds, managed funds and with-profit funds. Strictly speaking, these are "investment funds" rather than just "funds". Fund management is the act of actively looking after such investments on behalf of individual and institutional customers.
Management of money invested, typically, in stocks and shares, fixed interest, property and cash on behalf of individual and institutional customers. Also known as asset management or investment management.
A financial contract to buy or sell something on a specified future date for a pre-agreed price. Futures markets exist for currencies, government bonds and commodities such as coffee, cocoa, copper and tin.
hg0080.com皇冠Measure of the extent to which a company is funded by borrowings rather than shareholders’ equity. A highly geared company carries a lot of debt. Known in the US as leverage.
A non-life insurance or property and casualty insurance. Property insurance covers loss or damage through fire, theft, flood, storms and other specified risks. Casualty insurance primarily covers losses arising from accidents that cause injury to other people or damage to the property of others.
gilt-edged securities or gilts
hg0080.com皇冠Bonds or securities issued by the UK government to raise funds are called gilts, or gilt-edged, because they are considered to be a safe form of investment (the UK government has never failed to pay interest or repay capital). The stocks issued are mostly fixed interest, although some are index-linked. Most government stocks have a redemption date, and are known as dated gilts, but some have no redemption date and need never be repaid. Like shares, gilts are bought and sold on the stock exchange and their price fluctuates according to the prevailing interest rate and their redemption date. The market is known as the gilt market.
hg0080.com皇冠A unit trust or mutual fund investing in stocks or bonds across the world. Global funds provide opportunities for spreading investments into different markets and sectors, but can carry additional risks, such as currency fluctuations and political and economic instability.
globally systemic important banks (G-SIBs)
A list of banks deemed systemically important to the global financial system by the FSB as part of an international initiative set by the G20.
globally systemic important banks (G-SIBs)
A list of banks deemed systemically important to the global financial system by the FSB as part of an international initiative set by the G20.
hg0080.com皇冠The Great Crash was a catastrophic fall in prices on the New York Stock Exchange from late October to the end of November 1929 (the dates are sometimes given precisely as 29 October to 13 November), during which investors lost an estimated $100 billion and the economic conditions were created for the Great Depression. The US stock market eventually bottomed out in July 1932, by which time the Dow Jones Industrial Average had fallen by nearly 90%, and did not recover until after the Second World War. See also Black Monday and Black Tuesday.
A period of severe economic contraction during the 1930s when unemployment remained high and many businesses collapsed. Followed the US stock market crash of 1929.
Unofficial trading of securities before their formal issue on the stock market.
hg0080.com皇冠Before tax has been deducted. The opposite of net.
gross domestic product (GDP)
The total value of all goods and services produced domestically by a country each year. Can be calculated as gross national product minus income from abroad. A key measure of national economic health. US official statistics use gross national product (GNP).
gross national product (GNP)
Total value of goods and services produced each year by a country. Real growth in GNP reflects increase in output after taking away the effect of inflation.
gross premium income
Income from business written during the year, before any reinsurance is taken into account.
gross written premiums
The total earnings or revenue generated by sale of insurance products, before any reinsurance is taken into account. Not all premiums written will necessarily be treated as income in the current financial year, because some of them could relate to insurance cover for a subsequent period.
Group Adjusted Operating profit
It is based on expected investment returns and stated before tax and before adjusting items including impairment of goodwill and amortisation and impairment of AVIF, the profit or loss on disposal and remeasurement of subsidiaries, joint ventures and associates, integration and restructuring costs and other items. Other items are those items that, in the Directors’ view, are required to be separately disclosed by virtue of their nature or incidence to enable a full understanding of the Group’s financial performance.
Group SCR means the solvency capital requirement calculated at the level of the group, in accordance with the PRA Rulebook – Group Supervision 4 – 15.
Group of Seven (G7)
Seven leading industrialised countries - the US, Japan, Germany, France, UK, Italy and Canada - who meet to discuss major economic and political issues. The European Community also takes part. Began in the mid-1970s. The addition of Russia in 1998 created the G8.
group of twenty (G20)
Similar to the G20 but with 20 of the world’s largest economies’ heads of states and finance ministers meeting regularly to discuss global issues.
A pension plan that covers a group of people, which is typically purchased by a company and offered to their employees.
An investment fund whose aim is to achieve capital gains, rather than income, by investing in growth stocks. Typically it will focus on companies that demonstrate significant earnings or revenue growth, rather than companies paying high dividends. Growth funds can be more volatile than other types, rising more in bull markets and falling further in bear markets
harmonised index of consumer prices (HICP)
Internationally recognised measure of inflation used by the European Central Bank to compare price movements across the eurozone. Adopted as the main measure of domestic inflation in the UK in 2004, but known as the consumer prices index. Differs from the UK's former retail price index in the type of consumer spending included and how it is calculated, and consequently tends to give a lower inflation figure.
A type of policy that provides cover against loss from illness or bodily injury. It can pay for medicine, visits to the doctor, hospital stays, other medical expenses and loss of earnings, depending on the conditions covered and the benefits and choices of treatment available on the policy.
A type of investment fund that uses aggressive investment techniques and is exempt from many of the rules and regulations that govern other types of fund. Most hedge funds set high minimum investment amounts, so tend to be used by wealthy individuals and institutions.
Protecting against the risk of losses in one investment by taking up other investment positions that will reduce the risk run by the first commitment. This can mean investing in opposite positions in the same or equivalent stock or markets using complicated packages of futures and options. Though speculative, hedging is actually a cautious action which sets out to reduce the risk run by the investor.
hg0080.com皇冠Equities or bonds that offer a high rate of return on your investment are said to be high yield. There is likely to be more risk attached to such investments.
A legal entity that owns other companies and whose main assets are its shareholdings (usually a controlling interest) in those other businesses. Sometimes includes the word Holding or Holdings in its company name.
hg0080.com皇冠Where one company attempts to buy the shares of another and the directors of the target do not recommend acceptance of the offer. See also takeover bid.hybrid debtA means of borrowing from the market. It is called “hybrid” because it combines the features of two or more financial instruments.
The policyholder can transfer money from any pension fund to an income drawdown plan from which they receive an income. The remainder of the pension fund continues to be invested, giving it the potential for growth.
An investment fund that aims to generate current income in the form of dividends or payments from stocks and bonds, rather than capital growth. Income funds are regarded as conservative investment, and tend to be popular with retirees and other investors looking for a steady cash flow without taking on too much risk.
independent financial advisers (IFA)
A person or organisation authorised to give independent advice on financial matters. IFAs are authorised by the FCA in the UK.
An index is the weighted value of a group of securities used to measure the ups and downs of a market, market sector or asset class, and to provide a performance benchmark against which other investments in that category can be measured. Share price indices form the basis for many index-tracking funds. Examples around the world include the FTSE 100 and FTSE All-Share (UK); Dow Jones Industrial Average, Nasdaq Composite and Standard & Poor's 500 (US); Nikkei 225 (Japan); Hang Seng (Hong Kong); CAC-40 (France); Dax (Germany); Mibtel (Italy); Affärsvärlden (Sweden); and All Ordinaries (Australia).
indexation or index-linking
The creation of an automatic link between income or payments and a specified index of prices or earnings. Designed to offset the effects of inflation.
UK government bonds or securities whose returns are tied to the retail price index. Known in the US as treasury inflation protected securities (Tips). See gilt-edged securities.
Investment funds designed to match the performance of a market index, such as the FTSEhg0080.com皇冠 All-Share. This can be done by buying every single stock in the index (full replication) or by buying a representative cross-section of shares from the index (sampling).
hg0080.com皇冠see private investor.
individual savings accounts (ISAs)
Tax-efficient plans within the UK for investing in stocks and shares, cash deposits or life insurance investment funds, subject to certain limits.
hg0080.com皇冠An increase in the general level of prices over a period of time. Opposite of deflation.
