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The financial statements were approved and authorised for issue by the Board of Directors on 15th of April 2026. The financial statements were signed on behalf of the Board of Directors by Prof. Paolo Catalfamo (Director) and Mr Joseph Schembri (Director) as per the Directors' Declaration on ESEF Annual Financial Report submitted in conjunction with the Annual Financial Report.
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"value": "3874615.0", "decimals": 0, "dimensions": { "concept": "ext:AmountsReceivedFromFinancialInsuranceTreaty", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00", "unit": "iso4217:EUR" } }, "shtag_11923372": { "value": "0.0", "dimensions": { "concept": "ext:AmountsReceivedFromFinancialInsuranceTreaty", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:EUR" } }, "shtag_11923373": { "value": "3771204.0", "decimals": 0, "dimensions": { "concept": "ifrs-full:CashFlowsFromUsedInFinancingActivities", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00", "unit": "iso4217:EUR" } }, "shtag_11923374": { "value": "-105028.0", "decimals": 0, "dimensions": { "concept": "ifrs-full:CashFlowsFromUsedInFinancingActivities", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:EUR" } }, "shtag_11923375": { "value": "-73463.0", "decimals": 0, "dimensions": { "concept": "ifrs-full:IncreaseDecreaseInCashAndCashEquivalents", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00", "unit": "iso4217:EUR" } }, "shtag_11923376": { "value": "-3301576.0", "decimals": 0, "dimensions": { "concept": "ifrs-full:IncreaseDecreaseInCashAndCashEquivalents", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:EUR" } }, "shtag_11923377": { "value": "1619726.0", "decimals": 0, "dimensions": { "concept": "ifrs-full:CashAndCashEquivalents", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00", "unit": "iso4217:EUR" } }, "shtag_11923378": { "value": "4921302.0", "decimals": 0, "dimensions": { "concept": "ifrs-full:CashAndCashEquivalents", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "shtag_11923379": { "value": "1546263.0", "decimals": 0, "dimensions": { "concept": "ifrs-full:CashAndCashEquivalents", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2026-01-01T00:00:00", "unit": "iso4217:EUR" } }, "shtag_11923380": { "value": "1619726.0", "decimals": 0, "dimensions": { "concept": "ifrs-full:CashAndCashEquivalents", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00", "unit": "iso4217:EUR" } }, "v1-page38-cflshid_14084-tag11923258": { "value": "
Material accounting policies
6Intangible assets
(b)Goodwill
Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less any accumulated impairment losses.
7.Property, plant and equipment
Property, plant and equipment comprising land and buildings and office furniture, fittings and equipment are initially recorded at cost, and are subsequently shown at cost less accumulated depreciation and impairment losses, with the exception of land which is shown at cost. The assets\u2019 residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each report period.
16.Leases
(ii)Group as a lessee
Right-of-use asset
In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfNonfinancialAssetsExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page38-cflshid_14084-tag11923253": { "value": "
Material accounting policies
7.Property, plant and equipment
Subsequent costs are included in the asset\u2019s carrying amount, or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForRepairsAndMaintenanceExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page38-cflshid_14084-tag11923248": { "value": "
Material accounting policies
The material accounting policies adopted in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented.
The consolidated financial statements have been prepared from the financial statements of the companies comprising the group as detailed in notes to the consolidated financial statements.
1.Basis of preparation
LifeStar Insurance p.l.c. was incorporated on 21 December 2001 as an insurance company. The registered address and principal place of business of the company is LifeStar, Testaferrata Street, Ta\u2019 Xbiex.
These financial statements are prepared in accordance with International Financial Reporting Standards as adopted by the EU (EU IFRS\u2019s), the Insurance Business Act (Cap. 403 of the Laws of Malta) and the Companies Act (Cap. 386). The financial statements are prepared under the historical cost convention, as modified by the fair valuation of investment property and financial assets and financial liabilities at fair value through profit or loss.
The preparation of financial statements in conformity with EU IFRS\u2019s requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the accounting policies of the company and the subsidiary (the Group). The areas involving a higher degree of judgement or complexity are disclosed in Note 1 to these financial statements.
The Group\u2019s statement of financial position is presented in increasing order of liquidity, with additional disclosures on the current or non-current nature of the Group\u2019s assets and liabilities provided within the notes to the financial statements.
LifeStar Insurance p.l.c.\u2019s intermediate parent company (Note 32) prepares consolidated financial statements in accordance with the Companies Act (Cap. 386 of the Laws of Malta). LifeStar Insurance p.l.c. also prepares consolidated financial statements which include the results of the Group, which comprises the Company and its subsidiary as disclosed in Note 15.
These financial statements for the Company include a restatement of the comparative figures as at 31 December 2024 to retrospectively adjust for a change in accounting policy in accordance with IAS 8, Basis of Preparation of Financial Statements as disclosed in Note 31.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
For financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:
-Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;
-Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
-Level 3 inputs are unobservable inputs for the asset or liability.
For assets and liabilities that are recognised in the financial statements at fair value on a recurring basis, the Group determines when transfers are deemed to have occurred between Levels in the hierarchy at the end of each reporting period.
Appropriateness of going concern assumption in the preparation of the financial statements
The geopolitical arena and volatility in the financial markets had a significant impact on the Group\u2019s financial performance for the financial year ending 31 December 2025, and will continue to impact its performance going forward. The Group is continually assessing the situation and undertaking mitigating tactics to minimize the impact. Furthermore, an analysis was carried out on the credit rating of the main counterparties and no significant downgrades were noted since 31 December 2025. Such analysis was also extended to analyse the effect on the Solvency Capital Requirements (the \u201cSCR\u201d) of the Group by reference to stressed scenarios in the latest Own Risk and Solvency Assessment (ORSA) report prepared by the Group. Taking into consideration the current laws and regulations and the result from the aforementioned stressed scenarios. However, the Group continues to explore any and all ways possible to strengthen its capital base.
Having concluded this assessment the Directors expect that the Group will be able to sustain its operations over the next twelve months and in the foreseeable future and consider the going concern assumption in the preparation of the Group\u2019s financial statements as appropriate as at the date of authorisation for issue of these financial statements.
Standards, interpretations and amendments to published standards as endorsed by the EU that are effective in the current year
In the current year, the Group and the Company has applied an amendment to IFRS Standards issued by the International Accounting Standards Board (IASB) and adopted by the EU that is mandatorily effective in the EU for an accounting period that begins on or after 1 January 2025. The adoption does not have any material impact on the disclosures or on the amounts reported in these financial statements.
Lack of Exchangeability (Amendments to IAS 21)
The amendments specify when a currency is exchangeable into another currency and when it is not and how an entity determines the exchange rate to apply when a currency is not exchangeable. The amendments also introduce new disclosure requirements when a currency is not exchangeable.
Standards, amendments and interpretations to existing Standards that are not yet effective and have not been adopted early by the Group
At the date of authorisation of these consolidated financial statements, several new, but not yet effective, Standards and amendments to existing Standards, and Interpretations have been published by the IASB or IFRIC. None of these Standards or amendment to existing Standards have been adopted early by the Group and no Interpretations have been issued that are applicable and need to be taken into consideration by the Group at either reporting date.
Standards and amendments that are not yet effective and have not been adopted early by the Group include:
\u2022Amendments to the Classification and Measurement of Financial Instruments (Amendments to IFRS 9 and 7)
\u2022Contracts Referencing Nature-dependent Electricity (Amendments to IFRS 9 and IFRS 7)
\u2022Annual Improvements to IFRS Accounting Standards\u2014Volume 11
\u2022IFRS 19 \u2018Subsidiaries without Public Accountability: Disclosures\u2019
\u2022Amendments to IFRS 19 \u2018Subsidiaries without Public Accountability: Disclosures\u2019
These Standards and amendments are not expected to have a significant impact on the financial statements in the period of initial application and therefore no disclosures have been made.
Management anticipates that all relevant pronouncements will be adopted for the first period beginning on or after the effective date of the pronouncement.
In April 2024, the IASB issued IFRS 18, which replaces IAS 1 \u2018Presentation of Financial Statements\u2019. The adoption of IFRS 18 \u2018Presentation and Disclosure in financial statements\u2019, effective for periods commencing on or after 1 January 2027, is expected to have a material impact on the presentation of the financial Statements, and therefore relevant disclosures are included below.
\u00a0
Although IFRS 18 includes many of the requirements of IAS 1, it introduces new requirements
to better structure financial statements and to provide more detailed and useful information to
investors, including:
\u00a0
\u2022two new subtotals defined in the statement of profit or loss, namely (1) operating profit and (2) profit or loss before financing and income taxes
\u2022the classification of all income and expenses within the statement of profit or loss in one of five categories
\u2022a new requirement to disclose performance measures defined by management, and
\u2022an improvement in the principles related to the aggregation and disaggregation of information in the financial statements and accompanying notes.
\u00a0
IFRS 18 will be applied retrospectively with specific transitional provisions.
\u00a0
The Group is currently working to identify all of the impacts that IFRS 18 will have on the primary financial statements and notes to the financial statements.
Other new standards, amendments and interpretations not adopted in the current year have not been disclosed as they are not expected to have a material impact on the consolidated financial statements.
2.Insurance contracts
For presentation in the statement of financial position, the Group aggregates portfolios of insurance contracts issued (including investment contracts with discretionary participation features), and reinsurance contracts held and presents separately:
\u2022Portfolios of insurance contracts issued that are assets;
\u2022Portfolios of reinsurance contracts held that are assets;
\u2022Portfolios of insurance contracts issued that are liabilities;
\u2022Portfolios of reinsurance contracts held that are liabilities.
The portfolios referred to above are those established at initial recognition in accordance with the IFRS 17 Insurance Contracts requirements, which has been initially applied from 1 January 2023.
The line item descriptions on the statement of profit or loss and other comprehensive income are aligned with the requirements of IFRS 17, leading to the separate presentation of:
\u2022Insurance revenue.
\u2022Insurance service expense.
\u2022Allocation of reinsurance premiums.
\u2022Amounts recoverable from reinsurers for incurred claims.
\u2022Insurance finance income or expenses.
\u2022Reinsurance finance income or expenses.
The Group provides disaggregated qualitative and quantitative information in the notes to the financial statements about:
\u2022Amounts recognised in its financial statements from insurance contracts.
\u2022Significant judgements, and changes in those judgements, when applying the standard.
2.1Insurance contracts \u2013 Product lines
The following table summarises the characteristics of the Group\u2019s insurance contracts that are measured under IFRS 17 and the measurement methods.
IFRS 17 Product lineContracts issuedMeasurement MethodInsurance finance income and expense
ParticipatingDirect participating insurance contracts and investment contracts with discretionary participation features where the Company shares the performance of underlying items with policyholders. Guaranteed returns may also be offered.Variable Fee ApproachProfit or loss
SavingsInvestment-linked insurance policies which have a life insurance coverage and an investment account balance. These contracts also include individual and group pension plans which are based on life insurance unit-linked policies.Variable Fee Approach Profit or loss
Other lifeGroup life and non-participating individual life insurance contracts. Individual insurance contracts include Term, Endowment and Whole of Life insurance contracts.Premium Allocation ApproachGeneral Measurement ModelProfit or loss
Sickness & Accident Individual insurance contracts providing coverage for health and personal accidents.General Measurement ModelProfit or loss
In addition to issuing insurance contracts, the Group holds reinsurance contracts to mitigate certain risk exposures.
2.2Aggregation basis
The following table summarises the characteristics of the Company\u2019s reinsurance contracts held and the measurement methods.
IFRS 17 Product lineReinsurance contracts held (underlying risk covered)Measurement MethodInsurance finance income and expense
LifeLife risk reinsurance contracts with underlying Unit Linked, Term, Endowment and Whole life insurance contracts.General Measurement ModelProfit or loss
Reinsurance treaties with underlying group life insurance contracts. Premium Allocation ApproachProfit or loss
Catastrophe cover reinsurance contract covering the aggregate risk of the underlying contracts arising from catastrophic events.Premium Allocation ApproachProfit or loss
2.3Definition and classification of insurance and reinsurance contracts
Insurance contracts are contracts under which the Company accepts significant insurance risk from a policyholder by agreeing to compensate the policyholder if a specified uncertain future event adversely affects the policyholder.
In making this assessment, all substantive rights and obligations, including those arising from law or regulation, are considered on a contract-by-contract basis at the contract issue date. The Company uses judgement to assess whether a contract transfers insurance risk (that is, if there is a scenario with commercial substance in which the Company has the possibility of a loss on a present value basis) and whether the accepted insurance risk is significant.
The Company determines whether it has significant insurance risk, by comparing benefits payable after an insured event with benefits payable if the insured event had not occurred.
The Company issues contracts under which it accepts significant insurance risk from its policyholders, which are classified as insurance contracts.
Some investment contracts contain discretionary participation features (\u201cDPF\u201d), whereby the investor has the right and is expected to receive, as a supplement to the amount not subject to the Company\u2019s discretion, potentially significant additional benefits based on the return of specified pools of investment assets.
The Company issues investment contracts with DPF which are linked to the same pool of assets as insurance contracts and have economic characteristics similar to those of insurance contracts. The Company shall account for these contracts applying IFRS 17. Contracts are classified as direct participating contracts or contracts without direct participation features.
A Contract with direct participation features is defined as one which, at inception, meets the following criteria:
\u2022the contractual terms specify that the policyholder participates in a share of a clearly identified pool of underlying items;
\u2022the Company expects to pay to the policyholder an amount equal to a substantial share of the fair value returns on the underlying items; and
\u2022the Company expects a substantial proportion of any change in the amounts to be paid to the policyholder to vary with the change in fair value of the underlying items.
These criteria are assessed at the individual contract level based on the Company\u2019s expectations at the contract\u2019s inception, and they are not reassessed in subsequent periods, unless the contract is modified. The variability in the cash flows is assessed over the expected duration of a contract. The duration of a contract takes into account all cash flows within the boundary.
The savings and pensions (unit linked) contracts as well as the profit sharing contracts held within the run-off portfolio of the Company will be classified as direct participating contracts.
Such contracts allow policyholders to participate in investment returns with the Company, in addition to compensation for losses from insured risk. These contracts are substantially investment service-related contracts where the return on the underlying items is shared with policyholders. Underlying items comprise specified portfolios of investment assets that determine amounts payable to policyholders.
In addition to issuing insurance contracts, the Company holds reinsurance contracts to mitigate certain risk exposures. A reinsurance contract is an insurance contract issued by a reinsurer to compensate the Company for claims arising from one or more insurance contracts issued by the Company. These are quota share and excess of loss reinsurance contracts. For reinsurance contracts held by the Company, even if they do not expose the issuer (the reinsurer) to the possibility of a significant loss they would still be deemed to transfer significant insurance risk if they transfer substantially all of the insurance risk relating to the reinsured portions of the underlying insurance contracts to the reinsurer.
2.4Separating components from insurance contracts
At inception, the Company separates the following components from an insurance contract and accounts for them as if they were stand-alone financial instruments:
\u2022derivatives embedded in the contract whose economic characteristics and risks are not closely related to those of the host contract, and whose terms would not meet the definition of an insurance contract as a stand-alone instrument; and
\u2022distinct investment components i.e. investment components that are not highly inter-related with the insurance components and for which contracts with equivalent terms are sold, or could be sold, separately in the same market or the same jurisdiction.
The Company issues certain contracts which include a promise to transfer a good or non-insurance service. These transfers of a good or non-insurance service are not distinct and therefore are not separated from the contracts.
An investment component comprises of the amounts that an insurance contract requires the Company to repay to a policyholder in all circumstances, regardless of whether an insured event occurs. Investment components which are highly interrelated with the insurance contract of which they form a part are considered non-distinct and are not separately accounted for.
The Company assesses its insurance contracts to determine whether they contain any derivatives or investment components or promises to transfer to policyholders distinct goods or services other than insurance coverage and investment services which must be accounted for under a different IFRS than IFRS 17. The Company applies IFRS 17 to all remaining components of the host insurance contract.
After separating any embedded derivatives or distinct investment components, the Company separates any promises to transfer to policyholders distinct goods or services other than insurance coverage and investment services and accounts for them as separate contracts with customers (i.e. not as insurance contracts). A good or service is distinct if the policyholder can benefit from it either on its own or with other resources that are readily available to the policyholder. A good or service is not distinct and is accounted for together with the insurance component if the cash flows and risks associated with the good or service are highly inter-related with the cash flows and risks associated with the insurance component, and the Company provides a significant service of integrating the good or service with the insurance component.
The Company issues some contracts which include an embedded derivative (surrender option) and/or investment component (account balance) under which the surrender value is paid to the policyholder on maturity or earlier lapse of the contract. These components have been assessed to meet the definition of a highly related and/or non-distinct component. The surrender option is interrelated with the value of the insurance contract and as such, is not separated. Concerning the account balance, the Company is unable to measure the investment component separately from the contract and the policyholder is unable to benefit from the investment component unless the insurance component is also present and as such they are not separated.
Once the embedded derivatives and investment components and the goods and services components are separated, the Company assesses whether the contract should be separated into several insurance components that, in substance, should be treated as separate contracts.
To determine whether a single legal contract does not reflect the substance of the transaction and its insurance components recognised and measured separately instead, the Company considers whether there is an interdependency between the different risks covered, whether components can lapse independently of each other and whether the components can be priced and sold separately.
When the Company enters into one legal contract with different insurance components operating independently of each other, insurance components are recognised and measured separately applying IFRS 17.
Concerning the contracts with supplementary benefits (riders) the Company has determined that the legal contract reflects the substance of the transaction and as such the insurance components are not separated.
The reinsurance contracts held by the Company, despite the fact that they may cover more than one types of risk exposures, reflect single contracts in substance and are treated as one single accounting contract for IFRS 17.
2.5Aggregation level
The Company identifies portfolios by aggregating insurance contracts that are subject to similar risks and managed together. The Company expects that all contracts within each product line, as defined for management purposes, have similar risks and, therefore, would represent a portfolio of contracts when they are managed together. Reinsurance contracts held have been grouped into portfolios taking into consideration the nature of the risk and the type of reinsurance cover.
Each portfolio is sub-divided into groups of contracts to which the recognition and measurement requirements of IFRS 17 are applied. At initial recognition, the Company segregates contracts based on when they were issued. A portfolio contains all contracts that were issued within a 12-month period.
Each annual cohort is then further disaggregated into three groups of contracts:
\u2022any contracts that are onerous on initial recognition;
\u2022any contracts that, on initial recognition, have no significant possibility of becoming onerous subsequently; and
\u2022any remaining contracts in the portfolio.
Portfolios of reinsurance contracts held are assessed for aggregation separately from portfolios of insurance contracts issued. Applying the grouping requirements to reinsurance contracts held, the Company aggregates reinsurance contracts held into groups of:
\u2022contracts for which there is a net gain at initial recognition, if any;
\u2022contracts for which, at initial recognition, there is no significant possibility of a net gain arising subsequently; and
\u2022remaining contracts in the portfolio, if any.
The Company makes an evaluation of whether a set of contracts can be treated together in making the profitability assessment based on reasonable and supportable information. In the absence of such information the Company assesses each contract individually.
If insurance contracts within a portfolio would fall into different groups only because law or regulation specifically constrains the Company\u2019s practical ability to set a different price or level of benefits for policyholders with different characteristics, the Company may include those contracts in the same group.
The determination of whether a contract or a group of insurance contracts issued is onerous is based on the expectations as at the date of initial recognition, with fulfilment cash flow expectations determined on a probability-weighted basis. The Company determines the appropriate level at which reasonable and supportable information is available to assess whether the contracts are onerous at initial recognition and whether the contracts not onerous at initial recognition have a significant possibility of becoming onerous subsequently.
A similar assessment is done for reinsurance contracts held to determine the contracts for which there is a net gain at initial recognition or whether contracts for which there is not a net gain at initial recognition have a significant possibility of a net gain subsequently.
For contracts applying the Premium Allocation Approach (\u201cPAA\u201d) the Company assumes that contracts are not onerous (for reinsurance contracts there is not a net gain) on initial recognition unless there are facts and circumstances indicating otherwise. The Company assesses the likelihood of changes in applicable facts and circumstances to determine whether contracts not onerous (for reinsurance contracts there is not a net gain) at initial recognition belong to a group with no significant possibility of becoming onerous (for reinsurance contracts no significant possibility of a net gain) in the future.
The composition of groups established at initial recognition is not subsequently reassessed.
2.6Initial recognition
The Company recognises groups of insurance contracts that it issues from the earliest of the following:
\u2022The beginning of the coverage period of the group of contracts;
\u2022The date when the first payment from a policyholder in the group is due, or when the first payment is received if there is no due date;
\u2022When the Company determines that a group of contracts becomes onerous.
Concerning onerous contracts such contracts expected on initial recognition to be loss-making are grouped together and such groups are measured and presented separately. Once contracts are allocated to a group, they are not re-allocated to another group, unless they are substantively modified.
The Company recognises a group of reinsurance contracts held:
\u2022If the reinsurance contracts provide proportionate coverage, at the later of the beginning of the coverage period of the group, or the initial recognition of any underlying contract;
\u2022In all other cases, from the beginning of the coverage period of the first contract in the group.
If the Company entered into the reinsurance contract held at or before the date when an onerous group of underlying contracts is recognised prior to the beginning of the coverage period of the group of reinsurance contracts held, the reinsurance contract held is recognised at the same time as the group of underlying insurance contracts is recognised.
The Company adds new contracts to the group when they meet the recognition criteria.
2.7Contract boundaries
Insurance contracts
The Company includes in the measurement of a group of insurance contracts all the future cash flows within the boundary of each contract in the group.
Cash flows are within the boundary of an insurance contract if they arise from substantive rights and obligations that exist during the reporting period in which the Company can compel the policyholder to pay the premiums, or in which the Company has a substantive obligation to provide the policyholder with services.
Cash flows within the boundary of an insurance contract are those that relate directly to the fulfilment of the contract, including cash flows for which the Company has discretion over the amount or timing.
A substantive obligation to provide services ends when:
\u2022The Company has the practical ability to reassess the risks of the particular policyholder and, as a result, can set a price or level of benefits that fully reflects those risks; or
\u2022Both of the following criteria are satisfied:
-The Company has the practical ability to reassess the risks of the portfolio of insurance contracts that contain the contract and, as a result, can set a price or level of benefits that fully reflects the risk of that portfolio;
-The pricing of the premiums for coverage up to the date when the risks are reassessed does not take into account the risks that relate to periods after the reassessment date.
In determining whether all the risks have been reflected either in the premium or in the level of benefits, the Company considers all risks that policyholders would transfer had it issued the contracts (or portfolio of contracts) at the reassessment date. Similarly, the Company concludes on its practical ability to set a price that fully reflects the risks in the contract or portfolio at a renewal date by considering all the risks that it would assess when underwriting equivalent contracts on the renewal date for the remaining service.
The assessment on the Company\u2019s practical ability to reprice existing contracts takes into account all contractual, legal and regulatory restrictions. In doing so, the Company disregards restrictions that have no commercial substance. The Company also considers the impact of market competitiveness and commercial considerations on its practical ability to price new contracts and repricing existing contracts. Judgement is required to decide whether such commercial considerations are relevant in concluding as to whether the practical ability exists at the reporting date.
The Company issues contracts that include an option to add insurance coverage at a future date so that the Company is obligated to provide additional coverage if the policyholder exercises the option. The Company has no right to compel the policyholder to pay premiums and the option to add insurance coverage at a future date is an insurance component that is not measured separately from the insurance contract.
When the insurance option is not in substance a separate contract and the terms are guaranteed by the Company, the cash flows arising from the option are within the boundary of the contract. If the option is not a separate contract and the terms are not guaranteed by the Company, the cash flows arising from the option might be either within or outside the contract boundary, depending on whether the Company has the practical ability to set a price that fully reflects the reassessed risks of the whole contract. In case where the Company does not have the practical ability to reprice the whole contract when the policyholder exercises the option to add coverage, the expected cash flows arising from the additional premiums after the option exercise date would be within the original contract boundary.
In estimating expected future cash flows of the group of contracts the Company applies its judgement in assessing future policyholder behaviour surrounding the exercise of options available to them such as surrenders options, and other options falling within the contract boundary.
The Company assesses the contract boundary at initial recognition and at each subsequent reporting date to include the effect of changes in circumstances on the Company\u2019s substantive rights and obligations.
Reinsurance contracts
For groups of reinsurance contracts held, cash flows are within the contract boundary if they arise from substantive rights and obligations of the cedant that exist during the reporting period in which the Company is compelled to pay amounts to the reinsurer or has a substantive right to receive insurance contract services from the reinsurer.
A substantive right to receive services from the reinsurer ends when the reinsurer:
\u2022has the practical ability to reassess the risks transfer to it and can set a price or level of benefits that fully reflects those reassessed risks; or
\u2022has a substantive right to terminate the coverage.
The boundary of a reinsurance contract held includes cash flows resulting from the underlying contracts covered by the reinsurance contract. This includes cash flows from insurance contracts that are expected to be issued by the Company in the future if these contracts are expected to be issued within the boundary of the reinsurance contract held.
The Company holds proportional life reinsurance contracts which have an unlimited duration but which allow both the reinsurer and the Company to terminate the contract at three months\u2019 notice for new business ceded. The Company includes within the contracts boundary only cash flows arising from such three months\u2019 notice period because it does not have substantive rights or obligations beyond that point. Therefore, on initial recognition, the cash flows within the reinsurance contract boundary are determined to be those arising from underlying contracts that the Company expects to issue and cede under the reinsurance contract within the next three months. Subsequently, expected cash flows beyond the end of this initial notice period are considered cash flows of new reinsurance contracts and are recognised, separately from the initial contract, as they fall within the rolling three-month notice period. Other life reinsurance agreements have a cancellability clause for new business with three months\u2019 notice but this being effective at the next annual renewal of the agreement and hence, in this case, on initial recognition the cash flows within the reinsurance contract boundary are determined to be those arising from underlying contracts that the Company expects to issue and cede under the reinsurance contract within the year. The Company treats all the above mentioned reinsurance contracts as a series of contracts that form an annual group and cover underlying business issued within a year.
The Company holds proportional group life reinsurance contracts that have a short-term boundary and cover short-term underlying contracts issued within the term on a risk-attaching basis. All cash flows arising from claims incurred and expected to be incurred during the life of the underlying contracts are included in the measurement.
Finally, the Company\u2019s non-proportional, excess of loss reinsurance contracts held, have an annual term and provide coverage for claims incurred during an accident year (i.e. loss occurring). Thus, all cash flows arising from claims incurred and expected to be incurred in the accident year are included in the measurement of the reinsurance contracts held.
2.8Insurance acquisition cashflows
Insurance acquisition cash flows arise from the costs of selling, underwriting and starting a group of insurance contracts (issued or expected to be issued) that are directly attributable to the portfolio of insurance contracts to which the group belongs. Such cash flows include cash flows that are not directly attributable to individual contracts or groups of insurance contracts within the portfolio. Costs which are not directly attributable are recognised in the profit and loss account immediately.
Insurance acquisition cash flows that are directly attributable to a group of insurance contracts are allocated to that group and to renewal groups of insurance contracts using a systematic and rational method and considering, in an unbiased way, all reasonable and supportable information that is available without undue cost or effort.
A systematic and rational method is also used to allocate insurance acquisition cash flows directly attributable to a portfolio but not to groups of contracts to such groups in the portfolio.
Insurance acquisition cash flows arising before the recognition of the related group of contracts are recognised as an asset. Insurance acquisition cash flows arise when they are paid or when a liability is required to be recognised under a standard other than IFRS 17. Such an asset is recognised for each group of contracts to which the insurance acquisition cash flows are allocated. The asset is derecognised, fully or partially, when the insurance acquisition cash flows are included in the measurement of the group of contracts.
At each reporting date, the Company revises the amounts allocated to groups to reflect any changes in assumptions that determine the inputs to the allocation method used. Amounts allocated to a group are not revised once all contracts have been added to the group.
The Company reverses any impairment losses in profit or loss and increases the carrying amount of the asset to the extent that the impairment conditions have improved.
2.9Measurement of insurance contracts issued
The liability for remaining coverage (\u201cLRC\u201d) represents the Company\u2019s obligation to investigate and pay valid claims under existing contracts for insured events that have not yet occurred (i.e. the obligation that relates to the unexpired portion of the coverage period), comprising (a) fulfilment cash flows relating to future service and (b) the contractual service margin yet to be earned.
The liability for incurred claims (\u201cLIC\u201d) includes the Company\u2019s liability to pay valid claims for insured events that have already incurred, other incurred insurance expenses arising from past coverage service and it includes the Company\u2019s liability to pay amounts the Company is obliged to pay the policyholder under the contract, including repayment of investment components, when a contract is derecognised. The current estimate of LIC comprises the fulfilment cash flows related to current and past service allocated to the group at the reporting date.
The carrying amount of a group of insurance contracts at each reporting date is the sum of the LRC and the LIC.
2.9.1Measurement on initial recognition of contracts not measured under the PAA
Under the GM the Company measures a group of contracts on initial recognition as the sum of the expected fulfilment cash flows within the contract boundary and the contractual service margin representing the unearned profit in the contracts relating to services that will be provided under the contracts.
Fulfilment Cashflows (\u201cFCF\u201d)
FCF comprise unbiased and probability-weighted estimates of future cash flows, an adjustment to reflect the time value of money and the financial risks related to the future cash flows, to the extent that the financial risks are not included in the estimates of the future cash flows, plus a risk adjustment for non-financial risk.
The Company\u2019s objective in estimating future cash flows is to determine the expected value, or the probability weighted mean, of the full range of possible outcomes, considering all reasonable and supportable information available at the reporting date without undue cost or effort, that reflect the timing and uncertainty of those future cash flows.
The Company estimates future cash flows considering a range of scenarios which have commercial substance and give a good representation of possible outcomes. The cash flows from each scenario are probability-weighted and discounted using current assumptions.
The Company estimates certain FCF at the portfolio level or higher and then allocates such estimates to groups of contracts.
When estimating future cash flows, the Company includes all cash flows that are within the contract boundary including:
\u2022Premiums and related cash flows;
\u2022Claims and benefits, including reported claims not yet paid, incurred claims not yet reported and expected future claims;
\u2022Payments to policyholders resulting from embedded surrender value options;
\u2022An allocation of insurance acquisition cash flows attributable to the portfolio to which the contract belongs;
\u2022Claims handling costs;
\u2022Policy administration and maintenance costs;
\u2022An allocation of fixed and variable overheads directly attributable to fulfilling insurance contracts;
\u2022Transaction-based taxes;
\u2022Costs incurred for performing investment activities that enhance insurance coverage benefits for the policyholder;
\u2022Costs incurred for providing investment-related service to policyholders.
The cash flow estimates include both market variables, which are consistent with observable market prices, and non-market variables, which are not contradictory with market information and based on internally and externally derived data.
The Company updates its estimates at the end of each reporting period using all newly available, as well as historic evidence and information about trends. The Company determines its current expectations of probabilities of future events occurring at the end of the reporting period. In developing new estimates, the Company considers the most recent experience and earlier experience, as well as other information.
Risk of the Company\u2019s non-performance is not included in the measurement of groups of insurance contracts issued.
Risk Adjustment (\u201cRA\u201d)
The risk adjustment for non-financial risk for a group of insurance contracts, determined separately from the other estimates, is the compensation required for bearing uncertainty about the amount and timing of the cash flows that arises from non-financial risk to fulfill insurance contracts.
The risk adjustment also reflects the degree of diversification benefit the Company includes when determining the compensation it requires for bearing that risk; and both favourable and unfavourable outcomes, in a way that reflects the Company\u2019s degree of risk aversion.
The Company uses a Risk-based capital approach based on which the risk adjustment can be determined at the chosen level of confidence.
Time value of money and financial risks
The Company adjusts the estimates of future cash flows to reflect the time value of money and the financial risks related to those cash flows, to the extent that the financial risks are not included in the estimates of cash flows. The discount rates applied to the estimates of the future cash flows:
\u2022reflect the time value of money, the characteristics of the cash flows and the liquidity characteristics of the insurance contracts;
\u2022are consistent with observable current market prices (if any) for financial instruments with cash flows whose characteristics are consistent with those of the insurance contracts, in terms of, for example, timing, currency and liquidity; and
\u2022exclude the effect of factors that influence such observable market prices but do not affect the future cash flows of the insurance contracts.
In determining discount rates for cash flows that do not vary based on the returns of underlying items, the Company uses the \u2018bottom-up approach\u2019 to estimate discount rates.
Contractual Service Margin (\u201cCSM\u201d)
The CSM is a component of the overall carrying amount of a group of insurance contracts representing unearned profit the Company will recognise as it provides insurance contract services over the coverage period.
On initial recognition of a group of insurance contracts, if the total of (a) the fulfilment cash flows, (b) any cash flows arising at that date and (c) any amount arising from the derecognition of any assets or liabilities previously recognised for cash flows related to the group (including assets for insurance acquisition cash flows) is a net inflow, the CSM is measured as the equal and opposite amount of the net inflow, which results in no gain no loss, arising on initial recognition.
If the total is a net outflow, then the group is onerous. In this case, the net outflow is recognised as a loss in profit or loss. A loss component is created to depict the amount of the net cash outflow, which determines the amounts that are subsequently presented in profit or loss as reversals of losses on onerous contracts and are excluded from insurance revenue.
The Company determines, at initial recognition, the group\u2019s coverage units and allocates the group\u2019s CSM based on the coverage units provided in the period.
2.9.2Subsequent measurement of contracts not measured under the PAA
Changes in fulfilment cash flows
At the end of each reporting period, the Company will update the fulfilment cash flows for both LIC and LRC to reflect the current estimates of the amounts, timing and uncertainty of future cash flows, as well as discount rates and other financial variables.
Experience adjustments would be the difference between:
\u2022The expected cash flow estimate at the beginning of the period and the actual cash flows for premiums received in the period (and any related cash flows paid such as insurance acquisition cash flows);
\u2022The expected cash flow estimate at the beginning of the period and the actual incurred amounts of insurance service expenses in the period (excluding insurance acquisition expenses).
Experience adjustments relating to current or past service will be recognized in profit or loss. For incurred claims (including incurred but not reported) and other incurred insurance service expenses, experience adjustments would always relate to current or past service. They would be included in profit or loss as part of insurance service expenses. Experience adjustments relating to future service will be included in the LRC by adjusting the CSM.
Adjustments to the CSM - Insurance contracts without direct participation features
For a group of insurance contracts, the carrying amount of the CSM of the group at the end of the reporting period equals the carrying amount at the beginning of the reporting period adjusted, as follows:
\u2022The effect of any new contracts added to the group in the reporting period;
\u2022Interest accreted on the carrying amount of the CSM during the reporting period, measured at the discount rates at initial recognition;
\u2022The changes in fulfilment cash flows relating to future service, except to the extent that:
-Such increases in the fulfilment cash flows exceed the carrying amount of the CSM, giving rise to a loss; or
-Such decreases in the fulfilment cash flows are allocated to the loss component of the liability for remaining coverage;
\u2022The effect of any currency exchange differences on the CSM;
\u2022The amount recognised as insurance revenue because of the transfer of services in the period, determined by the allocation of the CSM remaining at the end of the reporting period (before any allocation) over the current and remaining coverage period.
The locked-in discount rate is the weighted average of the rates applicable at the date of initial recognition of contracts that joined a group over a 12-month period.
The changes in fulfilment cash flows relating to future service that adjust the CSM comprise of:
\u2022Experience adjustments that arise from the difference between the premium receipts (and any related cash flows such as insurance acquisition cash flows) and the estimate, at the beginning of the period, of the amounts expected.
\u2022Changes in estimates of the present value of future cash flows in the liability for remaining coverage, except those relating to the time value of money and changes in financial risk (recognised in the statement of profit or loss and other comprehensive income rather than adjusting the CSM)
\u2022Differences between:
-any investment component expected to become payable in the year, determined as the payment expected at the start of the year plus any insurance finance income or expenses related to that expected payment before it becomes payable; and
-the actual amount that becomes payable in the year
\u2022Changes in the risk adjustment for non-financial risk that relate to future service
Except for changes in the risk adjustment, adjustments to the CSM noted above are measured at discount rates that reflect the characteristics of the cash flows of the group of insurance contracts at initial recognition.
The CSM at the end of the reporting period represents the profit in the group of insurance contracts that has not yet been recognised in profit or loss, because it relates to future service.
An amount of the CSM is released to profit or loss in each period during which the insurance contract services are provided.
In determining the amount of the CSM to be released in each period, the Company follows three steps:
\u2022determines the total number of coverage units in the group. The amount of coverage units in the group is determined by considering for each contract the quantity of benefits provided under the contract and the expected coverage period;
\u2022allocates the CSM at the end of the period (before any of it is released to profit or loss to reflect the insurance contract services provided in the period) equally to each of the coverage units provided in the current period and expected to be provided in the future;
\u2022recognises in profit or loss the amount of CSM allocated to the coverage units provided during the period.
The number of coverage units changes as insurance contract services are provided, contracts expire, lapse or surrender and new contracts are added into the group. The total number of coverage units depends on the expected duration of the obligations that the Company has from its contracts, which can differ from the legal contract maturity because of the impact of policyholder behaviour and the uncertainty surrounding future insured events. In determining a number of coverage units, the Company exercises judgement in estimating the likelihood of insured events occurring and policyholder behaviours to the extent that they affect expected period of coverage in the group, the different levels of service offered across periods and the \u2018quantity of benefits\u2019 provided under a contract.
The Company does not issue insurance contracts generating cash flows in a foreign currency that is different from the functional currency of the Company.
Adjustments to the CSM - Insurance contracts with direct participation features
Direct participating contracts are contracts under which the Company\u2019s obligation to the policyholder is the net of:
\u2022the obligation to pay the policyholder an amount equal to the fair value of the underlying items; and
\u2022a variable fee in exchange for future services provided by the contracts, being the amount of the Company\u2019s share of the fair value of the underlying items less fulfilment cash flows that do not vary based on the returns on underlying items.
When measuring a group of direct participating contracts, the Company adjusts the fulfilment cash flows for the whole of the changes in the obligation to pay policyholders an amount equal to the fair value of the underlying items. These changes do not relate to future services and are recognised in profit or loss. The Company then adjusts any CSM for changes in the amount of the Company\u2019s share of the fair value of the underlying items which relate to future services.
Hence, the carrying amount of the CSM at each reporting date is the carrying amount at the start of the year, adjusted for:
\u2022the CSM of any new contracts that are added to the group in the year;
\u2022the change in the amount of the Company\u2019s share of the fair value of the underlying items and changes in fulfilment cash flows that relate to future services, except to the extent that:
-a decrease in the amount of the Company\u2019s share of the fair value of the underlying items, or an increase in the fulfilment cash flows that relate to future services, exceeds the carrying amount of the CSM, giving rise to a loss in profit or loss (included in insurance service expenses) and creating a loss component; or
-an increase in the amount of the Company\u2019s share of the fair value of the underlying items, or a decrease in the fulfilment cash flows that relate to future services, is allocated to the loss component, reversing losses previously recognised in profit or loss (included in insurance service expenses);
\u2022the effect of any currency exchange differences on the CSM; and
\u2022the amount recognised as insurance revenue because of the services provided in the year.
Changes in fulfilment cash flows that relate to future services include the changes relating to future services specified above for contracts without direct participation features (measured at current discount rates) and changes in the effect of the time value of money and financial risks that do not arise from underlying items \u2013 e.g. the effect of financial guarantees.
Onerous Contracts
After the loss component is recognised, the Company allocates any subsequent changes in fulfilment cash flows of the LRC on a systematic basis between \u2018loss component\u2019 and \u2018LRC excluding the loss component\u2019.
The subsequent changes in the fulfilment cash flows of the LRC to be allocated are:
\u2022insurance finance income or expense;
\u2022changes in risk adjustment for non-financial risk recognised in profit or loss representing release from risk in the period; and
\u2022estimates of the present value of future cash flows for claims and expenses released from the LRC because of incurred insurance service expense in the period.
The Company determines the systematic allocation of insurance service expenses incurred based on the percentage of loss component to the total outflows included in the LRC, excluding any investment component amount.
Any subsequent decreases relating to future service in fulfilment cash flows allocated to the group arising from changes in estimates of future cash flows and the risk adjustments for non-financial risk are allocated first only to the loss component, until it is exhausted. Once it is exhausted, any further decreases in fulfilment cash flows relating to future service create the group\u2019s CSM.
Measurement of contracts under the PAA
On initial recognition the Company applies the PAA:
\u2022When the coverage period of each insurance contract in the group is one year or less;
\u2022For groups of insurance contracts including contracts with a coverage period extending beyond one year the Company reasonably expects that such simplification would produce a measurement of the LRC for the group that would not differ materially from the one that would be produced applying the requirements of the general measurement model.
On initial recognition, the Company measures the LRC at the amount of premiums received in cash. As all the issued insurance contracts to which the PAA is applied have coverage of a year or less, the Company has elected the policy of expensing insurance acquisition cash flows as they are incurred.
On initial recognition of each group of contracts, the Company expects that the time between providing each part of the services and the related premium due date is no more than a year. Accordingly, the Company has chosen not to adjust the liability for remaining coverage to reflect the time value of money and the effect of financial risk.
There are no investment components within insurance contracts issued that are measured under the PAA.
The carrying amount of a group of insurance contracts issued at the end of each reporting period is the sum of (a) the LRC and (b) the LIC, comprising the FCF related to past service allocated to the group at the reporting date.
The carrying amount of the LRC for subsequent measurement purposes is increased by any premiums received and decreased by the amount recognised as insurance revenue for services provided.
The LIC is measured similarly to the LIC\u2019s measurement under the GMM. The liability equals the amount of the fulfilment cash flows relating to incurred claims. For claims that the Company expects to be paid within one year or less from the date of incurring the Company does not adjust future cash flows for the time value of money and the effect of financial risk. However, claims expected to take more than one year to settle are discounted.
If facts and circumstances indicate that a group of insurance contracts measured under the PAA is onerous on initial recognition or becomes onerous subsequently, the Company increases the carrying amount of the LRC to the amount of the FCF determined under the GMM with the amount of such an increase recognised in insurance service expenses, and a loss component is established for the amount of the loss recognised. The fulfilment cash flows are discounted at current rates, as the liability for incurred claims is also discounted.
2.10Measurement of reinsurance contracts held
The same accounting policies will be applied as for insurance contracts issued to measure a group of reinsurance contracts held, adapted where necessary to reflect features that differ from those of insurance contracts.
2.10.1Measurement of the asset for remaining coverage (\u201cARC\u201d)
Reinsurance contracts measured under the general model
The measurement of reinsurance contracts held follows the same principles as those for insurance contracts issued, with the exception of the following:
\u2022Measurement of the cash flows include an allowance on a probability-weighted basis for the effect of any non-performance by the reinsurers, including the effects of collateral and losses from disputes;
\u2022The Company determines the risk adjustment for non-financial risk so that it represents the amount of risk being transferred to the reinsurer;
\u2022The Company recognises both day 1 gains and day 1 losses at initial recognition in the statement of financial position as a CSM and releases this to profit or loss as the reinsurer renders services, except for any portion of a day 1 loss that relates to events before initial recognition as described below;
\u2022Changes in the fulfilment cash flows are recognised in profit or loss if the related changes arising from the underlying ceded contracts have been recognised in profit or loss. Alternatively, changes in the fulfilment cash flows adjust the CSM.
The Company measures the estimates of the present value of future cash flows using assumptions that are consistent with those used to measure the estimates of the present value of future cash flows for the underlying insurance contracts.
On initial recognition, the CSM of a group of reinsurance contracts represents a net cost or net gain on purchasing reinsurance. It is measured as the equal and opposite amount of the total of (a) the fulfilment cash flows, (b) any amount arising from the derecognition of any assets or liabilities previously recognised for cash flows related to the group, (c) any cash flows arising at that date and (d) any income recognised in profit or loss because of onerous underlying contracts recognised at that date.
However, if any net cost on purchasing reinsurance coverage relates to insured events that occurred before the purchase of the group, then the Company recognises the cost immediately in profit or loss as an expense.
The carrying amount of the CSM at each reporting date is the carrying amount at the start of the year, adjusted for:
\u2022the CSM of any new contracts that are added to the group in the year;
\u2022interest accreted on the carrying amount of the CSM during the year, measured at the discount rates determined on initial recognition;
\u2022income recognised in profit or loss in the year on initial recognition of onerous underlying contracts;
\u2022reversals of a loss-recovery component to the extent that they are not changes in the fulfilment cash flows of the group of reinsurance contracts;
\u2022changes in fulfilment cash flows that relate to future services, measured at the discount rates determined on initial recognition, unless they result from changes in fulfilment cash flows of onerous underlying contracts, in which case they are recognised in profit or loss and create or adjust a loss-recovery component;
\u2022the effect of any currency exchange differences on the CSM; and
\u2022the amount recognised in profit or loss because of the services received in the year.
For a group of reinsurance contracts covering onerous underlying contracts, the Company establishes a loss-recovery component of the asset for remaining coverage, adjusts the CSM and as a result recognises income when it recognises a loss on initial recognition of onerous underlying contracts, if the reinsurance contract is entered into before or at the same time as the onerous underlying contracts are recognised. The adjustment to the CSM is determined by multiplying:
\u2022the amount of the loss that relates to the underlying contracts; and
\u2022the percentage of claims on the underlying contracts that the Company expects to recover from the reinsurance contracts.
The loss-recovery component is adjusted for changes in FCFs of the group of reinsurance contracts relating to future services that result from changes in FCFs of the onerous underlying contracts. If the reinsurance contract covers only some of the insurance contracts included in an onerous group of contracts, then the Company uses a systematic and rational method to determine the portion of losses recognised on the onerous group of contracts that relates to underlying contracts covered by the reinsurance contract.
The loss-recovery component determines the amounts that are subsequently presented in profit or loss as reversals of recoveries of losses from the reinsurance contracts and are excluded from the allocation of reinsurance premiums paid. It is adjusted to reflect changes in the loss component of the onerous group of underlying contracts, but it cannot exceed the portion of the loss component of the onerous group of underlying contracts that the Company expects to recover from the reinsurance contracts.
Reinsurance contracts measured under the Premium Allocation Approach
The Company applies the PAA to measure a group of reinsurance contracts using the same accounting policies to the insurance contracts, as adapted where necessary to reflect the features of reinsurance contracts.
The Company applies the PAA to reinsurance contracts that it holds, as follows:
\u2022to groups of reinsurance contracts that it holds which at the inception of the group the effective coverage period of each contract in the group of reinsurance contracts held is one year or less;
\u2022to groups of reinsurance contracts that it holds including contracts with a coverage period extending beyond one year when the Company reasonably expects that such simplification would produce a measurement of the asset for remaining coverage for the group that would not differ materially from the one that would be produced applying the requirements of the general measurement model.
Under the PAA, the initial measurement of the asset equals the reinsurance premium paid. The Company measures the amount relating to remaining service by allocating the amount of expected reinsurance premium payments over the coverage period of receiving services for the group. For all reinsurance contracts held the allocation is based on the passage of time.
On initial recognition of each group of reinsurance contracts held, the Company expects that the time between receiving each part of the services and the related reinsurance premium due date is no more than a year. Accordingly, the Company has chosen not to adjust the asset for remaining coverage to reflect the time value of money and the effect of financial risk.
Where the reinsurance contracts held cover a group of onerous underlying insurance contracts, the Company adjusts the carrying amount of the asset for remaining coverage and recognises a gain when, in the same period, it reports a loss on initial recognition of an onerous group of underlying insurance contracts or on additional loss from an already onerous group of underlying insurance contracts. The recognition of this gain results in the accounting for the loss recovery component of the asset for the remaining coverage of a group of reinsurance contracts held. The loss-recovery component is adjusted to reflect changes in the loss component of the onerous group of underlying contracts, but it cannot exceed the portion of the loss component of the onerous group of underlying contracts that the Company expects to recover from the reinsurance contracts.
2.10.2Measurement of the asset for incurred claims (\u201cAIC\u201d)
The Company uses consistent assumptions to measure the estimates of the present value of future cash flows for the group of reinsurance contracts held and the estimates of the present value of future cash flows for the group(s) of underlying insurance contracts. The Company includes in the estimates of the present value of the future cash flows for the group of reinsurance contracts held the effect of any risk of non-performance by the issuer of the reinsurance contract, including the effects of collateral and losses from disputes.
The risk adjustment for non-financial risk for reinsurance contracts held represents the amount of risk being transferred by the Company to the reinsurer.
2.11Insurance contracts \u2013 modification and derecognition
The Company derecognises insurance contracts when, and only when:
\u2022The rights and obligations relating to the contract are extinguished (i.e., discharged, cancelled or expired); or
\u2022The contract is modified such that the modification results in:
-the contract being outside the scope of IFRS 17;
-a different insurance contract due to separating components from the host contract;
-a substantially different contract boundary;
-the contract being included in a different group of contracts.
If any of the modification criteria described above are met, the Company derecognises the initial contract and recognises the modified contract as a new contract.
On derecognition of a contract from within a group of contracts:
\u2022the fulfilment cash flows allocated to the group are adjusted to eliminate those that relate to the rights and obligations derecognised;
\u2022the CSM of the group is adjusted for the change in the fulfilment cash flows, except where such changes are allocated to a loss component; and
\u2022the number of coverage units for the expected remaining services is adjusted to reflect the coverage units derecognised from the group.
If a contract is derecognised because it is transferred to a third party, then the CSM is also adjusted for the premium charged by the third party, unless the group is onerous.
If a contract is derecognised because its terms are modified, then the CSM is also adjusted for the premium that would have been charged had the Company entered into a contract with the new contract\u2019s terms at the date of modification, less any additional premium charged for the modification. The new contract recognised is measured assuming that, at the date of modification, the Company received the premium that it would have charged less any additional premium charged for the modification.
If the contract modification does not meet the above conditions the Company treats the effect of the modification as changes in the estimates of fulfilment cash flows.
For insurance contracts accounted for applying the PAA the Company adjusts insurance revenue prospectively from the time of the contract modification.
2.12Investment contracts with discretionary participation features
The Company recognises investment contracts with DPF at the date when the Company becomes a party to the contract. The investment contracts with DPF are aggregated in the same manner as insurance contracts. The Company identified portfolios of such investment contracts with DPF. Within that portfolio, the Company aggregated them based on three expected profitability levels (groups of onerous contracts, groups of contracts that have no significant possibility of becoming onerous subsequently, and groups that are neither onerous nor have no significant possibility of becoming onerous subsequently). Groups comprise of contracts issued not more than a year apart.
At initial recognition, similar to insurance contracts, the Company estimates the fulfilment cash flows based on the present value of expected future cash flows and a risk adjustment for non-financial risk. Any expected net inflows are accounted for as the initial CSM.
In estimating future cash flows, the Company considers the contract boundary which only includes cash flows if they result from a substantive obligation of the Company to deliver cash at a present or future date.
In estimating the risk adjustment for non-financial risk for investment contracts with DPF, the Company considers other non-financial risks, such as the risks arising from the contract holder behaviour, e.g. lapse risk and expense risk.
The Company discounts cash flows using discount rates that reflect the characteristics of the fulfilment cash flows, including the extent of their dependency on the fair value of the underlying items.
The Company allocates the CSM over the group\u2019s whole duration period in a systematic way reflecting the transfer of investment services under a contract. The Company measures investment contracts with DPF at initial recognition as detailed in \u201cMeasurement on initial recognition of contracts not measured under the PAA\u201d and at subsequent measurement in accordance to \u201cSubsequent measurement of contracts not measured under PAA\u201d and \u201cAdjustments to the CSM \u2013 Insurance contracts with direct participation features\u201d.
2.13Presentation
The Company presents separately, in the statement of financial position, the carrying amount of portfolios of:
1.insurance contracts and investment contracts with DPF issued that are assets;
2.insurance contracts and investment contracts with DPF issued that are liabilities;
3.reinsurance contracts held that are assets;
4.reinsurance contracts held that are liabilities.
Any assets or liabilities for insurance acquisition cash flows recognised before the corresponding insurance contracts are included in the carrying amount of the related portfolio of contracts.
The Company disaggregates the total amount recognised in the statement of profit or loss and other comprehensive income into an insurance service result, comprising insurance revenue and insurance service expense, and insurance finance income or expenses.
The Company does not disaggregate the change in risk adjustment for non-financial risk between a financial and non-financial portion and includes the entire change as part of the insurance service result.
The Company separately presents income or expenses from reinsurance contracts held from the expenses or income from insurance contracts and investments contracts with DPF issued.
2.13.1Insurance Service Revenue
Contracts not measured under the PAA
The Company\u2019s insurance revenue depicts the provision of coverage and other services arising from a group of insurance contracts and investment contracts with DPF at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those services. Insurance revenue from a group of insurance contracts and a group of investment contracts with DPF is therefore the relevant portion for the period of the total consideration for the contracts, (i.e., the amount of premiums paid to the Company adjusted for financing effect (the time value of money) and excluding any investment components).
The total consideration for a group of contracts covers amounts related to the provision of services and is comprised of:
\u2022Insurance service expenses, excluding any amounts allocated to the loss component of the liability for remaining coverage;
\u2022The risk adjustment for non-financial risk related to current service, excluding any amounts allocated to the loss component of the liability for remaining coverage;
\u2022The CSM release measured based on coverage units provided.
In addition, the Company allocates a portion of premiums that relate to recovering insurance acquisition cash flows to each period in a systematic way based on the passage of time. The Company recognises the allocated amount, as insurance service revenue and an equal amount as insurance service expenses.
The amount of the CSM of a group of insurance contracts and a group of investment contracts with DPF that is recognised as insurance revenue in each year is determined by identifying the coverage units in the group, allocating the CSM remaining at the end of the year (before any allocation) equally to each coverage unit provided in the year and expected to be provided in future years, and recognising in profit or loss the amount of the CSM allocated to coverage units provided in the year. The number of coverage units is the quantity of services provided by the contracts in the group, determined by considering for each contract the quantity of benefits provided and its expected coverage period. The coverage units are reviewed and updated at each reporting date.
Services provided by insurance contracts include insurance coverage and, for all direct participating contracts, investment services for managing underlying items on behalf of policyholders. In addition, some contracts without direct participating features may also provide investment services for generating an investment return for the policyholder, if and only if:
\u2022an investment component exists or the policyholder has a right to withdraw an amount (e.g. the policyholder\u2019s right to receive a surrender value on cancellation of a contract);
\u2022the investment component or withdrawal amount is expected to include an investment return; and
\u2022the Company expects to perform investment activities to generate that investment return.
The expected coverage period reflects expectations of lapses and cancellations of contracts, as well as the likelihood of insured events occurring to the extent that they would affect the expected coverage period. The period of investment services ends no later than the date on which all amounts due to current policyholders relating to those services have been paid.
Contracts measured under the PAA
For contracts measured under the PAA, the insurance revenue for each period is the amount of expected premium receipts for providing services in the period. The Company recognises such insurance revenue based on the passage of time by allocating premium receipts including premium experience adjustments to each period of service.
2.13.2Loss Component
The Company groups contracts that are onerous at initial recognition separately from contracts in the same portfolio that are not onerous at initial recognition. Groups that were not onerous at initial recognition can also subsequently become onerous if assumptions and experience changes. The Company has established a loss component of the liability for remaining coverage for any onerous group depicting the future losses recognised.
2.13.3Insurance Service Expenses
Insurance service expenses arising from insurance contracts and investments contracts with DPF are recognised in profit or loss generally as they are incurred. They exclude repayments of investment components and comprise of:
-Incurred claims and other insurance service expenses: For some life risk contracts, incurred claims also include premiums waived on detection of critical illness;
-Amortisation of insurance acquisition cash flows: For contracts not measured under the PAA, this is equal to the amount of insurance revenue recognised in the year that relates to recovering insurance acquisition cash flows. For contracts measured under the PAA, the Company has elected to expense insurance acquisition cash flows as incurred;
-Losses on onerous contracts and reversals of such losses;
-Adjustments to the liabilities for incurred claims that do not arise from the effects of the time value of money, financial risk and changes therein.
2.13.4Insurance finance income and expense
Insurance finance income or expenses comprise the change in the carrying amount of the group of insurance contracts and investment contracts with DPF arising from:
\u2022The effect of the time value of money and changes in the time value of money;
\u2022The effect of financial risk and changes in financial risk.
For contracts without direct participation features, insurance finance income or expenses reflect interest accreted on the future cash flows and the CSM and the effect of changes in interest rates and other financial assumptions.
For contracts with direct participation features, insurance finance income or expenses comprise changes in the measurement of the groups of contracts caused by changes in the value of underlying items (excluding additions and withdrawals), interest accreted and the effect of changes in interest rated on future cash flows that do not vary with returns on underlying items.
For contracts measured under the PAA insurance finance or expenses reflect interest accreted on the future cash flows under the LIC and the effect of changes in interest rates and other financial assumptions.
The Company does not disaggregate changes in the risk adjustment for non-financial risk between insurance service result and insurance financial income or expenses.
The Company has an accounting policy choice to either present all of the period\u2019s insurance finance income or expenses in profit or loss or to split the amount between profit or loss and other comprehensive income (OCI). The accounting policy choice is applied on a portfolio-by-portfolio basis. The Company will include all insurance finance income or expenses for the reporting period in profit or loss for all its portfolios.
2.13.5Net income or expense from reinsurance contracts held
Net expenses from reinsurance contracts comprise an allocation of reinsurance premiums paid less amounts recovered from reinsurers.
The Company presents separately on the face of the statement of profit or loss and other comprehensive income the amounts expected to be recovered from reinsurers, and an allocation of the reinsurance premiums paid.
The Company treats reinsurance cash flows that are contingent on claims on the underlying contracts as part of the claims that are expected to be reimbursed under the reinsurance contract held. Ceding commissions that are not contingent on claims of the underlying contracts are presented as a deduction in the premiums to be paid to the reinsurer which is then allocated to profit or loss.
2.14Financial reinsurance liability
The Company enters into financing treaties with third-party reinsurers to secure upfront funding for the acquisition costs of specific underlying insurance contracts. These treaties do not transfer significant insurance risk and therefore do not meet the definition of reinsurance contracts held under IFRS 17 'Insurance Contracts'. As these treaties are not specifically addressed by other IFRS Accounting Standards, the Company applies judgement in accordance with IAS 8 'Accounting Policies, Changes in Accounting Estimates and Errors' to account for such transactions in its financial statements. Management has determined that the recognition and measurement principles for reinsurance contracts held under IFRS 17 provide the most relevant and reliable framework, and consequently, these principles are applied by analogy to these financing treaties.
Initial Recognition
Upon initial recognition, the Company's obligation arising from these financing treaties is recognised as a financial reinsurance liability represented by:
\u2022The present value of expected advances and repayments from the financing treaties.
\u2022The cost of financing of the financing treaties.
Subsequent Measurement
As the initial valuation, the subsequent measurement follows the IFRS 17 principles for reinsurance contracts held, applied by analogy. This incorporates changes in the present value of expected advances and repayments and to the cost of financing based on the Company\u2019s expectations at the end of each reporting period. Advances received and repayments paid are recognised directly in the statement of financial position. The cost of financing is recognised in profit or loss in a manner consistent with the release of the IFRS 17 Contractual Service Margin (CSM). Gains arising from the waiver of repayment, as per treaty terms, are also recognised in profit or loss.
Disclosures
While IFRS 17 measurement principles are applied by analogy, disclosures for these financing treaties are made in accordance with IAS 1 'Presentation of Financial Statements' and IAS 8. This ensures that the related balances and transactions are presented distinctly from contracts that fall within the scope of IFRS 17.
2.15Transition to IFRS 17
On transition to IFRS 17, the Company has applied the full retrospective approach to all insurance contracts issued and reinsurance contracts held measured under the PAA. For all groups of insurance contracts, investment contracts with DPF and reinsurance contracts not measured under the PAA the Company applied the fair value transition approach as it was impracticable to apply the full retrospective approach.
3Basis of consolidation
Subsidiaries are all entities over which the Group has control. The Group controls an investee when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. The existence and effect of potential voting rights that are when those rights give the Group the current ability to direct the relevant activities are considered when assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases.
4Business combinations
The Group applies the acquisition method in accounting for business combinations. The consideration transferred by the group to obtain control of a subsidiary is calculated as the sum of the acquisition-date fair values of assets transferred, liabilities incurred and the equity interests issued by the group, which includes the fair value of any asset or liability arising from a contingent consideration arrangement. Acquisition costs are expensed as incurred.
The Group recognises identifiable assets acquired and liabilities assumed in a business combination regardless of whether they have been previously recognised in the acquiree\u2019s financial statements prior to the acquisition. Assets acquired and liabilities assumed are generally measured at their acquisition-date fair values.
5Acquisition of subsidiaries
The acquisition of subsidiaries that are not under common control is accounted for by applying the acquisition method. The consideration is measured as the aggregate of the fair values, at the date of exchange of assets given, liabilities incurred or assumed, and equity instruments issued by the acquirer in exchange for control of the acquiree. Acquisition-related costs are recognised in profit or loss as incurred, except for costs to issue debt or equity securities.
The acquiree\u2019s identifiable assets and liabilities that meet the conditions for recognition are recognised at their fair values at the acquisition date, except as specifically required by other International Financial Reporting Standards as adopted by the EU. A contingent liability assumed in a business combination is recognised at the acquisition date if there is a present obligation that arises from past events and its fair value can be measured reliably.
The results of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Where necessary, in preparing these consolidated financial statements, appropriate adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with those used by group entities. Intra-group balances, transactions, income and expenses are eliminated on consolidation.
6Intangible assets
(a)Computer software
Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring to use the specific software. These costs are amortised using the straight-line method over their estimated useful lives (between five and thirteen years). Costs associated with developing or maintaining computer software programmes are recognised as an expense as incurred.
(b)Goodwill
Goodwill arising in a business combination that is accounted for using the acquisition method is recognised as an asset at the date that control is acquired. Goodwill is measured as the excess of (a) the aggregate of: (i) the consideration transferred; (ii) the amount of any non-controlling interests in the acquiree; and (iii) in a business combination achieved in stages, the acquisition-date fair value of the acquirer\u2019s previously held equity interest in the acquiree; and (b) the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less any accumulated impairment losses. Any gain on a bargain purchase, after reassessment, is recognised immediately in profit or loss.
(c)Passporting assets
Separately acquired passporting assets are shown at historical cost, which represent their acquisition price. Passporting assets are considered to have a useful life of five years, as management assesses that this period reflects the expected duration over which the assets will generate net cash inflows for the Group.
An impairment loss is recognised on intangible assets when the carrying amount exceeds the recoverable amount, being the higher of fair value less costs of disposal and value in use, and is recognised in profit or loss. Such losses, other than those relating to goodwill, are reviewed at each reporting date and reversed where appropriate.
\u00a0
7.Property, plant and equipment
Property, plant and equipment comprising land and buildings and office furniture, fittings and equipment are initially recorded at cost, and are subsequently shown at cost less accumulated depreciation and impairment losses, with the exception of land which is shown at cost. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the asset\u2019s carrying amount, or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.
Depreciation is calculated using the straight-line method to allocate the cost of the assets to their residual values over their estimated useful lives using the following depreciation rates:
%
Buildings2-20
Office furniture, fittings and equipment20-25
The assets\u2019 residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each report period. Gains and losses on disposals of plant and equipment are determined by comparing proceeds with the carrying amount, and are taken into account in determining operating profit. Where the carrying amount of an asset is greater than its estimated recoverable amount, an impairment loss is recognised where it is written down immediately to its recoverable amount.
Property is revalued at regular intervals. After revaluation date, property is recognised at revalued amount less accumulated depreciation and impairment losses.
A revaluation surplus is recorded in OCI and credited to the asset revaluation surplus on equity. However, to the extent that it reverses a revaluation deficit of the same asset previously recognised in profit or loss, the increase is recognised in profit and loss. A revaluation deficit is recognised in the statement of profit or loss, except to the extent that it offsets an existing surplus on the same asset recognised in the revaluation surplus.
An annual transfer from the asset revaluation surplus to retained earnings is made for the difference between depreciation based on the revalued carrying amount of the asset and depreciation based on the asset\u2019s original cost. Additionally, accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset. Upon disposal, any revaluation surplus relating to the particular asset being sold is transferred to retained earnings.
8.Investment property
Freehold and leasehold properties treated as investments principally comprise buildings that are held for long term rental yields or capital appreciation or both, and that are not occupied by the Group. Investment property is initially measured at cost including related transaction costs. Investment property is subsequently carried at fair value, representing open market value determined annually by external valuers or by virtue of a directors\u2019 valuation. It is the Group\u2019s policy to engage the services of an external expert valuer every two years at a minimum. Fair value is based on active market prices, adjusted, if necessary, for any difference in the nature, location or condition of the specific asset.
If this information is not available, the Group uses alternative valuation methods such as recent prices on less active markets or discounted cash flow projections. The fair value of investment property reflects, among other things, rental income from current leases and assumptions about rental income from future leases in the light of current market conditions.
Subsequent expenditure is charged to the asset\u2019s carrying amount only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance costs are charged to the profit and loss account during the financial period in which they are incurred.
Unrealised gains and losses arising from changes in fair value (net of deferred taxation) are initially recognised in profit or loss.
9.Other financial instruments
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially recognised at their fair value, except for trade receivables that do not have a significant financing component which are measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.
Financial assets and financial liabilities are off-set and the net amount presented in the statement of financial position when the Group has a legally enforceable right to set off the recognised amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.
Financial assets are derecognised when the contractual rights to the cash flows from the financial assets expire or when the entity transfers the financial asset and the transfer qualifies for derecognition.
Financial liabilities are derecognised when they are extinguished. This occurs when the obligation specified in the contract is discharged, cancelled or expires.
An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.
Financial assets
All recognised financial assets are measured subsequently in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.
Classification of financial assets
Debt instruments that meet the following conditions are measured subsequently at amortised cost:
\u2022The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows;
\u2022The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.Debt instruments that meet the following conditions are measured subsequently at fair value through other comprehensive income (FVTOCI):
\u2022The financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling the financial assets;
\u2022The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding
By default, all other financial assets are measured subsequently at fair value through profit or loss (FVTPL).
Despite the foregoing, the Group may make the following irrevocable election / designation at initial recognition of a financial asset:
\u2022The Group may irrevocably elect to present subsequent changes in fair value of an equity investment in other comprehensive income if certain criteria are met; and
\u2022The Group may irrevocably designate a debt investment that meets the amortised cost or FVTOCI criteria as measured at FVTPL if doing so eliminates or significantly reduces an accounting mismatch.
Regular way purchases or sales of financial assets are recognised and derecognised on trade date.
An assessment of business models for managing financial assets is fundamental to the classification of a financial asset. The Group determines the business models at a level that reflects how groups of financial assets are managed together to achieve a particular business objective.
The Group\u2019s business model does not depend on management\u2019s intentions for an individual instrument, therefore the business model assessment is performed at a higher level of aggregation rather than on an instrument-by-instrument basis. The information considered includes: (a) the stated policies and objectives for the portfolio and the operation of those policies in practice; (b) how the performance of the portfolio is evaluated and reported to the Company\u2019s management; (c) the risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed; (d) how managers of the business are compensated; and (e) the frequency, value and timing of sales of financial assets in prior periods, the reasons for such sales and expectations about future sales activity.
The Group classifies its financial assets into the following two categories: a) financial assets at fair value through profit or loss, and b) financial assets at amortised cost.
Debt instruments measured at amortised cost
The following financial assets are classified within this category \u2013 trade receivables, cash at bank, intercompany balances.
Appropriate allowances for expected credit losses (\u2018ECLs\u2019) are recognised in profit or loss in accordance with the Group\u2019s accounting policy on ECLs.
The amortised cost of a financial asset is the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus the cumulative amortisation using the effective interest method of any difference between that initial amount and the maturity amount, adjusted for any loss allowance. The gross carrying amount of a financial asset is the amortised cost of a financial asset before adjusting for any loss allowance.
Changes in the carrying amount as a result of foreign exchange gains or losses, impairment gains or losses and interest income are recognised in profit or loss. On derecognition, any difference between the carrying amount and the consideration received is recognised in profit or loss and is presented separately in the line item \u2018Gains and losses arising from the derecognition of financial assets measured at amortised cost\u2019.
Interest income is recognised using the effective interest method and is included in the line item \u2018Investment income\u2019.
Trade receivables which do not have a significant financing component are initially measured at their transaction price and are subsequently stated at their nominal value less any loss allowance for ECLs.
Financial assets at FVTPL
Financial assets that do not meet the criteria for being measured at amortised cost or FVTOCI are measured at FVTPL, specifically:
-investments in equity instruments are classified as at FVTPL. However, a Group may designate an equity investment that is neither held for trading nor a contingent consideration arising from a business combination as at FVTOCI on initial recognition;
-debt instruments that do not meet the amortised cost criteria or the FVTOCI criteria are classified as at FVTPL.
In addition, debt instruments that meet either the amortised cost criteria or the FVTOCI criteria may be designated as at FVTPL upon initial recognition if such designation eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring assets or liabilities or recognising the gains and losses on them on different bases.
Financial assets measured at FVTPL are subsequently measured at fair value at the end of each reporting period, with any fair value gains or losses including foreign exchange gains and losses, recognised in profit or loss.
Where applicable, dividend income is recognised with other dividend income, if any, arising on other financial assets within the line item \u2018Investment income\u2019. Where applicable, interest income is disclosed within the line item \u2018Investment income\u2019. Fair value gains and losses are recognised within the line items \u2018Investment income\u2019 and \u2018Investment losses\u2019 respectively.
Interest income using the effective interest method
Interest income is recognised using the effective interest method for debt instruments measured subsequently at amortised cost.
The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period. For financial instruments other than purchased or originated credit-impaired financial assets, the effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) excluding ECLs, through the expected life of the debt instrument, or where appropriate, a shorter period, to the gross carrying amount of the debt instrument on initial recognition.
Expected Credit Losses
The Group recognises a loss allowance for ECLs on, debt instruments measured at amortised cost, intercompany receivables, trade receivables and cash at bank.
The amount of ECL is updated at each reporting date to reflect changes in credit risk since the initial recognition.
For trade receivables that do not contain a significant financing component (or for which the IFRS 15 practical expedient for contracts that are one year or less is applied), the Group applies the simplified approach and recognises lifetime ECL.
Where a collective basis is applied (see the Accounting Policy entitled \u2018Collective basis\u2019 below), the ECLs on these financial assets are estimated using a provision matrix based on the Company\u2019s historical credit loss experience based on the past due status of the debtors, adjusted for factors that are specific to the debtors, general economic conditions of the industry in which the debtors operate and an assessment of both the current as well as the forecast direction of conditions at the reporting date.
For all other financial instruments, the Group uses the general approach and recognises lifetime ECL when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on the financial instrument has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month ECL (\u201812m ECL\u2019). The assessment of whether lifetime ECL should be recognised is based on significant increases in the likelihood or risk of a default occurring since initial recognition instead of on evidence of a financial asset being credit-impaired at the reporting date or an actual default occurring.
