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The Company is limited by shares and basis. The directors believe that they have a reasonable expectation that the Group has adequate has a primary listing on the London Stock Exchange. The address of the registered office is 2nd Floor, resources to continue in operational existence for a minimum of 12 months from the date of signing. Building 4, West Strand Business Park, West Strand Road, Preston, England, PR1 8UY, UK. In making this assessment, the directors have taken into consideration the points as set out in the financial management section of the Annual Report and Accounts under the heading \u2018Maintain The Company and its subsidiaries, together forming the Group, comprise UK, Swedish and Dutch life the Group as a going concern\u2019. and pensions businesses. The financial statements are presented in pounds sterling, rounded to the nearest one hundred The UK segment comprises a number of legacy books consisting of a mix of unit-linked, with-profits thousand, and are prepared on the historical cost basis except for insurance and reinsurance contracts and non-linked business and is substantially closed to new business, such that new insurance which are stated at their fulfilment value in accordance with IFRS 17 and the following assets and contracts are only issued to existing customers, dependent on their changing needs. On 23 December liabilities which are stated at their fair value: derivative financial instruments; financial instruments 2024, Chesnara announced the acquisition of a block of unit-linked bond and pension business at fair value through profit or loss; investment property; and investment contract liabilities at fair from Canada Life Limited. Further details regarding this transaction are disclosed in Note I7. value through profit or loss. The Swedish segment comprises the Movestic business, as described in Note C1. Its activities are Assets and liabilities are presented in order of increasing liquidity in the balance sheet. In addition, performed predominantly in Sweden, where it underwrites life, accident and health risks and amounts expected to be recovered or settled within a year are classified as current in the notes to provides a portfolio of investment contracts. It is open to new business, distributing its products the accounts. If they are expected to be recovered or settled in more than 1 year, they are classified principally through independent financial advisors. as non-current in the notes to the accounts. Assets and liabilities are presented on a current and The Dutch segment comprises the Waard Group and Scildon businesses, as described in Note C1. non-current basis in the Company Balance Sheet. The Group\u2019s Dutch life businesses contain a mix of term life, unit-linked, index-linked and non-linked The preparation of financial statements in conformity with IFRSs requires management to make business. Scildon is open to new business for some of its products, whilst the Waard Group has judgements, estimates and assumptions that affect the application of policies and reported amounts seen growth in recent years through a number of acquisitions of closed-book portfolios. of assets and liabilities, income and expenses. The estimates and associated assumptions are These financial statements are presented in pounds sterling, which is the functional currency of the based on historical experience and various other factors that are believed to be reasonable under Parent Company. Foreign operations are included in accordance with the policies set out in Note A4. the circumstances, the results of which form the basis of making the judgements about carrying The results and cash flows of these operations have been translated into sterling at an average rate values of assets and liabilities that are not readily apparent from other sources. Actual results may for the year of \u00a31 = SEK 13.51 (2023: \u00a31 = SEK 13.20) for the Swedish business and \u00a31 = EUR 1.18 differ from these estimates. (2023: \u00a31 = EUR 1.15) for the Dutch business. The estimates and underlying assumptions are reviewed on an ongoing basis. Judgements made Assets and liabilities have been translated at the year end rate of \u00a31 = SEK 13.84 (31 December 2023: by management in the process of applying the Group\u2019s accounting policies that have a significant \u00a31 = SEK 12.84) for the Swedish business and \u00a31 = EUR 1.21 (31 December 2023: \u00a31 = EUR 1.15) effect on the financial statements and estimates with a significant risk of material adjustment in for the Dutch business. the next year are set out in Note A5. Total foreign currency exchange rate loss for the year ended 31 December 2024 recognised in the The Group prepares interim financial statements at half year and as permitted by IFRS 17 has elected Consolidated Statement of Comprehensive Income of \u00a315.3m (year ended 31 December 2023: to apply the \u2018year-to-date\u2019 method and restate estimates in respect of insurance contracts made loss of \u00a37.8m). in the previous interim financial statements, in these year end financial statements. This accounting policy election applies to all groups of insurance and reinsurance contracts. The financial statements were authorised for issue by the directors on 26 March 2025. The accounting policies set in Note A4, unless otherwise stated, have been applied consistently to 2 Basis of consolidation all years presented in these Consolidated Financial Statements. The Consolidated Financial Statements incorporate the financial statements of the Company and of The Consolidated Financial Statements have been prepared in accordance with United Kingdom entities controlled by the Company (its subsidiaries), made up to 31 December each year. Control adopted international accounting standards in conformity with the requirements of the Companies is achieved when the Company is exposed or has rights to the variable returns from the involvement Act 2006. Both the Parent Company financial statements and the Group financial statements with the entity and has the ability to affect those returns through its power over the entity. The have been prepared and approved by the directors in accordance with United Kingdom adopted Parent Company financial statements present information about the Company as a separate entity international accounting standards. and not about its Group. There are no non-controlling interests in the net assets of the Group and all total comprehensive income is attributed to the Company shareholders. The results of subsidiaries acquired or disposed of during the year are included in the Consolidated Statement of Comprehensive Income from the effective date of acquisition or up to the effective date of disposal. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by the Group. All intra-group transactions, balances, income and expenses are eliminated on consolidation. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Restatement of prior year numbers BEPS 2.0 A prior year restatement has been applied in respect of the accounting treatment of the Canada Life The Organisation for Economic Cooperation and Development (OECD) has introduced international portfolio in 2023. tax reform measures under the Two-Pillar solution, including the Global Anti-Base Erosion (GloBE) rules, which establish a 15% global minimum tax for multinational groups with a consolidated turnover In the previously reported financial statements for December 2023, a long contract boundary was of at least EUR 750m in at least 2 of the past 4 years. applied in valuing the future cash flows beyond the expected termination of the reinsurance contract. On further assessment, as there is no executable right under the reinsurance agreement itself The Group operates in the United Kingdom, Sweden and the Netherlands, all of which have enacted to the underlying policies, then under IFRS 17 requirements a short contract boundary should have legislation implementing BEPS Pillar II effective from 1 January 2024. Based on the latest available been applied. guidance and the Group\u2019s financial position, Chesnara remains below the EUR 750m threshold and is not in scope of the GloBE rules for 2024. This accounting change means that the resulting CSM reflects only the profit to be realised in the reinsurance contract timeframe. Following the legal transfer of the underlying policies, the CSM The Group continues to monitor interpretations of BEPS legislation in each jurisdiction to assess is recalculated to reflect the profit to be earned on the full remaining duration of the policies. potential for future exposure, particularly the treatment of policyholder investment returns in the UK and the application of OECD guidance in Sweden in connection with insurance investment funds, Balance sheet: together with the classification of taxes paid therefrom. As reported Restated Although Chesnara remains below the threshold, the Group continues to assess potential future \u00a3m \u00a3m exposure, including the impact of business growth and future acquisitions; effective tax rates across jurisdictions; and the interaction of local tax regimes with GloBE rules. Present value of future cash flows 15.7 5.0 Risk adjustment (0.9 ) \u2013 Discussions with relevant tax authorities and industry bodies are ongoing to ensure continued CSM (11.2 ) (1.5 ) compliance with evolving published and draft guidance. Assets for incurred claims 0.4 0.4 Based on our assessment that Chesnara remains below the EUR 750m threshold, and is not in scope Insurance contract assets total 4.0 3.9 for BEPS in 2024, no adjustments to current or deferred tax have been made in respect of BEPS Pillar II, and no additional disclosures are required necessary under IAS 12. The total net assets reported at 31 December 2023 of \u00a3359.9m have therefore been restated to \u00a3359.8m from \u00a3359.9m as previously reported. A4 Material accounting policy information The following accounting policy information is in respect of the Group and also for the Parent Income statement: Company where it is applicable. The material accounting policies that relate to the Parent Company as well as to the Group are in respect of: Investment return, Other operating expenses, Financing As reported Restated costs, Income taxes, Financial investments, Derivative financial instruments, Other assets, Cash \u00a3m \u00a3m and cash equivalents, Lease contract liabilities, Borrowings, Other current liabilities and Employee Insurance revenue 228.0 228.0 benefits. The material accounting policies that relate to the Parent Company and not the Group Insurance service expense (224.7 ) (224.8 ) are: Investment in subsidiary, Share-based payments, Share capital and shares held in treasury and Dividends. The total comprehensive income reported for 2023 of \u00a310.3m has therefore been restated to \u00a310.2m. (a) Insurance contracts and reinsurance contracts Basic earnings per share has been restated from 12.41p to 12.36p. (i) Scope and classification Diluted earnings per share has been restated from 12.29p to 12.24p. Contracts under which the Group accepts significant insurance risk are classified as insurance contracts. Contracts held by the Group under which it transfers significant insurance risk related to The Part VII business transfer for the transaction received court approval on the 3 February 2025. underlying insurance contracts are classified as reinsurance contracts. Insurance and reinsurance contracts also expose the Group to financial risk. Standards and amendments issued but not yet effective At the date of authorisation of these financial statements the following standards and interpretations, Insurance contracts may be issued, and reinsurance contracts may be initiated by the Group, or they which are applicable to the Group, and which have not been applied in these financial statements, may be acquired in a business combination or in a transfer of contracts that does form a business. were in issue but not yet effective: All references in these accounting policies to \u2018insurance contracts\u2019 and \u2018reinsurance contracts\u2019 include contracts issued, reinsurance contracts initiated or insurance or reinsurance contracts acquired Title Effective date by the Group, unless otherwise stated. IFRS 9/IFRS 7 Amendments to the classification and Some contracts entered into by the Group have the legal form of insurance contracts but do not measurement of financial instruments 1 January 2026 transfer significant insurance risk. These contracts are classified as financial liabilities and are referred IFRS 18 Presentation and disclosure financial statements 1 January 2027 to as \u2018investment contracts\u2019 (see Note A4(b)). Similarly financial reinsurance contracts do not transfer significant insurance risk and are accounted for under IFRS 9. Mass lapse reinsurance contracts also The directors do not expect that the adoption of the IFRS 9/IFRS 7 amendments have a material contain no insurance risk and are accounted for under IAS 37. impact on the financial statements of the Group in future periods. The directors expect that the adoption of IFRS 18 will have a material impact on the presentation of the primary statements in future periods. CHESNARAANNUALREPORTANDACCOUNTS2024 153
IFRS FINANCIAL STATEMENTS
SECTION A GENERAL INFORMATION AND ACCOUNTING POLICIES AND JUDGEMENTS
A4 Material accounting policy information (continued)
Contracts within a portfolio that would fall into different groups only because law or regulation
(a) Insurance contracts and reinsurance contracts (continued)
specifically constrains the Group\u2019s practical ability to set a different price or level of benefits for
(i) Scope and classification (continued)
policyholders with different characteristics can be included in the same group, however the Group
Insurance contracts are classified as direct participating contracts or contracts without direct
has not taken advantage of this.
participating features. Direct participating contracts are contracts for which, at inception:
Portfolios of reinsurance contracts held are assessed separately from insurance contracts issued
\u2013 the contractual terms specify that the policyholder participates in a share of a clearly identified pool
and are assessed for aggregation on an individual contract basis. Some reinsurance contracts provide
of underlying items;
cover for underlying contracts that are included in different groups.