An insurance policy is "in force" from its start date until the date it is terminated.
hg0080.com皇冠A tax paid on the value of assets (such as money and property) passed from one person to another as part of their estate after death or, in certain circumstances, as gifts during their lifetime. Formerly known in the UK as death duties or capital transfer tax.
In the UK, the assets of the long-term with-profits funds less the realistic reserves for non-profit policies written within the with profits funds, less asset shares aggregated across the with-profits policies and any additional amounts expected at the valuation date to be paid to in-force policyholders in the future in respect of smoothing costs and guarantees.
A set-up fee paid on some unit-linked investment policies.
initial public offering (IPO)
hg0080.com皇冠The first time a company lists on the stock exchange, and asks investors to buy shares in it, is known as an IPO, new share issue, or flotation.
hg0080.com皇冠Illegal practice of buying or selling shares on the basis of privileged, confidential or price-sensitive information. Also known as insider trading.
Another term for bankruptcy. Happens when individuals or businesses do not have enough resources to pay their debts.
institutional investor or shareholder
Large financial organisation, such as a bank, insurance company, pension fund or investment trust, that holds and trades substantial volumes of stocks and shares for its own benefit or on behalf of others. See also private investor.
A contract taken out with an insurer to protect against loss from a perceived risk. The person taking out the insurance is called the insured. Payments for the policy are called premiums.
hg0080.com皇冠The theoretical value to a company of its non-physical assets, such as its brand name, patents, royalties, trademarks, copyright and goodwill.
The fee charged by a lender for the use of borrowed money, or the return earned on an investment, such as savings in a deposit account. Can also mean part or total ownership of an asset.
hg0080.com皇冠Home loan where the borrower pays back only the interest until the end of the loan period, at which time the original sum borrowed also needs to be repaid.
Percentage rate at which money is added to savings or borrowings. The cost of borrowing or lending money.
hg0080.com皇冠A dividend declared part-way through a company's financial year, before the final profit is known. Usually paid quarterly (in the US) or at the half-year (UK).
hg0080.com皇冠Figures issued during the financial year to indicate business performance since the last full-year accounts were published. Usually announced quarterly or at the half-year.
An individual or organisation who introduces business to an insurance company on behalf of a customer and represents them in dealings with the company. Types of intermediary include financial advisers, agents, brokers, dealers and traders.
International Financial Reporting Standards (IFRS)
These are international accounting rules and guidelines that all publicly listed companies in the European Union are required to use.
International Monetary Fund (IMF)
Established following the Brettonhg0080.com皇冠 Woods agreement of 1944 with a wide-ranging brief to oversee the international monetary system, promote exchange rate stability and encourage international trade. In practice, became the main lender to member countries facing balance of payments difficulties. Also publishes international financial surveys and forecasts.
hg0080.com皇冠Buying and holding assets, such as shares, bonds, property and commodities, to earn income or to make capital gains.
A US financial organisation involved in corporate finance, advice on mergers, takeovers and acquisitions, the launch of new stocks and shares, and investment management. Similar to the UK merchant bank.
Earnings or revenue (such as share dividends and interest payments) arising from the ownership of assets.investment managementseehg0080.com皇冠 fund management.
Investment return is the expected income on existing business (other than the underwriting margin). Life investment return comprises unit-linked margin, shareholders’ return on participating business, spread margin and the expected return on shareholder assets.
These comprise of retail sales of mutual fund-type products such as unit trusts, individual savings accounts (ISAs) and open ended investment companies (OEICs).
An investment fund set up as company quoted on the stock exchange which buys shares in other companies. Investment trusts have fixed capital, so the price of the shares is determined by investors' interest in the company itself, unlike unit trusts, which can buy or sell units in response to demand.
Income earned abroad from business other than the selling of goods. It can include earnings from banking, insurance, investment, shipping and tourism.
A claim for payment of a premium or fee, or a charge for services.
hg0080.com皇冠An insurance contract where two people are insured against death.
Partnership or co-operation on a business activity between two or more companies
hg0080.com皇冠Also known as keyperson insurance. Cover designed to protect or compensate a business in the event of the death or incapacity of an important employee regarded as crucial to that organisation.
hg0080.com皇冠A one troy ounce gold coin from South Africa. This is one of a number of gold coins that can be bought by individual investors and traded on the London bullion market.
General insurance claims that are often not made until many years after the period of cover provided, due to the impact of perils or causes not becoming evident for a number of years. Sources of latent claims include asbestos-related diseases, environmental pollution and industrial deafness.
hg0080.com皇冠A company's debts and obligations, shown on the balance sheet as claims on its assets.
Insurance designed to protect the policyholder in the event of a claim by a third party alleging that negligence or inappropriate action has resulted in bodily injury or damage to property. Can cover a range of personal, professional and commercial risks.
life achieved profit
The economic earnings of a life insurance business.
Life Insurance provides life cover and terminal illness cover. It pays out if, during the policy term, a policyholder dies or is diagnosed with a terminal illness.
Subsidiaries selling life and pension products.
London International Financial Futures and Options Exchange, where futures and options are traded. Pronounced "Life".
hg0080.com皇冠A legal arrangement where the owners of a business have limited responsibility for debts, usually restricted to the amount they have invested in shares or some other specified figure. Such businesses normally have "Limited" or "Ltd" as part of their name. By contrast, unlimited liability allows creditors to have a claim on other assets belonging to the owners in the event of a deficit.
Process which brings a company's existence to an end after distributing its assets. A liquidator is the insolvency practitioner who winds up a company.
hg0080.com皇冠Ease with which an asset can be bought or sold without significantly affecting its price. A liquid asset is one easily convertible into cash.
A company whose shares are accepted for trading on a stock exchange is said to be listed. Means the same as quoted.
Lloyd’s of London
hg0080.com皇冠The world's main market in marine, aviation and unique risks. Lloyd's is organised into underwriting syndicates comprising Names (investors with unlimited liabilities) who are willing to underwrite most types of insurance. Can trace its origins to Edward Lloyd's Coffee House in late-17th century London, where the owner attracted merchants and ship-owners by posting the latest shipping information. In 1771 a group of Lloyd's customers agreed to form their own association and in 1774 moved into rooms at the Royal Exchange. In 1871 Lloyd's was incorporated by Parliament for the "promotion of marine insurance and the diffusion of shipping intelligence".
Lloyd's Register is an independent risk management organisation with more than 200 offices around the world. Founded in 1760 as the Register Society by customers of Edward Lloyd's coffee house in London, it first published the Register of Ships in 1764 to give underwriters and merchants an idea of the condition of the vessels they insured and chartered. Today, in addition to marine activities, it has operations covering management systems, land-based industries, railways, and oil and gas. Lloyd's Register is sometimes confused with other organisations that owe their origins to Lloyd's coffee house, including Lloyd's of London, the international insurance market.
local currency terms
hg0080.com皇冠The performance of overseas business can be calculated in local currency to remove the effects of exchange rate volatility. This gives a clearer demonstration of trends.
The rate of interest on short-term credit charged by the Bundesbank, the German central bank, to other banks. It is seen as an important international economic indicator.
London Stock Exchange
hg0080.com皇冠The UK's main marketplace for buying and selling shares in quoted companies, and one of the leading exchanges in Europe. Technically the International Stock Exchange of the United Kingdom and Ireland. Can trace its roots back to 1760, when 150 brokers expelled from the Royal Exchange for rowdiness formed a club at Jonathan's Coffee House to buy and sell shares. In 1773 members voted to change the name to the Stock Exchange, and in 1801 it became a regulated exchange.