Lifetime ECL represents the ECLs that will result from all possible default events over the expected life of a financial instrument. In contrast, 12m ECL represents the portion of lifetime ECL that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.
If the Group has measured the loss allowance for a financial instrument at an amount equal to lifetime ECL in the previous reporting period, but determines at the current reporting date that the conditions for lifetime ECL are no longer met, the Group measures the loss allowance at an amount equal to 12m ECL at the current reporting date.
The Group recognises an impairment gain or loss in profit or loss for all financial assets with a corresponding adjustment to their carrying amount.
Significant increase in credit risk
In assessing whether the credit risk on a financial instrument has increased significantly since initial recognition, the Group and Company compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial instrument as at the date of initial recognition. In making this assessment, the Group and Company considers both quantitative and qualitative information that is reasonable and supportable, including historical experience and forward-looking information that is available without undue cost or effort and, where applicable, the financial position of the counterparties.
The Group and Company regularly monitors the effectiveness of the criteria used to identify whether there has been a significant increase in credit risk and revises them as appropriate to ensure that the criteria are capable of identifying significant increase in credit risk before the amount becomes past due.
Forward-looking information considered includes the future prospects of the industries in which the Group and Company\u2019s debtors operate as obtained from economic expert reports, financial analysts, governmental bodies, relevant think-tanks and similar organisations, as well as consideration of various external sources of actual and forecast economic information that relate to the Company\u2019s core operations.
Irrespective of the outcome of the above assessment, the Group and Company presumes that the credit risk on a financial asset has increased significantly since initial recognition when contractual payments are more than 30 days past due, unless the Group and Company has reasonable and supportable information, that is available without undue cost or effort, that demonstrates otherwise.
The Group and Company considers the following as constituting an event of default for internal credit risk management purposes as historical experience indicates that receivables that meet either of the following criteria are generally not recoverable:
-when there is a breach of financial covenants by the counterparty; or
-information developed internally or obtained from external sources indicates that the debtor is unlikely to pay its creditors, including the Group and Company, in full (without taking into account any collateral held by the Group and Company).
Irrespective of the above analysis, the Group and Company considers that default has occurred when a financial asset is more than 90 days past due unless the Group and Company has reasonable and supportable information to demonstrate that a more lagging default criterion is more appropriate.
Credit-impaired financial assets
A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of that financial asset have occurred.
Evidence that a financial asset is credit-impaired includes observable data about the following events:
(i)significant financial difficulty of the issuer or the borrower;
(ii)a breach of contract, such as a default or past due event;
(iii)the lender(s) of the borrower, for economic or contractual reasons relating to the borrower\u2019s financial difficulty, having granted to the borrower a concession(s) that the lender(s) would not otherwise consider;
(iv)it is becoming probable that the borrower will enter bankruptcy or other financial reorganisation; or
(v)the disappearance of an active market for that financial asset because of financial difficulties.
Write-off policy
The Group and Company writes off a financial asset when there is information indicating that the counterparty is in severe financial difficulty and there is no realistic prospect of recovery, for example when the counterparty has been placed under liquidation or has entered into bankruptcy proceedings, whichever occurs sooner.
Financial assets written off may still be subject to enforcement activities under the Group and Company\u2019s recovery procedures, taking into account legal advice where appropriate. Recoveries made are recognised in profit or loss as impairment gains.
Measurement and recognition of ECLs
For financial assets, the credit loss is the difference between all contractual cash flows that are due to the Group and Company in accordance with the contract and all the cash flows that the Group and Company expects to receive, discounted at the original effective interest rate. ECLs represent the weighted average of credit losses with the respective risks of a default occurring as the weights.
The measurement of ECLs is a function of:
-the probability of default, which is an estimate of the likelihood of default over a given time horizon estimated at a point in time;
-the loss given default, which is an estimate of the loss arising on default, taking into into consideration the cash flows expected from collateral and other credit enhancements that are part of the contractual terms and are not recognised separately;
-the exposure at default, which is an estimate of the exposure at a future default date, taking into account expected changes in the exposure after the reporting date that are permitted by the current contractual terms, including amortisation profiles and early repayment or overpayment.
The assessment of the probability of default and loss given default is based on historical data adjusted by forward-looking information, where applicable. Where applicable, the financial position of the counterparties is also taken into consideration.
Where applicable, forward-looking information considered includes the future prospects of the industries in which the Group and Company\u2019s debtors operate, obtained from economic expert reports, financial analysts, governmental bodies, relevant think-tanks and other similar organisations, as well as consideration of various external sources of actual and forecast economic information that relate to the Group and Company\u2019s core operations.
Collective basis
If evidence of a significant increase in credit risk at the individual instrument level is not yet available, the Group and Company performs the assessment of significant increases in credit risk on a collective basis by considering information on, for example, a group or sub-group of financial instruments.
Where the Group and Company does not have reasonable and supportable information that is available without undue cost or effort to measure lifetime ECL on an individual instrument basis, lifetime ECL is measured on a collective basis.
In such instances, the financial instruments are grouped on the basis of shared credit risk characteristics, as follows:
-Nature of financial instruments;
-Past-due status;
-Nature, size and industry of debtors;
-Nature of collaterals for finance lease receivables;
-External credit ratings where available;
-Date of initial recognition;
-Remaining term to maturity;
-Geographical location of the borrower;
-The value of collateral relative to the financial asset if it has an impact on the probability of default occurring (for example, loan-to-value ratios).
The grouping is regularly reviewed by management to ensure the constituents of each group continue to share similar credit risk characteristics.
Financial liabilities and equity
Trade payables are classified with current liabilities and are stated at their amortised cost using the EIR method.
Ordinary shares issued by the Group are classified as equity instruments.
10.Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, demand deposits and time deposits maturing within three months from the end of the reporting period.
11.Dividend distribution
Dividend distribution to the Group\u2019s shareholders is recognised as a liability in the Group\u2019s financial statements in the period in which the dividends are declared by the directors in the case of interim dividends or are approved by the shareholders in the case of final dividends.
12.Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount of the obligation can be made. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessment of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost.
13.Revenue recognition
Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services.
Revenue also includes interest, dividend and rental income and is recognised as follows:
a)Rendering of services
Premium recognition, dealing with insurance contracts and investments contracts with DPF is described in accounting policy 10. Revenue arising from the issue of investment contracts without DPF is recognised in the accounting period in which the services are rendered.
b)Insurance agency commissions
Insurance agency commissions earned on policies sold are taken to the income statement in full, irrespective of the period covered by the policy.
c)Dividend income
Dividend income is recognised when the Group\u2019s right to receive payment is established.
d)Interest income
Interest income from financial assets not classified as fair value through profit or loss is recognised using the effective interest method.
e)Rental income
Rental income from the leasing of immovable property is recognised on a straight-line basis over the lease term.
14.Investment return
Investment return includes dividend income, net fair value movements on financial assets at fair value through profit or loss (including interest income from financial assets classified as fair value through profit or loss), interest income from financial assets not classified as fair value through profit or loss, rental receivable, net fair value movements on investment property and is net of investment expenses, charges, and interest.
15.Foreign currencies
a)Functional and presentation currency
Items included in the financial statements of the Group are measured using the currency of the primary economic environment in which the entity operates (\u201cthe functional currency\u201d). The financial statements are presented in \u20ac, which is the Group\u2019s functional and presentation currency.
b)Transactions and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the profit or loss. Non-monetary assets and liabilities denominated in currencies other than the functional currency that are measured at fair value are re-translated using the exchange rate ruling on the date the fair value was measured. Non-monetary assets and liabilities denominated in currencies other than the functional currency that are measured in terms of historical cost are not re-translated. Exchange differences arising on the translation of non-monetary items carried at fair value are included in profit or loss for the period, except for differences arising on the re-translation of non-monetary items in respect of which gains and losses are recognised in other comprehensive income. For such non-monetary items, any exchange component of that gain or loss is also recognised in other comprehensive income.
16.Leases
(i)Group as a lessor
To classify each lease, the Group makes an overall assessment of whether the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then it is an operating lease. As part of this assessment, the Group considers certain indicators such as whether the lease is for the major part of the economic life of the asset.
The Group recognises lease payments received under operating leases as income on a straight-line basis over the lease term as part of \u2018rental income\u2019 \u2013 Note 4.
(ii)Group as a lessee
A lessee recognises a right-of-use asset representing its right to use the underlying asset and a lease liability representing its obligation to make lease payments.
Right-of-use asset
The Group recognises a right-of-use asset at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset of the Group by the end of the lease term or the cost of the right-of-use asset reflects that the Group will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The Group presents right-of-use asset that do not meet the definition of investment property as \u2018Right-of-use assets\u2019.
Lease liability
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group\u2019s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.
Estimating the incremental borrowing rate
The Group cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (\"IBR\") to measure lease liabilities. The IBR is the rate of interest that the Group would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the Group \u2018would have to pay\u2019, which requires estimation when no observable rates are available (such as for subsidiaries that do not enter into financing transactions) or when they need to be adjusted to reflect the terms and conditions of the lease (for example, when leases are not in the subsidiary\u2019s functional currency). The Group estimates the IBR using observable inputs (such as market interest rates) when available and is required to make certain entity-specific estimates.
Lease payments included in the measurement of the lease liability comprise the following:
-fixed payments (including payments which are essentially fixed), minus any incentive to lease to be paid;
-the price for exercising a purchase option which the lessee is reasonably certain to exercise; and
-payments for early cancellation.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in rate, if there is a change in the Group\u2019s estimate of the amount expected to be payable under a residual value guarantee, if the Group changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases of machinery and equipment (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipment that are considered to be low value. Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term.
17.Taxation
Current tax is recognised in profit or loss, except when it relates to items recognised in other comprehensive income or directly in equity, in which case the current tax is also dealt with in other comprehensive income or in equity, as appropriate. Current tax is based on the taxable result for the period. The taxable result for the period differs from the result as reported in profit or loss because it excludes items which are non-assessable or disallowed and it further excludes items which are taxable or deductible in other periods. It is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax is provided using the liability method for all temporary differences arising between the tax bases of assets and liabilities and their carrying values for financial reporting purposes. Currently enacted tax rates are used in the determination of deferred income tax. Deferred tax assets are recognised only to the extent that future taxable profit will be available such that realisation of the related tax benefit is probable.
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Material accounting policies
2.Insurance contracts
For presentation in the statement of financial position, the Group aggregates portfolios of insurance contracts issued (including investment contracts with discretionary participation features), and reinsurance contracts held and presents separately:
\u2022Portfolios of insurance contracts issued that are assets;
\u2022Portfolios of reinsurance contracts held that are assets;
\u2022Portfolios of insurance contracts issued that are liabilities;
\u2022Portfolios of reinsurance contracts held that are liabilities.
The portfolios referred to above are those established at initial recognition in accordance with the IFRS 17 Insurance Contracts requirements, which has been initially applied from 1 January 2023.
The line item descriptions on the statement of profit or loss and other comprehensive income are aligned with the requirements of IFRS 17, leading to the separate presentation of:
\u2022Insurance revenue.
\u2022Insurance service expense.
\u2022Allocation of reinsurance premiums.
\u2022Amounts recoverable from reinsurers for incurred claims.
\u2022Insurance finance income or expenses.
\u2022Reinsurance finance income or expenses.
The Group provides disaggregated qualitative and quantitative information in the notes to the financial statements about:
\u2022Amounts recognised in its financial statements from insurance contracts.
\u2022Significant judgements, and changes in those judgements, when applying the standard.
2.1Insurance contracts \u2013 Product lines
The following table summarises the characteristics of the Group\u2019s insurance contracts that are measured under IFRS 17 and the measurement methods.
IFRS 17 Product lineContracts issuedMeasurement MethodInsurance finance income and expense
ParticipatingDirect participating insurance contracts and investment contracts with discretionary participation features where the Company shares the performance of underlying items with policyholders. Guaranteed returns may also be offered.Variable Fee ApproachProfit or loss
SavingsInvestment-linked insurance policies which have a life insurance coverage and an investment account balance. These contracts also include individual and group pension plans which are based on life insurance unit-linked policies.Variable Fee Approach Profit or loss
Other lifeGroup life and non-participating individual life insurance contracts. Individual insurance contracts include Term, Endowment and Whole of Life insurance contracts.Premium Allocation ApproachGeneral Measurement ModelProfit or loss
Sickness & Accident Individual insurance contracts providing coverage for health and personal accidents.General Measurement ModelProfit or loss
In addition to issuing insurance contracts, the Group holds reinsurance contracts to mitigate certain risk exposures.
2.2Aggregation basis
The following table summarises the characteristics of the Company\u2019s reinsurance contracts held and the measurement methods.
IFRS 17 Product lineReinsurance contracts held (underlying risk covered)Measurement MethodInsurance finance income and expense
LifeLife risk reinsurance contracts with underlying Unit Linked, Term, Endowment and Whole life insurance contracts.General Measurement ModelProfit or loss
Reinsurance treaties with underlying group life insurance contracts. Premium Allocation ApproachProfit or loss
Catastrophe cover reinsurance contract covering the aggregate risk of the underlying contracts arising from catastrophic events.Premium Allocation ApproachProfit or loss
2.3Definition and classification of insurance and reinsurance contracts
Insurance contracts are contracts under which the Company accepts significant insurance risk from a policyholder by agreeing to compensate the policyholder if a specified uncertain future event adversely affects the policyholder.
In making this assessment, all substantive rights and obligations, including those arising from law or regulation, are considered on a contract-by-contract basis at the contract issue date. The Company uses judgement to assess whether a contract transfers insurance risk (that is, if there is a scenario with commercial substance in which the Company has the possibility of a loss on a present value basis) and whether the accepted insurance risk is significant.
The Company determines whether it has significant insurance risk, by comparing benefits payable after an insured event with benefits payable if the insured event had not occurred.
The Company issues contracts under which it accepts significant insurance risk from its policyholders, which are classified as insurance contracts.
Some investment contracts contain discretionary participation features (\u201cDPF\u201d), whereby the investor has the right and is expected to receive, as a supplement to the amount not subject to the Company\u2019s discretion, potentially significant additional benefits based on the return of specified pools of investment assets.
The Company issues investment contracts with DPF which are linked to the same pool of assets as insurance contracts and have economic characteristics similar to those of insurance contracts. The Company shall account for these contracts applying IFRS 17. Contracts are classified as direct participating contracts or contracts without direct participation features.
A Contract with direct participation features is defined as one which, at inception, meets the following criteria:
\u2022the contractual terms specify that the policyholder participates in a share of a clearly identified pool of underlying items;
\u2022the Company expects to pay to the policyholder an amount equal to a substantial share of the fair value returns on the underlying items; and
\u2022the Company expects a substantial proportion of any change in the amounts to be paid to the policyholder to vary with the change in fair value of the underlying items.
These criteria are assessed at the individual contract level based on the Company\u2019s expectations at the contract\u2019s inception, and they are not reassessed in subsequent periods, unless the contract is modified. The variability in the cash flows is assessed over the expected duration of a contract. The duration of a contract takes into account all cash flows within the boundary.
The savings and pensions (unit linked) contracts as well as the profit sharing contracts held within the run-off portfolio of the Company will be classified as direct participating contracts.
Such contracts allow policyholders to participate in investment returns with the Company, in addition to compensation for losses from insured risk. These contracts are substantially investment service-related contracts where the return on the underlying items is shared with policyholders. Underlying items comprise specified portfolios of investment assets that determine amounts payable to policyholders.
In addition to issuing insurance contracts, the Company holds reinsurance contracts to mitigate certain risk exposures. A reinsurance contract is an insurance contract issued by a reinsurer to compensate the Company for claims arising from one or more insurance contracts issued by the Company. These are quota share and excess of loss reinsurance contracts. For reinsurance contracts held by the Company, even if they do not expose the issuer (the reinsurer) to the possibility of a significant loss they would still be deemed to transfer significant insurance risk if they transfer substantially all of the insurance risk relating to the reinsured portions of the underlying insurance contracts to the reinsurer.
2.4Separating components from insurance contracts
At inception, the Company separates the following components from an insurance contract and accounts for them as if they were stand-alone financial instruments:
\u2022derivatives embedded in the contract whose economic characteristics and risks are not closely related to those of the host contract, and whose terms would not meet the definition of an insurance contract as a stand-alone instrument; and
\u2022distinct investment components i.e. investment components that are not highly inter-related with the insurance components and for which contracts with equivalent terms are sold, or could be sold, separately in the same market or the same jurisdiction.
The Company issues certain contracts which include a promise to transfer a good or non-insurance service. These transfers of a good or non-insurance service are not distinct and therefore are not separated from the contracts.
An investment component comprises of the amounts that an insurance contract requires the Company to repay to a policyholder in all circumstances, regardless of whether an insured event occurs. Investment components which are highly interrelated with the insurance contract of which they form a part are considered non-distinct and are not separately accounted for.
The Company assesses its insurance contracts to determine whether they contain any derivatives or investment components or promises to transfer to policyholders distinct goods or services other than insurance coverage and investment services which must be accounted for under a different IFRS than IFRS 17. The Company applies IFRS 17 to all remaining components of the host insurance contract.
After separating any embedded derivatives or distinct investment components, the Company separates any promises to transfer to policyholders distinct goods or services other than insurance coverage and investment services and accounts for them as separate contracts with customers (i.e. not as insurance contracts). A good or service is distinct if the policyholder can benefit from it either on its own or with other resources that are readily available to the policyholder. A good or service is not distinct and is accounted for together with the insurance component if the cash flows and risks associated with the good or service are highly inter-related with the cash flows and risks associated with the insurance component, and the Company provides a significant service of integrating the good or service with the insurance component.
The Company issues some contracts which include an embedded derivative (surrender option) and/or investment component (account balance) under which the surrender value is paid to the policyholder on maturity or earlier lapse of the contract. These components have been assessed to meet the definition of a highly related and/or non-distinct component. The surrender option is interrelated with the value of the insurance contract and as such, is not separated. Concerning the account balance, the Company is unable to measure the investment component separately from the contract and the policyholder is unable to benefit from the investment component unless the insurance component is also present and as such they are not separated.
Once the embedded derivatives and investment components and the goods and services components are separated, the Company assesses whether the contract should be separated into several insurance components that, in substance, should be treated as separate contracts.
To determine whether a single legal contract does not reflect the substance of the transaction and its insurance components recognised and measured separately instead, the Company considers whether there is an interdependency between the different risks covered, whether components can lapse independently of each other and whether the components can be priced and sold separately.
When the Company enters into one legal contract with different insurance components operating independently of each other, insurance components are recognised and measured separately applying IFRS 17.
Concerning the contracts with supplementary benefits (riders) the Company has determined that the legal contract reflects the substance of the transaction and as such the insurance components are not separated.
The reinsurance contracts held by the Company, despite the fact that they may cover more than one types of risk exposures, reflect single contracts in substance and are treated as one single accounting contract for IFRS 17.
2.5Aggregation level
The Company identifies portfolios by aggregating insurance contracts that are subject to similar risks and managed together. The Company expects that all contracts within each product line, as defined for management purposes, have similar risks and, therefore, would represent a portfolio of contracts when they are managed together. Reinsurance contracts held have been grouped into portfolios taking into consideration the nature of the risk and the type of reinsurance cover.
Each portfolio is sub-divided into groups of contracts to which the recognition and measurement requirements of IFRS 17 are applied. At initial recognition, the Company segregates contracts based on when they were issued. A portfolio contains all contracts that were issued within a 12-month period.
Each annual cohort is then further disaggregated into three groups of contracts:
\u2022any contracts that are onerous on initial recognition;
\u2022any contracts that, on initial recognition, have no significant possibility of becoming onerous subsequently; and
\u2022any remaining contracts in the portfolio.
Portfolios of reinsurance contracts held are assessed for aggregation separately from portfolios of insurance contracts issued. Applying the grouping requirements to reinsurance contracts held, the Company aggregates reinsurance contracts held into groups of:
\u2022contracts for which there is a net gain at initial recognition, if any;
\u2022contracts for which, at initial recognition, there is no significant possibility of a net gain arising subsequently; and
\u2022remaining contracts in the portfolio, if any.
The Company makes an evaluation of whether a set of contracts can be treated together in making the profitability assessment based on reasonable and supportable information. In the absence of such information the Company assesses each contract individually.
If insurance contracts within a portfolio would fall into different groups only because law or regulation specifically constrains the Company\u2019s practical ability to set a different price or level of benefits for policyholders with different characteristics, the Company may include those contracts in the same group.
The determination of whether a contract or a group of insurance contracts issued is onerous is based on the expectations as at the date of initial recognition, with fulfilment cash flow expectations determined on a probability-weighted basis. The Company determines the appropriate level at which reasonable and supportable information is available to assess whether the contracts are onerous at initial recognition and whether the contracts not onerous at initial recognition have a significant possibility of becoming onerous subsequently.
A similar assessment is done for reinsurance contracts held to determine the contracts for which there is a net gain at initial recognition or whether contracts for which there is not a net gain at initial recognition have a significant possibility of a net gain subsequently.
For contracts applying the Premium Allocation Approach (\u201cPAA\u201d) the Company assumes that contracts are not onerous (for reinsurance contracts there is not a net gain) on initial recognition unless there are facts and circumstances indicating otherwise. The Company assesses the likelihood of changes in applicable facts and circumstances to determine whether contracts not onerous (for reinsurance contracts there is not a net gain) at initial recognition belong to a group with no significant possibility of becoming onerous (for reinsurance contracts no significant possibility of a net gain) in the future.
The composition of groups established at initial recognition is not subsequently reassessed.
2.6Initial recognition
The Company recognises groups of insurance contracts that it issues from the earliest of the following:
\u2022The beginning of the coverage period of the group of contracts;
\u2022The date when the first payment from a policyholder in the group is due, or when the first payment is received if there is no due date;
\u2022When the Company determines that a group of contracts becomes onerous.
Concerning onerous contracts such contracts expected on initial recognition to be loss-making are grouped together and such groups are measured and presented separately. Once contracts are allocated to a group, they are not re-allocated to another group, unless they are substantively modified.
The Company recognises a group of reinsurance contracts held:
\u2022If the reinsurance contracts provide proportionate coverage, at the later of the beginning of the coverage period of the group, or the initial recognition of any underlying contract;
\u2022In all other cases, from the beginning of the coverage period of the first contract in the group.
If the Company entered into the reinsurance contract held at or before the date when an onerous group of underlying contracts is recognised prior to the beginning of the coverage period of the group of reinsurance contracts held, the reinsurance contract held is recognised at the same time as the group of underlying insurance contracts is recognised.
The Company adds new contracts to the group when they meet the recognition criteria.
2.7Contract boundaries
Insurance contracts
The Company includes in the measurement of a group of insurance contracts all the future cash flows within the boundary of each contract in the group.
Cash flows are within the boundary of an insurance contract if they arise from substantive rights and obligations that exist during the reporting period in which the Company can compel the policyholder to pay the premiums, or in which the Company has a substantive obligation to provide the policyholder with services.
Cash flows within the boundary of an insurance contract are those that relate directly to the fulfilment of the contract, including cash flows for which the Company has discretion over the amount or timing.
A substantive obligation to provide services ends when:
\u2022The Company has the practical ability to reassess the risks of the particular policyholder and, as a result, can set a price or level of benefits that fully reflects those risks; or
\u2022Both of the following criteria are satisfied:
-The Company has the practical ability to reassess the risks of the portfolio of insurance contracts that contain the contract and, as a result, can set a price or level of benefits that fully reflects the risk of that portfolio;
-The pricing of the premiums for coverage up to the date when the risks are reassessed does not take into account the risks that relate to periods after the reassessment date.
In determining whether all the risks have been reflected either in the premium or in the level of benefits, the Company considers all risks that policyholders would transfer had it issued the contracts (or portfolio of contracts) at the reassessment date. Similarly, the Company concludes on its practical ability to set a price that fully reflects the risks in the contract or portfolio at a renewal date by considering all the risks that it would assess when underwriting equivalent contracts on the renewal date for the remaining service.
The assessment on the Company\u2019s practical ability to reprice existing contracts takes into account all contractual, legal and regulatory restrictions. In doing so, the Company disregards restrictions that have no commercial substance. The Company also considers the impact of market competitiveness and commercial considerations on its practical ability to price new contracts and repricing existing contracts. Judgement is required to decide whether such commercial considerations are relevant in concluding as to whether the practical ability exists at the reporting date.
The Company issues contracts that include an option to add insurance coverage at a future date so that the Company is obligated to provide additional coverage if the policyholder exercises the option. The Company has no right to compel the policyholder to pay premiums and the option to add insurance coverage at a future date is an insurance component that is not measured separately from the insurance contract.
When the insurance option is not in substance a separate contract and the terms are guaranteed by the Company, the cash flows arising from the option are within the boundary of the contract. If the option is not a separate contract and the terms are not guaranteed by the Company, the cash flows arising from the option might be either within or outside the contract boundary, depending on whether the Company has the practical ability to set a price that fully reflects the reassessed risks of the whole contract. In case where the Company does not have the practical ability to reprice the whole contract when the policyholder exercises the option to add coverage, the expected cash flows arising from the additional premiums after the option exercise date would be within the original contract boundary.
In estimating expected future cash flows of the group of contracts the Company applies its judgement in assessing future policyholder behaviour surrounding the exercise of options available to them such as surrenders options, and other options falling within the contract boundary.
The Company assesses the contract boundary at initial recognition and at each subsequent reporting date to include the effect of changes in circumstances on the Company\u2019s substantive rights and obligations.
Reinsurance contracts
For groups of reinsurance contracts held, cash flows are within the contract boundary if they arise from substantive rights and obligations of the cedant that exist during the reporting period in which the Company is compelled to pay amounts to the reinsurer or has a substantive right to receive insurance contract services from the reinsurer.
A substantive right to receive services from the reinsurer ends when the reinsurer:
\u2022has the practical ability to reassess the risks transfer to it and can set a price or level of benefits that fully reflects those reassessed risks; or
\u2022has a substantive right to terminate the coverage.
The boundary of a reinsurance contract held includes cash flows resulting from the underlying contracts covered by the reinsurance contract. This includes cash flows from insurance contracts that are expected to be issued by the Company in the future if these contracts are expected to be issued within the boundary of the reinsurance contract held.
The Company holds proportional life reinsurance contracts which have an unlimited duration but which allow both the reinsurer and the Company to terminate the contract at three months\u2019 notice for new business ceded. The Company includes within the contracts boundary only cash flows arising from such three months\u2019 notice period because it does not have substantive rights or obligations beyond that point. Therefore, on initial recognition, the cash flows within the reinsurance contract boundary are determined to be those arising from underlying contracts that the Company expects to issue and cede under the reinsurance contract within the next three months. Subsequently, expected cash flows beyond the end of this initial notice period are considered cash flows of new reinsurance contracts and are recognised, separately from the initial contract, as they fall within the rolling three-month notice period. Other life reinsurance agreements have a cancellability clause for new business with three months\u2019 notice but this being effective at the next annual renewal of the agreement and hence, in this case, on initial recognition the cash flows within the reinsurance contract boundary are determined to be those arising from underlying contracts that the Company expects to issue and cede under the reinsurance contract within the year. The Company treats all the above mentioned reinsurance contracts as a series of contracts that form an annual group and cover underlying business issued within a year.
The Company holds proportional group life reinsurance contracts that have a short-term boundary and cover short-term underlying contracts issued within the term on a risk-attaching basis. All cash flows arising from claims incurred and expected to be incurred during the life of the underlying contracts are included in the measurement.
Finally, the Company\u2019s non-proportional, excess of loss reinsurance contracts held, have an annual term and provide coverage for claims incurred during an accident year (i.e. loss occurring). Thus, all cash flows arising from claims incurred and expected to be incurred in the accident year are included in the measurement of the reinsurance contracts held.
2.8Insurance acquisition cashflows
Insurance acquisition cash flows arise from the costs of selling, underwriting and starting a group of insurance contracts (issued or expected to be issued) that are directly attributable to the portfolio of insurance contracts to which the group belongs. Such cash flows include cash flows that are not directly attributable to individual contracts or groups of insurance contracts within the portfolio. Costs which are not directly attributable are recognised in the profit and loss account immediately.
Insurance acquisition cash flows that are directly attributable to a group of insurance contracts are allocated to that group and to renewal groups of insurance contracts using a systematic and rational method and considering, in an unbiased way, all reasonable and supportable information that is available without undue cost or effort.
A systematic and rational method is also used to allocate insurance acquisition cash flows directly attributable to a portfolio but not to groups of contracts to such groups in the portfolio.
Insurance acquisition cash flows arising before the recognition of the related group of contracts are recognised as an asset. Insurance acquisition cash flows arise when they are paid or when a liability is required to be recognised under a standard other than IFRS 17. Such an asset is recognised for each group of contracts to which the insurance acquisition cash flows are allocated. The asset is derecognised, fully or partially, when the insurance acquisition cash flows are included in the measurement of the group of contracts.
At each reporting date, the Company revises the amounts allocated to groups to reflect any changes in assumptions that determine the inputs to the allocation method used. Amounts allocated to a group are not revised once all contracts have been added to the group.
The Company reverses any impairment losses in profit or loss and increases the carrying amount of the asset to the extent that the impairment conditions have improved.
2.9Measurement of insurance contracts issued
The liability for remaining coverage (\u201cLRC\u201d) represents the Company\u2019s obligation to investigate and pay valid claims under existing contracts for insured events that have not yet occurred (i.e. the obligation that relates to the unexpired portion of the coverage period), comprising (a) fulfilment cash flows relating to future service and (b) the contractual service margin yet to be earned.
The liability for incurred claims (\u201cLIC\u201d) includes the Company\u2019s liability to pay valid claims for insured events that have already incurred, other incurred insurance expenses arising from past coverage service and it includes the Company\u2019s liability to pay amounts the Company is obliged to pay the policyholder under the contract, including repayment of investment components, when a contract is derecognised. The current estimate of LIC comprises the fulfilment cash flows related to current and past service allocated to the group at the reporting date.
The carrying amount of a group of insurance contracts at each reporting date is the sum of the LRC and the LIC.
2.9.1Measurement on initial recognition of contracts not measured under the PAA
Under the GM the Company measures a group of contracts on initial recognition as the sum of the expected fulfilment cash flows within the contract boundary and the contractual service margin representing the unearned profit in the contracts relating to services that will be provided under the contracts.
Fulfilment Cashflows (\u201cFCF\u201d)
FCF comprise unbiased and probability-weighted estimates of future cash flows, an adjustment to reflect the time value of money and the financial risks related to the future cash flows, to the extent that the financial risks are not included in the estimates of the future cash flows, plus a risk adjustment for non-financial risk.
The Company\u2019s objective in estimating future cash flows is to determine the expected value, or the probability weighted mean, of the full range of possible outcomes, considering all reasonable and supportable information available at the reporting date without undue cost or effort, that reflect the timing and uncertainty of those future cash flows.
The Company estimates future cash flows considering a range of scenarios which have commercial substance and give a good representation of possible outcomes. The cash flows from each scenario are probability-weighted and discounted using current assumptions.
The Company estimates certain FCF at the portfolio level or higher and then allocates such estimates to groups of contracts.
When estimating future cash flows, the Company includes all cash flows that are within the contract boundary including:
\u2022Premiums and related cash flows;
\u2022Claims and benefits, including reported claims not yet paid, incurred claims not yet reported and expected future claims;
\u2022Payments to policyholders resulting from embedded surrender value options;
\u2022An allocation of insurance acquisition cash flows attributable to the portfolio to which the contract belongs;
\u2022Claims handling costs;
\u2022Policy administration and maintenance costs;
\u2022An allocation of fixed and variable overheads directly attributable to fulfilling insurance contracts;
\u2022Transaction-based taxes;
\u2022Costs incurred for performing investment activities that enhance insurance coverage benefits for the policyholder;
\u2022Costs incurred for providing investment-related service to policyholders.
The cash flow estimates include both market variables, which are consistent with observable market prices, and non-market variables, which are not contradictory with market information and based on internally and externally derived data.
The Company updates its estimates at the end of each reporting period using all newly available, as well as historic evidence and information about trends. The Company determines its current expectations of probabilities of future events occurring at the end of the reporting period. In developing new estimates, the Company considers the most recent experience and earlier experience, as well as other information.
Risk of the Company\u2019s non-performance is not included in the measurement of groups of insurance contracts issued.
Risk Adjustment (\u201cRA\u201d)
The risk adjustment for non-financial risk for a group of insurance contracts, determined separately from the other estimates, is the compensation required for bearing uncertainty about the amount and timing of the cash flows that arises from non-financial risk to fulfill insurance contracts.
The risk adjustment also reflects the degree of diversification benefit the Company includes when determining the compensation it requires for bearing that risk; and both favourable and unfavourable outcomes, in a way that reflects the Company\u2019s degree of risk aversion.
The Company uses a Risk-based capital approach based on which the risk adjustment can be determined at the chosen level of confidence.
Time value of money and financial risks
The Company adjusts the estimates of future cash flows to reflect the time value of money and the financial risks related to those cash flows, to the extent that the financial risks are not included in the estimates of cash flows. The discount rates applied to the estimates of the future cash flows:
\u2022reflect the time value of money, the characteristics of the cash flows and the liquidity characteristics of the insurance contracts;
\u2022are consistent with observable current market prices (if any) for financial instruments with cash flows whose characteristics are consistent with those of the insurance contracts, in terms of, for example, timing, currency and liquidity; and
\u2022exclude the effect of factors that influence such observable market prices but do not affect the future cash flows of the insurance contracts.
In determining discount rates for cash flows that do not vary based on the returns of underlying items, the Company uses the \u2018bottom-up approach\u2019 to estimate discount rates.
Contractual Service Margin (\u201cCSM\u201d)
The CSM is a component of the overall carrying amount of a group of insurance contracts representing unearned profit the Company will recognise as it provides insurance contract services over the coverage period.
On initial recognition of a group of insurance contracts, if the total of (a) the fulfilment cash flows, (b) any cash flows arising at that date and (c) any amount arising from the derecognition of any assets or liabilities previously recognised for cash flows related to the group (including assets for insurance acquisition cash flows) is a net inflow, the CSM is measured as the equal and opposite amount of the net inflow, which results in no gain no loss, arising on initial recognition.
If the total is a net outflow, then the group is onerous. In this case, the net outflow is recognised as a loss in profit or loss. A loss component is created to depict the amount of the net cash outflow, which determines the amounts that are subsequently presented in profit or loss as reversals of losses on onerous contracts and are excluded from insurance revenue.
The Company determines, at initial recognition, the group\u2019s coverage units and allocates the group\u2019s CSM based on the coverage units provided in the period.
2.9.2Subsequent measurement of contracts not measured under the PAA
Changes in fulfilment cash flows
At the end of each reporting period, the Company will update the fulfilment cash flows for both LIC and LRC to reflect the current estimates of the amounts, timing and uncertainty of future cash flows, as well as discount rates and other financial variables.
Experience adjustments would be the difference between:
\u2022The expected cash flow estimate at the beginning of the period and the actual cash flows for premiums received in the period (and any related cash flows paid such as insurance acquisition cash flows);
\u2022The expected cash flow estimate at the beginning of the period and the actual incurred amounts of insurance service expenses in the period (excluding insurance acquisition expenses).
Experience adjustments relating to current or past service will be recognized in profit or loss. For incurred claims (including incurred but not reported) and other incurred insurance service expenses, experience adjustments would always relate to current or past service. They would be included in profit or loss as part of insurance service expenses. Experience adjustments relating to future service will be included in the LRC by adjusting the CSM.
Adjustments to the CSM - Insurance contracts without direct participation features
For a group of insurance contracts, the carrying amount of the CSM of the group at the end of the reporting period equals the carrying amount at the beginning of the reporting period adjusted, as follows:
\u2022The effect of any new contracts added to the group in the reporting period;
\u2022Interest accreted on the carrying amount of the CSM during the reporting period, measured at the discount rates at initial recognition;
\u2022The changes in fulfilment cash flows relating to future service, except to the extent that:
-Such increases in the fulfilment cash flows exceed the carrying amount of the CSM, giving rise to a loss; or
-Such decreases in the fulfilment cash flows are allocated to the loss component of the liability for remaining coverage;
\u2022The effect of any currency exchange differences on the CSM;
\u2022The amount recognised as insurance revenue because of the transfer of services in the period, determined by the allocation of the CSM remaining at the end of the reporting period (before any allocation) over the current and remaining coverage period.
The locked-in discount rate is the weighted average of the rates applicable at the date of initial recognition of contracts that joined a group over a 12-month period.
The changes in fulfilment cash flows relating to future service that adjust the CSM comprise of:
\u2022Experience adjustments that arise from the difference between the premium receipts (and any related cash flows such as insurance acquisition cash flows) and the estimate, at the beginning of the period, of the amounts expected.
\u2022Changes in estimates of the present value of future cash flows in the liability for remaining coverage, except those relating to the time value of money and changes in financial risk (recognised in the statement of profit or loss and other comprehensive income rather than adjusting the CSM)
\u2022Differences between:
-any investment component expected to become payable in the year, determined as the payment expected at the start of the year plus any insurance finance income or expenses related to that expected payment before it becomes payable; and
-the actual amount that becomes payable in the year
\u2022Changes in the risk adjustment for non-financial risk that relate to future service
Except for changes in the risk adjustment, adjustments to the CSM noted above are measured at discount rates that reflect the characteristics of the cash flows of the group of insurance contracts at initial recognition.
The CSM at the end of the reporting period represents the profit in the group of insurance contracts that has not yet been recognised in profit or loss, because it relates to future service.
An amount of the CSM is released to profit or loss in each period during which the insurance contract services are provided.
In determining the amount of the CSM to be released in each period, the Company follows three steps:
\u2022determines the total number of coverage units in the group. The amount of coverage units in the group is determined by considering for each contract the quantity of benefits provided under the contract and the expected coverage period;
\u2022allocates the CSM at the end of the period (before any of it is released to profit or loss to reflect the insurance contract services provided in the period) equally to each of the coverage units provided in the current period and expected to be provided in the future;
\u2022recognises in profit or loss the amount of CSM allocated to the coverage units provided during the period.
The number of coverage units changes as insurance contract services are provided, contracts expire, lapse or surrender and new contracts are added into the group. The total number of coverage units depends on the expected duration of the obligations that the Company has from its contracts, which can differ from the legal contract maturity because of the impact of policyholder behaviour and the uncertainty surrounding future insured events. In determining a number of coverage units, the Company exercises judgement in estimating the likelihood of insured events occurring and policyholder behaviours to the extent that they affect expected period of coverage in the group, the different levels of service offered across periods and the \u2018quantity of benefits\u2019 provided under a contract.
The Company does not issue insurance contracts generating cash flows in a foreign currency that is different from the functional currency of the Company.
Adjustments to the CSM - Insurance contracts with direct participation features
Direct participating contracts are contracts under which the Company\u2019s obligation to the policyholder is the net of:
\u2022the obligation to pay the policyholder an amount equal to the fair value of the underlying items; and
\u2022a variable fee in exchange for future services provided by the contracts, being the amount of the Company\u2019s share of the fair value of the underlying items less fulfilment cash flows that do not vary based on the returns on underlying items.
When measuring a group of direct participating contracts, the Company adjusts the fulfilment cash flows for the whole of the changes in the obligation to pay policyholders an amount equal to the fair value of the underlying items. These changes do not relate to future services and are recognised in profit or loss. The Company then adjusts any CSM for changes in the amount of the Company\u2019s share of the fair value of the underlying items which relate to future services.
Hence, the carrying amount of the CSM at each reporting date is the carrying amount at the start of the year, adjusted for:
\u2022the CSM of any new contracts that are added to the group in the year;
\u2022the change in the amount of the Company\u2019s share of the fair value of the underlying items and changes in fulfilment cash flows that relate to future services, except to the extent that:
-a decrease in the amount of the Company\u2019s share of the fair value of the underlying items, or an increase in the fulfilment cash flows that relate to future services, exceeds the carrying amount of the CSM, giving rise to a loss in profit or loss (included in insurance service expenses) and creating a loss component; or
-an increase in the amount of the Company\u2019s share of the fair value of the underlying items, or a decrease in the fulfilment cash flows that relate to future services, is allocated to the loss component, reversing losses previously recognised in profit or loss (included in insurance service expenses);
\u2022the effect of any currency exchange differences on the CSM; and
\u2022the amount recognised as insurance revenue because of the services provided in the year.
Changes in fulfilment cash flows that relate to future services include the changes relating to future services specified above for contracts without direct participation features (measured at current discount rates) and changes in the effect of the time value of money and financial risks that do not arise from underlying items \u2013 e.g. the effect of financial guarantees.
Onerous Contracts
After the loss component is recognised, the Company allocates any subsequent changes in fulfilment cash flows of the LRC on a systematic basis between \u2018loss component\u2019 and \u2018LRC excluding the loss component\u2019.
The subsequent changes in the fulfilment cash flows of the LRC to be allocated are:
\u2022insurance finance income or expense;
\u2022changes in risk adjustment for non-financial risk recognised in profit or loss representing release from risk in the period; and
\u2022estimates of the present value of future cash flows for claims and expenses released from the LRC because of incurred insurance service expense in the period.
The Company determines the systematic allocation of insurance service expenses incurred based on the percentage of loss component to the total outflows included in the LRC, excluding any investment component amount.
Any subsequent decreases relating to future service in fulfilment cash flows allocated to the group arising from changes in estimates of future cash flows and the risk adjustments for non-financial risk are allocated first only to the loss component, until it is exhausted. Once it is exhausted, any further decreases in fulfilment cash flows relating to future service create the group\u2019s CSM.
Measurement of contracts under the PAA
On initial recognition the Company applies the PAA:
\u2022When the coverage period of each insurance contract in the group is one year or less;
\u2022For groups of insurance contracts including contracts with a coverage period extending beyond one year the Company reasonably expects that such simplification would produce a measurement of the LRC for the group that would not differ materially from the one that would be produced applying the requirements of the general measurement model.
On initial recognition, the Company measures the LRC at the amount of premiums received in cash. As all the issued insurance contracts to which the PAA is applied have coverage of a year or less, the Company has elected the policy of expensing insurance acquisition cash flows as they are incurred.
On initial recognition of each group of contracts, the Company expects that the time between providing each part of the services and the related premium due date is no more than a year. Accordingly, the Company has chosen not to adjust the liability for remaining coverage to reflect the time value of money and the effect of financial risk.
There are no investment components within insurance contracts issued that are measured under the PAA.
The carrying amount of a group of insurance contracts issued at the end of each reporting period is the sum of (a) the LRC and (b) the LIC, comprising the FCF related to past service allocated to the group at the reporting date.
The carrying amount of the LRC for subsequent measurement purposes is increased by any premiums received and decreased by the amount recognised as insurance revenue for services provided.
The LIC is measured similarly to the LIC\u2019s measurement under the GMM. The liability equals the amount of the fulfilment cash flows relating to incurred claims. For claims that the Company expects to be paid within one year or less from the date of incurring the Company does not adjust future cash flows for the time value of money and the effect of financial risk. However, claims expected to take more than one year to settle are discounted.
If facts and circumstances indicate that a group of insurance contracts measured under the PAA is onerous on initial recognition or becomes onerous subsequently, the Company increases the carrying amount of the LRC to the amount of the FCF determined under the GMM with the amount of such an increase recognised in insurance service expenses, and a loss component is established for the amount of the loss recognised. The fulfilment cash flows are discounted at current rates, as the liability for incurred claims is also discounted.
2.10Measurement of reinsurance contracts held
The same accounting policies will be applied as for insurance contracts issued to measure a group of reinsurance contracts held, adapted where necessary to reflect features that differ from those of insurance contracts.
2.10.1Measurement of the asset for remaining coverage (\u201cARC\u201d)
Reinsurance contracts measured under the general model
The measurement of reinsurance contracts held follows the same principles as those for insurance contracts issued, with the exception of the following:
\u2022Measurement of the cash flows include an allowance on a probability-weighted basis for the effect of any non-performance by the reinsurers, including the effects of collateral and losses from disputes;
\u2022The Company determines the risk adjustment for non-financial risk so that it represents the amount of risk being transferred to the reinsurer;
\u2022The Company recognises both day 1 gains and day 1 losses at initial recognition in the statement of financial position as a CSM and releases this to profit or loss as the reinsurer renders services, except for any portion of a day 1 loss that relates to events before initial recognition as described below;
\u2022Changes in the fulfilment cash flows are recognised in profit or loss if the related changes arising from the underlying ceded contracts have been recognised in profit or loss. Alternatively, changes in the fulfilment cash flows adjust the CSM.
The Company measures the estimates of the present value of future cash flows using assumptions that are consistent with those used to measure the estimates of the present value of future cash flows for the underlying insurance contracts.
On initial recognition, the CSM of a group of reinsurance contracts represents a net cost or net gain on purchasing reinsurance. It is measured as the equal and opposite amount of the total of (a) the fulfilment cash flows, (b) any amount arising from the derecognition of any assets or liabilities previously recognised for cash flows related to the group, (c) any cash flows arising at that date and (d) any income recognised in profit or loss because of onerous underlying contracts recognised at that date.
However, if any net cost on purchasing reinsurance coverage relates to insured events that occurred before the purchase of the group, then the Company recognises the cost immediately in profit or loss as an expense.
The carrying amount of the CSM at each reporting date is the carrying amount at the start of the year, adjusted for:
\u2022the CSM of any new contracts that are added to the group in the year;
\u2022interest accreted on the carrying amount of the CSM during the year, measured at the discount rates determined on initial recognition;
\u2022income recognised in profit or loss in the year on initial recognition of onerous underlying contracts;
\u2022reversals of a loss-recovery component to the extent that they are not changes in the fulfilment cash flows of the group of reinsurance contracts;
\u2022changes in fulfilment cash flows that relate to future services, measured at the discount rates determined on initial recognition, unless they result from changes in fulfilment cash flows of onerous underlying contracts, in which case they are recognised in profit or loss and create or adjust a loss-recovery component;
\u2022the effect of any currency exchange differences on the CSM; and
\u2022the amount recognised in profit or loss because of the services received in the year.
For a group of reinsurance contracts covering onerous underlying contracts, the Company establishes a loss-recovery component of the asset for remaining coverage, adjusts the CSM and as a result recognises income when it recognises a loss on initial recognition of onerous underlying contracts, if the reinsurance contract is entered into before or at the same time as the onerous underlying contracts are recognised. The adjustment to the CSM is determined by multiplying:
\u2022the amount of the loss that relates to the underlying contracts; and
\u2022the percentage of claims on the underlying contracts that the Company expects to recover from the reinsurance contracts.
The loss-recovery component is adjusted for changes in FCFs of the group of reinsurance contracts relating to future services that result from changes in FCFs of the onerous underlying contracts. If the reinsurance contract covers only some of the insurance contracts included in an onerous group of contracts, then the Company uses a systematic and rational method to determine the portion of losses recognised on the onerous group of contracts that relates to underlying contracts covered by the reinsurance contract.
The loss-recovery component determines the amounts that are subsequently presented in profit or loss as reversals of recoveries of losses from the reinsurance contracts and are excluded from the allocation of reinsurance premiums paid. It is adjusted to reflect changes in the loss component of the onerous group of underlying contracts, but it cannot exceed the portion of the loss component of the onerous group of underlying contracts that the Company expects to recover from the reinsurance contracts.
Reinsurance contracts measured under the Premium Allocation Approach
The Company applies the PAA to measure a group of reinsurance contracts using the same accounting policies to the insurance contracts, as adapted where necessary to reflect the features of reinsurance contracts.
The Company applies the PAA to reinsurance contracts that it holds, as follows:
\u2022to groups of reinsurance contracts that it holds which at the inception of the group the effective coverage period of each contract in the group of reinsurance contracts held is one year or less;
\u2022to groups of reinsurance contracts that it holds including contracts with a coverage period extending beyond one year when the Company reasonably expects that such simplification would produce a measurement of the asset for remaining coverage for the group that would not differ materially from the one that would be produced applying the requirements of the general measurement model.
Under the PAA, the initial measurement of the asset equals the reinsurance premium paid. The Company measures the amount relating to remaining service by allocating the amount of expected reinsurance premium payments over the coverage period of receiving services for the group. For all reinsurance contracts held the allocation is based on the passage of time.
On initial recognition of each group of reinsurance contracts held, the Company expects that the time between receiving each part of the services and the related reinsurance premium due date is no more than a year. Accordingly, the Company has chosen not to adjust the asset for remaining coverage to reflect the time value of money and the effect of financial risk.
Where the reinsurance contracts held cover a group of onerous underlying insurance contracts, the Company adjusts the carrying amount of the asset for remaining coverage and recognises a gain when, in the same period, it reports a loss on initial recognition of an onerous group of underlying insurance contracts or on additional loss from an already onerous group of underlying insurance contracts. The recognition of this gain results in the accounting for the loss recovery component of the asset for the remaining coverage of a group of reinsurance contracts held. The loss-recovery component is adjusted to reflect changes in the loss component of the onerous group of underlying contracts, but it cannot exceed the portion of the loss component of the onerous group of underlying contracts that the Company expects to recover from the reinsurance contracts.
2.10.2Measurement of the asset for incurred claims (\u201cAIC\u201d)
The Company uses consistent assumptions to measure the estimates of the present value of future cash flows for the group of reinsurance contracts held and the estimates of the present value of future cash flows for the group(s) of underlying insurance contracts. The Company includes in the estimates of the present value of the future cash flows for the group of reinsurance contracts held the effect of any risk of non-performance by the issuer of the reinsurance contract, including the effects of collateral and losses from disputes.
The risk adjustment for non-financial risk for reinsurance contracts held represents the amount of risk being transferred by the Company to the reinsurer.
2.11Insurance contracts \u2013 modification and derecognition
The Company derecognises insurance contracts when, and only when:
\u2022The rights and obligations relating to the contract are extinguished (i.e., discharged, cancelled or expired); or
\u2022The contract is modified such that the modification results in:
-the contract being outside the scope of IFRS 17;
-a different insurance contract due to separating components from the host contract;
-a substantially different contract boundary;
-the contract being included in a different group of contracts.
If any of the modification criteria described above are met, the Company derecognises the initial contract and recognises the modified contract as a new contract.
On derecognition of a contract from within a group of contracts:
\u2022the fulfilment cash flows allocated to the group are adjusted to eliminate those that relate to the rights and obligations derecognised;
\u2022the CSM of the group is adjusted for the change in the fulfilment cash flows, except where such changes are allocated to a loss component; and
\u2022the number of coverage units for the expected remaining services is adjusted to reflect the coverage units derecognised from the group.
If a contract is derecognised because it is transferred to a third party, then the CSM is also adjusted for the premium charged by the third party, unless the group is onerous.
If a contract is derecognised because its terms are modified, then the CSM is also adjusted for the premium that would have been charged had the Company entered into a contract with the new contract\u2019s terms at the date of modification, less any additional premium charged for the modification. The new contract recognised is measured assuming that, at the date of modification, the Company received the premium that it would have charged less any additional premium charged for the modification.
If the contract modification does not meet the above conditions the Company treats the effect of the modification as changes in the estimates of fulfilment cash flows.
For insurance contracts accounted for applying the PAA the Company adjusts insurance revenue prospectively from the time of the contract modification.
2.12Investment contracts with discretionary participation features
The Company recognises investment contracts with DPF at the date when the Company becomes a party to the contract. The investment contracts with DPF are aggregated in the same manner as insurance contracts. The Company identified portfolios of such investment contracts with DPF. Within that portfolio, the Company aggregated them based on three expected profitability levels (groups of onerous contracts, groups of contracts that have no significant possibility of becoming onerous subsequently, and groups that are neither onerous nor have no significant possibility of becoming onerous subsequently). Groups comprise of contracts issued not more than a year apart.
At initial recognition, similar to insurance contracts, the Company estimates the fulfilment cash flows based on the present value of expected future cash flows and a risk adjustment for non-financial risk. Any expected net inflows are accounted for as the initial CSM.
In estimating future cash flows, the Company considers the contract boundary which only includes cash flows if they result from a substantive obligation of the Company to deliver cash at a present or future date.
In estimating the risk adjustment for non-financial risk for investment contracts with DPF, the Company considers other non-financial risks, such as the risks arising from the contract holder behaviour, e.g. lapse risk and expense risk.
The Company discounts cash flows using discount rates that reflect the characteristics of the fulfilment cash flows, including the extent of their dependency on the fair value of the underlying items.
The Company allocates the CSM over the group\u2019s whole duration period in a systematic way reflecting the transfer of investment services under a contract. The Company measures investment contracts with DPF at initial recognition as detailed in \u201cMeasurement on initial recognition of contracts not measured under the PAA\u201d and at subsequent measurement in accordance to \u201cSubsequent measurement of contracts not measured under PAA\u201d and \u201cAdjustments to the CSM \u2013 Insurance contracts with direct participation features\u201d.
2.13Presentation
The Company presents separately, in the statement of financial position, the carrying amount of portfolios of:
1.insurance contracts and investment contracts with DPF issued that are assets;
2.insurance contracts and investment contracts with DPF issued that are liabilities;
3.reinsurance contracts held that are assets;
4.reinsurance contracts held that are liabilities.
Any assets or liabilities for insurance acquisition cash flows recognised before the corresponding insurance contracts are included in the carrying amount of the related portfolio of contracts.
The Company disaggregates the total amount recognised in the statement of profit or loss and other comprehensive income into an insurance service result, comprising insurance revenue and insurance service expense, and insurance finance income or expenses.
The Company does not disaggregate the change in risk adjustment for non-financial risk between a financial and non-financial portion and includes the entire change as part of the insurance service result.
The Company separately presents income or expenses from reinsurance contracts held from the expenses or income from insurance contracts and investments contracts with DPF issued.
2.13.1Insurance Service Revenue
Contracts not measured under the PAA
The Company\u2019s insurance revenue depicts the provision of coverage and other services arising from a group of insurance contracts and investment contracts with DPF at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those services. Insurance revenue from a group of insurance contracts and a group of investment contracts with DPF is therefore the relevant portion for the period of the total consideration for the contracts, (i.e., the amount of premiums paid to the Company adjusted for financing effect (the time value of money) and excluding any investment components).
The total consideration for a group of contracts covers amounts related to the provision of services and is comprised of:
\u2022Insurance service expenses, excluding any amounts allocated to the loss component of the liability for remaining coverage;
\u2022The risk adjustment for non-financial risk related to current service, excluding any amounts allocated to the loss component of the liability for remaining coverage;
\u2022The CSM release measured based on coverage units provided.
In addition, the Company allocates a portion of premiums that relate to recovering insurance acquisition cash flows to each period in a systematic way based on the passage of time. The Company recognises the allocated amount, as insurance service revenue and an equal amount as insurance service expenses.
The amount of the CSM of a group of insurance contracts and a group of investment contracts with DPF that is recognised as insurance revenue in each year is determined by identifying the coverage units in the group, allocating the CSM remaining at the end of the year (before any allocation) equally to each coverage unit provided in the year and expected to be provided in future years, and recognising in profit or loss the amount of the CSM allocated to coverage units provided in the year. The number of coverage units is the quantity of services provided by the contracts in the group, determined by considering for each contract the quantity of benefits provided and its expected coverage period. The coverage units are reviewed and updated at each reporting date.
Services provided by insurance contracts include insurance coverage and, for all direct participating contracts, investment services for managing underlying items on behalf of policyholders. In addition, some contracts without direct participating features may also provide investment services for generating an investment return for the policyholder, if and only if:
\u2022an investment component exists or the policyholder has a right to withdraw an amount (e.g. the policyholder\u2019s right to receive a surrender value on cancellation of a contract);
\u2022the investment component or withdrawal amount is expected to include an investment return; and
\u2022the Company expects to perform investment activities to generate that investment return.
The expected coverage period reflects expectations of lapses and cancellations of contracts, as well as the likelihood of insured events occurring to the extent that they would affect the expected coverage period. The period of investment services ends no later than the date on which all amounts due to current policyholders relating to those services have been paid.
Contracts measured under the PAA
For contracts measured under the PAA, the insurance revenue for each period is the amount of expected premium receipts for providing services in the period. The Company recognises such insurance revenue based on the passage of time by allocating premium receipts including premium experience adjustments to each period of service.
2.13.2Loss Component
The Company groups contracts that are onerous at initial recognition separately from contracts in the same portfolio that are not onerous at initial recognition. Groups that were not onerous at initial recognition can also subsequently become onerous if assumptions and experience changes. The Company has established a loss component of the liability for remaining coverage for any onerous group depicting the future losses recognised.
2.13.3Insurance Service Expenses
Insurance service expenses arising from insurance contracts and investments contracts with DPF are recognised in profit or loss generally as they are incurred. They exclude repayments of investment components and comprise of:
-Incurred claims and other insurance service expenses: For some life risk contracts, incurred claims also include premiums waived on detection of critical illness;
-Amortisation of insurance acquisition cash flows: For contracts not measured under the PAA, this is equal to the amount of insurance revenue recognised in the year that relates to recovering insurance acquisition cash flows. For contracts measured under the PAA, the Company has elected to expense insurance acquisition cash flows as incurred;
-Losses on onerous contracts and reversals of such losses;
-Adjustments to the liabilities for incurred claims that do not arise from the effects of the time value of money, financial risk and changes therein.
2.13.4Insurance finance income and expense
Insurance finance income or expenses comprise the change in the carrying amount of the group of insurance contracts and investment contracts with DPF arising from:
\u2022The effect of the time value of money and changes in the time value of money;
\u2022The effect of financial risk and changes in financial risk.
For contracts without direct participation features, insurance finance income or expenses reflect interest accreted on the future cash flows and the CSM and the effect of changes in interest rates and other financial assumptions.
For contracts with direct participation features, insurance finance income or expenses comprise changes in the measurement of the groups of contracts caused by changes in the value of underlying items (excluding additions and withdrawals), interest accreted and the effect of changes in interest rated on future cash flows that do not vary with returns on underlying items.
For contracts measured under the PAA insurance finance or expenses reflect interest accreted on the future cash flows under the LIC and the effect of changes in interest rates and other financial assumptions.
The Company does not disaggregate changes in the risk adjustment for non-financial risk between insurance service result and insurance financial income or expenses.
The Company has an accounting policy choice to either present all of the period\u2019s insurance finance income or expenses in profit or loss or to split the amount between profit or loss and other comprehensive income (OCI). The accounting policy choice is applied on a portfolio-by-portfolio basis. The Company will include all insurance finance income or expenses for the reporting period in profit or loss for all its portfolios.
2.13.5Net income or expense from reinsurance contracts held
Net expenses from reinsurance contracts comprise an allocation of reinsurance premiums paid less amounts recovered from reinsurers.
The Company presents separately on the face of the statement of profit or loss and other comprehensive income the amounts expected to be recovered from reinsurers, and an allocation of the reinsurance premiums paid.
The Company treats reinsurance cash flows that are contingent on claims on the underlying contracts as part of the claims that are expected to be reimbursed under the reinsurance contract held. Ceding commissions that are not contingent on claims of the underlying contracts are presented as a deduction in the premiums to be paid to the reinsurer which is then allocated to profit or loss.
2.14Financial reinsurance liability
The Company enters into financing treaties with third-party reinsurers to secure upfront funding for the acquisition costs of specific underlying insurance contracts. These treaties do not transfer significant insurance risk and therefore do not meet the definition of reinsurance contracts held under IFRS 17 'Insurance Contracts'. As these treaties are not specifically addressed by other IFRS Accounting Standards, the Company applies judgement in accordance with IAS 8 'Accounting Policies, Changes in Accounting Estimates and Errors' to account for such transactions in its financial statements. Management has determined that the recognition and measurement principles for reinsurance contracts held under IFRS 17 provide the most relevant and reliable framework, and consequently, these principles are applied by analogy to these financing treaties.
Initial Recognition
Upon initial recognition, the Company's obligation arising from these financing treaties is recognised as a financial reinsurance liability represented by:
\u2022The present value of expected advances and repayments from the financing treaties.
\u2022The cost of financing of the financing treaties.
Subsequent Measurement
As the initial valuation, the subsequent measurement follows the IFRS 17 principles for reinsurance contracts held, applied by analogy. This incorporates changes in the present value of expected advances and repayments and to the cost of financing based on the Company\u2019s expectations at the end of each reporting period. Advances received and repayments paid are recognised directly in the statement of financial position. The cost of financing is recognised in profit or loss in a manner consistent with the release of the IFRS 17 Contractual Service Margin (CSM). Gains arising from the waiver of repayment, as per treaty terms, are also recognised in profit or loss.
Disclosures
While IFRS 17 measurement principles are applied by analogy, disclosures for these financing treaties are made in accordance with IAS 1 'Presentation of Financial Statements' and IAS 8. This ensures that the related balances and transactions are presented distinctly from contracts that fall within the scope of IFRS 17.
2.15Transition to IFRS 17
On transition to IFRS 17, the Company has applied the full retrospective approach to all insurance contracts issued and reinsurance contracts held measured under the PAA. For all groups of insurance contracts, investment contracts with DPF and reinsurance contracts not measured under the PAA the Company applied the fair value transition approach as it was impracticable to apply the full retrospective approach.
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Material accounting policies
18.Investment in group undertakings
In the Company\u2019s financial statements, shares in group undertakings are accounted for at fair value through profit and loss (FVTPL). The Company accounts for the investment at FVTPL and did not make the irrevocable election to account for it at fair value through other comprehensive income (FVOCI).
The dividend income from such investments is included in profit or loss in the accounting year in which the Company\u2019s right to receive payment of any dividend is established.
Notes to the financial statements
1.Critical accounting estimates and judgements
(d)Investment in group undertakings
The fair value of the investment in LifeStar Health Limited has been determined with reference to a valuation performed by an independent third-party valuer, determined based on the discounted cash flow method, using observable and unobservable inputs as appropriate. These investments are classified as Level 3 in the fair value hierarchy due to management assumptions forming a significant part of the valuation of the investment. Further detail in this regard is provided in Notes 15 and 31 to the financial statements.
15.Investments in group undertakings
As at 31 December 2025 the consolidated financial statements include the following subsidiary undertaking:
Group undertakingRegistered officeClass of shares heldPercentage of shares held
20252024
LifeStar Health LimitedTestaferrata Street, Ta XbiexOrdinary \u2018A\u2019100%100%
The principal activity of LifeStar Health Limited is to carry on business of an agent in all classes of health insurance, in terms of the Insurance Intermediaries Act (Cap. 487 of the Laws of Malta). LifeStar Health Limited has also issued non-profit participating \u2018B\u2019 shares to other subscribers. The subscribers of such \u2018B\u2019 shares are not entitled to a share of profits generated by LifeStar Health Limited, and hence the Company is deemed to have 100% of ownership interest. The distribution of dividends by LifeStar Health Limited is restricted by the own funds requirements of the Insurance Intermediaries Act (Cap. 487 of the Laws of Malta).
During the year under review, the Company elected to measure its Investments in group undertakings in accordance with IFRS 9 at fair value through profit or loss resulting in a change in accounting policy to be reflected in the separate financial statements of the Group. Previously, these investments were accounted for using the cost method. In estimating the fair value of the properties, the highest and best use of the properties is their current use. The Company adopted the Discounted Cash Flow (DCF) methodology.
The carrying amount of the Group\u2019s investment in the separate financial statements amounted to \u20ac1,048,218 as at 31 December 2024 based on historical cost. Management believes that the fair value method provides more relevant and reliable information to users of the financial statements, particularly in assessing the performance and financial position of the Group\u2019s investment in LifeStar Health Limited. The comparative figures for the year ended 31 December 2024 and 1 January 2024 have been restated accordingly.
LifeStar Health was valued using the DCF and Dividend Discount Model. The Company decided to use the DCF method due to the stability and predictability of its cash flows, resulting in a valuation of \u20ac5,994,686 as at 31 December 2023, \u20ac6,110,695 as at 31 December 2024 and \u20ac6,972,000 as at 31 December 2025. The same methodology will be used to value the Investments in Group Undertakings moving forward.
", "dimensions": { "concept": "ifrs-full:DisclosureOfConsolidatedAndSeparateFinancialStatementsExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page38-cflshid_14084-tag11923173": { "value": "
Material accounting policies
3Basis of consolidation
Subsidiaries are all entities over which the Group has control. The Group controls an investee when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. The existence and effect of potential voting rights that are when those rights give the Group the current ability to direct the relevant activities are considered when assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases.
5Acquisition of subsidiaries
The results of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Where necessary, in preparing these consolidated financial statements, appropriate adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with those used by group entities. Intra-group balances, transactions, income and expenses are eliminated on consolidation.
", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfConsolidationExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page38-cflshid_14084-tag11923172": { "value": "
Material accounting policies
2.Insurance contracts
2.13Presentation
The Company disaggregates the total amount recognised in the statement of profit or loss and other comprehensive income into an insurance service result, comprising insurance revenue and insurance service expense, and insurance finance income or expenses.
2.13.4Insurance finance income and expense
Insurance finance income or expenses comprise the change in the carrying amount of the group of insurance contracts and investment contracts with DPF arising from:
\u2022The effect of the time value of money and changes in the time value of money;
\u2022The effect of financial risk and changes in financial risk.
For contracts without direct participation features, insurance finance income or expenses reflect interest accreted on the future cash flows and the CSM and the effect of changes in interest rates and other financial assumptions.
For contracts with direct participation features, insurance finance income or expenses comprise changes in the measurement of the groups of contracts caused by changes in the value of underlying items (excluding additions and withdrawals), interest accreted and the effect of changes in interest rated on future cash flows that do not vary with returns on underlying items.
For contracts measured under the PAA insurance finance or expenses reflect interest accreted on the future cash flows under the LIC and the effect of changes in interest rates and other financial assumptions.
The Company does not disaggregate changes in the risk adjustment for non-financial risk between insurance service result and insurance financial income or expenses.
The Company has an accounting policy choice to either present all of the period\u2019s insurance finance income or expenses in profit or loss or to split the amount between profit or loss and other comprehensive income (OCI). The accounting policy choice is applied on a portfolio-by-portfolio basis. The Company will include all insurance finance income or expenses for the reporting period in profit or loss for all its portfolios.
12.Provisions
The unwinding of the discount is recognised as finance cost.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinanceCostsExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page38-cflshid_14084-tag11923171": { "value": "
Material accounting policies
2.Insurance contracts
2.13Presentation
The Company disaggregates the total amount recognised in the statement of profit or loss and other comprehensive income into an insurance service result, comprising insurance revenue and insurance service expense, and insurance finance income or expenses.
9.Other financial instruments
Financial assets
Debt instruments measured at amortised cost
Interest income is recognised using the effective interest method and is included in the line item \u2018Investment income\u2019.
Financial assets at FVTPL
Where applicable, dividend income is recognised with other dividend income, if any, arising on other financial assets within the line item \u2018Investment income\u2019. Where applicable, interest income is disclosed within the line item \u2018Investment income\u2019. Fair value gains and losses are recognised within the line items \u2018Investment income\u2019 and \u2018Investment losses\u2019 respectively.
Interest income using the effective interest method
Interest income is recognised using the effective interest method for debt instruments measured subsequently at amortised cost.
The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period. For financial instruments other than purchased or originated credit-impaired financial assets, the effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) excluding ECLs, through the expected life of the debt instrument, or where appropriate, a shorter period, to the gross carrying amount of the debt instrument on initial recognition.
12.Provisions
The unwinding of the discount is recognised as finance cost.13.Revenue recognition
d)Interest income
Interest income from financial assets not classified as fair value through profit or loss is recognised using the effective interest method.
14.Investment return
Investment return includes dividend income, net fair value movements on financial assets at fair value through profit or loss (including interest income from financial assets classified as fair value through profit or loss), interest income from financial assets not classified as fair value through profit or loss, rental receivable, net fair value movements on investment property and is net of investment expenses, charges, and interest.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInterestIncomeAndExpenseExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page38-cflshid_14084-tag11923170": { "value": "
Material accounting policies
9.Other financial instruments
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially recognised at their fair value, except for trade receivables that do not have a significant financing component which are measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.
Financial assets and financial liabilities are off-set and the net amount presented in the statement of financial position when the Group has a legally enforceable right to set off the recognised amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.
Financial liabilities are derecognised when they are extinguished. This occurs when the obligation specified in the contract is discharged, cancelled or expires.
Financial liabilities and equity
Trade payables are classified with current liabilities and are stated at their amortised cost using the EIR method.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTradeAndOtherPayablesExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page38-cflshid_14084-tag11923169": { "value": "
Material accounting policies
1.Basis of preparation
Appropriateness of going concern assumption in the preparation of the financial statements
The geopolitical arena and volatility in the financial markets had a significant impact on the Group\u2019s financial performance for the financial year ending 31 December 2025, and will continue to impact its performance going forward. The Group is continually assessing the situation and undertaking mitigating tactics to minimize the impact. Furthermore, an analysis was carried out on the credit rating of the main counterparties and no significant downgrades were noted since 31 December 2025. Such analysis was also extended to analyse the effect on the Solvency Capital Requirements (the \u201cSCR\u201d) of the Group by reference to stressed scenarios in the latest Own Risk and Solvency Assessment (ORSA) report prepared by the Group. Taking into consideration the current laws and regulations and the result from the aforementioned stressed scenarios. However, the Group continues to explore any and all ways possible to strengthen its capital base.
Having concluded this assessment the Directors expect that the Group will be able to sustain its operations over the next twelve months and in the foreseeable future and consider the going concern assumption in the preparation of the Group\u2019s financial statements as appropriate as at the date of authorisation for issue of these financial statements.
", "dimensions": { "concept": "ifrs-full:DisclosureOfGoingConcernExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page38-cflshid_14084-tag11923168": { "value": "
Material accounting policies
1.Basis of preparation
LifeStar Insurance p.l.c.\u2019s intermediate parent company (Note 32) prepares consolidated financial statements in accordance with the Companies Act (Cap. 386 of the Laws of Malta). LifeStar Insurance p.l.c. also prepares consolidated financial statements which include the results of the Group, which comprises the Company and its subsidiary as disclosed in Note 15.
15.Foreign currencies
a)Functional and presentation currency
The financial statements are presented in \u20ac, which is the Group\u2019s functional and presentation currency.
Notes to the financial statements
15.Investments in group undertakings
As at 31 December 2025 the consolidated financial statements include the following subsidiary undertaking:
Group undertakingRegistered officeClass of shares heldPercentage of shares held
20252024
LifeStar Health LimitedTestaferrata Street, Ta XbiexOrdinary \u2018A\u2019100%100%
", "dimensions": { "concept": "ifrs-full:DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page38-cflshid_14084-tag11923167": { "value": "
Material accounting policies
1.Basis of preparation
Standards, interpretations and amendments to published standards as endorsed by the EU that are effective in the current year
In the current year, the Group and the Company has applied an amendment to IFRS Standards issued by the International Accounting Standards Board (IASB) and adopted by the EU that is mandatorily effective in the EU for an accounting period that begins on or after 1 January 2025. The adoption does not have any material impact on the disclosures or on the amounts reported in these financial statements.