\u2013 the Group expects to pay to the policyholder an amount equal to a substantial share of the fair
As per the gross insurance contracts the reinsurance contracts are divided into profitability groupings
value returns on the underlying items; and
as follows:
\u2013 the Group expects a substantial proportion of any change in the amounts to be paid to the
\u2013 any contracts on which there is a net gain on initial recognition;
policyholder to vary with the change in fair value of the underlying items.
\u2013 any contracts that, on initial recognition, have no significant possibility of showing a net gain
All other insurance contracts and all reinsurance contracts are classified as contracts without direct
subsequently; and
participating features. Some of these contracts are measured under the PAA.
\u2013 any remaining contracts in the annual cohort.
The following table provides a summary of the broad product categories and the measurement model
All reinsurance contracts within the Group fall into the third profitability category above.
approach applied.
(iv) Recognition and derecognition of insurance and reinsurance contracts
Classification Product category
An insurance contract issued by the Group is recognised from the earliest of:
Long-term contracts without direct Immediate annuities
\u2013 the beginning of its coverage period (i.e. the period during which the Group provides services in
GMM)
participating features (
Term assurance and other non-linked
respect of any premiums within the boundary of the contract);
Unit-linked/index-linked/with-profits \u2013 GMM
\u2013 when the first payment from the policyholder becomes due or, if there is no contractual due date,
Long-term contracts with direct Unit-linked/index-linked/with-profits \u2013 VFA
when it is received from the policyholder; and
VFA
participating features (
)
\u2013 when a group of contracts becomes onerous or if the facts and circumstances indicate that a group
Short-term contracts (
PAA
)
Short-term protection
of contracts is onerous for those contracts measured using the PAA.
An insurance contract acquired in a transfer of contracts, or a business combination is recognised on
(ii) Separating components from insurance and reinsurance contracts
the date of acquisition.
The Group does not have any distinct investment components which require separation from the
insurance or reinsurance contract. Distinct investment components are investment components
When the contract is recognised, it is added to an existing group of contracts or, if the contract does
that are not highly inter-related with the insurance components and for which contracts with equivalent
not qualify for inclusion in an existing group, it forms a new group to which future contracts are
terms are sold, or could be sold, separately in the same market or the same jurisdiction.
added. Groups of contracts are established on initial recognition and their composition is not revised
once all contracts have been added to the group.
The Group does not have any insurance contracts containing embedded derivatives or have any
insurance contracts which transfer distinct goods and services other than insurance contract services
Non-proportionate reinsurance contracts are recognised at the earlier of:
which require separation from the host contract.
(a) the beginning of the coverage period of the group of reinsurance contracts; or
(iii) Aggregation of insurance and reinsurance contracts
(b) the date the entity recognises an onerous group of underlying insurance contracts if the entity
Insurance contracts are aggregated into groups for measurement purposes. Groups of insurance
entered into the related reinsurance contract held at or before that date.
contracts are determined by identifying portfolios of insurance contracts, each comprising contracts
The recognition of proportionate reinsurance contracts is delayed until the date that any underlying
that are subject to similar risks and are managed together. Each portfolio is divided into annual
insurance contract is initially recognised, if that date is later than the beginning of the coverage
cohorts (i.e. by year of issue) and each annual cohort into a maximum of three groups based on the
period of the group of reinsurance contracts held.
profitability of contracts:
Reinsurance contracts acquired as recognised at the date of acquisition.
\u2013 any contracts that are onerous on initial recognition;
The Group derecognises a contract when it is extinguished \u2013 i.e. when the specified obligations
\u2013 any contracts that, on initial recognition, have no significant possibility of becoming onerous
in the contract expire or are discharged or cancelled. The Group also derecognises a contract if its
subsequently; and
terms are modified in a way that would have changed the accounting for the contract significantly
\u2013 any remaining contracts in the annual cohort.
had the new terms always existed, in which case a new contract based on the modified terms is
recognised. If a contract modification does not result in derecognition, then the Group treats the
Further detail regarding the judgements involved in the defining portfolios and profitability groups can
changes in cash flows caused by the modification as changes in estimates of fulfilment cash flows.
be found in Note A5(c).
154 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (v) Fulfilment Cash Flows Insurance acquisition cash flows arising before the recognition of the related group of contracts are The Fulfilment Cash Flows (FCF) are the current estimates of the future cash flows within the contract recognised as an asset and the asset is derecognised, when the insurance acquisition cash flows boundary of a group of contracts and: are included in the measurement of the group of contracts. The Group derecognises the assets for insurance acquisition cash flows in the year within the reporting period in which the expenses are \u2013 are unbiased estimates of the future cash flows; incurred and therefore does not have any assets for insurance acquisition cash flows on the balance \u2013 are determined from the perspective of the Group, provided that the estimates are consistent with sheet at the reporting date. observable market practises and variables; and (viii) Initial measurement \u2013 insurance contracts not measured under the PAA \u2013 reflect conditions existing at the period-end date. The CSM is a component of the carrying amount of the asset or liability for a group of insurance An explicit risk adjustment for non-financial risk is estimated separately from the other estimates contracts issued representing the unearned profit that the Group will recognise as it provides and reflects the compensation that the Group requires for bearing the uncertainty about the amount insurance contract services in the future. At initial recognition, the CSM is an amount that results and timing of the cash flows from non-financial risk as the Group fulfils insurance contracts. For in no income or expenses (unless a group of contracts is onerous) arising from: reinsurance contracts held, the risk adjustment for non financial risk represents the amount of risk (a) the initial recognition of the FCF; and being transferred by the Group to the reinsurer. Methods and assumptions used to determine the risk adjustment for non-financial risk are discussed in Note A5(e). (b) cash flows arising from the contracts in the group at that date. The estimates of the future cash flows are adjusted using current discount rates to reflect the time When the above calculation results in a net outflow, the group of insurance contracts issued is value of money and the financial risks related to those cash flows. The discount rates reflect the onerous. A loss from onerous insurance contracts is recognised in profit or loss immediately, with characteristics of the cash flows arising from the groups of insurance contracts, including timing, no CSM recognised on the balance sheet on initial recognition, and a loss component is established currency and liquidity of cash flows. The determination of the discount rate that reflects the in the amount of loss recognised (see Note A4(a)(xi)). characteristics of the cash flows and liquidity characteristics of the insurance contracts requires significant judgement and estimation (See Note A5(d)). (ix) Initial measurement \u2013 reinsurance contracts not measured under the PAA For groups of reinsurance contracts held, any net gain or loss at initial recognition is recognised as The Group estimates certain FCF at the portfolio level or higher and then allocates such estimates the CSM unless the net cost of purchasing reinsurance relates to past events, in which case the to groups of contracts. The Group uses consistent assumptions to measure the estimates of the Group recognises the net cost immediately in profit or loss. For reinsurance contracts held, the CSM present value of future cash flows for the group of reinsurance contracts held and such estimates represents a deferred gain or loss that the Group will recognise as a reinsurance expense as it for the groups of underlying insurance contracts. receives insurance contract services from the reinsurer in the future and is calculated as the sum of: (vi) Contract boundaries (a) the initial recognition of the FCF; The measurement of a group of contracts includes all of the future cash flows within the boundary (b) cash flows arising from the contracts in the group at that date; and of each contract in the Group. For insurance contracts, cash flows are within the contract boundary if they arise from substantive rights and obligations that exist during the reporting period in which (c) any income recognised in profit or loss when the entity recognises a loss on initial recognition the Group can compel the policyholder to pay premiums or has a substantive obligation to provide of an onerous group of underlying insurance contracts or on addition of onerous underlying services (including insurance coverage and any investment related services). insurance contracts to that group. A substantive obligation to provide insurance contract services ends when either: A loss-recovery component is established or adjusted within the remaining coverage for reinsurance contracts held for the amount of income recognised in (c) above. This amount is calculated by \u2013 the Group has the practical ability to reassess the risks of the particular policyholder and as a result multiplying the loss recognised on underlying insurance contracts by the percentage of claims on can set a price or level of benefits that fully reflects those risks, or underlying insurance contracts that the Group expects to recover from the reinsurance contracts \u2013 the Group has the practical ability to reassess the risks of the portfolio of insurance contracts that held that are entered into before or at the same time as the loss is recognised on the underlying contain the contract and as a result can set a price or level of benefits that fully reflects the risk of insurance contracts. When underlying insurance contracts are included in the same group with that portfolio unless the pricing of the premiums up to the date when the risks are reassessed takes insurance contracts issued that are not reinsured, the Group applies a systematic and rational method into account the risks that relate to periods after the assessment. of allocation to determine the portion of losses that relates to underlying insurance contracts. For reinsurance contracts cash flows are within the contract boundary if they arise from substantive (x) Contracts acquired in a business combination or portfolio transfer rights and obligations that exist during the reporting period in which the Group is compelled to pay For groups of contracts acquired in a transfer of contracts or a business combination, the consideration amounts to the reinsurer or has a substantive right to receive services from the reinsurer. received for the contracts is included in the fulfilment cash flows as a proxy for the premiums received at the date of acquisition. In a business combination, the consideration received is the fair (vii) Insurance acquisition cash flows value of the contracts at that date. If the total is a net outflow, then the group is onerous. In this Insurance acquisition cash flows are cash flows arising from the costs of selling, underwriting and case, the net outflow is recognised as a loss in profit or loss, or as an adjustment to goodwill or the starting a group of insurance contracts (issued or expected to be issued) that are directly attributable gain on a bargain purchase if the contracts are acquired in a business combination. A loss component to the portfolio of insurance contracts to which the group belongs. Such cash flows are allocated to is created to depict the amount of the net cash outflow, which determines the amounts that are groups of insurance contracts using a systematic and rational method and considering, in an unbiased subsequently presented in profit or loss as reversals of losses on onerous contracts and are excluded way, all reasonable and supportable information that is available without undue cost or effort. from insurance revenue and instead reported within \u2018insurance service expense\u2019. CHESNARAANNUALREPORTANDACCOUNTS2024 155
IFRS FINANCIAL STATEMENTS
SECTION A GENERAL INFORMATION AND ACCOUNTING POLICIES AND JUDGEMENTS
A4 Material accounting policy information (continued)
The Group has not applied the risk mitigation option that is available under IFRS 17.B115 regarding
(a) Insurance contracts and reinsurance contracts (continued)
offsetting the impacts of derivatives and reinsurance contracts and therefore recognises all changes
(xi) Subsequent measurement \u2013 insurance contracts not measured under the PAA
in financial risk and the time value of money against the CSM for direct participating contracts.