Investors are long if they have bought stocks or shares but have not yet arranged a compensating sale. See also short.
Risk associated with increasing life expectancy trends among policyholders and pensioners.
long-term and savings business
Collective term for life insurance, pensions, savings, investments and related business.
The Company considers the risks, assets, liabilities of its subsidiary as if they were its own.
A product or service sold at a lower price than usual in order to generate additional sales.
Longer-term investment return.
lump sum benefit
A benefit arising in the form of a single, once-and-for-all payment rather than a series of payments.
hg0080.com皇冠Top of page
An investment fund in which the choice of investments is made by a fund manager, usually with the aim of producing steady growth and a good balance of security.
management buy-out (MBO)
The purchase of a company by some or all of its managers, usually with financial backing from outside.
Profit margin as a percentage of trading profit. Reflects the underlying profitability of the business, but not whether the company is making money for shareholders. It is calculated before interest charges and tax.
hg0080.com皇冠The place where transactions take place in a particular type of commodity, such as a stock exchange.
The value of a company calculated by multiplying the number of shares the company has in circulation by the market price of those shares.
An individual broker or dealer who sets the price at which stocks can be bought and sold. Each stock listed on the London Stock Exchange must have at least two market-makers. Before Big Bang, the only people allowed to make a market in company shares were called "jobbers", who dealt only with agency brokers. Now stockbrokers can also be market-makers, and can deal with whomever they like.
The price at which a stock, bond or commodity was most recently bought or sold. Also called market value. See also bid price and offer price.
market value adjustment
A penalty that may be applied if a customer takes units out of a with-profit fund other than on a pre-agreed date, to take account of investment market conditions at the time. The adjustment is used to protect the remaining policyholders with units in that fund.
An increase applied to the risk-free interest rate used to value insurance liabilities under Solvency II where the cash flows are relatively fixed (e.g. no future premiums or surrender risk) and are well matched to assets that are intended to be held to maturity and have cash flows that are also relatively fixed.
hg0080.com皇冠Economies such as the USA, UK and continental Europe that are considered to be well established, stable and therefore less risky for investors than emerging
The date that an insurance policy or other financial contract finishes or "matures", and the proceeds, sometimes known as the maturity value, become payable.
Specialised UK bank offering investment services, corporate advice, trade and project finance, exchange rate dealing, etc, to clients worldwide. It also acts as an issuing house for stocks and bonds, and advises companies involved in mergers.
A "marriage" of two or more companies, with the pre-agreement of both, whereby one company acquires the shares of the other (as was the case with the merger of CGU and Norwich Union, which created Aviva) or the shares of both companies pass to a third party.
The midpoint between the buying price (also known as the bid price) and the selling price (also known as the offer price) of a unit or share. Most newspapers quote the mid-price for shares. When buying, you generally pay a bit more than the mid-price; when selling, you usually receive a bit less. See also bid/offer spread.
Minimum Capital Requirement
The MCR is the minimum amount of capital that an insurer needs to hold to cover its risks under the Solvency II regulatory framework. If an insurer’s capital falls below the MCR then authorisation will be withdrawn by the regulator unless a firm is able to meet the MCR within a short period of time.
Regulation of the money supply and interest rates by a central bank, such as the Federal Reserve in the US, with the aim of controlling inflation and stabilising the national currency. Monetary policy enables a government to affect the amount of money spent by consumers and businesses.
hg0080.com皇冠The illegal process of disguising the origins of money from criminal activities so that it appears legitimate. This can be attempted by transferring it through many bank accounts so it becomes difficult to trace, or by investing it in legitimate business activities and taking "clean" cash from the proceeds. For this reason, many countries require financial institutions to check the origins of large cash deposits.
money market instrument
hg0080.com皇冠A short-term debt obligation, such as a banker's certificate of deposit, commercial paper or government security, generally regarded as a low-risk, low-return investment for the holder.
money purchase scheme
See defined contribution scheme.
Total amount of money in circulation in an economy. There are several ways this can be measured (such as M0, M1, M3hg0080.com皇冠), and the definitions for these figures vary slightly from country to country. Financial authorities use these measures to set targets for monetary growth.
Rate of disease or how likely someone will fall ill, varying by such parameters as age, gender and health, used in pricing and calculating liabilities for policyholders of life and annuity products, which contain morbidity risks.
Rate of death, varying by such parameters as age, gender and health, used in pricing and calculating liabilities for policyholders of life and annuity products, which contain mortality risks.
hg0080.com皇冠A loan to buy a home. Technically, it is the security provided by a borrower to a lender in return for funds advanced - usually the property in question. Typically there are two forms of mortgage: repayment (or capital and interest), where the homeowner pays back both the loan and interest in stages; and interest only, where the homeowner pays just the interest until the end of the loan period, when the capital is also due to be repaid.
An insurance contract combining savings and protection elements which is designed to repay the principal of a loan or mortgage.
mortgage life insurance
A protection contract designed to pay off the outstanding amount of a mortgage or loan in the event of the death of the insured.
Company with subsidiaries or operations in several different countries.
A business organisationhg0080.com皇冠, such as an insurance company or building society, owned by its members or policyholders. Any profits are shared among the members through bonus payments, dividends or reductions in future premiums.
American term for an investment vehicle that pools money from subscribers and invests in a range of stocks, bonds and other assets. Investors are mostly free to buy or sell shares in the fund at any time. An open-ended fund will sell as many shares as investors want (the equivalent of a unit trust), whereas for closed-end funds there is only a limited number of shares (equivalent to an investment trust).
hg0080.com皇冠North American Free Trade Agreement. An agreement reached in 1994 by the United States, Canada, and Mexico to phase out tariffs and encourage free trade between the three North American countries.
An underwriting member of the Lloyd's of London insurance market, organised into syndicates to spread the risks involved. Traditionally wealthy individuals who assumed unlimited liability for the risks they covered.
The National Association of Securities Dealers Automated Quotation system, operated in the US. A computerised system for providing price quotes for securities in the US. Set up in 1971 as an information service, now regarded as a major stock exchange in its own right.
The central government debt.
Payments made by most working people to the UK government to cover unemployment, sickness, maternity and old age pension benefits.
hg0080.com皇冠A UK government initiative to issue savings and investment products through the Post Office.
Where the money owed on a mortgage is greater than the value of the property.
hg0080.com皇冠After tax has been deducted. The opposite of gross.
net asset value
The difference between a company’s assets and liabilities. This is equivalent to the company’s equity, which is the amount contributed by the company’s owners plus retained earnings.
net asset value (NAV) per share
NAV per share is calculated as the equity attributable to shareholders of Aviva plc, less preference share capital (within the Consolidated statement of financial position), divided by the actual number of shares in issue as at the balance sheet date.
net premiums earned
hg0080.com皇冠The proportion of net premiums written recognised for accounting purposes as income in a given period. See unearned premiums.
net written premiums
Total gross written premiums for the given period, minus premiums paid over or 'ceded' to reinsurers.
The amount left over after deducting tax, interest, depreciation, fees, minority interests and extraordinary charges from sales revenue. Also known as net earnings, or net income.
hg0080.com皇冠Term used to describe the value of long-term savings policies sold to new and existing customers. Includes premium increases on existing business.
new business margins
New business margins are calculated as the adjusted Solvency II value of new business divided by the adjusted Solvency II present value of new business premiums (PVNBP), and expressed as a percentage.
new business strain
The technical name given to an initial depletion of cash and/or erosion of shareholders' net assets at the moment an insurance contract is sold. This "strain" arises because, in addition to meeting costs associated with the sale of contracts, insurance companies must make actuarial provisions at the outset of a contract that are often significantly higher than the premiums received. To begin with, therefore, cash outflows exceed inflows, creating a strain.