Lack of Exchangeability (Amendments to IAS 21)
The amendments specify when a currency is exchangeable into another currency and when it is not and how an entity determines the exchange rate to apply when a currency is not exchangeable. The amendments also introduce new disclosure requirements when a currency is not exchangeable.
Standards, amendments and interpretations to existing Standards that are not yet effective and have not been adopted early by the Group
At the date of authorisation of these consolidated financial statements, several new, but not yet effective, Standards and amendments to existing Standards, and Interpretations have been published by the IASB or IFRIC. None of these Standards or amendment to existing Standards have been adopted early by the Group and no Interpretations have been issued that are applicable and need to be taken into consideration by the Group at either reporting date.
Standards and amendments that are not yet effective and have not been adopted early by the Group include:
\u2022Amendments to the Classification and Measurement of Financial Instruments (Amendments to IFRS 9 and 7)
\u2022Contracts Referencing Nature-dependent Electricity (Amendments to IFRS 9 and IFRS 7)
\u2022Annual Improvements to IFRS Accounting Standards\u2014Volume 11
\u2022IFRS 19 \u2018Subsidiaries without Public Accountability: Disclosures\u2019
\u2022Amendments to IFRS 19 \u2018Subsidiaries without Public Accountability: Disclosures\u2019
These Standards and amendments are not expected to have a significant impact on the financial statements in the period of initial application and therefore no disclosures have been made.
Management anticipates that all relevant pronouncements will be adopted for the first period beginning on or after the effective date of the pronouncement.
In April 2024, the IASB issued IFRS 18, which replaces IAS 1 \u2018Presentation of Financial Statements\u2019. The adoption of IFRS 18 \u2018Presentation and Disclosure in financial statements\u2019, effective for periods commencing on or after 1 January 2027, is expected to have a material impact on the presentation of the financial Statements, and therefore relevant disclosures are included below.
\u00a0
Although IFRS 18 includes many of the requirements of IAS 1, it introduces new requirements
to better structure financial statements and to provide more detailed and useful information to
investors, including:
\u00a0
\u2022two new subtotals defined in the statement of profit or loss, namely (1) operating profit and (2) profit or loss before financing and income taxes
\u2022the classification of all income and expenses within the statement of profit or loss in one of five categories
\u2022a new requirement to disclose performance measures defined by management, and
\u2022an improvement in the principles related to the aggregation and disaggregation of information in the financial statements and accompanying notes.
\u00a0
IFRS 18 will be applied retrospectively with specific transitional provisions.
\u00a0
The Group is currently working to identify all of the impacts that IFRS 18 will have on the primary financial statements and notes to the financial statements.
Other new standards, amendments and interpretations not adopted in the current year have not been disclosed as they are not expected to have a material impact on the consolidated financial statements.
", "dimensions": { "concept": "ifrs-full:DisclosureOfChangesInAccountingPoliciesExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page38-cflshid_14084-tag11923166": { "value": "
Material accounting policies
1.Basis of preparation
Standards, interpretations and amendments to published standards as endorsed by the EU that are effective in the current year
In the current year, the Group and the Company has applied an amendment to IFRS Standards issued by the International Accounting Standards Board (IASB) and adopted by the EU that is mandatorily effective in the EU for an accounting period that begins on or after 1 January 2025. The adoption does not have any material impact on the disclosures or on the amounts reported in these financial statements.
Lack of Exchangeability (Amendments to IAS 21)
The amendments specify when a currency is exchangeable into another currency and when it is not and how an entity determines the exchange rate to apply when a currency is not exchangeable. The amendments also introduce new disclosure requirements when a currency is not exchangeable.
Standards, amendments and interpretations to existing Standards that are not yet effective and have not been adopted early by the Group
At the date of authorisation of these consolidated financial statements, several new, but not yet effective, Standards and amendments to existing Standards, and Interpretations have been published by the IASB or IFRIC. None of these Standards or amendment to existing Standards have been adopted early by the Group and no Interpretations have been issued that are applicable and need to be taken into consideration by the Group at either reporting date.
Standards and amendments that are not yet effective and have not been adopted early by the Group include:
\u2022Amendments to the Classification and Measurement of Financial Instruments (Amendments to IFRS 9 and 7)
\u2022Contracts Referencing Nature-dependent Electricity (Amendments to IFRS 9 and IFRS 7)
\u2022Annual Improvements to IFRS Accounting Standards\u2014Volume 11
\u2022IFRS 19 \u2018Subsidiaries without Public Accountability: Disclosures\u2019
\u2022Amendments to IFRS 19 \u2018Subsidiaries without Public Accountability: Disclosures\u2019
These Standards and amendments are not expected to have a significant impact on the financial statements in the period of initial application and therefore no disclosures have been made.
Management anticipates that all relevant pronouncements will be adopted for the first period beginning on or after the effective date of the pronouncement.
In April 2024, the IASB issued IFRS 18, which replaces IAS 1 \u2018Presentation of Financial Statements\u2019. The adoption of IFRS 18 \u2018Presentation and Disclosure in financial statements\u2019, effective for periods commencing on or after 1 January 2027, is expected to have a material impact on the presentation of the financial Statements, and therefore relevant disclosures are included below.
\u00a0
Although IFRS 18 includes many of the requirements of IAS 1, it introduces new requirements
to better structure financial statements and to provide more detailed and useful information to
investors, including:
\u00a0
\u2022two new subtotals defined in the statement of profit or loss, namely (1) operating profit and (2) profit or loss before financing and income taxes
\u2022the classification of all income and expenses within the statement of profit or loss in one of five categories
\u2022a new requirement to disclose performance measures defined by management, and
\u2022an improvement in the principles related to the aggregation and disaggregation of information in the financial statements and accompanying notes.
\u00a0
IFRS 18 will be applied retrospectively with specific transitional provisions.
\u00a0
The Group is currently working to identify all of the impacts that IFRS 18 will have on the primary financial statements and notes to the financial statements.
Other new standards, amendments and interpretations not adopted in the current year have not been disclosed as they are not expected to have a material impact on the consolidated financial statements.
", "dimensions": { "concept": "ifrs-full:DisclosureOfChangesInAccountingPoliciesAccountingEstimatesAndErrorsExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page38-cflshid_14084-tag11923165": { "value": "
Material accounting policies
1.Basis of preparation
LifeStar Insurance p.l.c. was incorporated on 21 December 2001 as an insurance company. The registered address and principal place of business of the company is LifeStar, Testaferrata Street, Ta\u2019 Xbiex.
These financial statements are prepared in accordance with International Financial Reporting Standards as adopted by the EU (EU IFRS\u2019s), the Insurance Business Act (Cap. 403 of the Laws of Malta) and the Companies Act (Cap. 386). The financial statements are prepared under the historical cost convention, as modified by the fair valuation of investment property and financial assets and financial liabilities at fair value through profit or loss.
The preparation of financial statements in conformity with EU IFRS\u2019s requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the accounting policies of the company and the subsidiary (the Group). The areas involving a higher degree of judgement or complexity are disclosed in Note 1 to these financial statements.
The Group\u2019s statement of financial position is presented in increasing order of liquidity, with additional disclosures on the current or non-current nature of the Group\u2019s assets and liabilities provided within the notes to the financial statements.
LifeStar Insurance p.l.c.\u2019s intermediate parent company (Note 32) prepares consolidated financial statements in accordance with the Companies Act (Cap. 386 of the Laws of Malta). LifeStar Insurance p.l.c. also prepares consolidated financial statements which include the results of the Group, which comprises the Company and its subsidiary as disclosed in Note 15.
These financial statements for the Company include a restatement of the comparative figures as at 31 December 2024 to retrospectively adjust for a change in accounting policy in accordance with IAS 8, Basis of Preparation of Financial Statements as disclosed in Note 31.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
For financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:
-Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;
-Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
-Level 3 inputs are unobservable inputs for the asset or liability.
For assets and liabilities that are recognised in the financial statements at fair value on a recurring basis, the Group determines when transfers are deemed to have occurred between Levels in the hierarchy at the end of each reporting period.
Appropriateness of going concern assumption in the preparation of the financial statements
The geopolitical arena and volatility in the financial markets had a significant impact on the Group\u2019s financial performance for the financial year ending 31 December 2025, and will continue to impact its performance going forward. The Group is continually assessing the situation and undertaking mitigating tactics to minimize the impact. Furthermore, an analysis was carried out on the credit rating of the main counterparties and no significant downgrades were noted since 31 December 2025. Such analysis was also extended to analyse the effect on the Solvency Capital Requirements (the \u201cSCR\u201d) of the Group by reference to stressed scenarios in the latest Own Risk and Solvency Assessment (ORSA) report prepared by the Group. Taking into consideration the current laws and regulations and the result from the aforementioned stressed scenarios. However, the Group continues to explore any and all ways possible to strengthen its capital base.
Having concluded this assessment the Directors expect that the Group will be able to sustain its operations over the next twelve months and in the foreseeable future and consider the going concern assumption in the preparation of the Group\u2019s financial statements as appropriate as at the date of authorisation for issue of these financial statements.
Standards, interpretations and amendments to published standards as endorsed by the EU that are effective in the current year
In the current year, the Group and the Company has applied an amendment to IFRS Standards issued by the International Accounting Standards Board (IASB) and adopted by the EU that is mandatorily effective in the EU for an accounting period that begins on or after 1 January 2025. The adoption does not have any material impact on the disclosures or on the amounts reported in these financial statements.
Lack of Exchangeability (Amendments to IAS 21)
The amendments specify when a currency is exchangeable into another currency and when it is not and how an entity determines the exchange rate to apply when a currency is not exchangeable. The amendments also introduce new disclosure requirements when a currency is not exchangeable.
Standards, amendments and interpretations to existing Standards that are not yet effective and have not been adopted early by the Group
At the date of authorisation of these consolidated financial statements, several new, but not yet effective, Standards and amendments to existing Standards, and Interpretations have been published by the IASB or IFRIC. None of these Standards or amendment to existing Standards have been adopted early by the Group and no Interpretations have been issued that are applicable and need to be taken into consideration by the Group at either reporting date.
Standards and amendments that are not yet effective and have not been adopted early by the Group include:
\u2022Amendments to the Classification and Measurement of Financial Instruments (Amendments to IFRS 9 and 7)
\u2022Contracts Referencing Nature-dependent Electricity (Amendments to IFRS 9 and IFRS 7)
\u2022Annual Improvements to IFRS Accounting Standards\u2014Volume 11
\u2022IFRS 19 \u2018Subsidiaries without Public Accountability: Disclosures\u2019
\u2022Amendments to IFRS 19 \u2018Subsidiaries without Public Accountability: Disclosures\u2019
These Standards and amendments are not expected to have a significant impact on the financial statements in the period of initial application and therefore no disclosures have been made.
Management anticipates that all relevant pronouncements will be adopted for the first period beginning on or after the effective date of the pronouncement.
In April 2024, the IASB issued IFRS 18, which replaces IAS 1 \u2018Presentation of Financial Statements\u2019. The adoption of IFRS 18 \u2018Presentation and Disclosure in financial statements\u2019, effective for periods commencing on or after 1 January 2027, is expected to have a material impact on the presentation of the financial Statements, and therefore relevant disclosures are included below.
\u00a0
Although IFRS 18 includes many of the requirements of IAS 1, it introduces new requirements
to better structure financial statements and to provide more detailed and useful information to
investors, including:
\u00a0
\u2022two new subtotals defined in the statement of profit or loss, namely (1) operating profit and (2) profit or loss before financing and income taxes
\u2022the classification of all income and expenses within the statement of profit or loss in one of five categories
\u2022a new requirement to disclose performance measures defined by management, and
\u2022an improvement in the principles related to the aggregation and disaggregation of information in the financial statements and accompanying notes.
\u00a0
IFRS 18 will be applied retrospectively with specific transitional provisions.
\u00a0
The Group is currently working to identify all of the impacts that IFRS 18 will have on the primary financial statements and notes to the financial statements.
Other new standards, amendments and interpretations not adopted in the current year have not been disclosed as they are not expected to have a material impact on the consolidated financial statements.
15.Foreign currencies
a)Functional and presentation currency
Items included in the financial statements of the Group are measured using the currency of the primary economic environment in which the entity operates (\u201cthe functional currency\u201d). The financial statements are presented in \u20ac, which is the Group\u2019s functional and presentation currency.
", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfPreparationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page38-cflshid_14084-tag11923164": { "value": "
Material accounting policies
1.Basis of preparation
These financial statements are prepared in accordance with International Financial Reporting Standards as adopted by the EU (EU IFRS\u2019s), the Insurance Business Act (Cap. 403 of the Laws of Malta) and the Companies Act (Cap. 386). The financial statements are prepared under the historical cost convention, as modified by the fair valuation of investment property and financial assets and financial liabilities at fair value through profit or loss.
", "dimensions": { "concept": "ifrs-full:StatementOfIFRSCompliance", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page38-cflshid_14084-tag11923162": { "value": "
Material accounting policies
2.Insurance contracts
2.13Presentation
The Company disaggregates the total amount recognised in the statement of profit or loss and other comprehensive income into an insurance service result, comprising insurance revenue and insurance service expense, and insurance finance income or expenses.
2.13.4Insurance finance income and expense
Insurance finance income or expenses comprise the change in the carrying amount of the group of insurance contracts and investment contracts with DPF arising from:
\u2022The effect of the time value of money and changes in the time value of money;
\u2022The effect of financial risk and changes in financial risk.
For contracts without direct participation features, insurance finance income or expenses reflect interest accreted on the future cash flows and the CSM and the effect of changes in interest rates and other financial assumptions.
For contracts with direct participation features, insurance finance income or expenses comprise changes in the measurement of the groups of contracts caused by changes in the value of underlying items (excluding additions and withdrawals), interest accreted and the effect of changes in interest rated on future cash flows that do not vary with returns on underlying items.
For contracts measured under the PAA insurance finance or expenses reflect interest accreted on the future cash flows under the LIC and the effect of changes in interest rates and other financial assumptions.
The Company does not disaggregate changes in the risk adjustment for non-financial risk between insurance service result and insurance financial income or expenses.
The Company has an accounting policy choice to either present all of the period\u2019s insurance finance income or expenses in profit or loss or to split the amount between profit or loss and other comprehensive income (OCI). The accounting policy choice is applied on a portfolio-by-portfolio basis. The Company will include all insurance finance income or expenses for the reporting period in profit or loss for all its portfolios.
9.Other financial instruments
Financial assets
Debt instruments measured at amortised cost
Interest income is recognised using the effective interest method and is included in the line item \u2018Investment income\u2019.
Financial assets at FVTPL
Where applicable, dividend income is recognised with other dividend income, if any, arising on other financial assets within the line item \u2018Investment income\u2019. Where applicable, interest income is disclosed within the line item \u2018Investment income\u2019. Fair value gains and losses are recognised within the line items \u2018Investment income\u2019 and \u2018Investment losses\u2019 respectively.
Interest income using the effective interest method
Interest income is recognised using the effective interest method for debt instruments measured subsequently at amortised cost.
The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period. For financial instruments other than purchased or originated credit-impaired financial assets, the effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) excluding ECLs, through the expected life of the debt instrument, or where appropriate, a shorter period, to the gross carrying amount of the debt instrument on initial recognition.
12.Provisions
The unwinding of the discount is recognised as finance cost.13.Revenue recognition
d)Interest income
Interest income from financial assets not classified as fair value through profit or loss is recognised using the effective interest method.
14.Investment return
Investment return includes dividend income, net fair value movements on financial assets at fair value through profit or loss (including interest income from financial assets classified as fair value through profit or loss), interest income from financial assets not classified as fair value through profit or loss, rental receivable, net fair value movements on investment property and is net of investment expenses, charges, and interest.
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Material accounting policies
2.Insurance contracts
2.2Aggregation basis
The following table summarises the characteristics of the Company\u2019s reinsurance contracts held and the measurement methods.
IFRS 17 Product lineReinsurance contracts held (underlying risk covered)Measurement MethodInsurance finance income and expense
LifeLife risk reinsurance contracts with underlying Unit Linked, Term, Endowment and Whole life insurance contracts.General Measurement ModelProfit or loss
Reinsurance treaties with underlying group life insurance contracts. Premium Allocation ApproachProfit or loss
Catastrophe cover reinsurance contract covering the aggregate risk of the underlying contracts arising from catastrophic events.Premium Allocation ApproachProfit or loss
2.3Definition and classification of insurance and reinsurance contracts
In addition to issuing insurance contracts, the Company holds reinsurance contracts to mitigate certain risk exposures. A reinsurance contract is an insurance contract issued by a reinsurer to compensate the Company for claims arising from one or more insurance contracts issued by the Company. These are quota share and excess of loss reinsurance contracts. For reinsurance contracts held by the Company, even if they do not expose the issuer (the reinsurer) to the possibility of a significant loss they would still be deemed to transfer significant insurance risk if they transfer substantially all of the insurance risk relating to the reinsured portions of the underlying insurance contracts to the reinsurer.
2.4Separating components from insurance contracts
The reinsurance contracts held by the Company, despite the fact that they may cover more than one types of risk exposures, reflect single contracts in substance and are treated as one single accounting contract for IFRS 17.
2.5Aggregation level
The Company identifies portfolios by aggregating insurance contracts that are subject to similar risks and managed together. The Company expects that all contracts within each product line, as defined for management purposes, have similar risks and, therefore, would represent a portfolio of contracts when they are managed together. Reinsurance contracts held have been grouped into portfolios taking into consideration the nature of the risk and the type of reinsurance cover.
Each annual cohort is then further disaggregated into three groups of contracts:
\u2022any contracts that are onerous on initial recognition;
\u2022any contracts that, on initial recognition, have no significant possibility of becoming onerous subsequently; and
\u2022any remaining contracts in the portfolio.
Portfolios of reinsurance contracts held are assessed for aggregation separately from portfolios of insurance contracts issued. Applying the grouping requirements to reinsurance contracts held, the Company aggregates reinsurance contracts held into groups of:
\u2022contracts for which there is a net gain at initial recognition, if any;
\u2022contracts for which, at initial recognition, there is no significant possibility of a net gain arising subsequently; and
\u2022remaining contracts in the portfolio, if any.
The Company makes an evaluation of whether a set of contracts can be treated together in making the profitability assessment based on reasonable and supportable information. In the absence of such information the Company assesses each contract individually.
If insurance contracts within a portfolio would fall into different groups only because law or regulation specifically constrains the Company\u2019s practical ability to set a different price or level of benefits for policyholders with different characteristics, the Company may include those contracts in the same group.
The determination of whether a contract or a group of insurance contracts issued is onerous is based on the expectations as at the date of initial recognition, with fulfilment cash flow expectations determined on a probability-weighted basis. The Company determines the appropriate level at which reasonable and supportable information is available to assess whether the contracts are onerous at initial recognition and whether the contracts not onerous at initial recognition have a significant possibility of becoming onerous subsequently.
A similar assessment is done for reinsurance contracts held to determine the contracts for which there is a net gain at initial recognition or whether contracts for which there is not a net gain at initial recognition have a significant possibility of a net gain subsequently.
For contracts applying the Premium Allocation Approach (\u201cPAA\u201d) the Company assumes that contracts are not onerous (for reinsurance contracts there is not a net gain) on initial recognition unless there are facts and circumstances indicating otherwise. The Company assesses the likelihood of changes in applicable facts and circumstances to determine whether contracts not onerous (for reinsurance contracts there is not a net gain) at initial recognition belong to a group with no significant possibility of becoming onerous (for reinsurance contracts no significant possibility of a net gain) in the future.
The composition of groups established at initial recognition is not subsequently reassessed.
2.6Initial recognition
The Company recognises a group of reinsurance contracts held:
\u2022If the reinsurance contracts provide proportionate coverage, at the later of the beginning of the coverage period of the group, or the initial recognition of any underlying contract;
\u2022In all other cases, from the beginning of the coverage period of the first contract in the group.
If the Company entered into the reinsurance contract held at or before the date when an onerous group of underlying contracts is recognised prior to the beginning of the coverage period of the group of reinsurance contracts held, the reinsurance contract held is recognised at the same time as the group of underlying insurance contracts is recognised.
The Company adds new contracts to the group when they meet the recognition criteria.
2.7Contract boundaries
Reinsurance contracts
For groups of reinsurance contracts held, cash flows are within the contract boundary if they arise from substantive rights and obligations of the cedant that exist during the reporting period in which the Company is compelled to pay amounts to the reinsurer or has a substantive right to receive insurance contract services from the reinsurer.
A substantive right to receive services from the reinsurer ends when the reinsurer:
\u2022has the practical ability to reassess the risks transfer to it and can set a price or level of benefits that fully reflects those reassessed risks; or
\u2022has a substantive right to terminate the coverage.
The boundary of a reinsurance contract held includes cash flows resulting from the underlying contracts covered by the reinsurance contract. This includes cash flows from insurance contracts that are expected to be issued by the Company in the future if these contracts are expected to be issued within the boundary of the reinsurance contract held.
The Company holds proportional life reinsurance contracts which have an unlimited duration but which allow both the reinsurer and the Company to terminate the contract at three months\u2019 notice for new business ceded. The Company includes within the contracts boundary only cash flows arising from such three months\u2019 notice period because it does not have substantive rights or obligations beyond that point. Therefore, on initial recognition, the cash flows within the reinsurance contract boundary are determined to be those arising from underlying contracts that the Company expects to issue and cede under the reinsurance contract within the next three months. Subsequently, expected cash flows beyond the end of this initial notice period are considered cash flows of new reinsurance contracts and are recognised, separately from the initial contract, as they fall within the rolling three-month notice period. Other life reinsurance agreements have a cancellability clause for new business with three months\u2019 notice but this being effective at the next annual renewal of the agreement and hence, in this case, on initial recognition the cash flows within the reinsurance contract boundary are determined to be those arising from underlying contracts that the Company expects to issue and cede under the reinsurance contract within the year. The Company treats all the above mentioned reinsurance contracts as a series of contracts that form an annual group and cover underlying business issued within a year.
The Company holds proportional group life reinsurance contracts that have a short-term boundary and cover short-term underlying contracts issued within the term on a risk-attaching basis. All cash flows arising from claims incurred and expected to be incurred during the life of the underlying contracts are included in the measurement.
Finally, the Company\u2019s non-proportional, excess of loss reinsurance contracts held, have an annual term and provide coverage for claims incurred during an accident year (i.e. loss occurring). Thus, all cash flows arising from claims incurred and expected to be incurred in the accident year are included in the measurement of the reinsurance contracts held.
2.10Measurement of reinsurance contracts held
The same accounting policies will be applied as for insurance contracts issued to measure a group of reinsurance contracts held, adapted where necessary to reflect features that differ from those of insurance contracts.
2.10.1Measurement of the asset for remaining coverage (\u201cARC\u201d)
Reinsurance contracts measured under the general model
The measurement of reinsurance contracts held follows the same principles as those for insurance contracts issued, with the exception of the following:
\u2022Measurement of the cash flows include an allowance on a probability-weighted basis for the effect of any non-performance by the reinsurers, including the effects of collateral and losses from disputes;
\u2022The Company determines the risk adjustment for non-financial risk so that it represents the amount of risk being transferred to the reinsurer;
\u2022The Company recognises both day 1 gains and day 1 losses at initial recognition in the statement of financial position as a CSM and releases this to profit or loss as the reinsurer renders services, except for any portion of a day 1 loss that relates to events before initial recognition as described below;
\u2022Changes in the fulfilment cash flows are recognised in profit or loss if the related changes arising from the underlying ceded contracts have been recognised in profit or loss. Alternatively, changes in the fulfilment cash flows adjust the CSM.
The Company measures the estimates of the present value of future cash flows using assumptions that are consistent with those used to measure the estimates of the present value of future cash flows for the underlying insurance contracts.
On initial recognition, the CSM of a group of reinsurance contracts represents a net cost or net gain on purchasing reinsurance. It is measured as the equal and opposite amount of the total of (a) the fulfilment cash flows, (b) any amount arising from the derecognition of any assets or liabilities previously recognised for cash flows related to the group, (c) any cash flows arising at that date and (d) any income recognised in profit or loss because of onerous underlying contracts recognised at that date.
However, if any net cost on purchasing reinsurance coverage relates to insured events that occurred before the purchase of the group, then the Company recognises the cost immediately in profit or loss as an expense.
The carrying amount of the CSM at each reporting date is the carrying amount at the start of the year, adjusted for:
\u2022the CSM of any new contracts that are added to the group in the year;
\u2022interest accreted on the carrying amount of the CSM during the year, measured at the discount rates determined on initial recognition;
\u2022income recognised in profit or loss in the year on initial recognition of onerous underlying contracts;
\u2022reversals of a loss-recovery component to the extent that they are not changes in the fulfilment cash flows of the group of reinsurance contracts;
\u2022changes in fulfilment cash flows that relate to future services, measured at the discount rates determined on initial recognition, unless they result from changes in fulfilment cash flows of onerous underlying contracts, in which case they are recognised in profit or loss and create or adjust a loss-recovery component;
\u2022the effect of any currency exchange differences on the CSM; and
\u2022the amount recognised in profit or loss because of the services received in the year.
For a group of reinsurance contracts covering onerous underlying contracts, the Company establishes a loss-recovery component of the asset for remaining coverage, adjusts the CSM and as a result recognises income when it recognises a loss on initial recognition of onerous underlying contracts, if the reinsurance contract is entered into before or at the same time as the onerous underlying contracts are recognised. The adjustment to the CSM is determined by multiplying:
\u2022the amount of the loss that relates to the underlying contracts; and
\u2022the percentage of claims on the underlying contracts that the Company expects to recover from the reinsurance contracts.
The loss-recovery component is adjusted for changes in FCFs of the group of reinsurance contracts relating to future services that result from changes in FCFs of the onerous underlying contracts. If the reinsurance contract covers only some of the insurance contracts included in an onerous group of contracts, then the Company uses a systematic and rational method to determine the portion of losses recognised on the onerous group of contracts that relates to underlying contracts covered by the reinsurance contract.
The loss-recovery component determines the amounts that are subsequently presented in profit or loss as reversals of recoveries of losses from the reinsurance contracts and are excluded from the allocation of reinsurance premiums paid. It is adjusted to reflect changes in the loss component of the onerous group of underlying contracts, but it cannot exceed the portion of the loss component of the onerous group of underlying contracts that the Company expects to recover from the reinsurance contracts.
Reinsurance contracts measured under the Premium Allocation Approach
The Company applies the PAA to measure a group of reinsurance contracts using the same accounting policies to the insurance contracts, as adapted where necessary to reflect the features of reinsurance contracts.
The Company applies the PAA to reinsurance contracts that it holds, as follows:
\u2022to groups of reinsurance contracts that it holds which at the inception of the group the effective coverage period of each contract in the group of reinsurance contracts held is one year or less;
\u2022to groups of reinsurance contracts that it holds including contracts with a coverage period extending beyond one year when the Company reasonably expects that such simplification would produce a measurement of the asset for remaining coverage for the group that would not differ materially from the one that would be produced applying the requirements of the general measurement model.
Under the PAA, the initial measurement of the asset equals the reinsurance premium paid. The Company measures the amount relating to remaining service by allocating the amount of expected reinsurance premium payments over the coverage period of receiving services for the group. For all reinsurance contracts held the allocation is based on the passage of time.
On initial recognition of each group of reinsurance contracts held, the Company expects that the time between receiving each part of the services and the related reinsurance premium due date is no more than a year. Accordingly, the Company has chosen not to adjust the asset for remaining coverage to reflect the time value of money and the effect of financial risk.
Where the reinsurance contracts held cover a group of onerous underlying insurance contracts, the Company adjusts the carrying amount of the asset for remaining coverage and recognises a gain when, in the same period, it reports a loss on initial recognition of an onerous group of underlying insurance contracts or on additional loss from an already onerous group of underlying insurance contracts. The recognition of this gain results in the accounting for the loss recovery component of the asset for the remaining coverage of a group of reinsurance contracts held. The loss-recovery component is adjusted to reflect changes in the loss component of the onerous group of underlying contracts, but it cannot exceed the portion of the loss component of the onerous group of underlying contracts that the Company expects to recover from the reinsurance contracts.
2.10.2Measurement of the asset for incurred claims (\u201cAIC\u201d)
The Company uses consistent assumptions to measure the estimates of the present value of future cash flows for the group of reinsurance contracts held and the estimates of the present value of future cash flows for the group(s) of underlying insurance contracts. The Company includes in the estimates of the present value of the future cash flows for the group of reinsurance contracts held the effect of any risk of non-performance by the issuer of the reinsurance contract, including the effects of collateral and losses from disputes.
The risk adjustment for non-financial risk for reinsurance contracts held represents the amount of risk being transferred by the Company to the reinsurer.
2.13Presentation
The Company presents separately, in the statement of financial position, the carrying amount of portfolios of:
1.insurance contracts and investment contracts with DPF issued that are assets;
2.insurance contracts and investment contracts with DPF issued that are liabilities;
3.reinsurance contracts held that are assets;
4.reinsurance contracts held that are liabilities.
The Company separately presents income or expenses from reinsurance contracts held from the expenses or income from insurance contracts and investments contracts with DPF issued.
2.13.5Net income or expense from reinsurance contracts held
Net expenses from reinsurance contracts comprise an allocation of reinsurance premiums paid less amounts recovered from reinsurers.
The Company presents separately on the face of the statement of profit or loss and other comprehensive income the amounts expected to be recovered from reinsurers, and an allocation of the reinsurance premiums paid.
The Company treats reinsurance cash flows that are contingent on claims on the underlying contracts as part of the claims that are expected to be reimbursed under the reinsurance contract held. Ceding commissions that are not contingent on claims of the underlying contracts are presented as a deduction in the premiums to be paid to the reinsurer which is then allocated to profit or loss.
2.14Financial reinsurance liability
The Company enters into financing treaties with third-party reinsurers to secure upfront funding for the acquisition costs of specific underlying insurance contracts. These treaties do not transfer significant insurance risk and therefore do not meet the definition of reinsurance contracts held under IFRS 17 'Insurance Contracts'. As these treaties are not specifically addressed by other IFRS Accounting Standards, the Company applies judgement in accordance with IAS 8 'Accounting Policies, Changes in Accounting Estimates and Errors' to account for such transactions in its financial statements. Management has determined that the recognition and measurement principles for reinsurance contracts held under IFRS 17 provide the most relevant and reliable framework, and consequently, these principles are applied by analogy to these financing treaties.
Initial Recognition
Upon initial recognition, the Company's obligation arising from these financing treaties is recognised as a financial reinsurance liability represented by:
\u2022The present value of expected advances and repayments from the financing treaties.
\u2022The cost of financing of the financing treaties.
Subsequent Measurement
As the initial valuation, the subsequent measurement follows the IFRS 17 principles for reinsurance contracts held, applied by analogy. This incorporates changes in the present value of expected advances and repayments and to the cost of financing based on the Company\u2019s expectations at the end of each reporting period. Advances received and repayments paid are recognised directly in the statement of financial position. The cost of financing is recognised in profit or loss in a manner consistent with the release of the IFRS 17 Contractual Service Margin (CSM). Gains arising from the waiver of repayment, as per treaty terms, are also recognised in profit or loss.
Disclosures
While IFRS 17 measurement principles are applied by analogy, disclosures for these financing treaties are made in accordance with IAS 1 'Presentation of Financial Statements' and IAS 8. This ensures that the related balances and transactions are presented distinctly from contracts that fall within the scope of IFRS 17.
2.15Transition to IFRS 17
On transition to IFRS 17, the Company has applied the full retrospective approach to all insurance contracts issued and reinsurance contracts held measured under the PAA. For all groups of insurance contracts, investment contracts with DPF and reinsurance contracts not measured under the PAA the Company applied the fair value transition approach as it was impracticable to apply the full retrospective approach.
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Material accounting policies
9.Other financial instruments
Financial assets
Expected Credit Losses
The Group recognises a loss allowance for ECLs on, debt instruments measured at amortised cost, intercompany receivables, trade receivables and cash at bank.
The amount of ECL is updated at each reporting date to reflect changes in credit risk since the initial recognition.
For trade receivables that do not contain a significant financing component (or for which the IFRS 15 practical expedient for contracts that are one year or less is applied), the Group applies the simplified approach and recognises lifetime ECL.
Where a collective basis is applied (see the Accounting Policy entitled \u2018Collective basis\u2019 below), the ECLs on these financial assets are estimated using a provision matrix based on the Company\u2019s historical credit loss experience based on the past due status of the debtors, adjusted for factors that are specific to the debtors, general economic conditions of the industry in which the debtors operate and an assessment of both the current as well as the forecast direction of conditions at the reporting date.
For all other financial instruments, the Group uses the general approach and recognises lifetime ECL when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on the financial instrument has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month ECL (\u201812m ECL\u2019). The assessment of whether lifetime ECL should be recognised is based on significant increases in the likelihood or risk of a default occurring since initial recognition instead of on evidence of a financial asset being credit-impaired at the reporting date or an actual default occurring.
Lifetime ECL represents the ECLs that will result from all possible default events over the expected life of a financial instrument. In contrast, 12m ECL represents the portion of lifetime ECL that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.
If the Group has measured the loss allowance for a financial instrument at an amount equal to lifetime ECL in the previous reporting period, but determines at the current reporting date that the conditions for lifetime ECL are no longer met, the Group measures the loss allowance at an amount equal to 12m ECL at the current reporting date.
The Group recognises an impairment gain or loss in profit or loss for all financial assets with a corresponding adjustment to their carrying amount.
Significant increase in credit risk
In assessing whether the credit risk on a financial instrument has increased significantly since initial recognition, the Group and Company compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial instrument as at the date of initial recognition. In making this assessment, the Group and Company considers both quantitative and qualitative information that is reasonable and supportable, including historical experience and forward-looking information that is available without undue cost or effort and, where applicable, the financial position of the counterparties.
The Group and Company regularly monitors the effectiveness of the criteria used to identify whether there has been a significant increase in credit risk and revises them as appropriate to ensure that the criteria are capable of identifying significant increase in credit risk before the amount becomes past due.
Forward-looking information considered includes the future prospects of the industries in which the Group and Company\u2019s debtors operate as obtained from economic expert reports, financial analysts, governmental bodies, relevant think-tanks and similar organisations, as well as consideration of various external sources of actual and forecast economic information that relate to the Company\u2019s core operations.
Irrespective of the outcome of the above assessment, the Group and Company presumes that the credit risk on a financial asset has increased significantly since initial recognition when contractual payments are more than 30 days past due, unless the Group and Company has reasonable and supportable information, that is available without undue cost or effort, that demonstrates otherwise.
The Group and Company considers the following as constituting an event of default for internal credit risk management purposes as historical experience indicates that receivables that meet either of the following criteria are generally not recoverable:
-when there is a breach of financial covenants by the counterparty; or
-information developed internally or obtained from external sources indicates that the debtor is unlikely to pay its creditors, including the Group and Company, in full (without taking into account any collateral held by the Group and Company).
Irrespective of the above analysis, the Group and Company considers that default has occurred when a financial asset is more than 90 days past due unless the Group and Company has reasonable and supportable information to demonstrate that a more lagging default criterion is more appropriate.
Credit-impaired financial assets
A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of that financial asset have occurred.
Evidence that a financial asset is credit-impaired includes observable data about the following events:
(i)significant financial difficulty of the issuer or the borrower;
(ii)a breach of contract, such as a default or past due event;
(iii)the lender(s) of the borrower, for economic or contractual reasons relating to the borrower\u2019s financial difficulty, having granted to the borrower a concession(s) that the lender(s) would not otherwise consider;
(iv)it is becoming probable that the borrower will enter bankruptcy or other financial reorganisation; or
(v)the disappearance of an active market for that financial asset because of financial difficulties.
Write-off policy
The Group and Company writes off a financial asset when there is information indicating that the counterparty is in severe financial difficulty and there is no realistic prospect of recovery, for example when the counterparty has been placed under liquidation or has entered into bankruptcy proceedings, whichever occurs sooner.
Financial assets written off may still be subject to enforcement activities under the Group and Company\u2019s recovery procedures, taking into account legal advice where appropriate. Recoveries made are recognised in profit or loss as impairment gains.
Measurement and recognition of ECLs
For financial assets, the credit loss is the difference between all contractual cash flows that are due to the Group and Company in accordance with the contract and all the cash flows that the Group and Company expects to receive, discounted at the original effective interest rate. ECLs represent the weighted average of credit losses with the respective risks of a default occurring as the weights.
The measurement of ECLs is a function of:
-the probability of default, which is an estimate of the likelihood of default over a given time horizon estimated at a point in time;
-the loss given default, which is an estimate of the loss arising on default, taking into into consideration the cash flows expected from collateral and other credit enhancements that are part of the contractual terms and are not recognised separately;
-the exposure at default, which is an estimate of the exposure at a future default date, taking into account expected changes in the exposure after the reporting date that are permitted by the current contractual terms, including amortisation profiles and early repayment or overpayment.
The assessment of the probability of default and loss given default is based on historical data adjusted by forward-looking information, where applicable. Where applicable, the financial position of the counterparties is also taken into consideration.
Where applicable, forward-looking information considered includes the future prospects of the industries in which the Group and Company\u2019s debtors operate, obtained from economic expert reports, financial analysts, governmental bodies, relevant think-tanks and other similar organisations, as well as consideration of various external sources of actual and forecast economic information that relate to the Group and Company\u2019s core operations.
Collective basis
If evidence of a significant increase in credit risk at the individual instrument level is not yet available, the Group and Company performs the assessment of significant increases in credit risk on a collective basis by considering information on, for example, a group or sub-group of financial instruments.
Where the Group and Company does not have reasonable and supportable information that is available without undue cost or effort to measure lifetime ECL on an individual instrument basis, lifetime ECL is measured on a collective basis.
In such instances, the financial instruments are grouped on the basis of shared credit risk characteristics, as follows:
-Nature of financial instruments;
-Past-due status;
-Nature, size and industry of debtors;
-Nature of collaterals for finance lease receivables;
-External credit ratings where available;
-Date of initial recognition;
-Remaining term to maturity;
-Geographical location of the borrower;
-The value of collateral relative to the financial asset if it has an impact on the probability of default occurring (for example, loan-to-value ratios).
The grouping is regularly reviewed by management to ensure the constituents of each group continue to share similar credit risk characteristics.
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Material accounting policies
9.Other financial instruments
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially recognised at their fair value, except for trade receivables that do not have a significant financing component which are measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.
Financial assets and financial liabilities are off-set and the net amount presented in the statement of financial position when the Group has a legally enforceable right to set off the recognised amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.
Financial liabilities are derecognised when they are extinguished. This occurs when the obligation specified in the contract is discharged, cancelled or expires.
Financial liabilities and equity
Trade payables are classified with current liabilities and are stated at their amortised cost using the EIR method.
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Material accounting policies
9.Other financial instruments
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially recognised at their fair value, except for trade receivables that do not have a significant financing component which are measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.
Financial assets and financial liabilities are off-set and the net amount presented in the statement of financial position when the Group has a legally enforceable right to set off the recognised amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.
Financial assets are derecognised when the contractual rights to the cash flows from the financial assets expire or when the entity transfers the financial asset and the transfer qualifies for derecognition.
Financial liabilities are derecognised when they are extinguished. This occurs when the obligation specified in the contract is discharged, cancelled or expires.
An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.
Financial assets
All recognised financial assets are measured subsequently in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.
Classification of financial assets
Debt instruments that meet the following conditions are measured subsequently at amortised cost:
\u2022The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows;
\u2022The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.Debt instruments that meet the following conditions are measured subsequently at fair value through other comprehensive income (FVTOCI):
\u2022The financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling the financial assets;
\u2022The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding
By default, all other financial assets are measured subsequently at fair value through profit or loss (FVTPL).
Despite the foregoing, the Group may make the following irrevocable election / designation at initial recognition of a financial asset:
\u2022The Group may irrevocably elect to present subsequent changes in fair value of an equity investment in other comprehensive income if certain criteria are met; and
\u2022The Group may irrevocably designate a debt investment that meets the amortised cost or FVTOCI criteria as measured at FVTPL if doing so eliminates or significantly reduces an accounting mismatch.
Regular way purchases or sales of financial assets are recognised and derecognised on trade date.
An assessment of business models for managing financial assets is fundamental to the classification of a financial asset. The Group determines the business models at a level that reflects how groups of financial assets are managed together to achieve a particular business objective.
The Group\u2019s business model does not depend on management\u2019s intentions for an individual instrument, therefore the business model assessment is performed at a higher level of aggregation rather than on an instrument-by-instrument basis. The information considered includes: (a) the stated policies and objectives for the portfolio and the operation of those policies in practice; (b) how the performance of the portfolio is evaluated and reported to the Company\u2019s management; (c) the risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed; (d) how managers of the business are compensated; and (e) the frequency, value and timing of sales of financial assets in prior periods, the reasons for such sales and expectations about future sales activity.
The Group classifies its financial assets into the following two categories: a) financial assets at fair value through profit or loss, and b) financial assets at amortised cost.
Debt instruments measured at amortised cost
The following financial assets are classified within this category \u2013 trade receivables, cash at bank, intercompany balances.
Appropriate allowances for expected credit losses (\u2018ECLs\u2019) are recognised in profit or loss in accordance with the Group\u2019s accounting policy on ECLs.
The amortised cost of a financial asset is the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus the cumulative amortisation using the effective interest method of any difference between that initial amount and the maturity amount, adjusted for any loss allowance. The gross carrying amount of a financial asset is the amortised cost of a financial asset before adjusting for any loss allowance.
Changes in the carrying amount as a result of foreign exchange gains or losses, impairment gains or losses and interest income are recognised in profit or loss. On derecognition, any difference between the carrying amount and the consideration received is recognised in profit or loss and is presented separately in the line item \u2018Gains and losses arising from the derecognition of financial assets measured at amortised cost\u2019.
Interest income is recognised using the effective interest method and is included in the line item \u2018Investment income\u2019.
Trade receivables which do not have a significant financing component are initially measured at their transaction price and are subsequently stated at their nominal value less any loss allowance for ECLs.
Financial assets at FVTPL
Financial assets that do not meet the criteria for being measured at amortised cost or FVTOCI are measured at FVTPL, specifically:
-investments in equity instruments are classified as at FVTPL. However, a Group may designate an equity investment that is neither held for trading nor a contingent consideration arising from a business combination as at FVTOCI on initial recognition;
-debt instruments that do not meet the amortised cost criteria or the FVTOCI criteria are classified as at FVTPL.
In addition, debt instruments that meet either the amortised cost criteria or the FVTOCI criteria may be designated as at FVTPL upon initial recognition if such designation eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring assets or liabilities or recognising the gains and losses on them on different bases.
Financial assets measured at FVTPL are subsequently measured at fair value at the end of each reporting period, with any fair value gains or losses including foreign exchange gains and losses, recognised in profit or loss.
Where applicable, dividend income is recognised with other dividend income, if any, arising on other financial assets within the line item \u2018Investment income\u2019. Where applicable, interest income is disclosed within the line item \u2018Investment income\u2019. Fair value gains and losses are recognised within the line items \u2018Investment income\u2019 and \u2018Investment losses\u2019 respectively.
Interest income using the effective interest method
Interest income is recognised using the effective interest method for debt instruments measured subsequently at amortised cost.
The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period. For financial instruments other than purchased or originated credit-impaired financial assets, the effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) excluding ECLs, through the expected life of the debt instrument, or where appropriate, a shorter period, to the gross carrying amount of the debt instrument on initial recognition.
Expected Credit Losses
The Group recognises a loss allowance for ECLs on, debt instruments measured at amortised cost, intercompany receivables, trade receivables and cash at bank.
The amount of ECL is updated at each reporting date to reflect changes in credit risk since the initial recognition.
For trade receivables that do not contain a significant financing component (or for which the IFRS 15 practical expedient for contracts that are one year or less is applied), the Group applies the simplified approach and recognises lifetime ECL.
Where a collective basis is applied (see the Accounting Policy entitled \u2018Collective basis\u2019 below), the ECLs on these financial assets are estimated using a provision matrix based on the Company\u2019s historical credit loss experience based on the past due status of the debtors, adjusted for factors that are specific to the debtors, general economic conditions of the industry in which the debtors operate and an assessment of both the current as well as the forecast direction of conditions at the reporting date.
For all other financial instruments, the Group uses the general approach and recognises lifetime ECL when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on the financial instrument has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month ECL (\u201812m ECL\u2019). The assessment of whether lifetime ECL should be recognised is based on significant increases in the likelihood or risk of a default occurring since initial recognition instead of on evidence of a financial asset being credit-impaired at the reporting date or an actual default occurring.
Lifetime ECL represents the ECLs that will result from all possible default events over the expected life of a financial instrument. In contrast, 12m ECL represents the portion of lifetime ECL that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.
If the Group has measured the loss allowance for a financial instrument at an amount equal to lifetime ECL in the previous reporting period, but determines at the current reporting date that the conditions for lifetime ECL are no longer met, the Group measures the loss allowance at an amount equal to 12m ECL at the current reporting date.
The Group recognises an impairment gain or loss in profit or loss for all financial assets with a corresponding adjustment to their carrying amount.
Significant increase in credit risk
In assessing whether the credit risk on a financial instrument has increased significantly since initial recognition, the Group and Company compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial instrument as at the date of initial recognition. In making this assessment, the Group and Company considers both quantitative and qualitative information that is reasonable and supportable, including historical experience and forward-looking information that is available without undue cost or effort and, where applicable, the financial position of the counterparties.
The Group and Company regularly monitors the effectiveness of the criteria used to identify whether there has been a significant increase in credit risk and revises them as appropriate to ensure that the criteria are capable of identifying significant increase in credit risk before the amount becomes past due.
Forward-looking information considered includes the future prospects of the industries in which the Group and Company\u2019s debtors operate as obtained from economic expert reports, financial analysts, governmental bodies, relevant think-tanks and similar organisations, as well as consideration of various external sources of actual and forecast economic information that relate to the Company\u2019s core operations.
Irrespective of the outcome of the above assessment, the Group and Company presumes that the credit risk on a financial asset has increased significantly since initial recognition when contractual payments are more than 30 days past due, unless the Group and Company has reasonable and supportable information, that is available without undue cost or effort, that demonstrates otherwise.
The Group and Company considers the following as constituting an event of default for internal credit risk management purposes as historical experience indicates that receivables that meet either of the following criteria are generally not recoverable:
-when there is a breach of financial covenants by the counterparty; or
-information developed internally or obtained from external sources indicates that the debtor is unlikely to pay its creditors, including the Group and Company, in full (without taking into account any collateral held by the Group and Company).
Irrespective of the above analysis, the Group and Company considers that default has occurred when a financial asset is more than 90 days past due unless the Group and Company has reasonable and supportable information to demonstrate that a more lagging default criterion is more appropriate.
Credit-impaired financial assets
A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of that financial asset have occurred.
Evidence that a financial asset is credit-impaired includes observable data about the following events:
(i)significant financial difficulty of the issuer or the borrower;
(ii)a breach of contract, such as a default or past due event;
(iii)the lender(s) of the borrower, for economic or contractual reasons relating to the borrower\u2019s financial difficulty, having granted to the borrower a concession(s) that the lender(s) would not otherwise consider;
(iv)it is becoming probable that the borrower will enter bankruptcy or other financial reorganisation; or
(v)the disappearance of an active market for that financial asset because of financial difficulties.
Write-off policy
The Group and Company writes off a financial asset when there is information indicating that the counterparty is in severe financial difficulty and there is no realistic prospect of recovery, for example when the counterparty has been placed under liquidation or has entered into bankruptcy proceedings, whichever occurs sooner.
Financial assets written off may still be subject to enforcement activities under the Group and Company\u2019s recovery procedures, taking into account legal advice where appropriate. Recoveries made are recognised in profit or loss as impairment gains.
Measurement and recognition of ECLs
For financial assets, the credit loss is the difference between all contractual cash flows that are due to the Group and Company in accordance with the contract and all the cash flows that the Group and Company expects to receive, discounted at the original effective interest rate. ECLs represent the weighted average of credit losses with the respective risks of a default occurring as the weights.
The measurement of ECLs is a function of:
-the probability of default, which is an estimate of the likelihood of default over a given time horizon estimated at a point in time;
-the loss given default, which is an estimate of the loss arising on default, taking into into consideration the cash flows expected from collateral and other credit enhancements that are part of the contractual terms and are not recognised separately;
-the exposure at default, which is an estimate of the exposure at a future default date, taking into account expected changes in the exposure after the reporting date that are permitted by the current contractual terms, including amortisation profiles and early repayment or overpayment.
The assessment of the probability of default and loss given default is based on historical data adjusted by forward-looking information, where applicable. Where applicable, the financial position of the counterparties is also taken into consideration.
Where applicable, forward-looking information considered includes the future prospects of the industries in which the Group and Company\u2019s debtors operate, obtained from economic expert reports, financial analysts, governmental bodies, relevant think-tanks and other similar organisations, as well as consideration of various external sources of actual and forecast economic information that relate to the Group and Company\u2019s core operations.
Collective basis
If evidence of a significant increase in credit risk at the individual instrument level is not yet available, the Group and Company performs the assessment of significant increases in credit risk on a collective basis by considering information on, for example, a group or sub-group of financial instruments.
Where the Group and Company does not have reasonable and supportable information that is available without undue cost or effort to measure lifetime ECL on an individual instrument basis, lifetime ECL is measured on a collective basis.
In such instances, the financial instruments are grouped on the basis of shared credit risk characteristics, as follows:
-Nature of financial instruments;
-Past-due status;
-Nature, size and industry of debtors;
-Nature of collaterals for finance lease receivables;
-External credit ratings where available;
-Date of initial recognition;
-Remaining term to maturity;
-Geographical location of the borrower;
-The value of collateral relative to the financial asset if it has an impact on the probability of default occurring (for example, loan-to-value ratios).
The grouping is regularly reviewed by management to ensure the constituents of each group continue to share similar credit risk characteristics.
Financial liabilities and equity
Trade payables are classified with current liabilities and are stated at their amortised cost using the EIR method.
10.Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, demand deposits and time deposits maturing within three months from the end of the reporting period.
14.Investment return
Investment return includes dividend income, net fair value movements on financial assets at fair value through profit or loss (including interest income from financial assets classified as fair value through profit or loss), interest income from financial assets not classified as fair value through profit or loss, rental receivable, net fair value movements on investment property and is net of investment expenses, charges, and interest.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page38-cflshid_14084-tag11923157": { "value": "
Material accounting policies
9.Other financial instruments
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially recognised at their fair value, except for trade receivables that do not have a significant financing component which are measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.
Financial assets and financial liabilities are off-set and the net amount presented in the statement of financial position when the Group has a legally enforceable right to set off the recognised amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.
Financial assets are derecognised when the contractual rights to the cash flows from the financial assets expire or when the entity transfers the financial asset and the transfer qualifies for derecognition.
Financial liabilities are derecognised when they are extinguished. This occurs when the obligation specified in the contract is discharged, cancelled or expires.
Financial assets
All recognised financial assets are measured subsequently in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.
Classification of financial assets
Debt instruments that meet the following conditions are measured subsequently at amortised cost:
\u2022The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows;
\u2022The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.Debt instruments that meet the following conditions are measured subsequently at fair value through other comprehensive income (FVTOCI):
\u2022The financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling the financial assets;
\u2022The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding
By default, all other financial assets are measured subsequently at fair value through profit or loss (FVTPL).
Despite the foregoing, the Group may make the following irrevocable election / designation at initial recognition of a financial asset:
\u2022The Group may irrevocably elect to present subsequent changes in fair value of an equity investment in other comprehensive income if certain criteria are met; and
\u2022The Group may irrevocably designate a debt investment that meets the amortised cost or FVTOCI criteria as measured at FVTPL if doing so eliminates or significantly reduces an accounting mismatch.
Regular way purchases or sales of financial assets are recognised and derecognised on trade date.
An assessment of business models for managing financial assets is fundamental to the classification of a financial asset. The Group determines the business models at a level that reflects how groups of financial assets are managed together to achieve a particular business objective.
The Group\u2019s business model does not depend on management\u2019s intentions for an individual instrument, therefore the business model assessment is performed at a higher level of aggregation rather than on an instrument-by-instrument basis. The information considered includes: (a) the stated policies and objectives for the portfolio and the operation of those policies in practice; (b) how the performance of the portfolio is evaluated and reported to the Company\u2019s management; (c) the risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed; (d) how managers of the business are compensated; and (e) the frequency, value and timing of sales of financial assets in prior periods, the reasons for such sales and expectations about future sales activity.
The Group classifies its financial assets into the following two categories: a) financial assets at fair value through profit or loss, and b) financial assets at amortised cost.
Financial assets at FVTPL
Financial assets that do not meet the criteria for being measured at amortised cost or FVTOCI are measured at FVTPL, specifically:
-investments in equity instruments are classified as at FVTPL. However, a Group may designate an equity investment that is neither held for trading nor a contingent consideration arising from a business combination as at FVTOCI on initial recognition;
-debt instruments that do not meet the amortised cost criteria or the FVTOCI criteria are classified as at FVTPL.
In addition, debt instruments that meet either the amortised cost criteria or the FVTOCI criteria may be designated as at FVTPL upon initial recognition if such designation eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring assets or liabilities or recognising the gains and losses on them on different bases.
Financial assets measured at FVTPL are subsequently measured at fair value at the end of each reporting period, with any fair value gains or losses including foreign exchange gains and losses, recognised in profit or loss.
Where applicable, dividend income is recognised with other dividend income, if any, arising on other financial assets within the line item \u2018Investment income\u2019. Where applicable, interest income is disclosed within the line item \u2018Investment income\u2019. Fair value gains and losses are recognised within the line items \u2018Investment income\u2019 and \u2018Investment losses\u2019 respectively.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page38-cflshid_14084-tag11923156": { "value": "
Material accounting policies
9.Other financial instruments
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially recognised at their fair value, except for trade receivables that do not have a significant financing component which are measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.
Financial assets and financial liabilities are off-set and the net amount presented in the statement of financial position when the Group has a legally enforceable right to set off the recognised amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.
Financial assets are derecognised when the contractual rights to the cash flows from the financial assets expire or when the entity transfers the financial asset and the transfer qualifies for derecognition.
Financial liabilities are derecognised when they are extinguished. This occurs when the obligation specified in the contract is discharged, cancelled or expires.
An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.
Financial assets
All recognised financial assets are measured subsequently in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.
Classification of financial assets
Debt instruments that meet the following conditions are measured subsequently at amortised cost:
\u2022The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows;
\u2022The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.Debt instruments that meet the following conditions are measured subsequently at fair value through other comprehensive income (FVTOCI):
\u2022The financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling the financial assets;
\u2022The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding
By default, all other financial assets are measured subsequently at fair value through profit or loss (FVTPL).
Despite the foregoing, the Group may make the following irrevocable election / designation at initial recognition of a financial asset:
\u2022The Group may irrevocably elect to present subsequent changes in fair value of an equity investment in other comprehensive income if certain criteria are met; and
\u2022The Group may irrevocably designate a debt investment that meets the amortised cost or FVTOCI criteria as measured at FVTPL if doing so eliminates or significantly reduces an accounting mismatch.
Regular way purchases or sales of financial assets are recognised and derecognised on trade date.
An assessment of business models for managing financial assets is fundamental to the classification of a financial asset. The Group determines the business models at a level that reflects how groups of financial assets are managed together to achieve a particular business objective.
The Group\u2019s business model does not depend on management\u2019s intentions for an individual instrument, therefore the business model assessment is performed at a higher level of aggregation rather than on an instrument-by-instrument basis. The information considered includes: (a) the stated policies and objectives for the portfolio and the operation of those policies in practice; (b) how the performance of the portfolio is evaluated and reported to the Company\u2019s management; (c) the risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed; (d) how managers of the business are compensated; and (e) the frequency, value and timing of sales of financial assets in prior periods, the reasons for such sales and expectations about future sales activity.
The Group classifies its financial assets into the following two categories: a) financial assets at fair value through profit or loss, and b) financial assets at amortised cost.
Debt instruments measured at amortised cost
The following financial assets are classified within this category \u2013 trade receivables, cash at bank, intercompany balances.
Appropriate allowances for expected credit losses (\u2018ECLs\u2019) are recognised in profit or loss in accordance with the Group\u2019s accounting policy on ECLs.
The amortised cost of a financial asset is the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus the cumulative amortisation using the effective interest method of any difference between that initial amount and the maturity amount, adjusted for any loss allowance. The gross carrying amount of a financial asset is the amortised cost of a financial asset before adjusting for any loss allowance.
Changes in the carrying amount as a result of foreign exchange gains or losses, impairment gains or losses and interest income are recognised in profit or loss. On derecognition, any difference between the carrying amount and the consideration received is recognised in profit or loss and is presented separately in the line item \u2018Gains and losses arising from the derecognition of financial assets measured at amortised cost\u2019.
Interest income is recognised using the effective interest method and is included in the line item \u2018Investment income\u2019.
Trade receivables which do not have a significant financing component are initially measured at their transaction price and are subsequently stated at their nominal value less any loss allowance for ECLs.
Financial assets at FVTPL
Financial assets that do not meet the criteria for being measured at amortised cost or FVTOCI are measured at FVTPL, specifically:
-investments in equity instruments are classified as at FVTPL. However, a Group may designate an equity investment that is neither held for trading nor a contingent consideration arising from a business combination as at FVTOCI on initial recognition;
-debt instruments that do not meet the amortised cost criteria or the FVTOCI criteria are classified as at FVTPL.
In addition, debt instruments that meet either the amortised cost criteria or the FVTOCI criteria may be designated as at FVTPL upon initial recognition if such designation eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring assets or liabilities or recognising the gains and losses on them on different bases.
Financial assets measured at FVTPL are subsequently measured at fair value at the end of each reporting period, with any fair value gains or losses including foreign exchange gains and losses, recognised in profit or loss.
Where applicable, dividend income is recognised with other dividend income, if any, arising on other financial assets within the line item \u2018Investment income\u2019. Where applicable, interest income is disclosed within the line item \u2018Investment income\u2019. Fair value gains and losses are recognised within the line items \u2018Investment income\u2019 and \u2018Investment losses\u2019 respectively.
Interest income using the effective interest method
Interest income is recognised using the effective interest method for debt instruments measured subsequently at amortised cost.
The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period. For financial instruments other than purchased or originated credit-impaired financial assets, the effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) excluding ECLs, through the expected life of the debt instrument, or where appropriate, a shorter period, to the gross carrying amount of the debt instrument on initial recognition.
Expected Credit Losses
The Group recognises a loss allowance for ECLs on, debt instruments measured at amortised cost, intercompany receivables, trade receivables and cash at bank.
The amount of ECL is updated at each reporting date to reflect changes in credit risk since the initial recognition.
For trade receivables that do not contain a significant financing component (or for which the IFRS 15 practical expedient for contracts that are one year or less is applied), the Group applies the simplified approach and recognises lifetime ECL.
Where a collective basis is applied (see the Accounting Policy entitled \u2018Collective basis\u2019 below), the ECLs on these financial assets are estimated using a provision matrix based on the Company\u2019s historical credit loss experience based on the past due status of the debtors, adjusted for factors that are specific to the debtors, general economic conditions of the industry in which the debtors operate and an assessment of both the current as well as the forecast direction of conditions at the reporting date.
For all other financial instruments, the Group uses the general approach and recognises lifetime ECL when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on the financial instrument has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month ECL (\u201812m ECL\u2019). The assessment of whether lifetime ECL should be recognised is based on significant increases in the likelihood or risk of a default occurring since initial recognition instead of on evidence of a financial asset being credit-impaired at the reporting date or an actual default occurring.
Lifetime ECL represents the ECLs that will result from all possible default events over the expected life of a financial instrument. In contrast, 12m ECL represents the portion of lifetime ECL that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.
If the Group has measured the loss allowance for a financial instrument at an amount equal to lifetime ECL in the previous reporting period, but determines at the current reporting date that the conditions for lifetime ECL are no longer met, the Group measures the loss allowance at an amount equal to 12m ECL at the current reporting date.
The Group recognises an impairment gain or loss in profit or loss for all financial assets with a corresponding adjustment to their carrying amount.
Significant increase in credit risk
In assessing whether the credit risk on a financial instrument has increased significantly since initial recognition, the Group and Company compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial instrument as at the date of initial recognition. In making this assessment, the Group and Company considers both quantitative and qualitative information that is reasonable and supportable, including historical experience and forward-looking information that is available without undue cost or effort and, where applicable, the financial position of the counterparties.
The Group and Company regularly monitors the effectiveness of the criteria used to identify whether there has been a significant increase in credit risk and revises them as appropriate to ensure that the criteria are capable of identifying significant increase in credit risk before the amount becomes past due.
Forward-looking information considered includes the future prospects of the industries in which the Group and Company\u2019s debtors operate as obtained from economic expert reports, financial analysts, governmental bodies, relevant think-tanks and similar organisations, as well as consideration of various external sources of actual and forecast economic information that relate to the Company\u2019s core operations.
Irrespective of the outcome of the above assessment, the Group and Company presumes that the credit risk on a financial asset has increased significantly since initial recognition when contractual payments are more than 30 days past due, unless the Group and Company has reasonable and supportable information, that is available without undue cost or effort, that demonstrates otherwise.
The Group and Company considers the following as constituting an event of default for internal credit risk management purposes as historical experience indicates that receivables that meet either of the following criteria are generally not recoverable:
-when there is a breach of financial covenants by the counterparty; or
-information developed internally or obtained from external sources indicates that the debtor is unlikely to pay its creditors, including the Group and Company, in full (without taking into account any collateral held by the Group and Company).
Irrespective of the above analysis, the Group and Company considers that default has occurred when a financial asset is more than 90 days past due unless the Group and Company has reasonable and supportable information to demonstrate that a more lagging default criterion is more appropriate.
Credit-impaired financial assets
A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of that financial asset have occurred.
Evidence that a financial asset is credit-impaired includes observable data about the following events:
(i)significant financial difficulty of the issuer or the borrower;
(ii)a breach of contract, such as a default or past due event;
(iii)the lender(s) of the borrower, for economic or contractual reasons relating to the borrower\u2019s financial difficulty, having granted to the borrower a concession(s) that the lender(s) would not otherwise consider;
(iv)it is becoming probable that the borrower will enter bankruptcy or other financial reorganisation; or
(v)the disappearance of an active market for that financial asset because of financial difficulties.
Write-off policy
The Group and Company writes off a financial asset when there is information indicating that the counterparty is in severe financial difficulty and there is no realistic prospect of recovery, for example when the counterparty has been placed under liquidation or has entered into bankruptcy proceedings, whichever occurs sooner.
Financial assets written off may still be subject to enforcement activities under the Group and Company\u2019s recovery procedures, taking into account legal advice where appropriate. Recoveries made are recognised in profit or loss as impairment gains.
Measurement and recognition of ECLs
For financial assets, the credit loss is the difference between all contractual cash flows that are due to the Group and Company in accordance with the contract and all the cash flows that the Group and Company expects to receive, discounted at the original effective interest rate. ECLs represent the weighted average of credit losses with the respective risks of a default occurring as the weights.
The measurement of ECLs is a function of:
-the probability of default, which is an estimate of the likelihood of default over a given time horizon estimated at a point in time;
-the loss given default, which is an estimate of the loss arising on default, taking into into consideration the cash flows expected from collateral and other credit enhancements that are part of the contractual terms and are not recognised separately;
-the exposure at default, which is an estimate of the exposure at a future default date, taking into account expected changes in the exposure after the reporting date that are permitted by the current contractual terms, including amortisation profiles and early repayment or overpayment.
The assessment of the probability of default and loss given default is based on historical data adjusted by forward-looking information, where applicable. Where applicable, the financial position of the counterparties is also taken into consideration.
Where applicable, forward-looking information considered includes the future prospects of the industries in which the Group and Company\u2019s debtors operate, obtained from economic expert reports, financial analysts, governmental bodies, relevant think-tanks and other similar organisations, as well as consideration of various external sources of actual and forecast economic information that relate to the Group and Company\u2019s core operations.
Collective basis
If evidence of a significant increase in credit risk at the individual instrument level is not yet available, the Group and Company performs the assessment of significant increases in credit risk on a collective basis by considering information on, for example, a group or sub-group of financial instruments.
Where the Group and Company does not have reasonable and supportable information that is available without undue cost or effort to measure lifetime ECL on an individual instrument basis, lifetime ECL is measured on a collective basis.
In such instances, the financial instruments are grouped on the basis of shared credit risk characteristics, as follows:
-Nature of financial instruments;
-Past-due status;
-Nature, size and industry of debtors;
-Nature of collaterals for finance lease receivables;
-External credit ratings where available;
-Date of initial recognition;
-Remaining term to maturity;
-Geographical location of the borrower;
-The value of collateral relative to the financial asset if it has an impact on the probability of default occurring (for example, loan-to-value ratios).
The grouping is regularly reviewed by management to ensure the constituents of each group continue to share similar credit risk characteristics.
10.Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, demand deposits and time deposits maturing within three months from the end of the reporting period.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialAssetsExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page38-cflshid_14084-tag11923155": { "value": "
Material accounting policies
2.13Presentation
The Company disaggregates the total amount recognised in the statement of profit or loss and other comprehensive income into an insurance service result, comprising insurance revenue and insurance service expense, and insurance finance income or expenses.
The Company does not disaggregate the change in risk adjustment for non-financial risk between a financial and non-financial portion and includes the entire change as part of the insurance service result.
2.13.3Insurance Service Expenses
Insurance service expenses arising from insurance contracts and investments contracts with DPF are recognised in profit or loss generally as they are incurred. They exclude repayments of investment components and comprise of:
-Incurred claims and other insurance service expenses: For some life risk contracts, incurred claims also include premiums waived on detection of critical illness;
-Amortisation of insurance acquisition cash flows: For contracts not measured under the PAA, this is equal to the amount of insurance revenue recognised in the year that relates to recovering insurance acquisition cash flows. For contracts measured under the PAA, the Company has elected to expense insurance acquisition cash flows as incurred;
-Losses on onerous contracts and reversals of such losses;
-Adjustments to the liabilities for incurred claims that do not arise from the effects of the time value of money, financial risk and changes therein.
2.13.4Insurance finance income and expense
Insurance finance income or expenses comprise the change in the carrying amount of the group of insurance contracts and investment contracts with DPF arising from:
\u2022The effect of the time value of money and changes in the time value of money;
\u2022The effect of financial risk and changes in financial risk.
For contracts without direct participation features, insurance finance income or expenses reflect interest accreted on the future cash flows and the CSM and the effect of changes in interest rates and other financial assumptions.
For contracts with direct participation features, insurance finance income or expenses comprise changes in the measurement of the groups of contracts caused by changes in the value of underlying items (excluding additions and withdrawals), interest accreted and the effect of changes in interest rated on future cash flows that do not vary with returns on underlying items.
For contracts measured under the PAA insurance finance or expenses reflect interest accreted on the future cash flows under the LIC and the effect of changes in interest rates and other financial assumptions.
The Company does not disaggregate changes in the risk adjustment for non-financial risk between insurance service result and insurance financial income or expenses.
The Company has an accounting policy choice to either present all of the period\u2019s insurance finance income or expenses in profit or loss or to split the amount between profit or loss and other comprehensive income (OCI). The accounting policy choice is applied on a portfolio-by-portfolio basis. The Company will include all insurance finance income or expenses for the reporting period in profit or loss for all its portfolios.
2.13.5Net income or expense from reinsurance contracts held
Net expenses from reinsurance contracts comprise an allocation of reinsurance premiums paid less amounts recovered from reinsurers.
The Company presents separately on the face of the statement of profit or loss and other comprehensive income the amounts expected to be recovered from reinsurers, and an allocation of the reinsurance premiums paid.
The Company treats reinsurance cash flows that are contingent on claims on the underlying contracts as part of the claims that are expected to be reimbursed under the reinsurance contract held. Ceding commissions that are not contingent on claims of the underlying contracts are presented as a deduction in the premiums to be paid to the reinsurer which is then allocated to profit or loss.
7.Property, plant and equipment
Depreciation is calculated using the straight-line method to allocate the cost of the assets to their residual values over their estimated useful lives using the following depreciation rates:
%
Buildings2-20
Office furniture, fittings and equipment20-25
The assets\u2019 residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each report period. A revaluation deficit is recognised in the statement of profit or loss, except to the extent that it offsets an existing surplus on the same asset recognised in the revaluation surplus.
8.Investment property
Subsequent expenditure is charged to the asset\u2019s carrying amount only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance costs are charged to the profit and loss account during the financial period in which they are incurred.
Unrealised gains and losses arising from changes in fair value (net of deferred taxation) are initially recognised in profit or loss.
9.Other financial instruments
Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.
Financial assets
Debt instruments measured at amortised cost
The following financial assets are classified within this category \u2013 trade receivables, cash at bank, intercompany balances.
Appropriate allowances for expected credit losses (\u2018ECLs\u2019) are recognised in profit or loss in accordance with the Group\u2019s accounting policy on ECLs.
The amortised cost of a financial asset is the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus the cumulative amortisation using the effective interest method of any difference between that initial amount and the maturity amount, adjusted for any loss allowance. The gross carrying amount of a financial asset is the amortised cost of a financial asset before adjusting for any loss allowance.
Changes in the carrying amount as a result of foreign exchange gains or losses, impairment gains or losses and interest income are recognised in profit or loss. On derecognition, any difference between the carrying amount and the consideration received is recognised in profit or loss and is presented separately in the line item \u2018Gains and losses arising from the derecognition of financial assets measured at amortised cost\u2019.
Financial assets at FVTPL
Financial assets measured at FVTPL are subsequently measured at fair value at the end of each reporting period, with any fair value gains or losses including foreign exchange gains and losses, recognised in profit or loss.
Fair value gains and losses are recognised within the line items \u2018Investment income\u2019 and \u2018Investment losses\u2019 respectively.
Expected Credit Losses
The Group recognises a loss allowance for ECLs on, debt instruments measured at amortised cost, intercompany receivables, trade receivables and cash at bank.
The amount of ECL is updated at each reporting date to reflect changes in credit risk since the initial recognition.
For trade receivables that do not contain a significant financing component (or for which the IFRS 15 practical expedient for contracts that are one year or less is applied), the Group applies the simplified approach and recognises lifetime ECL.
Where a collective basis is applied (see the Accounting Policy entitled \u2018Collective basis\u2019 below), the ECLs on these financial assets are estimated using a provision matrix based on the Company\u2019s historical credit loss experience based on the past due status of the debtors, adjusted for factors that are specific to the debtors, general economic conditions of the industry in which the debtors operate and an assessment of both the current as well as the forecast direction of conditions at the reporting date.
For all other financial instruments, the Group uses the general approach and recognises lifetime ECL when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on the financial instrument has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month ECL (\u201812m ECL\u2019). The assessment of whether lifetime ECL should be recognised is based on significant increases in the likelihood or risk of a default occurring since initial recognition instead of on evidence of a financial asset being credit-impaired at the reporting date or an actual default occurring.
