Total non recourse borrowings 690 644 644 606
Group holding of operational
borrowings(2) (61) (52) (58) (49)
Total operational borrowings 715 678 775 746
1. Operational Borrowings has been restated to reflect the adoption
by the Group of IFRS 10, 'Consolidated Financial Statements'. Further
details are contained in Note 2.24.
2. Group investments in operational borrowings have been eliminated
from the Group Consolidated Balance Sheet.
The presented fair values of the Group's operational borrowings
reflect observable market information and have been classified as
level 2 in the fair value hierarchy.
Short term operational borrowings
Short term assets available at the holding company level
exceeded the amount of short term operational borrowings of GBP86m
(2013: GBP189m). Short term operational borrowings comprise Euro
Commercial paper, bank loans and overdrafts.
Non recourse borrowings
US Dollar Triple X securitisation 2037
In 2006, a subsidiary of LGA issued US$450m of non recourse debt
in the US capital markets to meet the Triple X reserve requirements
of part of the US term insurance written after 2005 and 2006. It is
secured on the cash flows related to that tranche of business.
Suffolk Life unit linked borrowings
All of these non recourse borrowings are in relation to
commercial properties held within SIPP plans and the borrowings
solely relate to client investments.
LGV 6/LGV 7 Private Equity Fund Limited Partnerships
These borrowings are non recourse bank borrowings.
Consolidated Property Limited Partnerships
These borrowings are non recourse bank borrowings.
Syndicated credit facility
As at 31 December 2014, the Group had in place a GBP1bn
syndicated committed revolving credit facility provided by a number
of its key relationship banks, GBP0.04bn matures in October 2017
and GBP0.96bn 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 GBPm GBPm GBPm GBPm
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
GBPm GBPm GBPm GBPm
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
GBPm GBPm GBPm GBPm
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
GBPm GBPm GBPm GBPm
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
GBPm GBPm GBPm GBPm
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 GBPm GBPm GBPm GBPm
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
GBPm GBPm GBPm GBPm
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 GBP33,385m (2013: GBP30,458m).
Fair value movements of GBP33,198m (2013: GBP30,095m) 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
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