The table below reports the breakdown of VIF for 2013 and 2012 into its components.

Breakdown of Value in-force as at 31 December 2013 and 2012 (€ mln)
  2013 2012
PVFP before Time Value of FG&O 19,35115,605
Time Value of FG&O -2,609-3,224
PVFP after Time Value of FG&O 16,742 12,381
Cost of capital -1,141 -1,253
Cost of NHR -1,141-1,775
Value in-force 14,4609,352

Compared with 2012, the significant increase of the present value of future profits (PVFP) before Time Value of FG&O (+34.4% on a comparable basis) is mainly explained by the more favourable year-end economic environment, with the recovery more evident in Italy and Spain, also on account of the narrowing of the local government bond spreads.
The higher reference rates, together with lower interest rate and equity volatilities, have a positive impact also on the Time Value of FG&O.
As a consequence, the PVFP after Time Value of FG&O increases from 12,381mln to 16,742mln (+48.6% on a comparable basis).

After the allowances for the cost of capital (impacted by the decrease of required capital on account of the better economic conditions) and the cost of non hedgeable risks (also driven by the exit of the business in the US), the VIF increases to 14,460mln (+72.1% on comparable basis).

The following table shows the expected run-off pattern of VIF emergence across future projection years, grouping discounted distributable profits into 5 year buckets. In particular, the table reports the contribution of each time-bucket’s profits to the total VIF at year-end 2013. The calculation has been performed considering distributable profits (i.e. including the release of required capital) generated by the value in-force and calculated according to a deterministic projection based on "real-world" best estimate assumptions.

Contribution of future years to VIF as at 31 December 2013
  Percentage of VIF Cumulated distribution
Years 1-5 44%44%
Years 6-10 25%69%
Years 11-15 14%83%
Years 16-20 7%90%
Years 21-25 4%95%
Years 26-30 2%97%
Years 31-onwards 3%100%

The profits emerging within the first 20 years of projection account for 90% of the overall VIF.

Assicurazioni Generali S.p.A. - C.F. e P.IVA 00079760328