178 | Just Group PLC | Annual Report and Accounts 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
22. INSURANCE CONTRACTS AND RELATED REINSURANCE
31 December 2024 £m
31 December 2023 £m
Gross insurance liabilities Reinsurance contract assets Reinsurance contract liabilities Net reinsurance contracts
27,753
24,131
(2,067)
(1,143)
94
125
(1,973)
(1,018)
Net insurance liabilities
25,780
23,113
Insurance liabilities and reinsurance assets and liabilities include valuation of the Best estimate of the present value of future cash flows, the Risk adjustment for non-financial risk and the Contractual service margin. A summary of the movement in insurance liabilities and net reinsurance contracts is presented below.
Year ended 31 December 2024
Year ended 31 December 2023
Gross £m
Net reinsurance £m
Net £m
Gross £m
Net reinsurance £m
Net £m
Best estimate Risk adjustment
20,758
64
20,822
17,030
76
17,106
924
(592) (490)
332
674
(399) (332) (655)
275
CSM
2,449
1,959
1,943
1,611
Net opening balance
24,131
(1,018)
23,113
19,647
18,992
CSM recognised for services provided
(177)
23
(154)
(156)
27
(129)
CSM accretion
113 346
(30)
83
79
(12)
67
Other movements in the CSM Release from risk adjustment
94
440
583
(173)
410
(11)
4
(7) (5)
(11)
4
(7)
Other movements in risk adjustment
139
(144) (902)
261
(197)
64
Movements in best estimate
3,212
2,310
3,728
(12)
3,716
Net closing balance
27,753
(1,973)
25,780
24,131
(1,018)
23,113
Best estimate Risk adjustment
23,970
(838) (732) (403)
23,132
20,758
64
20,822
1,052 2,731
320
924
(592) (490)
332
CSM
2,328
2,449
1,959
Net closing balance
27,753
(1,973)
25,780
24,131
(1,018)
23,113
The detailed movements analysis of insurance liabilities and reinsurance assets and liabilities are presented in note 22(c) and (d) respectively. The movements include the CSM split between contracts under the Fair Value Approach (“FVA”) and other contracts, including those measured under the Fully Retrospective Approach (“FRA”) at transition to IFRS 17 and new contracts since transition to IFRS 17. (a) Terms and conditions of insurance and reinsurance contracts The Group’s long-term insurance contracts include Retirement Income (Defined Benefit, Guaranteed Income for Life, and Care Plans), and whole of life and term protection insurance. Although the process for the establishment of insurance liabilities follows specified rules and guidelines, the liabilities that result from the process remain uncertain. As a consequence of this uncertainty, the eventual value of claims could vary from the amounts provided to cover future claims. The estimation process used in determining insurance liabilities involves projecting future annuity payments and the cost of maintaining the contracts. The Group uses reinsurance as an integral part of its risk and capital management activities. New business is reinsured via longevity swap and quota share arrangements. The percentage of new business reinsured in 2024 is: • GIfL was reinsured using longevity swap reinsurance at 90%. • DB was reinsured using longevity swap reinsurance at c.90% for future cash flows excluding tax free cash. • One DB Partner transaction was executed in 2024 and was reinsured using both quota share (funded) reinsurance and longevity swap reinsurance at respectively 60% and 35% of the total risk. The funded reinsurance represented 17% of the total new business volume in 2024. In-force business is reinsured under longevity swap and quota share treaties.
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