The carrying amount of a group of insurance contracts at each reporting date is the sum of the
The following adjustments relate to future service and thus adjust the CSM:
Liability for Remaining Coverage (LRC) and the Liability for Incurred Claims (LIC). The LRC comprises
the FCF that relate to services that will be provided under the contracts in future periods and any
(a) changes in the amount of the Group\u2019s share of the fair value of the underlying items; and
remaining CSM at that date. The LIC includes the FCF for incurred claims and expenses that have
(b) changes in the FCF that do not vary based on the returns of underlying items:
not yet been paid, including claims that have been incurred but not yet reported.
(i) changes in the effect of the time value of money and financial risks including the effect of
The FCF of groups of insurance contracts are updated by the Group for current assumptions at the
financial guarantees;
end of every reporting period, using the current estimates of the amount, timing and uncertainty
of future cash flows and of discount rates. The way in which the changes in estimates of the FCF
(ii) changes in estimates of the present value of future cash flows in the LRC; and
are treated follow the general principle below:
(iii) changes in the risk adjustment for non-financial risk that relate to future service.
(a) changes that relate to current or past service are recognised in profit or loss; and
Adjustments are measured using the current discount rates.
(b) changes that relate to future service are recognised by adjusting the CSM or the loss component
For insurance contracts under the VFA, the following adjustments do not adjust the CSM:
within the LRC as per the policy below.
(a) changes in the obligation to pay the policyholder the amount equal to the fair value of the
For insurance contracts under the GMM:
underlying items;
The following adjustments relate to future service and thus adjust the CSM:
(b) changes in the FCF that do not vary based on the returns of underlying items:
(a) experience adjustments \u2013 arising from premiums received in the period that relate to future
(i) changes in the FCF relating to the LIC; and
service and related cash flows such as insurance acquisition cash flows and premium-based taxes;
(ii) experience adjustments relating to insurance service expenses (excluding insurance
(b) changes in estimates of the present value of future cash flows in the LRC, except those described
acquisition cash flows).
in the following paragraph;
The Group does not classify any premiums received in the period as relating to current service on
(c) differences between any investment component expected to become payable in the period
materiality grounds.
and the actual investment component that becomes payable in the period, determined by
comparing (i) the actual investment component that becomes payable in a period with (ii) the
Changes to the CSM for insurance contracts:
payment in the period that was expected at the start of the period plus any insurance finance
For insurance contracts, the carrying amount of the CSM at each reporting date is the carrying amount
income or expenses related to that expected payment before it becomes payable; and
at the start of the year, adjusted for:
(d) changes in the risk adjustment for non-financial risk that relate to future service.
(i) the CSM of any new contracts that are added to the Group in the year;
Adjustments (a), (b) and (d) above are measured using discount rates determined on initial recognition
(ii) interest accreted on the carrying amount of the CSM during the year (for contracts under the
(the locked-in discount rates).
GMM, using discount rates determined at initial recognition that are applied to nominal cash
For insurance contracts under the GMM, the following adjustments do not adjust the CSM:
flows that do not vary based on the returns of underlying items);
(a) changes in the FCF for the effect of the time value of money and the effect of financial risk and
(iii) as detailed above, changes in fulfilment cash flows that relate to future services, to the extent
changes thereof;
that there is a CSM available. When an increase in the FCF exceeds the carrying amount of the
CSM, the CSM is reduced to zero, the excess is recognised in insurance service expenses and
(b) changes in the FCF relating to the LIC; and
a loss component is recognised within the LRC. When the CSM is zero, changes in the FCF
(c) experience adjustments relating to insurance service expenses (excluding insurance acquisition
adjust the loss component within the LRC with the impact going to insurance service expenses.
cash flows).
The excess of any decrease in the FCF over the loss component reduces the loss component
to zero and reinstates the CSM;
The Group does not classify any premiums received in the period as relating to current service on
materiality grounds.
(iv) the effect of any currency exchange differences on the CSM; and
(v) the amount recognised as insurance revenue for insurance services provided in the year,
For insurance contracts under the VFA:
determined after all other adjustments above.
Direct participating contracts are contracts under which the Group\u2019s obligation to the policyholder
is the net of:
The CSM for Movestic, Scildon in Waard is calculated in the Swedish krona and euro respectively
and translated into sterling on consolidation into the Group financial statements.
\u2013 the obligation to pay the policyholder an amount equal to the fair value of the underlying items; and
\u2013 a variable fee in exchange for future services provided by the contracts, being the amount of the
Release of the CSM to profit or loss for insurance contracts \u2013 coverage units
Group\u2019s share of the fair value of the underlying items less fulfilment cash flows that do not vary
The amount of the CSM recognised in profit or loss for insurance contract services in the period is
based on the returns on underlying items. The Group provides investment related services under
determined by the allocation of the CSM remaining at the end of the reporting period over the current
these contracts by promising an investment return based on underlying items, in addition to
and remaining expected coverage period of the group of insurance contracts based on coverage
insurance coverage.
units. The coverage period is defined as a period during which the entity provides insurance contract
156 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS services. Insurance contract services include coverage for an insured event (insurance coverage), (v) changes in fulfilment cash flows that relate to future services, measured at the discount rates the generation of an investment return for the policyholder, if applicable (investment-return service) determined on initial recognition, unless they result from changes in fulfilment cash flows of for the contracts under the GMM, and the management of underlying items on behalf of the onerous underlying contracts, in which case they are recognised in profit or loss and create or policyholder (investment-related service) for the contracts under the VFA. adjust a loss-recovery component; Investment-return services are provided only when an investment component exists in insurance (vi) the effect of any currency exchange differences on the CSM; and contracts or the policyholder has a right to withdraw an amount, and the Group expects these (vii) the amount recognised in profit or loss because of the services received in the year. amounts to include an investment return that is achieved by the Group by performing investment activities to generate that investment return. Income referred to in (iii) above is calculated by multiplying the loss recognised on underlying insurance contracts by the percentage of claims on underlying insurance contracts that the Group Note A5(g) sets out the coverage units that are applied to the products within the Group. expects to recover from the reinsurance contract held that is entered into before or at the same time as the loss is recognised on the underlying insurance contracts. For the purposes of (iii) to (v) Insurance contracts \u2013 loss component above, when underlying insurance contracts are included in the same group with insurance contracts When the negative adjustments to the CSM exceed the amount of the CSM, the group of contracts issued that are not reinsured, the Group applies a systematic and rational method of allocation to becomes onerous, and the Group recognises the excess in insurance service expenses and records determine the portion of losses that relates to underlying insurance contracts. the excess as a loss component of the LRC. Both additions and reversals to the loss component are measured at locked-in discount rates and allocations are made at the beginning of the period. The Release of the CSM to profit or loss for reinsurance contracts \u2013 coverage units systematic allocation is calculated as the opening loss component of the LRC divided by the sum For reinsurance contracts held, the CSM is released to profit or loss as insurance contract services of the total opening present value of future cash flows and adjustment for future non-financial risk. are received from the reinsurer in the period. Note A5(g) sets out the coverage units that are applied When a loss component exists, the Group allocates between the loss component and the remaining to the reinsurance contracts held within the Group. component of the LRC for the respective group of contracts, on a systematic and rational basis for: Reinsurance contracts held \u2013 loss-recovery component (a) expected incurred claims and other directly attributable expenses for the period; A loss-recovery component is established or adjusted within the asset for remaining coverage for (b) changes in the risk adjustment for non-financial risk for the risk expired; and reinsurance contracts held for the amount of income recognised in profit or loss when the Group recognises a loss on initial recognition of an onerous group of underlying insurance contracts or on (c) finance income (expenses) from insurance contracts issued. addition of onerous underlying insurance contracts to that group. Subsequently, the loss-recovery The amounts of loss component allocation in (a) and (b) above reduce the respective components component is adjusted to reflect changes in the loss component of an onerous group of underlying of insurance revenue and are reflected in insurance service expenses. Decreases in the FCF in insurance contracts. subsequent periods that relate to future service reduce the remaining loss component and reinstate The loss-recovery component is further adjusted, if required, to ensure that it does not exceed the the CSM after the loss component is reduced to zero. Increases in the FCF in subsequent periods portion of the carrying amount of the loss component of the onerous group of underlying insurance that relate to future service increase the loss component. contracts that the Group expects to recover from the group of reinsurance contracts held. The Movement in the loss component comprises changes in experience and systematic allocation. loss-recovery component determines the amounts that are presented as a reduction of incurred claims Changes relating to experience and assumptions are presented as \u2018Losses and reversals of losses on recovery from reinsurance contracts held and are consequently excluded from the reinsurance onerous contracts\u2019 and changes relating to systematic allocation are presented as \u2018Incurred claims expenses determination. and other directly attributable expenses\u2019 in the loss component column of the \u2018analysis by remaining coverage and incurred claims\u2019 tables in the insurance and reinsurance contracts notes in Section F. (xiii) Insurance and reinsurance contracts measured under PAA The Group uses PAA to simplify the measurement of groups of contracts where the coverage period (xii) Subsequent measurement \u2013 reinsurance contracts not measured under the PAA of each contract in the group is 1 year or less. This approach is used for stand-alone short-term The carrying amount of a group of insurance contracts at each reporting date is the sum of the Asset protection products in Movestic. for Remaining Coverage (ARC) and the Asset for Incurred Claims (AIC). The ARC comprises the FCF On initial recognition of each group of insurance contracts, the carrying amount of the LRC is that relates to services that will be received under the reinsurance contracts held in future periods measured at the premiums received. The Group has chosen to expense insurance acquisition cash and any remaining CSM at that date. The AIC comprises the FCF related to past service for incurred flows when they are incurred. claims that have not yet been received. Subsequently, the carrying amount of the LRC is increased by any premiums received and decreased Changes to the CSM for reinsurance contracts: by the amount recognised as insurance revenue for services provided. On initial recognition of each For reinsurance contracts, the carrying amount of the CSM at each reporting date is the carrying group of contracts, the Group expects that the time between providing each part of the services and amount at the start of the year, adjusted for: the related premium due date is no more than a year. Accordingly, the Group has chosen not to adjust the LRC to reflect the time value of money and the effect of financial risk. (i) the CSM of any new contracts that are added to the Group in the year; For contracts measured under the PAA, the LIC is adjusted for the time value of money, as the (ii) Interest accreted on the carrying amount of the CSM during the year, measured at the discount contracts issued and measured under the PAA typically have a settlement period of over 1 year. rates on nominal cash flows that do not vary based on the returns on any underlying items A risk adjustment for non-financial risk is also calculated. determined on initial recognition; There are no investment components within insurance contracts issued and reinsurance contracts (iii) Income recognised in profit or loss in the year on initial recognition of onerous underlying contracts; held that are measured under the PAA. (iv) reversals of a loss-recovery component to the extent that they are not changes in the fulfilment cash flows of the group of reinsurance contracts; CHESNARAANNUALREPORTANDACCOUNTS2024157
IFRS FINANCIAL STATEMENTS
SECTION A \u2013 GENERAL INFORMATION AND ACCOUNTING POLICIES AND JUDGEMENTS
A4 Material accounting policy information (continued)
The Group disaggregates changes in the risk adjustment for non-financial risk between the insurance
(a) Insurance contracts and reinsurance contracts (continued)
service result and insurance finance income or expenses so that the impact of measuring the
(xiv) Non-distinct investment components
risk adjustment for non-financial risk at current discount rates is reported within insurance finance
Insurance revenue and insurance service expenses exclude any Non-Distinct Investment Components
income or expense.