Lifetime ECL represents the ECLs that will result from all possible default events over the expected life of a financial instrument. In contrast, 12m ECL represents the portion of lifetime ECL that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.
If the Group has measured the loss allowance for a financial instrument at an amount equal to lifetime ECL in the previous reporting period, but determines at the current reporting date that the conditions for lifetime ECL are no longer met, the Group measures the loss allowance at an amount equal to 12m ECL at the current reporting date.
The Group recognises an impairment gain or loss in profit or loss for all financial assets with a corresponding adjustment to their carrying amount.
Significant increase in credit risk
In assessing whether the credit risk on a financial instrument has increased significantly since initial recognition, the Group and Company compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial instrument as at the date of initial recognition. In making this assessment, the Group and Company considers both quantitative and qualitative information that is reasonable and supportable, including historical experience and forward-looking information that is available without undue cost or effort and, where applicable, the financial position of the counterparties.
The Group and Company regularly monitors the effectiveness of the criteria used to identify whether there has been a significant increase in credit risk and revises them as appropriate to ensure that the criteria are capable of identifying significant increase in credit risk before the amount becomes past due.
Forward-looking information considered includes the future prospects of the industries in which the Group and Company\u2019s debtors operate as obtained from economic expert reports, financial analysts, governmental bodies, relevant think-tanks and similar organisations, as well as consideration of various external sources of actual and forecast economic information that relate to the Company\u2019s core operations.
Irrespective of the outcome of the above assessment, the Group and Company presumes that the credit risk on a financial asset has increased significantly since initial recognition when contractual payments are more than 30 days past due, unless the Group and Company has reasonable and supportable information, that is available without undue cost or effort, that demonstrates otherwise.
The Group and Company considers the following as constituting an event of default for internal credit risk management purposes as historical experience indicates that receivables that meet either of the following criteria are generally not recoverable:
-when there is a breach of financial covenants by the counterparty; or
-information developed internally or obtained from external sources indicates that the debtor is unlikely to pay its creditors, including the Group and Company, in full (without taking into account any collateral held by the Group and Company).
Irrespective of the above analysis, the Group and Company considers that default has occurred when a financial asset is more than 90 days past due unless the Group and Company has reasonable and supportable information to demonstrate that a more lagging default criterion is more appropriate.
Credit-impaired financial assets
A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of that financial asset have occurred.
Evidence that a financial asset is credit-impaired includes observable data about the following events:
(i)significant financial difficulty of the issuer or the borrower;
(ii)a breach of contract, such as a default or past due event;
(iii)the lender(s) of the borrower, for economic or contractual reasons relating to the borrower\u2019s financial difficulty, having granted to the borrower a concession(s) that the lender(s) would not otherwise consider;
(iv)it is becoming probable that the borrower will enter bankruptcy or other financial reorganisation; or
(v)the disappearance of an active market for that financial asset because of financial difficulties.
Write-off policy
The Group and Company writes off a financial asset when there is information indicating that the counterparty is in severe financial difficulty and there is no realistic prospect of recovery, for example when the counterparty has been placed under liquidation or has entered into bankruptcy proceedings, whichever occurs sooner.
Financial assets written off may still be subject to enforcement activities under the Group and Company\u2019s recovery procedures, taking into account legal advice where appropriate. Recoveries made are recognised in profit or loss as impairment gains.
Measurement and recognition of ECLs
For financial assets, the credit loss is the difference between all contractual cash flows that are due to the Group and Company in accordance with the contract and all the cash flows that the Group and Company expects to receive, discounted at the original effective interest rate. ECLs represent the weighted average of credit losses with the respective risks of a default occurring as the weights.
The measurement of ECLs is a function of:
-the probability of default, which is an estimate of the likelihood of default over a given time horizon estimated at a point in time;
-the loss given default, which is an estimate of the loss arising on default, taking into into consideration the cash flows expected from collateral and other credit enhancements that are part of the contractual terms and are not recognised separately;
-the exposure at default, which is an estimate of the exposure at a future default date, taking into account expected changes in the exposure after the reporting date that are permitted by the current contractual terms, including amortisation profiles and early repayment or overpayment.
The assessment of the probability of default and loss given default is based on historical data adjusted by forward-looking information, where applicable. Where applicable, the financial position of the counterparties is also taken into consideration.
Where applicable, forward-looking information considered includes the future prospects of the industries in which the Group and Company\u2019s debtors operate, obtained from economic expert reports, financial analysts, governmental bodies, relevant think-tanks and other similar organisations, as well as consideration of various external sources of actual and forecast economic information that relate to the Group and Company\u2019s core operations.
Collective basis
If evidence of a significant increase in credit risk at the individual instrument level is not yet available, the Group and Company performs the assessment of significant increases in credit risk on a collective basis by considering information on, for example, a group or sub-group of financial instruments.
Where the Group and Company does not have reasonable and supportable information that is available without undue cost or effort to measure lifetime ECL on an individual instrument basis, lifetime ECL is measured on a collective basis.
In such instances, the financial instruments are grouped on the basis of shared credit risk characteristics, as follows:
-Nature of financial instruments;
-Past-due status;
-Nature, size and industry of debtors;
-Nature of collaterals for finance lease receivables;
-External credit ratings where available;
-Date of initial recognition;
-Remaining term to maturity;
-Geographical location of the borrower;
-The value of collateral relative to the financial asset if it has an impact on the probability of default occurring (for example, loan-to-value ratios).
The grouping is regularly reviewed by management to ensure the constituents of each group continue to share similar credit risk characteristics.
12.Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount of the obligation can be made. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessment of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost.
15.Foreign currencies
b)Transactions and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the profit or loss. Non-monetary assets and liabilities denominated in currencies other than the functional currency that are measured at fair value are re-translated using the exchange rate ruling on the date the fair value was measured. Non-monetary assets and liabilities denominated in currencies other than the functional currency that are measured in terms of historical cost are not re-translated. Exchange differences arising on the translation of non-monetary items carried at fair value are included in profit or loss for the period, except for differences arising on the re-translation of non-monetary items in respect of which gains and losses are recognised in other comprehensive income. For such non-monetary items, any exchange component of that gain or loss is also recognised in other comprehensive income.
16.Leases
(ii)Group as a lessee
Right-of-use asset
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset of the Group by the end of the lease term or the cost of the right-of-use asset reflects that the Group will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases of machinery and equipment (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipment that are considered to be low value. Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term.
17.Taxation
Current tax is recognised in profit or loss, except when it relates to items recognised in other comprehensive income or directly in equity, in which case the current tax is also dealt with in other comprehensive income or in equity, as appropriate. Current tax is based on the taxable result for the period. The taxable result for the period differs from the result as reported in profit or loss because it excludes items which are non-assessable or disallowed and it further excludes items which are taxable or deductible in other periods. It is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax is provided using the liability method for all temporary differences arising between the tax bases of assets and liabilities and their carrying values for financial reporting purposes. Currently enacted tax rates are used in the determination of deferred income tax. Deferred tax assets are recognised only to the extent that future taxable profit will be available such that realisation of the related tax benefit is probable.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForExpensesExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page38-cflshid_14084-tag11923154": { "value": "
Material accounting policies
7.Property, plant and equipment
Depreciation is calculated using the straight-line method to allocate the cost of the assets to their residual values over their estimated useful lives using the following depreciation rates:
%
Buildings2-20
Office furniture, fittings and equipment20-25
The assets\u2019 residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each report period. An annual transfer from the asset revaluation surplus to retained earnings is made for the difference between depreciation based on the revalued carrying amount of the asset and depreciation based on the asset\u2019s original cost. Additionally, accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset.
16.Leases
(ii)Group as a lessee
Right-of-use asset
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset of the Group by the end of the lease term or the cost of the right-of-use asset reflects that the Group will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
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Material accounting policies
10.Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, demand deposits and time deposits maturing within three months from the end of the reporting period.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyToDetermineComponentsOfCashAndCashEquivalents", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page38-cflshid_14084-tag11923152": { "value": "
Material accounting policies
9.Other financial instruments
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially recognised at their fair value, except for trade receivables that do not have a significant financing component which are measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.
Financial assets and financial liabilities are off-set and the net amount presented in the statement of financial position when the Group has a legally enforceable right to set off the recognised amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.
Financial assets are derecognised when the contractual rights to the cash flows from the financial assets expire or when the entity transfers the financial asset and the transfer qualifies for derecognition.
Financial assets
Debt instruments measured at amortised cost
The following financial assets are classified within this category \u2013 trade receivables, cash at bank, intercompany balances.
Appropriate allowances for expected credit losses (\u2018ECLs\u2019) are recognised in profit or loss in accordance with the Group\u2019s accounting policy on ECLs.
Trade receivables which do not have a significant financing component are initially measured at their transaction price and are subsequently stated at their nominal value less any loss allowance for ECLs.
Expected Credit Losses
The Group recognises a loss allowance for ECLs on, debt instruments measured at amortised cost, intercompany receivables, trade receivables and cash at bank.
The amount of ECL is updated at each reporting date to reflect changes in credit risk since the initial recognition.
For trade receivables that do not contain a significant financing component (or for which the IFRS 15 practical expedient for contracts that are one year or less is applied), the Group applies the simplified approach and recognises lifetime ECL.
Where a collective basis is applied (see the Accounting Policy entitled \u2018Collective basis\u2019 below), the ECLs on these financial assets are estimated using a provision matrix based on the Company\u2019s historical credit loss experience based on the past due status of the debtors, adjusted for factors that are specific to the debtors, general economic conditions of the industry in which the debtors operate and an assessment of both the current as well as the forecast direction of conditions at the reporting date.
For all other financial instruments, the Group uses the general approach and recognises lifetime ECL when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on the financial instrument has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month ECL (\u201812m ECL\u2019). The assessment of whether lifetime ECL should be recognised is based on significant increases in the likelihood or risk of a default occurring since initial recognition instead of on evidence of a financial asset being credit-impaired at the reporting date or an actual default occurring.
Lifetime ECL represents the ECLs that will result from all possible default events over the expected life of a financial instrument. In contrast, 12m ECL represents the portion of lifetime ECL that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.
If the Group has measured the loss allowance for a financial instrument at an amount equal to lifetime ECL in the previous reporting period, but determines at the current reporting date that the conditions for lifetime ECL are no longer met, the Group measures the loss allowance at an amount equal to 12m ECL at the current reporting date.
The Group recognises an impairment gain or loss in profit or loss for all financial assets with a corresponding adjustment to their carrying amount.
Significant increase in credit risk
In assessing whether the credit risk on a financial instrument has increased significantly since initial recognition, the Group and Company compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial instrument as at the date of initial recognition. In making this assessment, the Group and Company considers both quantitative and qualitative information that is reasonable and supportable, including historical experience and forward-looking information that is available without undue cost or effort and, where applicable, the financial position of the counterparties.
The Group and Company regularly monitors the effectiveness of the criteria used to identify whether there has been a significant increase in credit risk and revises them as appropriate to ensure that the criteria are capable of identifying significant increase in credit risk before the amount becomes past due.
Forward-looking information considered includes the future prospects of the industries in which the Group and Company\u2019s debtors operate as obtained from economic expert reports, financial analysts, governmental bodies, relevant think-tanks and similar organisations, as well as consideration of various external sources of actual and forecast economic information that relate to the Company\u2019s core operations.
Irrespective of the outcome of the above assessment, the Group and Company presumes that the credit risk on a financial asset has increased significantly since initial recognition when contractual payments are more than 30 days past due, unless the Group and Company has reasonable and supportable information, that is available without undue cost or effort, that demonstrates otherwise.
The Group and Company considers the following as constituting an event of default for internal credit risk management purposes as historical experience indicates that receivables that meet either of the following criteria are generally not recoverable:
-when there is a breach of financial covenants by the counterparty; or
-information developed internally or obtained from external sources indicates that the debtor is unlikely to pay its creditors, including the Group and Company, in full (without taking into account any collateral held by the Group and Company).
Irrespective of the above analysis, the Group and Company considers that default has occurred when a financial asset is more than 90 days past due unless the Group and Company has reasonable and supportable information to demonstrate that a more lagging default criterion is more appropriate.
Credit-impaired financial assets
A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of that financial asset have occurred.
Evidence that a financial asset is credit-impaired includes observable data about the following events:
(i)significant financial difficulty of the issuer or the borrower;
(ii)a breach of contract, such as a default or past due event;
(iii)the lender(s) of the borrower, for economic or contractual reasons relating to the borrower\u2019s financial difficulty, having granted to the borrower a concession(s) that the lender(s) would not otherwise consider;
(iv)it is becoming probable that the borrower will enter bankruptcy or other financial reorganisation; or
(v)the disappearance of an active market for that financial asset because of financial difficulties.
Write-off policy
The Group and Company writes off a financial asset when there is information indicating that the counterparty is in severe financial difficulty and there is no realistic prospect of recovery, for example when the counterparty has been placed under liquidation or has entered into bankruptcy proceedings, whichever occurs sooner.
Financial assets written off may still be subject to enforcement activities under the Group and Company\u2019s recovery procedures, taking into account legal advice where appropriate. Recoveries made are recognised in profit or loss as impairment gains.
Measurement and recognition of ECLs
For financial assets, the credit loss is the difference between all contractual cash flows that are due to the Group and Company in accordance with the contract and all the cash flows that the Group and Company expects to receive, discounted at the original effective interest rate. ECLs represent the weighted average of credit losses with the respective risks of a default occurring as the weights.
The measurement of ECLs is a function of:
-the probability of default, which is an estimate of the likelihood of default over a given time horizon estimated at a point in time;
-the loss given default, which is an estimate of the loss arising on default, taking into into consideration the cash flows expected from collateral and other credit enhancements that are part of the contractual terms and are not recognised separately;
-the exposure at default, which is an estimate of the exposure at a future default date, taking into account expected changes in the exposure after the reporting date that are permitted by the current contractual terms, including amortisation profiles and early repayment or overpayment.
The assessment of the probability of default and loss given default is based on historical data adjusted by forward-looking information, where applicable. Where applicable, the financial position of the counterparties is also taken into consideration.
Where applicable, forward-looking information considered includes the future prospects of the industries in which the Group and Company\u2019s debtors operate, obtained from economic expert reports, financial analysts, governmental bodies, relevant think-tanks and other similar organisations, as well as consideration of various external sources of actual and forecast economic information that relate to the Group and Company\u2019s core operations.
Collective basis
If evidence of a significant increase in credit risk at the individual instrument level is not yet available, the Group and Company performs the assessment of significant increases in credit risk on a collective basis by considering information on, for example, a group or sub-group of financial instruments.
Where the Group and Company does not have reasonable and supportable information that is available without undue cost or effort to measure lifetime ECL on an individual instrument basis, lifetime ECL is measured on a collective basis.
In such instances, the financial instruments are grouped on the basis of shared credit risk characteristics, as follows:
-Nature of financial instruments;
-Past-due status;
-Nature, size and industry of debtors;
-Nature of collaterals for finance lease receivables;
-External credit ratings where available;
-Date of initial recognition;
-Remaining term to maturity;
-Geographical location of the borrower;
-The value of collateral relative to the financial asset if it has an impact on the probability of default occurring (for example, loan-to-value ratios).
The grouping is regularly reviewed by management to ensure the constituents of each group continue to share similar credit risk characteristics.
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Material accounting policies
5Acquisition of subsidiaries
The acquisition of subsidiaries that are not under common control is accounted for by applying the acquisition method. The consideration is measured as the aggregate of the fair values, at the date of exchange of assets given, liabilities incurred or assumed, and equity instruments issued by the acquirer in exchange for control of the acquiree. Acquisition-related costs are recognised in profit or loss as incurred, except for costs to issue debt or equity securities.
The acquiree\u2019s identifiable assets and liabilities that meet the conditions for recognition are recognised at their fair values at the acquisition date, except as specifically required by other International Financial Reporting Standards as adopted by the EU. A contingent liability assumed in a business combination is recognised at the acquisition date if there is a present obligation that arises from past events and its fair value can be measured reliably.
The results of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Where necessary, in preparing these consolidated financial statements, appropriate adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with those used by group entities. Intra-group balances, transactions, income and expenses are eliminated on consolidation.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSubsidiariesExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page38-cflshid_14084-tag11923150": { "value": "
Material accounting policies
2.Insurance contracts
2.13Presentation
The Company disaggregates the total amount recognised in the statement of profit or loss and other comprehensive income into an insurance service result, comprising insurance revenue and insurance service expense, and insurance finance income or expenses.
2.13.1Insurance Service Revenue
Contracts not measured under the PAA
The Company\u2019s insurance revenue depicts the provision of coverage and other services arising from a group of insurance contracts and investment contracts with DPF at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those services. Insurance revenue from a group of insurance contracts and a group of investment contracts with DPF is therefore the relevant portion for the period of the total consideration for the contracts, (i.e., the amount of premiums paid to the Company adjusted for financing effect (the time value of money) and excluding any investment components).
The total consideration for a group of contracts covers amounts related to the provision of services and is comprised of:
\u2022Insurance service expenses, excluding any amounts allocated to the loss component of the liability for remaining coverage;
\u2022The risk adjustment for non-financial risk related to current service, excluding any amounts allocated to the loss component of the liability for remaining coverage;
\u2022The CSM release measured based on coverage units provided.
In addition, the Company allocates a portion of premiums that relate to recovering insurance acquisition cash flows to each period in a systematic way based on the passage of time. The Company recognises the allocated amount, as insurance service revenue and an equal amount as insurance service expenses.
The amount of the CSM of a group of insurance contracts and a group of investment contracts with DPF that is recognised as insurance revenue in each year is determined by identifying the coverage units in the group, allocating the CSM remaining at the end of the year (before any allocation) equally to each coverage unit provided in the year and expected to be provided in future years, and recognising in profit or loss the amount of the CSM allocated to coverage units provided in the year. The number of coverage units is the quantity of services provided by the contracts in the group, determined by considering for each contract the quantity of benefits provided and its expected coverage period. The coverage units are reviewed and updated at each reporting date.
Services provided by insurance contracts include insurance coverage and, for all direct participating contracts, investment services for managing underlying items on behalf of policyholders. In addition, some contracts without direct participating features may also provide investment services for generating an investment return for the policyholder, if and only if:
\u2022an investment component exists or the policyholder has a right to withdraw an amount (e.g. the policyholder\u2019s right to receive a surrender value on cancellation of a contract);
\u2022the investment component or withdrawal amount is expected to include an investment return; and
\u2022the Company expects to perform investment activities to generate that investment return.
The expected coverage period reflects expectations of lapses and cancellations of contracts, as well as the likelihood of insured events occurring to the extent that they would affect the expected coverage period. The period of investment services ends no later than the date on which all amounts due to current policyholders relating to those services have been paid.
Contracts measured under the PAA
For contracts measured under the PAA, the insurance revenue for each period is the amount of expected premium receipts for providing services in the period. The Company recognises such insurance revenue based on the passage of time by allocating premium receipts including premium experience adjustments to each period of service.
13.Revenue recognition
Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services.
Revenue also includes interest, dividend and rental income and is recognised as follows:
a)Rendering of services
Premium recognition, dealing with insurance contracts and investments contracts with DPF is described in accounting policy 10. Revenue arising from the issue of investment contracts without DPF is recognised in the accounting period in which the services are rendered.
b)Insurance agency commissions
Insurance agency commissions earned on policies sold are taken to the income statement in full, irrespective of the period covered by the policy.
c)Dividend income
Dividend income is recognised when the Group\u2019s right to receive payment is established.
d)Interest income
Interest income from financial assets not classified as fair value through profit or loss is recognised using the effective interest method.
e)Rental income
Rental income from the leasing of immovable property is recognised on a straight-line basis over the lease term.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForRecognitionOfRevenue", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page38-cflshid_14084-tag11923149": { "value": "
Material accounting policies
12.Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount of the obligation can be made. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessment of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForProvisionsExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page38-cflshid_14084-tag11923148": { "value": "
Material accounting policies
7.Property, plant and equipment
Property, plant and equipment comprising land and buildings and office furniture, fittings and equipment are initially recorded at cost, and are subsequently shown at cost less accumulated depreciation and impairment losses, with the exception of land which is shown at cost. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the asset\u2019s carrying amount, or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.
Depreciation is calculated using the straight-line method to allocate the cost of the assets to their residual values over their estimated useful lives using the following depreciation rates:
%
Buildings2-20
Office furniture, fittings and equipment20-25
The assets\u2019 residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each report period. Gains and losses on disposals of plant and equipment are determined by comparing proceeds with the carrying amount, and are taken into account in determining operating profit. Where the carrying amount of an asset is greater than its estimated recoverable amount, an impairment loss is recognised where it is written down immediately to its recoverable amount.
Property is revalued at regular intervals. After revaluation date, property is recognised at revalued amount less accumulated depreciation and impairment losses.
A revaluation surplus is recorded in OCI and credited to the asset revaluation surplus on equity. However, to the extent that it reverses a revaluation deficit of the same asset previously recognised in profit or loss, the increase is recognised in profit and loss. A revaluation deficit is recognised in the statement of profit or loss, except to the extent that it offsets an existing surplus on the same asset recognised in the revaluation surplus.
An annual transfer from the asset revaluation surplus to retained earnings is made for the difference between depreciation based on the revalued carrying amount of the asset and depreciation based on the asset\u2019s original cost. Additionally, accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset. Upon disposal, any revaluation surplus relating to the particular asset being sold is transferred to retained earnings.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page38-cflshid_14084-tag11923147": { "value": "
Material accounting policies
9.Other financial instruments
Financial assets and financial liabilities are off-set and the net amount presented in the statement of financial position when the Group has a legally enforceable right to set off the recognised amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForOffsettingOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page38-cflshid_14084-tag11923146": { "value": "
Material accounting policies
16.Leases
(i)Group as a lessor
To classify each lease, the Group makes an overall assessment of whether the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then it is an operating lease. As part of this assessment, the Group considers certain indicators such as whether the lease is for the major part of the economic life of the asset.
The Group recognises lease payments received under operating leases as income on a straight-line basis over the lease term as part of \u2018rental income\u2019 \u2013 Note 4.
(ii)Group as a lessee
A lessee recognises a right-of-use asset representing its right to use the underlying asset and a lease liability representing its obligation to make lease payments.
Right-of-use asset
The Group recognises a right-of-use asset at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset of the Group by the end of the lease term or the cost of the right-of-use asset reflects that the Group will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The Group presents right-of-use asset that do not meet the definition of investment property as \u2018Right-of-use assets\u2019.
Lease liability
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group\u2019s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.
Estimating the incremental borrowing rate
The Group cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (\"IBR\") to measure lease liabilities. The IBR is the rate of interest that the Group would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the Group \u2018would have to pay\u2019, which requires estimation when no observable rates are available (such as for subsidiaries that do not enter into financing transactions) or when they need to be adjusted to reflect the terms and conditions of the lease (for example, when leases are not in the subsidiary\u2019s functional currency). The Group estimates the IBR using observable inputs (such as market interest rates) when available and is required to make certain entity-specific estimates.
Lease payments included in the measurement of the lease liability comprise the following:
-fixed payments (including payments which are essentially fixed), minus any incentive to lease to be paid;
-the price for exercising a purchase option which the lessee is reasonably certain to exercise; and
-payments for early cancellation.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in rate, if there is a change in the Group\u2019s estimate of the amount expected to be payable under a residual value guarantee, if the Group changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases of machinery and equipment (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipment that are considered to be low value. Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForLeasesExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page38-cflshid_14084-tag11923145": { "value": "
Material accounting policies
9.Other financial instruments
Financial liabilities and equity
Ordinary shares issued by the Group are classified as equity instruments.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIssuedCapitalExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page38-cflshid_14084-tag11923144": { "value": "
Material accounting policies
8.Investment property
Freehold and leasehold properties treated as investments principally comprise buildings that are held for long term rental yields or capital appreciation or both, and that are not occupied by the Group. Investment property is initially measured at cost including related transaction costs. Investment property is subsequently carried at fair value, representing open market value determined annually by external valuers or by virtue of a directors\u2019 valuation. It is the Group\u2019s policy to engage the services of an external expert valuer every two years at a minimum. Fair value is based on active market prices, adjusted, if necessary, for any difference in the nature, location or condition of the specific asset.
If this information is not available, the Group uses alternative valuation methods such as recent prices on less active markets or discounted cash flow projections. The fair value of investment property reflects, among other things, rental income from current leases and assumptions about rental income from future leases in the light of current market conditions.
Subsequent expenditure is charged to the asset\u2019s carrying amount only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance costs are charged to the profit and loss account during the financial period in which they are incurred.
Unrealised gains and losses arising from changes in fair value (net of deferred taxation) are initially recognised in profit or loss.
9.Other financial instruments
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially recognised at their fair value, except for trade receivables that do not have a significant financing component which are measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.
Financial assets and financial liabilities are off-set and the net amount presented in the statement of financial position when the Group has a legally enforceable right to set off the recognised amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.
Financial assets are derecognised when the contractual rights to the cash flows from the financial assets expire or when the entity transfers the financial asset and the transfer qualifies for derecognition.
Financial assets
All recognised financial assets are measured subsequently in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.
Classification of financial assets
Debt instruments that meet the following conditions are measured subsequently at amortised cost:
\u2022The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows;
\u2022The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.Debt instruments that meet the following conditions are measured subsequently at fair value through other comprehensive income (FVTOCI):
\u2022The financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling the financial assets;
\u2022The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding
By default, all other financial assets are measured subsequently at fair value through profit or loss (FVTPL).
Despite the foregoing, the Group may make the following irrevocable election / designation at initial recognition of a financial asset:
\u2022The Group may irrevocably elect to present subsequent changes in fair value of an equity investment in other comprehensive income if certain criteria are met; and
\u2022The Group may irrevocably designate a debt investment that meets the amortised cost or FVTOCI criteria as measured at FVTPL if doing so eliminates or significantly reduces an accounting mismatch.
Regular way purchases or sales of financial assets are recognised and derecognised on trade date.
An assessment of business models for managing financial assets is fundamental to the classification of a financial asset. The Group determines the business models at a level that reflects how groups of financial assets are managed together to achieve a particular business objective.
The Group\u2019s business model does not depend on management\u2019s intentions for an individual instrument, therefore the business model assessment is performed at a higher level of aggregation rather than on an instrument-by-instrument basis. The information considered includes: (a) the stated policies and objectives for the portfolio and the operation of those policies in practice; (b) how the performance of the portfolio is evaluated and reported to the Company\u2019s management; (c) the risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed; (d) how managers of the business are compensated; and (e) the frequency, value and timing of sales of financial assets in prior periods, the reasons for such sales and expectations about future sales activity.
The Group classifies its financial assets into the following two categories: a) financial assets at fair value through profit or loss, and b) financial assets at amortised cost.
Debt instruments measured at amortised cost
The following financial assets are classified within this category \u2013 trade receivables, cash at bank, intercompany balances.
Appropriate allowances for expected credit losses (\u2018ECLs\u2019) are recognised in profit or loss in accordance with the Group\u2019s accounting policy on ECLs.
The amortised cost of a financial asset is the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus the cumulative amortisation using the effective interest method of any difference between that initial amount and the maturity amount, adjusted for any loss allowance. The gross carrying amount of a financial asset is the amortised cost of a financial asset before adjusting for any loss allowance.
Changes in the carrying amount as a result of foreign exchange gains or losses, impairment gains or losses and interest income are recognised in profit or loss. On derecognition, any difference between the carrying amount and the consideration received is recognised in profit or loss and is presented separately in the line item \u2018Gains and losses arising from the derecognition of financial assets measured at amortised cost\u2019.
Interest income is recognised using the effective interest method and is included in the line item \u2018Investment income\u2019.
Trade receivables which do not have a significant financing component are initially measured at their transaction price and are subsequently stated at their nominal value less any loss allowance for ECLs.
Financial assets at FVTPL
Financial assets that do not meet the criteria for being measured at amortised cost or FVTOCI are measured at FVTPL, specifically:
-investments in equity instruments are classified as at FVTPL. However, a Group may designate an equity investment that is neither held for trading nor a contingent consideration arising from a business combination as at FVTOCI on initial recognition;
-debt instruments that do not meet the amortised cost criteria or the FVTOCI criteria are classified as at FVTPL.
In addition, debt instruments that meet either the amortised cost criteria or the FVTOCI criteria may be designated as at FVTPL upon initial recognition if such designation eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring assets or liabilities or recognising the gains and losses on them on different bases.
Financial assets measured at FVTPL are subsequently measured at fair value at the end of each reporting period, with any fair value gains or losses including foreign exchange gains and losses, recognised in profit or loss.
Where applicable, dividend income is recognised with other dividend income, if any, arising on other financial assets within the line item \u2018Investment income\u2019. Where applicable, interest income is disclosed within the line item \u2018Investment income\u2019. Fair value gains and losses are recognised within the line items \u2018Investment income\u2019 and \u2018Investment losses\u2019 respectively.
Interest income using the effective interest method
Interest income is recognised using the effective interest method for debt instruments measured subsequently at amortised cost.
The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period. For financial instruments other than purchased or originated credit-impaired financial assets, the effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) excluding ECLs, through the expected life of the debt instrument, or where appropriate, a shorter period, to the gross carrying amount of the debt instrument on initial recognition.
Expected Credit Losses
The Group recognises a loss allowance for ECLs on, debt instruments measured at amortised cost, intercompany receivables, trade receivables and cash at bank.
The amount of ECL is updated at each reporting date to reflect changes in credit risk since the initial recognition.
For trade receivables that do not contain a significant financing component (or for which the IFRS 15 practical expedient for contracts that are one year or less is applied), the Group applies the simplified approach and recognises lifetime ECL.
Where a collective basis is applied (see the Accounting Policy entitled \u2018Collective basis\u2019 below), the ECLs on these financial assets are estimated using a provision matrix based on the Company\u2019s historical credit loss experience based on the past due status of the debtors, adjusted for factors that are specific to the debtors, general economic conditions of the industry in which the debtors operate and an assessment of both the current as well as the forecast direction of conditions at the reporting date.
For all other financial instruments, the Group uses the general approach and recognises lifetime ECL when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on the financial instrument has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month ECL (\u201812m ECL\u2019). The assessment of whether lifetime ECL should be recognised is based on significant increases in the likelihood or risk of a default occurring since initial recognition instead of on evidence of a financial asset being credit-impaired at the reporting date or an actual default occurring.
Lifetime ECL represents the ECLs that will result from all possible default events over the expected life of a financial instrument. In contrast, 12m ECL represents the portion of lifetime ECL that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.
If the Group has measured the loss allowance for a financial instrument at an amount equal to lifetime ECL in the previous reporting period, but determines at the current reporting date that the conditions for lifetime ECL are no longer met, the Group measures the loss allowance at an amount equal to 12m ECL at the current reporting date.
The Group recognises an impairment gain or loss in profit or loss for all financial assets with a corresponding adjustment to their carrying amount.
Significant increase in credit risk
In assessing whether the credit risk on a financial instrument has increased significantly since initial recognition, the Group and Company compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial instrument as at the date of initial recognition. In making this assessment, the Group and Company considers both quantitative and qualitative information that is reasonable and supportable, including historical experience and forward-looking information that is available without undue cost or effort and, where applicable, the financial position of the counterparties.
The Group and Company regularly monitors the effectiveness of the criteria used to identify whether there has been a significant increase in credit risk and revises them as appropriate to ensure that the criteria are capable of identifying significant increase in credit risk before the amount becomes past due.
Forward-looking information considered includes the future prospects of the industries in which the Group and Company\u2019s debtors operate as obtained from economic expert reports, financial analysts, governmental bodies, relevant think-tanks and similar organisations, as well as consideration of various external sources of actual and forecast economic information that relate to the Company\u2019s core operations.
Irrespective of the outcome of the above assessment, the Group and Company presumes that the credit risk on a financial asset has increased significantly since initial recognition when contractual payments are more than 30 days past due, unless the Group and Company has reasonable and supportable information, that is available without undue cost or effort, that demonstrates otherwise.
The Group and Company considers the following as constituting an event of default for internal credit risk management purposes as historical experience indicates that receivables that meet either of the following criteria are generally not recoverable:
-when there is a breach of financial covenants by the counterparty; or
-information developed internally or obtained from external sources indicates that the debtor is unlikely to pay its creditors, including the Group and Company, in full (without taking into account any collateral held by the Group and Company).
Irrespective of the above analysis, the Group and Company considers that default has occurred when a financial asset is more than 90 days past due unless the Group and Company has reasonable and supportable information to demonstrate that a more lagging default criterion is more appropriate.
Credit-impaired financial assets
A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of that financial asset have occurred.
Evidence that a financial asset is credit-impaired includes observable data about the following events:
(i)significant financial difficulty of the issuer or the borrower;
(ii)a breach of contract, such as a default or past due event;
(iii)the lender(s) of the borrower, for economic or contractual reasons relating to the borrower\u2019s financial difficulty, having granted to the borrower a concession(s) that the lender(s) would not otherwise consider;
(iv)it is becoming probable that the borrower will enter bankruptcy or other financial reorganisation; or
(v)the disappearance of an active market for that financial asset because of financial difficulties.
Write-off policy
The Group and Company writes off a financial asset when there is information indicating that the counterparty is in severe financial difficulty and there is no realistic prospect of recovery, for example when the counterparty has been placed under liquidation or has entered into bankruptcy proceedings, whichever occurs sooner.
Financial assets written off may still be subject to enforcement activities under the Group and Company\u2019s recovery procedures, taking into account legal advice where appropriate. Recoveries made are recognised in profit or loss as impairment gains.
Measurement and recognition of ECLs
For financial assets, the credit loss is the difference between all contractual cash flows that are due to the Group and Company in accordance with the contract and all the cash flows that the Group and Company expects to receive, discounted at the original effective interest rate. ECLs represent the weighted average of credit losses with the respective risks of a default occurring as the weights.
The measurement of ECLs is a function of:
-the probability of default, which is an estimate of the likelihood of default over a given time horizon estimated at a point in time;
-the loss given default, which is an estimate of the loss arising on default, taking into into consideration the cash flows expected from collateral and other credit enhancements that are part of the contractual terms and are not recognised separately;
-the exposure at default, which is an estimate of the exposure at a future default date, taking into account expected changes in the exposure after the reporting date that are permitted by the current contractual terms, including amortisation profiles and early repayment or overpayment.
The assessment of the probability of default and loss given default is based on historical data adjusted by forward-looking information, where applicable. Where applicable, the financial position of the counterparties is also taken into consideration.
Where applicable, forward-looking information considered includes the future prospects of the industries in which the Group and Company\u2019s debtors operate, obtained from economic expert reports, financial analysts, governmental bodies, relevant think-tanks and other similar organisations, as well as consideration of various external sources of actual and forecast economic information that relate to the Group and Company\u2019s core operations.
Collective basis
If evidence of a significant increase in credit risk at the individual instrument level is not yet available, the Group and Company performs the assessment of significant increases in credit risk on a collective basis by considering information on, for example, a group or sub-group of financial instruments.
Where the Group and Company does not have reasonable and supportable information that is available without undue cost or effort to measure lifetime ECL on an individual instrument basis, lifetime ECL is measured on a collective basis.
In such instances, the financial instruments are grouped on the basis of shared credit risk characteristics, as follows:
-Nature of financial instruments;
-Past-due status;
-Nature, size and industry of debtors;
-Nature of collaterals for finance lease receivables;
-External credit ratings where available;
-Date of initial recognition;
-Remaining term to maturity;
-Geographical location of the borrower;
-The value of collateral relative to the financial asset if it has an impact on the probability of default occurring (for example, loan-to-value ratios).
The grouping is regularly reviewed by management to ensure the constituents of each group continue to share similar credit risk characteristics.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentsOtherThanInvestmentsAccountedForUsingEquityMethodExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page38-cflshid_14084-tag11923143": { "value": "
Material accounting policies
8.Investment property
Freehold and leasehold properties treated as investments principally comprise buildings that are held for long term rental yields or capital appreciation or both, and that are not occupied by the Group. Investment property is initially measured at cost including related transaction costs. Investment property is subsequently carried at fair value, representing open market value determined annually by external valuers or by virtue of a directors\u2019 valuation. It is the Group\u2019s policy to engage the services of an external expert valuer every two years at a minimum. Fair value is based on active market prices, adjusted, if necessary, for any difference in the nature, location or condition of the specific asset.
If this information is not available, the Group uses alternative valuation methods such as recent prices on less active markets or discounted cash flow projections. The fair value of investment property reflects, among other things, rental income from current leases and assumptions about rental income from future leases in the light of current market conditions.
Subsequent expenditure is charged to the asset\u2019s carrying amount only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance costs are charged to the profit and loss account during the financial period in which they are incurred.
Unrealised gains and losses arising from changes in fair value (net of deferred taxation) are initially recognised in profit or loss.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentPropertyExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page38-cflshid_14084-tag11923142": { "value": "
Material accounting policies
6Intangible assets
(a)Computer software
Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring to use the specific software. These costs are amortised using the straight-line method over their estimated useful lives (between five and thirteen years). Costs associated with developing or maintaining computer software programmes are recognised as an expense as incurred.
(c)Passporting assets
Separately acquired passporting assets are shown at historical cost, which represent their acquisition price. Passporting assets are considered to have a useful life of five years, as management assesses that this period reflects the expected duration over which the assets will generate net cash inflows for the Group.
An impairment loss is recognised on intangible assets when the carrying amount exceeds the recoverable amount, being the higher of fair value less costs of disposal and value in use, and is recognised in profit or loss. Such losses, other than those relating to goodwill, are reviewed at each reporting date and reversed where appropriate.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsOtherThanGoodwillExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page38-cflshid_14084-tag11923141": { "value": "
Material accounting policies
6Intangible assets
(a)Computer software
Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring to use the specific software. These costs are amortised using the straight-line method over their estimated useful lives (between five and thirteen years). Costs associated with developing or maintaining computer software programmes are recognised as an expense as incurred.
(b)Goodwill
Goodwill arising in a business combination that is accounted for using the acquisition method is recognised as an asset at the date that control is acquired. Goodwill is measured as the excess of (a) the aggregate of: (i) the consideration transferred; (ii) the amount of any non-controlling interests in the acquiree; and (iii) in a business combination achieved in stages, the acquisition-date fair value of the acquirer\u2019s previously held equity interest in the acquiree; and (b) the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less any accumulated impairment losses. Any gain on a bargain purchase, after reassessment, is recognised immediately in profit or loss.
(c)Passporting assets
Separately acquired passporting assets are shown at historical cost, which represent their acquisition price. Passporting assets are considered to have a useful life of five years, as management assesses that this period reflects the expected duration over which the assets will generate net cash inflows for the Group.
An impairment loss is recognised on intangible assets when the carrying amount exceeds the recoverable amount, being the higher of fair value less costs of disposal and value in use, and is recognised in profit or loss. Such losses, other than those relating to goodwill, are reviewed at each reporting date and reversed where appropriate.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsAndGoodwillExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page38-cflshid_14084-tag11923140": { "value": "
Material accounting policies
17.Taxation
Current tax is recognised in profit or loss, except when it relates to items recognised in other comprehensive income or directly in equity, in which case the current tax is also dealt with in other comprehensive income or in equity, as appropriate. Current tax is based on the taxable result for the period. The taxable result for the period differs from the result as reported in profit or loss because it excludes items which are non-assessable or disallowed and it further excludes items which are taxable or deductible in other periods. It is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax is provided using the liability method for all temporary differences arising between the tax bases of assets and liabilities and their carrying values for financial reporting purposes. Currently enacted tax rates are used in the determination of deferred income tax. Deferred tax assets are recognised only to the extent that future taxable profit will be available such that realisation of the related tax benefit is probable.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIncomeTaxExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page38-cflshid_14084-tag11923139": { "value": "
Material accounting policies
6Intangible assets
(b)Goodwill
Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less any accumulated impairment losses. Any gain on a bargain purchase, after reassessment, is recognised immediately in profit or loss.
(c)Passporting assets
An impairment loss is recognised on intangible assets when the carrying amount exceeds the recoverable amount, being the higher of fair value less costs of disposal and value in use, and is recognised in profit or loss. Such losses, other than those relating to goodwill, are reviewed at each reporting date and reversed where appropriate.
7.Property, plant and equipment
Property, plant and equipment comprising land and buildings and office furniture, fittings and equipment are initially recorded at cost, and are subsequently shown at cost less accumulated depreciation and impairment losses, with the exception of land which is shown at cost. The assets\u2019 residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each report period.
9.Other financial instruments
Financial assets
Expected Credit Losses
The Group recognises a loss allowance for ECLs on, debt instruments measured at amortised cost, intercompany receivables, trade receivables and cash at bank.
The amount of ECL is updated at each reporting date to reflect changes in credit risk since the initial recognition.
For trade receivables that do not contain a significant financing component (or for which the IFRS 15 practical expedient for contracts that are one year or less is applied), the Group applies the simplified approach and recognises lifetime ECL.
Where a collective basis is applied (see the Accounting Policy entitled \u2018Collective basis\u2019 below), the ECLs on these financial assets are estimated using a provision matrix based on the Company\u2019s historical credit loss experience based on the past due status of the debtors, adjusted for factors that are specific to the debtors, general economic conditions of the industry in which the debtors operate and an assessment of both the current as well as the forecast direction of conditions at the reporting date.
For all other financial instruments, the Group uses the general approach and recognises lifetime ECL when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on the financial instrument has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month ECL (\u201812m ECL\u2019). The assessment of whether lifetime ECL should be recognised is based on significant increases in the likelihood or risk of a default occurring since initial recognition instead of on evidence of a financial asset being credit-impaired at the reporting date or an actual default occurring.
Lifetime ECL represents the ECLs that will result from all possible default events over the expected life of a financial instrument. In contrast, 12m ECL represents the portion of lifetime ECL that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.
If the Group has measured the loss allowance for a financial instrument at an amount equal to lifetime ECL in the previous reporting period, but determines at the current reporting date that the conditions for lifetime ECL are no longer met, the Group measures the loss allowance at an amount equal to 12m ECL at the current reporting date.
The Group recognises an impairment gain or loss in profit or loss for all financial assets with a corresponding adjustment to their carrying amount.
Significant increase in credit risk
In assessing whether the credit risk on a financial instrument has increased significantly since initial recognition, the Group and Company compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial instrument as at the date of initial recognition. In making this assessment, the Group and Company considers both quantitative and qualitative information that is reasonable and supportable, including historical experience and forward-looking information that is available without undue cost or effort and, where applicable, the financial position of the counterparties.
The Group and Company regularly monitors the effectiveness of the criteria used to identify whether there has been a significant increase in credit risk and revises them as appropriate to ensure that the criteria are capable of identifying significant increase in credit risk before the amount becomes past due.
Forward-looking information considered includes the future prospects of the industries in which the Group and Company\u2019s debtors operate as obtained from economic expert reports, financial analysts, governmental bodies, relevant think-tanks and similar organisations, as well as consideration of various external sources of actual and forecast economic information that relate to the Company\u2019s core operations.
Irrespective of the outcome of the above assessment, the Group and Company presumes that the credit risk on a financial asset has increased significantly since initial recognition when contractual payments are more than 30 days past due, unless the Group and Company has reasonable and supportable information, that is available without undue cost or effort, that demonstrates otherwise.
The Group and Company considers the following as constituting an event of default for internal credit risk management purposes as historical experience indicates that receivables that meet either of the following criteria are generally not recoverable:
-when there is a breach of financial covenants by the counterparty; or
-information developed internally or obtained from external sources indicates that the debtor is unlikely to pay its creditors, including the Group and Company, in full (without taking into account any collateral held by the Group and Company).
Irrespective of the above analysis, the Group and Company considers that default has occurred when a financial asset is more than 90 days past due unless the Group and Company has reasonable and supportable information to demonstrate that a more lagging default criterion is more appropriate.
Credit-impaired financial assets
A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of that financial asset have occurred.
Evidence that a financial asset is credit-impaired includes observable data about the following events:
(i)significant financial difficulty of the issuer or the borrower;
(ii)a breach of contract, such as a default or past due event;
(iii)the lender(s) of the borrower, for economic or contractual reasons relating to the borrower\u2019s financial difficulty, having granted to the borrower a concession(s) that the lender(s) would not otherwise consider;
(iv)it is becoming probable that the borrower will enter bankruptcy or other financial reorganisation; or
(v)the disappearance of an active market for that financial asset because of financial difficulties.
Write-off policy
The Group and Company writes off a financial asset when there is information indicating that the counterparty is in severe financial difficulty and there is no realistic prospect of recovery, for example when the counterparty has been placed under liquidation or has entered into bankruptcy proceedings, whichever occurs sooner.
Financial assets written off may still be subject to enforcement activities under the Group and Company\u2019s recovery procedures, taking into account legal advice where appropriate. Recoveries made are recognised in profit or loss as impairment gains.
Measurement and recognition of ECLs
For financial assets, the credit loss is the difference between all contractual cash flows that are due to the Group and Company in accordance with the contract and all the cash flows that the Group and Company expects to receive, discounted at the original effective interest rate. ECLs represent the weighted average of credit losses with the respective risks of a default occurring as the weights.
The measurement of ECLs is a function of:
-the probability of default, which is an estimate of the likelihood of default over a given time horizon estimated at a point in time;
-the loss given default, which is an estimate of the loss arising on default, taking into into consideration the cash flows expected from collateral and other credit enhancements that are part of the contractual terms and are not recognised separately;
-the exposure at default, which is an estimate of the exposure at a future default date, taking into account expected changes in the exposure after the reporting date that are permitted by the current contractual terms, including amortisation profiles and early repayment or overpayment.
The assessment of the probability of default and loss given default is based on historical data adjusted by forward-looking information, where applicable. Where applicable, the financial position of the counterparties is also taken into consideration.
Where applicable, forward-looking information considered includes the future prospects of the industries in which the Group and Company\u2019s debtors operate, obtained from economic expert reports, financial analysts, governmental bodies, relevant think-tanks and other similar organisations, as well as consideration of various external sources of actual and forecast economic information that relate to the Group and Company\u2019s core operations.
Collective basis
If evidence of a significant increase in credit risk at the individual instrument level is not yet available, the Group and Company performs the assessment of significant increases in credit risk on a collective basis by considering information on, for example, a group or sub-group of financial instruments.
Where the Group and Company does not have reasonable and supportable information that is available without undue cost or effort to measure lifetime ECL on an individual instrument basis, lifetime ECL is measured on a collective basis.
In such instances, the financial instruments are grouped on the basis of shared credit risk characteristics, as follows:
-Nature of financial instruments;
-Past-due status;
-Nature, size and industry of debtors;
-Nature of collaterals for finance lease receivables;
-External credit ratings where available;
-Date of initial recognition;
-Remaining term to maturity;
-Geographical location of the borrower;
-The value of collateral relative to the financial asset if it has an impact on the probability of default occurring (for example, loan-to-value ratios).
The grouping is regularly reviewed by management to ensure the constituents of each group continue to share similar credit risk characteristics.
16.Leases
(ii)Group as a lessee
Right-of-use asset
In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfAssetsExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page38-cflshid_14084-tag11923138": { "value": "
Material accounting policies
6Intangible assets
(b)Goodwill
Goodwill arising in a business combination that is accounted for using the acquisition method is recognised as an asset at the date that control is acquired. Goodwill is measured as the excess of (a) the aggregate of: (i) the consideration transferred; (ii) the amount of any non-controlling interests in the acquiree; and (iii) in a business combination achieved in stages, the acquisition-date fair value of the acquirer\u2019s previously held equity interest in the acquiree; and (b) the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less any accumulated impairment losses. Any gain on a bargain purchase, after reassessment, is recognised immediately in profit or loss.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForGoodwillExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page38-cflshid_14084-tag11923137": { "value": "
Material accounting policies
15.Foreign currencies
a)Functional and presentation currency
Items included in the financial statements of the Group are measured using the currency of the primary economic environment in which the entity operates (\u201cthe functional currency\u201d). The financial statements are presented in \u20ac, which is the Group\u2019s functional and presentation currency.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFunctionalCurrencyExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page38-cflshid_14084-tag11923136": { "value": "
Material accounting policies
15.Foreign currencies
b)Transactions and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the profit or loss. Non-monetary assets and liabilities denominated in currencies other than the functional currency that are measured at fair value are re-translated using the exchange rate ruling on the date the fair value was measured. Non-monetary assets and liabilities denominated in currencies other than the functional currency that are measured in terms of historical cost are not re-translated. Exchange differences arising on the translation of non-monetary items carried at fair value are included in profit or loss for the period, except for differences arising on the re-translation of non-monetary items in respect of which gains and losses are recognised in other comprehensive income. For such non-monetary items, any exchange component of that gain or loss is also recognised in other comprehensive income.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page38-cflshid_14084-tag11923135": { "value": "
Material accounting policies
1.Basis of preparation
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
For financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:
-Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;
-Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
-Level 3 inputs are unobservable inputs for the asset or liability.
For assets and liabilities that are recognised in the financial statements at fair value on a recurring basis, the Group determines when transfers are deemed to have occurred between Levels in the hierarchy at the end of each reporting period.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFairValueMeasurementExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page38-cflshid_14084-tag11923134": { "value": "
Material accounting policies
11.Dividend distribution
Dividend distribution to the Group\u2019s shareholders is recognised as a liability in the Group\u2019s financial statements in the period in which the dividends are declared by the directors in the case of interim dividends or are approved by the shareholders in the case of final dividends.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDividendsExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page38-cflshid_14084-tag11923133": { "value": "
Material accounting policies
9.Other financial instruments
Financial assets are derecognised when the contractual rights to the cash flows from the financial assets expire or when the entity transfers the financial asset and the transfer qualifies for derecognition.
Financial liabilities are derecognised when they are extinguished. This occurs when the obligation specified in the contract is discharged, cancelled or expires.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerecognitionOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page38-cflshid_14084-tag11923132": { "value": "
Material accounting policies
17.Taxation
Deferred tax is provided using the liability method for all temporary differences arising between the tax bases of assets and liabilities and their carrying values for financial reporting purposes. Currently enacted tax rates are used in the determination of deferred income tax. Deferred tax assets are recognised only to the extent that future taxable profit will be available such that realisation of the related tax benefit is probable.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDeferredIncomeTaxExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page38-cflshid_14084-tag11923131": { "value": "
Material accounting policies
10.Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, demand deposits and time deposits maturing within three months from the end of the reporting period.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForCashFlowsExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page38-cflshid_14084-tag11923130": { "value": "
Material accounting policies
4Business combinations
The Group applies the acquisition method in accounting for business combinations. The consideration transferred by the group to obtain control of a subsidiary is calculated as the sum of the acquisition-date fair values of assets transferred, liabilities incurred and the equity interests issued by the group, which includes the fair value of any asset or liability arising from a contingent consideration arrangement. Acquisition costs are expensed as incurred.
The Group recognises identifiable assets acquired and liabilities assumed in a business combination regardless of whether they have been previously recognised in the acquiree\u2019s financial statements prior to the acquisition. Assets acquired and liabilities assumed are generally measured at their acquisition-date fair values.
5Acquisition of subsidiaries
The acquisition of subsidiaries that are not under common control is accounted for by applying the acquisition method. The consideration is measured as the aggregate of the fair values, at the date of exchange of assets given, liabilities incurred or assumed, and equity instruments issued by the acquirer in exchange for control of the acquiree. Acquisition-related costs are recognised in profit or loss as incurred, except for costs to issue debt or equity securities.
The acquiree\u2019s identifiable assets and liabilities that meet the conditions for recognition are recognised at their fair values at the acquisition date, except as specifically required by other International Financial Reporting Standards as adopted by the EU. A contingent liability assumed in a business combination is recognised at the acquisition date if there is a present obligation that arises from past events and its fair value can be measured reliably.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page38-cflshid_14084-tag11923129": { "value": "
Material accounting policies
4Business combinations
The Group applies the acquisition method in accounting for business combinations. The consideration transferred by the group to obtain control of a subsidiary is calculated as the sum of the acquisition-date fair values of assets transferred, liabilities incurred and the equity interests issued by the group, which includes the fair value of any asset or liability arising from a contingent consideration arrangement. Acquisition costs are expensed as incurred.
The Group recognises identifiable assets acquired and liabilities assumed in a business combination regardless of whether they have been previously recognised in the acquiree\u2019s financial statements prior to the acquisition. Assets acquired and liabilities assumed are generally measured at their acquisition-date fair values.
5Acquisition of subsidiaries
The acquisition of subsidiaries that are not under common control is accounted for by applying the acquisition method. The consideration is measured as the aggregate of the fair values, at the date of exchange of assets given, liabilities incurred or assumed, and equity instruments issued by the acquirer in exchange for control of the acquiree. Acquisition-related costs are recognised in profit or loss as incurred, except for costs to issue debt or equity securities.
The acquiree\u2019s identifiable assets and liabilities that meet the conditions for recognition are recognised at their fair values at the acquisition date, except as specifically required by other International Financial Reporting Standards as adopted by the EU. A contingent liability assumed in a business combination is recognised at the acquisition date if there is a present obligation that arises from past events and its fair value can be measured reliably.
6Intangible assets
(b)Goodwill
Goodwill arising in a business combination that is accounted for using the acquisition method is recognised as an asset at the date that control is acquired. Goodwill is measured as the excess of (a) the aggregate of: (i) the consideration transferred; (ii) the amount of any non-controlling interests in the acquiree; and (iii) in a business combination achieved in stages, the acquisition-date fair value of the acquirer\u2019s previously held equity interest in the acquiree; and (b) the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less any accumulated impairment losses. Any gain on a bargain purchase, after reassessment, is recognised immediately in profit or loss.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsAndGoodwillExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page38-cflshid_14128-tag11923163": { "value": "LifeStar Insurance p.l.c. ", "dimensions": { "concept": "ifrs-full:NameOfReportingEntityOrOtherMeansOfIdentification", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923259": { "value": "
Notes to the financial statements
17.Other assets
Consolidated and Company
20252024
\u20ac\u20ac
Year ended 31 December\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Balance at 1 January 198,680 -
Additions-61,538
Reclassification from intangible asset (Note 11)1,020,890137,142
Impairment (198,680)-
Balance at 31 December1,020,890198,680
Reclassification of \u20ac 1,020,890 from intangible assets during the year represents certain assets that have not been put into use. Such amount is stated net of total provision of \u20ac 442,630.
18.Receivables, prepayments and accrued income
ConsolidatedCompany
2025202420252024
\u20ac\u20ac\u20ac\u20ac
Amounts due from intermediate parent (Note ii)6,994,3006,872,5586,994,3006,872,558
Amount receivable from subsidiary--291,952440,000
Amounts due from related parties (Note iii)5,931,9805,740,2665,670,7105,463,475
Other receivables (Note i and iv)102,020468,874102,020468,874
13,028,30013,081,69813,058,98213,244,907
iv.Other receivables are unsecured, interest-free and repayable on demand. They are stated net of provision for impairment of \u20ac161,967 (2024: \u20ac30,042). The company has directly written off other receivables of \u20ac57,432 during the current year which is included within the administrative and other expense in the statement of comprehensive income (2024: \u20ac110,618).
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherAssetsExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923252": { "value": "
Notes to the financial statements
2.Management of insurance and financial risk
Market risk
(a)Foreign exchange rates currency risk
Should exchange rates at the end of the reporting period differ by +/-10% (2024: +/-10%), with all other variables held constant, the impact on the Company\u2019s and the Group\u2019s pre-tax profit would be +/- \u20ac499,484 (2024: +/- \u20ac620,916).
16.Other investments
(a)Investments at fair value through profit or loss
The movements in investments classified as fair value through profit or loss are summarised as follows:
Consolidated and Company
20252024
\u20ac\u20ac
Year ended 31 December
Balance at 1 January \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0104,977,638 93,843,285
Impact on initial application of IFRS 9-
Additions22,174,09814,434,840
Disposals(20,558,870)(3,110,927)
Net fair value and foreign exchange movements2,391,530(189,560)
Balance at 31 December108,984,396104,977,638
At 31 December
Cost 99,753,81698,138,588
Accumulated fair value and foreign exchange gains9,230,5806,839,050
Net book amount 108,984,396104,977,638
(b)Loans and receivables
Consolidated and Company
20252024
\u20ac\u20ac
Year ended 31 December
Balance at 1 January 3,298,5033,134,171
Additions -14,036
Disposals (16,886)-
Foreign exchange movement(163,012)150,296
Balance at 31 December3,118,6053,298,503
", "dimensions": { "concept": "ifrs-full:DisclosureOfEffectOfChangesInForeignExchangeRatesExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923251": { "value": "
Notes to the financial statements
24.Payables, accruals and deferred income
ConsolidatedCompany
2025202420252024
\u20ac\u20ac\u20ac\u20ac
Amounts due to group undertaking8,0683,161--
Other payables154,673307,490130,081119,683
162,741310,651130,081119,683
Accruals and deferred income
- Accruals775,514532,558601,245370,381
- Bond interest accrued56,22056,22056,22156,220
- Deferred income345,433349,0556,95010,573
1,177,167937,833664,416437,174
At end of year1,339,9081,248,484794,497556,857
(i)Other payables are unsecured, non-interest bearing and fall due within the next twelve months;
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherNoncurrentLiabilitiesExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923250": { "value": "
Notes to the financial statements
16.Other investments
(a)Investments at fair value through profit or loss
Consolidated and Company
20252024
\u20ac\u20ac
Equity securities and units in unit trusts:
Listed shares11,871,81421,024,952
Unlisted investments3,074,7963,242,035
Collective investment schemes-752,553
14,946,61025,019,540
Assets held to cover linked liabilities:
Collective investment schemes82,928,37465,656,576
Debt securities - fixed interest rate:
Government bonds6,244,6197,696,531
Corporate bonds4,864,7936,604,991
11,109,41214,301,522
Total investments at fair value through profit or loss108,984,396104,977,638
Maturity of fixed income debt securities classified as fair value through profit or loss.
Consolidated and Company
20252024
\u20ac\u20ac
Within 1 year2,651,787263,115
Between 1 and 2 years1,001,4072,930,011
Between 2 and 5 years2,728,5135,622,666
Over 5 years4,727,7055,485,730
11,109,41214,301,522
Consolidated and Company
%%
Weighted average effective interest rate at the balance sheet date 56
All other securities classified at fair value through profit or loss are non-current in nature.
The movements in investments classified as fair value through profit or loss are summarised as follows:
Consolidated and Company
20252024
\u20ac\u20ac
Year ended 31 December
Balance at 1 January \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0104,977,638 93,843,285
Impact on initial application of IFRS 9-
Additions22,174,09814,434,840
Disposals(20,558,870)(3,110,927)
Net fair value and foreign exchange movements2,391,530(189,560)
Balance at 31 December108,984,396104,977,638
At 31 December
Cost 99,753,81698,138,588
Accumulated fair value and foreign exchange gains9,230,5806,839,050
Net book amount 108,984,396104,977,638
The table below analyses debt securities classified at fair value through profit or loss by sector:
Consolidated and Company
20252024
\u20ac\u20ac
Banks1,352,5571,139,478
Energy2,706,6402,453,972
Government6,244,619\u00a0\u00a0\u00a07,696,532
Other805,596\u00a0\u00a0\u00a03,011,540
11,109,412\u00a0\u00a014,301,522
(d)Unlisted investments
LifeStar Insurance plc has two loan notes titled Stellium Equity Notes and Stellium Credit Notes (the \u201cStellium Notes\u201d), totalling GBP4.2 million which matured on 31 July 2024 and 31 August 2024 respectively, both of which have been extended for the reasons explained below. These loan notes form part of a wider GBP30 million funding arrangement for a fintech startup business, Stellium Holdings Limited (UK Registration No 12130247), located in Newcastle, UK.
The principal holders of the loan notes are Apex Group Nominees 1 (UK) Limited acting as trustee on behalf of the ultimate controlling parties Tiger Infrastructure Associates GP II and Tiger Infrastructure GP II (Europe).
Eram Capital Advisors Luxembourg (\u201cEram\u201d), in their capacity as the Calculation Agent, Advisor and Alternative Asset Manager of the Securitised Vehicles (SVs) linked to the Stellium Notes has confirmed that LifeStar\u2019s held notes are valued at par as at 31 December 2025. In note 14 of the financial statements for the year ended 31 March 2025 of Stellium Holdings Limited, entitled \u201cPost Balance Sheet Events\u201d, it is reported that Stellium Datacentres Limited issued new preference shares amounting to GBP12.5 million to provide additional working capital and funding to assist in the purchase of Digital 9 Seaedge Limited, the owner of the long lease of the data centre at Cobalt Business Park. This transaction was concluded on 11 June 2025. LifeStar Insurance plc did not participate in this investment. Also, in December 2025, Stellium Holdings Limited and the Senior Loan Noteholder and the Junior Loan Noteholder agreed to extend the existing loan note agreements. The loans notes repayment date has been amended from 31 May 2026 to 28 December 2028. All other terms of the loan note agreements are unchanged. During the year, the Company has commissioned an independent third party to carry out a valuation of its investments in the SV\u2019s, which valuation is still being finalized as at the date of the signing of these financial statements.
On the basis of the above, the Directors are of the opinion that the recent investment in Stellium Holdings Limited is a strong indication of its viability. In view of this, the extension of the existing loan note agreements and on the strength of the confirmations received from ERAM as the Calculation Agent of the SVs, the Stellium Notes are to continue being carried at their face value in these financial statements. In view of the substantial additional investment and also the extension of the notes to 28 December 2028, we do not envisage a material impact to the Solvency Capital Ratio (SCR) in the near future.
27.Fair values of financial assets and financial liabilities
The group
The following table presents the assets and liabilities measured at fair value at 31 December 2025
Consolidated and Company
Fair value measurement at end of the reporting period using:
Level 1Level 2Level 3Total
\u20ac\u20ac\u20ac\u20ac
2025
Assets
Other Investments:
Financial assets at fair value through profit or loss 22,981,22682,928,3743,074,796108,984,396
Financial assets at amortised cost-3,005,6023,113,0036,118,605
Total22,981,22685,933,9766,187,799115,103,001
Liabilities
Unit linked financial instruments-(15,399,647)-(15,399,647)
The following table presents the assets and liabilities measured at fair value at 31 December 2024
Consolidated and Company
Fair value measurement at end of the reporting period using:
Level 1Level 2Level 3Total
\u20ac\u20ac\u20ac\u20ac
2024
Assets
Other Investments:
Financial assets at fair value through profit or loss 36,174,20365,561,4003,242,035104,977,638
Financial assets at amortised cost-322,4873,276,0163,598,503
Total36,174,20365,883,8876,518,051108,576,141
Liabilities
Unit linked financial instruments-8,619,624-8,619,624
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923249": { "value": "
Notes to the financial statements
3.Particulars of business
3.6.Investment contract liabilities
The table shows a reconciliation of the opening to closing balance for the investment contract liabilities:
Consolidated and CompanyConsolidated and Company
20252024
\u20ac\u20ac
At 1 January8,619,6246,705,671
Amounts recognised in profit or loss
Investment return from underlying assets 1,164,280741,674
Recurring investment management fees deducted(451,770)(396,413)
Cash flows
Contribution received6,992,2002,432,547
Benefits paid(924,687)(863,855)
At 31 December15,399,6478,619,624
In the above reconciliation, the investment return from the underlying assets represents changes in the fair value of the Investment contact liabilities due to changes in the market conditions. Asset management services revenue of \u20ac712,509 (2024: \u20ac345,260) in the profit or loss also includes the asset management fees charged and income trailer fees.
The above liabilities are substantially non-current in nature.
", "dimensions": { "concept": "ifrs-full:DisclosureOfInvestmentContractsLiabilitiesExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923246": { "value": "
Notes to the financial statements
3.Particulars of business
3.2Insurance service expense
The table below shows an analysis of insurance service expense recognised in the period.
Consolidated and Company
20252024
\u20ac\u20ac
Incurred claims and other insurance service expenses2,292,6072,624,565
Changes that relate to future service: losses on onerous contracts and reversals of those losses625,319(6,593)
Changes that relate to past service: changes to liabilities for incurred claims978,956216,498
Amortisation of insurance acquisition cash flows1,018,256366,902
Total insurance service expenses4,915,1383,201,372
3.3Net expense from reinsurance contracts held
An analysis of allocation of reinsurance premiums paid and amounts recovered from reinsurers are presented in the tables below.
Consolidated and Company
20252024
\u20ac\u20ac
Amounts related to liabilities for remaining coverage
-Recoveries for expected incurred claims and other expenses(2,062,206)(1,764,422)
-Risk adjustment for the risk expired(84,816)(73,182)
-CSM for the service received(309,368)(126,569)
Contracts not measured under the PAA(2,456,390)(1,964,173)
Contracts measured under the PAA(312,321)(296,397)
Allocation of reinsurance paid(2,768,711)(2,260,570)
Recoveries for incurred claims and other expenses395,3271,333,493
Changes that relate to future service: recoveries for losses on onerous contracts and reversals of those losses33,347(2,386)
Changes that relate to past service: changes to recoveries of liabilities for incurred claims662,819279,746
Amounts recovered from reinsurers1,091,4931,610,853
Net expenses from reinsurance contracts held(1,677,218)(649,717)
3.4Investment income and net insurance financial result
The tables below present analysis of net investment income and net insurance finance income/(expenses) recognised in profit and loss and OCI in the period:
Consolidated and Company
2025NON-LINKED WITH PROFITSPENSIONVARIABLE LIFEPROTECTIONSICKNESS & ACCIDENTPASSPORTINGTOTAL
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Insurance finance expenses/(income) from insurance contracts issued
Changes in fair value of underlying assets measured under VFA1,159,0641,094,5502,207,580---4,461,194
Interest accreted---(83,114)(17,997)(71,853)(172,964)
Effect of changes in interest rates and other financial assumptions---(77,634)9,387(186,690)(254,937)
Effect of changes in free cash flow at current rates when CSM is unlocked at locked-in rates---188,005(1,300)(128,563)58,142
Total insurance finance expenses/(income) from insurance contracts issued recognised in P&L1,159,0641,094,5502,207,58027,257(9,910)(387,106)4,091,435
LIFE REINSURANCE PROTECTIONLIFE REINSURANCEI INVESTMENTLIFE REINSURANCE PASSPORTINGTOTAL
\u20ac\u20ac\u20ac\u20ac
Finance income/(expenses) from reinsurance contracts held
Interest accreted 45,89815,844(2,642)59,100
Effect of changes in interest rates and other financial assumptions(167,666)(81,160)144,643(104,183)
Effect of changes in free cash flow at current rates when CSM is unlocked at locked-in rates191,96375,323(96,334)170,952
Total finance income from reinsurance contracts held recognised in P&L70,19510,00745,667125,869
The tables below present analysis of net investment income and net insurance finance income/(expenses) recognised in profit and loss and OCI in the period:
Consolidated and Company
2024NON- LINKED WITH PROFITSPENSIONVARIABLE LIFEPROTECTIONSICKNESS & ACCIDENTPASSPORTINGTOTAL
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Insurance finance expenses/(income) from insurance contracts issued
Changes in fair value of underlying assets measured under VFA1,174,134 978,846 10,334,619 ---12,487,599
Interest accreted---(185,836)(31,253)(6,534)(223,623)
Effect of changes in interest rates and other financial assumptions---30,253 2,941 7,716 40,910
Effect of changes in free cash flow at current rates when CSM is unlocked at locked-in rates---(9,881)(1,087)-(10,968)
Total insurance finance expenses/(income) from insurance contracts issued recognised in P&L1,174,134 978,846 10,334,619 (165,464)(29,399)1,182 12,293,918
LIFE REINSURANCE PROTECTIONLIFE REINSURANCE INVESTMENTLIFE REINSURANCE PASSPORTINGTOTAL
\u20ac\u20ac\u20ac\u20ac
Finance income/(expenses) from reinsurance contracts held
Interest accreted 75,449 28,264 (823)102,890
Effect of changes in interest rates and other financial assumptions8,630 8,775 (1,092)16,313
Effect of changes in free cash flow at current rates when CSM is unlocked at locked-in rates15,445 14,746 -30,191
Total finance income/(expenses) from reinsurance contracts held recognised in P&L99,52451,785(1,915)149,394
4.Investment return and fair value movements
ConsolidatedCompany
2025202420252024(As Restated)
\u20ac\u20ac\u20ac\u20ac
Investment income
Rental income from investment property104,455149,760104,455149,760
Dividends received from:
-subsidiary--307,692583,170
-investments at fair value through profit or loss728,089785,185728,089785,185
Interest income from investments at fair value through profit or loss 579,241664,550579,241664,550
Other investment losses(218,406)93,147(218,405)93,147
1,193,3791,692,6421,501,0722,275,812
Movement in fair value
Net fair value (loss)/gain on investment property 31,891(22,000)31,891(22,000)
Net fair value gain on investments \u2013 equity and collective investment schemes4,176,77411,987,6485,038,07912,103,657
4,208,66511,965,6485,069,97012,081,657
Net investment income5,402,04413,658,2906,571,04214,357,469
7. Expenses by nature
ConsolidatedCompany
2025202420252024
\u20ac\u20ac\u20ac\u20ac
Professional fees1,606,9781,230,6621,562,3101,225,979
Management fees (Note 28)1,898,4091,130,4041,898,4091,130,404
Amortisation of intangible assets (Note 11)355,888504,101355,883504,101
IT related expenses397,435479,143290,517376,198
Commission and direct marketing costs8,886,7742,974,5878,766,1482,855,221
Depreciation of plant and machinery (Note 13)179,382177,444176,148175,933
Other expenses7,299,9915,400,9157,017,4785,213,310
Bank charges69,33160,59869,33160,598
Licences and insurance 187,673187,796187,673187,796
Office expense97,952142,15597,952142,155
Wages and salaries recharged from group undertaking3,066,2602,931,7092,178,0022,069,398
Investment management expense296,468286,732--
Short-term leases 43,19338,73814,22516,900
Provision for bad debt57,433-57,433-
Eliminations from application of IFRS 17(12,050,497)(5,367,899)(12,050,497)(5,367,899)
12,392,67010,177,08510,621,0128,590,094
ConsolidatedCompany
2025202420252024
\u20ac\u20ac\u20ac\u20ac
Amounts attributed to insurance acquisition cash flows incurred during the year(8,249,575)(3,162,329)(8,249,575)(3,162,329)
Amortisation of insurance acquisition cash flows1,018,257366,9021,018,257366,902
Represented by:
Insurance service expense4,915,1383,201,3724,915,1383,201,372
Other operating expenses7,477,5326,975,7135,705,8745,388,722
Total12,392,67010,177,08510,621,0128,590,094
Auditor\u2019s remuneration for the current financial year amounted to \u20ac 175,500 (2024: \u20ac164,500). Other fees payable to the auditor comprise \u20ac35,000 (2024: \u20ac32,500) for other assurance services and \u20ac2,580 (2024: \u20ac2,580) for tax services.
8.Finance costs
Consolidated and Company
20252024
\u20ac\u20ac
Interest expense on bonds97,25297,252
10.Directors\u2019 emoluments
All directors\u2019 emoluments are recharged by the intermediate parent company.
