IFRS condensed financial statements
A8 - Insurance liabilities
(a) Carrying amount
Insurance liabilities at 30 June/31 December comprise:
| 30 June 2009 | 30 June 2008 | 31 December 2008 | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Long-term
business £m |
General
insurance
and health £m |
Total £m |
Long-term
business £m |
General
insurance
and health £m |
Total £m |
Long-term
business £m |
General
insurance
and health £m |
Total £m |
|
| Long-term business provisions | |||||||||
| Participating | 61,230 | - | 61,230 | 64,563 | - | 64,563 | 66,863 | - | 66,863 |
| Unit-linked non-participating | 20,284 | - | 20,284 | 21,948 | - | 21,948 | 22,060 | - | 22,060 |
| Other non-participating | 62,586 | - | 62,586 | 52,266 | - | 52,266 | 67,265 | - | 67,265 |
| 144,100 | - | 144,100 | 138,777 | - | 138,777 | 156,188 | - | 156,188 | |
| Outstanding claims provisions | 1,105 | 9,948 | 11,053 | 916 | 10,778 | 11,694 | 907 | 11,842 | 12,749 |
| Provision for claims incurred but not reported | - | 2,710 | 2,710 | - | 2,043 | 2,043 | - | 2,518 | 2,518 |
| 1,105 | 12,658 | 13,763 | 916 | 12,821 | 13,737 | 907 | 14,360 | 15,267 | |
| Provision for unearned premiums | - | 5,220 | 5,220 | - | 5,760 | 5,760 | - | 5,493 | 5,493 |
| Provision arising from liability adequacy tests | - | 11 | 11 | - | 33 | 33 | - | 13 | 13 |
| Other technical provisions | - | - | - | 2,195 | 8 | 2,203 | - | - | - |
| Total | 145,205 | 17,889 | 163,094 | 141,888 | 18,622 | 160,510 | 157,095 | 19,866 | 176,961 |
| Less: Obligations to staff pension schemes transferred to provisions | (1,234) | - | (1,234) | (1,109) | - | (1,109) | (1,402) | - | (1,402) |
| Amounts classified as held for sale | (85) | - | (85) | (3,854) | (954) | (4,808) | - | (709) | (709) |
| 143,886 | 17,889 | 161,775 | 136,925 | 17,668 | 154,593 | 155,693 | 19,157 | 174,850 | |
(b) Movements in long-term business liabilities
The following movements have occurred in the long-term business provisions during the period
| 6 months 2009 £m |
6 months 2008 £m |
Full year 2008 £m |
|
|---|---|---|---|
| Carrying amount at 1 January | 156,188 | 135,312 | 135,312 |
| Provisions in respect of new business | 6,425 | 6,288 | 13,414 |
| Expected change in existing business provisions | (3,268) | (2,920) | (6,423) |
| Variance between actual and expected experience | (765) | (4,918) | (9,401) |
| Effect of adjusting to PS06/14 realistic basis | - | - | (40) |
| Impact of other operating assumption changes | (128) | 23 | (812) |
| Impact of economic assumption changes | (2,562) | (1,607) | (604) |
| Other movements | 228 | (157) | (527) |
| Change in liability recognised as an expense | (70) | (3,291) | (4,393) |
| Effect of portfolio transfers, acquisitions and disposals | 35 | 2,129 | 1,872 |
| Foreign exchange rate movements | (12,053) | 4,627 | 23,397 |
| Carrying amount at 30 June/31 December | 144,100 | 138,777 | 156,188 |
(b) Movements in general insurance and health liabilities
The following changes have occurred in the general insurance and health claims provisions during the period:
| 6 months 2009 £m |
Restated 6 months 2008 £m |
Full year 2008 £m |
|
|---|---|---|---|
| Carrying amount at 1 January – reported | 14,360 | 13,142 | 12,941 |
| Prior year adjustment – impact of discounting on latent claims | - | (201) | - |
| Carrying amount at 1 January – restated | 14,360 | 12,941 | 12,941 |
| Impact of changes in assumptions | (72) | (5) | 120 |
| Claim losses and expenses incurred in the current year | 3,689 | 4,188 | 8,721 |
| Decrease in estimated claim losses and expenses incurred in prior years | (303) | (470) | (828) |
| Exceptional strengthening of general insurance latent claims provisions | - | - | 356 |
| Incurred claims losses and expenses | 3,314 | 3,713 | 8,369 |
| Less: | |||
| Payments made on claims incurred in the current year | (1,511) | (1,684) | (4,682) |
| Payments made on claims incurred in prior years | (2,254) | (2,627) | (4,307) |
| Recoveries on claim payments | 132 | 163 | 293 |
| Claims payments made in the year, net of recoveries | (3,633) | (4,148) | (8,696) |
| Unwind of discounting | 20 | 16 | 32 |
| Other movements in the claims provisions | 6 | - | (27) |
| Changes in claims reserve recognised as an expense | (293) | (419) | (322) |
| Effect of portfolio transfers, acquisitions and disposals | (655) | 16 | 128 |
| Foreign exchange rate movements | (754) | 283 | 1,613 |
| Carrying amount at 30 June/31 December | 12,658 | 12,821 | 14,360 |
(c) Movements in unearned premiums
The following changes have occurred in the provision for unearned premiums (UPR) during the period:
| 6 months 2009 £m |
6 months 2008 £m |
Full year 2008 £m |
|
|---|---|---|---|
| Carrying amount at 1 January | 5,493 | 5,484 | 5,484 |
| Premiums written during the year | 5,320 | 6,193 | 11,934 |
| Less: premiums earned during the year | (5,366) | (6,017) | (12,322) |
| Changes in UPR recognised as (income)/expense | (46) | 176 | (388) |
| Gross portfolio transfers and acquisitions | - | 34 | (11) |
| Foreign exchange rate movements | (227) | 66 | 408 |
| Carrying amount at 30 June/31 December | 5,220 | 5,760 | 5,493 |