(NDIC). The Group identifies the investment component of a contract by determining the amount
Portfolios of insurance contracts that are assets and those that are liabilities, and portfolios of
that it would be required to repay to the policyholder in all scenarios with commercial substance.
reinsurance contracts that are assets and those that are liabilities, are presented separately in the
These include circumstances in which an insured event occurs, or the contract matures or is
balance sheet. Any assets or liabilities recognised for cash flows arising before the recognition of
terminated without an insured event occurring. Investment components are excluded from insurance
the related group of contracts (including any assets for insurance acquisition cash flows) are included
revenue and insurance service expenses, being recognised instead directly in the balance sheet.
in the carrying amount of the related portfolios of contracts.
The table that follows details the source of the NDICs for the broad product categories.
(b) Investment contracts
Product category Typical NDIC
Investment contracts are contracts that carry financial risk, with no significant insurance risk and
are accounted for under IFRS 9. Where contracts contain both insurance and investment components
Immediate annuities None
the investment component can only be separated if it meets the requirements of a \u2018distinct
Term assurance and other non-linked Term assurance: None
investment component\u2019. Distinct in this sense is where the investment component is not highly
Other non-linked: Lower of death, surrender
inter-related with the insurance component and for which contracts with equivalent terms are
and maturity benefit
sold, or could be sold, separately in the same market or the same jurisdiction.
Unit-linked/index-linked/with-profits \u2013 GMM Lower of death, surrender and maturity benefit
All investment contract liabilities are designated on initial recognition as held at fair value through
profit or loss. The Group has designated investment contract liabilities at fair value through profit or
Unit-linked/index-linked/with-profits \u2013 VFA Lower of death, surrender and maturity benefit
loss as this more closely reflects the basis on which the businesses are managed.
Short-term protection None
The financial liability in respect of unit-linked contracts is measured by reference to the value of the
underlying net asset value of the unitised investment funds, determined on a bid value, at the balance
(xv) Presentation in the profit and loss and balance sheet
sheet date.
Under IFRS 17, for contracts not measured under the PAA, the Group recognises insurance revenue
as it satisfies its performance obligations \u2013 i.e. as it provides services under groups of insurance
For the UK business, the impact of deferred tax on unrealised capital gains is passed to the
contracts. The insurance revenue relating to services provided for each year represents the total of
policyholder and for the Swedish business a policyholder yield tax in respect of an estimate of the
the changes in the LRC that relate to services for which the Group expects to receive consideration.
investment return on the underlying investments in the unitised funds are also reflected in the
This mainly comprises the release of expected claims, the risk adjustment expired and the CSM
measurement of the respective unit-linked liabilities.
amortised in the period.
Investment contract liabilities are managed together with related investment assets on a fair value
For contracts measured under the PAA, the insurance revenue for each period equates to the amount
basis as part of the documented risk management strategy.
of expected premium receipts for providing services in the period.
The fair value of other investment contracts is measured by discounting current estimates of all
\u2018Insurance service expenses\u2019 in each reporting period represents the cost of providing those services,
contractual cash flows that are expected to arise under contracts.
broadly comprising incurred claims and benefits and expenses that are directly attributable to
Amounts collected on investment contracts are accounted for using deposit accounting, under
providing the service in the period. Incurred claims and benefits include lapse amounts but exclude
which the amounts collected, less any initial fees deducted, are credited directly to the balance sheet
NDICs per note above.
as an adjustment to the liability to the investor. Similarly, benefits paid are not included in the
\u2018Net income/(expenses) from reinsurance contracts\u2019 generally comprises reinsurance expenses and
income statement but are instead deducted from investment contract liabilities in the accounting
the recovery of incurred claims. Reinsurance expenses are recognised similarly to insurance revenue,
period in which they are paid.
with the amount of reinsurance expenses representing an allocation of the premiums paid to
reinsurers that depicts the received insurance contract services in the period. Income and expenses
(c) Amounts deposited with reinsurers
from reinsurance contracts are presented separately from income and expenses from insurance
Amounts deposited with reinsurers are investment contract assets under reinsurance arrangements,
contracts issued. Income and expenses from reinsurance contracts, other than insurance finance
which primarily involve the transfer of financial risk with no significant insurance risk. These assets
income or expenses, are presented on a net basis on the face of the income statement as \u2018net
are designated on initial recognition as at fair value through profit or loss in order to significantly
expenses from reinsurance contracts\u2019 in the insurance service result.
reduce the accounting mismatch with the corresponding liabilities which these assets share a risk
with and tend to offset. These assets are accounted for under IFRS 9 in line with the corresponding
Together, the insurance revenue, insurance service expenses and net income/(expenses) from
gross investment contracts.
reinsurance contracts make up the insurance service result, presented on the face of the
income statement.
(d) Investment return
The \u2018investment result\u2019 comprises the \u2018net investment return\u2019, changes in investment contract
Investment return comprises investment income from financial assets and rental income from
liabilities and policyholder funds held by the Group and insurance finance income or expenses (IFIE)
investment properties.
for both insurance and reinsurance contracts. The IFIE broadly includes the effect of changes in the
Income from financial assets comprises dividend and interest income, net fair value gains and losses
time value of money and the effect of financial risk and changes in financial risk. The Group includes
(both unrealised and realised) in respect of financial assets classified as fair value through profit or
all IFIE in the profit or loss, with no disaggregation into Other Comprehensive Income.
loss, and realised gains on financial assets classified as measured at amortised cost.