ConsolidatedCompany
2025202420252024
\u20ac\u20ac\u20ac\u20ac
Directors' fees239,783269,840226,238259,073
11.Intangible assets
Consolidated
GoodwillComputer softwarePassporting assetTotal
\u20ac\u20ac\u20ac\u20ac
Year ended 31 December 2025
Opening carrying amount 311,5383,336,819460,1414,108,498
Additions-1,352,531187,7811,540,312
Reclassification to other assets (Note 17)-(1,020,890)-(1,020,890)
Impairment -(179,140)-(179,140)
Amortisation charge (Note 7)-(244,164)(111,724)(355,888)
Closing carrying amount 311,5383,245,156536,1984,092,892
At 31 December 2025
Cost 311,5386,041,474647,9227,000,934
Accumulated amortisation-(2,756,197)(111,724)(2,867,921)
Accumulated impairment-(40,121)-(40,121)
Net book amount 311,5383,245,156536,1984,092,892
Year ended 31 December 2024
Opening carrying amount 311,5383,003,390253,2653,568,193
Additions-1,278,283206,8761,485,159
Reclassification to other assets (Note 17)-(137,142)-(137,142)
Impairment-(303,610)-(303,610)
Amortisation charge (Note 7)-(504,101)-(504,101)
Closing carrying amount 311,5383,336,820460,1414,108,499
At 31 December 2024
Cost 311,5386,152,463460,1416,924,142
Accumulated amortisation-(2,512,032)-(2,512,032)
Accumulated impairment-(303,611)-(303,611)
Net book amount 311,5383,336,820460,1414,108,499
12.Leases
(a)Leases as the lessee (IFRS 16)
(ii)Amounts recognised in profit or loss
Consolidated and Company
20252024
\u20ac\u20ac
Depreciation of right-of-use asset5,2478,078
Interest expense on lease liabilities404243
13.Property, plant and equipment
ConsolidatedCompany
Land and buildingsOffice furniture, fittings and equipmentTotalLand and buildingOffice furniture, fittings and equipmentTotal
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Year ended 31 December 2025
Opening net book amount 5,656,51969,6805,726,1995,656,51960,2085,716,727
Additions19,64845,00264,65019,64837,80557,453
Revaluation for the year440,109-440,109440,109-440,109
Depreciation charge (143,458)(35,924)(179,382)(143,458)(32,690)(176,148)
Net book amount5,972,81878,7586,051,5765,972,81865,3236,038,141
At 31 December 2025
Revalued amount/Cost6,893,8391,771,1168,664,9556,893,8391,706,7498,600,588
Accumulated depreciation(921,021)(1,692,358)(2,613,379)(921,021)(1,641,426)(2,562,447)
Net book amount5,972,81878,7586,051,5765,972,81865,3236,038,141
ConsolidatedCompany
Land and buildingsOffice furniture, fittings and equipmentTotalLand and buildingOffice furniture, fittings and equipmentTotal
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Year ended 31 December 2024
Opening net book amount 3,537,01553,729 3,590,7443,537,01551,1863,588,201
Additions121,59653,411175,007121,59644,971166,567
Transfer from investment property2,137,892-2,137,8922,137,892-2,137,892
Depreciation charge (139,984)(37,460)(177,444)(139,984)(35,949)(175,933)
Net book amount5,656,51969,6805,726,1995,656,51960,2085,716,727
\u00a0
At 31 December 2024
Revalued amount/Cost6,434,0821,726,1148,160,1966,434,0821,668,9448,103,026
Accumulated depreciation(777,563)(1,656,434)(2,433,997)(777,563)(1,608,736)(2,386,299)
Net book amount5,656,51969,6805,726,1995,656,51960,2085,716,727
14.Investment property
Consolidated and Company
\u20ac
Year ended 31 December 2025
Opening net book amount 13,691,547
Additions65,836
Disposals(900,001)
Increase in fair value 31,891
Closing net book amount12,889,273
At 31 December 2025
Cost 2,086,790
Accumulated fair value gains 10,802,483
Net book amount 12,889,273
Year ended 31 December 2024
Opening net book amount 15,851,439
Reclassification to PPE(2,137,892)
Decrease in fair value (22,000)
Closing net book amount13,691,547
At 31 December 2024
Cost 2,284,414
Accumulated fair value gains 11,407,133
Net book amount 13,691,547
In estimating the fair value of the properties, the highest and best use of the properties is their current use. In accordance with the Group's accounting policy, the valuation of investment properties is assessed by the Board of Directors at the end of every reporting period. An impairment charge was approved by the Board of Directors and debited to profit or loss and is presented within \u2018Investment return and fair value movements\u2019.
16.Other investments
(a)Investments at fair value through profit or loss
The movements in investments classified as fair value through profit or loss are summarised as follows:
Consolidated and Company
20252024
\u20ac\u20ac
Year ended 31 December
Balance at 1 January \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0104,977,638 93,843,285
Impact on initial application of IFRS 9-
Additions22,174,09814,434,840
Disposals(20,558,870)(3,110,927)
Net fair value and foreign exchange movements2,391,530(189,560)
Balance at 31 December108,984,396104,977,638
At 31 December
Cost 99,753,81698,138,588
Accumulated fair value and foreign exchange gains9,230,5806,839,050
Net book amount 108,984,396104,977,638
(b)Loans and receivables
They are charged with interest at the rate of 12% (2024: 12%) per annum.
Consolidated and Company
20252024
\u20ac\u20ac
Year ended 31 December
Balance at 1 January 3,298,5033,134,171
Additions -14,036
Disposals (16,886)-
Foreign exchange movement(163,012)150,296
Balance at 31 December3,118,6053,298,503
17.Other assets
Consolidated and Company
20252024
\u20ac\u20ac
Year ended 31 December\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Balance at 1 January 198,680 -
Additions-61,538
Reclassification from intangible asset (Note 11)1,020,890137,142
Impairment (198,680)-
Balance at 31 December1,020,890198,680
28.Related party transactions
The following transactions were carried out by the Group with related parties:
ConsolidatedCompany
Year ended 31 December2025202420252024
\u20ac\u20ac\u20ac\u20ac
Interest income from loans to the immediate parent261,458262,174261,458262,174
Interest income from loans to other related undertakings136,308136,681136,308136,681
Management fees charged by a related undertaking604,686360,000404,600360,000
Recharge of expense1,852,922430,0001,463,809430,000
Shared service expense-699,635-699,635
Dividends received--200,000440,000
Key management personnel during 2025 and 2024 comprised of the Board of Directors and the Managing Director of the Group. Total remuneration paid by the Group to its key management personnel amounted to \u20ac749,619 (2024: \u20ac566,490).
The compensation to directors in 2025 and 2024 is disclosed in Note 10 to the financial statements.
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Notes to the financial statements
25.Cash flows generated from operations
Reconciliation of profit before tax to cash generated from operations:
ConsolidatedCompany
20252024 20252024 (Restated)
\u20ac\u20ac\u20ac\u20ac
Cash flows generated from operating activities
Loss before tax(1,630,322)(928,760)(821,202)(421,812)
Adjustments for:
Amortisation on computer software (Note 11)355,888504,101355,883504,101
Impairment of intangible and other assets (Note 11 and 17)377,821303,611337,699303,611
Amortisation of lease (Note 12)5,2478,0785,2478,078
Lease interest expense404243404243
Depreciation of property, plant and equipment (Note 13)179,382177,444176,148175,933
Insurance finance expense4,091,44012,293,9184,091,43412,293,918
Finance cost on borrowings (Note 8)97,25297,25297,25297,252
Financial reinsurance expense (Note 3.7)266,118-266,118-
Net fair value movement on investment property (Note 14)(31,891)22,000(31,891)22,000
Net reversal of provision for bad debts (Note 16 and 18)(22,210)-(30,279)-
Net fair value & FX movement on FVTPL investments (Note 16)(4,383,644)438,681(4,383,644)438,681
Other non-cash movements-30,99830,998
Interest income (Note 6)(706,469)(652,066)(706,469)(652,066)
Dividend from subsidiary--(307,692)(583,170)
Reversal of gain/(loss) from investment in group undertaking--(861,305)(116,009)
ConsolidatedCompany
20252024 20252024 Restated
\u20ac\u20ac\u20ac\u20ac
Receivables written off57,432110,61857,432110,618
Dividends receivable from FVTPL investments(729,089)(785,185)-(729,089)(785,185)
Interest income from investments at FVTPL(579,241)(664,550)(579,241)(664,550)
Movement in:
-Insurance and reinsurance contracts(2,657,160)(2,816,797)(2,657,164)(2,816,797)
-Trade and other receivables 340,022(194,180)548,619(201,623)
-Investment contract liabilities4,502,4011,913,9534,502,4011,913,953
-Trade and other payables239,600(205,310)259,746177,588
Cash flows generated from operations(227,019)9,654,049(409,583)9,835,762
26.Cash and cash equivalents
For the purposes of the statement of cash flows, the year-end cash and cash equivalents comprise the following:
ConsolidatedCompany
2025202420252024
\u20ac\u20ac\u20ac\u20ac
Cash at bank and on hand1,546,2631,619,7261,144,0261,013,287
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Notes to the financial statements
29.Contingent liability
During 2020, the Company gave a guarantee in favour of Bank of Valletta for the amount of \u20ac3 million, to secure, jointly and severally with other related parties, a bank loan of the same amount granted by that bank to LifeStar Holding p.l.c.
At 31 December 2025, the balance outstanding on the loan in the books of LifeStar Holding p.l.c. amounted to \u20ac363,503 (2024: \u20ac961,483).
The directors assessed the impact of this guarantee and concluded that it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation and have therefore treated this as a contingent liability.
30.Litigation and regulatory matters
On 4 April 2022, the Company instituted a lawsuit before the First Hall Civil Court against the Malta Financial Services Authority (the \u201cAuthority\u201d), Mazars Consulting Limited (\u201cMazars\u201d) and Mr Keith Cutajar, a sub-contractor of Mazars.
The Company has taken such judicial action to safeguard its legal right to communications which are privileged at law. This action follows the appointment of Mazars, on 26 November 2021, as an inspector in connection with an investigation by the Authority relating to the Company\u2019s business and operations, and, inter alia, the powers conferred on Mazars by the Authority, on 25 January 2022, in relation to the Company's information and documents, including its privileged communications.
While the Company continues to co-operate with the Authority in relation to the investigation of the Company, based on legal advice, it considers its right to privileged communications to be significantly prejudiced by the Authority\u2019s actions. Accordingly, the Company intends to pursue all remedies available to it at law in this regard.
In June 2024, the Authority communicated the preliminary conclusions of its investigation to the Company. The Company considers that it has acted in compliance with its legal and regulatory obligations. The Company also confirmed to the Authority its intention to engage in without prejudice discussions with the aim of concluding the process in an unprotracted and non-contentious manner. In August 2024, the Company submitted its response to the Authority\u2019s preliminary conclusions. As part of its response, the Company undertook to implement a number of measures to continue enhancing the governance, risk management and compliance functions within its group. The Company\u2019s undertaking plan is in an advanced stage of implementation. In addition, without prejudice discussions with the Authority are in their final stages.
Nevertheless, it remains inherently difficult to predict the outcome of any judicial proceedings and regulatory investigation. There are many factors that may affect the range of outcomes, and the resulting impact, of these matters. As a result, it is not possible to predict or quantify a range of possible outcomes, or the timing thereof.
The Directors recognise the fact that the Company may be subject to reputational, legal and compliance risk due to the extent and complexity of its operations and its regulatory obligations. Given the increased levels of regulatory scrutiny experienced in recent years across the financial services industry, the level of inherent legal and compliance risk faced by the Company is expected to continue to remain high for the foreseeable future.
The Company employs a range of policies and practices to mitigate such inherent risks and ensure they remain within its risk tolerance limits. Furthermore, the Company remains committed to adhere to it legal and regulatory obligations to meet its compliance requirement on an on-going basis at all times.
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherProvisionsContingentLiabilitiesAndContingentAssetsExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923236": { "value": "
Notes to the financial statements
29.Contingent liability
During 2020, the Company gave a guarantee in favour of Bank of Valletta for the amount of \u20ac3 million, to secure, jointly and severally with other related parties, a bank loan of the same amount granted by that bank to LifeStar Holding p.l.c.
At 31 December 2025, the balance outstanding on the loan in the books of LifeStar Holding p.l.c. amounted to \u20ac363,503 (2024: \u20ac961,483).
The directors assessed the impact of this guarantee and concluded that it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation and have therefore treated this as a contingent liability.
30.Litigation and regulatory matters
On 4 April 2022, the Company instituted a lawsuit before the First Hall Civil Court against the Malta Financial Services Authority (the \u201cAuthority\u201d), Mazars Consulting Limited (\u201cMazars\u201d) and Mr Keith Cutajar, a sub-contractor of Mazars.
The Company has taken such judicial action to safeguard its legal right to communications which are privileged at law. This action follows the appointment of Mazars, on 26 November 2021, as an inspector in connection with an investigation by the Authority relating to the Company\u2019s business and operations, and, inter alia, the powers conferred on Mazars by the Authority, on 25 January 2022, in relation to the Company's information and documents, including its privileged communications.
While the Company continues to co-operate with the Authority in relation to the investigation of the Company, based on legal advice, it considers its right to privileged communications to be significantly prejudiced by the Authority\u2019s actions. Accordingly, the Company intends to pursue all remedies available to it at law in this regard.
In June 2024, the Authority communicated the preliminary conclusions of its investigation to the Company. The Company considers that it has acted in compliance with its legal and regulatory obligations. The Company also confirmed to the Authority its intention to engage in without prejudice discussions with the aim of concluding the process in an unprotracted and non-contentious manner. In August 2024, the Company submitted its response to the Authority\u2019s preliminary conclusions. As part of its response, the Company undertook to implement a number of measures to continue enhancing the governance, risk management and compliance functions within its group. The Company\u2019s undertaking plan is in an advanced stage of implementation. In addition, without prejudice discussions with the Authority are in their final stages.
Nevertheless, it remains inherently difficult to predict the outcome of any judicial proceedings and regulatory investigation. There are many factors that may affect the range of outcomes, and the resulting impact, of these matters. As a result, it is not possible to predict or quantify a range of possible outcomes, or the timing thereof.
The Directors recognise the fact that the Company may be subject to reputational, legal and compliance risk due to the extent and complexity of its operations and its regulatory obligations. Given the increased levels of regulatory scrutiny experienced in recent years across the financial services industry, the level of inherent legal and compliance risk faced by the Company is expected to continue to remain high for the foreseeable future.
The Company employs a range of policies and practices to mitigate such inherent risks and ensure they remain within its risk tolerance limits. Furthermore, the Company remains committed to adhere to it legal and regulatory obligations to meet its compliance requirement on an on-going basis at all times.
", "dimensions": { "concept": "ifrs-full:DisclosureOfContingentLiabilitiesExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923235": { "value": "
Notes to the financial statements
29.Contingent liability
During 2020, the Company gave a guarantee in favour of Bank of Valletta for the amount of \u20ac3 million, to secure, jointly and severally with other related parties, a bank loan of the same amount granted by that bank to LifeStar Holding p.l.c.
At 31 December 2025, the balance outstanding on the loan in the books of LifeStar Holding p.l.c. amounted to \u20ac363,503 (2024: \u20ac961,483).
The directors assessed the impact of this guarantee and concluded that it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation and have therefore treated this as a contingent liability.
30.Litigation and regulatory matters
On 4 April 2022, the Company instituted a lawsuit before the First Hall Civil Court against the Malta Financial Services Authority (the \u201cAuthority\u201d), Mazars Consulting Limited (\u201cMazars\u201d) and Mr Keith Cutajar, a sub-contractor of Mazars.
The Company has taken such judicial action to safeguard its legal right to communications which are privileged at law. This action follows the appointment of Mazars, on 26 November 2021, as an inspector in connection with an investigation by the Authority relating to the Company\u2019s business and operations, and, inter alia, the powers conferred on Mazars by the Authority, on 25 January 2022, in relation to the Company's information and documents, including its privileged communications.
While the Company continues to co-operate with the Authority in relation to the investigation of the Company, based on legal advice, it considers its right to privileged communications to be significantly prejudiced by the Authority\u2019s actions. Accordingly, the Company intends to pursue all remedies available to it at law in this regard.
In June 2024, the Authority communicated the preliminary conclusions of its investigation to the Company. The Company considers that it has acted in compliance with its legal and regulatory obligations. The Company also confirmed to the Authority its intention to engage in without prejudice discussions with the aim of concluding the process in an unprotracted and non-contentious manner. In August 2024, the Company submitted its response to the Authority\u2019s preliminary conclusions. As part of its response, the Company undertook to implement a number of measures to continue enhancing the governance, risk management and compliance functions within its group. The Company\u2019s undertaking plan is in an advanced stage of implementation. In addition, without prejudice discussions with the Authority are in their final stages.
Nevertheless, it remains inherently difficult to predict the outcome of any judicial proceedings and regulatory investigation. There are many factors that may affect the range of outcomes, and the resulting impact, of these matters. As a result, it is not possible to predict or quantify a range of possible outcomes, or the timing thereof.
The Directors recognise the fact that the Company may be subject to reputational, legal and compliance risk due to the extent and complexity of its operations and its regulatory obligations. Given the increased levels of regulatory scrutiny experienced in recent years across the financial services industry, the level of inherent legal and compliance risk faced by the Company is expected to continue to remain high for the foreseeable future.
The Company employs a range of policies and practices to mitigate such inherent risks and ensure they remain within its risk tolerance limits. Furthermore, the Company remains committed to adhere to it legal and regulatory obligations to meet its compliance requirement on an on-going basis at all times.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCommitmentsAndContingentLiabilitiesExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923234": { "value": "
Notes to the financial statements
16.Other investments
(d)Unlisted investments
LifeStar Insurance plc has two loan notes titled Stellium Equity Notes and Stellium Credit Notes (the \u201cStellium Notes\u201d), totalling GBP4.2 million which matured on 31 July 2024 and 31 August 2024 respectively, both of which have been extended for the reasons explained below. These loan notes form part of a wider GBP30 million funding arrangement for a fintech startup business, Stellium Holdings Limited (UK Registration No 12130247), located in Newcastle, UK.
The principal holders of the loan notes are Apex Group Nominees 1 (UK) Limited acting as trustee on behalf of the ultimate controlling parties Tiger Infrastructure Associates GP II and Tiger Infrastructure GP II (Europe).
Eram Capital Advisors Luxembourg (\u201cEram\u201d), in their capacity as the Calculation Agent, Advisor and Alternative Asset Manager of the Securitised Vehicles (SVs) linked to the Stellium Notes has confirmed that LifeStar\u2019s held notes are valued at par as at 31 December 2025. In note 14 of the financial statements for the year ended 31 March 2025 of Stellium Holdings Limited, entitled \u201cPost Balance Sheet Events\u201d, it is reported that Stellium Datacentres Limited issued new preference shares amounting to GBP12.5 million to provide additional working capital and funding to assist in the purchase of Digital 9 Seaedge Limited, the owner of the long lease of the data centre at Cobalt Business Park. This transaction was concluded on 11 June 2025. LifeStar Insurance plc did not participate in this investment. Also, in December 2025, Stellium Holdings Limited and the Senior Loan Noteholder and the Junior Loan Noteholder agreed to extend the existing loan note agreements. The loans notes repayment date has been amended from 31 May 2026 to 28 December 2028. All other terms of the loan note agreements are unchanged.During the year, the Company has commissioned an independent third party to carry out a valuation of its investments in the SV\u2019s, which valuation is still being finalized as at the date of the signing of these financial statements.
On the basis of the above, the Directors are of the opinion that the recent investment in Stellium Holdings Limited is a strong indication of its viability. In view of this, the extension of the existing loan note agreements and on the strength of the confirmations received from ERAM as the Calculation Agent of the SVs, the Stellium Notes are to continue being carried at their face value in these financial statements. In view of the substantial additional investment and also the extension of the notes to 28 December 2028, we do not envisage a material impact to the Solvency Capital Ratio (SCR) in the near future.
27.Fair values of financial assets and financial liabilities
The group
The following table presents the assets measured in the statements of financial position at fair value by level of the following fair value measurement hierarchy at 31 December 2025 and 31 December 2024:
-Quoted prices(unadjusted) in active markets for identical assets or liabilities (Level 1);
-Inputs other than quoted prices included within Level 1 that are observable for the asset or liabilities, either directly (that is, as prices) or indirectly (that is, derived from prices (Level 2);
-Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs (Level 3)
The group recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.
The following table presents the assets and liabilities measured at fair value at 31 December 2025
Consolidated and Company
Fair value measurement at end of the reporting period using:
Level 1Level 2Level 3Total
\u20ac\u20ac\u20ac\u20ac
2025
Assets
Other Investments:
Financial assets at fair value through profit or loss 22,981,22682,928,3743,074,796108,984,396
Financial assets at amortised cost-3,005,6023,113,0036,118,605
Total22,981,22685,933,9766,187,799115,103,001
Liabilities
Unit linked financial instruments-(15,399,647)-(15,399,647)
The following table presents the assets and liabilities measured at fair value at 31 December 2024
Consolidated and Company
Fair value measurement at end of the reporting period using:
Level 1Level 2Level 3Total
\u20ac\u20ac\u20ac\u20ac
2024
Assets
Other Investments:
Financial assets at fair value through profit or loss 36,174,20365,561,4003,242,035104,977,638
Financial assets at amortised cost-322,4873,276,0163,598,503
Total36,174,20365,883,8876,518,051108,576,141
Liabilities
Unit linked financial instruments-8,619,624-8,619,624
At 31 December 2025 and 2024 the carrying amounts of financial assets and current financial liabilities approximated their fair values except for investment contracts with DPF. It is impracticable to determine the fair value of equity investment and the investment contracts with DPF due to the lack of a reliable basis to measure the future discretionary return that is a material feature of these contracts.
Included in Level 3 investments for the years ended 31 December 2025 and 2024 are the Stellium Notes. Note 16 (d) explains the directors\u2019 assessment of the value of these notes.
", "dimensions": { "concept": "ifrs-full:DisclosureOfFairValueOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923233": { "value": "
Notes to the financial statements
26.Cash and cash equivalents
For the purposes of the statement of cash flows, the year-end cash and cash equivalents comprise the following:
ConsolidatedCompany
2025202420252024
\u20ac\u20ac\u20ac\u20ac
Cash at bank and on hand1,546,2631,619,7261,144,0261,013,287
Cash at bank earns interest on current deposits at floating rates.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCashAndCashEquivalentsExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923232": { "value": "
Notes to the financial statements
24.Payables, accruals and deferred income
ConsolidatedCompany
2025202420252024
\u20ac\u20ac\u20ac\u20ac
Amounts due to group undertaking8,0683,161--
Other payables154,673307,490130,081119,683
162,741310,651130,081119,683
Accruals and deferred income
- Accruals775,514532,558601,245370,381
- Bond interest accrued56,22056,22056,22156,220
- Deferred income345,433349,0556,95010,573
1,177,167937,833664,416437,174
At end of year1,339,9081,248,484794,497556,857
(i)Other payables are unsecured, non-interest bearing and fall due within the next twelve months;
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherCurrentLiabilitiesExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923231": { "value": "
Notes to the financial statements
24.Payables, accruals and deferred income
ConsolidatedCompany
2025202420252024
\u20ac\u20ac\u20ac\u20ac
Amounts due to group undertaking8,0683,161--
Other payables154,673307,490130,081119,683
162,741310,651130,081119,683
Accruals and deferred income
- Accruals775,514532,558601,245370,381
- Bond interest accrued56,22056,22056,22156,220
- Deferred income345,433349,0556,95010,573
1,177,167937,833664,416437,174
At end of year1,339,9081,248,484794,497556,857
(i)Other payables are unsecured, non-interest bearing and fall due within the next twelve months;
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherLiabilitiesExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923230": { "value": "
Notes to the financial statements
24.Payables, accruals and deferred income
ConsolidatedCompany
2025202420252024
\u20ac\u20ac\u20ac\u20ac
Amounts due to group undertaking8,0683,161--
Other payables154,673307,490130,081119,683
162,741310,651130,081119,683
Accruals and deferred income
- Accruals775,514532,558601,245370,381
- Bond interest accrued56,22056,22056,22156,220
- Deferred income345,433349,0556,95010,573
1,177,167937,833664,416437,174
At end of year1,339,9081,248,484794,497556,857
(i)Other payables are unsecured, non-interest bearing and fall due within the next twelve months;
(ii)Amounts owed to group are unsecured and bear no interest. These balances are repayable on demand.
", "dimensions": { "concept": "ifrs-full:DisclosureOfTradeAndOtherPayablesExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923229": { "value": "
Notes to the financial statements
24.Payables, accruals and deferred income
ConsolidatedCompany
2025202420252024
\u20ac\u20ac\u20ac\u20ac
Amounts due to group undertaking8,0683,161--
Other payables154,673307,490130,081119,683
162,741310,651130,081119,683
Accruals and deferred income
- Accruals775,514532,558601,245370,381
- Bond interest accrued56,22056,22056,22156,220
- Deferred income345,433349,0556,95010,573
1,177,167937,833664,416437,174
At end of year1,339,9081,248,484794,497556,857
", "dimensions": { "concept": "ifrs-full:DisclosureOfDeferredIncomeExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923228": { "value": "
Notes to the financial statements
24.Payables, accruals and deferred income
ConsolidatedCompany
2025202420252024
\u20ac\u20ac\u20ac\u20ac
Amounts due to group undertaking8,0683,161--
Other payables154,673307,490130,081119,683
162,741310,651130,081119,683
Accruals and deferred income
- Accruals775,514532,558601,245370,381
- Bond interest accrued56,22056,22056,22156,220
- Deferred income345,433349,0556,95010,573
1,177,167937,833664,416437,174
At end of year1,339,9081,248,484794,497556,857
(i)Other payables are unsecured, non-interest bearing and fall due within the next twelve months;
", "dimensions": { "concept": "ifrs-full:DisclosureOfAccruedExpensesAndOtherLiabilitiesExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923227": { "value": "
Notes to the financial statements
23.Debt securities in issue
ConsolidatedCompany
Year ended 31 December2025202420252024
\u20ac\u20ac\u20ac\u20ac
4% Unsecured Subordinated Bonds Due 2026 \u2013 20312,243,1512,221,0352,243,1512,221,035
In May 2021, the company issued 100,000 4% unsecured subordinated bonds of a nominal value of \u20ac100 per bond. A total of 24,313 Subordinated Bonds (for a total value of \u20ac2,431,300) were received by the Company.
The bonds are redeemable at their nominal value on 2 June 2031, unless redeemed early on any interest payment date in the year 2026 and 2031.
Interest on the bonds is due and payable annually on 2 June of each year.
The bonds are listed on the Official List of the Malta Stock Exchange. The carrying amount of the bonds is net of direct issue costs of \u20ac188,149 (2024: \u20ac222,599) which are being amortised over the life of the bonds and bond tax payable of \u20acnil (2024: \u20ac12,334). The market value of debt securities on the last trading day before the statement of financial position date was \u20ac2,431,300 (2024: \u20ac2,431,300).
24.Payables, accruals and deferred income
ConsolidatedCompany
2025202420252024
\u20ac\u20ac\u20ac\u20ac
Amounts due to group undertaking8,0683,161--
Other payables154,673307,490130,081119,683
162,741310,651130,081119,683
Accruals and deferred income
- Accruals775,514532,558601,245370,381
- Bond interest accrued56,22056,22056,22156,220
- Deferred income345,433349,0556,95010,573
1,177,167937,833664,416437,174
At end of year1,339,9081,248,484794,497556,857
(i)Other payables are unsecured, non-interest bearing and fall due within the next twelve months;
(ii)Amounts owed to group are unsecured and bear no interest. These balances are repayable on demand.
", "dimensions": { "concept": "ifrs-full:DisclosureOfSubordinatedLiabilitiesExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923226": { "value": "
Notes to the financial statements
3.Particulars of business
3.6.Investment contract liabilities
The table shows a reconciliation of the opening to closing balance for the investment contract liabilities:
Consolidated and CompanyConsolidated and Company
20252024
\u20ac\u20ac
At 1 January8,619,6246,705,671
Amounts recognised in profit or loss
Investment return from underlying assets 1,164,280741,674
Recurring investment management fees deducted(451,770)(396,413)
Cash flows
Contribution received6,992,2002,432,547
Benefits paid(924,687)(863,855)
At 31 December15,399,6478,619,624
In the above reconciliation, the investment return from the underlying assets represents changes in the fair value of the Investment contact liabilities due to changes in the market conditions. Asset management services revenue of \u20ac712,509 (2024: \u20ac345,260) in the profit or loss also includes the asset management fees charged and income trailer fees.
The above liabilities are substantially non-current in nature.
23.Debt securities in issue
ConsolidatedCompany
Year ended 31 December2025202420252024
\u20ac\u20ac\u20ac\u20ac
4% Unsecured Subordinated Bonds Due 2026 \u2013 20312,243,1512,221,0352,243,1512,221,035
In May 2021, the company issued 100,000 4% unsecured subordinated bonds of a nominal value of \u20ac100 per bond. A total of 24,313 Subordinated Bonds (for a total value of \u20ac2,431,300) were received by the Company.
The bonds are redeemable at their nominal value on 2 June 2031, unless redeemed early on any interest payment date in the year 2026 and 2031.
Interest on the bonds is due and payable annually on 2 June of each year.
The bonds are listed on the Official List of the Malta Stock Exchange. The carrying amount of the bonds is net of direct issue costs of \u20ac188,149 (2024: \u20ac222,599) which are being amortised over the life of the bonds and bond tax payable of \u20acnil (2024: \u20ac12,334). The market value of debt securities on the last trading day before the statement of financial position date was \u20ac2,431,300 (2024: \u20ac2,431,300).
", "dimensions": { "concept": "ifrs-full:DisclosureOfBorrowingsExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923225": { "value": "
Notes to the financial statements
21.Other reserves
Consolidated
Other unrealised gainsProperty revaluation reserveTotal
\u20ac\u20ac\u20ac
Year ended 31 December 2025
At beginning of year 418,6001,154,3871,572,987
Revaluation of property (Note 13)-440,109440,109
At end of year 418,6001,594,4962,013,096
Year ended 31 December 2024
At beginning of year 418,6001,154,3881,572,988
At end of year 418,6001,154,3881,572,988
The above reserves are not distributable.
", "dimensions": { "concept": "ifrs-full:DisclosureOfReservesAndOtherEquityInterestExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923224": { "value": "
Notes to the financial statements
20.Dividends paid and declared
No dividend was paid or declared during the year (2024: \u20acNil) to ordinary shareholders.
", "dimensions": { "concept": "ifrs-full:DisclosureOfDividendsExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923223": { "value": "
Notes to the financial statements
19.Share capital
Consolidated and Company
2025
AuthorisedIssued and called up
\u20ac\u20ac
353,411,942 ordinary shares of \u20ac0.141478 each,
64,814,817 of which were issued and called up50,000,0009,169,870
50,000,0009,169,870
Consolidated and Company
2024
AuthorisedIssued and called up
\u20ac\u20ac
353,411,942 ordinary shares of \u20ac0.141478 each,
64,814,817 of which were issued and called up50,000,0009,169,870
50,000,0009,169,870
Retained earnings
Retained earnings include the current and prior period results as disclosed in the statement of comprehensive income.
21.Other reserves
Consolidated
Other unrealised gainsProperty revaluation reserveTotal
\u20ac\u20ac\u20ac
Year ended 31 December 2025
At beginning of year 418,6001,154,3871,572,987
Revaluation of property (Note 13)-440,109440,109
At end of year 418,6001,594,4962,013,096
Year ended 31 December 2024
At beginning of year 418,6001,154,3881,572,988
At end of year 418,6001,154,3881,572,988
The above reserves are not distributable.
", "dimensions": { "concept": "ifrs-full:DisclosureOfShareCapitalReservesAndOtherEquityInterestExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923222": { "value": "
Notes to the financial statements
19.Share capital
Capital management
The Group\u2019s objectives when managing capital are:
(i)to comply with the insurance capital requirements required by the Maltese insurance regulator, the MFSA;
(ii)to safeguard the Group\u2019s ability to continue as a going concern so that it can continue to provide returns for shareholders and benefits for other stakeholders; and
(iii)to provide an adequate return to shareholders by pricing insurance contracts commensurate with the level of risk.
In order to maintain or adjust the capital structure, the Group may issue new shares or capitalise contributions received from its shareholders.
As of 1 January 2016, the Solvency II Directive (2009/138/EC) came into force with new regulatory requirements that ascertain the level of capital required on the basis of the risks the Company undertakes. Solvency II also outlines how the Own Funds shall be derived by converting the statement of financial position from an IFRS perspective to one where assets and liabilities are measured in line with their underlying economic value.
The Directors are actively involved in the implementation of the Solvency II rules and these are highly embedded in the Company\u2019s operations and regular monitoring of the Solvency Capital Requirement (\u201cSCR\u201d) is considered crucial.
The Company is required to hold regulatory capital for its long term insurance business in compliance with the Solvency II Directive. The Solvency II Directive stipulates the Minimum Capital Requirement (\u201cMCR\u201d) and the SCR that the Company is required to hold. The MCR and SCR must be maintained at all times throughout the year.
Based on the audited SCR calculations as at 31 December 2025, the Company has complied with the capital and solvency requirements as stipulated in the rules issued by the MFSA. Going forward, the Company is also expected to continue meeting the Solvency II requirements, based on the projected SCR calculations included in the 2022 ORSA report. In the case of any solvency gap, the Directors have put in place a capital plan aimed to ensure that the Company will have adequate \u2018Own Funds\u2019 to meet the required SCR.
", "dimensions": { "concept": "ifrs-full:DisclosureOfObjectivesPoliciesAndProcessesForManagingCapitalExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923221": { "value": "
Notes to the financial statements
19.Share capital
Consolidated and Company
2025
AuthorisedIssued and called up
\u20ac\u20ac
353,411,942 ordinary shares of \u20ac0.141478 each,
64,814,817 of which were issued and called up50,000,0009,169,870
50,000,0009,169,870
Consolidated and Company
2024
AuthorisedIssued and called up
\u20ac\u20ac
353,411,942 ordinary shares of \u20ac0.141478 each,
64,814,817 of which were issued and called up50,000,0009,169,870
50,000,0009,169,870
", "dimensions": { "concept": "ifrs-full:DisclosureOfIssuedCapitalExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923220": { "value": "
Notes to the financial statements
18.Receivables, prepayments and accrued income
ConsolidatedCompany
2025202420252024
\u20ac\u20ac\u20ac\u20ac
Amounts due from intermediate parent (Note ii)6,994,3006,872,5586,994,3006,872,558
Amount receivable from subsidiary--291,952440,000
Amounts due from related parties (Note iii)5,931,9805,740,2665,670,7105,463,475
Other receivables (Note i and iv)102,020468,874102,020468,874
13,028,30013,081,69813,058,98213,244,907
iv.Other receivables are unsecured, interest-free and repayable on demand. They are stated net of provision for impairment of \u20ac161,967 (2024: \u20ac30,042). The company has directly written off other receivables of \u20ac57,432 during the current year which is included within the administrative and other expense in the statement of comprehensive income (2024: \u20ac110,618).
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherCurrentAssetsExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923219": { "value": "
Notes to the financial statements
17.Other assets
Consolidated and Company
20252024
\u20ac\u20ac
Year ended 31 December\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Balance at 1 January 198,680 -
Additions-61,538
Reclassification from intangible asset (Note 11)1,020,890137,142
Impairment (198,680)-
Balance at 31 December1,020,890198,680
Reclassification of \u20ac 1,020,890 from intangible assets during the year represents certain assets that have not been put into use. Such amount is stated net of total provision of \u20ac 442,630.
18.Receivables, prepayments and accrued income
ConsolidatedCompany
2025202420252024
\u20ac\u20ac\u20ac\u20ac
Prepayments and accrued income:
- Prepayments 237,749191,000197,136137,618
- Accrued income3,977,5783,601,4903,569,0613,147,676
4,215,3273,792,4903,766,1973,285,294
At end of year17,243,62716,874,18916,825,17916,530,201
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Notes to the financial statements
18.Receivables, prepayments and accrued income
ConsolidatedCompany
2025202420252024
\u20ac\u20ac\u20ac\u20ac
Amounts due from intermediate parent (Note ii)6,994,3006,872,5586,994,3006,872,558
Amount receivable from subsidiary--291,952440,000
Amounts due from related parties (Note iii)5,931,9805,740,2665,670,7105,463,475
Other receivables (Note i and iv)102,020468,874102,020468,874
13,028,30013,081,69813,058,98213,244,907
i.Interest-bearing automatic premium loans are classified as investments in Note 16 to the financial statements.
ii.Amounts due from intermediate parent are secured, bearing interest at 3% or 4.5% and expected to be repaid in 10 years\u2019 time. The carrying amount is stated net of a provision of \u20ac146,748 (2024: \u20ac255,891).
The loans in question have been approved by the Malta Financial Services Authority.
The Directors are confident that such balances will be recovered within the stipulated time frame above.
iii.Amounts due from other related parties are secured and bear interest at 3% or 4.5% and as at 31 December 2025 the Directors expect these to be repaid in 5 and 10 years\u2019 time in accordance with the agreements. The carrying amount is stated net of a provision of \u20ac46,280 (2024: \u20ac129,383). Such balance has been carried forward prior to 1 January 2017.
iv.Other receivables are unsecured, interest-free and repayable on demand. They are stated net of provision for impairment of \u20ac161,967 (2024: \u20ac30,042). The company has directly written off other receivables of \u20ac57,432 during the current year which is included within the administrative and other expense in the statement of comprehensive income (2024: \u20ac110,618).
Amounts due from intermediate parent and other related parties are non-current in nature, whilst the rest of the amounts are current in nature.
", "dimensions": { "concept": "ifrs-full:DisclosureOfTradeAndOtherReceivablesExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923217": { "value": "
Notes to the financial statements
16.Other investments
(a)Investments at fair value through profit or loss
Consolidated and Company
20252024
\u20ac\u20ac
Equity securities and units in unit trusts:
Listed shares11,871,81421,024,952
Unlisted investments3,074,7963,242,035
Collective investment schemes-752,553
14,946,61025,019,540
Assets held to cover linked liabilities:
Collective investment schemes82,928,37465,656,576
Debt securities - fixed interest rate:
Government bonds6,244,6197,696,531
Corporate bonds4,864,7936,604,991
11,109,41214,301,522
Total investments at fair value through profit or loss108,984,396104,977,638
Maturity of fixed income debt securities classified as fair value through profit or loss.
Consolidated and Company
20252024
\u20ac\u20ac
Within 1 year2,651,787263,115
Between 1 and 2 years1,001,4072,930,011
Between 2 and 5 years2,728,5135,622,666
Over 5 years4,727,7055,485,730
11,109,41214,301,522
Consolidated and Company
%%
Weighted average effective interest rate at the balance sheet date 56
All other securities classified at fair value through profit or loss are non-current in nature.
The movements in investments classified as fair value through profit or loss are summarised as follows:
Consolidated and Company
20252024
\u20ac\u20ac
Year ended 31 December
Balance at 1 January \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0104,977,638 93,843,285
Impact on initial application of IFRS 9-
Additions22,174,09814,434,840
Disposals(20,558,870)(3,110,927)
Net fair value and foreign exchange movements2,391,530(189,560)
Balance at 31 December108,984,396104,977,638
At 31 December
Cost 99,753,81698,138,588
Accumulated fair value and foreign exchange gains9,230,5806,839,050
Net book amount 108,984,396104,977,638
The table below analyses debt securities classified at fair value through profit or loss by sector:
Consolidated and Company
20252024
\u20ac\u20ac
Banks1,352,5571,139,478
Energy2,706,6402,453,972
Government6,244,619\u00a0\u00a0\u00a07,696,532
Other805,596\u00a0\u00a0\u00a03,011,540
11,109,412\u00a0\u00a014,301,522
(b)Loans and receivables
Consolidated and Company
20252024
\u20ac\u20ac
Loans secured on policies5,60222,487
Other loans and receivables3,113,0033,276,016
3,118,6053,298,503
Loans secured on policies are substantially non-current in nature. Other loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market, other than those that the Group intends to sell in the short term. They are charged with interest at the rate of 12% (2024: 12%) per annum.
Consolidated and Company
20252024
\u20ac\u20ac
Year ended 31 December
Balance at 1 January 3,298,5033,134,171
Additions -14,036
Disposals (16,886)-
Foreign exchange movement(163,012)150,296
Balance at 31 December3,118,6053,298,503
(d)Unlisted investments
LifeStar Insurance plc has two loan notes titled Stellium Equity Notes and Stellium Credit Notes (the \u201cStellium Notes\u201d), totalling GBP4.2 million which matured on 31 July 2024 and 31 August 2024 respectively, both of which have been extended for the reasons explained below. These loan notes form part of a wider GBP30 million funding arrangement for a fintech startup business, Stellium Holdings Limited (UK Registration No 12130247), located in Newcastle, UK.
The principal holders of the loan notes are Apex Group Nominees 1 (UK) Limited acting as trustee on behalf of the ultimate controlling parties Tiger Infrastructure Associates GP II and Tiger Infrastructure GP II (Europe).
Eram Capital Advisors Luxembourg (\u201cEram\u201d), in their capacity as the Calculation Agent, Advisor and Alternative Asset Manager of the Securitised Vehicles (SVs) linked to the Stellium Notes has confirmed that LifeStar\u2019s held notes are valued at par as at 31 December 2025. In note 14 of the financial statements for the year ended 31 March 2025 of Stellium Holdings Limited, entitled \u201cPost Balance Sheet Events\u201d, it is reported that Stellium Datacentres Limited issued new preference shares amounting to GBP12.5 million to provide additional working capital and funding to assist in the purchase of Digital 9 Seaedge Limited, the owner of the long lease of the data centre at Cobalt Business Park. This transaction was concluded on 11 June 2025. LifeStar Insurance plc did not participate in this investment. Also, in December 2025, Stellium Holdings Limited and the Senior Loan Noteholder and the Junior Loan Noteholder agreed to extend the existing loan note agreements. The loans notes repayment date has been amended from 31 May 2026 to 28 December 2028. All other terms of the loan note agreements are unchanged.During the year, the Company has commissioned an independent third party to carry out a valuation of its investments in the SV\u2019s, which valuation is still being finalized as at the date of the signing of these financial statements.
On the basis of the above, the Directors are of the opinion that the recent investment in Stellium Holdings Limited is a strong indication of its viability. In view of this, the extension of the existing loan note agreements and on the strength of the confirmations received from ERAM as the Calculation Agent of the SVs, the Stellium Notes are to continue being carried at their face value in these financial statements. In view of the substantial additional investment and also the extension of the notes to 28 December 2028, we do not envisage a material impact to the Solvency Capital Ratio (SCR) in the near future.
23.Debt securities in issue
ConsolidatedCompany
Year ended 31 December2025202420252024
\u20ac\u20ac\u20ac\u20ac
4% Unsecured Subordinated Bonds Due 2026 \u2013 20312,243,1512,221,0352,243,1512,221,035
In May 2021, the company issued 100,000 4% unsecured subordinated bonds of a nominal value of \u20ac100 per bond. A total of 24,313 Subordinated Bonds (for a total value of \u20ac2,431,300) were received by the Company.
The bonds are redeemable at their nominal value on 2 June 2031, unless redeemed early on any interest payment date in the year 2026 and 2031.
Interest on the bonds is due and payable annually on 2 June of each year.
The bonds are listed on the Official List of the Malta Stock Exchange. The carrying amount of the bonds is net of direct issue costs of \u20ac188,149 (2024: \u20ac222,599) which are being amortised over the life of the bonds and bond tax payable of \u20acnil (2024: \u20ac12,334). The market value of debt securities on the last trading day before the statement of financial position date was \u20ac2,431,300 (2024: \u20ac2,431,300).
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Notes to the financial statements
1.Critical accounting estimates and judgements
(c)Valuation of Level 3 Investments
The valuation of Level 3 investments requires significant judgement and management estimates. Uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the assets in the future. Details of key judgements, estimates and assumptions relating to Level 3 investments are disclosed in Note 16 and 27 to the financial statements.
16.Other investments
The Group\u2019s investments are summarised by measurement category in the table below:
Consolidated and Company
20252024
\u20ac\u20ac
Financial assets mandatorily at FVTPL 97,874,98490,676,116
Financial assets designated at FVTPL11,109,41214,301,522
Loans and receivables3,118,6053,298,503
Term deposits 3,000,000300,000
Total investments 115,103,001108,576,141
(a)Investments at fair value through profit or loss
Consolidated and Company
20252024
\u20ac\u20ac
Equity securities and units in unit trusts:
Listed shares11,871,81421,024,952
Unlisted investments3,074,7963,242,035
Collective investment schemes-752,553
14,946,61025,019,540
Assets held to cover linked liabilities:
Collective investment schemes82,928,37465,656,576
Debt securities - fixed interest rate:
Government bonds6,244,6197,696,531
Corporate bonds4,864,7936,604,991
11,109,41214,301,522
Total investments at fair value through profit or loss108,984,396104,977,638
Maturity of fixed income debt securities classified as fair value through profit or loss.
Consolidated and Company
20252024
\u20ac\u20ac
Within 1 year2,651,787263,115
Between 1 and 2 years1,001,4072,930,011
Between 2 and 5 years2,728,5135,622,666
Over 5 years4,727,7055,485,730
11,109,41214,301,522
Consolidated and Company
%%
Weighted average effective interest rate at the balance sheet date 56
All other securities classified at fair value through profit or loss are non-current in nature.
The movements in investments classified as fair value through profit or loss are summarised as follows:
Consolidated and Company
20252024
\u20ac\u20ac
Year ended 31 December
Balance at 1 January \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0104,977,638 93,843,285
Impact on initial application of IFRS 9-
Additions22,174,09814,434,840
Disposals(20,558,870)(3,110,927)
Net fair value and foreign exchange movements2,391,530(189,560)
Balance at 31 December108,984,396104,977,638
At 31 December
Cost 99,753,81698,138,588
Accumulated fair value and foreign exchange gains9,230,5806,839,050
Net book amount 108,984,396104,977,638
The table below analyses debt securities classified at fair value through profit or loss by sector:
Consolidated and Company
20252024
\u20ac\u20ac
Banks1,352,5571,139,478
Energy2,706,6402,453,972
Government6,244,619\u00a0\u00a0\u00a07,696,532
Other805,596\u00a0\u00a0\u00a03,011,540
11,109,412\u00a0\u00a014,301,522
(d)Unlisted investments
LifeStar Insurance plc has two loan notes titled Stellium Equity Notes and Stellium Credit Notes (the \u201cStellium Notes\u201d), totalling GBP4.2 million which matured on 31 July 2024 and 31 August 2024 respectively, both of which have been extended for the reasons explained below. These loan notes form part of a wider GBP30 million funding arrangement for a fintech startup business, Stellium Holdings Limited (UK Registration No 12130247), located in Newcastle, UK.
The principal holders of the loan notes are Apex Group Nominees 1 (UK) Limited acting as trustee on behalf of the ultimate controlling parties Tiger Infrastructure Associates GP II and Tiger Infrastructure GP II (Europe).
Eram Capital Advisors Luxembourg (\u201cEram\u201d), in their capacity as the Calculation Agent, Advisor and Alternative Asset Manager of the Securitised Vehicles (SVs) linked to the Stellium Notes has confirmed that LifeStar\u2019s held notes are valued at par as at 31 December 2025. In note 14 of the financial statements for the year ended 31 March 2025 of Stellium Holdings Limited, entitled \u201cPost Balance Sheet Events\u201d, it is reported that Stellium Datacentres Limited issued new preference shares amounting to GBP12.5 million to provide additional working capital and funding to assist in the purchase of Digital 9 Seaedge Limited, the owner of the long lease of the data centre at Cobalt Business Park. This transaction was concluded on 11 June 2025. LifeStar Insurance plc did not participate in this investment. Also, in December 2025, Stellium Holdings Limited and the Senior Loan Noteholder and the Junior Loan Noteholder agreed to extend the existing loan note agreements. The loans notes repayment date has been amended from 31 May 2026 to 28 December 2028. All other terms of the loan note agreements are unchanged. During the year, the Company has commissioned an independent third party to carry out a valuation of its investments in the SV\u2019s, which valuation is still being finalized as at the date of the signing of these financial statements.
On the basis of the above, the Directors are of the opinion that the recent investment in Stellium Holdings Limited is a strong indication of its viability. In view of this, the extension of the existing loan note agreements and on the strength of the confirmations received from ERAM as the Calculation Agent of the SVs, the Stellium Notes are to continue being carried at their face value in these financial statements. In view of the substantial additional investment and also the extension of the notes to 28 December 2028, we do not envisage a material impact to the Solvency Capital Ratio (SCR) in the near future.
27.Fair values of financial assets and financial liabilities
The group
The following table presents the assets and liabilities measured at fair value at 31 December 2025
Consolidated and Company
Fair value measurement at end of the reporting period using:
Level 1Level 2Level 3Total
\u20ac\u20ac\u20ac\u20ac
2025
Assets
Other Investments:
Financial assets at fair value through profit or loss 22,981,22682,928,3743,074,796108,984,396
Financial assets at amortised cost-3,005,6023,113,0036,118,605
Total22,981,22685,933,9766,187,799115,103,001
Liabilities
Unit linked financial instruments-(15,399,647)-(15,399,647)
The following table presents the assets and liabilities measured at fair value at 31 December 2024
Consolidated and Company
Fair value measurement at end of the reporting period using:
Level 1Level 2Level 3Total
\u20ac\u20ac\u20ac\u20ac
2024
Assets
Other Investments:
Financial assets at fair value through profit or loss 36,174,20365,561,4003,242,035104,977,638
Financial assets at amortised cost-322,4873,276,0163,598,503
Total36,174,20365,883,8876,518,051108,576,141
Liabilities
Unit linked financial instruments-8,619,624-8,619,624
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Notes to the financial statements
15.Investments in group undertakings
As at 31 December 2025 the consolidated financial statements include the following subsidiary undertaking:
Group undertakingRegistered officeClass of shares heldPercentage of shares held
20252024
LifeStar Health LimitedTestaferrata Street, Ta XbiexOrdinary \u2018A\u2019100%100%
The principal activity of LifeStar Health Limited is to carry on business of an agent in all classes of health insurance, in terms of the Insurance Intermediaries Act (Cap. 487 of the Laws of Malta). LifeStar Health Limited has also issued non-profit participating \u2018B\u2019 shares to other subscribers. The subscribers of such \u2018B\u2019 shares are not entitled to a share of profits generated by LifeStar Health Limited, and hence the Company is deemed to have 100% of ownership interest. The distribution of dividends by LifeStar Health Limited is restricted by the own funds requirements of the Insurance Intermediaries Act (Cap. 487 of the Laws of Malta).
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Notes to the financial statements
15.Investments in group undertakings
As at 31 December 2025 the consolidated financial statements include the following subsidiary undertaking:
Group undertakingRegistered officeClass of shares heldPercentage of shares held
20252024
LifeStar Health LimitedTestaferrata Street, Ta XbiexOrdinary \u2018A\u2019100%100%
The principal activity of LifeStar Health Limited is to carry on business of an agent in all classes of health insurance, in terms of the Insurance Intermediaries Act (Cap. 487 of the Laws of Malta). LifeStar Health Limited has also issued non-profit participating \u2018B\u2019 shares to other subscribers. The subscribers of such \u2018B\u2019 shares are not entitled to a share of profits generated by LifeStar Health Limited, and hence the Company is deemed to have 100% of ownership interest. The distribution of dividends by LifeStar Health Limited is restricted by the own funds requirements of the Insurance Intermediaries Act (Cap. 487 of the Laws of Malta).
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Notes to the financial statements
14.Investment property
Details about the Group\u2019s investment properties and information about the fair value hierarchy at 31 December 2025 and 2024 are as follows:
Consolidated and Company
Fair value measurement at end of the reporting period using:
Level 1Level 2Level 3Total
\u20ac\u20ac\u20ac\u20ac
2025
Investment property:
Local property--12,889,27312,889,273
Total--12,889,27312,889,273
Consolidated and Company
Fair value measurement at end of the reporting period using:
Level 1Level 2Level 3Total
\u20ac\u20ac\u20ac\u20ac
2024
Investment property:
Local property--13,691,54713,691,547
Total--13,691,54713,691,547
In estimating the fair value of the properties, the highest and best use of the properties is their current use. In accordance with the Group's accounting policy, the valuation of investment properties is assessed by the Board of Directors at the end of every reporting period. An impairment charge was approved by the Board of Directors and debited to profit or loss and is presented within \u2018Investment return and fair value movements\u2019.
The table below includes further information about the Group\u2019s Level 3 fair value measurements for local properties:
2025/2024Significant unobservable inputNarrative sensitivity
Local propertiesRental value per square metre, ranging from \u20ac200 to \u20ac400 (2024: \u20ac200 to \u20ac400)The higher the price per square metre, the higher the fair value
Rent growth of 5% (2024: 5%) per annumThe higher the rent growth, the higher the fair value
Discount rate of 3.01% (2024: 3.01%)The higher the discount rate, the lower the fair value
16.Other investments
(d)Unlisted investments
LifeStar Insurance plc has two loan notes titled Stellium Equity Notes and Stellium Credit Notes (the \u201cStellium Notes\u201d), totalling GBP4.2 million which matured on 31 July 2024 and 31 August 2024 respectively, both of which have been extended for the reasons explained below. These loan notes form part of a wider GBP30 million funding arrangement for a fintech startup business, Stellium Holdings Limited (UK Registration No 12130247), located in Newcastle, UK.
The principal holders of the loan notes are Apex Group Nominees 1 (UK) Limited acting as trustee on behalf of the ultimate controlling parties Tiger Infrastructure Associates GP II and Tiger Infrastructure GP II (Europe).
Eram Capital Advisors Luxembourg (\u201cEram\u201d), in their capacity as the Calculation Agent, Advisor and Alternative Asset Manager of the Securitised Vehicles (SVs) linked to the Stellium Notes has confirmed that LifeStar\u2019s held notes are valued at par as at 31 December 2025. In note 14 of the financial statements for the year ended 31 March 2025 of Stellium Holdings Limited, entitled \u201cPost Balance Sheet Events\u201d, it is reported that Stellium Datacentres Limited issued new preference shares amounting to GBP12.5 million to provide additional working capital and funding to assist in the purchase of Digital 9 Seaedge Limited, the owner of the long lease of the data centre at Cobalt Business Park. This transaction was concluded on 11 June 2025. LifeStar Insurance plc did not participate in this investment. Also, in December 2025, Stellium Holdings Limited and the Senior Loan Noteholder and the Junior Loan Noteholder agreed to extend the existing loan note agreements. The loans notes repayment date has been amended from 31 May 2026 to 28 December 2028. All other terms of the loan note agreements are unchanged.During the year, the Company has commissioned an independent third party to carry out a valuation of its investments in the SV\u2019s, which valuation is still being finalized as at the date of the signing of these financial statements.
On the basis of the above, the Directors are of the opinion that the recent investment in Stellium Holdings Limited is a strong indication of its viability. In view of this, the extension of the existing loan note agreements and on the strength of the confirmations received from ERAM as the Calculation Agent of the SVs, the Stellium Notes are to continue being carried at their face value in these financial statements. In view of the substantial additional investment and also the extension of the notes to 28 December 2028, we do not envisage a material impact to the Solvency Capital Ratio (SCR) in the near future.
27.Fair values of financial assets and financial liabilities
The group
The following table presents the assets measured in the statements of financial position at fair value by level of the following fair value measurement hierarchy at 31 December 2025 and 31 December 2024:
-Quoted prices(unadjusted) in active markets for identical assets or liabilities (Level 1);
-Inputs other than quoted prices included within Level 1 that are observable for the asset or liabilities, either directly (that is, as prices) or indirectly (that is, derived from prices (Level 2);
-Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs (Level 3)
The group recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.
The following table presents the assets and liabilities measured at fair value at 31 December 2025
Consolidated and Company
Fair value measurement at end of the reporting period using:
Level 1Level 2Level 3Total
\u20ac\u20ac\u20ac\u20ac
2025
Assets
Other Investments:
Financial assets at fair value through profit or loss 22,981,22682,928,3743,074,796108,984,396
Financial assets at amortised cost-3,005,6023,113,0036,118,605
Total22,981,22685,933,9766,187,799115,103,001
Liabilities
Unit linked financial instruments-(15,399,647)-(15,399,647)
The following table presents the assets and liabilities measured at fair value at 31 December 2024
Consolidated and Company
Fair value measurement at end of the reporting period using:
Level 1Level 2Level 3Total
\u20ac\u20ac\u20ac\u20ac
2024
Assets
Other Investments:
Financial assets at fair value through profit or loss 36,174,20365,561,4003,242,035104,977,638
Financial assets at amortised cost-322,4873,276,0163,598,503
Total36,174,20365,883,8876,518,051108,576,141
Liabilities
Unit linked financial instruments-8,619,624-8,619,624
At 31 December 2025 and 2024 the carrying amounts of financial assets and current financial liabilities approximated their fair values except for investment contracts with DPF. It is impracticable to determine the fair value of equity investment and the investment contracts with DPF due to the lack of a reliable basis to measure the future discretionary return that is a material feature of these contracts.
Included in Level 3 investments for the years ended 31 December 2025 and 2024 are the Stellium Notes. Note 16 (d) explains the directors\u2019 assessment of the value of these notes.
", "dimensions": { "concept": "ifrs-full:DisclosureOfFairValueMeasurementExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923211": { "value": "
Notes to the financial statements
14.Investment property
Consolidated and Company
\u20ac
Year ended 31 December 2025
Opening net book amount 13,691,547
Additions65,836
Disposals(900,001)
Increase in fair value 31,891
Closing net book amount12,889,273
At 31 December 2025
Cost 2,086,790
Accumulated fair value gains 10,802,483
Net book amount 12,889,273
Year ended 31 December 2024
Opening net book amount 15,851,439
Reclassification to PPE(2,137,892)
Decrease in fair value (22,000)
Closing net book amount13,691,547
At 31 December 2024
Cost 2,284,414
Accumulated fair value gains 11,407,133
Net book amount 13,691,547
Details about the Group\u2019s investment properties and information about the fair value hierarchy at 31 December 2025 and 2024 are as follows:
Consolidated and Company
Fair value measurement at end of the reporting period using:
Level 1Level 2Level 3Total
\u20ac\u20ac\u20ac\u20ac
2025
Investment property:
Local property--12,889,27312,889,273
Total--12,889,27312,889,273
Consolidated and Company
Fair value measurement at end of the reporting period using:
Level 1Level 2Level 3Total
\u20ac\u20ac\u20ac\u20ac
2024
Investment property:
Local property--13,691,54713,691,547
Total--13,691,54713,691,547
In estimating the fair value of the properties, the highest and best use of the properties is their current use. In accordance with the Group's accounting policy, the valuation of investment properties is assessed by the Board of Directors at the end of every reporting period. An impairment charge was approved by the Board of Directors and debited to profit or loss and is presented within \u2018Investment return and fair value movements\u2019.
During 2025, investment property amounting to nil (2024: \u20ac2,137,892) has been reclassified to property, plant and equipment to be used for own use.
During 2025, the Group revalued its investment property on the basis of valuations obtained from an independent professionally qualified valuer. The revaluation in relation to property classified for \u201cown use\u201d was credited to Other Comprehensive Income.
The table below includes further information about the Group\u2019s Level 3 fair value measurements for local properties:
2025/2024Significant unobservable inputNarrative sensitivity
Local propertiesRental value per square metre, ranging from \u20ac200 to \u20ac400 (2024: \u20ac200 to \u20ac400)The higher the price per square metre, the higher the fair value
Rent growth of 5% (2024: 5%) per annumThe higher the rent growth, the higher the fair value
Discount rate of 3.01% (2024: 3.01%)The higher the discount rate, the lower the fair value
Operating leases relate to the investment property owned by the Group with lease terms of between 1 to 5 years. The lessee does not have an option to purchase the property at the expiry of the lease period. The rental income earned, under operating leases, amounted to \u20ac104,455 (2024: \u20ac149,760).
16.Other investments
The Group\u2019s investments are summarised by measurement category in the table below:
Consolidated and Company
20252024
\u20ac\u20ac
Financial assets mandatorily at FVTPL 97,874,98490,676,116
Financial assets designated at FVTPL11,109,41214,301,522
Loans and receivables3,118,6053,298,503
Term deposits 3,000,000300,000
Total investments 115,103,001108,576,141
(a)Investments at fair value through profit or loss
Consolidated and Company
20252024
\u20ac\u20ac
Equity securities and units in unit trusts:
Listed shares11,871,81421,024,952
Unlisted investments3,074,7963,242,035
Collective investment schemes-752,553
14,946,61025,019,540
Assets held to cover linked liabilities:
Collective investment schemes82,928,37465,656,576
Debt securities - fixed interest rate:
Government bonds6,244,6197,696,531
Corporate bonds4,864,7936,604,991
11,109,41214,301,522
Total investments at fair value through profit or loss108,984,396104,977,638
Maturity of fixed income debt securities classified as fair value through profit or loss.
Consolidated and Company
20252024
\u20ac\u20ac
Within 1 year2,651,787263,115
Between 1 and 2 years1,001,4072,930,011
Between 2 and 5 years2,728,5135,622,666
Over 5 years4,727,7055,485,730
11,109,41214,301,522
Consolidated and Company
%%
Weighted average effective interest rate at the balance sheet date 56
All other securities classified at fair value through profit or loss are non-current in nature.
The movements in investments classified as fair value through profit or loss are summarised as follows:
Consolidated and Company
20252024
\u20ac\u20ac
Year ended 31 December
Balance at 1 January \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0104,977,638 93,843,285
Impact on initial application of IFRS 9-
Additions22,174,09814,434,840
Disposals(20,558,870)(3,110,927)
Net fair value and foreign exchange movements2,391,530(189,560)
Balance at 31 December108,984,396104,977,638
At 31 December
Cost 99,753,81698,138,588
Accumulated fair value and foreign exchange gains9,230,5806,839,050
Net book amount 108,984,396104,977,638
The table below analyses debt securities classified at fair value through profit or loss by sector:
Consolidated and Company
20252024
\u20ac\u20ac
Banks1,352,5571,139,478
Energy2,706,6402,453,972
Government6,244,619\u00a0\u00a0\u00a07,696,532
Other805,596\u00a0\u00a0\u00a03,011,540
11,109,412\u00a0\u00a014,301,522
(b)Loans and receivables
Consolidated and Company
20252024
\u20ac\u20ac
Loans secured on policies5,60222,487
Other loans and receivables3,113,0033,276,016
3,118,6053,298,503
Loans secured on policies are substantially non-current in nature. Other loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market, other than those that the Group intends to sell in the short term. They are charged with interest at the rate of 12% (2024: 12%) per annum.
Consolidated and Company
20252024
\u20ac\u20ac
Year ended 31 December
Balance at 1 January 3,298,5033,134,171
Additions -14,036
Disposals (16,886)-
Foreign exchange movement(163,012)150,296
Balance at 31 December3,118,6053,298,503
(c)Term Deposits
Consolidated and Company
20252024
\u20ac\u20ac
Loans secured on policies3,000,000300,000
3,000,000300,000
Consolidated and Company
20252024
\u20ac\u20ac
Year ended 31 December
Balance at 1 January 300,000-
Additions3,000,000400,000
Disposals(300,000)(100,000)
Balance at 31 December3,000,000300,000
Bank term deposits earn average interest of 7.75% per annum (2024: 7.75%). As at year end, their carrying amount approximated its fair value.
(d)Unlisted investments
LifeStar Insurance plc has two loan notes titled Stellium Equity Notes and Stellium Credit Notes (the \u201cStellium Notes\u201d), totalling GBP4.2 million which matured on 31 July 2024 and 31 August 2024 respectively, both of which have been extended for the reasons explained below. These loan notes form part of a wider GBP30 million funding arrangement for a fintech startup business, Stellium Holdings Limited (UK Registration No 12130247), located in Newcastle, UK.
The principal holders of the loan notes are Apex Group Nominees 1 (UK) Limited acting as trustee on behalf of the ultimate controlling parties Tiger Infrastructure Associates GP II and Tiger Infrastructure GP II (Europe).
Eram Capital Advisors Luxembourg (\u201cEram\u201d), in their capacity as the Calculation Agent, Advisor and Alternative Asset Manager of the Securitised Vehicles (SVs) linked to the Stellium Notes has confirmed that LifeStar\u2019s held notes are valued at par as at 31 December 2025. In note 14 of the financial statements for the year ended 31 March 2025 of Stellium Holdings Limited, entitled \u201cPost Balance Sheet Events\u201d, it is reported that Stellium Datacentres Limited issued new preference shares amounting to GBP12.5 million to provide additional working capital and funding to assist in the purchase of Digital 9 Seaedge Limited, the owner of the long lease of the data centre at Cobalt Business Park. This transaction was concluded on 11 June 2025. LifeStar Insurance plc did not participate in this investment. Also, in December 2025, Stellium Holdings Limited and the Senior Loan Noteholder and the Junior Loan Noteholder agreed to extend the existing loan note agreements. The loans notes repayment date has been amended from 31 May 2026 to 28 December 2028. All other terms of the loan note agreements are unchanged. During the year, the Company has commissioned an independent third party to carry out a valuation of its investments in the SV\u2019s, which valuation is still being finalized as at the date of the signing of these financial statements.
On the basis of the above, the Directors are of the opinion that the recent investment in Stellium Holdings Limited is a strong indication of its viability. In view of this, the extension of the existing loan note agreements and on the strength of the confirmations received from ERAM as the Calculation Agent of the SVs, the Stellium Notes are to continue being carried at their face value in these financial statements. In view of the substantial additional investment and also the extension of the notes to 28 December 2028, we do not envisage a material impact to the Solvency Capital Ratio (SCR) in the near future.
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Notes to the financial statements
13.Property, plant and equipment
ConsolidatedCompany
Land and buildingsOffice furniture, fittings and equipmentTotalLand and buildingOffice furniture, fittings and equipmentTotal
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Year ended 31 December 2025
Opening net book amount 5,656,51969,6805,726,1995,656,51960,2085,716,727
Additions19,64845,00264,65019,64837,80557,453
Revaluation for the year440,109-440,109440,109-440,109
Depreciation charge (143,458)(35,924)(179,382)(143,458)(32,690)(176,148)
Net book amount5,972,81878,7586,051,5765,972,81865,3236,038,141
At 31 December 2025
Revalued amount/Cost6,893,8391,771,1168,664,9556,893,8391,706,7498,600,588
Accumulated depreciation(921,021)(1,692,358)(2,613,379)(921,021)(1,641,426)(2,562,447)
Net book amount5,972,81878,7586,051,5765,972,81865,3236,038,141
ConsolidatedCompany
Land and buildingsOffice furniture, fittings and equipmentTotalLand and buildingOffice furniture, fittings and equipmentTotal
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Year ended 31 December 2024
Opening net book amount 3,537,01553,729 3,590,7443,537,01551,1863,588,201
Additions121,59653,411175,007121,59644,971166,567
Transfer from investment property2,137,892-2,137,8922,137,892-2,137,892
Depreciation charge (139,984)(37,460)(177,444)(139,984)(35,949)(175,933)
Net book amount5,656,51969,6805,726,1995,656,51960,2085,716,727
\u00a0
At 31 December 2024
Revalued amount/Cost6,434,0821,726,1148,160,1966,434,0821,668,9448,103,026
Accumulated depreciation(777,563)(1,656,434)(2,433,997)(777,563)(1,608,736)(2,386,299)
Net book amount5,656,51969,6805,726,1995,656,51960,2085,716,727
\u20ac1,984,515 (2024: \u20ac1,916,087) worth of office furniture, fittings and equipment assets are fully depreciated and are still in use.
During 2025, the Group and the Company have performed an external revaluation of property, plant and equipment. The Group and the Company have incurred an overall gain as the fair value was higher than the asset\u2019s carrying amount. Further detail about the valuation technique to derive the fair value less cost to sell is set out in Note 14. During 2024 the Group did not obtain any valuations from an independent professionally qualified valuer but the Group did an impairment assessment on all the properties and concluded that impairment was not required.
", "dimensions": { "concept": "ifrs-full:DisclosureOfPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923209": { "value": "
Notes to the financial statements
12.Leases
(a)Leases as the lessee (IFRS 16)
The Group leases property which generally run for a period of two years with the option to renew. Lease payments are subsequently renegotiated to reflect market rates.
(i)Right-of-use assets
Right-of-use asset related to leased properties that do not meet the definition of investment property are presented as a separate line item on the face of the Statement of Financial Position.
Consolidated and Company
20252024
\u20ac\u20ac
Balance on 1 January1,8479,925
Additions15,991-
Depreciation for the year(5,247)(8,078)
Balance on 31 December12,5911,847
(ii)Amounts recognised in profit or loss
Consolidated and Company
20252024
\u20ac\u20ac
Depreciation of right-of-use asset5,2478,078
Interest expense on lease liabilities404243
(iii)Amounts recognised in statement of cash flows
Consolidated and Company
20252024
\u20ac\u20ac
Total cash outflows for leases6,1577,776
(iv)Lease liability
The net value of the lease liability as at 31 December 2025 was \u20ac12,161 (2024: \u20ac1,924).
(a)Leases as the lessor (IFRS 16)
The Group leases out certain property. Note 14 sets out information about investment property. The Group has classified these leases as operating leases because they do not transfer substantially all the risks and rewards incidental to the ownership of the assets.
The following table sets out a maturity analysis of lease payments receivable, showing the undiscounted lease payments to be received after the reporting date.
Operating leases under IFRS 16
Consolidated and Company
20252024
\u20ac\u20ac
Less than one year 86,39772,213
One to two years36,868-
Two to three years--
123,26572,213
14.Investment property
Operating leases relate to the investment property owned by the Group with lease terms of between 1 to 5 years. The lessee does not have an option to purchase the property at the expiry of the lease period. The rental income earned, under operating leases, amounted to \u20ac104,455 (2024: \u20ac149,760).
