Just Annual Report and Accounts 2023

194 | Just Group PLC | Annual Report and Accounts 2023

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued

26. INSURANCE CONTRACTS AND RELATED REINSURANCE continued

Liability for remaining coverage £m

Incurred claims £m

Total £m

Year ended 31 December 2022 (restated)

Opening insurance contract liabilities balance Changes in the statement of comprehensive income Insurance revenue Insurance service expenses – Incurred claims and directly attributable expenses – Amortisation of insurance acquisition cash flows

(23,154)

(23,086)

1,325

–

1,325

–

(1,188)

(8) (8)

–

(8)

(1,188) (1,188)

(1,196)

Insurance service result Investment component

1,317

129

292

(292)

–

Net finance expenses from insurance contracts

4,823

– –

4,823

Exchange rate movements

(8)

Total changes in the statement of comprehensive income

6,424

(1,480)

4,944

Cash flows Premiums received

(3,114)

–

(3,114)

Claims and other insurance service expenses paid, including investment components

–

1,485

Insurance acquisition cash flows

124

–

124

Total cash flows

(2,990) (19,720)

1,485

(1,505) (19,647)

Closing insurance contract liabilities balance

Liabilities for remaining coverage represent the present value of cash flows due for payment in future years adjusted for non-financial risk, together with the value of unamortised CSM. This balance includes guarantee period payments due in future years (together with related CSM) regardless of whether or not the guarantees have crystallised. Incurred claims represent the value of annuity payments due in the current year. Payments of annuities in advance, notably where due dates fall on

non-working days, are treated as prepaid incurred claims. There were no material loss components during the year. Insurance service result Insurance revenue and insurance service expenses are explained in more detail in notes 2 and 3 respectively. 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 also included as investment component and also excluded from insurance revenue and insurance service expenses. This is further explained in accounting policy note 1.5.9.1. Net finance expenses from insurance contracts Net finance expenses are explained in note 6. Exchange rate movements Exchange rate movements of £26m in 2023 (2022: £8m) reflect the impact of change in converting the reserves of Just Retirement South Africa into sterling at year end exchange rates. Cash flows Premiums received and claims paid represent the cash flows received from, and paid to, policyholders in the year respectively. Insurance acquisition cash flows represent the costs of acquiring new business incurred in the year.