New York Stock Exchange (NYSE)
Founded in 1792, this is the largest and oldest organised securities exchange in the US. Also known as the Big Board. It was founded by the signing of the Buttonwood Agreement by a group of stockbrokers and merchants who met under a buttonwood tree at what is now 68 Wall Street. The Bank of New York was the first corporate stock traded, and was the first listed company on the NYSE. It operates as an auction market where orders are brought to the trading floor for execution.
hg0080.com皇冠Benchmark share price index of the largest companies quoted on the Tokyo Stock Exchange. Equivalent to the UK's FTSE 100 or the US S&P 500.
nil premium merger
Where the shareholders of the companies that are merging receive shares in the merged entity in return for their existing shares, but no money changes hands.
hg0080.com皇冠Return that does not take account of the effects of inflation.
hg0080.com皇冠Someone nominated to act on your behalf. For example, traders often hold securities in a nominee name as this makes settlement easier.
A company with very little external borrowing relative to the money shareholders have invested in it.
hg0080.com皇冠Insurance cover guaranteeing certain benefits but for which the policyholder bears no investment risk and does not gain or lose if returns differ from expectations. Pure risk business, such as term assurance, annuities, health insurance and disability cover, is normally written on a non-profit basis.
occupational pension scheme
hg0080.com皇冠A pension scheme arranged by an employer for the benefit of one or more employees. Membership is optional.
hg0080.com皇冠See open-ended investment company.
hg0080.com皇冠The price an investor must pay, or what the market demands, for buying a share or a unit in an investment fund. See also bid/offer spread.
The main market in London, comprising the UK Listing Authority's record of all listed (or "quoted") securities. Companies on the Official List have been vetted by the London Stock Exchange quotations department and are subject to the listing rules in the Yellow Book. The first issues date back to 1698.
hg0080.com皇冠In the UK, a government official who administers the sale or disposal of assets in cases of bankruptcy, insolvency and compulsory liquidation.
hg0080.com皇冠Term used for funds held outside one's own country, sometimes in "tax havens" that operate in less heavily regulated financial jurisdictions and offer tax advantages or greater privacy to the investor.
The relocation of business processes from one country to another where there are lower costs or tax savings. Also known as business process outsourcing (BPO), where a company in one country provides services for a company in another part of the world. Business operations can include manufacturing, IT, administration and call centres.
Ogden discount rate
The Ogden discount rate is used by courts in the UK to calculate awards for cases involving bodily injury.
Old Lady of Threadneedle Street
Nickname for the Bank of England.
Open-Ended Investment Company (OEIC)
A collective investment fund structured as a limited company in which investors can buy and sell shares.
open market option
hg0080.com皇冠The option to use the proceeds of a pension contract to buy an annuity from an insurance company other than the one with whom the pension was held. Usually done to obtain a better interest rate but sometimes used for convenience, so that all payments to an individual come from the same source.
operating earnings per share (EPS)
Operating EPS is calculated based on the Group adjusted operating profit attributable to ordinary shareholders net of tax, non-controlling interests, preference dividends, the direct capital instrument (DCI) and tier one notes divided by the weighted average number of ordinary shares in issue, after deducting treasury shares.
operating expense ratio
The Group operating expense ratio expresses operating expenses as a percentage of operating income. Operating income is calculated as Group adjusted operating profit before Group debt costs and operating expenses.
The day-to-day expenses involved in running the business including staff costs. For the avoidance of doubt, operating expenses excludes impairment of goodwill and amortisation and impairment of AVIF, the profit or loss on disposal and remeasurement of subsidiaries, joint ventures and associates, integration and restructuring costs and other items.
The difference between total income/revenue and total running costs/operating expenses from continuing operations.Excludes non-operational items, such as one-off gains or losses from the sale of assets or acquisition costs. Also called earnings before interest and taxes (EBIT), or operating income.
Where ownership of a company is divided into a number of equal parts or "shares", ordinary shareholders are entitled to a distribution of the profits (known as dividends) and have the right to vote at company meetings. If the company is wound up, ordinary shareholders are entitled to any assets left after all other obligations have been met. These residual assets are known as the equity of the company, hence the term "equities" sometimes used to describe ordinary shares. Ordinary shares rank after debentures and preference shares. Known in the US as common stock.
Organisation for Economic Co-operation and Development (OECD)
The OECD provides a forum in which governments can work together to share experiences and seek solutions to common problems. The mission of the OECD is to promote policies that will improve the economic and social well-being of people around the world.
See unclaimed assets.
See inherited estate.
An arrangement of any form between an insurance or reinsurance undertaking and a service provider, whether a supervised entity or not, by which that service provider performs a process, a service or an activity, whether directly or by sub-outsourcing, which would otherwise be performed by the insurance or reinsurance undertaking itself.
hg0080.com皇冠The continuing administrative costs of running a business that cannot be attributed to any specific activity but are still necessary for the business to function. Examples include rent, insurance, electricity and water.
hg0080.com皇冠To have a larger proportion of a fund or share portfolio in one type of investment or sector than the market benchmark or average. The opposite of "underweight".
Under Solvency II, capital available to cover the SCR and MCR is referred to as own funds. This includes the excess of assets over liabilities in the Solvency II balance sheet (calculated on best estimate, market consistent assumptions and net of transitional measures on technical provisions), subordinated liabilities that qualify as capital under Solvency II, and off-balance sheet own funds approved by the regulator. Own funds eligible to cover the SCR and MCR also reflect any tiering restrictions.
paid out in benefits and claims
Paid out in benefits and claims comprise claims, expenses (net of reinsurance) and amounts paid relating to investment contracts which are not included within the income statement.
A business association formed by two or more people. Often known as a firm. A partnership is not an incorporated company, and has no standalone legal basis, which means that the partners (or "general partners") usually have unlimited responsibility for any debts incurred by the business. An exception is limited partners who, like shareholders, are liable only for what they have invested in the business. See also limited liability.
penny stocks and shares
hg0080.com皇冠Ordinary shares or common stocks that are low-priced and often regarded as highly speculative because of the perceived risks of investing in the companies concerned. Traditionally popular with private investors. In the UK shares of less than £1, and in the US shares of less than $1 (or sometimes $5), can qualify for this description.
A regular sum of money paid to a person when they retire. This is a tax efficient form of investment for the retiree.
pensionable earnings or salary
Those elements of an employee benefits package on which pension contributions and/or benefits are calculated. Pensionable salary can differ from actual remuneration as it excludes items such as overtime and commission.
hg0080.com皇冠The period of service with an employer that is taken into account when calculating pension benefits.
Refers to a pool of pensions contributions invested for growth. Also used to refer to a type of institutional investor who administers and invests funds for pension plans.
A financial institution (such as a bank or insurance company) authorised to provide pensions contracts.
Average per person. Per capita income represents the average earnings for each person in a population, and is often used to measure a country's standard of living.
The rate at which policies are retained over time and therefore continue to contribute premium income and assets under management.
personal equity plan (Pep)
hg0080.com皇冠Method for UK individuals to invest a certain sum in stocks and shares each year without attracting income tax or capital gains tax. Introduced in 1987 but no longer sold. Replaced in 1999 by individual savings accounts.
personal injury protection
An extension of car insurance which covers medical expenses and, in some cases, lost wages and other damages.
A pension plan tailored to the individual policyholder, which includes the options to stop, start or change their payments.
An issue of stocks or shares to a specific group of buyers.
hg0080.com皇冠See public limited company.
hg0080.com皇冠A booklet that details the full product information and terms and conditions of an insurance policy, and the policy schedule(s) which provides the specific benefits/premiums/payment conditions covered. It provides evidence that a contract exists between the insured and insurer.
A collection of financial assets - investments in shares, fixed interest stocks, cash and property - held by an investor.