", "dimensions": { "concept": "ifrs-full:DisclosureOfLeasesExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923208": { "value": "
Notes to the financial statements
11.Intangible assets
Consolidated
GoodwillComputer softwarePassporting assetTotal
\u20ac\u20ac\u20ac\u20ac
Year ended 31 December 2025
Opening carrying amount 311,5383,336,819460,1414,108,498
Additions-1,352,531187,7811,540,312
Reclassification to other assets (Note 17)-(1,020,890)-(1,020,890)
Impairment -(179,140)-(179,140)
Amortisation charge (Note 7)-(244,164)(111,724)(355,888)
Closing carrying amount 311,5383,245,156536,1984,092,892
At 31 December 2025
Cost 311,5386,041,474647,9227,000,934
Accumulated amortisation-(2,756,197)(111,724)(2,867,921)
Accumulated impairment-(40,121)-(40,121)
Net book amount 311,5383,245,156536,1984,092,892
Year ended 31 December 2024
Opening carrying amount 311,5383,003,390253,2653,568,193
Additions-1,278,283206,8761,485,159
Reclassification to other assets (Note 17)-(137,142)-(137,142)
Impairment-(303,610)-(303,610)
Amortisation charge (Note 7)-(504,101)-(504,101)
Closing carrying amount 311,5383,336,820460,1414,108,499
At 31 December 2024
Cost 311,5386,152,463460,1416,924,142
Accumulated amortisation-(2,512,032)-(2,512,032)
Accumulated impairment-(303,611)-(303,611)
Net book amount 311,5383,336,820460,1414,108,499
", "dimensions": { "concept": "ifrs-full:DisclosureOfIntangibleAssetsExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923207": { "value": "
Notes to the financial statements
11.Intangible assets
Consolidated
GoodwillComputer softwarePassporting assetTotal
\u20ac\u20ac\u20ac\u20ac
Year ended 31 December 2025
Opening carrying amount 311,5383,336,819460,1414,108,498
Additions-1,352,531187,7811,540,312
Reclassification to other assets (Note 17)-(1,020,890)-(1,020,890)
Impairment -(179,140)-(179,140)
Amortisation charge (Note 7)-(244,164)(111,724)(355,888)
Closing carrying amount 311,5383,245,156536,1984,092,892
At 31 December 2025
Cost 311,5386,041,474647,9227,000,934
Accumulated amortisation-(2,756,197)(111,724)(2,867,921)
Accumulated impairment-(40,121)-(40,121)
Net book amount 311,5383,245,156536,1984,092,892
Year ended 31 December 2024
Opening carrying amount 311,5383,003,390253,2653,568,193
Additions-1,278,283206,8761,485,159
Reclassification to other assets (Note 17)-(137,142)-(137,142)
Impairment-(303,610)-(303,610)
Amortisation charge (Note 7)-(504,101)-(504,101)
Closing carrying amount 311,5383,336,820460,1414,108,499
At 31 December 2024
Cost 311,5386,152,463460,1416,924,142
Accumulated amortisation-(2,512,032)-(2,512,032)
Accumulated impairment-(303,611)-(303,611)
Net book amount 311,5383,336,820460,1414,108,499
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Notes to the financial statements
11.Intangible assets
Consolidated
GoodwillComputer softwarePassporting assetTotal
\u20ac\u20ac\u20ac\u20ac
Year ended 31 December 2025
Opening carrying amount 311,5383,336,819460,1414,108,498
Additions-1,352,531187,7811,540,312
Reclassification to other assets (Note 17)-(1,020,890)-(1,020,890)
Impairment -(179,140)-(179,140)
Amortisation charge (Note 7)-(244,164)(111,724)(355,888)
Closing carrying amount 311,5383,245,156536,1984,092,892
At 31 December 2025
Cost 311,5386,041,474647,9227,000,934
Accumulated amortisation-(2,756,197)(111,724)(2,867,921)
Accumulated impairment-(40,121)-(40,121)
Net book amount 311,5383,245,156536,1984,092,892
Year ended 31 December 2024
Opening carrying amount 311,5383,003,390253,2653,568,193
Additions-1,278,283206,8761,485,159
Reclassification to other assets (Note 17)-(137,142)-(137,142)
Impairment-(303,610)-(303,610)
Amortisation charge (Note 7)-(504,101)-(504,101)
Closing carrying amount 311,5383,336,820460,1414,108,499
At 31 December 2024
Cost 311,5386,152,463460,1416,924,142
Accumulated amortisation-(2,512,032)-(2,512,032)
Accumulated impairment-(303,611)-(303,611)
Net book amount 311,5383,336,820460,1414,108,499
14.Investment property
Consolidated and Company
\u20ac
Year ended 31 December 2025
Opening net book amount 13,691,547
Additions65,836
Disposals(900,001)
Increase in fair value 31,891
Closing net book amount12,889,273
At 31 December 2025
Cost 2,086,790
Accumulated fair value gains 10,802,483
Net book amount 12,889,273
Year ended 31 December 2024
Opening net book amount 15,851,439
Reclassification to PPE(2,137,892)
Decrease in fair value (22,000)
Closing net book amount13,691,547
At 31 December 2024
Cost 2,284,414
Accumulated fair value gains 11,407,133
Net book amount 13,691,547
In estimating the fair value of the properties, the highest and best use of the properties is their current use. In accordance with the Group's accounting policy, the valuation of investment properties is assessed by the Board of Directors at the end of every reporting period. An impairment charge was approved by the Board of Directors and debited to profit or loss and is presented within \u2018Investment return and fair value movements\u2019.
17.Other assets
Consolidated and Company
20252024
\u20ac\u20ac
Year ended 31 December\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
Balance at 1 January 198,680 -
Additions-61,538
Reclassification from intangible asset (Note 11)1,020,890137,142
Impairment (198,680)-
Balance at 31 December1,020,890198,680
", "dimensions": { "concept": "ifrs-full:DisclosureOfImpairmentOfAssetsExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923205": { "value": "
Notes to the financial statements
11.Intangible assets
Consolidated
GoodwillComputer softwarePassporting assetTotal
\u20ac\u20ac\u20ac\u20ac
Year ended 31 December 2025
Opening carrying amount 311,5383,336,819460,1414,108,498
Additions-1,352,531187,7811,540,312
Reclassification to other assets (Note 17)-(1,020,890)-(1,020,890)
Impairment -(179,140)-(179,140)
Amortisation charge (Note 7)-(244,164)(111,724)(355,888)
Closing carrying amount 311,5383,245,156536,1984,092,892
At 31 December 2025
Cost 311,5386,041,474647,9227,000,934
Accumulated amortisation-(2,756,197)(111,724)(2,867,921)
Accumulated impairment-(40,121)-(40,121)
Net book amount 311,5383,245,156536,1984,092,892
Year ended 31 December 2024
Opening carrying amount 311,5383,003,390253,2653,568,193
Additions-1,278,283206,8761,485,159
Reclassification to other assets (Note 17)-(137,142)-(137,142)
Impairment-(303,610)-(303,610)
Amortisation charge (Note 7)-(504,101)-(504,101)
Closing carrying amount 311,5383,336,820460,1414,108,499
At 31 December 2024
Cost 311,5386,152,463460,1416,924,142
Accumulated amortisation-(2,512,032)-(2,512,032)
Accumulated impairment-(303,611)-(303,611)
Net book amount 311,5383,336,820460,1414,108,499
", "dimensions": { "concept": "ifrs-full:DisclosureOfGoodwillExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923204": { "value": "
Notes to the financial statements
11.Intangible assets
Consolidated
GoodwillComputer softwarePassporting assetTotal
\u20ac\u20ac\u20ac\u20ac
Year ended 31 December 2025
Opening carrying amount 311,5383,336,819460,1414,108,498
Additions-1,352,531187,7811,540,312
Reclassification to other assets (Note 17)-(1,020,890)-(1,020,890)
Impairment -(179,140)-(179,140)
Amortisation charge (Note 7)-(244,164)(111,724)(355,888)
Closing carrying amount 311,5383,245,156536,1984,092,892
At 31 December 2025
Cost 311,5386,041,474647,9227,000,934
Accumulated amortisation-(2,756,197)(111,724)(2,867,921)
Accumulated impairment-(40,121)-(40,121)
Net book amount 311,5383,245,156536,1984,092,892
Year ended 31 December 2024
Opening carrying amount 311,5383,003,390253,2653,568,193
Additions-1,278,283206,8761,485,159
Reclassification to other assets (Note 17)-(137,142)-(137,142)
Impairment-(303,610)-(303,610)
Amortisation charge (Note 7)-(504,101)-(504,101)
Closing carrying amount 311,5383,336,820460,1414,108,499
At 31 December 2024
Cost 311,5386,152,463460,1416,924,142
Accumulated amortisation-(2,512,032)-(2,512,032)
Accumulated impairment-(303,611)-(303,611)
Net book amount 311,5383,336,820460,1414,108,499
12.Leases
(a)Leases as the lessee (IFRS 16)
(ii)Amounts recognised in profit or loss
Consolidated and Company
20252024
\u20ac\u20ac
Depreciation of right-of-use asset5,2478,078
Interest expense on lease liabilities404243
13.Property, plant and equipment
ConsolidatedCompany
Land and buildingsOffice furniture, fittings and equipmentTotalLand and buildingOffice furniture, fittings and equipmentTotal
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Year ended 31 December 2025
Opening net book amount 5,656,51969,6805,726,1995,656,51960,2085,716,727
Additions19,64845,00264,65019,64837,80557,453
Revaluation for the year440,109-440,109440,109-440,109
Depreciation charge (143,458)(35,924)(179,382)(143,458)(32,690)(176,148)
Net book amount5,972,81878,7586,051,5765,972,81865,3236,038,141
At 31 December 2025
Revalued amount/Cost6,893,8391,771,1168,664,9556,893,8391,706,7498,600,588
Accumulated depreciation(921,021)(1,692,358)(2,613,379)(921,021)(1,641,426)(2,562,447)
Net book amount5,972,81878,7586,051,5765,972,81865,3236,038,141
ConsolidatedCompany
Land and buildingsOffice furniture, fittings and equipmentTotalLand and buildingOffice furniture, fittings and equipmentTotal
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Year ended 31 December 2024
Opening net book amount 3,537,01553,729 3,590,7443,537,01551,1863,588,201
Additions121,59653,411175,007121,59644,971166,567
Transfer from investment property2,137,892-2,137,8922,137,892-2,137,892
Depreciation charge (139,984)(37,460)(177,444)(139,984)(35,949)(175,933)
Net book amount5,656,51969,6805,726,1995,656,51960,2085,716,727
\u00a0
At 31 December 2024
Revalued amount/Cost6,434,0821,726,1148,160,1966,434,0821,668,9448,103,026
Accumulated depreciation(777,563)(1,656,434)(2,433,997)(777,563)(1,608,736)(2,386,299)
Net book amount5,656,51969,6805,726,1995,656,51960,2085,716,727
", "dimensions": { "concept": "ifrs-full:DisclosureOfDepreciationAndAmortisationExpenseExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923203": { "value": "
Notes to the financial statements
10.Directors\u2019 emoluments
All directors\u2019 emoluments are recharged by the intermediate parent company.
ConsolidatedCompany
2025202420252024
\u20ac\u20ac\u20ac\u20ac
Directors' fees239,783269,840226,238259,073
15.Investments in group undertakings
As at 31 December 2025 the consolidated financial statements include the following subsidiary undertaking:
Group undertakingRegistered officeClass of shares heldPercentage of shares held
20252024
LifeStar Health LimitedTestaferrata Street, Ta XbiexOrdinary \u2018A\u2019100%100%
The principal activity of LifeStar Health Limited is to carry on business of an agent in all classes of health insurance, in terms of the Insurance Intermediaries Act (Cap. 487 of the Laws of Malta). LifeStar Health Limited has also issued non-profit participating \u2018B\u2019 shares to other subscribers. The subscribers of such \u2018B\u2019 shares are not entitled to a share of profits generated by LifeStar Health Limited, and hence the Company is deemed to have 100% of ownership interest. The distribution of dividends by LifeStar Health Limited is restricted by the own funds requirements of the Insurance Intermediaries Act (Cap. 487 of the Laws of Malta).
18.Receivables, prepayments and accrued income
ConsolidatedCompany
2025202420252024
\u20ac\u20ac\u20ac\u20ac
Amounts due from intermediate parent (Note ii)6,994,3006,872,5586,994,3006,872,558
Amount receivable from subsidiary--291,952440,000
Amounts due from related parties (Note iii)5,931,9805,740,2665,670,7105,463,475
Other receivables (Note i and iv)102,020468,874102,020468,874
13,028,30013,081,69813,058,98213,244,907
ii.Amounts due from intermediate parent are secured, bearing interest at 3% or 4.5% and expected to be repaid in 10 years\u2019 time. The carrying amount is stated net of a provision of \u20ac146,748 (2024: \u20ac255,891).
The loans in question have been approved by the Malta Financial Services Authority.
The Directors are confident that such balances will be recovered within the stipulated time frame above.
iii.Amounts due from other related parties are secured and bear interest at 3% or 4.5% and as at 31 December 2025 the Directors expect these to be repaid in 5 and 10 years\u2019 time in accordance with the agreements. The carrying amount is stated net of a provision of \u20ac46,280 (2024: \u20ac129,383). Such balance has been carried forward prior to 1 January 2017.
Amounts due from intermediate parent and other related parties are non-current in nature, whilst the rest of the amounts are current in nature.
24.Payables, accruals and deferred income
ConsolidatedCompany
2025202420252024
\u20ac\u20ac\u20ac\u20ac
Amounts due to group undertaking8,0683,161--
Other payables154,673307,490130,081119,683
162,741310,651130,081119,683
Accruals and deferred income
- Accruals775,514532,558601,245370,381
- Bond interest accrued56,22056,22056,22156,220
- Deferred income345,433349,0556,95010,573
1,177,167937,833664,416437,174
At end of year1,339,9081,248,484794,497556,857
(ii)Amounts owed to group are unsecured and bear no interest. These balances are repayable on demand.
28.Related party transactions
All companies forming part of the LifeStar Group are considered by the directors to be related parties as these companies are also ultimately owned by LifeStar Holding p.l.c. Related parties that do not form part of the consolidated group include entities related by way of common directors and ultimate shareholders.
The following transactions were carried out by the Group with related parties:
ConsolidatedCompany
Year ended 31 December2025202420252024
\u20ac\u20ac\u20ac\u20ac
Interest income from loans to the immediate parent261,458262,174261,458262,174
Interest income from loans to other related undertakings136,308136,681136,308136,681
Management fees charged by a related undertaking604,686360,000404,600360,000
Recharge of expense1,852,922430,0001,463,809430,000
Shared service expense-699,635-699,635
Dividends received--200,000440,000
Key management personnel during 2025 and 2024 comprised of the Board of Directors and the Managing Director of the Group. Total remuneration paid by the Group to its key management personnel amounted to \u20ac749,619 (2024: \u20ac566,490).
Amounts owed by or to group undertakings and other related parties are disclosed in Notes 15, 18 and 24 to these financial statements.
The compensation to directors in 2025 and 2024 is disclosed in Note 10 to the financial statements.
29.Contingent liability
During 2020, the Company gave a guarantee in favour of Bank of Valletta for the amount of \u20ac3 million, to secure, jointly and severally with other related parties, a bank loan of the same amount granted by that bank to LifeStar Holding p.l.c.
At 31 December 2025, the balance outstanding on the loan in the books of LifeStar Holding p.l.c. amounted to \u20ac363,503 (2024: \u20ac961,483).
The directors assessed the impact of this guarantee and concluded that it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation and have therefore treated this as a contingent liability.
32.Statutory information
LifeStar Insurance p.l.c. is a public limited liability Group incorporated in Malta with registration number C29086. On 9 November 2020, Global Capital Life Insurance Limited was renamed and rebranded as LifeStar Insurance Limited. On 27 April 2021, the Company changed its status to a public limited liability company. The registered address of the Group is Testaferrata Street, Ta\u2019 Xbiex. The parent company of LifeStar Insurance p.l.c. is LifeStar Holding p.l.c, a company registered in Malta, with its registered address at Testaferrata Street, Ta\u2019 Xbiex.
At year end, the directors considered the ultimate controlling party to be Prof. Paolo Catalfamo who owns 99.99% (2024: 99.99%) of the issued share capital of Investar p.l.c., which is the single major shareholder owning directly 60.58% (2024: 60.58%) of the Company\u2019s intermediate parent company, LifeStar Holding p.l.c, and indirectly through shares held by Lifestar Asset Management Limited (previously known as Global Capital Financial Management Limited) (C 30053) as nominee in the Company\u2019s intermediate parent company, LifeStar Holding p.l.c, a further 30.81% (2024: 30.81%). LifeStar Holding p.l.c. owns directly 74.23% (2024: 74.15%) of LifeStar Insurance p.l.c. and is also the beneficial owner of 0.08% (2024: 0.08%) through shares held by LifeStar Asset Management Limited as nominee. Subsequent to year-end, the indirect shareholding of LifeStar Holding p.l.c. in the company increased to 75.40%.
Consolidated financial statements prepared by LifeStar Holding p.l.c. may be obtained from the Group\u2019s registered office.
", "dimensions": { "concept": "ifrs-full:DisclosureOfRelatedPartyExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923202": { "value": "
Notes to the financial statements
10.Directors\u2019 emoluments
All directors\u2019 emoluments are recharged by the intermediate parent company.
ConsolidatedCompany
2025202420252024
\u20ac\u20ac\u20ac\u20ac
Directors' fees239,783269,840226,238259,073
28.Related party transactions
Key management personnel during 2025 and 2024 comprised of the Board of Directors and the Managing Director of the Group. Total remuneration paid by the Group to its key management personnel amounted to \u20ac749,619 (2024: \u20ac566,490).
The compensation to directors in 2025 and 2024 is disclosed in Note 10 to the financial statements.
", "dimensions": { "concept": "ifrs-full:DisclosureOfInformationAboutKeyManagementPersonnelExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923201": { "value": "
Notes to the financial statements
7. Expenses by nature
ConsolidatedCompany
2025202420252024
\u20ac\u20ac\u20ac\u20ac
Professional fees1,606,9781,230,6621,562,3101,225,979
Management fees (Note 28)1,898,4091,130,4041,898,4091,130,404
Amortisation of intangible assets (Note 11)355,888504,101355,883504,101
IT related expenses397,435479,143290,517376,198
Commission and direct marketing costs8,886,7742,974,5878,766,1482,855,221
Depreciation of plant and machinery (Note 13)179,382177,444176,148175,933
Other expenses7,299,9915,400,9157,017,4785,213,310
Bank charges69,33160,59869,33160,598
Licences and insurance 187,673187,796187,673187,796
Office expense97,952142,15597,952142,155
Wages and salaries recharged from group undertaking3,066,2602,931,7092,178,0022,069,398
Investment management expense296,468286,732--
Short-term leases 43,19338,73814,22516,900
Provision for bad debt57,433-57,433-
Eliminations from application of IFRS 17(12,050,497)(5,367,899)(12,050,497)(5,367,899)
12,392,67010,177,08510,621,0128,590,094
10.Directors\u2019 emoluments
All directors\u2019 emoluments are recharged by the intermediate parent company.
ConsolidatedCompany
2025202420252024
\u20ac\u20ac\u20ac\u20ac
Directors' fees239,783269,840226,238259,073
28.Related party transactions
Key management personnel during 2025 and 2024 comprised of the Board of Directors and the Managing Director of the Group. Total remuneration paid by the Group to its key management personnel amounted to \u20ac749,619 (2024: \u20ac566,490).
", "dimensions": { "concept": "ifrs-full:DisclosureOfEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923200": { "value": "
Notes to the financial statements
9.Income tax credit
ConsolidatedCompany
20252024 20252024 (Restated)
\u20ac\u20ac\u20ac\u20ac
Current tax expense(52,422)(6,525)(73,763)(17,967)
Current tax on IFRS17 implementation-201,164-201,164
Deferred tax charge (Note 22)526,762308,925382,948312,744
Deferred tax on IFRS17 implementation-(201,164)-(201,164)
Income tax credit474,340(302,396)309,185(294,777)
No deferred tax was recognised in other comprehensive income during 2025 (2024: NIL).
In 2024, following the issuance of Legal Notice L.N. 334 of 2024, an adjustment of \u20ac201,164 was required to the tax payable and deferred tax balances. The adoption of this legal notice necessitated an amendment to the tax computation for the year and resulted in certain updates to tax classifications. The effect of such change did not have an impact in the results of the company and the group, but merely a reclassification between tax liability as aforementioned.
The tax on the Group\u2019s loss before tax differs from the theoretical amount that would arise using the basic tax rate as follows:
ConsolidatedCompany
20252024 20252024 (Restated)
\u20ac\u20ac\u20ac\u20ac
Loss before tax(1,630,322)(928,760)(821,202)(421,812)
Theoretical tax credit at 35%570,613325,066287,421147,634
Tax effect of:
Income taxed at lower rates(73,773)(12,207)(73,773)(12,207)
Adjustment for income not subject to tax748,74970,6981,050,206111,301
Group loss claimed119,198-119,198-
Disallowable expenses for tax purposes(1,069,864)42,731(1,351,968)45,265
Prior period adjustment 145,650---
Other33,767(123,892)278,1012,784
Tax credit474,340302,396309,185294,777
22.Deferred income tax
Deferred taxes are calculated on temporary differences under the balance sheet liability method using a principal tax rate ranging between 8% and 35% (2024: 8% and 35%). In particular, temporary differences on investment properties situated in Malta that have been owned by the Group since 1 January 2004 are calculated under the liability method using a principal tax rate of 8% of the carrying amount, while investment properties situated in Malta that had been acquired by the Group before 1 January 2004 are calculated under the liability method using a principal tax rate of 10% of the carrying amount. Deferred tax on temporary differences on investment properties situated outside Malta has been calculated based on tax rates that have been enacted or substantively enacted at the end of the reporting period.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to set off a current tax asset against a current tax liability and the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.
The movement on the deferred tax asset account is as follows:
ConsolidatedCompany
Year ended 31 December20252024 20252024
\u20ac\u20ac\u20ac\u20ac
At the beginning of the year1,705,9681,466,2431,718,8091,475,265
Reclassification to deferred tax liability96,826(73,304)111,594(69,485)
Other movement-2853285
Debited to profit and loss account (Note 9)240,947312,74482,364312,744
At end of year2,043,7411,705,9681,912,7701,718,809
Deferred income taxes are calculated on temporary differences under the liability method using a principal tax rate of 35% (2024: 35%).
The movement on the deferred tax liability account is as follows:
ConsolidatedCompany
Year ended 31 December20252024 20252024
\u20ac\u20ac\u20ac\u20ac
At the beginning of the year1,618,8691,487,1901,618,8691,487,190
Reclassification to deferred tax assets96,826(73,304)111,594(69,485)
Other movement(10)-(10)-
(Debited)/Credited to profit and loss account (Note 9)(285,815)204,983(300,584)201,164
At end of year1,429,8701,618,8691,429,8691,618,869
The net deferred taxation at the year-end comprises the following temporary differences:
ConsolidatedCompany
Year ended 31 December20252024 20252024
\u20ac\u20ac\u20ac\u20ac
Fair value losses on investments1,120,121908,3361,120,121908,336
Temporary differences on:
-property, plant and equipment72,936181,25587,705194,096
-provisions145,650---
-investment property(1,068,658)(1,143,324)(1,068,658)(1,143,324)
-Deferred tax on reclass of investment property to PPE(324,586)(324,586)(324,586)(324,586)
-leases unutilised under IFRS 16(36,626)(35,744)(36,626)(35,744)
-unutilised tax losses and capital allowances593,347616,377593,347616,377
-other111,687(115,215)111,595(115,215)
Net deferred income tax asset/(liability)613,87187,099482,89899,940
The directors consider that the above temporary differences are substantially non-current in nature.
", "dimensions": { "concept": "ifrs-full:DisclosureOfIncomeTaxExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923199": { "value": "
Notes to the financial statements
9.Income tax credit
ConsolidatedCompany
20252024 20252024 (Restated)
\u20ac\u20ac\u20ac\u20ac
Current tax expense(52,422)(6,525)(73,763)(17,967)
Current tax on IFRS17 implementation-201,164-201,164
Deferred tax charge (Note 22)526,762308,925382,948312,744
Deferred tax on IFRS17 implementation-(201,164)-(201,164)
Income tax credit474,340(302,396)309,185(294,777)
No deferred tax was recognised in other comprehensive income during 2025 (2024: NIL).
In 2024, following the issuance of Legal Notice L.N. 334 of 2024, an adjustment of \u20ac201,164 was required to the tax payable and deferred tax balances. The adoption of this legal notice necessitated an amendment to the tax computation for the year and resulted in certain updates to tax classifications. The effect of such change did not have an impact in the results of the company and the group, but merely a reclassification between tax liability as aforementioned.
The tax on the Group\u2019s loss before tax differs from the theoretical amount that would arise using the basic tax rate as follows:
ConsolidatedCompany
20252024 20252024 (Restated)
\u20ac\u20ac\u20ac\u20ac
Loss before tax(1,630,322)(928,760)(821,202)(421,812)
Theoretical tax credit at 35%570,613325,066287,421147,634
Tax effect of:
Income taxed at lower rates(73,773)(12,207)(73,773)(12,207)
Adjustment for income not subject to tax748,74970,6981,050,206111,301
Group loss claimed119,198-119,198-
Disallowable expenses for tax purposes(1,069,864)42,731(1,351,968)45,265
Prior period adjustment 145,650---
Other33,767(123,892)278,1012,784
Tax credit474,340302,396309,185294,777
22.Deferred income tax
Deferred taxes are calculated on temporary differences under the balance sheet liability method using a principal tax rate ranging between 8% and 35% (2024: 8% and 35%). In particular, temporary differences on investment properties situated in Malta that have been owned by the Group since 1 January 2004 are calculated under the liability method using a principal tax rate of 8% of the carrying amount, while investment properties situated in Malta that had been acquired by the Group before 1 January 2004 are calculated under the liability method using a principal tax rate of 10% of the carrying amount. Deferred tax on temporary differences on investment properties situated outside Malta has been calculated based on tax rates that have been enacted or substantively enacted at the end of the reporting period.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to set off a current tax asset against a current tax liability and the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.
The movement on the deferred tax asset account is as follows:
ConsolidatedCompany
Year ended 31 December20252024 20252024
\u20ac\u20ac\u20ac\u20ac
At the beginning of the year1,705,9681,466,2431,718,8091,475,265
Reclassification to deferred tax liability96,826(73,304)111,594(69,485)
Other movement-2853285
Debited to profit and loss account (Note 9)240,947312,74482,364312,744
At end of year2,043,7411,705,9681,912,7701,718,809
Deferred income taxes are calculated on temporary differences under the liability method using a principal tax rate of 35% (2024: 35%).
The movement on the deferred tax liability account is as follows:
ConsolidatedCompany
Year ended 31 December20252024 20252024
\u20ac\u20ac\u20ac\u20ac
At the beginning of the year1,618,8691,487,1901,618,8691,487,190
Reclassification to deferred tax assets96,826(73,304)111,594(69,485)
Other movement(10)-(10)-
(Debited)/Credited to profit and loss account (Note 9)(285,815)204,983(300,584)201,164
At end of year1,429,8701,618,8691,429,8691,618,869
The net deferred taxation at the year-end comprises the following temporary differences:
ConsolidatedCompany
Year ended 31 December20252024 20252024
\u20ac\u20ac\u20ac\u20ac
Fair value losses on investments1,120,121908,3361,120,121908,336
Temporary differences on:
-property, plant and equipment72,936181,25587,705194,096
-provisions145,650---
-investment property(1,068,658)(1,143,324)(1,068,658)(1,143,324)
-Deferred tax on reclass of investment property to PPE(324,586)(324,586)(324,586)(324,586)
-leases unutilised under IFRS 16(36,626)(35,744)(36,626)(35,744)
-unutilised tax losses and capital allowances593,347616,377593,347616,377
-other111,687(115,215)111,595(115,215)
Net deferred income tax asset/(liability)613,87187,099482,89899,940
The directors consider that the above temporary differences are substantially non-current in nature.
", "dimensions": { "concept": "ifrs-full:DisclosureOfDeferredTaxesExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923198": { "value": "
Notes to the financial statements
8.Finance costs
Consolidated and Company
20252024
\u20ac\u20ac
Interest expense on bonds97,25297,252
", "dimensions": { "concept": "ifrs-full:DisclosureOfBorrowingCostsExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923197": { "value": "
Notes to the financial statements
7. Expenses by nature
ConsolidatedCompany
2025202420252024
\u20ac\u20ac\u20ac\u20ac
Professional fees1,606,9781,230,6621,562,3101,225,979
Management fees (Note 28)1,898,4091,130,4041,898,4091,130,404
Amortisation of intangible assets (Note 11)355,888504,101355,883504,101
IT related expenses397,435479,143290,517376,198
Commission and direct marketing costs8,886,7742,974,5878,766,1482,855,221
Depreciation of plant and machinery (Note 13)179,382177,444176,148175,933
Other expenses7,299,9915,400,9157,017,4785,213,310
Bank charges69,33160,59869,33160,598
Licences and insurance 187,673187,796187,673187,796
Office expense97,952142,15597,952142,155
Wages and salaries recharged from group undertaking3,066,2602,931,7092,178,0022,069,398
Investment management expense296,468286,732--
Short-term leases 43,19338,73814,22516,900
Provision for bad debt57,433-57,433-
Eliminations from application of IFRS 17(12,050,497)(5,367,899)(12,050,497)(5,367,899)
12,392,67010,177,08510,621,0128,590,094
ConsolidatedCompany
2025202420252024
\u20ac\u20ac\u20ac\u20ac
Amounts attributed to insurance acquisition cash flows incurred during the year(8,249,575)(3,162,329)(8,249,575)(3,162,329)
Amortisation of insurance acquisition cash flows1,018,257366,9021,018,257366,902
Represented by:
Insurance service expense4,915,1383,201,3724,915,1383,201,372
Other operating expenses7,477,5326,975,7135,705,8745,388,722
Total12,392,67010,177,08510,621,0128,590,094
Auditor\u2019s remuneration for the current financial year amounted to \u20ac 175,500 (2024: \u20ac164,500). Other fees payable to the auditor comprise \u20ac35,000 (2024: \u20ac32,500) for other assurance services and \u20ac2,580 (2024: \u20ac2,580) for tax services.
", "dimensions": { "concept": "ifrs-full:DisclosureOfGeneralAndAdministrativeExpenseExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923196": { "value": "
Notes to the financial statements
7. Expenses by nature
ConsolidatedCompany
2025202420252024
\u20ac\u20ac\u20ac\u20ac
Professional fees1,606,9781,230,6621,562,3101,225,979
Management fees (Note 28)1,898,4091,130,4041,898,4091,130,404
Amortisation of intangible assets (Note 11)355,888504,101355,883504,101
IT related expenses397,435479,143290,517376,198
Commission and direct marketing costs8,886,7742,974,5878,766,1482,855,221
Depreciation of plant and machinery (Note 13)179,382177,444176,148175,933
Other expenses7,299,9915,400,9157,017,4785,213,310
Bank charges69,33160,59869,33160,598
Licences and insurance 187,673187,796187,673187,796
Office expense97,952142,15597,952142,155
Wages and salaries recharged from group undertaking3,066,2602,931,7092,178,0022,069,398
Investment management expense296,468286,732--
Short-term leases 43,19338,73814,22516,900
Provision for bad debt57,433-57,433-
Eliminations from application of IFRS 17(12,050,497)(5,367,899)(12,050,497)(5,367,899)
12,392,67010,177,08510,621,0128,590,094
ConsolidatedCompany
2025202420252024
\u20ac\u20ac\u20ac\u20ac
Amounts attributed to insurance acquisition cash flows incurred during the year(8,249,575)(3,162,329)(8,249,575)(3,162,329)
Amortisation of insurance acquisition cash flows1,018,257366,9021,018,257366,902
Represented by:
Insurance service expense4,915,1383,201,3724,915,1383,201,372
Other operating expenses7,477,5326,975,7135,705,8745,388,722
Total12,392,67010,177,08510,621,0128,590,094
Auditor\u2019s remuneration for the current financial year amounted to \u20ac 175,500 (2024: \u20ac164,500). Other fees payable to the auditor comprise \u20ac35,000 (2024: \u20ac32,500) for other assurance services and \u20ac2,580 (2024: \u20ac2,580) for tax services.
", "dimensions": { "concept": "ifrs-full:DisclosureOfExpensesByNatureExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923195": { "value": "
Notes to the financial statements
7. Expenses by nature
Auditor\u2019s remuneration for the current financial year amounted to \u20ac 175,500 (2024: \u20ac164,500). Other fees payable to the auditor comprise \u20ac35,000 (2024: \u20ac32,500) for other assurance services and \u20ac2,580 (2024: \u20ac2,580) for tax services.
", "dimensions": { "concept": "ifrs-full:DisclosureOfAuditorsRemunerationExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923194": { "value": "
Notes to the financial statements
5.Commissions and fees receivable
Revenue represents the commissions receivable by LifeStar Health in respect of premia written relating to business generated during the year.
This includes profit commission earned during the year, which is determined on the basis of the estimated performance of business underwritten during the same period. This basis may change significantly once the insurance principal finalises its profit for the underwriting year under review. In view of this, the actual profit commission might be different from the estimated profit commission calculated as at the end of the reporting period.
Consolidated
20252024
\u20ac\u20ac
Commission and fees receivable2,112,3881,759,510
", "dimensions": { "concept": "ifrs-full:DisclosureOfFeeAndCommissionIncomeExpenseExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923193": { "value": "
Notes to the financial statements
3.Particulars of business
3.4Investment income and net insurance financial result
The tables below present analysis of net investment income and net insurance finance income/(expenses) recognised in profit and loss and OCI in the period:
Consolidated and Company
2025NON-LINKED WITH PROFITSPENSIONVARIABLE LIFEPROTECTIONSICKNESS & ACCIDENTPASSPORTINGTOTAL
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Insurance finance expenses/(income) from insurance contracts issued
Changes in fair value of underlying assets measured under VFA1,159,0641,094,5502,207,580---4,461,194
Interest accreted---(83,114)(17,997)(71,853)(172,964)
Effect of changes in interest rates and other financial assumptions---(77,634)9,387(186,690)(254,937)
Effect of changes in free cash flow at current rates when CSM is unlocked at locked-in rates---188,005(1,300)(128,563)58,142
Total insurance finance expenses/(income) from insurance contracts issued recognised in P&L1,159,0641,094,5502,207,58027,257(9,910)(387,106)4,091,435
LIFE REINSURANCE PROTECTIONLIFE REINSURANCEI INVESTMENTLIFE REINSURANCE PASSPORTINGTOTAL
\u20ac\u20ac\u20ac\u20ac
Finance income/(expenses) from reinsurance contracts held
Interest accreted 45,89815,844(2,642)59,100
Effect of changes in interest rates and other financial assumptions(167,666)(81,160)144,643(104,183)
Effect of changes in free cash flow at current rates when CSM is unlocked at locked-in rates191,96375,323(96,334)170,952
Total finance income from reinsurance contracts held recognised in P&L70,19510,00745,667125,869
The tables below present analysis of net investment income and net insurance finance income/(expenses) recognised in profit and loss and OCI in the period:
Consolidated and Company
2024NON- LINKED WITH PROFITSPENSIONVARIABLE LIFEPROTECTIONSICKNESS & ACCIDENTPASSPORTINGTOTAL
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Insurance finance expenses/(income) from insurance contracts issued
Changes in fair value of underlying assets measured under VFA1,174,134 978,846 10,334,619 ---12,487,599
Interest accreted---(185,836)(31,253)(6,534)(223,623)
Effect of changes in interest rates and other financial assumptions---30,253 2,941 7,716 40,910
Effect of changes in free cash flow at current rates when CSM is unlocked at locked-in rates---(9,881)(1,087)-(10,968)
Total insurance finance expenses/(income) from insurance contracts issued recognised in P&L1,174,134 978,846 10,334,619 (165,464)(29,399)1,182 12,293,918
LIFE REINSURANCE PROTECTIONLIFE REINSURANCE INVESTMENTLIFE REINSURANCE PASSPORTINGTOTAL
\u20ac\u20ac\u20ac\u20ac
Finance income/(expenses) from reinsurance contracts held
Interest accreted 75,449 28,264 (823)102,890
Effect of changes in interest rates and other financial assumptions8,630 8,775 (1,092)16,313
Effect of changes in free cash flow at current rates when CSM is unlocked at locked-in rates15,445 14,746 -30,191
Total finance income/(expenses) from reinsurance contracts held recognised in P&L99,52451,785(1,915)149,394
4.Investment return and fair value movements
ConsolidatedCompany
2025202420252024(As Restated)
\u20ac\u20ac\u20ac\u20ac
Investment income
Rental income from investment property104,455149,760104,455149,760
Dividends received from:
-subsidiary--307,692583,170
-investments at fair value through profit or loss728,089785,185728,089785,185
Interest income from investments at fair value through profit or loss 579,241664,550579,241664,550
Other investment losses(218,406)93,147(218,405)93,147
1,193,3791,692,6421,501,0722,275,812
Movement in fair value
Net fair value (loss)/gain on investment property 31,891(22,000)31,891(22,000)
Net fair value gain on investments \u2013 equity and collective investment schemes4,176,77411,987,6485,038,07912,103,657
4,208,66511,965,6485,069,97012,081,657
Net investment income5,402,04413,658,2906,571,04214,357,469
6.Interest income from financial assets at amortised cost
ConsolidatedCompany
2025202420252024
\u20ac\u20ac\u20ac\u20ac
Interest receivable from:
-other loans and receivables 308,703253,211308,703253,211
-related companies397,766398,855397,766398,855
Total interest income706,469652,066706,469652,066
", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestIncomeExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923192": { "value": "
Notes to the financial statements
3.Particulars of business
3.4Investment income and net insurance financial result
The tables below present analysis of net investment income and net insurance finance income/(expenses) recognised in profit and loss and OCI in the period:
Consolidated and Company
2025NON-LINKED WITH PROFITSPENSIONVARIABLE LIFEPROTECTIONSICKNESS & ACCIDENTPASSPORTINGTOTAL
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Insurance finance expenses/(income) from insurance contracts issued
Changes in fair value of underlying assets measured under VFA1,159,0641,094,5502,207,580---4,461,194
Interest accreted---(83,114)(17,997)(71,853)(172,964)
Effect of changes in interest rates and other financial assumptions---(77,634)9,387(186,690)(254,937)
Effect of changes in free cash flow at current rates when CSM is unlocked at locked-in rates---188,005(1,300)(128,563)58,142
Total insurance finance expenses/(income) from insurance contracts issued recognised in P&L1,159,0641,094,5502,207,58027,257(9,910)(387,106)4,091,435
LIFE REINSURANCE PROTECTIONLIFE REINSURANCEI INVESTMENTLIFE REINSURANCE PASSPORTINGTOTAL
\u20ac\u20ac\u20ac\u20ac
Finance income/(expenses) from reinsurance contracts held
Interest accreted 45,89815,844(2,642)59,100
Effect of changes in interest rates and other financial assumptions(167,666)(81,160)144,643(104,183)
Effect of changes in free cash flow at current rates when CSM is unlocked at locked-in rates191,96375,323(96,334)170,952
Total finance income from reinsurance contracts held recognised in P&L70,19510,00745,667125,869
The tables below present analysis of net investment income and net insurance finance income/(expenses) recognised in profit and loss and OCI in the period:
Consolidated and Company
2024NON- LINKED WITH PROFITSPENSIONVARIABLE LIFEPROTECTIONSICKNESS & ACCIDENTPASSPORTINGTOTAL
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Insurance finance expenses/(income) from insurance contracts issued
Changes in fair value of underlying assets measured under VFA1,174,134 978,846 10,334,619 ---12,487,599
Interest accreted---(185,836)(31,253)(6,534)(223,623)
Effect of changes in interest rates and other financial assumptions---30,253 2,941 7,716 40,910
Effect of changes in free cash flow at current rates when CSM is unlocked at locked-in rates---(9,881)(1,087)-(10,968)
Total insurance finance expenses/(income) from insurance contracts issued recognised in P&L1,174,134 978,846 10,334,619 (165,464)(29,399)1,182 12,293,918
LIFE REINSURANCE PROTECTIONLIFE REINSURANCE INVESTMENTLIFE REINSURANCE PASSPORTINGTOTAL
\u20ac\u20ac\u20ac\u20ac
Finance income/(expenses) from reinsurance contracts held
Interest accreted 75,449 28,264 (823)102,890
Effect of changes in interest rates and other financial assumptions8,630 8,775 (1,092)16,313
Effect of changes in free cash flow at current rates when CSM is unlocked at locked-in rates15,445 14,746 -30,191
Total finance income/(expenses) from reinsurance contracts held recognised in P&L99,52451,785(1,915)149,394
4.Investment return and fair value movements
ConsolidatedCompany
2025202420252024(As Restated)
\u20ac\u20ac\u20ac\u20ac
Investment income
Rental income from investment property104,455149,760104,455149,760
Dividends received from:
-subsidiary--307,692583,170
-investments at fair value through profit or loss728,089785,185728,089785,185
Interest income from investments at fair value through profit or loss 579,241664,550579,241664,550
Other investment losses(218,406)93,147(218,405)93,147
1,193,3791,692,6421,501,0722,275,812
Movement in fair value
Net fair value (loss)/gain on investment property 31,891(22,000)31,891(22,000)
Net fair value gain on investments \u2013 equity and collective investment schemes4,176,77411,987,6485,038,07912,103,657
4,208,66511,965,6485,069,97012,081,657
Net investment income5,402,04413,658,2906,571,04214,357,469
6.Interest income from financial assets at amortised cost
ConsolidatedCompany
2025202420252024
\u20ac\u20ac\u20ac\u20ac
Interest receivable from:
-other loans and receivables 308,703253,211308,703253,211
-related companies397,766398,855397,766398,855
Total interest income706,469652,066706,469652,066
8.Finance costs
Consolidated and Company
20252024
\u20ac\u20ac
Interest expense on bonds97,25297,252
", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestIncomeExpenseExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923191": { "value": "
Notes to the financial statements
3.Particulars of business
3.4Investment income and net insurance financial result
The tables below present analysis of net investment income and net insurance finance income/(expenses) recognised in profit and loss and OCI in the period:
Consolidated and Company
2025NON-LINKED WITH PROFITSPENSIONVARIABLE LIFEPROTECTIONSICKNESS & ACCIDENTPASSPORTINGTOTAL
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Insurance finance expenses/(income) from insurance contracts issued
Changes in fair value of underlying assets measured under VFA1,159,0641,094,5502,207,580---4,461,194
Interest accreted---(83,114)(17,997)(71,853)(172,964)
Effect of changes in interest rates and other financial assumptions---(77,634)9,387(186,690)(254,937)
Effect of changes in free cash flow at current rates when CSM is unlocked at locked-in rates---188,005(1,300)(128,563)58,142
Total insurance finance expenses/(income) from insurance contracts issued recognised in P&L1,159,0641,094,5502,207,58027,257(9,910)(387,106)4,091,435
LIFE REINSURANCE PROTECTIONLIFE REINSURANCEI INVESTMENTLIFE REINSURANCE PASSPORTINGTOTAL
\u20ac\u20ac\u20ac\u20ac
Finance income/(expenses) from reinsurance contracts held
Interest accreted 45,89815,844(2,642)59,100
Effect of changes in interest rates and other financial assumptions(167,666)(81,160)144,643(104,183)
Effect of changes in free cash flow at current rates when CSM is unlocked at locked-in rates191,96375,323(96,334)170,952
Total finance income from reinsurance contracts held recognised in P&L70,19510,00745,667125,869
The tables below present analysis of net investment income and net insurance finance income/(expenses) recognised in profit and loss and OCI in the period:
Consolidated and Company
2024NON- LINKED WITH PROFITSPENSIONVARIABLE LIFEPROTECTIONSICKNESS & ACCIDENTPASSPORTINGTOTAL
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Insurance finance expenses/(income) from insurance contracts issued
Changes in fair value of underlying assets measured under VFA1,174,134 978,846 10,334,619 ---12,487,599
Interest accreted---(185,836)(31,253)(6,534)(223,623)
Effect of changes in interest rates and other financial assumptions---30,253 2,941 7,716 40,910
Effect of changes in free cash flow at current rates when CSM is unlocked at locked-in rates---(9,881)(1,087)-(10,968)
Total insurance finance expenses/(income) from insurance contracts issued recognised in P&L1,174,134 978,846 10,334,619 (165,464)(29,399)1,182 12,293,918
LIFE REINSURANCE PROTECTIONLIFE REINSURANCE INVESTMENTLIFE REINSURANCE PASSPORTINGTOTAL
\u20ac\u20ac\u20ac\u20ac
Finance income/(expenses) from reinsurance contracts held
Interest accreted 75,449 28,264 (823)102,890
Effect of changes in interest rates and other financial assumptions8,630 8,775 (1,092)16,313
Effect of changes in free cash flow at current rates when CSM is unlocked at locked-in rates15,445 14,746 -30,191
Total finance income/(expenses) from reinsurance contracts held recognised in P&L99,52451,785(1,915)149,394
8.Finance costs
Consolidated and Company
20252024
\u20ac\u20ac
Interest expense on bonds97,25297,252
", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestExpenseExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923190": { "value": "
Notes to the financial statements
3.Particulars of business
3.4Investment income and net insurance financial result
The tables below present analysis of net investment income and net insurance finance income/(expenses) recognised in profit and loss and OCI in the period:
Consolidated and Company
2025NON-LINKED WITH PROFITSPENSIONVARIABLE LIFEPROTECTIONSICKNESS & ACCIDENTPASSPORTINGTOTAL
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Insurance finance expenses/(income) from insurance contracts issued
Changes in fair value of underlying assets measured under VFA1,159,0641,094,5502,207,580---4,461,194
Interest accreted---(83,114)(17,997)(71,853)(172,964)
Effect of changes in interest rates and other financial assumptions---(77,634)9,387(186,690)(254,937)
Effect of changes in free cash flow at current rates when CSM is unlocked at locked-in rates---188,005(1,300)(128,563)58,142
Total insurance finance expenses/(income) from insurance contracts issued recognised in P&L1,159,0641,094,5502,207,58027,257(9,910)(387,106)4,091,435
LIFE REINSURANCE PROTECTIONLIFE REINSURANCEI INVESTMENTLIFE REINSURANCE PASSPORTINGTOTAL
\u20ac\u20ac\u20ac\u20ac
Finance income/(expenses) from reinsurance contracts held
Interest accreted 45,89815,844(2,642)59,100
Effect of changes in interest rates and other financial assumptions(167,666)(81,160)144,643(104,183)
Effect of changes in free cash flow at current rates when CSM is unlocked at locked-in rates191,96375,323(96,334)170,952
Total finance income from reinsurance contracts held recognised in P&L70,19510,00745,667125,869
The tables below present analysis of net investment income and net insurance finance income/(expenses) recognised in profit and loss and OCI in the period:
Consolidated and Company
2024NON- LINKED WITH PROFITSPENSIONVARIABLE LIFEPROTECTIONSICKNESS & ACCIDENTPASSPORTINGTOTAL
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Insurance finance expenses/(income) from insurance contracts issued
Changes in fair value of underlying assets measured under VFA1,174,134 978,846 10,334,619 ---12,487,599
Interest accreted---(185,836)(31,253)(6,534)(223,623)
Effect of changes in interest rates and other financial assumptions---30,253 2,941 7,716 40,910
Effect of changes in free cash flow at current rates when CSM is unlocked at locked-in rates---(9,881)(1,087)-(10,968)
Total insurance finance expenses/(income) from insurance contracts issued recognised in P&L1,174,134 978,846 10,334,619 (165,464)(29,399)1,182 12,293,918
LIFE REINSURANCE PROTECTIONLIFE REINSURANCE INVESTMENTLIFE REINSURANCE PASSPORTINGTOTAL
\u20ac\u20ac\u20ac\u20ac
Finance income/(expenses) from reinsurance contracts held
Interest accreted 75,449 28,264 (823)102,890
Effect of changes in interest rates and other financial assumptions8,630 8,775 (1,092)16,313
Effect of changes in free cash flow at current rates when CSM is unlocked at locked-in rates15,445 14,746 -30,191
Total finance income/(expenses) from reinsurance contracts held recognised in P&L99,52451,785(1,915)149,394
4.Investment return and fair value movements
ConsolidatedCompany
2025202420252024(As Restated)
\u20ac\u20ac\u20ac\u20ac
Investment income
Rental income from investment property104,455149,760104,455149,760
Dividends received from:
-subsidiary--307,692583,170
-investments at fair value through profit or loss728,089785,185728,089785,185
Interest income from investments at fair value through profit or loss 579,241664,550579,241664,550
Other investment losses(218,406)93,147(218,405)93,147
1,193,3791,692,6421,501,0722,275,812
Movement in fair value
Net fair value (loss)/gain on investment property 31,891(22,000)31,891(22,000)
Net fair value gain on investments \u2013 equity and collective investment schemes4,176,77411,987,6485,038,07912,103,657
4,208,66511,965,6485,069,97012,081,657
Net investment income5,402,04413,658,2906,571,04214,357,469
6.Interest income from financial assets at amortised cost
ConsolidatedCompany
2025202420252024
\u20ac\u20ac\u20ac\u20ac
Interest receivable from:
-other loans and receivables 308,703253,211308,703253,211
-related companies397,766398,855397,766398,855
Total interest income706,469652,066706,469652,066
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceIncomeExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923189": { "value": "
Notes to the financial statements
3.Particulars of business
3.4Investment income and net insurance financial result
The tables below present analysis of net investment income and net insurance finance income/(expenses) recognised in profit and loss and OCI in the period:
Consolidated and Company
2025NON-LINKED WITH PROFITSPENSIONVARIABLE LIFEPROTECTIONSICKNESS & ACCIDENTPASSPORTINGTOTAL
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Insurance finance expenses/(income) from insurance contracts issued
Changes in fair value of underlying assets measured under VFA1,159,0641,094,5502,207,580---4,461,194
Interest accreted---(83,114)(17,997)(71,853)(172,964)
Effect of changes in interest rates and other financial assumptions---(77,634)9,387(186,690)(254,937)
Effect of changes in free cash flow at current rates when CSM is unlocked at locked-in rates---188,005(1,300)(128,563)58,142
Total insurance finance expenses/(income) from insurance contracts issued recognised in P&L1,159,0641,094,5502,207,58027,257(9,910)(387,106)4,091,435
LIFE REINSURANCE PROTECTIONLIFE REINSURANCEI INVESTMENTLIFE REINSURANCE PASSPORTINGTOTAL
\u20ac\u20ac\u20ac\u20ac
Finance income/(expenses) from reinsurance contracts held
Interest accreted 45,89815,844(2,642)59,100
Effect of changes in interest rates and other financial assumptions(167,666)(81,160)144,643(104,183)
Effect of changes in free cash flow at current rates when CSM is unlocked at locked-in rates191,96375,323(96,334)170,952
Total finance income from reinsurance contracts held recognised in P&L70,19510,00745,667125,869
The tables below present analysis of net investment income and net insurance finance income/(expenses) recognised in profit and loss and OCI in the period:
Consolidated and Company
2024NON- LINKED WITH PROFITSPENSIONVARIABLE LIFEPROTECTIONSICKNESS & ACCIDENTPASSPORTINGTOTAL
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Insurance finance expenses/(income) from insurance contracts issued
Changes in fair value of underlying assets measured under VFA1,174,134 978,846 10,334,619 ---12,487,599
Interest accreted---(185,836)(31,253)(6,534)(223,623)
Effect of changes in interest rates and other financial assumptions---30,253 2,941 7,716 40,910
Effect of changes in free cash flow at current rates when CSM is unlocked at locked-in rates---(9,881)(1,087)-(10,968)
Total insurance finance expenses/(income) from insurance contracts issued recognised in P&L1,174,134 978,846 10,334,619 (165,464)(29,399)1,182 12,293,918
LIFE REINSURANCE PROTECTIONLIFE REINSURANCE INVESTMENTLIFE REINSURANCE PASSPORTINGTOTAL
\u20ac\u20ac\u20ac\u20ac
Finance income/(expenses) from reinsurance contracts held
Interest accreted 75,449 28,264 (823)102,890
Effect of changes in interest rates and other financial assumptions8,630 8,775 (1,092)16,313
Effect of changes in free cash flow at current rates when CSM is unlocked at locked-in rates15,445 14,746 -30,191
Total finance income/(expenses) from reinsurance contracts held recognised in P&L99,52451,785(1,915)149,394
4.Investment return and fair value movements
ConsolidatedCompany
2025202420252024(As Restated)
\u20ac\u20ac\u20ac\u20ac
Investment income
Rental income from investment property104,455149,760104,455149,760
Dividends received from:
-subsidiary--307,692583,170
-investments at fair value through profit or loss728,089785,185728,089785,185
Interest income from investments at fair value through profit or loss 579,241664,550579,241664,550
Other investment losses(218,406)93,147(218,405)93,147
1,193,3791,692,6421,501,0722,275,812
6.Interest income from financial assets at amortised cost
ConsolidatedCompany
2025202420252024
\u20ac\u20ac\u20ac\u20ac
Interest receivable from:
-other loans and receivables 308,703253,211308,703253,211
-related companies397,766398,855397,766398,855
Total interest income706,469652,066706,469652,066
8.Finance costs
Consolidated and Company
20252024
\u20ac\u20ac
Interest expense on bonds97,25297,252
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceIncomeExpenseExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923188": { "value": "
Notes to the financial statements
3.Particulars of business
3.4Investment income and net insurance financial result
The tables below present analysis of net investment income and net insurance finance income/(expenses) recognised in profit and loss and OCI in the period:
Consolidated and Company
2025NON-LINKED WITH PROFITSPENSIONVARIABLE LIFEPROTECTIONSICKNESS & ACCIDENTPASSPORTINGTOTAL
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Insurance finance expenses/(income) from insurance contracts issued
Changes in fair value of underlying assets measured under VFA1,159,0641,094,5502,207,580---4,461,194
Interest accreted---(83,114)(17,997)(71,853)(172,964)
Effect of changes in interest rates and other financial assumptions---(77,634)9,387(186,690)(254,937)
Effect of changes in free cash flow at current rates when CSM is unlocked at locked-in rates---188,005(1,300)(128,563)58,142
Total insurance finance expenses/(income) from insurance contracts issued recognised in P&L1,159,0641,094,5502,207,58027,257(9,910)(387,106)4,091,435
LIFE REINSURANCE PROTECTIONLIFE REINSURANCEI INVESTMENTLIFE REINSURANCE PASSPORTINGTOTAL
\u20ac\u20ac\u20ac\u20ac
Finance income/(expenses) from reinsurance contracts held
Interest accreted 45,89815,844(2,642)59,100
Effect of changes in interest rates and other financial assumptions(167,666)(81,160)144,643(104,183)
Effect of changes in free cash flow at current rates when CSM is unlocked at locked-in rates191,96375,323(96,334)170,952
Total finance income from reinsurance contracts held recognised in P&L70,19510,00745,667125,869
The tables below present analysis of net investment income and net insurance finance income/(expenses) recognised in profit and loss and OCI in the period:
Consolidated and Company
2024NON- LINKED WITH PROFITSPENSIONVARIABLE LIFEPROTECTIONSICKNESS & ACCIDENTPASSPORTINGTOTAL
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Insurance finance expenses/(income) from insurance contracts issued
Changes in fair value of underlying assets measured under VFA1,174,134 978,846 10,334,619 ---12,487,599
Interest accreted---(185,836)(31,253)(6,534)(223,623)
Effect of changes in interest rates and other financial assumptions---30,253 2,941 7,716 40,910
Effect of changes in free cash flow at current rates when CSM is unlocked at locked-in rates---(9,881)(1,087)-(10,968)
Total insurance finance expenses/(income) from insurance contracts issued recognised in P&L1,174,134 978,846 10,334,619 (165,464)(29,399)1,182 12,293,918
LIFE REINSURANCE PROTECTIONLIFE REINSURANCE INVESTMENTLIFE REINSURANCE PASSPORTINGTOTAL
\u20ac\u20ac\u20ac\u20ac
Finance income/(expenses) from reinsurance contracts held
Interest accreted 75,449 28,264 (823)102,890
Effect of changes in interest rates and other financial assumptions8,630 8,775 (1,092)16,313
Effect of changes in free cash flow at current rates when CSM is unlocked at locked-in rates15,445 14,746 -30,191
Total finance income/(expenses) from reinsurance contracts held recognised in P&L99,52451,785(1,915)149,394
8.Finance costs
Consolidated and Company
20252024
\u20ac\u20ac
Interest expense on bonds97,25297,252
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceCostExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923187": { "value": "
Notes to the financial statements
3.Particulars of business
3.1Insurance revenue
The following table present an analysis of the insurance revenue recognised in the period.
Consolidated and Company
20252024
\u20ac\u20ac
Contracts not measured under the PAA
Amounts relating to changes in liabilities for remaining coverage
-Expected incurred claims and other insurance service expenses 4,287,0273,816,098
-Change in risk adjustment for non-financial risk for risk expired 337,499161,626
-CSM recognised for services provided 2,452,421971,210
Recovery of insurance acquisition cash flows 957,240315,307
Contracts measured under the PAA 668,880671,466
Total insurance revenue8,703,0675,935,707
", "dimensions": { "concept": "ifrs-full:DisclosureOfRevenueExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923186": { "value": "
Notes to the financial statements
3.Particulars of business
3.1Insurance revenue
The following table present an analysis of the insurance revenue recognised in the period.
Consolidated and Company
20252024
\u20ac\u20ac
Contracts not measured under the PAA
Amounts relating to changes in liabilities for remaining coverage
-Expected incurred claims and other insurance service expenses 4,287,0273,816,098
-Change in risk adjustment for non-financial risk for risk expired 337,499161,626
-CSM recognised for services provided 2,452,421971,210
Recovery of insurance acquisition cash flows 957,240315,307
Contracts measured under the PAA 668,880671,466
Total insurance revenue8,703,0675,935,707
", "dimensions": { "concept": "ifrs-full:DisclosureOfInsurancePremiumRevenueExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923185": { "value": "
Notes to the financial statements
2.Management of insurance and financial risk
Financial risk
The Group is exposed to financial risk through its financial assets and liabilities, reinsurance assets, and insurance liabilities. In particular, the key financial risk is that the proceeds from its financial assets are not sufficient to fund the obligations arising from its insurance and investment contracts with DPF. The most important components of financial risk are market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk.
These risks partly arise from open positions in interest rate, currency, debt and equity products, all of which are exposed to general and specific market movements. The Group manages these positions through adherence to an investment policy. The policy adopted is modelled to take into account actuarial recommendations and is developed to achieve long term investment returns in excess of its obligations under insurance and investment contracts with DPF. The principal technique underlying the Group\u2019s framework is to broadly match assets to the liabilities arising from insurance and investment contracts with DPF by reference to the type of benefits payable to contract holders, and the recommended portfolio mix as advised by the approved actuary.
The Group\u2019s investment policy is formally approved by the Board of Directors. Portfolio review processes and investment decisions are generally delegated to a dedicated Sub-Investment Committee or the Chief Executive Officer. Transactions in excess of pre-established parameters are subject to Board approval. The procedures consider, inter alia, a recommended portfolio structure, authorisation parameters, asset and counterparty limits and currency restrictions. Management reports to the Investment Committee on a regular basis. The Committee meets regularly to consider, inter alia, investment prospects, liquidity, the performance of the portfolio and the overall framework of the Group\u2019s investment strategy. Solvency considerations as regulated by the relevant Authority are also taken into account as appropriate.
Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument, insurance contract issued or reinsurance contract held will fluctuate because of changes in market prices.
Market risk comprises three types of risk:
(a)Foreign exchange rates currency risk;
(b)Market interest rates; and
(c)Market prices risk.
(a)Foreign exchange rates currency risk
The Company's and Group\u2019s exposure to foreign exchange risk arises primarily from investments that are denominated in currencies other than the Euro. As at 31 December 2025, the Company\u2019s and Group\u2019s exposure to foreign currency investments (principally comprising a mix of US Dollar and UK pound) represented 4.3% (2024: 5.7%) of the Group\u2019s total investments excluding the term deposits.
An amount equivalent to 8% (2024: 0.9%) of the Group\u2019s cash and cash equivalents and term deposits, at 31 December 2025, are denominated in foreign currency (principally comprising a mix of US Dollar and UK pound). The Group\u2019s corresponding proportion of cash and cash equivalents and term deposits which are denominated in foreign currency is 5.9% (2024: 0.6%).
The risk arising from foreign currency transactions is managed by regular monitoring of the relevant exchange rates and management\u2019s reaction to material movements thereto.
For financial instruments held or issued, a sensitivity analysis technique that measures the change in the fair value and the cash flows of the Group\u2019s financial instruments at the reporting date for hypothetical changes in exchange rates has been used. The amounts generated from the sensitivity analysis are forward-looking estimates of market risk assuming certain market conditions. Actual results in the future may differ materially from those projected results due to the inherent uncertainty of global financial markets. The sensitivity analysis is for illustrative purposes only, as in practice market rates rarely change in isolation and are likely to be inter-dependent.
Should exchange rates at the end of the reporting period differ by +/-10% (2024: +/-10%), with all other variables held constant, the impact on the Company\u2019s and the Group\u2019s pre-tax profit would be +/- \u20ac499,484 (2024: +/- \u20ac620,916).
(b)Market interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument or insurance contract or reinsurance contract will fluctuate because of changes in market interest rates.
(c)Market prices risk
The Group is exposed to market price risk arising from the uncertainty about the future prices of investments held that are classified in the statement of financial position as at fair value through profit or loss and as available-for-sale. This risk is mitigated through the adherence to an investment policy geared towards diversification as described earlier.
The total assets subject to equity price risk are the following:
Consolidated and Company
2025\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a02024
\u20ac\u00a0\u00a0\u00a0 \u20ac
Other investments (Note 16) 12,008,35421,024,952
The sensitivity analysis for price risk illustrates how changes in the fair value of equity securities will fluctuate because of changes in market prices, whether these changes are caused by factors specific to the individual equity issuer, or factors affecting all similar equity securities traded in the market. The Group is principally exposed to price risk in respect of equity investments. Approximately 31% (2024: 34%) of equity securities held at fair value through profit or loss in Note 16 relate to holdings in one (2024: three) local banks. The remaining equity securities held at fair value through profit or loss are mainly held in equities in the Telecommunication Services, Property and Information Technology sectors.
The sensitivity analysis measures the change in the fair value of the instruments for a hypothetical change of 10% in the market price. The amounts generated from the sensitivity analysis are forward-looking estimates of market risk assuming certain market conditions. Actual results in the future may differ materially from those projected results due to the inherent uncertainty of global financial markets. Should market prices at the end of the reporting period increase/decrease by 10%, with all other variables held constant, the impact on the Group\u2019s pre-tax profit would be +/- \u20ac1,200,835 (2024: +/- \u20ac2,102,495). This sensitivity analysis is based on a change in an assumption while holding all other assumptions constant and does not consider, for example, the mitigating impact of the DPF element on policyholder liabilities for contracts with a DPF.
20252024
ChangeIImpact on profit before taxImpact on equityImpact on profit before taxImpact on equity
\u20ac\u20ac\u20ac\u20ac
Insurance contract liabilities+10%-10,523,15041,174,610-11,026,77336,404,284
Insurance contract liabilities-10%-12,165,55418,485,906-12,102,41513,275,096
Credit risk
The Group has exposure to credit risk, which is the risk that a counterparty will be unable to pay amounts in full when due. Financial assets that potentially subject the Group to concentrations of credit risk consist principally of:
-other investments;
-reinsurers\u2019 contract assets;
-amounts due from insurance policy holders and intermediaries associated with future premium inflows from insurance contracts issued;
-cash and cash equivalents; and
-amounts due from group undertakings.
The Group structures the levels of credit risk it accepts by placing limits on its exposure to a single counterparty, or group of counterparties. Limits on the level of credit risk by category are defined within the Group\u2019s investment policy as described earlier. This policy also considers regulatory restrictions on asset and counterparty exposures. Further detail on the content of the Group\u2019s investment portfolio is provided in Note 16 to these financial statements.
The Group is exposed to credit risk in respect of receivables from group undertakings. Management assesses the respective group undertaking\u2019s ability to repay balances due to the Group periodically and makes provisions for balances which it believes may not be recoverable.
Credit risk in respect of other receivables is not deemed to be significant after considering the range of underlying receivables, and their creditworthiness. Receivables are stated net of impairment. Further detail in this regard is provided in Note 18 to the financial statements.
Reinsurance is used to manage insurance risk. This does not, however, discharge the Company\u2019s liability as primary insurer. If a reinsurer fails to pay a claim for any reason, the Company remains liable for payment to the policyholder. The creditworthiness of reinsurers is considered on an ongoing basis and by reviewing their financial strength prior to finalisation of any contract. The Company\u2019s reinsurer retained its Standard & Poor\u2019s rating of AAA to AA+ bracket as at 31 December 2025.
The following table illustrates the assets that expose the Group to credit risk as at the end of the reporting period and includes the Standard & Poor\u2019s, Moody\u2019s and ARC composite rating for debt securities at fair value through profit or loss, when available, and the default rating for deposits with banks and cash and cash equivalents, when available.
Assets bearing credit risk at the end of the reporting period are analysed as follows:
Consolidated
As at 31 December 2025
AAA to AAABBB to BBelow B to unratedTotal
\u20ac\u20ac\u20ac\u20ac\u20ac
Investments
Debt securities at fair value through profit or loss279,0463,566,9985,901,7511,361,61711,109,412
279,0463,566,9985,901,7511,361,61711,109,412
Loans and receivables
Loans secured on policies-----133,348133,348
Other loans and receivables-3,113,003--3,113,003
Trade and other receivables---102,021102,021
Amounts due from group undertakings---12,926,28012,926,280
Term deposits----3,000,00033,000,000
Cash and cash equivalents434,627-1,006,043105,5931,546,263
434,6273,113,0031,006,04316,267,24220,820,915
Reinsurance Contract Assets2,820,285----2,820,285
Total assets bearing credit risk3,533,9586,680,0016,907,79417,628,85934,750,612
Consolidated
As at 31 December 2024
AAA to AAABBB to BBelow B to unratedTotal
\u20ac\u20ac\u20ac\u20ac\u20ac
Investments
Debt securities at fair value through profit or loss279,0063,657,1946,723,2973,642,02514,301,522
279,0063,657,1946,723,2973,642,02514,301,522
Loans and receivables
Loans secured on policies---22,48722,487
Other loans and receivables-3,276,016--3,276,016
Trade and other receivables---468,874468,874
Amounts due from group undertakings---12,612,82512,612,825
Term deposits--300,000-300,000
Cash and cash equivalents47,820-1,571,906-1,619,726
47,8203,276,0161,871,90613,104,18618,299,928
Reinsurance Contract Assets3,571,127 ---3,571,127
Total assets bearing credit risk3,897,9536,933,2108,595,20316,746,21136,172,577
Unrated financial assets principally comprise locally traded corporate bonds on the Malta Stock Exchange, amounts due from group companies, trade and other receivables, loans secured on policies and certain deposits with local bank institutions for which no international rating is available.
As at 31 December 2025 and 2024 the Group had an exposure with the Government of Malta through investments in debt securities. In 2025 these were equivalent to 3% (2024: 3%) of the Group\u2019s total investments.
Liquidity risk
Liquidity is the risk that cash may not be available to pay obligations when due at a reasonable cost. The Group adopts a prudent liquidity risk management approach by maintaining a sufficient proportion of its assets in cash and marketable securities through the ability to close out market positions. Senior management is updated on a regular basis on the cash position of the Group illustrating, inter alia, actual cash balance net of operational commitments falling due in the short term as well as investment commitments falling due in the medium and long term.
The Group is exposed to daily calls on its available cash resources in order to meet its obligations, including claims arising from contracts in issue by the Company. Other financial liabilities which expose the Group to liquidity risk mainly comprise trade and other payables. Liquidity is the risk that cash may not be available to pay obligations when due at a reasonable cost.
Maturity analysis for insurance liabilities
The following table summarizes the maturity profile of the Company\u2019s portfolios of insurance contracts issued that are liabilities based on the remaining contractual undiscounted net cash flows expected to be paid out in the periods presented. Liabilities for remaining coverage measured under the PAA have been excluded from this analysis.
2025Undiscounted net future cash flows
1 year or less1-2 years2-3 years3-4 years4-5 yearsMore than 5 yearsTotal
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Insurance contracts
Participating10,957,34414,175,1015,843,0435,444,5394,399,86712,787,63553,607,529
Other life (2,966,024)(2,998,259)(2,464,878)(1,951,239)(1,205,658)(1,964,547)(13,550,605)
Savings(4,902,166)(4,079,045)(2,653,871)(1,538,015)(172,926)132,324,392118,978,369
Sickness and Accident (150,173)(310,223)(246,560)(190,184)(147,696)(345,554)(1,390,390)
Sub-Total2,938,9816,787,574477,7341,765,1012,873,587142,801,926157,644,903
Life Reinsurance Contracts(753,726)(90,140)(142,959)(189,644)(202,647)(2,077,446)(3,456,562)
Sub-Total(753,726)(90,140)(142,959)(189,644)(202,647)(2,077,446)(3,456,562)
Total2,185,2556,697,433334,7761,575,4572,670,941140,724,480154,188,342
2024Undiscounted net future cash flows
1 year or less1-2 years2-3 years3-4 years4-5 yearsMore than 5 yearsTotal
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Insurance contracts
Participating12,595,2299,873,4298,914,4415,782,8385,129,58116,351,80758,647,325
Other life (1,197,836)(1,560,839)(1,321,505)(1,138,223)(897,443)(1,589,640)(7,705,486)
Sickness and Accident(2,399,767)(3,615,455)(2,324,981)(1,239,097)(492,003)94,590,84284,519,539
Savings(297,209)(284,123)(234,706)(180,158)(131,249)(267,749)(1,395,194)
Sub-Total8,700,4174,413,0125,033,2493,225,3603,608,886109,085,260134,066,184
Life Reinsurance Contracts(3,673,408)(254,728)(260,278)(261,737)(260,584)(3,575,358)(8,286,093)
Sub-Total(3,673,408)(254,728)(260,278)(261,737)(260,584)(3,575,358)(8,286,093)
Total5,027,0094,158,2844,772,9712,963,6233,348,302105,509,902125,780,091
The amounts of insurance contract liabilities that are repayable on demand are set out below.
2025Amount payable on demandCarrying amount
\u20ac\u20ac
Participating40,885,99948,102,934
Savings73,587,45564,753,840
Total114,473,454112,856,774
2024Amount payable on demandCarrying amount
\u20ac\u20ac
Participating49,141,46758,301,311
Savings60,165,78553,035,698
Total109,307,252111,337,009
Maturity analysis for financial assets
The following table summarises the maturity profile of financial assets of the Company based on remaining undiscounted contractual cash flows.
The tables below analyse the Group\u2019s financial assets and reinsurance contract assets into relevant maturity groupings based on the remaining period between the end of the reporting period and the maturity date. The expected cash outflows for insurance and investment contracts do not consider the impact of early surrenders.
Consolidated and Company
Expected undiscounted cash inflows
Year ended 2025Less than one yearBetween one and five yearsBetween five and ten yearsBetween 10 and 20 yearsOver 20 yearsTotal
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Assets2,651,7873,729,9203,202,0241,525,682-11,109,413
Consolidated and Company
Expected undiscounted cash inflows
Year ended 2024Less than one yearBetween one and five yearsBetween five and ten yearsBetween 10 and 20 yearsOver 20 yearsTotal
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Assets263,1158,343,7284,356,2491,338,430-14,301,522
Regulatory compliance risk
The risk of non-compliance with legal and regulatory requirements as well as supervisory expectations which may result in administrative or disciplinary sanctions, or of material financial loss, due to failure to comply with the provisions governing the Company\u2019s activities. By ensuring that these rules are observed, the Company works to protect its customers, shareholders, counterparties and employees. This is conducted in alignment with the Company\u2019s strategy as operating a business model based on prudence, sound governance and integrity.
