202 | Just Group PLC | Annual Report and Accounts 2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
26. INSURANCE CONTRACTS AND RELATED REINSURANCE continued (g) Estimated timing of net cash outflows from insurance contract liabilities The following table shows the insurance contract balances analysed by duration. The total balances are split by duration of payments in proportion to the policy cash flows estimated to arise during the year, measured as the expected undiscounted net cash flows.
Insurance contract liability £m
Reinsurance contract assets £m
Reinsurance contract liabilities £m
Net £m
31 December 2023
1,731 1,715 1,697 1,679 1,662 7,971
(73) (75) (76) (76) (76)
30 31 33 34 35
1,688 1,671 1,654 1,637 1,621 7,780
Less than 1 year
1–2 years 2–3 years 3–4 years 4–5 years
(378) (659) (408) (253)
187 324
5–10 years 10–20 years 20–30 years Over 30 years
13,317
12,982
8,325 5,802
86
8,003 5,419
(130)
Total value (undiscounted) Carrying value (discounted)
43,899 21,789
(2,074) (1,039)
630 426
42,455 21,176
Insurance contract liability £m
Reinsurance contract assets £m
Reinsurance contract liabilities £m
Net £m
31 December 2022 (restated)
Less than 1 year
1,508 1,492 1,473 1,450 1,430 6,800
(55) (56) (56) (55) (55)
28 30 30 31 32
1,481 1,466 1,447 1,426 1,407 6,692
1–2 years 2–3 years 3–4 years 4–5 years
5–10 years 10–20 years 20–30 years Over 30 years
(265) (427) (198)
157 220
11,012
10,805
6,237 3,556
42
6,081 3,477
(47)
(32)
Total value (undiscounted) Carrying value (discounted)
34,958 17,704
(1,214)
538 346
34,282 17,381
(669)
The tables above present the timing and amount of expected future cash flows excluding both current insurance related accruals and prepayments, and the CSM release as presented in Note 26(f). Contractual amounts payable on demand include amounts that DB scheme members may transfer out in the deferred phase prior to retirement of £2,868m at 31 December 2023 (31 December 2022: £1,467m). (h) Sensitivity analysis The Group has estimated the impact on profit before tax for the year in relation to insurance contracts and related reinsurance from reasonably possible changes in key assumptions relating to financial assets and to liabilities. The sensitivities capture the liability impacts arising from the impact on the yields of the assets backing liabilities in each sensitivity. The impact of changes in the value of assets and liabilities has been shown separately to aid the comparison with the change in value of assets for the relevant sensitivities in note 20. The sensitivity factors are applied via financial models either as at the valuation date or from a suitable recent reporting period where appropriate to do so. The analysis has been prepared for a change in each variable with other assumptions remaining constant. In reality, such an occurrence is unlikely, due to correlation between the assumptions and other factors. It should also be noted that these sensitivities are non-linear, and larger or smaller impacts cannot necessarily be interpolated or extrapolated from these results. The extent of non-linearity grows as the severity of any sensitivity is increased. For example, in the specific scenario of property price falls, the impact on IFRS profit before tax from a 5% fall in property prices would be slightly less than half of that disclosed in the table below. Furthermore, in the specific scenario of a mortality reduction, a smaller fall in fulfilment cash flows than disclosed in the table below or a similar increase in mortality may be expected to result in broadly linear impacts. However, it becomes less appropriate to extrapolate the expected impact for more severe scenarios. The sensitivity factors take into consideration that the Group’s assets and liabilities are actively managed and may vary at the time that any actual market movement occurs. The sensitivities below cover the changes on all assets and liabilities from the given stress. Parameters that have had limited sensitivity both historically and currently are not included, such as inflation for which the risk is substantially hedged. The impact of these sensitivities on IFRS net equity is the impact on profit before tax as set out in the table below less tax at the current tax rate.
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