158 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Dividends are accrued on an ex-dividend basis. Interest received and receivable in respect of (g) Financing costs interest-bearing financial assets classified as fair value through profit or loss is included in net fair Financing costs comprise interest payable on borrowings and on reinsurance claims deposits included value gains and losses. For financial assets measured at amortised cost, interest income is within reinsurance payables, calculated using the effective interest rate method. Under IFRS 16, calculated using the effective interest method. interest on lease liabilities is recognised in the Statement of Comprehensive Income as finance costs. Rental income from investment properties under operating leases is recognised in the Consolidated (h) Income taxes Statement of Comprehensive Income on a straight-line basis over the term of each lease. Lease Income tax on the profit or loss for the year comprises current and deferred tax and is recognised incentives are recognised in the Consolidated Statement of Comprehensive Income as an integral in the Consolidated Statement of Comprehensive Income. Tax that relates directly to transactions part of the total lease income. reflected within equity is also presented within equity. The investment return in respect of assets backing investment contracts is disclosed separately (i) Current tax from the investment return for those assets backing insurance contracts in order to meet the Current tax is the expected tax payable on the taxable income for the year, using tax rates IFRS 17 requirement to illustrate the relationship between insurance finance income or expenses enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable and the corresponding return on the assets. in respect of previous years. (e) Fee, commission income and other operating income (ii) Deferred tax Fee and commission income for investment contracts: Deferred tax is provided using the balance sheet liability method, providing for temporary In accordance with IFRS 15, fees charged for investment management services provided in connection differences between the carrying amounts of assets and liabilities for financial reporting purposes with investment contracts are recognised as revenue over time, as the services are provided. and the amounts used for taxation purposes. The amount of deferred tax provided is based on Initial fees which exceed the level of recurring fees and relate to the future provision of services are the expected manner of realisation or settlement of the carrying amount of assets and liabilities, deferred and amortised over the anticipated period over time in which services will be provided. using tax rates enacted or substantively enacted at the balance sheet date. Initial fees, annual management charges and contract administration charges are recognised over A deferred tax asset is recognised only to the extent that it is probable that future taxable profits time as revenue on an accruals basis. Surrender charges are recognised as a reduction to policyholder will be available against which the asset can be utilised. Deferred tax assets are reduced to claims and benefits incurred when the surrender benefits are paid and as such are not reported the extent that it is no longer probable that the related tax benefit will be realised. in the income statement. In accordance with IAS 12, deferred tax assets and deferred tax liabilities arising from different Commissions received or receivable which do not require the Group to render further services are tax jurisdictions in which the Group operates are not offset against each other. recognised at the point at which the commission becomes due. However, when it is probable that (iii) Policyholders\u2019 fund yield tax the Group will be required to render further services during the life of the contract, the commission, Certain of the Group\u2019s policyholders within the Swedish business are subject to a yield tax which or part thereof, is deferred and recognised over time as revenue over the period in which services is calculated based on an estimate of the investment return on underlying investments within are rendered. their unitised funds. The Group is under an obligation to deduct the yield tax from the policyholders\u2019 All fees in respect of insurance contracts are now recognised within insurance revenue. unitised funds and to remit these deductions to the tax authorities. The remittance of this tax payment is included in other operating expenses as it does not comprise a tax charge on Other operating income: Group profits. Fee income from investment managers is recognised in accordance with IFRS 15 and are in relation to Movestic, and are received from the fund companies, based on the value of the managed assets. (i) Intangible assets The fee income is recognised and adjusted on an ongoing basis, as Movestic meets its commitments. (i) Acquired value of in-force business (AVIF) Acquired in-force investment contracts are in respect of investment contracts acquired under (f) Other operating expenses business combinations and are measured at fair value at the time of acquisition. Actual incurred expenses within the Group are assessed according to the Group\u2019s guidelines to consider whether they are attributable to fulfilling insurance contracts and those meeting this The present value of in-force investment contracts recognised under IFRS 9 is stated at cost requirement are reported as \u2018insurance service expenses\u2019. As part of this assessment, the eligible less accumulated amortisation and impairment losses. The initial cost is deemed to be the fair expenses are apportioned between investment and insurance contracts on a systematic and rational value of the contractual customer relationships acquired. The acquired present value of the basis. Certain expenses such as project expenses and one-off expenses are considered to be in-force investment contracts is carried gross of tax and is amortised against income on a time non-attributable and are therefore excluded from the apportionment and directly allocated to \u2018other profile which, it is intended, will broadly match the profile of the underlying emergence of operating expenses\u2019. The \u2018other operating expenses\u2019 therefore include all expenses that are not profit from the contracts. The recoverable amount is estimated at each balance sheet date. If the attributable to insurance contracts, as they are either not eligible or have been apportioned to recoverable amount is less than the carrying amount, an impairment loss is recognised in the investment contracts. Consolidated Statement of Comprehensive Income and the carrying amount is reduced to its recoverable amount. Operating lease payments Under IFRS 16, the deprecation of right-of-use assets is recognised in the Statement of Comprehensive (ii) Acquired value of customer relationships (AVCR) Income as an administration expense. Payments made in relation to lease commitments are The acquired value of customer relationships arising from business combinations is measured reflected in the balance sheet as a reduction to the corresponding lease liability. at fair value at the time of acquisition. This comprises the discounted cash flows relating to new insurance and investment contracts which are expected to arise from existing customer relationships. These are carried gross of tax, are amortised in accordance with the expected emergence of profit from the new contracts and are tested for recoverability if there is an indication of impairment. CHESNARAANNUALREPORTANDACCOUNTS2024159
IFRS FINANCIAL STATEMENTS
SECTION A GENERAL INFORMATION AND ACCOUNTING POLICIES AND JUDGEMENTS
A4 Material accounting policy information (continued)
Fair value is understood as the value of a property estimated without regard to costs of sale or
(i) Intangible assets (continued)
purchase, and without offset for any associated taxes. All such valuations are prepared and expressed
(iii) Software assets
exclusive of VAT payments, unless otherwise stated.
An intangible asset in respect of internal development software costs is only recognised if all of
The properties are derecognised either when they have been disposed of, or when the investment
the following conditions are met:
property is permanently withdrawn from use and no future economic benefit is expected from its
(i) an asset is created that can be identified;
disposal. Any gains or losses on the retirement or disposal of an investment property are recognised
within investment income in the Statement of Comprehensive Income in the year of retirement
(ii) it is probable that the asset created will generate future economic benefits; and
or disposal.
(iii) the development costs of the asset can be measured reliably.
SIPP Commercial Property (Directly Held)
Where no internally generated intangible asset can be recognised, development expenditure
The self-invested fund properties are initially recorded at purchase price and then valued triennially, by
is recognised as an expense in the period in which it is incurred. Software assets, including
an independent professional valuer, on an open market basis, using valuation models in accordance
internally developed software, are amortised on a straight-line basis over their estimated useful
with the Practice Statements in the RICS Appraisal and Valuation Standards (5th Edition). The portfolio
life, which typically varies between 3 and 5 years.
is revalued annually using an index valuation on each property. Any funds in receipt of the sale of
the property are for the benefit of the respective pension fund members.
(iv) Deferred acquisition costs
Acquisition costs relating to investment contracts comprise directly attributable incremental
(l) Financial investments, assets and liabilities
acquisition costs, which vary with, and are related to, securing new contracts, and are recognised
IFRS 9 requires financial investments to be classified into measurement categories using the
as an asset under IFRS 15 to the extent that they represent the contractual right to benefit
\u2018business model\u2019 test and the \u2018solely payment of principal and interest\u2019 test. The measurement
from the provision of investment management services. The asset is presented as a deferred
categories under IFRS 9 are:
acquisition cost asset and is amortised over the expected term of the contract, as the fees
relating to the provision of the services are recognised. All other costs are recognised as expenses
(i) Amortised Cost (AC);
when incurred.
(ii) Fair Value Through Other Comprehensive Income (FVOCI); and
(j) Property and equipment
(iii) Fair Value Through Profit or Loss (FVTPL).
Items of property and equipment are stated at cost less accumulated depreciation and
IFRS 9 also permits the application of a \u2018fair value option\u2019 in instances where the outcome of the
impairment losses.
business model and SPPI tests would lead to a classification of financial assets that would result
Depreciation is charged to the Consolidated Statement of Comprehensive Income on a straight-line
in an accounting mismatch with the corresponding liabilities.
basis over the estimated useful economic lives of the property and equipment on the following basis:
The Group has accordingly classified all financial assets held for investment purposes and derivative
Computers and similar equipment 3 to 5 years
financial instruments as FVTPL either mandatorily as a result of the business model and SPPI tests
Fixtures and other equipment 5 years
or has designated as FVTPL as permitted by the \u2018fair value option\u2019. The fair values of financial assets
quoted in an active market are their bid prices at the balance sheet date.
Assets held under leases, as right-of-use assets, are depreciated over their useful economic lives
on the same basis as owned assets, or where shorter, over the term of the relevant lease. These
Asset groups to which the fair value option has been applied are debt securities, the mortgage loan
include office buildings, office and IT equipment and motor vehicles.
portfolio and cash and cash equivalents. The mortgage loan portfolio includes the savings mortgage
books for Argenta which encompass both insurance and investment components. As a separate
(k) Investment properties
contractional relationship exists, the mortgage assets are accounted for separately to the liabilities.
Investment properties consist of properties held in the Unit-Linked Property Investment Fund and
For the liabilities, the investment component and the insurance component are not separated but
SIPP Commercial Property (Directly Held) in our UK division, as described below.
accounted for as a single unit of account.
Unit-Linked Property Investment Fund
The present value of the insurance liabilities associated with the mortgage loan and debt securities
The properties held in the unit-linked property fund are valued on a monthly basis by Jones Lang
are strongly dependent on discount rates sourced from market data and therefore a classification
Lasalle (JLL), an independent property valuer, on an open-market basis. Their valuation is prepared
of AC for these assets would lead to a large mismatch with the insurance liability.
in accordance with the Practice Statements in the RICS Appraisal and Valuation Standards
Investments in subsidiaries are carried in the Company Balance Sheet at cost less impairment and
(5th Edition).
all short-term receivables are classified as AC.
The properties are measured initially at cost. The carrying amount includes the cost of replacing part
Financial assets are derecognised when contractual rights to receive cash flows from the financial
of an existing property at the time that cost is incurred if the recognition criteria are met; and excludes
assets expire, or where the financial assets have been transferred together with substantially all
the costs of day-to-day servicing of a property. Subsequent to initial recognition, properties are
the risks and rewards of ownership.
stated at fair value, which reflects market conditions at the reporting date. Gains or losses arising
from changes in the fair values of properties are included within investment income in the Statement
Financial liabilities
of Comprehensive Income in the year in which they arise. Rental income from investment property
\u2018Investment contract liabilities\u2019 and \u2018Liabilities relating to policyholder funds held by the Group\u2019 are
is accounted for as described in Accounting Policy (l).
designated as FVTPL, since the liabilities are managed together with the investment assets on a
fair value basis as part of the documented risk management strategy. Purchases and sales of \u2018regular
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
way\u2019 financial assets are recognised on the trade date, which is when the Group commits to
transaction between market participants at the measurement date.
purchase, or sell, the assets.
Borrowings and short-term payables are classified as AC.
