The FSA's new realistic reporting regime shows that Norwich Union's average risk capital margin coverage for its with-profits business is 2.63 – around the middle of life office figures.
Norwich Union says that under the new rules it has total assets of £4.3bn in excess of its liabilities across its CGNU Life, Culac and NUL&P funds.
The capital margin coverage figure is the factor by which a life office's assets exceed its potential risk in the event of stockmarket falls and is seen as replacing free-asset ratios as a more accurate resilience test.
Last week, Legal & General said its with-profits surplus was £1.03bn and its risk capital margin was covered 4.6 times. In March, Standard Life reported that its risk capital margin was covered two times.
Norwich Union says the vast majority of new business is going into the CGNU life fund, which has a risk capital margin coverage ratio of 3.05, and its Culac fund, where the coverage ratio is 4.71 per cent. The equity-backing ratio of these two funds is 65 per cent.
Norwich Union says it will publish its principles and practices of financial management at the end of April, setting out in detail what rules its with-profits funds will follow.
NU says under the realistic regime, surplus assets will fall for many mature funds but are likely to be more stable in future. It says younger funds with genuine free assets and fewer guarantees will continue to look strong in most environments.
Chief actuary Mike Urmston says: “Consumers and advisers should focus on the strength and resilience of the companies and the equity-backing ratio to judge the prospects for a new or existing with-profits policy.”