A company or individual who plans to take control of another company, usually by buying a controlling interest and installing new management. Also known as a raider.
preference shares or preferred stock
Shares paying a fixed dividend, and which have prior claims over ordinary shares to dividends and to capital repayment if a company is wound up. They have no priority over debentures, loan stocks and company creditors. Like ordinary shares, preference shares represent part-ownership in a company, although preference shareholders do not enjoy voting rights at company meetings.
A company's unaudited full-year results, declared as a prelude to the publication of the annual report and accounts.
hg0080.com皇冠The monetary amount paid for an insurance policy. The payment a policyholder makes in return for insurance cover. Usually paid monthly, annually or as a single lump sum. Also, if the market price of a new share is higher than its issue price, it is said to be trading at a premium (the opposite of discount).
present value of new business premiums (PVNBP)
PVNBPhg0080.com皇冠 is a measure of life and pension sales using the European embedded value method of financial reporting. It is calculated as the present value of new regular premiums plus 100% of single premiums, using assumptions consistent with those used to determine new business contribution. Similar in principle to the UK industry standard of annual premium equivalent.
price/earnings ratio (P/E ratio)
Share price divided by earnings per share over the latest 12-month period. The result offers investors a way of comparing companies' prospects. For example, a high P/E ratio might suggest a company has strong growth potential, and investors will pay more for a share if they think that the company's earnings will rise rapidly. See also yield.
Information about a business which, if made public, would be likely to have a significant effect on the company's share price. Listed companies must report such information to the stock exchange. See regulatory news service.
A term for the original investment, or the amount borrowed, or the part of the amount borrowed that remains unpaid (excluding interest).
A company which is not allowed to offer its shares to the general public.
private investor or shareholder
An individual who buys and sells relatively small amounts of shares or other holdings for their own benefit. Also known as an "individual", "retail" or "small" investor. See also institutional investor.
Conversion of a state-run company one in private ownership, often as a public limited company with shares offered for sale to the public.
hg0080.com皇冠Excess of income over expenses for a particular period. Figures may be given as gross profit, net profit before tax, net profit after tax, and earnings.
profit and loss account
hg0080.com皇冠An account compiled at the end of the financial year showing that year's revenue and expense items, and indicating gross and net profit or loss.
profit before tax
All profits earned in a period, including investment gains.
pro forma results
hg0080.com皇冠Set way to describe or restate a company's financial results when circumstances have changed, for example after a flotation, merger or takeover.
property and casualty insurance
Also known as non-life or general insurance. Casualty insurance primarily covers losses arising from accidents that cause injury to other people or damage to the property of others. Property insurance covers loss or damage through fire, theft, floods, storms and other specified risks.
An insurance contract that protects the policyholder or his/her dependants against financial loss on death or ill-health.
A method by which a shareholder may vote without attending a meeting by appointing someone else to vote on their behalf.
Prudential Regulatory Authority (PRA)
hg0080.com皇冠The PRA is a part of the Bank of England and is responsible for the prudential regulation of deposit taking institutions, insurers and major investment firms. The PRA’s objectives are: to promote the safety and soundness of the firms it regulates; specifically for insurers, to contribute to the securing of an appropriate degree of protection for policyholders; and a secondary objective to facilitate effective competition.
The PRA Rulebook, Solvency II Firms, contains provisions made by the PRA applicable to Solvency II firms, including rules transposing the Solvency II Directive.
hg0080.com皇冠A company whose shares are available to members of the public.
public limited company (plc)
A company in the UK whose shares can be bought by members of the public and which has authorised share capital above a statutory minimum £50,000. Only public limited companies may be listed or traded on the London Stock Exchange.
public sector borrowing requirement (PSBR)
hg0080.com皇冠In the UK, the annual budget deficit of the public sector as a whole - in other words, the amount of public funding that has to be borrowed in any financial year. In other countries, known as public sector deficit.
A direct or indirect holding in an undertaking which represents 10 % or more of the capital or of the voting rights or which makes it possible to exercise a significant influence over the management of that undertaking.
hg0080.com皇冠If a company has a quote (or is "quoted"), its shares can be bought and sold on the stock exchange. Means the same as listed.
A sharp rise in the value of a stock market or particular share. Sometimes followed by a fall in price (also known as a "reaction" or "correction") as investors sell to take profits.
rate of exchange
hg0080.com皇冠See exchange rate.
rate of return
hg0080.com皇冠The change in value of an investment over a period of time, taking into account income from it and any change in its market value. Normally expressed as an equivalent annual percentage of the total amount invested. Also the yield from a fixed income security.
hg0080.com皇冠The actual price of an investment at that moment. Most share prices displayed on websites are delayed by at least 15-20 minutes.
hg0080.com皇冠A reattribution allows eligible policyholders to choose to receive an incentive payment in return for giving up their interests in any possible future payout from an inherited estate. The payment is made from shareholders’ funds and does not come from the with-profits fund.
A period of general economic decline. Specifically, a decline in gross domestic product (GDP) for two or more consecutive quarters.
The deadline determined by a company's board of directors by when an investor must be recorded as an owner of shares to qualify for a forthcoming dividend or share distribution.
hg0080.com皇冠Person or organisation that keeps a record of individual shareholders and information such as dividend payment dates.
hg0080.com皇冠An additional amount allocated to a with-profit policy, usually once a year, to reflect earnings on the underlying investments. Once declared, the bonus is guaranteed as part of the payout on maturity. Also known as "annual" or "reversionary" bonus.
A series of payments are made by the policyholder, typically monthly or annually, for part of or all of the duration of the contract.
hg0080.com皇冠An organisation with statutory powers to lay down a framework within which member companies must operate.
regulatory news service (RNS)
hg0080.com皇冠Information service used by listed companies to make announcements to the London Stock Exchange to ensure that price sensitive information is communicated in a timely and secure manner to all investors.
A form of insurance bought by insurance companies to protect themselves from the risk of large losses. One insurer pays to place part of an insured risk or an entire book of business with one or more other insurance companies, known as the reinsurers.
Method of repaying a mortgage loan where each monthly payment comprises a part repayment of the original loan plus interest on the outstanding amount. By the end of the loan period, the mortgage loan should be fully repaid. Also known as a capital and interest mortgage.
reserve assets or funds
hg0080.com皇冠Assets held by a bank or company in case of future needs. Also a technical term for holdings held by banks at the central bank.
See private investor.
retail prices index (RPI)
Former measure of inflation in the UK, representing the average cost of spending by typical households. RPI includes mortgage interest payments, while RPIX excludes them. Now replaced by the harmonised index of consumer prices, which is calculated differently, and tends to result in a lower figure. The equivalent in the US is the consumer prices index.
hg0080.com皇冠For savings, the difference between the original sum invested and the final value of income or capital growth, given as a percentage. For shares, the overall investment performance based on the movement in the price of the shares (gain or loss) and the dividend income from the shares. See also rate of return.
return on capital employed (ROCE)
Usually calculated as pre-tax profit divided by capital employed (total assets minus current liabilities), expressed as a percentage. Indicates how efficiently a company's management uses its assets to generate profits over a period of time.
return on equity
The return on equity calculation is based on operating return after tax attributable to ordinary shareholders expressed as a percentage of weighted average ordinary shareholders’ equity.
hg0080.com皇冠The acquisition of a stock market-listed company by a private company or, more generally, a smaller company buying a larger one. See also takeover.
See regular bonus.
hg0080.com皇冠An invitation from a company to their existing shareholders to buy new shares, usually for less than the prevailing share price, to raise additional capital. See also vendor placing.
ring fenced funds (RFF)
RFF are arrangements where assets and liabilities are ring-fenced and form an identifiable unit in the same manner as though the RFF were a separate undertaking. This arises where assets are earmarked or allocated to meeting specific liabilities to the exclusion of other liabilities or losses. In the case of a RFF there is a lack of transferability of assets that are included in calculating the excess of assets over liabilities within the insurance or reinsurance undertaking.