160 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (m) Impairment and Expected Credit Loss provisioning Operating activities cash flows include loans and financial investments. The purchases are funded IFRS 9 utilises a forward-looking Expected Credit Loss (ECL) impairment model which applies to from cash flows associated with the origination of insurance and investment contracts, net of financial assets measured at amortised cost, debt investments at FVOCI and lease receivables. payments of related benefits and claims. This is due to the cash receipts and payments made on behalf of the customers for which their funds are held by the entity. Dividends and interest received As stated above, for the Group all financial assets held for investment purposes are classified as from the financial investments are captured within the operating activities. FVTPL. Financial assets that are subject to ECL provisioning are limited to short-term receivables only. The simplified approach under IFRS 9 has been applied in assessing full lifetime loss provisions Investing activities cash flows include cash payments to acquire property, plant and equipment, for these assets. Due to the short-term nature of these instruments and the minimal historical intangibles, and other long-term assets. These payments include those relating to capitalised losses on these asset classes, the resulting provisions that would be required are not considered development costs. to be material and therefore no provision is made. Financing activities cash flows include cash proceeds from issuing share capital, cash payments to owners to acquire or redeem the entity\u2019s shares, cash repayments of amounts borrowed, cash (n) Policyholders\u2019 funds held by the Group and liabilities relating payments by a lessee for the reduction of the outstanding liability relating to a finance lease, dividends to policyholders\u2019 funds held by the Group paid out to shareholders, and interest paid on the borrowings. Policyholders\u2019 funds held by the Group and liabilities relating to policyholders\u2019 funds held by the Group are investment contracts that are recognised at fair value and accounted for under IFRS 9. (r) Other provisions (i) Policyholders\u2019 funds held by the Group Provisions are recognised when the Group has a present, legal or constructive obligation as a result The policyholders\u2019 funds held by the Group represent the assets associated with an investment of past events such that it is probable that an outflow of economic benefits will be required to product in the Swedish business, where the assets are held on behalf of the policyholder, for settle the obligation and a reliable estimate of the amount of the obligation can be made. Where the which the group holds a corresponding liability as noted in (ii) below. effect of the time value of money is material, the amount of the provision is the present value of the expenditure expected to be required to settle the obligation. The Group recognises provisions The policyholders\u2019 funds held by the Group are held for investment purposes on behalf of the for onerous contracts when the expected benefits to be derived from a contract are less than the policyholders and are designated as at fair value through profit or loss. The fair values of the unavoidable costs of meeting the obligations under the contract. policyholders\u2019 funds held by the Group are the accumulation of the bid prices of the underlying assets at the balance sheet date. Transactions in these financial assets are recognised on the (s) Lease contract liabilities trade date, which is when the Group commits (on behalf of the policyholder) to purchase or sell The Group assesses whether a contract is or contains a lease, at inception of the contract. The the assets. Group recognises a right-of-use asset and a corresponding lease liability with respect to all lease (ii) Liabilities relating to policyholders\u2019 funds held by the Group arrangements in which it is the lessee, except for short-term leases (defined as leases with a lease The liability relating to policyholders\u2019 funds held by the Group represents the liability that matches term of 12 months or less) and leases of low value assets (such as tablets and personal computers, the asset policyholders\u2019 funds held by the Group. small items of office furniture and telephones). For these leases, the Group recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another (o) Derivative financial instruments systematic basis is more representative of the time pattern in which economic benefits from the Derivative financial instruments are recognised at fair value. The gain or loss on re-measurement to leased assets are consumed. fair value is recognised immediately in profit or loss. Hedge accounting has not been applied. The lease liability is initially measured at the present value of the lease payments that are not paid The fair value of interest rate swaps is the estimated amount that the Group would receive or pay at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot to terminate the swap at the balance sheet date, taking into account current interest rates and the be readily determined, the Group uses its incremental borrowing rate. Lease payments included in current creditworthiness of the swap counterparties. The fair value of forward exchange contracts the measurement of the lease liability comprise: is their quoted market price at the balance sheet date, being the present value of the quoted \u2013 Fixed lease payments forward price. \u2013 Variable lease payments Embedded derivatives which are not closely related to their host contracts, and which meet the definition of a derivative are separated and fair valued through profit or loss. \u2013 The amount expected to be payable by the lessee under residual value guarantees \u2013 The exercise price of purchase options (p) Other assets \u2018Other assets\u2019 comprise receivables arising from investment contracts and other receivables such \u2013 The payments of penalties for terminating the lease, if the lease term reflects the exercise of an as accrued interest, receivables from fund management companies and income tax balances. option to terminate the lease Financial assets classified as \u2018other assets\u2019, other than accrued interest, are stated at amortised cost The lease liability is presented as a separate line in the Consolidated Balance Sheet. less impairment losses. These assets are subject to an expected credit loss assessment under IFRS 9 and are assessed as being immaterial given the typically short-term nature of these balances. The lease liability is subsequently measured by increasing the carrying amount to reflect interest on The majority of the accrued interest relates to financial assets that are measured at FVTPL and the lease liability (using the effective interest method) and by reducing the carrying amount to reflect are therefore not subject to the expected credit loss assessment. the lease payments made. The right-of-use assets comprise the initial measurement of the corresponding lease liability, (q) Cash and cash equivalents lease payments made at or before the commencement day and any initial direct costs. They are Cash and cash equivalents include cash in hand, deposits held at call with banks and other short-term subsequently measured at cost less accumulated depreciation and impairment losses. highly liquid investments. Highly liquid is defined as having a short maturity of 3 months or less at their acquisition. CHESNARAANNUALREPORTANDACCOUNTS2024 161
IFRS FINANCIAL STATEMENTS
SECTION A GENERAL INFORMATION AND ACCOUNTING POLICIES AND JUDGEMENTS
A4 Material accounting policy information (continued)
Dutch business (Waard)
(s) Lease contract liabilities (continued)
Group companies operate defined contribution pension schemes, which are funded through
The right-of-use assets are depreciated over the shorter of the lease term and the useful life of the
payments to insurance companies, to which Group companies pay fixed contributions. There are
underlying asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use
no legal or constructive obligations on Group companies to pay further contributions if the fund
asset reflects that the Group expects to exercise a purchase option, the related right-of-use asset is
does not hold sufficient assets to pay employee benefits relating to service in current and prior
depreciated over the useful life of the underlying asset. The depreciation starts at the commencement
periods. Accordingly, Group companies have no further payment obligations once the contributions
date of the lease. The Group does not have any leases that include purchase options or transfer
have been paid. Contributions to defined contribution pension schemes are recognised in the
ownership of the underlying asset. The right-of-use assets are presented within the same line item
Consolidated Statement of Comprehensive Income when due.
as that within which the corresponding underlying assets would be presented if these were owned.
As a result of the Conservatrix acquisition, Waard Leven assumed the obligations under a defined
For the Group this is \u2018Property and Equipment\u2019.
benefit pension scheme for a small number of former Conservatrix employees. This scheme
For short-term leases (lease of than 12 months or less) and leases of low-value assets (such as
is closed to new entrants with no further benefits accruing and as such the exposure for Waard
personal computers and office furniture) the Group has opted to recognise a lease expense on
Leven is limited to the longevity risk of the contracts. The liability is valued under IAS 19 and
a straight-line basis as permitted by IFRS 16. This expense is presented within \u2018Other operating
reported under \u2018Other provisions\u2019 in the balance sheet.
expenses\u2019 in the Consolidated Income Statement.
Dutch business (Scildon)
As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and
Scildon had a defined benefit plan which was closed and transferred into a defined contribution
instead account for any lease and associated non-lease components as a single arrangement.
pension plan during 2019. The defined benefit pension scheme was administered by Stichting
The Group has not used this practical expedient.
Pensionfonds Legal & General Nederland. The Company had agreed to contribute to the premium
for the unconditional part of the pension. The Company paid a contribution to the Scheme and
The Group\u2019s weighted average incremental borrowing rate applied to lease liabilities during 2024
subsequently had no further financial obligations with respect to this part of the Scheme.
is 4.7% for the UK division, 2.1% or the Swedish division and 2.0% for the Dutch division.
During 2019, a new defined contribution pension scheme was established for the benefit of
Scildon employees.
(t) Borrowings
Borrowings are recognised initially at fair value, less transaction costs, and are subsequently measured
(ii) Bonus plans
at amortised cost using the effective interest rate method, with interest expense recognised in the
The Group recognises a liability and an expense for bonuses based on a formula that takes into
Consolidated Statement of Comprehensive Income on an effective yield basis. The effective interest
consideration the profit attributable to the Company\u2019s shareholders after certain adjustments.
rate method is a method of calculating the amortised cost of a financial liability and of allocating
The expense is recognised in the Consolidated Statement of Comprehensive Income on an
interest expense over the relevant period. The effective interest rate is the rate that exactly discounts
accruals basis.
future cash payments through the expected life of the financial liability.
(x) Share-based payments (Parent Company only)
(u) Deferred income
The value of employee share options and other equity settled share-based payments is calculated
Deferred income is in respect of initial fees that relate to the future provision of services that are
at fair value at the grant date using appropriate and recognised option pricing models. Vesting
deferred and amortised over the anticipated period.
conditions, which comprise service conditions and performance conditions, other than those based
upon market conditions, are not taken into account when estimating the fair value of such awards
(v) Other current liabilities
but are taken into account by adjusting the number of equity instruments included in the ultimate
\u2018Other current liabilities,\u2019 comprising investment contract payables and other payables, are recognised
measurement of the transaction amount. The value of the awards is recognised as an expense on
when due and are measured on initial recognition at the fair value of the consideration paid. Current
a systematic basis over the period during which the employment services are provided. Where an
liabilities in respect of insurance contracts are reported as part of the Liability for Incurred Claims.
award of options is cancelled by an employee, the full value of the award (less any value previously
recognised) is recognised at the cancellation date.
(w) Employee benefits
(i) Pension obligations
(y) Share capital and shares held in treasury (Parent Company only)
UK businesses
(i) Share capital
Group companies operate defined contribution pension schemes, which are funded through
Shares are classified as equity when there is no obligation to transfer cash or other assets.
payments to insurance companies, to which Group companies pay fixed contributions. There are
Incremental costs directly attributable to the issue of equity instruments are shown in equity
no legal or constructive obligations on Group companies to pay further contributions if the fund
as a deduction from the proceeds, net of tax. Incremental costs directly attributable to the
does not hold sufficient assets to pay employee benefits relating to service in current and prior
issue of equity instruments, as consideration for the acquisition of a business, are included in
periods. Accordingly, Group companies have no further payment obligations once the contributions
the cost of acquisition.
have been paid. Contributions to defined contribution pension schemes are recognised in the
(ii) Shares held in treasury
Consolidated Statement of Comprehensive Income when due.
Where the Company purchases its own equity share capital, the consideration paid, including
Swedish business
directly attributable costs, is deducted from total shareholders\u2019 equity and shown separately
The Group participates in a combined defined benefit and defined contribution scheme for the
as \u2018treasury shares\u2019 until they are cancelled. Where such shares are subsequently sold, any
benefit of its employees. However, the Scheme is a multi-employer scheme, with the associated
consideration received is credited to the share premium account.
assets and liabilities maintained on a pooled basis. There is limited information available to the
Group to allow it to account for the Scheme as a defined benefit scheme and, in accordance with
(z) Dividends (Parent Company only)
IAS 19 Employee Benefits, it is, therefore, accounted for as a defined contribution scheme.
