REG - Legal & General Grp - L&G FY 2014 results part 2 <Origin Href="QuoteRef">LGEN.L</Origin> - Part 5
04/03/2015 07:12
- Part 5: For the preceding part double click ID:nRSD4568Gd
Limited Partnerships
These borrowings are non recourse bank borrowings.
Syndicated credit facility
As at 31 December 2014, the Group had in place a £1bn syndicated committed revolving credit facility provided by a number
of its key relationship banks, £0.04bn matures in October 2017 and £0.96bn matures in October 2018. No amounts were
outstanding at 31 December 2014.
IFRS and Cash
46
2.17 Insurance contract liabilities
(a) Analysis of insurance contract liabilities
Re- Re-
Gross insurance Gross insurance
2014 2014 2013 2013
Notes £m £m £m £m
Participating insurance contracts 2.17(b) 6,579 (1) 6,972 (1)
Non-participating insurance contracts 2.17(c) 49,589 (2,587) 39,975 (2,596)
General insurance contracts 2.17(d) 287 (8) 298 (5)
Insurance contract liabilities 56,455 (2,596) 47,245 (2,602)
(b) Movement in participating insurance contract liabilities
Re- Re-
Gross insurance Gross insurance
2014 2014 2013 2013
£m £m £m £m
As at 1 January 6,972 (1) 8,116 (1)
New liabilities in the year 61 - 75 -
Liabilities discharged in the year (1,159) - (1,606) -
Unwinding of discount rates 54 - 79 -
Effect of change in non-economic assumptions (5) - 4 -
Effect of change in economic assumptions 561 - 291 -
Other 95 - 13 -
As at 31 December 6,579 (1) 6,972 (1)
IFRS and Cash
47
2.17 Insurance contract liabilities (continued)
(c) Movement in non-participating insurance contract liabilities
Re- Re-
Gross insurance Gross insurance
2014 2014 2013 2013
£m £m £m £m
As at 1 January 39,975 (2,596) 37,445 (2,277)
New liabilities in the year 7,325 (446) 3,872 (334)
Liabilities discharged in the year (2,469) 259 (2,307) 167
Unwinding of discount rates 1,493 (145) 1,308 (134)
Effect of change in non-economic assumptions (569) 362 77 (25)
Effect of change in economic assumptions 3,844 (3) (430) -
Foreign exchange adjustments (10) (18) 10 7
As at 31 December 49,589 (2,587) 39,975 (2,596)
(d) Analysis of General insurance contract liabilities
Re- Re-
Gross insurance Gross insurance
2014 2014 2013 2013
£m £m £m £m
Outstanding claims 61 (1) 66 -
Claims incurred but not reported 30 - 37 -
Unearned premiums 196 (7) 195 (5)
General insurance contract liabilities 287 (8) 298 (5)
(e) Movement in General insurance claim liabilities
Re- Re-
Gross insurance Gross insurance
2014 2014 2013 2013
£m £m £m £m
As at 1 January 103 - 104 -
Claims arising 182 (2) 175 -
Claims paid (183) 1 (156) -
Adjustments to prior year liabilities (11) - (20) -
As at 31 December 91 (1) 103 -
IFRS and Cash
48
2.18 Investment contract liabilities
(a) Analysis of investment contract liabilities
Re- Re-
Gross insurance Gross insurance
2014 2014 2013 2013
Note £m £m £m £m
Participating investment contracts 7,667 14 7,493 -
Non-participating investment contracts 288,558 (324) 278,754 (295)
Investment contract liabilities 2.18(b) 296,225 (310) 286,247 (295)
(b) Movement in investment contract liabilities
Re- Re-
Gross insurance Gross insurance
2014 2014 2013 2013
£m £m £m £m
As at 1 January 286,247 (295) 272,361 (213)
Reserves in respect of new business 30,645 (334) 30,816 (237)
Amounts paid on surrenders and maturities during the year (53,311) 60 (47,055) 66
Investment return and related benefits 33,126 259 30,369 89
Management charges (309) - (295) -
Foreign exchange adjustments (177) - 51 -
Other 4 - - -
As at 31 December 296,225 (310) 286,247 (295)
Change in provisions for investment contract liabilities represents the total gross and reinsurance investment return and related benefits of £33,385m (2013: £30,458m).
Fair value movements of £33,198m (2013: £30,095m) are included within the income statement arising from movements in investment contract liabilities designated as fair value through profit and loss.
IFRS and Cash
49
2.19 IFRS sensitivity analysis
Impact on
pre-tax Impact on
Group profit Group equity
net of re- net of re-
insurance insurance
2014 2014
£m £m
Economic sensitivity
Long-term insurance
1% increase in interest rates 120 54
1% decrease in interest rates (245) (146)
1% increase in long term inflation expectations (193) (152)
Credit spread widens by 100bps with no change in expected defaults (177) (212)
10% decrease in listed equities (155) (126)
10% fall in property values (130) (102)
10bps increase in credit default assumption (370) (290)
10bps decrease in credit default assumption 344 270
Non-economic sensitivity
Long-term insurance
1% decrease in annuitant mortality (170) (133)
5% increase in assurance mortality (56) (44)
Default of largest external reinsurer (657) (516)
General Insurance
Single storm event with 1 in 200 year probability (74) (59)
Subsidence event - worst claims ratio in last 30 years (54) (43)
5% decrease in overall claims ratio 8 6
5% surplus over claims liabilities 5 4
The table shows the impacts on Group pre-tax profit and equity, net of reinsurance, under each sensitivity scenario for the
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