Operating Profit vs IFRS Profit

UK life insurers (Aviva, Legal & General, Phoenix Group, M&G, Prudential and others) publish two distinct profit figures each year. They aren't competing answers — one is a management lens on the other.

	Operating profit	IFRS profit
Nature	Non-GAAP "Alternative Performance Measure," company-defined	Statutory bottom-line profit under IFRS accounting standards
Purpose	Shows underlying, normalised trading performance	Legal/statutory result — audited, underpins dividends
Volatility	Smoothed — deliberately strips out short-term noise	Much more volatile, year to year
Investment returns	Based on expected / longer-term return assumptions	Based on actual returns, marked to market

Excluded from operating profit, included in IFRS profit

Short-term investment variances — actual vs. expected return on assets backing liabilities
Economic assumption changes — rate, spread and inflation moves on liabilities and unmatched assets
Non-operating items — restructuring, integration costs, goodwill/intangible impairments
Disposals and acquisitions — gains or losses on business transactions
Amortisation of acquired intangibles
One-off tax effects or policyholder tax adjustments

The relationship in practice

Operating profit is a smoothed subset of IFRS profit — the results announcement always carries a reconciling table between the two.
In any single year the two can diverge sharply, especially when rates or credit spreads move — IFRS profit swings with market marks; operating profit doesn't.
Over the long run, cumulative operating profit plus cumulative non-operating items should broadly converge with cumulative IFRS profit.
Management treats operating profit as the "signal" — what's guided on and remunerated against — and IFRS profit as the audited "actual."