Strategic Report Governance
Financial Statements
183
Liability for remaining coverage (restated 1 ) £m
Incurred claims (restated 1 ) £m
Total £m
Year ended 31 December 2023
Note
Opening insurance contract liabilities balance
19,720
(73)
19,647
Changes in the statement of comprehensive income Insurance revenue Insurance service expenses – Incurred claims and directly attributable expenses – Amortisation of insurance acquisition cash flows
3(a)
(1,555)
–
(1,555)
–
1,377
1,377
19 19
–
19
1,377 1,377
1,396
3(b)
Insurance service result Investment component 1
(1,536)
(159)
(267)
267
–
Net finance expenses from insurance contracts
4(b)
2,006
– –
2,006
Exchange rate movements
(26)
(26)
Total changes in the statement of comprehensive income
177
1,644
1,821
Cash flows Premiums received
2
4,494
–
4,494
Claims and other insurance service expenses paid, including investment components
–
(1,648)
(1,648)
Insurance acquisition cash flows
3(b)
(183)
–
(183)
Total cash flows
4,311
(1,648)
2,663
Closing insurance contract liabilities balance
24,208
(77)
24,131
1 The investment component has been restated by £34m to also include amounts paid as tax free cash and transfers out, consistent with the presentation in the statement of comprehensive income. The amount of insurance contract liabilities that relates to annuity payments due in the year “liability for incurred claims” is reported separately from the amounts related to future periods “Liability for remaining coverage” in the table above. This balance includes guarantee period payments due in future years (together with related CSM) regardless of whether or not the guarantees have crystallised. Payments of annuities in advance are deducted as prepayments from incurred claims. These include payments made, for example on the final working day of the month. There were no material loss components during the year. Investment component Investment component represents the value of payments due to annuitants in the year that fall within guarantee periods. These payments are made to annuitants or their beneficiaries regardless of any insurance event and are excluded from insurance revenue and insurance service expenses. Transfer payments and tax-free cash paid to DB scheme members at retirement are treated by the Group as non-insurance cash flows, not relating to any insurance event, and are therefore included as investment components and also excluded from insurance revenue and insurance service expenses. This is further explained in accounting policy note 1.7.9.1. Exchange rate movements Exchange rate movements of £4m in 2024 (2023: £26m) reflect the impact of change in converting the reserves of Just Retirement South Africa into sterling at year end exchange rates.
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