In this workout, we've been given some information on Generali's new business written in 2017 and 2018 and we've been asked to calculate the present value of their new business margin. Now, the information we've been given on the left is the present value of the new business premiums, PVNBP. And you can see that for 2018 that was 43.2 billion and 45.4 billion in 2017. So the present value of new business premiums was slightly low in 2018 than 2017. Now, on the right hand side we've been given the new business value of 1.9 billion and that's just another way of describing the present value of the profits from the new business. Now, to calculate the new business margin we're gonna need to take that new business value and divide it by the present value of the new business premiums. So let's calculate that now and we're gonna need to take some of the information from above and pop it into this table here. So we start off with the present value of new business premiums, which was 45.4 billion in 2017 and the amount in 2018 was 43.2 billion.

Now, the present value of new business, that was 1.8 billion in 2017 and 1.9 billion in 2018.

So we've got all the ingredients we need to calculate the new business margin. We simply need to take that present value of new business and divide it by the present value of new business premiums. So we'll do that for 2017 and also for 2018. And you can see that actually, although the present value of new business premiums is actually slightly lower in 2018, that new business was more profitable. The new business margin was 4.3% in 2018 compared with just 4% in 2017. So clearly that suggests they're writing more profitable business in 2018.