Strategic Report Governance
Financial Statements
187
Liabilities for remaining coverage represent the present value of reinsurance cash flows due for payment in future years adjusted for non-financial risk, together with the value of unamortised CSM. Incurred claims represent the value of net reinsurance settlements on longevity swaps, facultative reinsurance, and other reinsurance arrangements during the period. As noted in note 1.7.3, reinsurance contracts in each legal entity are allocated to either a portfolio of treaties transferring longevity and financial (inflation and/or investment) risk, or a portfolio transferring longevity risk alone. Portfolios may be in either net asset or liability positions including CSM. Within the table above, the value of fixed legs of longevity swaps are presented as Reinsurance expenses and Premiums paid, and the value of floated legs of longevity swaps are presented as Claims recovered and Claims received. Premiums paid of £1,976m in 2024 (2023: £1,196m) mainly represented new quota share premiums of £1,013m including in relation to DB partner (funded re) and current year fixed leg values on longevity swaps of £963m (2023: £397m and £761m respectively). (ii) Reinsurance contracts analysed by measurement component
Estimate of present value of future cash flows £m
Risk adjustment for non-financial risk £m
CSM £m 100 390 490
Total £m
Year ended 31 December 2024
Note
Opening reinsurance contract asset Opening reinsurance contract liability
937
106 486 592
1,143
(1,001)
(125)
Net opening balance
(64)
1,018
Changes in the statement of comprehensive income Changes that relate to current service CSM recognised for service received Change in risk adjustment for non-financial risk for risk expired
3(c) 3(c) 3(c)
– –
–
(23)
(23)
(4)
– –
(4)
Experience adjustments
(12)
–
(12)
Changes that relate to future service Contracts initially recognised in the year Change in estimates that adjust the CSM
(208)
232
(24) (70)
– –
(2)
72
Net expenses from reinsurance contracts Net finance expenses from reinsurance contracts
(222)
300
(117)
(39) (52) (91)
3(c) 4(c)
78
(160)
30
Total changes in the statement of comprehensive income
(144)
140
(87)
Cash flows Premiums paid Claims received Total cash flows
1,976
– – –
– – –
1,976
(930)
(930)
1,046
1,046
Closing reinsurance contract asset Closing reinsurance contract liability
1,802
128 604 732
137 266 403
2,067
(964)
(94)
Net closing balance
838
1,973
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