The measurable probability of loss or less-than-expected returns from an investment, asset or business activity.
Adjusting profits earned and investment returns by how much risk is involved in producing that return or profit.
hg0080.com皇冠Capital allocated by a company to cover risks arising from the nature of its business and the markets in which it operates, based on an assessment of those risks and the likelihood of adverse developments. For example, banks may be required to set aside capital to cover their exposure to the risk of customers defaulting on the repayment of loans.
The amount an insurance company would require, in excess of best estimate liabilities, in order to take over and meet the whole portfolio of insurance and reinsurance obligations. It reflects the cost of providing capital equal to the Solvency II capital requirement for non-hedgeable risks necessary to support the insurance obligations over their lifetime. Risk Margin represents the value of deviation risk of the actual outcome compared with the best estimate, expressed in terms of a defined risk measure.
See regulatory news service.
hg0080.com皇冠The process of managing accounts and settling claims for an insurance business or investment fund that has stopped accepting new risks or has been closed to new business. It can also be a termination condition of a reinsurance contract that the reinsurer remains liable for losses after the contract ends until policies in force at the time have been "run off", either for a specified period or until they have expired.
savings and loan association (S&L)
Organisationhg0080.com皇冠 that provides funds for house purchase. American equivalent of a building society.
The payment of dividends in the form of extra shares, rather than cash. The advantage to the company is that cash resources are retained while the shareholder gets more shares at no cost. The disadvantage is that it increases the amount of stock and can therefore dilute earnings.
A free issue of new shares to existing shareholders in proportion to their holdings. Can make shares more attractive to investors because there are more of them at a lower price. Also known as stock split, capitalisationhg0080.com皇冠 issue or bonus issue.
Part of a market or industry whose components share similar characteristics. Stocks are often grouped into sectors, such as banks, beverages, construction, engineering, food, healthcare, insurance, leisure, media, oil and gas, pharmaceuticals, real estate, technology, transport and utilities.
hg0080.com皇冠General term for financial instruments traded on a stock exchange, such as stocks and shares, and the notes, certificates and bearer warrants that signify ownership of them.
Securities and Exchange Commission (SEC)
hg0080.com皇冠Created in 1934, the SEC is empowered to issue regulations and to enforce provisions of the federal securities laws and its own regulations, including regulations governing the disclosure of information in connection with securities being offered for sale of the public. The SEC is also responsible for regulating the activities of securities traders. The SEC sees that investors are fully informed about securities being offered for sale and prevents misrepresentations, deceit and other types of fraud involved with securities transactions.
This is the process by which a financial instrument is created based on pooling various types of contractual debt assets together as a packaged product. That pool of assets is then divided up into different risk tranches (or sections) depending on the risk of default or non-payment from the assets.
hg0080.com皇冠An analyst employed by a brokerage firm or other business that manages client accounts. See also analyst.
Completion, or the date on which the money for a transaction changes hands.
Common term for equity. Specifically, a certificate conferring ownership rights in a company. Ordinary shares (or common stock) provide voting rights at company meetings and entitle the holder to a proportional share of the profits. Only listed companies (in the US called corporations) issue shares. Other types, such as sole ownerships or limited partnerships, do not. See also stock.
hg0080.com皇冠How a company distributes its profits to its shareholders, who receive a set amount for each share that they own. See dividend.
hg0080.com皇冠Someone who owns shares or stock in a company or mutual fund. Shareholders also have the right to declared dividends and the right to vote on company matters, including the board of directors. Also called stockholder.
hg0080.com皇冠Shareholders' funds represent the assets that remain once all a company's liabilities have been accounted for. This also equates to the capital of the company, plus any profits that have been retained by the business.
share price discounts
Investment trust shares normally sell at a discount to (ie, at a price lower than) the value of the underlying assets attributable to each share. When times are tough these discounts may widen, so the share price falls faster than the underlying assets.
hg0080.com皇冠Investors are short if they have sold shares they do not possess, in the hope of buying them later at a lower price to make a profit. See also long.
Abbreviation for Société d'investissement à capital variable (variable capital investment company). An open-ended investment fund similar to an Oeichg0080.com皇冠 in the UK, structured as a legally independent joint stock company. Units are issued in the form of shares.
hg0080.com皇冠An accounting method by which transactions are recorded as either a credit or debit. Generally suitable for small companies with simple financial statements. See also double-entry bookkeeping.
A single lump sum is paid by the policyholder at the start of the contract.
socially responsible investment (SRI)
A policy of investing in companies or funds that demonstrate best practice in social, environmental and corporate governance. Examples include environmentally friendly or "green" funds, and sectors such as hospitals and education. Depending on the criteria used, it might entail avoiding such industries as alcohol, firearms, tobacco and chemical pollutants. Some institutional shareholders use their investment muscle to influence companies in which they invest to promote improved standards of business conduct.
Solvency Capital Requirement (SCR)
The SCR is the amount of capital the regulator requires an insurer to hold to meet the requirements under the Solvency II regulatory framework. Firms may use their own internal model, the European Insurance and Occupational Pensions Authority (EIOPA) prescribed standard formula or a partial internal model to determine SCR.
hg0080.com皇冠These are insurance regulations designed to harmonise EU insurance regulation. Primarily this concerns the amount of capital that European insurance companies must hold under a measure of capital and risk. Solvency II became effective from 1 January 2016.
Solvency II cover ratio (Regulatory view)
Own funds divided by the Solvency Capital Requirement (SCR), as calculated on a regulatory basis.
Solvency II cover ratio (Shareholder view)
Own funds divided by the Solvency Capital Requirement (SCR), as calculated on a shareholder view. The shareholder view excludes the contribution to Group SCR and Group own funds of fully ring fenced with-profits funds and staff pension schemes in surplus – these exclusions have no impact on Solvency II surplus. The shareholder view also includes a notional reset of the transitional measure on technical provisions and pro forma adjustments to reflect known or highly likely events materially affecting the Group’s solvency position post balance sheet date.
Solvency II Directive
Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 which was subsequently amended by Directive 2014/51/EU of the European Parliament and of the Council of 16 April 2014 (the so-called “Omnibus II Directive"). This Directive lays down rules concerning the following:
(1) the taking-up and pursuit, within the Community, of the self- employed activities of direct insurance and reinsurance;
hg0080.com皇冠(2) the supervision of insurance and reinsurance groups;
(3) the reorganisation and winding-up of direct insurance undertakings.
Solvency II Operating Capital Generation (OCG)
OCG is the Solvency II surplus movement in the period due to operating items including the impact of new business, expected investment returns on existing business, operating variances, non-economic assumption changes and non-recurring capital actions. It excludes economic variances, economic assumption changes and integration and restructuring costs.
Solvency II Own Funds impact of new business
hg0080.com皇冠The change in own funds resulting from new business written in the period.
Solvency II Regulation
hg0080.com皇冠The directly applicable EU Regulations adopted in accordance with the Solvency II Directive.
Solvency II regulatory framework
The PRA Rulebook - Solvency II Firms and associated guidance, PRA Supervisory Statements, Solvency II Regulations, EIOPA Guidelines.
Solvency II surplus
Own funds less the SCR. Holding capital in excess of the SCR demonstrates an insurer has adequate financial resources in place to meet all its liabilities as and when they fall due and that there is sufficient capital to absorb significant losses.