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialRiskManagementExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923184": { "value": "
Notes to the financial statements
4.Investment return and fair value movements
ConsolidatedCompany
2025202420252024(As Restated)
\u20ac\u20ac\u20ac\u20ac
Investment income
Rental income from investment property104,455149,760104,455149,760
Dividends received from:
-subsidiary--307,692583,170
-investments at fair value through profit or loss728,089785,185728,089785,185
Interest income from investments at fair value through profit or loss 579,241664,550579,241664,550
Other investment losses(218,406)93,147(218,405)93,147
1,193,3791,692,6421,501,0722,275,812
Movement in fair value
Net fair value (loss)/gain on investment property 31,891(22,000)31,891(22,000)
Net fair value gain on investments \u2013 equity and collective investment schemes4,176,77411,987,6485,038,07912,103,657
4,208,66511,965,6485,069,97012,081,657
Net investment income5,402,04413,658,2906,571,04214,357,469
6.Interest income from financial assets at amortised cost
ConsolidatedCompany
2025202420252024
\u20ac\u20ac\u20ac\u20ac
Interest receivable from:
-other loans and receivables 308,703253,211308,703253,211
-related companies397,766398,855397,766398,855
Total interest income706,469652,066706,469652,066
8.Finance costs
Consolidated and Company
20252024
\u20ac\u20ac
Interest expense on bonds97,25297,252
12.Leases
(a)Leases as the lessee (IFRS 16)
The Group leases property which generally run for a period of two years with the option to renew. Lease payments are subsequently renegotiated to reflect market rates.
(iv)Lease liability
The net value of the lease liability as at 31 December 2025 was \u20ac12,161 (2024: \u20ac1,924).
16.Other investments
The Group\u2019s investments are summarised by measurement category in the table below:
Consolidated and Company
20252024
\u20ac\u20ac
Financial assets mandatorily at FVTPL 97,874,98490,676,116
Financial assets designated at FVTPL11,109,41214,301,522
Loans and receivables3,118,6053,298,503
Term deposits 3,000,000300,000
Total investments 115,103,001108,576,141
(a)Investments at fair value through profit or loss
Consolidated and Company
20252024
\u20ac\u20ac
Equity securities and units in unit trusts:
Listed shares11,871,81421,024,952
Unlisted investments3,074,7963,242,035
Collective investment schemes-752,553
14,946,61025,019,540
Assets held to cover linked liabilities:
Collective investment schemes82,928,37465,656,576
Debt securities - fixed interest rate:
Government bonds6,244,6197,696,531
Corporate bonds4,864,7936,604,991
11,109,41214,301,522
Total investments at fair value through profit or loss108,984,396104,977,638
Maturity of fixed income debt securities classified as fair value through profit or loss.
Consolidated and Company
20252024
\u20ac\u20ac
Within 1 year2,651,787263,115
Between 1 and 2 years1,001,4072,930,011
Between 2 and 5 years2,728,5135,622,666
Over 5 years4,727,7055,485,730
11,109,41214,301,522
Consolidated and Company
%%
Weighted average effective interest rate at the balance sheet date 56
All other securities classified at fair value through profit or loss are non-current in nature.
The movements in investments classified as fair value through profit or loss are summarised as follows:
Consolidated and Company
20252024
\u20ac\u20ac
Year ended 31 December
Balance at 1 January \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0104,977,638 93,843,285
Impact on initial application of IFRS 9-
Additions22,174,09814,434,840
Disposals(20,558,870)(3,110,927)
Net fair value and foreign exchange movements2,391,530(189,560)
Balance at 31 December108,984,396104,977,638
At 31 December
Cost 99,753,81698,138,588
Accumulated fair value and foreign exchange gains9,230,5806,839,050
Net book amount 108,984,396104,977,638
The table below analyses debt securities classified at fair value through profit or loss by sector:
Consolidated and Company
20252024
\u20ac\u20ac
Banks1,352,5571,139,478
Energy2,706,6402,453,972
Government6,244,619\u00a0\u00a0\u00a07,696,532
Other805,596\u00a0\u00a0\u00a03,011,540
11,109,412\u00a0\u00a014,301,522
(b)Loans and receivables
Consolidated and Company
20252024
\u20ac\u20ac
Loans secured on policies5,60222,487
Other loans and receivables3,113,0033,276,016
3,118,6053,298,503
Loans secured on policies are substantially non-current in nature. Other loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market, other than those that the Group intends to sell in the short term. They are charged with interest at the rate of 12% (2024: 12%) per annum.
Consolidated and Company
20252024
\u20ac\u20ac
Year ended 31 December
Balance at 1 January 3,298,5033,134,171
Additions -14,036
Disposals (16,886)-
Foreign exchange movement(163,012)150,296
Balance at 31 December3,118,6053,298,503
(c)Term Deposits
Consolidated and Company
20252024
\u20ac\u20ac
Loans secured on policies3,000,000300,000
3,000,000300,000
Consolidated and Company
20252024
\u20ac\u20ac
Year ended 31 December
Balance at 1 January 300,000-
Additions3,000,000400,000
Disposals(300,000)(100,000)
Balance at 31 December3,000,000300,000
Bank term deposits earn average interest of 7.75% per annum (2024: 7.75%). As at year end, their carrying amount approximated its fair value.
(d)Unlisted investments
LifeStar Insurance plc has two loan notes titled Stellium Equity Notes and Stellium Credit Notes (the \u201cStellium Notes\u201d), totalling GBP4.2 million which matured on 31 July 2024 and 31 August 2024 respectively, both of which have been extended for the reasons explained below. These loan notes form part of a wider GBP30 million funding arrangement for a fintech startup business, Stellium Holdings Limited (UK Registration No 12130247), located in Newcastle, UK.
The principal holders of the loan notes are Apex Group Nominees 1 (UK) Limited acting as trustee on behalf of the ultimate controlling parties Tiger Infrastructure Associates GP II and Tiger Infrastructure GP II (Europe).
Eram Capital Advisors Luxembourg (\u201cEram\u201d), in their capacity as the Calculation Agent, Advisor and Alternative Asset Manager of the Securitised Vehicles (SVs) linked to the Stellium Notes has confirmed that LifeStar\u2019s held notes are valued at par as at 31 December 2025. In note 14 of the financial statements for the year ended 31 March 2025 of Stellium Holdings Limited, entitled \u201cPost Balance Sheet Events\u201d, it is reported that Stellium Datacentres Limited issued new preference shares amounting to GBP12.5 million to provide additional working capital and funding to assist in the purchase of Digital 9 Seaedge Limited, the owner of the long lease of the data centre at Cobalt Business Park. This transaction was concluded on 11 June 2025. LifeStar Insurance plc did not participate in this investment. Also, in December 2025, Stellium Holdings Limited and the Senior Loan Noteholder and the Junior Loan Noteholder agreed to extend the existing loan note agreements. The loans notes repayment date has been amended from 31 May 2026 to 28 December 2028. All other terms of the loan note agreements are unchanged.During the year, the Company has commissioned an independent third party to carry out a valuation of its investments in the SV\u2019s, which valuation is still being finalized as at the date of the signing of these financial statements.
On the basis of the above, the Directors are of the opinion that the recent investment in Stellium Holdings Limited is a strong indication of its viability. In view of this, the extension of the existing loan note agreements and on the strength of the confirmations received from ERAM as the Calculation Agent of the SVs, the Stellium Notes are to continue being carried at their face value in these financial statements. In view of the substantial additional investment and also the extension of the notes to 28 December 2028, we do not envisage a material impact to the Solvency Capital Ratio (SCR) in the near future.
18.Receivables, prepayments and accrued income
ConsolidatedCompany
2025202420252024
\u20ac\u20ac\u20ac\u20ac
Amounts due from intermediate parent (Note ii)6,994,3006,872,5586,994,3006,872,558
Amount receivable from subsidiary--291,952440,000
Amounts due from related parties (Note iii)5,931,9805,740,2665,670,7105,463,475
Other receivables (Note i and iv)102,020468,874102,020468,874
13,028,30013,081,69813,058,98213,244,907
ConsolidatedCompany
2025202420252024
\u20ac\u20ac\u20ac\u20ac
Prepayments and accrued income:
- Prepayments 237,749191,000197,136137,618
- Accrued income3,977,5783,601,4903,569,0613,147,676
4,215,3273,792,4903,766,1973,285,294
At end of year17,243,62716,874,18916,825,17916,530,201
i.Interest-bearing automatic premium loans are classified as investments in Note 16 to the financial statements.
ii.Amounts due from intermediate parent are secured, bearing interest at 3% or 4.5% and expected to be repaid in 10 years\u2019 time. The carrying amount is stated net of a provision of \u20ac146,748 (2024: \u20ac255,891).
The loans in question have been approved by the Malta Financial Services Authority.
The Directors are confident that such balances will be recovered within the stipulated time frame above.
iii.Amounts due from other related parties are secured and bear interest at 3% or 4.5% and as at 31 December 2025 the Directors expect these to be repaid in 5 and 10 years\u2019 time in accordance with the agreements. The carrying amount is stated net of a provision of \u20ac46,280 (2024: \u20ac129,383). Such balance has been carried forward prior to 1 January 2017.
iv.Other receivables are unsecured, interest-free and repayable on demand. They are stated net of provision for impairment of \u20ac161,967 (2024: \u20ac30,042). The company has directly written off other receivables of \u20ac57,432 during the current year which is included within the administrative and other expense in the statement of comprehensive income (2024: \u20ac110,618).
Amounts due from intermediate parent and other related parties are non-current in nature, whilst the rest of the amounts are current in nature.
23.Debt securities in issue
ConsolidatedCompany
Year ended 31 December2025202420252024
\u20ac\u20ac\u20ac\u20ac
4% Unsecured Subordinated Bonds Due 2026 \u2013 20312,243,1512,221,0352,243,1512,221,035
In May 2021, the company issued 100,000 4% unsecured subordinated bonds of a nominal value of \u20ac100 per bond. A total of 24,313 Subordinated Bonds (for a total value of \u20ac2,431,300) were received by the Company.
The bonds are redeemable at their nominal value on 2 June 2031, unless redeemed early on any interest payment date in the year 2026 and 2031.
Interest on the bonds is due and payable annually on 2 June of each year.
The bonds are listed on the Official List of the Malta Stock Exchange. The carrying amount of the bonds is net of direct issue costs of \u20ac188,149 (2024: \u20ac222,599) which are being amortised over the life of the bonds and bond tax payable of \u20acnil (2024: \u20ac12,334). The market value of debt securities on the last trading day before the statement of financial position date was \u20ac2,431,300 (2024: \u20ac2,431,300).
24.Payables, accruals and deferred income
ConsolidatedCompany
2025202420252024
\u20ac\u20ac\u20ac\u20ac
Amounts due to group undertaking8,0683,161--
Other payables154,673307,490130,081119,683
162,741310,651130,081119,683
Accruals and deferred income
- Accruals775,514532,558601,245370,381
- Bond interest accrued56,22056,22056,22156,220
- Deferred income345,433349,0556,95010,573
1,177,167937,833664,416437,174
At end of year1,339,9081,248,484794,497556,857
(i)Other payables are unsecured, non-interest bearing and fall due within the next twelve months;
(ii)Amounts owed to group are unsecured and bear no interest. These balances are repayable on demand.
26.Cash and cash equivalents
For the purposes of the statement of cash flows, the year-end cash and cash equivalents comprise the following:
ConsolidatedCompany
2025202420252024
\u20ac\u20ac\u20ac\u20ac
Cash at bank and on hand1,546,2631,619,7261,144,0261,013,287
Cash at bank earns interest on current deposits at floating rates.
27.Fair values of financial assets and financial liabilities
The group
The following table presents the assets and liabilities measured at fair value at 31 December 2025
Consolidated and Company
Fair value measurement at end of the reporting period using:
Level 1Level 2Level 3Total
\u20ac\u20ac\u20ac\u20ac
2025
Assets
Other Investments:
Financial assets at fair value through profit or loss 22,981,22682,928,3743,074,796108,984,396
Financial assets at amortised cost-3,005,6023,113,0036,118,605
Total22,981,22685,933,9766,187,799115,103,001
Liabilities
Unit linked financial instruments-(15,399,647)-(15,399,647)
The following table presents the assets and liabilities measured at fair value at 31 December 2024
Consolidated and Company
Fair value measurement at end of the reporting period using:
Level 1Level 2Level 3Total
\u20ac\u20ac\u20ac\u20ac
2024
Assets
Other Investments:
Financial assets at fair value through profit or loss 36,174,20365,561,4003,242,035104,977,638
Financial assets at amortised cost-322,4873,276,0163,598,503
Total36,174,20365,883,8876,518,051108,576,141
Liabilities
Unit linked financial instruments-8,619,624-8,619,624
At 31 December 2025 and 2024 the carrying amounts of financial assets and current financial liabilities approximated their fair values except for investment contracts with DPF. 29.Contingent liability
During 2020, the Company gave a guarantee in favour of Bank of Valletta for the amount of \u20ac3 million, to secure, jointly and severally with other related parties, a bank loan of the same amount granted by that bank to LifeStar Holding p.l.c.
At 31 December 2025, the balance outstanding on the loan in the books of LifeStar Holding p.l.c. amounted to \u20ac363,503 (2024: \u20ac961,483).
The directors assessed the impact of this guarantee and concluded that it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation and have therefore treated this as a contingent liability.
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Notes to the financial statements
2.Management of insurance and financial risk
Insurance risk
Experience shows that the larger the portfolio of similar insurance contracts, the smaller the relative variability about the expected outcome will be. In addition, a more diversified portfolio is less likely to be affected across the board by a change in any subset of the portfolio. The Group has developed its insurance underwriting strategy to diversify the type of insurance risk accepted and within each of these categories to achieve a sufficiently large population of risks to reduce the variability of the expected outcome.
Factors that aggravate insurance risk include lack of risk diversification in terms of type and amount of risk and geographical location.
The geographical concentration of the Company\u2019s insurance contract liabilities and reinsurance contract assets is noted below. The disclosure is based on the countries where the business is written:
\u00a020252024
\u00a0Insurance contract issued \u2013 Net LiabilitiesReinsurance contracts held \u2013 Net AssetsInsurance contract issued \u2013 Net LiabilitiesReinsurance contracts held \u2013 Net Assets
Italy(4,587,197)(253,185)(473,416)3,764
Malta(108,856,320)3,073,470(115,172,522)3,567,363
\u00a0(113,443,517)2,820,285(115,645,938)3,571,127
(a)Frequency and severity of claims
The Group manages these risks through its underwriting strategy and reinsurance agreements. The underwriting strategy is intended to ensure that the risks underwritten are well diversified in terms of type of risk and the level of insured benefits. Medical selection is also included in the Group\u2019s underwriting procedures with premiums varied to reflect the health condition and lifestyle of the applicants.
The Group has retention limits on any single life assured for term business or risk premium business. The Group reinsures the excess of the insured benefits over approved retention limits under a treaty reinsurance arrangement. Short term insurance contracts are also protected through a combination of selective quota share and surplus reinsurance. Further, the Group has a \u201cCAT XL\u201d reinsurance arrangement to cover its exposure in the case of an event affecting more than three lives.
In general, all large sums assured are facultatively reinsured on terms that substantially limit the Group\u2019s maximum net exposure. The Directors consider that all other business is adequately protected through treaty reinsurance with a reasonable spread of benefits payable according to the age of the insured, and the size of the sum assured. The Group is largely exposed to insurance risk in Malta and Italy. Single event exposure is capped through the \u201cCAT XL\u201d reinsurance arrangement as referred above.
(b)Lapse and surrender rates
Lapses relate to the termination of policies due to non\u2013payment of premiums. Surrenders relate to the voluntary termination of policies by policyholders. Policy termination assumptions are determined using statistical measures based on the Group\u2019s experience and vary by product type, policy duration and sales trends.
An increase in lapse rates early in the life of the policy would tend to reduce profits for shareholders, but later increases are broadly neutral in effect.
(c)Policy maintenance expenses
Operating expenses assumptions reflect the projected costs of maintaining and servicing in\u2013force policies and associated overhead expenses. The current level of expenses is taken as an appropriate expense base, adjusted for expected expense inflation if appropriate.
An increase in the level of expenses would result in an increase in expenditure, thereby reducing profits for the shareholders.
(d)Discount rates and investment return
Life insurance liabilities are determined as the sum of the discounted value of the expected benefits and future administration expenses directly related to the contract, less the discounted value of the expected theoretical premiums that would be required to meet these future cash outflows. Discount rates are based on current industry risk rates as these are published by EIOPA.
Consistent rates are used also as investment return assumptions to ensure a risk neutral valuation basis.
A change in interest rates will impact the value of the insurance liability and therefore affect the profits for the shareholders.
(e)Sources of uncertainty in the estimation of future benefit payments and premium receipts
Uncertainty in the estimation of future benefit payments and premium receipts for long term insurance contracts arises from the unpredictability of long-term changes in overall levels of mortality and the variability in contract holder behaviour. The Group uses appropriate base tables of standard mortality according to the type of contract being written.
Sensitivity analysis
Life business
The tables below analyse how the CSM, profit or loss and equity would have increased (decreased) if changes in underwriting risk variables that were reasonably possible at the reporting date had occurred. This analysis presents the sensitivities both gross and net of reinsurance held and is based on a change in one risk variable with all other variables held constant. Sensitivity analysis assumes that changes to variables can be made independently, which is very unlikely to occur in practice.
Key assumptionChange in assumptionImpact on CSM\u20acImpact on profit\u20acImpact on equity\u20ac
Year ended 2025
Insurance contract liabilities
Mortality rates+10%(1,872,396)(218,961)(142,325)
Mortality rates-10%2,272,487232,975151,434
Expenses+10%(1,507,384)(399,648)(259,771)
Expenses-10%1,784,570122,46279,600
Lapse rates+10%(854,477)(199,572)(129,722)
Lapse rates-10%1,054,02597,88963,628
Reinsurance contract assets
Mortality rates+10%1,708,467179,047116,381
Mortality rates-10%(1,716,797)(179,814)(116,879)
Lapse rates+10%(130,705)(18,407)(11,964)
Lapse rates-10%151,49421,36613,888
Sensitivity analysis (continued)
Life business (continued)
Key assumptionChange in assumptionImpact on CSM\u20acImpact on profit\u20acImpact on equity\u20ac
Year ended 2024
Insurance contract liabilities
Mortality rates+10%(1,948,180)(300,264)(195,172)
Mortality rates-10%2,144,009117,95976,673
Expenses+10%(1,249,963)(174,756)(113,591)
Expenses-10%1,363,47261,24739,811
Lapse rates+10%(851,944)(146,886)(95,476)
Lapse rates-10%1,062,76576,21949,542
Reinsurance contract assets
Mortality rates+10%1,449,424168,762109,695
Mortality rates-10%(1,456,175)(169,544)(110,204)
Lapse rates+10%(331,187)(35,161)(22,854)
Lapse rates-10%393,40841,69927,104
Financial risk
The Group is exposed to financial risk through its financial assets and liabilities, reinsurance assets, and insurance liabilities. In particular, the key financial risk is that the proceeds from its financial assets are not sufficient to fund the obligations arising from its insurance and investment contracts with DPF. The most important components of financial risk are market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk.
These risks partly arise from open positions in interest rate, currency, debt and equity products, all of which are exposed to general and specific market movements. The Group manages these positions through adherence to an investment policy. The policy adopted is modelled to take into account actuarial recommendations and is developed to achieve long term investment returns in excess of its obligations under insurance and investment contracts with DPF. The principal technique underlying the Group\u2019s framework is to broadly match assets to the liabilities arising from insurance and investment contracts with DPF by reference to the type of benefits payable to contract holders, and the recommended portfolio mix as advised by the approved actuary.
The Group\u2019s investment policy is formally approved by the Board of Directors. Portfolio review processes and investment decisions are generally delegated to a dedicated Sub-Investment Committee or the Chief Executive Officer. Transactions in excess of pre-established parameters are subject to Board approval. The procedures consider, inter alia, a recommended portfolio structure, authorisation parameters, asset and counterparty limits and currency restrictions. Management reports to the Investment Committee on a regular basis. The Committee meets regularly to consider, inter alia, investment prospects, liquidity, the performance of the portfolio and the overall framework of the Group\u2019s investment strategy. Solvency considerations as regulated by the relevant Authority are also taken into account as appropriate.
Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument, insurance contract issued or reinsurance contract held will fluctuate because of changes in market prices.
Market risk comprises three types of risk:
(a)Foreign exchange rates currency risk;
(b)Market interest rates; and
(c)Market prices risk.
(b)Market interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument or insurance contract or reinsurance contract will fluctuate because of changes in market interest rates.
(c)Market prices risk
The sensitivity analysis measures the change in the fair value of the instruments for a hypothetical change of 10% in the market price. The amounts generated from the sensitivity analysis are forward-looking estimates of market risk assuming certain market conditions. Actual results in the future may differ materially from those projected results due to the inherent uncertainty of global financial markets. Should market prices at the end of the reporting period increase/decrease by 10%, with all other variables held constant, the impact on the Group\u2019s pre-tax profit would be +/- \u20ac1,200,835 (2024: +/- \u20ac2,102,495). This sensitivity analysis is based on a change in an assumption while holding all other assumptions constant and does not consider, for example, the mitigating impact of the DPF element on policyholder liabilities for contracts with a DPF.
20252024
ChangeIImpact on profit before taxImpact on equityImpact on profit before taxImpact on equity
\u20ac\u20ac\u20ac\u20ac
Insurance contract liabilities+10%-10,523,15041,174,610-11,026,77336,404,284
Insurance contract liabilities-10%-12,165,55418,485,906-12,102,41513,275,096
Credit risk
The Group has exposure to credit risk, which is the risk that a counterparty will be unable to pay amounts in full when due. Financial assets that potentially subject the Group to concentrations of credit risk consist principally of:
-other investments;
-reinsurers\u2019 contract assets;
-amounts due from insurance policy holders and intermediaries associated with future premium inflows from insurance contracts issued;
-cash and cash equivalents; and
-amounts due from group undertakings.
The Group structures the levels of credit risk it accepts by placing limits on its exposure to a single counterparty, or group of counterparties. Limits on the level of credit risk by category are defined within the Group\u2019s investment policy as described earlier. This policy also considers regulatory restrictions on asset and counterparty exposures. Further detail on the content of the Group\u2019s investment portfolio is provided in Note 16 to these financial statements.
Reinsurance is used to manage insurance risk. This does not, however, discharge the Company\u2019s liability as primary insurer. If a reinsurer fails to pay a claim for any reason, the Company remains liable for payment to the policyholder. The creditworthiness of reinsurers is considered on an ongoing basis and by reviewing their financial strength prior to finalisation of any contract. The Company\u2019s reinsurer retained its Standard & Poor\u2019s rating of AAA to AA+ bracket as at 31 December 2025.
The following table illustrates the assets that expose the Group to credit risk as at the end of the reporting period and includes the Standard & Poor\u2019s, Moody\u2019s and ARC composite rating for debt securities at fair value through profit or loss, when available, and the default rating for deposits with banks and cash and cash equivalents, when available.
Assets bearing credit risk at the end of the reporting period are analysed as follows:
Consolidated
As at 31 December 2025
AAA to AAABBB to BBelow B to unratedTotal
\u20ac\u20ac\u20ac\u20ac\u20ac
Investments
Debt securities at fair value through profit or loss279,0463,566,9985,901,7511,361,61711,109,412
279,0463,566,9985,901,7511,361,61711,109,412
Loans and receivables
Loans secured on policies-----133,348133,348
Other loans and receivables-3,113,003--3,113,003
Trade and other receivables---102,021102,021
Amounts due from group undertakings---12,926,28012,926,280
Term deposits----3,000,00033,000,000
Cash and cash equivalents434,627-1,006,043105,5931,546,263
434,6273,113,0031,006,04316,267,24220,820,915
Reinsurance Contract Assets2,820,285----2,820,285
Total assets bearing credit risk3,533,9586,680,0016,907,79417,628,85934,750,612
Consolidated
As at 31 December 2024
AAA to AAABBB to BBelow B to unratedTotal
\u20ac\u20ac\u20ac\u20ac\u20ac
Investments
Debt securities at fair value through profit or loss279,0063,657,1946,723,2973,642,02514,301,522
279,0063,657,1946,723,2973,642,02514,301,522
Loans and receivables
Loans secured on policies---22,48722,487
Other loans and receivables-3,276,016--3,276,016
Trade and other receivables---468,874468,874
Amounts due from group undertakings---12,612,82512,612,825
Term deposits--300,000-300,000
Cash and cash equivalents47,820-1,571,906-1,619,726
47,8203,276,0161,871,90613,104,18618,299,928
Reinsurance Contract Assets3,571,127 ---3,571,127
Total assets bearing credit risk3,897,9536,933,2108,595,20316,746,21136,172,577
Liquidity risk
Liquidity is the risk that cash may not be available to pay obligations when due at a reasonable cost. The Group adopts a prudent liquidity risk management approach by maintaining a sufficient proportion of its assets in cash and marketable securities through the ability to close out market positions. Senior management is updated on a regular basis on the cash position of the Group illustrating, inter alia, actual cash balance net of operational commitments falling due in the short term as well as investment commitments falling due in the medium and long term.
The Group is exposed to daily calls on its available cash resources in order to meet its obligations, including claims arising from contracts in issue by the Company. Other financial liabilities which expose the Group to liquidity risk mainly comprise trade and other payables. Liquidity is the risk that cash may not be available to pay obligations when due at a reasonable cost.
Maturity analysis for insurance liabilities
The following table summarizes the maturity profile of the Company\u2019s portfolios of insurance contracts issued that are liabilities based on the remaining contractual undiscounted net cash flows expected to be paid out in the periods presented. Liabilities for remaining coverage measured under the PAA have been excluded from this analysis.
2025Undiscounted net future cash flows
1 year or less1-2 years2-3 years3-4 years4-5 yearsMore than 5 yearsTotal
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Insurance contracts
Participating10,957,34414,175,1015,843,0435,444,5394,399,86712,787,63553,607,529
Other life (2,966,024)(2,998,259)(2,464,878)(1,951,239)(1,205,658)(1,964,547)(13,550,605)
Savings(4,902,166)(4,079,045)(2,653,871)(1,538,015)(172,926)132,324,392118,978,369
Sickness and Accident (150,173)(310,223)(246,560)(190,184)(147,696)(345,554)(1,390,390)
Sub-Total2,938,9816,787,574477,7341,765,1012,873,587142,801,926157,644,903
Life Reinsurance Contracts(753,726)(90,140)(142,959)(189,644)(202,647)(2,077,446)(3,456,562)
Sub-Total(753,726)(90,140)(142,959)(189,644)(202,647)(2,077,446)(3,456,562)
Total2,185,2556,697,433334,7761,575,4572,670,941140,724,480154,188,342
2024Undiscounted net future cash flows
1 year or less1-2 years2-3 years3-4 years4-5 yearsMore than 5 yearsTotal
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Insurance contracts
Participating12,595,2299,873,4298,914,4415,782,8385,129,58116,351,80758,647,325
Other life (1,197,836)(1,560,839)(1,321,505)(1,138,223)(897,443)(1,589,640)(7,705,486)
Sickness and Accident(2,399,767)(3,615,455)(2,324,981)(1,239,097)(492,003)94,590,84284,519,539
Savings(297,209)(284,123)(234,706)(180,158)(131,249)(267,749)(1,395,194)
Sub-Total8,700,4174,413,0125,033,2493,225,3603,608,886109,085,260134,066,184
Life Reinsurance Contracts(3,673,408)(254,728)(260,278)(261,737)(260,584)(3,575,358)(8,286,093)
Sub-Total(3,673,408)(254,728)(260,278)(261,737)(260,584)(3,575,358)(8,286,093)
Total5,027,0094,158,2844,772,9712,963,6233,348,302105,509,902125,780,091
The amounts of insurance contract liabilities that are repayable on demand are set out below.
2025Amount payable on demandCarrying amount
\u20ac\u20ac
Participating40,885,99948,102,934
Savings73,587,45564,753,840
Total114,473,454112,856,774
2024Amount payable on demandCarrying amount
\u20ac\u20ac
Participating49,141,46758,301,311
Savings60,165,78553,035,698
Total109,307,252111,337,009
3.Particulars of business
3.3Net expense from reinsurance contracts held
An analysis of allocation of reinsurance premiums paid and amounts recovered from reinsurers are presented in the tables below.
Consolidated and Company
20252024
\u20ac\u20ac
Amounts related to liabilities for remaining coverage
-Recoveries for expected incurred claims and other expenses(2,062,206)(1,764,422)
-Risk adjustment for the risk expired(84,816)(73,182)
-CSM for the service received(309,368)(126,569)
Contracts not measured under the PAA(2,456,390)(1,964,173)
Contracts measured under the PAA(312,321)(296,397)
Allocation of reinsurance paid(2,768,711)(2,260,570)
Recoveries for incurred claims and other expenses395,3271,333,493
Changes that relate to future service: recoveries for losses on onerous contracts and reversals of those losses33,347(2,386)
Changes that relate to past service: changes to recoveries of liabilities for incurred claims662,819279,746
Amounts recovered from reinsurers1,091,4931,610,853
Net expenses from reinsurance contracts held(1,677,218)(649,717)
3.5Insurance and reinsurance contracts
The table below sets out the carrying amounts of groups of insurance and reinsurance contracts assets and liabilities at the end of reporting date.
20252024
AssetsLiabilitiesNetAssetsLiabilitiesNet
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Total insurance contracts issued-(118,919,672)(118,919,672)-(115,645,938)(115,645,938)
Total reinsurance contracts held2,820,283-2,820,2833,571,127-3,571,127
3.5.3Reconciliation of changes in reinsurance contracts held by remaining coverage and incurred claims
The tables below represent the reconciliation from the opening to the closing balances of the assets for the remaining coverage and the assets for incurred claims for reinsurance contracts held.
Consolidated and Company
2025Liabilities for remaining coverageAmounts recoverable for incurred claimsTotal
Remaining coverage componentLoss-recovery componentContracts not under PAAContracts under PAA
Estimates of present value of future cash flowsRisk adjustment for non-financial risk
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Opening assets4,847,01119,444(1,288,462)98,305-3,676,298
Opening liabilities(99,472)(5,702)---(105,174)
Net opening balance4,747,53913,742(1,288,462)98,305-3,571,124
Changes in the statement of profit or loss
Allocation of reinsurance premiums(2,768,711)----(2,768,711)
Amounts recovered from reinsurers-33,347669,622388,525-1,091,494
Recoveries for incurred claims and other expenses--6,803388,525-395,328
2025Liabilities for remaining coverageAmounts recoverable for incurred claimsTotal
Remaining coverage componentLoss-recovery componentContracts not under PAAContracts under PAA
Estimates of present value of future cash flowsRisk adjustment for non-financial risk
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Changes in the statement of profit or loss (continued)
Changes that relate to future service: recoveries for losses on onerous contracts and reversals of those losses-33,347---33,347
Changes that relate to past service: changes to recoveries of liabilities for incurred claims--662,819--662,819
Net expenses from reinsurance contracts(2,768,711)33,347669,622388,525-(1,677,217)
Finance income from reinsurance contracts held recognised in P&L125,485383---125,868
Total changes in the statement of comprehensive income(2,643,226)33,730669,622388,525-(1,551,349)
2025Liabilities for remaining coverageAmounts recoverable for incurred claimsTotal
Remaining coverage componentLoss-recovery componentContracts not under PAAContracts under PAA
Estimates of present value of future cash flowsRisk adjustment for non-financial risk
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Cash flows
Premiums paid2,660,928----2,660,928
Amounts received--(1,373,591)(486,830)-(1,860,421)
Total cash flows2,660,928-(1,373,591)(486,830)-800,507
Net closing balance4,765,24247,472(1,992,431)--2,820,283
Closing assets4,862,92450,240(1,992,431)--2,920,733
Closing liabilities(97,682)(2,768)---(100,450)
Net closing balance4,765,24247,472(1,992,431)--2,820,283
2024Liabilities for remaining coverageAmounts recoverable for incurred claimsTotal
Remaining coverage componentLoss-recovery componentContracts not under PAAContracts under PAA
Estimates of present value of future cash flowsRisk adjustment for non-financial risk
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Opening assets4,846,38025,908(2,175,416)54,581-2,751,453
Opening liabilities(175,245)(10,607)---(185,852)
Net opening balance4,671,13515,301(2,175,416)54,581-2,565,601
Changes in the statement of profit or loss
Allocation of reinsurance premiums(2,260,570)----(2,260,570)
Amounts recovered from reinsurers-(2,386)1,038,736574,503-1,610,853
Recoveries for incurred claims and other expenses--758,990574,503-1,333,493
2024Liabilities for remaining coverageAmounts recoverable for incurred claimsTotal
Remaining coverage componentLoss-recovery componentContracts not under PAAContracts under PAA
Estimates of present value of future cash flowsRisk adjustment for non-financial risk
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Changes in the statement of profit or loss (continued)
Changes that relate to future service: recoveries for losses on onerous contracts and reversals of those losses-(2,386)---(2,386)
Changes that relate to past service: changes to recoveries of liabilities for incurred claims--279,746--279,746
Net expenses from reinsurance contracts(2,260,570)(2,386)1,038,736574,503-(649,717)
Finance income from reinsurance contracts held recognised in P&L148,566828---149,394
Total changes in the statement of comprehensive income(2,112,004)(1,558)1,038,736574,503-(500,323)
2024Liabilities for remaining coverageAmounts recoverable for incurred claimsTotal
Remaining coverage componentLoss-recovery componentContracts not under PAAContracts under PAA
Estimates of present value of future cash flowsRisk adjustment for non-financial risk
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Cash flows
Premiums paid2,188,409----2,188,409
Amounts received--(151,782)(530,779)-(682,561)
Total cash flows2,188,409-(151,782)(530,779)-1,505,848
Net closing balance4,747,53913,743(1,288,462)98,305-3,571,125
Closing assets4,847,01119,444(1,288,462)98,305-3,676,298
Closing liabilities(99,472)(5,702)---(105,174)
Net closing balance4,747,53913,742(1,288,462)98,305-3,571,124
3.5.4Reconciliation of measurement components of reinsurance contracts held not measured under the PAA
The table below represents the reconciliation from the opening to the closing balance for each measurement component of reinsurance contracts held (other than those measured under the PAA).
2025Estimates of present value of future cash flowsRisk adjustment for non-financial riskContractual Service MarginTotal
\u20ac\u20ac\u20ac\u20ac
Opening assets1,392,130643,3921,372,1123,407,634
Opening liabilities485,523180,838(771,534)(105,173)
Net opening balance1,877,653824,230600,5783,302,461
CSM recognised for services received--(309,368)(309,368)
Risk adjustment recognised for the risk expired-(84,816)-(84,816)
Experience adjustments \u2013 expected (2,055,403)--(2,055,403)
2025Estimates of present value of future cash flowsRisk adjustment for non-financial riskContractual Service MarginTotal
\u20ac\u20ac\u20ac\u20ac
Changes that relate to future services
Contracts initially recognised in the period(1,350,969)204,6911,146,278-
Changes in estimates that adjust the CSM(813,067)(20,113)833,180-
Changes in the FCF that do not adjust the CSM for the group of underlying insurance contracts--33,34733,347
Changes in recoveries of losses on onerous underlying contracts that adjust the CSM----
Changes that relate to past services-
Changes in amounts recoverable arising from changes in liability for incurred claims662,819--662,819
Effect of changes in non-performance risk of reinsurers----
Net expense from reinsurance contracts(3,556,620)99,7621,703,436(1,753,422)
2025Estimates of present value of future cash flowsRisk adjustment for non-financial riskContractual Service MarginTotal
\u20ac\u20ac\u20ac\u20ac
Net finance income from reinsurance contracts121,427-4,440125,867
Total changes in the statement of comprehensive income(3,435,193)99,7621,707,877(1,627,554)
Cash flows976,273--976,273
Net closing balance(581,267)923,9922,308,4552,651,180
Closing assets(1,647,091)657,0013,741,7202,751,630
Closing liabilities1,065,824266,991(1,433,265)(100,450)
Net closing balance(581,267)923,9922,308,4552,651,180
2024Estimates of present value of future cash flowsRisk adjustment for non-financial riskContractual Service MarginTotal
\u20ac\u20ac\u20ac\u20ac
Opening assets196,550574,9101,802,6842,574,144
Opening liabilities817,754161,507(1,165,113)(185,852)
Net opening balance1,014,304736,417637,5712,388,292
CSM recognised for services received--(126,569)(126,569)
Risk adjustment recognized for the risk expired-(73,182)-(73,182)
Experience adjustments(1,005,432)--(1,005,432)
2024Estimates of present value of future cash flowsRisk adjustment for non-financial riskContractual Service MarginTotal
\u20ac\u20ac\u20ac\u20ac
Changes that relate to future services
Contracts initially recognised in the period277,432130,230(407,662)-
Changes in estimates that adjust the CSM(564,058)30,765533,293-
Changes in the FCF that do not adjust the CSM for the group of underlying insurance contracts--(18,650)(18,650)
Changes in recoveries of losses on onerous underlying contracts that adjust the CSM--16,26416,264
Changes that relate to past services----
Changes in amounts recoverable arising from changes in liability for incurred claims279,746--279,746
Effect of changes in non-performance risk of reinsurers----
Net expense from reinsurance contracts(1,012,312)87,813(3,324)(927,823)
2024Estimates of present value of future cash flowsRisk adjustment for non-financial riskContractual Service MarginTotal
\u20ac\u20ac\u20ac\u20ac
Net finance income from reinsurance contracts183,062-(33,669)149,393
Total changes in the statement of comprehensive income(829,250)87,813(36,993)(778,430)
Cash flows1,692,599--1,692,599
Net closing balance1,877,653824,230600,5783,302,461
Closing assets1,392,130643,3921,372,1123,407,634
Closing liabilities485,523180,838(771,534)(105,173)
Net closing balance1,877,653824,230600,5783,302,461
3.5.5Effect of contracts initially recognised in the period
Profitable (non-onerous) contractsOnerous Contracts
2025202420252024
\u20ac\u20ac\u20ac\u20ac
Insurance acquisition cash flows6,755,2072,065,226182,112169,613
Claims and other insurance service expenses payable36,725,66526,466,4982,198,1203,354,067
Estimates of present value of cash outflows43,480,87228,531,7242,380,2323,523,680
Estimates of present value of cash inflows(51,036,398)(32,384,607)(2,223,436)(3,362,226)
Risk adjustment for non-financial risk763,092426,1905,05918,079
Contractual Service Margin (CSM)6,792,4333,426,695--
Losses recognised on initial recognition / Amount included in insurance contract liabilities for the period--161,855179,533
Reinsurance contracts held20252024
\u20ac\u20ac
Estimates of PV of future cash inflows(6,501,338)2,793,591
Estimates of PV of future cash outflows7,852,307(2,516,159)
Risk adjustment(204,691)130,230
Income recognised on initial recognition--
CSM(1,146,278)407,662
3.5.6Expected recognition of the contractual service margin
An analysis of the expected recognition of the CSM remaining at the end of reporting period in profit or loss is presented below.
Consolidated and Company
2025Less than 1 year1-2 years2-3 years3-4 years4-5 years5-10 years >10 yearsTotal
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Insurance contracts
-Participating773,959643,437550,796470,129402,5741,294,7751,120,8245,256,494
-Other Life1,222,1151,115,2981,012,095915,446825,9443,006,4073,066,97611,164,281
-Savings176,697167,389157,284146,974137,237559,620953,4362,298,637
-Sickness & Accident131,748121,849112,802104,40196,584296,085-863,469
Total CSM for insurance contracts2,304,5192,047,9731,832,9771,636,9501,462,3395,156,8875,141,23619,582,881
Reinsurance contracts
-Life Reinsurance(307,033)(268,813)(232,180)(199,719)(171,804)(578,903)(550,003)(2,308,455)
Total CSM for reinsurance contracts held(307,033)(268,813)(232,180)(199,719)(171,804)(578,903)(550,003)(2,308,455)
Total CSM net of reinsurance1,997,4861,779,1601,600,7971,437,2311,290,5354,577,9844,591,23317,274,426
Consolidated and Company
2024Less than 1 year1-2 years2-3 years3-4 years4-5 years5-10 years >10 yearsTotal
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Insurance contracts
-Participating197,263203,208212,315220,793226,6191,201,1763,820,5526,081,926
-Other Life492,588480,233465,434445,426424,5361,860,9504,857,5889,026,755
-Savings239,198233,573226,263218,006209,512916,9611,710,1263,753,639
-Sickness & Accident89,60782,66875,31367,92561,330192,384-569,227
Total CSM for insurance contracts1,018,656999,682979,325952,150921,9974,171,47110,388,26619,431,547
Reinsurance contracts
-Life Reinsurance(104,000)(88,573)(73,361)(59,051)(46,868)(126,067)(102,658)(600,578)
Total CSM for reinsurance contracts held(104,000)(88,573)(73,361)(59,051)(46,868)(126,067)(102,658)(600,578)
Total CSM net of reinsurance914,656911,109905,964893,099875,1294,045,40410,285,60818,830,969
3.7 Financial reinsurance liability
The financial reinsurance liability is variable in nature and directly linked to the net position arising from the underlying reinsurance activity, calculated as premiums less commissions. Accordingly, movements in the liability balance are driven by the periodic net results of the arrangement, such that where premiums exceed commissions the liability decreases, and where commissions exceed premiums the liability increases.
In cases of significant volumes of lapses of the underlying business, the reinsurer writes off the remaining liabilities to the extent that they relate to the recovery of acquisition costs.
The movement for 2025, amounting to \u20ac4,140,733, comprises ceded premiums of \u20ac1,012,796, commissions received of \u20ac4,887,411, and the reinsurance expenses for the year amounting to \u20ac266,118. The net movement reflects the combined effect of these components in accordance with the mechanics described above.
Consolidated and Company
20252024
\u20ac\u20ac
Balance at 1 January --
Amounts received3,874,615-
Financial reinsurance expense266,118-
Balance at 31 December 4,140,733-
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Notes to the financial statements
2.Management of insurance and financial risk
Insurance risk
(a)Frequency and severity of claims
For contracts where death is the insured risk, the most significant factors that could increase the overall frequency of claims are epidemics or widespread changes in lifestyle, resulting in earlier or more claims than expected.
At present, these risks do not vary significantly in relation to the location of the risk insured by the Group. However, undue concentration by amounts could have an impact on the severity of benefit payments on a portfolio basis.
For contracts with fixed and guaranteed benefits and fixed future premiums, there are no mitigating terms and conditions that reduce the insurance risk accepted. Investment contracts with DPF (\u201cDiscretionary participation feature\u201d) carry negligible insurance risk.
The Group manages these risks through its underwriting strategy and reinsurance agreements. The underwriting strategy is intended to ensure that the risks underwritten are well diversified in terms of type of risk and the level of insured benefits. Medical selection is also included in the Group\u2019s underwriting procedures with premiums varied to reflect the health condition and lifestyle of the applicants.
The Group has retention limits on any single life assured for term business or risk premium business. The Group reinsures the excess of the insured benefits over approved retention limits under a treaty reinsurance arrangement. Short term insurance contracts are also protected through a combination of selective quota share and surplus reinsurance. Further, the Group has a \u201cCAT XL\u201d reinsurance arrangement to cover its exposure in the case of an event affecting more than three lives.
In general, all large sums assured are facultatively reinsured on terms that substantially limit the Group\u2019s maximum net exposure. The Directors consider that all other business is adequately protected through treaty reinsurance with a reasonable spread of benefits payable according to the age of the insured, and the size of the sum assured. The Group is largely exposed to insurance risk in Malta and Italy. Single event exposure is capped through the \u201cCAT XL\u201d reinsurance arrangement as referred above.
3.Particulars of business
3.2Insurance service expense
The table below shows an analysis of insurance service expense recognised in the period.
Consolidated and Company
20252024
\u20ac\u20ac
Incurred claims and other insurance service expenses2,292,6072,624,565
Changes that relate to future service: losses on onerous contracts and reversals of those losses625,319(6,593)
Changes that relate to past service: changes to liabilities for incurred claims978,956216,498
Amortisation of insurance acquisition cash flows1,018,256366,902
Total insurance service expenses4,915,1383,201,372
3.3Net expense from reinsurance contracts held
An analysis of allocation of reinsurance premiums paid and amounts recovered from reinsurers are presented in the tables below.
Consolidated and Company
20252024
\u20ac\u20ac
Amounts related to liabilities for remaining coverage
-Recoveries for expected incurred claims and other expenses(2,062,206)(1,764,422)
-Risk adjustment for the risk expired(84,816)(73,182)
-CSM for the service received(309,368)(126,569)
Contracts not measured under the PAA(2,456,390)(1,964,173)
Contracts measured under the PAA(312,321)(296,397)
Allocation of reinsurance paid(2,768,711)(2,260,570)
Recoveries for incurred claims and other expenses395,3271,333,493
Changes that relate to future service: recoveries for losses on onerous contracts and reversals of those losses33,347(2,386)
Changes that relate to past service: changes to recoveries of liabilities for incurred claims662,819279,746
Amounts recovered from reinsurers1,091,4931,610,853
Net expenses from reinsurance contracts held(1,677,218)(649,717)
3.5Insurance and reinsurance contracts
3.5.1Reconciliation of changes in insurance contracts by remaining coverage and incurred claims
The tables below represent the reconciliation from the opening to the closing balances of the liabilities for the remaining coverage and the liabilities for incurred claims for insurance contracts
Consolidated and Company
2025Liabilities for remaining coverageLiabilities for incurred claimsTotal
Excluding loss componentLoss component Contracts not under PAAContracts under PAA
Estimates of present value of future cash flowsRisk adjustment for non-financial risk
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Opening assets(1,613,431)(6,467)(2,300)--(1,622,198)
Opening liabilities113,583,341945,0472,605,314140,435-117,274,137
Net opening balance111,969,910938,5802,603,014140,435-115,651,939
Changes in the statement of comprehensive income
Contracts under fair value approach(8,703,067)----(8,703,067)
Other contracts------
Insurance revenue(8,703,067)(8,703,067)
2025Liabilities for remaining coverageLiabilities for incurred claimsTotal
Excluding loss componentLoss component Contracts not under PAAContracts under PAA
Estimates of present value of future cash flowsRisk adjustment for non-financial risk
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Incurred claims and other insurance service expenses-(46,445)2,339,051--2,292,606
Acquisition expenses1,018,257----1,018,257
Losses and reversal of losses on onerous contracts -625,319---625,319
Adjustments to liabilities for incurred claims--978,956--978,956
Insurance service expenses1,018,257578,8743,318,007--4,915,138
Investment components(15,873,022)-15,873,022---
Insurance service results(23,557,832)578,87419,191,029--(3,787,929)
Insurance finance income / expense4,073,69617,739---4,091,435
Total changes in the statement of comprehensive income(19,484,136)596,61319,191,029--303,506
Consolidated and Company
2025Liabilities for remaining coverageLiabilities for incurred claimsTotal
Excluding loss componentLoss component Contracts not under PAAContracts under PAA
Estimates of present value of future cash flowsRisk adjustment for non-financial risk
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Cash flows
Premium received26,405,37713,472---26,418,849
Claims and other insurance service expenses paid, including investment components--(19,767,068)(140,435)-(19,907,503)
Insurance acquisition cash flows(9,023,273)----(9,023,273)
Total cash flows17,382,10413,472(19,767,068)(140,435)-(2,511,927)
Net closing balance109,867,8771,548,6652,026,975--113,443,517
Closing assets(5,822,750)58,028288,566--(5,476,156)
Closing liabilities115,690,6271,490,6371,738,410--118,919,674
Net closing balance109,867,8761,548,6652,026,976--113,443,517
2024Liabilities for remaining coverageLiabilities for incurred claimsTotal
Excluding loss componentLoss component Contracts not under PAAContracts under PAA
Estimates of present value of future cash flowsRisk adjustment for non-financial risk
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Opening assets(1,231,272)(18,713)304,200--(945,785)
Opening liabilities103,372,7031,037,9781,620,42377,972-106,109,076
Net opening balance102,141,4311,019,2651,924,62377,972-105,163,291
Changes in the statement of comprehensive income
Contracts under fair value approach------
Other contracts------
Insurance revenue(5,935,707)----(5,935,707)
2024Liabilities for remaining coverageLiabilities for incurred claimsTotal
Excluding loss componentLoss component Contracts not under PAAContracts under PAA
Estimates of present value of future cash flowsRisk adjustment for non-financial risk
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Incurred claims and other insurance service expenses-(58,615)2,267,143416,037-2,624,565
Acquisition expenses366,902----366,902
Losses and reversal of losses on onerous contracts -(6,593)---(6,593)
Adjustments to liabilities for incurred claims--216,498--216,498
Insurance service expenses366,902(65,208)2,483,641416,037-3,201,372
Investment components(15,273,291)-15,273,291---
Insurance service results(20,842,096)(65,208)17,756,932416,037-(2,734,335)
Insurance finance income / expense12,309,396(15,478)---12,293,918
Total changes in the statement of comprehensive income(8,532,700)(80,686)17,756,932416,037-9,559,583
Consolidated and Company
2024Liabilities for remaining coverageLiabilities for incurred claimsTotal
Excluding loss componentLoss component Contracts not under PAAContracts under PAA
Estimates of present value of future cash flowsRisk adjustment for non-financial risk
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Cash flows
Premium received22,635,313----22,635,313
Claims and other insurance service expenses paid, including investment components--(17,078,542)(353,574)-(17,432,115)
Insurance acquisition cash flows(4,274,133)----(4,274,133)
Total cash flows18,361,180-(17,078,542)(353,574)-929,065
Net closing balance111,969,910938,5792,603,014140,435-115,651,938
Closing assets(1,613,431)(6,467)(2,300)--(1,622,199)
Closing liabilities113,583,341945,0472,605,314140,435-117,274,137
Net closing balance111,969,910938,5792,603,014140,435-115,651,938
", "dimensions": { "concept": "ifrs-full:DisclosureOfClaimsAndBenefitsPaidExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923181": { "value": "
Notes to the financial statements
2.Management of insurance and financial risk
Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument, insurance contract issued or reinsurance contract held will fluctuate because of changes in market prices.
Market risk comprises three types of risk:
(a)Foreign exchange rates currency risk;
(b)Market interest rates; and
(c)Market prices risk.
(a)Foreign exchange rates currency risk
The Company's and Group\u2019s exposure to foreign exchange risk arises primarily from investments that are denominated in currencies other than the Euro. As at 31 December 2025, the Company\u2019s and Group\u2019s exposure to foreign currency investments (principally comprising a mix of US Dollar and UK pound) represented 4.3% (2024: 5.7%) of the Group\u2019s total investments excluding the term deposits.
An amount equivalent to 8% (2024: 0.9%) of the Group\u2019s cash and cash equivalents and term deposits, at 31 December 2025, are denominated in foreign currency (principally comprising a mix of US Dollar and UK pound). The Group\u2019s corresponding proportion of cash and cash equivalents and term deposits which are denominated in foreign currency is 5.9% (2024: 0.6%).
The risk arising from foreign currency transactions is managed by regular monitoring of the relevant exchange rates and management\u2019s reaction to material movements thereto.
For financial instruments held or issued, a sensitivity analysis technique that measures the change in the fair value and the cash flows of the Group\u2019s financial instruments at the reporting date for hypothetical changes in exchange rates has been used. The amounts generated from the sensitivity analysis are forward-looking estimates of market risk assuming certain market conditions. Actual results in the future may differ materially from those projected results due to the inherent uncertainty of global financial markets. The sensitivity analysis is for illustrative purposes only, as in practice market rates rarely change in isolation and are likely to be inter-dependent.
Should exchange rates at the end of the reporting period differ by +/-10% (2024: +/-10%), with all other variables held constant, the impact on the Company\u2019s and the Group\u2019s pre-tax profit would be +/- \u20ac499,484 (2024: +/- \u20ac620,916).
(b)Market interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument or insurance contract or reinsurance contract will fluctuate because of changes in market interest rates.
(c)Market prices risk
The Group is exposed to market price risk arising from the uncertainty about the future prices of investments held that are classified in the statement of financial position as at fair value through profit or loss and as available-for-sale. This risk is mitigated through the adherence to an investment policy geared towards diversification as described earlier.
The total assets subject to equity price risk are the following:
Consolidated and Company
2025\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a02024
\u20ac\u00a0\u00a0\u00a0 \u20ac
Other investments (Note 16) 12,008,35421,024,952
The sensitivity analysis for price risk illustrates how changes in the fair value of equity securities will fluctuate because of changes in market prices, whether these changes are caused by factors specific to the individual equity issuer, or factors affecting all similar equity securities traded in the market. The Group is principally exposed to price risk in respect of equity investments. Approximately 31% (2024: 34%) of equity securities held at fair value through profit or loss in Note 16 relate to holdings in one (2024: three) local banks. The remaining equity securities held at fair value through profit or loss are mainly held in equities in the Telecommunication Services, Property and Information Technology sectors.
The sensitivity analysis measures the change in the fair value of the instruments for a hypothetical change of 10% in the market price. The amounts generated from the sensitivity analysis are forward-looking estimates of market risk assuming certain market conditions. Actual results in the future may differ materially from those projected results due to the inherent uncertainty of global financial markets. Should market prices at the end of the reporting period increase/decrease by 10%, with all other variables held constant, the impact on the Group\u2019s pre-tax profit would be +/- \u20ac1,200,835 (2024: +/- \u20ac2,102,495). This sensitivity analysis is based on a change in an assumption while holding all other assumptions constant and does not consider, for example, the mitigating impact of the DPF element on policyholder liabilities for contracts with a DPF.
20252024
ChangeIImpact on profit before taxImpact on equityImpact on profit before taxImpact on equity
\u20ac\u20ac\u20ac\u20ac
Insurance contract liabilities+10%-10,523,15041,174,610-11,026,77336,404,284
Insurance contract liabilities-10%-12,165,55418,485,906-12,102,41513,275,096
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Notes to the financial statements
2.Management of insurance and financial risk
Liquidity risk
Liquidity is the risk that cash may not be available to pay obligations when due at a reasonable cost. The Group adopts a prudent liquidity risk management approach by maintaining a sufficient proportion of its assets in cash and marketable securities through the ability to close out market positions. Senior management is updated on a regular basis on the cash position of the Group illustrating, inter alia, actual cash balance net of operational commitments falling due in the short term as well as investment commitments falling due in the medium and long term.
The Group is exposed to daily calls on its available cash resources in order to meet its obligations, including claims arising from contracts in issue by the Company. Other financial liabilities which expose the Group to liquidity risk mainly comprise trade and other payables. Liquidity is the risk that cash may not be available to pay obligations when due at a reasonable cost.
Maturity analysis for insurance liabilities
The following table summarizes the maturity profile of the Company\u2019s portfolios of insurance contracts issued that are liabilities based on the remaining contractual undiscounted net cash flows expected to be paid out in the periods presented. Liabilities for remaining coverage measured under the PAA have been excluded from this analysis.
2025Undiscounted net future cash flows
1 year or less1-2 years2-3 years3-4 years4-5 yearsMore than 5 yearsTotal
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Insurance contracts
Participating10,957,34414,175,1015,843,0435,444,5394,399,86712,787,63553,607,529
Other life (2,966,024)(2,998,259)(2,464,878)(1,951,239)(1,205,658)(1,964,547)(13,550,605)
Savings(4,902,166)(4,079,045)(2,653,871)(1,538,015)(172,926)132,324,392118,978,369
Sickness and Accident (150,173)(310,223)(246,560)(190,184)(147,696)(345,554)(1,390,390)
Sub-Total2,938,9816,787,574477,7341,765,1012,873,587142,801,926157,644,903
Life Reinsurance Contracts(753,726)(90,140)(142,959)(189,644)(202,647)(2,077,446)(3,456,562)
Sub-Total(753,726)(90,140)(142,959)(189,644)(202,647)(2,077,446)(3,456,562)
Total2,185,2556,697,433334,7761,575,4572,670,941140,724,480154,188,342
2024Undiscounted net future cash flows
1 year or less1-2 years2-3 years3-4 years4-5 yearsMore than 5 yearsTotal
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Insurance contracts
Participating12,595,2299,873,4298,914,4415,782,8385,129,58116,351,80758,647,325
Other life (1,197,836)(1,560,839)(1,321,505)(1,138,223)(897,443)(1,589,640)(7,705,486)
Sickness and Accident(2,399,767)(3,615,455)(2,324,981)(1,239,097)(492,003)94,590,84284,519,539
Savings(297,209)(284,123)(234,706)(180,158)(131,249)(267,749)(1,395,194)
Sub-Total8,700,4174,413,0125,033,2493,225,3603,608,886109,085,260134,066,184
Life Reinsurance Contracts(3,673,408)(254,728)(260,278)(261,737)(260,584)(3,575,358)(8,286,093)
Sub-Total(3,673,408)(254,728)(260,278)(261,737)(260,584)(3,575,358)(8,286,093)
Total5,027,0094,158,2844,772,9712,963,6233,348,302105,509,902125,780,091
The amounts of insurance contract liabilities that are repayable on demand are set out below.
2025Amount payable on demandCarrying amount
\u20ac\u20ac
Participating40,885,99948,102,934
Savings73,587,45564,753,840
Total114,473,454112,856,774
2024Amount payable on demandCarrying amount
\u20ac\u20ac
Participating49,141,46758,301,311
Savings60,165,78553,035,698
Total109,307,252111,337,009
Maturity analysis for financial assets
The following table summarises the maturity profile of financial assets of the Company based on remaining undiscounted contractual cash flows.
The tables below analyse the Group\u2019s financial assets and reinsurance contract assets into relevant maturity groupings based on the remaining period between the end of the reporting period and the maturity date. The expected cash outflows for insurance and investment contracts do not consider the impact of early surrenders.
Consolidated and Company
Expected undiscounted cash inflows
Year ended 2025Less than one yearBetween one and five yearsBetween five and ten yearsBetween 10 and 20 yearsOver 20 yearsTotal
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Assets2,651,7873,729,9203,202,0241,525,682-11,109,413
Consolidated and Company
Expected undiscounted cash inflows
Year ended 2024Less than one yearBetween one and five yearsBetween five and ten yearsBetween 10 and 20 yearsOver 20 yearsTotal
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Assets263,1158,343,7284,356,2491,338,430-14,301,522
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Notes to the financial statements
2.Management of insurance and financial risk
Credit risk
The Group has exposure to credit risk, which is the risk that a counterparty will be unable to pay amounts in full when due. Financial assets that potentially subject the Group to concentrations of credit risk consist principally of:
-other investments;
-reinsurers\u2019 contract assets;
-amounts due from insurance policy holders and intermediaries associated with future premium inflows from insurance contracts issued;
-cash and cash equivalents; and
-amounts due from group undertakings.
The Group structures the levels of credit risk it accepts by placing limits on its exposure to a single counterparty, or group of counterparties. Limits on the level of credit risk by category are defined within the Group\u2019s investment policy as described earlier. This policy also considers regulatory restrictions on asset and counterparty exposures. Further detail on the content of the Group\u2019s investment portfolio is provided in Note 16 to these financial statements.
The Group is exposed to credit risk in respect of receivables from group undertakings. Management assesses the respective group undertaking\u2019s ability to repay balances due to the Group periodically and makes provisions for balances which it believes may not be recoverable.
Credit risk in respect of other receivables is not deemed to be significant after considering the range of underlying receivables, and their creditworthiness. Receivables are stated net of impairment. Further detail in this regard is provided in Note 18 to the financial statements.
Reinsurance is used to manage insurance risk. This does not, however, discharge the Company\u2019s liability as primary insurer. If a reinsurer fails to pay a claim for any reason, the Company remains liable for payment to the policyholder. The creditworthiness of reinsurers is considered on an ongoing basis and by reviewing their financial strength prior to finalisation of any contract. The Company\u2019s reinsurer retained its Standard & Poor\u2019s rating of AAA to AA+ bracket as at 31 December 2025.
The following table illustrates the assets that expose the Group to credit risk as at the end of the reporting period and includes the Standard & Poor\u2019s, Moody\u2019s and ARC composite rating for debt securities at fair value through profit or loss, when available, and the default rating for deposits with banks and cash and cash equivalents, when available.
Assets bearing credit risk at the end of the reporting period are analysed as follows:
Consolidated
As at 31 December 2025
AAA to AAABBB to BBelow B to unratedTotal
\u20ac\u20ac\u20ac\u20ac\u20ac
Investments
Debt securities at fair value through profit or loss279,0463,566,9985,901,7511,361,61711,109,412
279,0463,566,9985,901,7511,361,61711,109,412
Loans and receivables
Loans secured on policies-----133,348133,348
Other loans and receivables-3,113,003--3,113,003
Trade and other receivables---102,021102,021
Amounts due from group undertakings---12,926,28012,926,280
Term deposits----3,000,00033,000,000
Cash and cash equivalents434,627-1,006,043105,5931,546,263
434,6273,113,0031,006,04316,267,24220,820,915
Reinsurance Contract Assets2,820,285----2,820,285
Total assets bearing credit risk3,533,9586,680,0016,907,79417,628,85934,750,612
Consolidated
As at 31 December 2024
AAA to AAABBB to BBelow B to unratedTotal
\u20ac\u20ac\u20ac\u20ac\u20ac
Investments
Debt securities at fair value through profit or loss279,0063,657,1946,723,2973,642,02514,301,522
279,0063,657,1946,723,2973,642,02514,301,522
Loans and receivables
Loans secured on policies---22,48722,487
Other loans and receivables-3,276,016--3,276,016
Trade and other receivables---468,874468,874
Amounts due from group undertakings---12,612,82512,612,825
Term deposits--300,000-300,000
Cash and cash equivalents47,820-1,571,906-1,619,726
47,8203,276,0161,871,90613,104,18618,299,928
Reinsurance Contract Assets3,571,127 ---3,571,127
Total assets bearing credit risk3,897,9536,933,2108,595,20316,746,21136,172,577
Unrated financial assets principally comprise locally traded corporate bonds on the Malta Stock Exchange, amounts due from group companies, trade and other receivables, loans secured on policies and certain deposits with local bank institutions for which no international rating is available.
As at 31 December 2025 and 2024 the Group had an exposure with the Government of Malta through investments in debt securities. In 2025 these were equivalent to 3% (2024: 3%) of the Group\u2019s total investments.
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Notes to the financial statements
2.Management of insurance and financial risk
Credit risk
Credit risk in respect of other receivables is not deemed to be significant after considering the range of underlying receivables, and their creditworthiness. Receivables are stated net of impairment. Further detail in this regard is provided in Note 18 to the financial statements.
16.Other investments
(b)Loans and receivables
Loans secured on policies are substantially non-current in nature. Other loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market, other than those that the Group intends to sell in the short term. They are charged with interest at the rate of 12% (2024: 12%) per annum.
Consolidated and Company
20252024
\u20ac\u20ac
Year ended 31 December
Balance at 1 January 3,298,5033,134,171
Additions -14,036
Disposals (16,886)-
Foreign exchange movement(163,012)150,296
Balance at 31 December3,118,6053,298,503
18.Receivables, prepayments and accrued income
ConsolidatedCompany
2025202420252024
\u20ac\u20ac\u20ac\u20ac
Amounts due from intermediate parent (Note ii)6,994,3006,872,5586,994,3006,872,558
Amount receivable from subsidiary--291,952440,000
Amounts due from related parties (Note iii)5,931,9805,740,2665,670,7105,463,475
Other receivables (Note i and iv)102,020468,874102,020468,874
13,028,30013,081,69813,058,98213,244,907
ii.Amounts due from intermediate parent are secured, bearing interest at 3% or 4.5% and expected to be repaid in 10 years\u2019 time. The carrying amount is stated net of a provision of \u20ac146,748 (2024: \u20ac255,891).
The loans in question have been approved by the Malta Financial Services Authority.
The Directors are confident that such balances will be recovered within the stipulated time frame above.
iii.Amounts due from other related parties are secured and bear interest at 3% or 4.5% and as at 31 December 2025 the Directors expect these to be repaid in 5 and 10 years\u2019 time in accordance with the agreements. The carrying amount is stated net of a provision of \u20ac46,280 (2024: \u20ac129,383). Such balance has been carried forward prior to 1 January 2017.
iv.Other receivables are unsecured, interest-free and repayable on demand. They are stated net of provision for impairment of \u20ac161,967 (2024: \u20ac30,042). The company has directly written off other receivables of \u20ac57,432 during the current year which is included within the administrative and other expense in the statement of comprehensive income (2024: \u20ac110,618).
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Notes to the financial statements
1.Critical accounting estimates and judgements
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. Estimates and judgements are continually evaluated and based on historical experience and other factors including expectations of future events that are believed to be reasonable under the circumstances.
Except for the areas specified hereunder, in the opinion of the Directors, the accounting estimates and judgements made in the course of preparing these financial statements are not subjective or complex to a degree which would warrant their description as critical in terms of the requirements of IAS 1 (revised).
(a)Insurance contracts
Definition and classification
The Company has applied judgement to determine whether contracts are within the scope of IFRS 17 and, for contracts determined to be within the scope of IFRS 17, what measurement model is applicable, as explained below.
\u2022The Company issues certain contracts that do not transfer significant insurance risk and classifies such contracts as investment contracts with DPF. In assessing whether these are within the scope of IFRS 17, the Company assessed if the discretionary amount is a significant amount of the total benefits;
\u2022Contracts determined to be within the scope of IFRS 17 are assessed on whether they meet the definition of an insurance contract with direct participation features (subject to IFRS 17 criteria). The savings (unit-linked), the non-linked contracts with profit sharing and the investment contracts with DPF issued by the Company are classified as direct participation contracts;
\u2022For the proportional group life reinsurance contracts on a risk-attaching basis the Company elects to apply the PAA if at the inception of the group the Company reasonably expects that it will provide a liability/asset for remaining coverage that would not differ materially from the general model. The Company applies its judgement in determining whether the PAA eligibility criteria are met at initial recognition.
Insurance contracts unit of account
The Company is required to aggregate insurance contracts issued on initial recognition into groups of onerous contracts, groups of contracts with no significant possibility of becoming onerous, and groups of other contracts. Concerning the life long-term contracts, the Company has applied its judgment on initial recognition to distinguish between non-onerous contracts (those having no significant possibility of becoming onerous) and other contracts by assessing the likelihood of adverse changes in assumptions that might result in contracts becoming onerous.
For short-term group life contracts measured under the PAA, management judgement is required to assess whether facts and circumstances indicate that a group of contracts is onerous at initial recognition or has become onerous subsequently and whether any loss component measurement is required. In 2025 and 2024, the Company did not identify any facts or circumstances that might have indicated that a group of contracts measured under the PAA had become onerous.
Measurement of future cash flows
The measurement of a group of insurance contracts includes all the future cash flows arising within the contract boundary. In determining which cash flows fall within a contract boundary, the Company considers its substantive rights and obligations arising from the terms of the contract, and also from applicable law and regulation. Cash flows are considered to be outside of the contract boundary if the Company has the practical ability to reprice existing contracts to reflect their reassessed risks and if the contract\u2019s pricing for coverage up to the date of reassessment considers only the risks till that next reassessment date.
The following assumptions were used when estimating future cash flows:
\u2022Mortality and morbidity rates
Mortality and morbidity risks are inherent in most lines of business. The Company performs an investigation, at least on an annual basis, to ensure the validity of the mortality assumptions, and when deemed necessary the assumptions are adjusted accordingly. The assumptions are set based on the internal experience of the Company when there are sufficient volumes of data to support a credible investigation. When internal experience is not sufficient, the assumptions are set with reference to industry experience and commonly used mortality tables.
\u2022Expenses
Assessment of directly attributable cash flows
The Company applies judgement in assessing whether cash flows are directly attributable to a specific portfolio of insurance contracts. Insurance acquisition cash flows are included in the measurement of a group of insurance contracts only if they are directly attributable to either the individual contracts in a group, or to the group itself, or the portfolio of insurance contracts to which the group belongs. The Company also considers as attributable cash flows fixed and variable overheads directly attributable to the fulfilment of insurance contracts.
Expense basis for cashflow projections
The Company performs a detailed expense investigation, at least on an annual basis, to determine the expense assumptions used in the cashflow projections. The expense basis is set in accordance with the budgeted attributable expenses and the projected volumes of business. The Company also determines an assumption for the future expense inflation.
\u2022Lapse and surrender rates
Lapse and surrenders assumptions relate to the rate by which policyholders cancel/surrender their policies. The assumptions are set in line with recent Company experience, by adjusting for expected improvements/deteriorations where necessary. The rates vary by product and duration in force.
Discount rates
Life insurance contract liabilities are calculated by discounting expected future cash flows. The Company uses the bottom-up approach in determining the discount rates and hence uses a risk-free rate, plus an illiquidity premium. Risk free rates are determined by reference to the European Insurance and Occupational Pensions Authority (EIOPA) yields and the illiquidity premium is determined by the volatility adjustment as published by EIOPA.
The discount rates that were used to discount the estimates of future cash flows of the life insurance contracts issued and reinsurance contracts held are based on the EUR risk-free rate with volatility adjustment, as these are published by EIOPA. EIOPA annual spot rates are presented in the below table:
1 year3 years5 years10 years20 years
2024202520242025202420252024202520242025
2.466%2.216%2.323%2.423%2.372%2.619%2.497%3.003%2.489%3.349%
Risk adjustment for non-financial risk
The risk adjustment for non-financial risk is determined to reflect the compensation that the Company requires for bearing non-financial risk and its degree of risk aversion. The risk adjustment is determined using a confidence level technique and specifically a Risk-based capital approach with its target confidence level set at 80 percent, over a one year period, which represents the Company\u2019s degree of risk aversion.
CSM amortisation
The CSM of a group of contracts is recognised in profit or loss to reflect services provided in each year, by identifying the coverage units in the group, allocating the CSM remaining at the end of the year (before any allocation) equally to each coverage unit provided in the year and expected to be provided in future years, and recognising in profit or loss the amount of the CSM allocated to coverage units provided in the year. The number of coverage units is the quantity of services provided by the contracts in the Company, determined by considering for each contract the quantity of the benefits provided and its expected coverage period. The coverage units will be reviewed and updated at each reporting date. The Company determined the coverage units for its insurance contracts and investment contracts with DPF on the basis of their quantity of benefits (sum insured), including any investment components, and the respective expected durations of each contract.
For reinsurance contracts held, the CSM amortisation reflects the level of service received and depends on the number of underlying contracts in-force.
2.Management of insurance and financial risk
The Group issues contracts that transfer insurance risk or financial risk or both. This section summarises these risks and the way the Group manages them.
