Strategic Report | Governance | Financial Statements | 227
Financial investments credit ratings The sector analysis of the Group’s financial investments portfolio by credit rating at 31 December 2023 is shown below: Total £m % AAA £m AA £m A £m
BBB £m
% BBB £m
BB or below £m
Basic materials
149
0.6%
–
5
39
101 700
1%
4 5 –
Communications and technology
1,334
5.6% 125
244
260 115 660
10%
Auto manufacturers
130
0.5%
–
–
15
0% 5% 2% 2% 8% 7% 1% 4% 4% 5%
Consumer staples (including healthcare)
1,405
5.9% 125
228
371 135 167 589 477
21
Consumer cyclical
197 378
0.8% 1.6% 6.7% 3.1% 2.4% 2.8%
– –
8
54 30
–
Energy Banks
114 119 208 133
67
1,606
84
814
– – –
Insurance
735 583 660
–
50
Financial – other
95 31
266 279 220
89
Real estate including REITs
46
272 259 380
32
Government
1,767
7.4% 317
971
–
Industrial
543
2.3%
– –
65
79
19 12
Utilities
2,637
11.0%
106 205
833 212 185 991
1,686
23%
Commercial mortgages Long income real estate¹
764 916
3.2% 111 3.8% 164
233 547
3% 8%
3 –
20
Infrastructure
2,473
10.3%
65
173
1,231
17%
13
Other
42
0.2%
–
–
42
–
–
–
Corporate/government bond total
16,319
68.1% 1,117
2,645
5,129
7,252
100% 176
Other assets
822
3.4%
Lifetime mortgages
5,681 1,141
23.7%
Liquidity funds
4.8%
Investments portfolio Derivatives and collateral Gilts (interest rate hedging)
23,963 100.0%
3,083 2,549
Total
29,595
1 Includes residential ground rents of £164m rated AAA and £12m rated AA. NEW BUSINESS PROFIT RECONCILIATION
New business profit is deferred on the balance sheet under IFRS 17. It is the equivalent of the previous new business profit KPI under IFRS 4 and is determined in a similar manner, but uses risk parameters updated for IFRS 17. The effect of these changes is detailed in the reconciliation in the Business Review on page 33. In addition IFRS 17 introduces clarification regarding the economic assumptions to be used at the point of recognition of contracts for accounts purposes. Just recognises contracts based on their completion dates for IFRS 17, but bases its assessment of new business profitability for management purposes based on the economic parameters prevailing at the quote date of the business. IFRS 17 also introduces a requirement to include the reinsurance CSM in respect of business to be written after the reporting date up until the end of reinsurance treaty notice periods.
Year ended 31 December 2022 £m (restated)
Year ended 31 December 2023 £m
New business CSM on gross business written
380
320
Reinsurance CSM
(37)
(50)
Net new business CSM
343
270
Impact of using quote date for profitability measurement
12
(4)
New business profit
355
266
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