Dividend distributions to the Company\u2019s shareholders are recognised in the period in which the
Contributions paid to the Scheme are recognised in the Consolidated Statement of Comprehensive
dividends are paid, and, for the final dividend, when approved by the Company\u2019s shareholders at the
Income when due.
Annual General Meeting.
162 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (aa) Investment in subsidiaries (Parent Company only) Transactions relating to business combinations denominated in foreign currencies are translated Investments in subsidiaries are carried in the balance sheet at cost less impairment. The Company into sterling at the exchange rates prevailing on the transaction date. assesses at each reporting date whether an investment is impaired by assessing whether any indicators of impairment exist. If objective evidence of impairment exists, the Company calculates (ae) Climate change the amount of impairment as the difference between the recoverable amount of the Group entity In our Climate-related Financial Disclosures on pages 74 to 91, we note that climate change-related and its carrying value and recognises the amount as an expense in the income statement. The risks are potentially material and as such we have made commitments to transition to net zero by recoverable amount is determined based on the cash flow projections of the underlying entities. 2050. Primarily for Chesnara, climate change risk would be expected to arise through other financial risks e.g. equity risk, credit risk etc (PR1 \u2013 Investment and Liquidity risk) and also regulatory risk (ab) Business combinations given the level of ongoing change. The Group is also exposed to strategic and reputational risks (PR9 Acquisitions meeting the definition of a \u2018business\u2019 are accounted for under IFRS 3 \u2018Business \u2013 Reputational risk) arising from its action or inaction in response to climate change. combinations\u2018. This requires management to perform an assessment of the fair value of the assets The year end balance sheet does not include any explicit adjustments in relation to climate risk related and liabilities acquired and consideration paid at the point of acquisition. The acquiree\u2019s identifiable impacts. This is based on the expectation that financial markets will factor into their pricing the assets, liabilities, and contingent liabilities, are classified according to the relevant accounting standard potential risks and impacts of climate change and other sustainability risks. The market approach to and are measured initially at their fair values at the acquisition date. Expenses directly attributable this will continue to develop as the methodology and underlying data to quantify the potential risk to the acquisition are expensed as incurred unless determined to be attributable to future insurance becomes better understood. contracts. Gains arising on a bargain purchase, where the net fair value of the identifiable assets acquired and the liabilities and contingent liabilities assumed exceeds the fair value of the consideration A5 Significant accounting judgements and estimates for the acquisition, are recognised in the Consolidated Statement of Comprehensive Income. In preparing the financial statements, the Group makes judgements and applies estimates and Where the fair value of the consideration exceeds the fair value of the assets and liabilities acquired assumptions that affect the application of accounting policies and reported amounts of assets and it is recognised as a goodwill intangible asset on the Group balance sheet. liabilities, income and expenses. Disclosures of judgements made by the Group in applying the The non-controlling interest in the acquiree is initially measured at the non-controlling interest\u2019s accounting policies include those that have the most significant effect on the amounts that are proportion of the net fair value of the assets, liabilities and contingent liabilities recognised. recognised in the Consolidated Financial Statements. Such estimates and judgements are continually evaluated and are based on historical experience (ac) Portfolio transfers and other factors, including expectations of future events that are believed to be reasonable. Details Where a transaction is not deemed to be a business combination it is accounted for as an asset of all critical accounting judgements and estimates are set out in the notes that follow. and liability purchase. In this scenario the Group identifies and recognises the individual identifiable assets acquired (including those assets that meet the definition of, and recognition criteria for, IFRS 17 significant judgements applied in determining the transition amounts intangible assets in IAS 38 Intangible Assets) and liabilities assumed. The cost of the transaction to (a) Judgement in applying the IFRS 17 fair value approach at transition the Group shall be allocated to the individual identifiable assets and liabilities on the basis of their IFRS 17 became effective from 1 January 2023 with a transition date of 1 January 2022. The Group relative fair values at the date of purchase. applied the full retrospective approach where practical to measure each group of insurance contracts on transition which means IFRS 17 has been applied since acquisition into the Group. Where it (ad) Foreign currencies was impractical to apply the full retrospective approach a fair value approach was used. The transition The individual financial statements of each Group company are presented in the currency of the approach was determined at the level of a group of insurance contracts, however due to the factors primary economic environment in which it operates, being its functional currency. For the purpose under consideration (such as the length of time since acquisition and availability of data) the outcome of these Consolidated Financial Statements, the results and balance sheet of each Group company of the practicability assessment resulted in a transition approach being applied for the operating are expressed in pounds sterling, which is the functional currency of the Parent Company and the segment as a whole, with the exception of Movestic. presentation currency of the Consolidated Financial Statements. In preparing the financial statements of the individual companies, transactions in currencies other Operating segment Transition approach than the entity\u2019s functional currency, being foreign currencies, are recorded at the rates of exchange UK \u2013 CA Fair value prevailing on the dates of the transactions. Income and expense items are translated at the average Movestic Fair value* exchange rates for the year, unless exchange rates fluctuate significantly during the period, in which Waard Group Full retrospective case the exchange rates at the dates of transactions are used. At each balance sheet date, Scildon Full retrospective monetary assets and liabilities which are denominated in foreign currencies are retranslated at the Other Group activities N/A rates prevailing on the balance sheet date and exchange differences are recognised in profit or loss. Non-monetary items carried at fair value, which are denominated in foreign currencies, are translated *For PAA contracts in Movestic the Group has concluded that it is practicable to apply the at the rates prevailing when the fair value was determined. full retrospective approach and hence this was applied. However, it was concluded that the full For the purpose of presenting Consolidated Financial Statements, the assets and liabilities of the retrospective approach could not be applied to the majority of the pension benefits in scope of Group\u2019s foreign operations are translated at exchange rates prevailing on the balance sheet date. IFRS 17, and hence the fair value approach has been applied. Income and expense items are translated at the average exchange rates for the year, unless exchange Note F2 provides information relating to the disaggregation of insurance revenue and CSM by rates fluctuate significantly during the period, in which case the exchange rates at the dates of transition approach. transactions are used. Exchange differences arising are classified as other comprehensive income and are recognised in the Group\u2019s foreign currency translation reserve. Such translation differences are recognised as income or as expense in the year in which the operation is disposed of. CHESNARAANNUALREPORTANDACCOUNTS2024163
IFRS FINANCIAL STATEMENTS
SECTION A GENERAL INFORMATION AND ACCOUNTING POLICIES AND JUDGEMENTS
A5 Significant accounting judgements and estimates (continued)
IFRS 17 accounting judgements
IFRS 17 significant judgements applied in determining the transition amounts (continued)
(b) Separation of contracts and classification
(a) Judgement in applying the IFRS 17 fair value approach at transition (continued)
Judgement has been exercised across the Group in determining whether contracts issued contain
The Group determined that it would be impracticable to apply the full retrospective approach where
significant insurance risk and whether contracts including investment components and insurance
the following applied:
components can be separated. Once any investment components are separated, the Group assesses
whether the contract should be separated into several insurance components that, in substance,
(i) Historical cash flow information was unavailable at the required level of aggregation
should be treated as separate contracts to reflect the substance of the transaction. To determine
(ii) Historical actuarial models were unavailable
whether insurance components should be recognised and measured separately, the Group considers
whether there is an interdependency between the different risks covered, whether components
(iii) Information relating to historical assumptions that reflected the conditions existing at the relevant
can lapse independently of each other and whether the components can be priced and sold
date was unavailable or not possible to create without the use of hindsight
separately. When the Group enters into one legal contract with different insurance components
Chesnara has been able to apply the full retrospective approach to all material business acquired
operating independently of each other, insurance components are recognised and measured
or written since 2016 when SII was introduced. There was no material new business in the UK or
separately applying IFRS 17.
Sweden from 2016 to the transition date. In addition the full retrospective approach has been applied
Generally, the contracts identified as insurance contracts under IFRS 17 at transition were the same
to all of the contracts within Waard, which includes business acquired in 2015. Note A5 provides
as those under IFRS 4. However, there are some contracts, in the Swedish business, where under
information relating to the key accounting judgements applied to business that has transitioned under
IFRS 17 the investment and insurance components can no longer be separated resulting in certain
the full retrospective approach.
pension benefits becoming in scope of IFRS 17. No contracts have been switched from insurance
In applying the fair value approach, the Group determined the CSM to be the difference between
to investment contracts at transition. Many contracts issued include \u2018rider\u2019 benefits in addition to the
the fair value of a group of insurance contracts, measured in accordance with IFRS 13, \u2018Fair Value
base policy, however having considered the facts and circumstances of these products it has been
Measurement\u2019 (IFRS 13), and its FCF at the transition date. The fair value of an insurance liability is
determined that these components should not be separated and that the contract is measured as
the price that a market participant would be willing to pay to assume the obligation and the
one contract.
remaining risks of the in-force contracts as at the transition date.
The assessment as to whether insurance contracts have direct participating features qualify for the
In the absence of recent market transactions for similar contracts, a present value technique was
VFA requires an element of judgement to determine whether the proportion of the underlying item
used to determine the fair value of the groups of contracts. IFRS 13 defines fair value accounting
to be paid to the policyholder is substantial and whether the policyholder liability varies substantially
techniques according to the inputs used. The lack of observable market prices for the liabilities under
with the movement in the fair value of the underlying item.
consideration and hence the reliance on significant judgement to determine a market participant\u2019s
view results in the present value technique being considered a Level 3 technique. The significant
(c) Level of aggregation
judgements to determine a market participant\u2019s view include:
Judgement is required in applying the requirement to group portfolios of insurance contracts that
(a) a market participant\u2019s view of the expected future cash flows and risk allowances would align
have similar risks and are managed together. The Group has considered the following factors (to the
to Chesnara\u2019s view;
extent that they are relevant for the entity) in order to group contracts by similar risks and those
that are managed together: principal insurance risk, product type, tax status, legacy book/outsource
(b) only future cash flows within the boundaries of the insurance contracts were included in the
provider and measurement model.
market participant\u2019s fair value estimation;
Further judgement is required in determining the profitability grouping that applies to portfolios of
(c) a market participant would require a compensation for the cost of holding capital in respect of
contracts. For the new business cohorts in Scildon, a policy level test is applied and contracts are
the liabilities which has been determined based on market rates; and
allocated to the relevant profitability group. To date, this has not resulted in any contracts being
(d) a market participant would determine the compensation for the cost of holding capital based
classified as \u2018no significant risk of becoming onerous\u2019. Where portfolios of contracts are acquired in
on a buffer in excess of the SII regulatory capital requirements. The buffer assumed is in the range
a business combination or a portfolio transfer, the purchase terms have been such that to date all
of 130% -140% reflecting the specifics of the underlying business.
contracts have been allocated to the \u2018other\u2019 profitable cohort.