Insurance risk
The risk under any one insurance contract is the possibility that the insured event occurs and the uncertainty of the amount of the resulting claim. By the very nature of an insurance contract, this risk is random and therefore unpredictable.
For a portfolio of insurance contracts where the theory of probability is applied to pricing and provisioning, the principal risk that the Group faces under its insurance contracts is that the actual claims and benefit payments exceed the carrying amount of the insurance liabilities. This could occur because the frequency or severity of claims and benefits are greater than estimated. Insurance events are random and the actual number and amount of claims and benefits will vary from year to year from the estimate established using statistical techniques.
Experience shows that the larger the portfolio of similar insurance contracts, the smaller the relative variability about the expected outcome will be. In addition, a more diversified portfolio is less likely to be affected across the board by a change in any subset of the portfolio. The Group has developed its insurance underwriting strategy to diversify the type of insurance risk accepted and within each of these categories to achieve a sufficiently large population of risks to reduce the variability of the expected outcome.
Factors that aggravate insurance risk include lack of risk diversification in terms of type and amount of risk and geographical location.
The geographical concentration of the Company\u2019s insurance contract liabilities and reinsurance contract assets is noted below. The disclosure is based on the countries where the business is written:
\u00a020252024
\u00a0Insurance contract issued \u2013 Net LiabilitiesReinsurance contracts held \u2013 Net AssetsInsurance contract issued \u2013 Net LiabilitiesReinsurance contracts held \u2013 Net Assets
Italy(4,587,197)(253,185)(473,416)3,764
Malta(108,856,320)3,073,470(115,172,522)3,567,363
\u00a0(113,443,517)2,820,285(115,645,938)3,571,127
(a)Frequency and severity of claims
For contracts where death is the insured risk, the most significant factors that could increase the overall frequency of claims are epidemics or widespread changes in lifestyle, resulting in earlier or more claims than expected.
At present, these risks do not vary significantly in relation to the location of the risk insured by the Group. However, undue concentration by amounts could have an impact on the severity of benefit payments on a portfolio basis.
For contracts with fixed and guaranteed benefits and fixed future premiums, there are no mitigating terms and conditions that reduce the insurance risk accepted. Investment contracts with DPF (\u201cDiscretionary participation feature\u201d) carry negligible insurance risk.
The Group manages these risks through its underwriting strategy and reinsurance agreements. The underwriting strategy is intended to ensure that the risks underwritten are well diversified in terms of type of risk and the level of insured benefits. Medical selection is also included in the Group\u2019s underwriting procedures with premiums varied to reflect the health condition and lifestyle of the applicants.
The Group has retention limits on any single life assured for term business or risk premium business. The Group reinsures the excess of the insured benefits over approved retention limits under a treaty reinsurance arrangement. Short term insurance contracts are also protected through a combination of selective quota share and surplus reinsurance. Further, the Group has a \u201cCAT XL\u201d reinsurance arrangement to cover its exposure in the case of an event affecting more than three lives.
In general, all large sums assured are facultatively reinsured on terms that substantially limit the Group\u2019s maximum net exposure. The Directors consider that all other business is adequately protected through treaty reinsurance with a reasonable spread of benefits payable according to the age of the insured, and the size of the sum assured. The Group is largely exposed to insurance risk in Malta and Italy. Single event exposure is capped through the \u201cCAT XL\u201d reinsurance arrangement as referred above.
(b)Lapse and surrender rates
Lapses relate to the termination of policies due to non\u2013payment of premiums. Surrenders relate to the voluntary termination of policies by policyholders. Policy termination assumptions are determined using statistical measures based on the Group\u2019s experience and vary by product type, policy duration and sales trends.
An increase in lapse rates early in the life of the policy would tend to reduce profits for shareholders, but later increases are broadly neutral in effect.
(c)Policy maintenance expenses
Operating expenses assumptions reflect the projected costs of maintaining and servicing in\u2013force policies and associated overhead expenses. The current level of expenses is taken as an appropriate expense base, adjusted for expected expense inflation if appropriate.
An increase in the level of expenses would result in an increase in expenditure, thereby reducing profits for the shareholders.
(d)Discount rates and investment return
Life insurance liabilities are determined as the sum of the discounted value of the expected benefits and future administration expenses directly related to the contract, less the discounted value of the expected theoretical premiums that would be required to meet these future cash outflows. Discount rates are based on current industry risk rates as these are published by EIOPA.
Consistent rates are used also as investment return assumptions to ensure a risk neutral valuation basis.
A change in interest rates will impact the value of the insurance liability and therefore affect the profits for the shareholders.
(e)Sources of uncertainty in the estimation of future benefit payments and premium receipts
Uncertainty in the estimation of future benefit payments and premium receipts for long term insurance contracts arises from the unpredictability of long-term changes in overall levels of mortality and the variability in contract holder behaviour. The Group uses appropriate base tables of standard mortality according to the type of contract being written.
Sensitivity analysis
Life business
The tables below analyse how the CSM, profit or loss and equity would have increased (decreased) if changes in underwriting risk variables that were reasonably possible at the reporting date had occurred. This analysis presents the sensitivities both gross and net of reinsurance held and is based on a change in one risk variable with all other variables held constant. Sensitivity analysis assumes that changes to variables can be made independently, which is very unlikely to occur in practice.
Key assumptionChange in assumptionImpact on CSM\u20acImpact on profit\u20acImpact on equity\u20ac
Year ended 2025
Insurance contract liabilities
Mortality rates+10%(1,872,396)(218,961)(142,325)
Mortality rates-10%2,272,487232,975151,434
Expenses+10%(1,507,384)(399,648)(259,771)
Expenses-10%1,784,570122,46279,600
Lapse rates+10%(854,477)(199,572)(129,722)
Lapse rates-10%1,054,02597,88963,628
Reinsurance contract assets
Mortality rates+10%1,708,467179,047116,381
Mortality rates-10%(1,716,797)(179,814)(116,879)
Lapse rates+10%(130,705)(18,407)(11,964)
Lapse rates-10%151,49421,36613,888
Sensitivity analysis (continued)
Life business (continued)
Key assumptionChange in assumptionImpact on CSM\u20acImpact on profit\u20acImpact on equity\u20ac
Year ended 2024
Insurance contract liabilities
Mortality rates+10%(1,948,180)(300,264)(195,172)
Mortality rates-10%2,144,009117,95976,673
Expenses+10%(1,249,963)(174,756)(113,591)
Expenses-10%1,363,47261,24739,811
Lapse rates+10%(851,944)(146,886)(95,476)
Lapse rates-10%1,062,76576,21949,542
Reinsurance contract assets
Mortality rates+10%1,449,424168,762109,695
Mortality rates-10%(1,456,175)(169,544)(110,204)
Lapse rates+10%(331,187)(35,161)(22,854)
Lapse rates-10%393,40841,69927,104
Financial risk
The Group is exposed to financial risk through its financial assets and liabilities, reinsurance assets, and insurance liabilities. In particular, the key financial risk is that the proceeds from its financial assets are not sufficient to fund the obligations arising from its insurance and investment contracts with DPF. The most important components of financial risk are market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk.
These risks partly arise from open positions in interest rate, currency, debt and equity products, all of which are exposed to general and specific market movements. The Group manages these positions through adherence to an investment policy. The policy adopted is modelled to take into account actuarial recommendations and is developed to achieve long term investment returns in excess of its obligations under insurance and investment contracts with DPF. The principal technique underlying the Group\u2019s framework is to broadly match assets to the liabilities arising from insurance and investment contracts with DPF by reference to the type of benefits payable to contract holders, and the recommended portfolio mix as advised by the approved actuary.
The Group\u2019s investment policy is formally approved by the Board of Directors. Portfolio review processes and investment decisions are generally delegated to a dedicated Sub-Investment Committee or the Chief Executive Officer. Transactions in excess of pre-established parameters are subject to Board approval. The procedures consider, inter alia, a recommended portfolio structure, authorisation parameters, asset and counterparty limits and currency restrictions. Management reports to the Investment Committee on a regular basis. The Committee meets regularly to consider, inter alia, investment prospects, liquidity, the performance of the portfolio and the overall framework of the Group\u2019s investment strategy. Solvency considerations as regulated by the relevant Authority are also taken into account as appropriate.
Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument, insurance contract issued or reinsurance contract held will fluctuate because of changes in market prices.
Market risk comprises three types of risk:
(a)Foreign exchange rates currency risk;
(b)Market interest rates; and
(c)Market prices risk.
(a)Foreign exchange rates currency risk
The Company's and Group\u2019s exposure to foreign exchange risk arises primarily from investments that are denominated in currencies other than the Euro. As at 31 December 2025, the Company\u2019s and Group\u2019s exposure to foreign currency investments (principally comprising a mix of US Dollar and UK pound) represented 4.3% (2024: 5.7%) of the Group\u2019s total investments excluding the term deposits.
An amount equivalent to 8% (2024: 0.9%) of the Group\u2019s cash and cash equivalents and term deposits, at 31 December 2025, are denominated in foreign currency (principally comprising a mix of US Dollar and UK pound). The Group\u2019s corresponding proportion of cash and cash equivalents and term deposits which are denominated in foreign currency is 5.9% (2024: 0.6%).
The risk arising from foreign currency transactions is managed by regular monitoring of the relevant exchange rates and management\u2019s reaction to material movements thereto.
For financial instruments held or issued, a sensitivity analysis technique that measures the change in the fair value and the cash flows of the Group\u2019s financial instruments at the reporting date for hypothetical changes in exchange rates has been used. The amounts generated from the sensitivity analysis are forward-looking estimates of market risk assuming certain market conditions. Actual results in the future may differ materially from those projected results due to the inherent uncertainty of global financial markets. The sensitivity analysis is for illustrative purposes only, as in practice market rates rarely change in isolation and are likely to be inter-dependent.
Should exchange rates at the end of the reporting period differ by +/-10% (2024: +/-10%), with all other variables held constant, the impact on the Company\u2019s and the Group\u2019s pre-tax profit would be +/- \u20ac499,484 (2024: +/- \u20ac620,916).
(b)Market interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument or insurance contract or reinsurance contract will fluctuate because of changes in market interest rates.
(c)Market prices risk
This sensitivity analysis is based on a change in an assumption while holding all other assumptions constant and does not consider, for example, the mitigating impact of the DPF element on policyholder liabilities for contracts with a DPF.
20252024
ChangeIImpact on profit before taxImpact on equityImpact on profit before taxImpact on equity
\u20ac\u20ac\u20ac\u20ac
Insurance contract liabilities+10%-10,523,15041,174,610-11,026,77336,404,284
Insurance contract liabilities-10%-12,165,55418,485,906-12,102,41513,275,096
Credit risk
The Group has exposure to credit risk, which is the risk that a counterparty will be unable to pay amounts in full when due. Financial assets that potentially subject the Group to concentrations of credit risk consist principally of:
-other investments;
-reinsurers\u2019 contract assets;
-amounts due from insurance policy holders and intermediaries associated with future premium inflows from insurance contracts issued;
-cash and cash equivalents; and
-amounts due from group undertakings.
The Group structures the levels of credit risk it accepts by placing limits on its exposure to a single counterparty, or group of counterparties. Limits on the level of credit risk by category are defined within the Group\u2019s investment policy as described earlier. This policy also considers regulatory restrictions on asset and counterparty exposures. Further detail on the content of the Group\u2019s investment portfolio is provided in Note 16 to these financial statements.
Assets bearing credit risk at the end of the reporting period are analysed as follows:
Consolidated
As at 31 December 2025
AAA to AAABBB to BBelow B to unratedTotal
\u20ac\u20ac\u20ac\u20ac\u20ac
Investments
Debt securities at fair value through profit or loss279,0463,566,9985,901,7511,361,61711,109,412
279,0463,566,9985,901,7511,361,61711,109,412
Loans and receivables
Loans secured on policies-----133,348133,348
Other loans and receivables-3,113,003--3,113,003
Trade and other receivables---102,021102,021
Amounts due from group undertakings---12,926,28012,926,280
Term deposits----3,000,00033,000,000
Cash and cash equivalents434,627-1,006,043105,5931,546,263
434,6273,113,0031,006,04316,267,24220,820,915
Reinsurance Contract Assets2,820,285----2,820,285
Total assets bearing credit risk3,533,9586,680,0016,907,79417,628,85934,750,612
Consolidated
As at 31 December 2024
AAA to AAABBB to BBelow B to unratedTotal
\u20ac\u20ac\u20ac\u20ac\u20ac
Investments
Debt securities at fair value through profit or loss279,0063,657,1946,723,2973,642,02514,301,522
279,0063,657,1946,723,2973,642,02514,301,522
Loans and receivables
Loans secured on policies---22,48722,487
Other loans and receivables-3,276,016--3,276,016
Trade and other receivables---468,874468,874
Amounts due from group undertakings---12,612,82512,612,825
Term deposits--300,000-300,000
Cash and cash equivalents47,820-1,571,906-1,619,726
47,8203,276,0161,871,90613,104,18618,299,928
Reinsurance Contract Assets3,571,127 ---3,571,127
Total assets bearing credit risk3,897,9536,933,2108,595,20316,746,21136,172,577
Liquidity risk
Liquidity is the risk that cash may not be available to pay obligations when due at a reasonable cost. The Group adopts a prudent liquidity risk management approach by maintaining a sufficient proportion of its assets in cash and marketable securities through the ability to close out market positions. Senior management is updated on a regular basis on the cash position of the Group illustrating, inter alia, actual cash balance net of operational commitments falling due in the short term as well as investment commitments falling due in the medium and long term.
The Group is exposed to daily calls on its available cash resources in order to meet its obligations, including claims arising from contracts in issue by the Company. Other financial liabilities which expose the Group to liquidity risk mainly comprise trade and other payables. Liquidity is the risk that cash may not be available to pay obligations when due at a reasonable cost.
Maturity analysis for insurance liabilities
The following table summarizes the maturity profile of the Company\u2019s portfolios of insurance contracts issued that are liabilities based on the remaining contractual undiscounted net cash flows expected to be paid out in the periods presented. Liabilities for remaining coverage measured under the PAA have been excluded from this analysis.
2025Undiscounted net future cash flows
1 year or less1-2 years2-3 years3-4 years4-5 yearsMore than 5 yearsTotal
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Insurance contracts
Participating10,957,34414,175,1015,843,0435,444,5394,399,86712,787,63553,607,529
Other life (2,966,024)(2,998,259)(2,464,878)(1,951,239)(1,205,658)(1,964,547)(13,550,605)
Savings(4,902,166)(4,079,045)(2,653,871)(1,538,015)(172,926)132,324,392118,978,369
Sickness and Accident (150,173)(310,223)(246,560)(190,184)(147,696)(345,554)(1,390,390)
Sub-Total2,938,9816,787,574477,7341,765,1012,873,587142,801,926157,644,903
Life Reinsurance Contracts(753,726)(90,140)(142,959)(189,644)(202,647)(2,077,446)(3,456,562)
Sub-Total(753,726)(90,140)(142,959)(189,644)(202,647)(2,077,446)(3,456,562)
Total2,185,2556,697,433334,7761,575,4572,670,941140,724,480154,188,342
2024Undiscounted net future cash flows
1 year or less1-2 years2-3 years3-4 years4-5 yearsMore than 5 yearsTotal
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Insurance contracts
Participating12,595,2299,873,4298,914,4415,782,8385,129,58116,351,80758,647,325
Other life (1,197,836)(1,560,839)(1,321,505)(1,138,223)(897,443)(1,589,640)(7,705,486)
Sickness and Accident(2,399,767)(3,615,455)(2,324,981)(1,239,097)(492,003)94,590,84284,519,539
Savings(297,209)(284,123)(234,706)(180,158)(131,249)(267,749)(1,395,194)
Sub-Total8,700,4174,413,0125,033,2493,225,3603,608,886109,085,260134,066,184
Life Reinsurance Contracts(3,673,408)(254,728)(260,278)(261,737)(260,584)(3,575,358)(8,286,093)
Sub-Total(3,673,408)(254,728)(260,278)(261,737)(260,584)(3,575,358)(8,286,093)
Total5,027,0094,158,2844,772,9712,963,6233,348,302105,509,902125,780,091
The amounts of insurance contract liabilities that are repayable on demand are set out below.
2025Amount payable on demandCarrying amount
\u20ac\u20ac
Participating40,885,99948,102,934
Savings73,587,45564,753,840
Total114,473,454112,856,774
2024Amount payable on demandCarrying amount
\u20ac\u20ac
Participating49,141,46758,301,311
Savings60,165,78553,035,698
Total109,307,252111,337,009
3.Particulars of business
3.1Insurance revenue
The following table present an analysis of the insurance revenue recognised in the period.
Consolidated and Company
20252024
\u20ac\u20ac
Contracts not measured under the PAA
Amounts relating to changes in liabilities for remaining coverage
-Expected incurred claims and other insurance service expenses 4,287,0273,816,098
-Change in risk adjustment for non-financial risk for risk expired 337,499161,626
-CSM recognised for services provided 2,452,421971,210
Recovery of insurance acquisition cash flows 957,240315,307
Contracts measured under the PAA 668,880671,466
Total insurance revenue8,703,0675,935,707
3.2Insurance service expense
The table below shows an analysis of insurance service expense recognised in the period.
Consolidated and Company
20252024
\u20ac\u20ac
Incurred claims and other insurance service expenses2,292,6072,624,565
Changes that relate to future service: losses on onerous contracts and reversals of those losses625,319(6,593)
Changes that relate to past service: changes to liabilities for incurred claims978,956216,498
Amortisation of insurance acquisition cash flows1,018,256366,902
Total insurance service expenses4,915,1383,201,372
3.3Net expense from reinsurance contracts held
An analysis of allocation of reinsurance premiums paid and amounts recovered from reinsurers are presented in the tables below.
Consolidated and Company
20252024
\u20ac\u20ac
Amounts related to liabilities for remaining coverage
-Recoveries for expected incurred claims and other expenses(2,062,206)(1,764,422)
-Risk adjustment for the risk expired(84,816)(73,182)
-CSM for the service received(309,368)(126,569)
Contracts not measured under the PAA(2,456,390)(1,964,173)
Contracts measured under the PAA(312,321)(296,397)
Allocation of reinsurance paid(2,768,711)(2,260,570)
Recoveries for incurred claims and other expenses395,3271,333,493
Changes that relate to future service: recoveries for losses on onerous contracts and reversals of those losses33,347(2,386)
Changes that relate to past service: changes to recoveries of liabilities for incurred claims662,819279,746
Amounts recovered from reinsurers1,091,4931,610,853
Net expenses from reinsurance contracts held(1,677,218)(649,717)
3.5Insurance and reinsurance contracts
The table below sets out the carrying amounts of groups of insurance and reinsurance contracts assets and liabilities at the end of reporting date.
20252024
AssetsLiabilitiesNetAssetsLiabilitiesNet
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Total insurance contracts issued-(118,919,672)(118,919,672)-(115,645,938)(115,645,938)
Total reinsurance contracts held2,820,283-2,820,2833,571,127-3,571,127
3.5.1Reconciliation of changes in insurance contracts by remaining coverage and incurred claims
The tables below represent the reconciliation from the opening to the closing balances of the liabilities for the remaining coverage and the liabilities for incurred claims for insurance contracts
Consolidated and Company
2025Liabilities for remaining coverageLiabilities for incurred claimsTotal
Excluding loss componentLoss component Contracts not under PAAContracts under PAA
Estimates of present value of future cash flowsRisk adjustment for non-financial risk
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Opening assets(1,613,431)(6,467)(2,300)--(1,622,198)
Opening liabilities113,583,341945,0472,605,314140,435-117,274,137
Net opening balance111,969,910938,5802,603,014140,435-115,651,939
Changes in the statement of comprehensive income
Contracts under fair value approach(8,703,067)----(8,703,067)
Other contracts------
Insurance revenue(8,703,067)(8,703,067)
2025Liabilities for remaining coverageLiabilities for incurred claimsTotal
Excluding loss componentLoss component Contracts not under PAAContracts under PAA
Estimates of present value of future cash flowsRisk adjustment for non-financial risk
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Incurred claims and other insurance service expenses-(46,445)2,339,051--2,292,606
Acquisition expenses1,018,257----1,018,257
Losses and reversal of losses on onerous contracts -625,319---625,319
Adjustments to liabilities for incurred claims--978,956--978,956
Insurance service expenses1,018,257578,8743,318,007--4,915,138
Investment components(15,873,022)-15,873,022---
Insurance service results(23,557,832)578,87419,191,029--(3,787,929)
Insurance finance income / expense4,073,69617,739---4,091,435
Total changes in the statement of comprehensive income(19,484,136)596,61319,191,029--303,506
Consolidated and Company
2025Liabilities for remaining coverageLiabilities for incurred claimsTotal
Excluding loss componentLoss component Contracts not under PAAContracts under PAA
Estimates of present value of future cash flowsRisk adjustment for non-financial risk
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Cash flows
Premium received26,405,37713,472---26,418,849
Claims and other insurance service expenses paid, including investment components--(19,767,068)(140,435)-(19,907,503)
Insurance acquisition cash flows(9,023,273)----(9,023,273)
Total cash flows17,382,10413,472(19,767,068)(140,435)-(2,511,927)
Net closing balance109,867,8771,548,6652,026,975--113,443,517
Closing assets(5,822,750)58,028288,566--(5,476,156)
Closing liabilities115,690,6271,490,6371,738,410--118,919,674
Net closing balance109,867,8761,548,6652,026,976--113,443,517
2024Liabilities for remaining coverageLiabilities for incurred claimsTotal
Excluding loss componentLoss component Contracts not under PAAContracts under PAA
Estimates of present value of future cash flowsRisk adjustment for non-financial risk
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Opening assets(1,231,272)(18,713)304,200--(945,785)
Opening liabilities103,372,7031,037,9781,620,42377,972-106,109,076
Net opening balance102,141,4311,019,2651,924,62377,972-105,163,291
Changes in the statement of comprehensive income
Contracts under fair value approach------
Other contracts------
Insurance revenue(5,935,707)----(5,935,707)
2024Liabilities for remaining coverageLiabilities for incurred claimsTotal
Excluding loss componentLoss component Contracts not under PAAContracts under PAA
Estimates of present value of future cash flowsRisk adjustment for non-financial risk
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Incurred claims and other insurance service expenses-(58,615)2,267,143416,037-2,624,565
Acquisition expenses366,902----366,902
Losses and reversal of losses on onerous contracts -(6,593)---(6,593)
Adjustments to liabilities for incurred claims--216,498--216,498
Insurance service expenses366,902(65,208)2,483,641416,037-3,201,372
Investment components(15,273,291)-15,273,291---
Insurance service results(20,842,096)(65,208)17,756,932416,037-(2,734,335)
Insurance finance income / expense12,309,396(15,478)---12,293,918
Total changes in the statement of comprehensive income(8,532,700)(80,686)17,756,932416,037-9,559,583
Consolidated and Company
2024Liabilities for remaining coverageLiabilities for incurred claimsTotal
Excluding loss componentLoss component Contracts not under PAAContracts under PAA
Estimates of present value of future cash flowsRisk adjustment for non-financial risk
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Cash flows
Premium received22,635,313----22,635,313
Claims and other insurance service expenses paid, including investment components--(17,078,542)(353,574)-(17,432,115)
Insurance acquisition cash flows(4,274,133)----(4,274,133)
Total cash flows18,361,180-(17,078,542)(353,574)-929,065
Net closing balance111,969,910938,5792,603,014140,435-115,651,938
Closing assets(1,613,431)(6,467)(2,300)--(1,622,199)
Closing liabilities113,583,341945,0472,605,314140,435-117,274,137
Net closing balance111,969,910938,5792,603,014140,435-115,651,938
3.5.2Reconciliation of measurement components of insurance contracts not measured under the PAA
The tables below represent the reconciliation from the opening to the closing balances for each measurement component of insurance contracts (other than those measured under the PAA).
Consolidated and Company
2025Estimates of present value of future cash flowsRisk adjustment for non-financial riskContractual Service MarginTotal
\u20ac\u20ac\u20ac\u20ac
Opening assets(4,774,918)320,5362,832,183(1,622,199)
Opening liabilities98,199,3581,885,36116,599,364116,684,083
Net opening balance93,424,4402,205,89719,431,547115,061,884
Changes in the statement of comprehensive income
Changes that relate to current services
CSM recognised for services provided6,005-2,438,9482,444,953
Risk adjustment recognised for the risk expired-337,764-337,764
Experience adjustments - expected1,994,155--1,994,155
Experience adjustments - actual----
Consolidated and Company
2025Estimates of present value of future cash flowsRisk adjustment for non-financial riskContractual Service MarginTotal
\u20ac\u20ac\u20ac\u20ac
Changes that relate to future services
Contracts initially recognised in the period7,398,729(768,151)(6,792,433)(161,855)
Changes in estimates that adjust the CSM(4,089,327)(344,946)4,434,273-
Changes in estimates that result in losses and reversal of losses on onerous contracts(450,697)(12,766)-(463,463)
Changes that relate to past services
Adjustments to liabilities for incurred claims(978,956)--(978,956)
Insurance service result3,879,909(788,100)80,7883,172,597
Insurance finance expenses(3,859,312)-(232,122)(4,091,434)
Total changes in the statement of comprehensive income20,597(788,100)(151,334)(918,837)
Cash flows 2,907,691--2,907,691
Net closing balance(90,496,153)(2,993,997)(19,582,881)(113,073,031)
Closing assets12,498,790(1,114,475)(5,908,160)5,476,155
Closing liabilities(102,994,943)(1,879,521)(13,674,720)(118,549,184)
Net closing balance(90,496,153)(2,993,996)(19,582,880)(113,073,029)
Consolidated and Company
2024Estimates of present value of future cash flowsRisk adjustment for non-financial riskContractual Service MarginTotal
\u20ac\u20ac\u20ac\u20ac
Opening assets(3,186,466)337,2801,903,401(945,785)
Opening liabilities90,323,4461,445,16414,002,338105,770,948
Net opening balance87,136,9801,782,44415,905,739104,825,163
Changes in the statement of comprehensive income
Changes that relate to current services
CSM recognised for services provided
Risk adjustment recognised for the risk expired--(971,211)(971,211)
Experience adjustments - expected-(162,224)-(162,224)
Experience adjustments - actual(1,606,971)--(1,606,971)
Consolidated and Company
2024Estimates of present value of future cash flowsRisk adjustment for non-financial riskContractual Service MarginTotal
\u20ac\u20ac\u20ac\u20ac
Changes that relate to future services
Contracts initially recognised in the period(3,691,430)444,2693,426,695179,534
Changes in estimates that adjust the CSM(1,066,667)117,461949,206-
Changes in estimates that result in losses and reversal of losses on onerous contracts(210,074)23,949-(186,125)
Changes that relate to past services
Adjustments to liabilities for incurred claims216,497--216,497
Insurance service result(6,358,645)423,4553,404,690(2,530,500)
Insurance finance expenses12,172,800-121,11812,293,918
Total changes in the statement of comprehensive income5,814,155423,4553,525,8089,763,416
Cash flows 473,306--473,306
Net closing balance93,424,4402,205,89919,431,547115,061,884
Closing assets(4,774,918)320,5362,832,183(1,622,199)
Closing liabilities98,199,3581,885,36116,599,364116,684,083
Net closing balance93,424,4402,205,89719,431,547115,061,884
3.5.3Reconciliation of changes in reinsurance contracts held by remaining coverage and incurred claims
The tables below represent the reconciliation from the opening to the closing balances of the assets for the remaining coverage and the assets for incurred claims for reinsurance contracts held.
Consolidated and Company
2025Liabilities for remaining coverageAmounts recoverable for incurred claimsTotal
Remaining coverage componentLoss-recovery componentContracts not under PAAContracts under PAA
Estimates of present value of future cash flowsRisk adjustment for non-financial risk
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Opening assets4,847,01119,444(1,288,462)98,305-3,676,298
Opening liabilities(99,472)(5,702)---(105,174)
Net opening balance4,747,53913,742(1,288,462)98,305-3,571,124
Changes in the statement of profit or loss
Allocation of reinsurance premiums(2,768,711)----(2,768,711)
Amounts recovered from reinsurers-33,347669,622388,525-1,091,494
Recoveries for incurred claims and other expenses--6,803388,525-395,328
2025Liabilities for remaining coverageAmounts recoverable for incurred claimsTotal
Remaining coverage componentLoss-recovery componentContracts not under PAAContracts under PAA
Estimates of present value of future cash flowsRisk adjustment for non-financial risk
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Changes in the statement of profit or loss (continued)
Changes that relate to future service: recoveries for losses on onerous contracts and reversals of those losses-33,347---33,347
Changes that relate to past service: changes to recoveries of liabilities for incurred claims--662,819--662,819
Net expenses from reinsurance contracts(2,768,711)33,347669,622388,525-(1,677,217)
Finance income from reinsurance contracts held recognised in P&L125,485383---125,868
Total changes in the statement of comprehensive income(2,643,226)33,730669,622388,525-(1,551,349)
2025Liabilities for remaining coverageAmounts recoverable for incurred claimsTotal
Remaining coverage componentLoss-recovery componentContracts not under PAAContracts under PAA
Estimates of present value of future cash flowsRisk adjustment for non-financial risk
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Cash flows
Premiums paid2,660,928----2,660,928
Amounts received--(1,373,591)(486,830)-(1,860,421)
Total cash flows2,660,928-(1,373,591)(486,830)-800,507
Net closing balance4,765,24247,472(1,992,431)--2,820,283
Closing assets4,862,92450,240(1,992,431)--2,920,733
Closing liabilities(97,682)(2,768)---(100,450)
Net closing balance4,765,24247,472(1,992,431)--2,820,283
2024Liabilities for remaining coverageAmounts recoverable for incurred claimsTotal
Remaining coverage componentLoss-recovery componentContracts not under PAAContracts under PAA
Estimates of present value of future cash flowsRisk adjustment for non-financial risk
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Opening assets4,846,38025,908(2,175,416)54,581-2,751,453
Opening liabilities(175,245)(10,607)---(185,852)
Net opening balance4,671,13515,301(2,175,416)54,581-2,565,601
Changes in the statement of profit or loss
Allocation of reinsurance premiums(2,260,570)----(2,260,570)
Amounts recovered from reinsurers-(2,386)1,038,736574,503-1,610,853
Recoveries for incurred claims and other expenses--758,990574,503-1,333,493
2024Liabilities for remaining coverageAmounts recoverable for incurred claimsTotal
Remaining coverage componentLoss-recovery componentContracts not under PAAContracts under PAA
Estimates of present value of future cash flowsRisk adjustment for non-financial risk
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Changes in the statement of profit or loss (continued)
Changes that relate to future service: recoveries for losses on onerous contracts and reversals of those losses-(2,386)---(2,386)
Changes that relate to past service: changes to recoveries of liabilities for incurred claims--279,746--279,746
Net expenses from reinsurance contracts(2,260,570)(2,386)1,038,736574,503-(649,717)
Finance income from reinsurance contracts held recognised in P&L148,566828---149,394
Total changes in the statement of comprehensive income(2,112,004)(1,558)1,038,736574,503-(500,323)
2024Liabilities for remaining coverageAmounts recoverable for incurred claimsTotal
Remaining coverage componentLoss-recovery componentContracts not under PAAContracts under PAA
Estimates of present value of future cash flowsRisk adjustment for non-financial risk
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Cash flows
Premiums paid2,188,409----2,188,409
Amounts received--(151,782)(530,779)-(682,561)
Total cash flows2,188,409-(151,782)(530,779)-1,505,848
Net closing balance4,747,53913,743(1,288,462)98,305-3,571,125
Closing assets4,847,01119,444(1,288,462)98,305-3,676,298
Closing liabilities(99,472)(5,702)---(105,174)
Net closing balance4,747,53913,742(1,288,462)98,305-3,571,124
3.5.4Reconciliation of measurement components of reinsurance contracts held not measured under the PAA
The table below represents the reconciliation from the opening to the closing balance for each measurement component of reinsurance contracts held (other than those measured under the PAA).
2025Estimates of present value of future cash flowsRisk adjustment for non-financial riskContractual Service MarginTotal
\u20ac\u20ac\u20ac\u20ac
Opening assets1,392,130643,3921,372,1123,407,634
Opening liabilities485,523180,838(771,534)(105,173)
Net opening balance1,877,653824,230600,5783,302,461
CSM recognised for services received--(309,368)(309,368)
Risk adjustment recognised for the risk expired-(84,816)-(84,816)
Experience adjustments \u2013 expected (2,055,403)--(2,055,403)
2025Estimates of present value of future cash flowsRisk adjustment for non-financial riskContractual Service MarginTotal
\u20ac\u20ac\u20ac\u20ac
Changes that relate to future services
Contracts initially recognised in the period(1,350,969)204,6911,146,278-
Changes in estimates that adjust the CSM(813,067)(20,113)833,180-
Changes in the FCF that do not adjust the CSM for the group of underlying insurance contracts--33,34733,347
Changes in recoveries of losses on onerous underlying contracts that adjust the CSM----
Changes that relate to past services-
Changes in amounts recoverable arising from changes in liability for incurred claims662,819--662,819
Effect of changes in non-performance risk of reinsurers----
Net expense from reinsurance contracts(3,556,620)99,7621,703,436(1,753,422)
2025Estimates of present value of future cash flowsRisk adjustment for non-financial riskContractual Service MarginTotal
\u20ac\u20ac\u20ac\u20ac
Net finance income from reinsurance contracts121,427-4,440125,867
Total changes in the statement of comprehensive income(3,435,193)99,7621,707,877(1,627,554)
Cash flows976,273--976,273
Net closing balance(581,267)923,9922,308,4552,651,180
Closing assets(1,647,091)657,0013,741,7202,751,630
Closing liabilities1,065,824266,991(1,433,265)(100,450)
Net closing balance(581,267)923,9922,308,4552,651,180
2024Estimates of present value of future cash flowsRisk adjustment for non-financial riskContractual Service MarginTotal
\u20ac\u20ac\u20ac\u20ac
Opening assets196,550574,9101,802,6842,574,144
Opening liabilities817,754161,507(1,165,113)(185,852)
Net opening balance1,014,304736,417637,5712,388,292
CSM recognised for services received--(126,569)(126,569)
Risk adjustment recognized for the risk expired-(73,182)-(73,182)
Experience adjustments(1,005,432)--(1,005,432)
2024Estimates of present value of future cash flowsRisk adjustment for non-financial riskContractual Service MarginTotal
\u20ac\u20ac\u20ac\u20ac
Changes that relate to future services
Contracts initially recognised in the period277,432130,230(407,662)-
Changes in estimates that adjust the CSM(564,058)30,765533,293-
Changes in the FCF that do not adjust the CSM for the group of underlying insurance contracts--(18,650)(18,650)
Changes in recoveries of losses on onerous underlying contracts that adjust the CSM--16,26416,264
Changes that relate to past services----
Changes in amounts recoverable arising from changes in liability for incurred claims279,746--279,746
Effect of changes in non-performance risk of reinsurers----
Net expense from reinsurance contracts(1,012,312)87,813(3,324)(927,823)
2024Estimates of present value of future cash flowsRisk adjustment for non-financial riskContractual Service MarginTotal
\u20ac\u20ac\u20ac\u20ac
Net finance income from reinsurance contracts183,062-(33,669)149,393
Total changes in the statement of comprehensive income(829,250)87,813(36,993)(778,430)
Cash flows1,692,599--1,692,599
Net closing balance1,877,653824,230600,5783,302,461
Closing assets1,392,130643,3921,372,1123,407,634
Closing liabilities485,523180,838(771,534)(105,173)
Net closing balance1,877,653824,230600,5783,302,461
3.5.5Effect of contracts initially recognised in the period
Profitable (non-onerous) contractsOnerous Contracts
2025202420252024
\u20ac\u20ac\u20ac\u20ac
Insurance acquisition cash flows6,755,2072,065,226182,112169,613
Claims and other insurance service expenses payable36,725,66526,466,4982,198,1203,354,067
Estimates of present value of cash outflows43,480,87228,531,7242,380,2323,523,680
Estimates of present value of cash inflows(51,036,398)(32,384,607)(2,223,436)(3,362,226)
Risk adjustment for non-financial risk763,092426,1905,05918,079
Contractual Service Margin (CSM)6,792,4333,426,695--
Losses recognised on initial recognition / Amount included in insurance contract liabilities for the period--161,855179,533
Reinsurance contracts held20252024
\u20ac\u20ac
Estimates of PV of future cash inflows(6,501,338)2,793,591
Estimates of PV of future cash outflows7,852,307(2,516,159)
Risk adjustment(204,691)130,230
Income recognised on initial recognition--
CSM(1,146,278)407,662
3.5.6Expected recognition of the contractual service margin
An analysis of the expected recognition of the CSM remaining at the end of reporting period in profit or loss is presented below.
Consolidated and Company
2025Less than 1 year1-2 years2-3 years3-4 years4-5 years5-10 years >10 yearsTotal
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Insurance contracts
-Participating773,959643,437550,796470,129402,5741,294,7751,120,8245,256,494
-Other Life1,222,1151,115,2981,012,095915,446825,9443,006,4073,066,97611,164,281
-Savings176,697167,389157,284146,974137,237559,620953,4362,298,637
-Sickness & Accident131,748121,849112,802104,40196,584296,085-863,469
Total CSM for insurance contracts2,304,5192,047,9731,832,9771,636,9501,462,3395,156,8875,141,23619,582,881
Reinsurance contracts
-Life Reinsurance(307,033)(268,813)(232,180)(199,719)(171,804)(578,903)(550,003)(2,308,455)
Total CSM for reinsurance contracts held(307,033)(268,813)(232,180)(199,719)(171,804)(578,903)(550,003)(2,308,455)
Total CSM net of reinsurance1,997,4861,779,1601,600,7971,437,2311,290,5354,577,9844,591,23317,274,426
Consolidated and Company
2024Less than 1 year1-2 years2-3 years3-4 years4-5 years5-10 years >10 yearsTotal
\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac\u20ac
Insurance contracts
-Participating197,263203,208212,315220,793226,6191,201,1763,820,5526,081,926
-Other Life492,588480,233465,434445,426424,5361,860,9504,857,5889,026,755
-Savings239,198233,573226,263218,006209,512916,9611,710,1263,753,639
-Sickness & Accident89,60782,66875,31367,92561,330192,384-569,227
Total CSM for insurance contracts1,018,656999,682979,325952,150921,9974,171,47110,388,26619,431,547
Reinsurance contracts
-Life Reinsurance(104,000)(88,573)(73,361)(59,051)(46,868)(126,067)(102,658)(600,578)
Total CSM for reinsurance contracts held(104,000)(88,573)(73,361)(59,051)(46,868)(126,067)(102,658)(600,578)
Total CSM net of reinsurance914,656911,109905,964893,099875,1294,045,40410,285,60818,830,969
3.6.Investment contract liabilities
The table shows a reconciliation of the opening to closing balance for the investment contract liabilities:
Consolidated and CompanyConsolidated and Company
20252024
\u20ac\u20ac
At 1 January8,619,6246,705,671
Amounts recognised in profit or loss
Investment return from underlying assets 1,164,280741,674
Recurring investment management fees deducted(451,770)(396,413)
Cash flows
Contribution received6,992,2002,432,547
Benefits paid(924,687)(863,855)
At 31 December15,399,6478,619,624
In the above reconciliation, the investment return from the underlying assets represents changes in the fair value of the Investment contact liabilities due to changes in the market conditions. Asset management services revenue of \u20ac712,509 (2024: \u20ac345,260) in the profit or loss also includes the asset management fees charged and income trailer fees.
The above liabilities are substantially non-current in nature.
3.7 Financial reinsurance liability
The financial reinsurance liability is variable in nature and directly linked to the net position arising from the underlying reinsurance activity, calculated as premiums less commissions. Accordingly, movements in the liability balance are driven by the periodic net results of the arrangement, such that where premiums exceed commissions the liability decreases, and where commissions exceed premiums the liability increases.
In cases of significant volumes of lapses of the underlying business, the reinsurer writes off the remaining liabilities to the extent that they relate to the recovery of acquisition costs.
The movement for 2025, amounting to \u20ac4,140,733, comprises ceded premiums of \u20ac1,012,796, commissions received of \u20ac4,887,411, and the reinsurance expenses for the year amounting to \u20ac266,118. The net movement reflects the combined effect of these components in accordance with the mechanics described above.
Consolidated and Company
20252024
\u20ac\u20ac
Balance at 1 January --
Amounts received3,874,615-
Financial reinsurance expense266,118-
Balance at 31 December 4,140,733-
", "dimensions": { "concept": "ifrs-full:DisclosureOfInsuranceContractsExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923176": { "value": "
Notes to the financial statements
1.Critical accounting estimates and judgements
(b)Fair valuation of investment property
The determination of the fair value of investment property at the year-end requires the use of significant management estimates. Details of key assumptions are disclosed in Note 14 to the financial statements.
14.Investment property
Consolidated and Company
\u20ac
Year ended 31 December 2025
Opening net book amount 13,691,547
Additions65,836
Disposals(900,001)
Increase in fair value 31,891
Closing net book amount12,889,273
At 31 December 2025
Cost 2,086,790
Accumulated fair value gains 10,802,483
Net book amount 12,889,273
Year ended 31 December 2024
Opening net book amount 15,851,439
Reclassification to PPE(2,137,892)
Decrease in fair value (22,000)
Closing net book amount13,691,547
At 31 December 2024
Cost 2,284,414
Accumulated fair value gains 11,407,133
Net book amount 13,691,547
In estimating the fair value of the properties, the highest and best use of the properties is their current use. In accordance with the Group's accounting policy, the valuation of investment properties is assessed by the Board of Directors at the end of every reporting period. An impairment charge was approved by the Board of Directors and debited to profit or loss and is presented within \u2018Investment return and fair value movements\u2019.
During 2025, investment property amounting to nil (2024: \u20ac2,137,892) has been reclassified to property, plant and equipment to be used for own use.
During 2025, the Group revalued its investment property on the basis of valuations obtained from an independent professionally qualified valuer. The revaluation in relation to property classified for \u201cown use\u201d was credited to Other Comprehensive Income.
The table below includes further information about the Group\u2019s Level 3 fair value measurements for local properties:
2025/2024Significant unobservable inputNarrative sensitivity
Local propertiesRental value per square metre, ranging from \u20ac200 to \u20ac400 (2024: \u20ac200 to \u20ac400)The higher the price per square metre, the higher the fair value
Rent growth of 5% (2024: 5%) per annumThe higher the rent growth, the higher the fair value
Discount rate of 3.01% (2024: 3.01%)The higher the discount rate, the lower the fair value
Operating leases relate to the investment property owned by the Group with lease terms of between 1 to 5 years. The lessee does not have an option to purchase the property at the expiry of the lease period. The rental income earned, under operating leases, amounted to \u20ac104,455 (2024: \u20ac149,760).
", "dimensions": { "concept": "ifrs-full:DisclosureOfInvestmentPropertyExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30194-tag11923175": { "value": "
Notes to the financial statements
1.Critical accounting estimates and judgements
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. Estimates and judgements are continually evaluated and based on historical experience and other factors including expectations of future events that are believed to be reasonable under the circumstances.
Except for the areas specified hereunder, in the opinion of the Directors, the accounting estimates and judgements made in the course of preparing these financial statements are not subjective or complex to a degree which would warrant their description as critical in terms of the requirements of IAS 1 (revised).
(a)Insurance contracts
Definition and classification
The Company has applied judgement to determine whether contracts are within the scope of IFRS 17 and, for contracts determined to be within the scope of IFRS 17, what measurement model is applicable, as explained below.
\u2022The Company issues certain contracts that do not transfer significant insurance risk and classifies such contracts as investment contracts with DPF. In assessing whether these are within the scope of IFRS 17, the Company assessed if the discretionary amount is a significant amount of the total benefits;
\u2022Contracts determined to be within the scope of IFRS 17 are assessed on whether they meet the definition of an insurance contract with direct participation features (subject to IFRS 17 criteria). The savings (unit-linked), the non-linked contracts with profit sharing and the investment contracts with DPF issued by the Company are classified as direct participation contracts;
\u2022For the proportional group life reinsurance contracts on a risk-attaching basis the Company elects to apply the PAA if at the inception of the group the Company reasonably expects that it will provide a liability/asset for remaining coverage that would not differ materially from the general model. The Company applies its judgement in determining whether the PAA eligibility criteria are met at initial recognition.
Insurance contracts unit of account
The Company is required to aggregate insurance contracts issued on initial recognition into groups of onerous contracts, groups of contracts with no significant possibility of becoming onerous, and groups of other contracts. Concerning the life long-term contracts, the Company has applied its judgment on initial recognition to distinguish between non-onerous contracts (those having no significant possibility of becoming onerous) and other contracts by assessing the likelihood of adverse changes in assumptions that might result in contracts becoming onerous.
For short-term group life contracts measured under the PAA, management judgement is required to assess whether facts and circumstances indicate that a group of contracts is onerous at initial recognition or has become onerous subsequently and whether any loss component measurement is required. In 2025 and 2024, the Company did not identify any facts or circumstances that might have indicated that a group of contracts measured under the PAA had become onerous.
Measurement of future cash flows
The measurement of a group of insurance contracts includes all the future cash flows arising within the contract boundary. In determining which cash flows fall within a contract boundary, the Company considers its substantive rights and obligations arising from the terms of the contract, and also from applicable law and regulation. Cash flows are considered to be outside of the contract boundary if the Company has the practical ability to reprice existing contracts to reflect their reassessed risks and if the contract\u2019s pricing for coverage up to the date of reassessment considers only the risks till that next reassessment date.
The following assumptions were used when estimating future cash flows:
\u2022Mortality and morbidity rates
Mortality and morbidity risks are inherent in most lines of business. The Company performs an investigation, at least on an annual basis, to ensure the validity of the mortality assumptions, and when deemed necessary the assumptions are adjusted accordingly. The assumptions are set based on the internal experience of the Company when there are sufficient volumes of data to support a credible investigation. When internal experience is not sufficient, the assumptions are set with reference to industry experience and commonly used mortality tables.
\u2022Expenses
Assessment of directly attributable cash flows
The Company applies judgement in assessing whether cash flows are directly attributable to a specific portfolio of insurance contracts. Insurance acquisition cash flows are included in the measurement of a group of insurance contracts only if they are directly attributable to either the individual contracts in a group, or to the group itself, or the portfolio of insurance contracts to which the group belongs. The Company also considers as attributable cash flows fixed and variable overheads directly attributable to the fulfilment of insurance contracts.
Expense basis for cashflow projections
The Company performs a detailed expense investigation, at least on an annual basis, to determine the expense assumptions used in the cashflow projections. The expense basis is set in accordance with the budgeted attributable expenses and the projected volumes of business. The Company also determines an assumption for the future expense inflation.
\u2022Lapse and surrender rates
Lapse and surrenders assumptions relate to the rate by which policyholders cancel/surrender their policies. The assumptions are set in line with recent Company experience, by adjusting for expected improvements/deteriorations where necessary. The rates vary by product and duration in force.
Discount rates
Life insurance contract liabilities are calculated by discounting expected future cash flows. The Company uses the bottom-up approach in determining the discount rates and hence uses a risk-free rate, plus an illiquidity premium. Risk free rates are determined by reference to the European Insurance and Occupational Pensions Authority (EIOPA) yields and the illiquidity premium is determined by the volatility adjustment as published by EIOPA.
The discount rates that were used to discount the estimates of future cash flows of the life insurance contracts issued and reinsurance contracts held are based on the EUR risk-free rate with volatility adjustment, as these are published by EIOPA. EIOPA annual spot rates are presented in the below table:
1 year3 years5 years10 years20 years
2024202520242025202420252024202520242025
2.466%2.216%2.323%2.423%2.372%2.619%2.497%3.003%2.489%3.349%
Risk adjustment for non-financial risk
The risk adjustment for non-financial risk is determined to reflect the compensation that the Company requires for bearing non-financial risk and its degree of risk aversion. The risk adjustment is determined using a confidence level technique and specifically a Risk-based capital approach with its target confidence level set at 80 percent, over a one year period, which represents the Company\u2019s degree of risk aversion.
CSM amortisation
The CSM of a group of contracts is recognised in profit or loss to reflect services provided in each year, by identifying the coverage units in the group, allocating the CSM remaining at the end of the year (before any allocation) equally to each coverage unit provided in the year and expected to be provided in future years, and recognising in profit or loss the amount of the CSM allocated to coverage units provided in the year. The number of coverage units is the quantity of services provided by the contracts in the Company, determined by considering for each contract the quantity of the benefits provided and its expected coverage period. The coverage units will be reviewed and updated at each reporting date. The Company determined the coverage units for its insurance contracts and investment contracts with DPF on the basis of their quantity of benefits (sum insured), including any investment components, and the respective expected durations of each contract.
For reinsurance contracts held, the CSM amortisation reflects the level of service received and depends on the number of underlying contracts in-force.
(b)Fair valuation of investment property
The determination of the fair value of investment property at the year-end requires the use of significant management estimates. Details of key assumptions are disclosed in Note 14 to the financial statements.
(c)Valuation of Level 3 Investments
The valuation of Level 3 investments requires significant judgement and management estimates. Uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the assets in the future. Details of key judgements, estimates and assumptions relating to Level 3 investments are disclosed in Note 16 and 27 to the financial statements.
14.Investment property
Details about the Group\u2019s investment properties and information about the fair value hierarchy at 31 December 2025 and 2024 are as follows:
Consolidated and Company
Fair value measurement at end of the reporting period using:
Level 1Level 2Level 3Total
\u20ac\u20ac\u20ac\u20ac
2025
Investment property:
Local property--12,889,27312,889,273
Total--12,889,27312,889,273
Consolidated and Company
Fair value measurement at end of the reporting period using:
Level 1Level 2Level 3Total
\u20ac\u20ac\u20ac\u20ac
2024
Investment property:
Local property--13,691,54713,691,547
Total--13,691,54713,691,547
In estimating the fair value of the properties, the highest and best use of the properties is their current use. In accordance with the Group's accounting policy, the valuation of investment properties is assessed by the Board of Directors at the end of every reporting period. An impairment charge was approved by the Board of Directors and debited to profit or loss and is presented within \u2018Investment return and fair value movements\u2019.
During 2025, the Group revalued its investment property on the basis of valuations obtained from an independent professionally qualified valuer. The revaluation in relation to property classified for \u201cown use\u201d was credited to Other Comprehensive Income.
The table below includes further information about the Group\u2019s Level 3 fair value measurements for local properties:
2025/2024Significant unobservable inputNarrative sensitivity
Local propertiesRental value per square metre, ranging from \u20ac200 to \u20ac400 (2024: \u20ac200 to \u20ac400)The higher the price per square metre, the higher the fair value
Rent growth of 5% (2024: 5%) per annumThe higher the rent growth, the higher the fair value
Discount rate of 3.01% (2024: 3.01%)The higher the discount rate, the lower the fair value
15.Investments in group undertakings
In estimating the fair value of the properties, the highest and best use of the properties is their current use. The Company adopted the Discounted Cash Flow (DCF) methodology.
The carrying amount of the Group\u2019s investment in the separate financial statements amounted to \u20ac1,048,218 as at 31 December 2024 based on historical cost. Management believes that the fair value method provides more relevant and reliable information to users of the financial statements, particularly in assessing the performance and financial position of the Group\u2019s investment in LifeStar Health Limited. The comparative figures for the year ended 31 December 2024 and 1 January 2024 have been restated accordingly.
LifeStar Health was valued using the DCF and Dividend Discount Model. The Company decided to use the DCF method due to the stability and predictability of its cash flows, resulting in a valuation of \u20ac5,994,686 as at 31 December 2023, \u20ac6,110,695 as at 31 December 2024 and \u20ac6,972,000 as at 31 December 2025. The same methodology will be used to value the Investments in Group Undertakings moving forward.
Details of the group\u2019s investment in group undertakings and information about the fair value hierarchy as at the end of the reporting period are as follows:
Level 1Level 2Level 3Fair value as at 31/12/2025
\u20ac\u20ac\u20ac\u20ac
Investment in Group Undertakings--6,972,000 6,972,000
Level 1Level 2Level 3Fair value as at 31/12/2024
\u20ac\u20ac\u20ac\u20ac
Investment in Group Undertakings--6,110,6956,110,695
Level 1Level 2Level 3Fair value as at 31/12/2023
\u20ac\u20ac\u20ac\u20ac
Investment in Group Undertakings--5,994,6865,994,686
The valuation technique and key inputs, including sensitivity analysis in determining the fair value of LifeStar Health Limited is summarized in the table below.
Valuation technique(s) and key input(s)Significant unobservable input(s)Relationship and sensitivity of unobservable inputs to fair value
Income approach. In this approach, the discounted cash flow method was used to capture the present value of the expected future economic benefits to be derived from the ownership of these investees.Long-term revenue growth rates, taking into account management\u2019s experience and knowledge of market conditions of the specific industries, ranging from 4 to 10 percent (2024: 0-10 percent).The higher the revenue growth rate, the higher the fair value. If the revenue growth was 1% percent higher/lower while all other variables were held constant, the carrying amount would increase/decrease by \u20ac1.2 million (2024: \u20ac1.2 million).
Weighted average cost of capital, determined using a Capital Asset Pricing Model of 10 per cent (2024: 9.9).The higher the weighted average cost of capital, the lower the fair value. If the weighted average cost of capital was one percent higher/lower while all other variables were held constant, the carrying amount would decrease/increase by \u20ac0.9 million (2024:\u20ac0.9 million).
The following table reconciles the movements for investments in group undertakings with fair value measurements classified as level 3:
Investment in group undertaking\u20ac
Balance at 1 January 2024 (as previously stated)1,048,218
Restatement due to change in accounting policy4,946,468
Balance at 1 January 2024 (as restated)5,994,686
Gains in profit or loss (as restated)116,009
Balance at 31 December 2024 (as restated)6,110,695
Gains in profit or loss861,305
Balance at 31 December 20256,972,000
16.Other investments
(d)Unlisted investments
LifeStar Insurance plc has two loan notes titled Stellium Equity Notes and Stellium Credit Notes (the \u201cStellium Notes\u201d), totalling GBP4.2 million which matured on 31 July 2024 and 31 August 2024 respectively, both of which have been extended for the reasons explained below. These loan notes form part of a wider GBP30 million funding arrangement for a fintech startup business, Stellium Holdings Limited (UK Registration No 12130247), located in Newcastle, UK.
The principal holders of the loan notes are Apex Group Nominees 1 (UK) Limited acting as trustee on behalf of the ultimate controlling parties Tiger Infrastructure Associates GP II and Tiger Infrastructure GP II (Europe).
Eram Capital Advisors Luxembourg (\u201cEram\u201d), in their capacity as the Calculation Agent, Advisor and Alternative Asset Manager of the Securitised Vehicles (SVs) linked to the Stellium Notes has confirmed that LifeStar\u2019s held notes are valued at par as at 31 December 2025. In note 14 of the financial statements for the year ended 31 March 2025 of Stellium Holdings Limited, entitled \u201cPost Balance Sheet Events\u201d, it is reported that Stellium Datacentres Limited issued new preference shares amounting to GBP12.5 million to provide additional working capital and funding to assist in the purchase of Digital 9 Seaedge Limited, the owner of the long lease of the data centre at Cobalt Business Park. This transaction was concluded on 11 June 2025. LifeStar Insurance plc did not participate in this investment. Also, in December 2025, Stellium Holdings Limited and the Senior Loan Noteholder and the Junior Loan Noteholder agreed to extend the existing loan note agreements. The loans notes repayment date has been amended from 31 May 2026 to 28 December 2028. All other terms of the loan note agreements are unchanged.During the year, the Company has commissioned an independent third party to carry out a valuation of its investments in the SV\u2019s, which valuation is still being finalized as at the date of the signing of these financial statements.
On the basis of the above, the Directors are of the opinion that the recent investment in Stellium Holdings Limited is a strong indication of its viability. In view of this, the extension of the existing loan note agreements and on the strength of the confirmations received from ERAM as the Calculation Agent of the SVs, the Stellium Notes are to continue being carried at their face value in these financial statements. In view of the substantial additional investment and also the extension of the notes to 28 December 2028, we do not envisage a material impact to the Solvency Capital Ratio (SCR) in the near future.
27.Fair values of financial assets and financial liabilities
The group
The following table presents the assets and liabilities measured at fair value at 31 December 2025
Consolidated and Company
Fair value measurement at end of the reporting period using:
Level 1Level 2Level 3Total
\u20ac\u20ac\u20ac\u20ac
2025
Assets
Other Investments:
Financial assets at fair value through profit or loss 22,981,22682,928,3743,074,796108,984,396
Financial assets at amortised cost-3,005,6023,113,0036,118,605
Total22,981,22685,933,9766,187,799115,103,001
Liabilities
Unit linked financial instruments-(15,399,647)-(15,399,647)
The following table presents the assets and liabilities measured at fair value at 31 December 2024
Consolidated and Company
Fair value measurement at end of the reporting period using:
Level 1Level 2Level 3Total
\u20ac\u20ac\u20ac\u20ac
2024
Assets
Other Investments:
Financial assets at fair value through profit or loss 36,174,20365,561,4003,242,035104,977,638
Financial assets at amortised cost-322,4873,276,0163,598,503
Total36,174,20365,883,8876,518,051108,576,141
Liabilities
Unit linked financial instruments-8,619,624-8,619,624
At 31 December 2025 and 2024 the carrying amounts of financial assets and current financial liabilities approximated their fair values except for investment contracts with DPF. It is impracticable to determine the fair value of equity investment and the investment contracts with DPF due to the lack of a reliable basis to measure the future discretionary return that is a material feature of these contracts.
Included in Level 3 investments for the years ended 31 December 2025 and 2024 are the Stellium Notes. Note 16 (d) explains the directors\u2019 assessment of the value of these notes.
", "dimensions": { "concept": "ifrs-full:DisclosureOfAccountingJudgementsAndEstimatesExplanatory", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page78-cflshid_30196-tag11923174": { "value": "Notes to the financial statements1.Critical accounting estimates and judgementsThe Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. Estimates and judgements are continually evaluated and based on historical experience and other factors including expectations of future events that are believed to be reasonable under the circumstances.Except for the areas specified hereunder, in the opinion of the Directors, the accounting estimates and judgements made in the course of preparing these financial statements are not subjective or complex to a degree which would warrant their description as critical in terms of the requirements of IAS 1 (revised). (a)Insurance contracts Definition and classificationThe Company has applied judgement to determine whether contracts are within the scope of IFRS 17 and, for contracts determined to be within the scope of IFRS 17, what measurement model is applicable, as explained below. \u2022The Company issues certain contracts that do not transfer significant insurance risk and classifies such contracts as investment contracts with DPF. In assessing whether these are within the scope of IFRS 17, the Company assessed if the discretionary amount is a significant amount of the total benefits;\u2022Contracts determined to be within the scope of IFRS 17 are assessed on whether they meet the definition of an insurance contract with direct participation features (subject to IFRS 17 criteria). The savings (unit-linked), the non-linked contracts with profit sharing and the investment contracts with DPF issued by the Company are classified as direct participation contracts;\u2022For the proportional group life reinsurance contracts on a risk-attaching basis the Company elects to apply the PAA if at the inception of the group the Company reasonably expects that it will provide a liability/asset for remaining coverage that would not differ materially from the general model. The Company applies its judgement in determining whether the PAA eligibility criteria are met at initial recognition.Insurance contracts unit of accountThe Company is required to aggregate insurance contracts issued on initial recognition into groups of onerous contracts, groups of contracts with no significant possibility of becoming onerous, and groups of other contracts. Concerning the life long-term contracts, the Company has applied its judgment on initial recognition to distinguish between non-onerous contracts (those having no significant possibility of becoming onerous) and other contracts by assessing the likelihood of adverse changes in assumptions that might result in contracts becoming onerous.For short-term group life contracts measured under the PAA, management judgement is required to assess whether facts and circumstances indicate that a group of contracts is onerous at initial recognition or has become onerous subsequently and whether any loss component measurement is required. In 2025 and 2024, the Company did not identify any facts or circumstances that might have indicated that a group of contracts measured under the PAA had become onerous.Measurement of future cash flowsThe measurement of a group of insurance contracts includes all the future cash flows arising within the contract boundary. In determining which cash flows fall within a contract boundary, the Company considers its substantive rights and obligations arising from the terms of the contract, and also from applicable law and regulation. Cash flows are considered to be outside of the contract boundary if the Company has the practical ability to reprice existing contracts to reflect their reassessed risks and if the contract\u2019s pricing for coverage up to the date of reassessment considers only the risks till that next reassessment date.The following assumptions were used when estimating future cash flows:\u2022Mortality and morbidity ratesMortality and morbidity risks are inherent in most lines of business. The Company performs an investigation, at least on an annual basis, to ensure the validity of the mortality assumptions, and when deemed necessary the assumptions are adjusted accordingly. The assumptions are set based on the internal experience of the Company when there are sufficient volumes of data to support a credible investigation. When internal experience is not sufficient, the assumptions are set with reference to industry experience and commonly used mortality tables.\u2022ExpensesAssessment of directly attributable cash flowsThe Company applies judgement in assessing whether cash flows are directly attributable to a specific portfolio of insurance contracts. Insurance acquisition cash flows are included in the measurement of a group of insurance contracts only if they are directly attributable to either the individual contracts in a group, or to the group itself, or the portfolio of insurance contracts to which the group belongs. The Company also considers as attributable cash flows fixed and variable overheads directly attributable to the fulfilment of insurance contracts. Expense basis for cashflow projectionsThe Company performs a detailed expense investigation, at least on an annual basis, to determine the expense assumptions used in the cashflow projections. The expense basis is set in accordance with the budgeted attributable expenses and the projected volumes of business. The Company also determines an assumption for the future expense inflation.\u2022Lapse and surrender ratesLapse and surrenders assumptions relate to the rate by which policyholders cancel/surrender their policies. The assumptions are set in line with recent Company experience, by adjusting for expected improvements/deteriorations where necessary. The rates vary by product and duration in force.Discount ratesLife insurance contract liabilities are calculated by discounting expected future cash flows. The Company uses the bottom-up approach in determining the discount rates and hence uses a risk-free rate, plus an illiquidity premium. Risk free rates are determined by reference to the European Insurance and Occupational Pensions Authority (EIOPA) yields and the illiquidity premium is determined by the volatility adjustment as published by EIOPA.The discount rates that were used to discount the estimates of future cash flows of the life insurance contracts issued and reinsurance contracts held are based on the EUR risk-free rate with volatility adjustment, as these are published by EIOPA. EIOPA annual spot rates are presented in the below table:1 year3 years5 years10 years20 years20242025202420252024202520242025202420252.466%2.216%2.323%2.423%2.372%2.619%2.497%3.003%2.489%3.349%Risk adjustment for non-financial riskThe risk adjustment for non-financial risk is determined to reflect the compensation that the Company requires for bearing non-financial risk and its degree of risk aversion. The risk adjustment is determined using a confidence level technique and specifically a Risk-based capital approach with its target confidence level set at 80 percent, over a one year period, which represents the Company\u2019s degree of risk aversion.CSM amortisationThe CSM of a group of contracts is recognised in profit or loss to reflect services provided in each year, by identifying the coverage units in the group, allocating the CSM remaining at the end of the year (before any allocation) equally to each coverage unit provided in the year and expected to be provided in future years, and recognising in profit or loss the amount of the CSM allocated to coverage units provided in the year. The number of coverage units is the quantity of services provided by the contracts in the Company, determined by considering for each contract the quantity of the benefits provided and its expected coverage period. The coverage units will be reviewed and updated at each reporting date. The Company determined the coverage units for its insurance contracts and investment contracts with DPF on the basis of their quantity of benefits (sum insured), including any investment components, and the respective expected durations of each contract.For reinsurance contracts held, the CSM amortisation reflects the level of service received and depends on the number of underlying contracts in-force.(b)Fair valuation of investment propertyThe determination of the fair value of investment property at the year-end requires the use of significant management estimates. Details of key assumptions are disclosed in Note 14 to the financial statements.(c)Valuation of Level 3 InvestmentsThe valuation of Level 3 investments requires significant judgement and management estimates. Uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the assets in the future. Details of key judgements, estimates and assumptions relating to Level 3 investments are disclosed in Note 16 and 27 to the financial statements.14.Investment property Details about the Group\u2019s investment properties and information about the fair value hierarchy at 31 December 2025 and 2024 are as follows:Consolidated and CompanyFair value measurement at end of the reporting period using:Level 1Level 2Level 3Total\u20ac\u20ac\u20ac\u20ac2025Investment property:Local property--12,889,27312,889,273Total--12,889,27312,889,273Consolidated and CompanyFair value measurement at end of the reporting period using:Level 1Level 2Level 3Total\u20ac\u20ac\u20ac\u20ac2024Investment property:Local property--13,691,54713,691,547Total--13,691,54713,691,547In estimating the fair value of the properties, the highest and best use of the properties is their current use. In accordance with the Group's accounting policy, the valuation of investment properties is assessed by the Board of Directors at the end of every reporting period. An impairment charge was approved by the Board of Directors and debited to profit or loss and is presented within \u2018Investment return and fair value movements\u2019. During 2025, the Group revalued its investment property on the basis of valuations obtained from an independent professionally qualified valuer. The revaluation in relation to property classified for \u201cown use\u201d was credited to Other Comprehensive Income. The table below includes further information about the Group\u2019s Level 3 fair value measurements for local properties:2025/2024Significant unobservable inputNarrative sensitivityLocal propertiesRental value per square metre, ranging from \u20ac200 to \u20ac400 (2024: \u20ac200 to \u20ac400)The higher the price per square metre, the higher the fair valueRent growth of 5% (2024: 5%) per annumThe higher the rent growth, the higher the fair valueDiscount rate of 3.01% (2024: 3.01%)The higher the discount rate, the lower the fair value16.Other investments(d)Unlisted investmentsLifeStar Insurance plc has two loan notes titled Stellium Equity Notes and Stellium Credit Notes (the \u201cStellium Notes\u201d), totalling GBP4.2 million which matured on 31 July 2024 and 31 August 2024 respectively, both of which have been extended for the reasons explained below. These loan notes form part of a wider GBP30 million funding arrangement for a fintech startup business, Stellium Holdings Limited (UK Registration No 12130247), located in Newcastle, UK.The principal holders of the loan notes are Apex Group Nominees 1 (UK) Limited acting as trustee on behalf of the ultimate controlling parties Tiger Infrastructure Associates GP II and Tiger Infrastructure GP II (Europe). Eram Capital Advisors Luxembourg (\u201cEram\u201d), in their capacity as the Calculation Agent, Advisor and Alternative Asset Manager of the Securitised Vehicles (SVs) linked to the Stellium Notes has confirmed that LifeStar\u2019s held notes are valued at par as at 31 December 2025. In note 14 of the financial statements for the year ended 31 March 2025 of Stellium Holdings Limited, entitled \u201cPost Balance Sheet Events\u201d, it is reported that Stellium Datacentres Limited issued new preference shares amounting to GBP12.5 million to provide additional working capital and funding to assist in the purchase of Digital 9 Seaedge Limited, the owner of the long lease of the data centre at Cobalt Business Park. This transaction was concluded on 11 June 2025. LifeStar Insurance plc did not participate in this investment. Also, in December 2025, Stellium Holdings Limited and the Senior Loan Noteholder and the Junior Loan Noteholder agreed to extend the existing loan note agreements. The loans notes repayment date has been amended from 31 May 2026 to 28 December 2028. All other terms of the loan note agreements are unchanged.During the year, the Company has commissioned an independent third party to carry out a valuation of its investments in the SV\u2019s, which valuation is still being finalized as at the date of the signing of these financial statements.On the basis of the above, the Directors are of the opinion that the recent investment in Stellium Holdings Limited is a strong indication of its viability. In view of this, the extension of the existing loan note agreements and on the strength of the confirmations received from ERAM as the Calculation Agent of the SVs, the Stellium Notes are to continue being carried at their face value in these financial statements. In view of the substantial additional investment and also the extension of the notes to 28 December 2028, we do not envisage a material impact to the Solvency Capital Ratio (SCR) in the near future. 27.Fair values of financial assets and financial liabilitiesThe group The following table presents the assets and liabilities measured at fair value at 31 December 2025Consolidated and CompanyFair value measurement at end of the reporting period using:Level 1Level 2Level 3Total\u20ac\u20ac\u20ac\u20ac2025AssetsOther Investments:Financial assets at fair value through profit or loss 22,981,22682,928,3743,074,796108,984,396Financial assets at amortised cost-3,005,6023,113,0036,118,605Total22,981,22685,933,9766,187,799115,103,001LiabilitiesUnit linked financial instruments-(15,399,647)-(15,399,647)The following table presents the assets and liabilities measured at fair value at 31 December 2024Consolidated and CompanyFair value measurement at end of the reporting period using:Level 1Level 2Level 3Total\u20ac\u20ac\u20ac\u20ac2024AssetsOther Investments:Financial assets at fair value through profit or loss 36,174,20365,561,4003,242,035104,977,638Financial assets at amortised cost-322,4873,276,0163,598,503Total36,174,20365,883,8876,518,051108,576,141LiabilitiesUnit linked financial instruments-8,619,624-8,619,624At 31 December 2025 and 2024 the carrying amounts of financial assets and current financial liabilities approximated their fair values except for investment contracts with DPF. It is impracticable to determine the fair value of equity investment and the investment contracts with DPF due to the lack of a reliable basis to measure the future discretionary return that is a material feature of these contracts.Included in Level 3 investments for the years ended 31 December 2025 and 2024 are the Stellium Notes. Note 16 (d) explains the directors\u2019 assessment of the value of these notes.", "dimensions": { "concept": "ifrs-full:ExplanationOfAssumptionAboutFutureWithSignificantRiskOfResultingInMaterialAdjustments", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page160-cflshid_60868-tag11923239": { "value": "public limited liability ", "dimensions": { "concept": "ifrs-full:LegalFormOfEntity", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page160-cflshid_60880-tag11923238": { "value": "Malta ", "dimensions": { "concept": "ifrs-full:DomicileOfEntity", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page160-cflshid_60880-tag11923240": { "value": "Malta ", "dimensions": { "concept": "ifrs-full:CountryOfIncorporation", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page160-cflshid_60880-tag11923242": { "value": "Malta ", "dimensions": { "concept": "ifrs-full:PrincipalPlaceOfBusiness", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page160-cflshid_60868-tag11923241": { "value": "Testaferrata Street, Ta\u2019 Xbiex.", "dimensions": { "concept": "ifrs-full:AddressOfRegisteredOfficeOfEntity", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page160-cflshid_60868-tag11923243": { "value": "LifeStar Holding p.l.c", "dimensions": { "concept": "ifrs-full:NameOfParentEntity", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "v1-page160-cflshid_60944-tag11923244": { "value": "Prof. Paolo Catalfamo ", "dimensions": { "concept": "ifrs-full:NameOfUltimateParentOfGroup", "language": "en", "entity": "scheme:213800RJG2OCEN9KIW48", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } } } }