(i) Analysis of insurance contract liabilities
(Download XLS:)  |
|
|
Notes |
Gross |
Reinsurance |
Gross |
Reinsurance | ||
|---|---|---|---|---|---|---|---|
| |||||||
|
Participating insurance contracts |
9,404 |
(1) |
9,384 |
(1) | |||
|
Non-participating insurance contracts1 |
28,353 |
(1,902) |
25,582 |
(1,847) | |||
|
General insurance contracts |
230 |
(9) |
259 |
(11) | |||
|
Insurance contract liabilities |
|
37,987 |
(1,912) |
35,225 |
(1,859) | ||
(ii) Expected insurance contract liability cash flows
| (Download XLS:) |
|
|
Date of undiscounted cash flow |
|
| |||||
|---|---|---|---|---|---|---|---|---|
|
As at 31 December 2009 |
0-5 |
5-15 |
15-25 |
Over |
Total |
Carrying | ||
| ||||||||
|
Participating insurance contracts |
5,807 |
3,949 |
1,152 |
462 |
11,370 |
9,404 | ||
|
Non-participating insurance contracts |
8,450 |
14,047 |
12,128 |
15,026 |
49,651 |
19,029 | ||
|
General insurance contracts1 |
110 |
– |
– |
– |
110 |
110 | ||
|
Insurance contract liabilities |
14,367 |
17,996 |
13,280 |
15,488 |
61,131 |
28,543 | ||
|
|
|
|
|
|
|
| ||
|
|
Date of undiscounted cash flow |
|
| |||||
|
As at 31 December 2008 |
0-5 |
5-15 |
15-25 |
Over |
Total |
Carrying | ||
|
Life and pensions participating insurance contracts |
5,849 |
3,757 |
867 |
326 |
10,799 |
9,384 | ||
|
Life and pensions non-participating insurance contracts |
8,148 |
13,360 |
11,559 |
14,334 |
47,401 |
17,695 | ||
|
General insurance contracts1 |
128 |
– |
– |
– |
128 |
128 | ||
|
Insurance contract liabilities |
14,125 |
17,117 |
12,426 |
14,660 |
58,328 |
27,207 | ||
Insurance contract undiscounted cash flows are based on the expected date of settlement.
Amounts under unit linked contracts are generally repayable on demand and the Group is responsible for ensuring there is sufficient liquidity within the asset portfolio to enable liabilities to unit linked policyholders to be met as they fall due. However, the terms of funds investing in less liquid assets permit the deferral of redemptions for predefined periods in circumstances where there are not sufficient liquid assets within the fund to meet the level of requested redemptions. Accordingly, unit linked liabilities have been excluded from the table.
(iii) Movement in participating insurance contract liabilities
| (Download XLS:) |
|
|
Notes |
Gross |
Reinsurance |
Gross |
Reinsurance |
|---|---|---|---|---|---|
|
As at 1 January |
|
9,384 |
(1) |
11,663 |
(1) |
|
New liabilities in the year |
|
658 |
– |
333 |
– |
|
Liabilities discharged in the year |
|
(1,157) |
– |
(1,628) |
– |
|
Unwinding of discount rates |
|
92 |
– |
383 |
– |
|
Effect of change in non-economic assumptions |
48 |
– |
58 |
– | |
|
Effect of change in economic assumptions |
430 |
– |
(1,348) |
– | |
|
Other |
|
(51) |
– |
(77) |
– |
|
As at 31 December |
|
9,404 |
(1) |
9,384 |
(1) |
|
Expected to be settled within 12 months |
|
1,366 |
|
1,522 |
|
|
Expected to be settled after 12 months |
|
8,037 |
|
7,861 |
|
(iv) Movement in non-participating insurance contract liabilities
| (Download XLS:) |
|
|
Notes |
Gross |
Reinsurance |
Gross |
Reinsurance | ||
|---|---|---|---|---|---|---|---|
| |||||||
|
As at 1 January |
|
25,582 |
(1,847) |
22,568 |
(1,302) | ||
|
New liabilities in the year |
|
2,339 |
(312) |
3,020 |
(262) | ||
|
Liabilities discharged in the year |
|
(2,004) |
136 |
(1,493) |
79 | ||
|
Unwinding of discount rates |
|
1,233 |
(103) |
1,022 |
(88) | ||
|
Effect of change in non-economic assumptions |
(319) |
188 |
(87) |
121 | |||
|
Effect of change in economic assumptions1 |
1,871 |
(2) |
(1,366) |
(26) | |||
|
Foreign exchange adjustments |
|
(363) |
33 |
946 |
(82) | ||
|
Acquisitions |
|
– |
– |
1,172 |
(286) | ||
|
Other |
|
14 |
5 |
(200) |
(1) | ||
|
As at 31 December |
|
28,353 |
(1,902) |
25,582 |
(1,847) | ||
|
Expected to be settled within 12 months |
|
1,927 |
|
751 |
| ||
|
Expected to be settled after 12 months |
|
24,524 |
|
22,984 |
| ||
In 2008, the Effect of changes in economic assumptions includes the impact arising from the prevailing interest rate environment and increased credit spreads reducing liabilities, partially offset by £650m of additional reserves for non profit annuity credit default.
(v) Analysis of General insurance contract liabilities
| (Download XLS:) |
|
|
Gross |
Reinsurance |
Gross |
Reinsurance |
|---|---|---|---|---|
|
Outstanding claims |
87 |
(3) |
99 |
(4) |
|
Claims incurred but not reported |
23 |
– |
29 |
– |
|
Unearned premiums |
120 |
(6) |
131 |
(7) |
|
General insurance contract liabilities |
230 |
(9) |
259 |
(11) |
(vi) Movement in General insurance claim liabilities
| (Download XLS:) |
|
|
Gross |
Reinsurance |
Gross |
Reinsurance |
|---|---|---|---|---|
|
As at 1 January |
128 |
(4) |
172 |
(12) |
|
Claims arising |
188 |
(1) |
231 |
(4) |
|
Claims paid |
(177) |
2 |
(235) |
6 |
|
Adjustments to prior year liabilities |
(29) |
– |
(40) |
6 |
|
As at 31 December |
110 |
(3) |
128 |
(4) |
|
Expected to be settled within 12 months |
79 |
|
88 |
|
|
Expected to be settled after 12 months |
28 |
|
36 |
|
(vii) Unearned premiums
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|
|
Gross |
Reinsurance |
Gross |
Reinsurance |
|---|---|---|---|---|
|
As at 1 January |
131 |
(7) |
133 |
(7) |
|
Earned in the period |
(131) |
7 |
(133) |
7 |
|
Gross written premiums in respect of future periods |
120 |
(6) |
131 |
(7) |
|
As at 31 December |
120 |
(6) |
131 |
(7) |
|
Expected to be earned within 12 months |
114 |
|
124 |
|
|
Expected to be earned after 12 months |
– |
|
|
(viii) Claims development – General insurance
Changes may occur in the amount of the Group’s obligations at the end of a contract period. The top section of the following two tables illustrates how the estimate of total claims outstanding for each accident year developed over time. The bottom section of the tables reconciles the cumulative claims to the amount appearing in the balance sheet.
| (Download XLS:) |
|
Gross of reinsurance |
|
|
|
|
|
|
|---|---|---|---|---|---|---|
|
Accident year |
2005 |
2006 |
2007 |
2008 |
2009 |
Total |
|
Estimate of ultimate claims costs: |
|
|
|
|
|
|
|
– At end of accident year |
209 |
205 |
294 |
191 |
164 |
1,063 |
|
– One year later |
195 |
192 |
277 |
189 |
– |
853 |
|
– Two years later |
191 |
192 |
276 |
– |
– |
659 |
|
– Three years later |
191 |
190 |
– |
– |
– |
381 |
|
– Four years later |
190 |
– |
– |
– |
– |
190 |
|
Estimate of cumulative claims |
190 |
190 |
276 |
189 |
164 |
1,009 |
|
Cumulative payments |
(185) |
(183) |
(271) |
(176) |
(90) |
(905) |
|
Outstanding claims provision |
5 |
7 |
5 |
13 |
74 |
104 |
|
Prior period outstanding claims |
|
|
|
|
|
2 |
|
Claims handling provision |
|
|
|
|
|
4 |
|
Total claims liabilities |
|
|
|
|
|
110 |
|
|
|
|
|
|
|
|
|
Net of reinsurance |
|
|
|
|
|
|
|
Accident year |
2005 |
2006 |
2007 |
2008 |
2009 |
Total |
|
Estimate of ultimate claims costs: |
|
|
|
|
|
|
|
– At end of accident year |
205 |
200 |
280 |
189 |
162 |
1,036 |
|
– One year later |
193 |
188 |
267 |
188 |
– |
836 |
|
– Two years later |
189 |
189 |
265 |
– |
– |
643 |
|
– Three years later |
189 |
186 |
– |
– |
– |
375 |
|
– Four years later |
187 |
– |
– |
– |
– |
187 |
|
Estimate of cumulative claims |
187 |
186 |
265 |
188 |
162 |
988 |
|
Cumulative payments |
(184) |
(180) |
(262) |
(176) |
(89) |
(891) |
|
Outstanding claims provision |
3 |
6 |
3 |
12 |
73 |
97 |
|
Prior period outstanding claims |
|
|
|
|
|
7 |
|
Claims handling provision |
|
|
|
|
|
3 |
|
Total claims liabilities |
|
|
|
|
|
107 |