Solvency II surplus impact of new business
The change in Solvency II surplus resulting from new business written in the period.
special purpose vehicle
Any undertaking, whether incorporated or not, other than an existing insurance or reinsurance undertaking, which assumes risks from insurance or reinsurance undertakings and which fully funds its exposure to such risks through the proceeds of a debt issuance or any other financing mechanism where the repayment rights of the providers of such debt or financing mechanism are subordinated to the reinsurance obligations of such an undertaking.
split capital trust
An investment trust that offers different types of share, typically to provide either income or capital growth. Income shares entitle the holder to dividends paid during the lifetime of the trust and a predetermined amount of any capital increase. Holders of capital shares benefit from capital gains but receive little or no income. The aim is to provide investors with the flexibility to choose the mix of shares that best suits their requirements.
The current cash price of a commodity.
The trading of commodities at the "spot" or current cash price. When a commodity is bought for cash, the ownership passes to the buyer along with the holding costs until the commodity is used or resold.
hg0080.com皇冠See bid/offer spread.
The spread margin represents the return made on the Group’s annuity and other non-linked business, based on the expected investment return, less amounts credited to policyholders.
Someone who subscribes for a new share issue in the hope of selling at a profit immediately dealing starts.
Any individual or organisation with an interest in a company. Also, stakeholder pensions were introduced in the UK in April 2001 as an affordable, tax-efficient way for people to save for retirement.
Low-cost and flexible pension plans available in the UK, governed by specific regulations.
hg0080.com皇冠The UK tax on the buying of shares and other assets, such as houses.
Standard & Poor’s index
US stock market benchmark comprising 500 shares in various industry sectors.
standard of living
Financial well-being, often measured by gross national income per capitahg0080.com皇冠 (the average earnings for each person in the country). One drawback is that this does not take into account factors such as the crime rate, social and environmental issues.
state earnings related pension scheme (Serps)
UK retirement savings scheme. Employees contribute through National Insurance payments, and the amount of benefit depends on earnings and the amount of National Insurance contributions paid.
The accounts that every public limited company is required by law to produce.
The valuation basis and approach used for reporting financial statements to local regulators.
hg0080.com皇冠Often used as an alternative word for share, especially in the US. However, it can refer specifically to fixed-interest investments, such as bonds and gilt-edged stocks, which represent a loan to the issuer, rather than shares, which signify part ownership of a company.
hg0080.com皇冠Person or firm that arranges the buying and selling of shares and other securities.
A marketplace where stocks and shares and other financial instruments can be traded. Most major financial centres - examples include London, New York, Paris, Hong Kong and Tokyo - have their own stock exchange with a centralised dealing system and strict operating rules and regulations.
Stock Exchange Automated Quotations system (SEAQ)
The computer trading system for UK stocks and shares, which shows prices for buying and selling shares and volumes traded. SEAQ was introduced as part of "Big Bang" in 1986.
See stock exchange.
subordinated debt, loan or security
Subordinated debt is debt that ranks after other debts and is therefore eligible, in some circumstances, to be recognisedhg0080.com皇冠 as capital by regulators and rating agencies. For instance, subordinated debt ranks below other senior debt in order of priority for repayment if the issuer is liquidated. Holders are compensated for the added risk through higher rates of interest.
A type of mortgage for borrowers with a low credit rating or poor credit history because, for example, they have defaulted on previous loans or been bankrupt. Lenders generally charge a higher rate of interest on subprime loans because of the greater risks involved.
The lump sum benefit payable under an insurance policy or contract in circumstances defined within the policy (usually it represents an amount payable on death).
The act of cancelling or cashing in the proceeds of an insurance contract before it becomes payable or reaches its maturity date for a surrender value.
The amount of money payable on cancellation ("surrender") of a policy with an investment element, before the benefit becomes payable (normally on death or maturity). Surrender values will depend on premiums paid and time elapsed.
Unique abbreviations used to identify different companies traded on a stock exchange. For example, Avivahg0080.com皇冠 is represented by "AV." in London. Sometimes called a "ticker symbol" after the electronic display (or "ticker") which shows the price for each successive trade on an exchange, the trading volume and the share symbol.
Where one company bids for the shares of another and seeks to persuade the shareholders of the target company to accept the offer. It is called a "hostile bid" when the directors of the target do not recommend acceptance of the offer. See also reverse takeover.
Legal arrangements made by an organisationhg0080.com皇冠 or individual to reduce the amount of tax they pay. The illegal method is called tax evasion.
The annual accounting period, also known as the fiscal year or the financial year.
Launched in November 1999, techMARKhg0080.com皇冠 is the London Stock Exchange's international market for shares in technology companies. Members range from established multinationals to small start-up businesses and represent a variety of industries.
hg0080.com皇冠Amounts set aside on the basis of actuarial calculations to meet obligations to policyholders.
hg0080.com皇冠The insurance profit of life, pensions and general insurance business. Measures performance in the core businesses.
See final bonus.
A simple form of life insurance, offering cover over a fixed number of years during which a lump sum will be paid out if the life insured dies within the specified time period.
hg0080.com皇冠An investment strategy that begins with overall economic conditions before narrowing down to markets and industries, and then companies in those sectors that are expected to perform well. Analysis of the individual stock is the final step. Opposite of bottom up.
Total return is the change in value of an investment over a given period, including income from dividends and interest, as well as any capital gains or losses, expressed as a percentage of the initial investment.
total shareholder return
A measure of company performance based on the overall value to shareholders of their investment in a stock over a given period of time. TSR includes movement in the share price and dividends paid and reinvested, expressed as a percentage of the initial value of the investment or share price at the beginning of the period.
An investment fund which aims to replicate the performance of a selected market index. See index tracking.
The amount of money a person can move from one pension scheme to another.
transitional measures on technical provisions (TMTP)
TMTP is an adjustment to Solvency II technical provisions to bring them into line with the pre-Solvency II equivalent as at 1 January 2016 when the regulatory basis changed, to smooth the introduction of the new regime. This will decrease linearly over the 16 years following Solvency II implementation but may be recalculated to allow for material changes to the risk profile of the relevant business, subject to agreement with the regulator. TMTP may also be recalculated every 24 months if considered appropriate by the firm or at the request of the regulator.
hg0080.com皇冠Loan or debt securities issued by a government to help pay for its financial needs. Investors receive a guaranteed return over a fixed period. In the USA, treasury bills (also known as T-bills) are short-term securities issued for up to one year. They are sold at a discount, the difference between the purchase price and the face value representing the holder's profit at the end of the term. Treasury notes (T-notes) have a term of between one and 10 years, and pay a fixed rate of interest. Treasury bonds (T-bonds) also pay a fixed rate of interest and are long-term securities issued with a term of more than 10 years. The UK government issues short-term treasury bills and longer-term treasury bonds, usually known as gilt-edged securities.
A legal arrangement where one or more people are appointed to look after property or investments on behalf of someone else (the beneficiary). The trustees are legally responsible for how the assets are managed. Trusts can be used to look after company pension schemes and individual portfolios. Sometimes they are used as a means of protecting funds, such as an inheritance, until the beneficiary reaches a certain age.
hg0080.com皇冠Someone appointed to hold or administer assets for the benefit of other people.
UK Corporate Governance Code "The Code"
hg0080.com皇冠The code sets out guidance in the form of principles and provisions on how companies should be directed and controlled to follow good governance practice.
hg0080.com皇冠A term for funds held usually by financial institutions that have been left untouched by their owners for a considerable period of time. Unclaimed assets include dormant bank accounts, forgotten life insurance policies, surplus funds from payouts that remain unclaimed, unredeemed bonds and savings certificates, lost shares, abandoned dividends, and even unclaimed lottery winnings. Some countries have rules and regulations that govern what may be done with unclaimed assets, including whether they may be put to productive use by the business that holds them. Also known as orphan assets. Not to be confused with inherited (or "orphan") estate.
undertakings for collective investment in transferable securities (UCITS)
UCITS are pooled investment funds that may be sold across national borders within the European Union. They can invest in a range of shares, bonds, money market instruments, bank deposits, derivatives and units in other investment funds, subject to certain restrictions.
hg0080.com皇冠To have a smaller proportion of a fund or share portfolio in one type of investment or sector than the market benchmark or average. The opposite of "overweight".
Someone willing to assume an insurance risk in exchange for payment of a premium. The term derives from the practice of the person who accepted the risk signing their name under the amount they insured (thereby entering into a contract).
The process of selecting which risks an insurance company can cover, and deciding the premiums and terms of acceptance. On the stock exchange, an arrangement by which a company is guaranteed that an issue of shares will raise a given amount of money, because the underwriters promise to buy any of the issue not taken up by the public.
hg0080.com皇冠The underwriting margin represents the release of reserves held to cover claims, surrenders and administrative expenses less the cost of actual claims and surrenders in the period.
The difference between insurance premiums earned and claims and expenses paid over a given period. If premiums are the higher figure, there is an underwriting profit; if they are lower, there is an underwriting loss. Underwriting profit excludes investment income, so is a commonly used method of evaluating the performance of a general insurance company. See also combined operating ratio.
The profit or loss from general insurance and health activities, excluding investment performance. It is calculated as net earned premiums less net insurance claims, commission and expenses.
Money not earned by working. Excludes wages, salaries, bonuses, tips and other employee remuneration. Includes dividends from shares, interest on savings, investment income, capital gains, rental fees, royalties, pensions and social security benefits. It can also be payments received in advance for work that has not yet been carried out.
Premiums received by an insurer relating to cover provided outside the current accounting period. Such premiums are not normally treated as income until they have been "earned" during the period to which they relate.
hg0080.com皇冠Investment policy under which contributions are used to buy units in a chosen investment fund. See unit linked.
hg0080.com皇冠A unitised investment contract where the unit price increases daily in line with a declared bonus rate. The unit price is guaranteed not to fall (and may even be guaranteed to grow at a particular rate) and therefore the unit price is not directly related to the value of the assets in the fund.
A type of long-term savings plan where premiums are used to buy units in an investment fund, such as a unit trust. The assets in the fund can be a mix of stocks, shares, bonds, property or other securities. The value of the units and the return from them can fluctuate in line with the investment performance of the assets in the fund, and there is no guarantee on the amount of capital that will be returned.
hg0080.com皇冠The unit-linked margin represents the annual management charges on unit-linked business based on expected investment return.
A form of open ended collective investment constituted under a trust deed, in which investors can buy and sell units.
A notional profit or loss that has not yet been achieved through a transaction. The profit or loss is "realised" when the investor sells the security or asset in question. Unrealised gains are usually not taxable.
hg0080.com皇冠A basic service supplied to the public, such as water, electricity, gas, and sometimes telecommunications or transport.
value of new business (VNB)
A measure of the value created by writing new business. Value of new business is Aviva’s key measure of profitability of sales, and reflects the value of future cash flows arising from these sales.
An interest rate that fluctuates or is periodically reset.
hg0080.com皇冠When a company issues new shares to the market generally, rather than only to its present shareholders, the issue is called a vendor placing. This type of issue can be a quick way of raising money for a company without relying on the original shareholders to provide the cash. See also rights issue.
hg0080.com皇冠A specialist form of high-risk financing provided for small, new companies by speculative investors.
The variable amount by which a share price or market value rises and falls during a period of time. If it moves up and down rapidly or unpredictably, it has high volatility; if it is more stable or rarely changes, it has low volatility.
A reduction to Solvency II technical provisions to reflect temporary distortions in spreads caused by illiquidity in the market or extreme widening of credit spreads. The volatility adjustment reduces technical provisions by increasing the discount rate used to calculate the best estimate liability. Volatility adjustments are prescribed by EIOPA on a currency and country basis.
hg0080.com皇冠The total number of shares traded (bought and sold) in a given period.
The winding up of a company by special resolution, not one imposed by a court.
Financial district of New York; the American equivalent of the City of London. Used as shorthand for the US financial markets.
hg0080.com皇冠A tradable security that gives the holder the right to buy a share or bond at a fixed price on a future date. Similar to options.
A company or individual who rescues another company in financial difficulties, or saves a takeover target from an unwanted bidder by making a counter-bid.
whole life insurance
A protection policy that remains in force for the insured’s whole life with a lump sum paid out on death. Traditional whole life contracts have fixed premium payments that typically cannot be missed without lapsing the policy. Flexible whole life contracts allow the policyholder to vary the premium and/or amount of life cover, within certain limits.
hg0080.com皇冠Free shares, typically used as an incentive to persuade the members of a mutual business to vote in favour of conversion to a public limited company. The shares are compensation for the loss of membership. People who try to become members because they think a mutual organisation is looking to convert are known as carpetbaggers.
wireless application protocol (Wap)
Technology that enables mobile phones to access data on the internet, such as share prices.
hg0080.com皇冠Tax deducted from dividends paid in some countries to non-residents. Individual can claim it back under certain conditions.
A type of investment plan sold in the UK in which extra amounts may be added to the main benefit (known as the sum assured) to reflect profits earned during the course of the contract. Regular or "reversionary" bonuses may be added, usually each year, and once declared are guaranteed. A final or "terminal" bonus may be added when the policy becomes payable. With-profit funds are typically invested in a mixture of equities, property and fixed income investments. Under poor stock market conditions a “market value adjustment" (MVA) may be applied to the value of the policy if it is surrendered before the maturity date.
An agency for channelling aid funds to developing member countries of the International Monetary Fund who might otherwise have difficulty raising capital for major infrastructure projects. Full name is the International Bank for Reconstruction and Development. See Bretton Woods.
World Trade Organisation (WTO)
An international organisation that deals with the rules of trade between countries, with the objective of helping producers, suppliers, importers and exporters conduct their business. Its activities are based upon WTO agreements signed by the majority of the world’s trading nations and ratified in their parliaments. Successor organisation to the General Agreement on Tariffs and Trade (Gatt).
hg0080.com皇冠An account in which a broker or fund manager executes investment decisions on behalf of a client in exchange for a single quarterly or annual fee, usually based on the total assets in the account rather than the number of transactions. Sometimes includes “fund of funds”.
To reduce the value of an asset or holding on the balance sheet to reflect its current market value. An accounting action sometimes used to reflect the effect of depreciation on the book value of an asset.
To cancel a debt, or to acknowledge the loss or worthlessness of an asset. Also to remove an asset or holding entirely from a balance sheet. The reduction in value, or loss, is said to be "written off".
An abbreviation used to signal that a share is trading ex-dividend.
A type of investment denominated in dollars and issued in the US by foreign companies, banks and governments.
hg0080.com皇冠Another name for a London Stock Exchange publication, Admission of Securities to Listing, which sets out the rules for companies that wish to be quoted on the exchange.
The yellow band on a stock market price display screen which displays the current prices for a security. They are sometimes referred to as the "yellow strip" or "touch" prices.
Rate of return on an investment in percentage terms, taking into account annual income and any change in capital value. Also the dividend payable on a share expressed as a percentage of the market price.
yield to maturity (YTM)
hg0080.com皇冠Yield to maturity is the rate of return expected if a bond or other dated investment is held for the full term of the contract, or until the maturity date.
Abbreviation for "year to date". Usually means the period starting 1 January of the current year and ending today.
zero coupon bond
A bond that does not pay interest and matures at face value. It provides an investment return normally by being bought at a discounted price.
zero dividend preference share
A share that pays no, or "zero", dividends. Instead, it is bought at one price and redeemed later for a higher price agreed in advance.
An event that would be expected to occur once every 200 years.