A number of specific modifications are permitted when using the fair value approach. The Group has
adopted the following modifications:
(i) Level of aggregation \u2013 to use information at the transition date to identify groups of
insurance contracts;
(ii) Level of aggregation \u2013 to group annual cohorts of business;
(iii) Level of aggregation \u2013 the assessment for profitability was made at the transition date; and
(iv) Measurement model \u2013 to use information at the transition date to assess eligibility for the VFA.
Fulfilment cash flows were estimated prospectively at the transition date and discount rates were
determined at the transition date.
164 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (d) Discount rates are discounted using the same curve used to value the corresponding mortgage assets which itself Cash flows are discounted using currency-specific, risk-free yield curves adjusted for the characteristics is derived from mortgage rates available in the market. of the cash flows and the liquidity of the insurance contracts. The Group applies a \u2018bottom-up\u2019 The cash flows are discounted using a discount rate that adjusts risk-free yields for portfolio specific approach to determining discount rates and follows the methodology used by the PRA and EIOPA characteristics, with differences in liquidity characteristics between the financial assets used to determine risk-free yield curves and ultimate forward rates for regulatory solvency calculations. to derive the risk-free yield and the relevant liability cash flows (known as an illiquidity premium). To reflect the liquidity or otherwise of the insurance contracts, the risk-free yield curves are adjusted by an illiquidity premium, which is aligned to the SII Volatility Adjustment. Inflation rates mainly relate to expense inflation. The assumptions in respect of expense inflation reflect the Group\u2019s best estimate view incorporating market consistent data such as earnings indices For certain Dutch \u2018savings mortgage\u2019 products, there is a direct connection to the policyholder\u2019s and central bank inflation targets. mortgage loan and the premiums to repay the loan in that the crediting rate is set such that the account value will be equal to the balance on the loan at maturity. For this product, the cash flows The yield curves that were used to discount the estimates of future cash flows that were modelled deterministically are shown in the table below: 2024 2023 Yield curve Broad product category Currency 1 yr 5 yrs 10 yrs 20 yrs 30 yrs 1 yr 5 yrs 10 yrs 20 yrs 30 yrs RFR Unit-linked/index-linked/with-profits \u2013 VFA EUR 2.24% 2.14% 2.27% 2.26% 2.39% 3.36% 2.32% 2.39% 2.41% 2.53% Unit-linked/index-linked/with-profits \u2013 GMM GBP 4.46% 4.04% 4.07% 4.30% 4.23% 4.74% 3.36% 3.28% 3.43% 3.36% (with high liquidity) Short-term protection SEK 2.25% 2.41% 2.63% 2.93% 3.05% 3.03% 2.26% 2.25% 2.76% 2.99% RFR + VA Immediate annuities EUR 2.47% 2.37% 2.50% 2.49% 2.58% 3.56% 2.52% 2.59% 2.61% 2.70% Term assurance and other non-linked Unit-linked/index-linked/with-profits \u2013 GMM GBP 4.70% 4.28% 4.31% 4.54% 4.47% 5.05% 3.67% 3.59% 3.74% 3.67% (with medium liquidity) Market Mortgage Rates Waard Savings Mortgage EUR 3.36% 3.32% 3.43% 3.39% 3.51% 4.77% 3.73% 3.80% 3.82% 3.94% The sensitivity of the income statement and balance sheet to movements in the yield curve is shown in Note B3(a)(ii). (e) Methods used to measure the risk adjustment for non-financial risk In determining the risk adjustment for non-financial risk each entity allows for diversification between The Group calculates the risk adjustment using a Cost of Capital (CoC) methodology similar to the the risks in a consistent manner to that applied in the Solvency II risk margin. Diversification is PRA and EIOPA Solvency II Risk Margin approach. The differences between the Solvency II Risk allowed for within each entity, but not across the entities, and is allocated to groups of insurance Margin and the IFRS 17 risk adjustment for non-financial risk include: contracts in proportion to the undiversified risk capital amounts. The risk adjustment is then determined by applying a CoC rate to the amount of capital required for each future reporting date (a) the risk adjustment for non-financial risk only includes risks within the IFRS 17 contract boundary and discounting the result using the appropriate portfolio level risk-free rates adjusted for illiquidity. which may differ to the contract boundary assumed in Solvency II; The required capital is determined using stresses and diversification factors aligned to the relevant (b) the Solvency II risk margin makes allowance for counterparty default risk and operational risk, Solvency II methodologies and allocated to groups of contracts in a way that is consistent with the but these are not permitted in the risk adjustment for non-financial risk; and risk profiles of the groups. The CoC rate reflects that used in the Group\u2019s own EcV reporting, currently (c) the Solvency II risk margin does not apply a tapering factor for the overseas divisions. 3.25%pa (2023: 3.25%). The tapering factor reduces the liabilities within the Group and was introduced to the risk margin To determine the risk adjustments for non-financial risk for reinsurance contracts, the Group applies calculation in the UK SII reforms at December 2023. The same methodology and parameters have these techniques both gross and net of reinsurance and derives the amount of risk being transferred been applied for the first time to the risk adjustment calculation for IFRS 17 at 31 December 2024 to the reinsurer as the difference between the two results. as a result of the Group also adopting the tapering factor in its EcV reporting, from which the CoC Over a 1 year time horizon and on a net of reinsurance basis, this risk adjustment corresponds to a is also derived. The impact of this change in accounting estimate in the year has been a reduction confidence level of 66.5% (2023: 75.9%). This is equivalent to estimating that the probability that in the risk adjustment of \u00a315.0m and an increase in the CSM of \u00a313.8m. any changes in best estimate liabilities from non-financial risk over the next year exceed the amount of the risk adjustment is less than 33.5%. Using statistical approximations, the 1-year figure can be transformed into an equivalent confidence level over the expected lifetime of in-force policies of 59.6% (2023: 61.9%). CHESNARAANNUALREPORTANDACCOUNTS2024165
IFRS FINANCIAL STATEMENTS
SECTION A GENERAL INFORMATION AND ACCOUNTING POLICIES AND JUDGEMENTS
A5 Significant accounting judgements and estimates (continued)
The following table provides details of the coverage units applied for the broad product categories:
IFRS 17 accounting judgements (continued)
(f) Expense allocations
Product category Typical coverage unit
Expenses cash flows are assessed as to whether they are attributable to the fulfilment or acquisition
Immediate annuities Annuity face amount
of insurance contracts. Where estimates of expenses-related cash flows are determined at the
portfolio level or higher, they are allocated to groups of contracts on a systematic basis, such as
Term assurance and other non-linked Term assurance: Sum insured
activity-based costing method. The Group has determined that this method results in a systematic
Other non-linked: Higher of death and
and rational allocation.
maturity benefit
Unit-linked/index-linked/with-profits \u2013 GMM Higher of death benefit, account value
(g) Coverage period and units
and maturity benefit
Judgement is required in determining the expected coverage period over which the CSM is allocated
into profit or loss for the services provided or received.
Unit-linked/index-linked/with-profits \u2013 VFA Higher of death benefit, account value
and maturity benefit
For contracts issued, the Group determines the coverage period for the CSM recognition as follows :
Short-term protection N/A
(a) for non-participating contracts, the coverage period corresponds to the policy coverage for
mortality and/or morbidity risk and investment return services;
Notes F2 to F5 provide information regarding the timing of the future release of the CSM to the profit
(b) for contracts with direct participating features, the coverage period corresponds to the period
and loss account, based on the CSM at the balance sheet date.
in which insurance or investment related services are expected to be provided.
(h) Non-distinct investment components
The coverage period for reinsurance contracts is determined based on the coverage period of all
Insurance revenue and insurance service expenses exclude any NDIC. The Group identifies the
underlying contracts whose cash flows are included in the reinsurance contract boundary.
investment component of a contract by determining the amount that it would be required to repay
The CSM at the end of the reporting period is allocated to profit and loss based on the relevant
to the policyholder in all scenarios with commercial substance. In so doing a judgement that this
underlying coverage units where the number of coverage units in a group is determined by
is from the perspective of the policyholder has been applied. These include circumstances in which
considering, for each contract, the quantity of the benefits provided under a contract and its expected
an insured event occurs or the contract matures or is terminated without an insured event occurring.
coverage period. The quantity of benefits provided includes insurance, investment return and
Investment components are excluded from insurance revenue and insurance service expenses. Where
investment-related services and hence the coverage unit is based on the maximum benefit paymen t
the required information for the actual NDIC is unavailable at a policy level, the Group applies
(including insurance, investment return and investment-related services) which may become due
estimation techniques based on expected data. Typical non-distinct investment components are
in a period.
outlined in Note A4(a)(xiv).
Where a specific unit of account contains a mixture of services, and therefore coverage units, it is
Other significant accounting estimates
necessary to weight the coverage units so that the resulting profile of CSM release reflects the
(i) Acquired value of in-force business (CASLP)
overall package of benefits provided. This is particularly pertinent to units of account incorporating
The Group applies accounting estimates and judgements in determining the fair value, amortisation
a combination of immediate and deferred annuities. Under IFRS 17, deferred annuities usually
and recoverability of acquired in-force business. In the initial determination of the acquired value
provide multiple services, split between the two phases of benefit provision (the deferral phase and
of in-force business, the Group uses actuarial models to determine the expected net cash flows (on
the payment phase). Judgement is therefore required to combine the different coverage units
a discounted basis) of the policies acquired. The key assumptions applied in the models are driven
so that they fairly reflect the services provided. The weighting between the deferral phase and the
by the expected behaviour of policyholders on termination rates, expenses of management and age
payment phase coverage units is calculated so that the services provided in the deferral phase
of individual contract holders as well as global estimates of investment growth, based on recent
reflect the investment return provided and the probability weighted delivery of any lump sum death
experience at the date of acquisition. The assumptions applied within the models are considered
benefits, both adjusted so that all of the CSM is earned in the deferral phase for all contracts
against historical experience of each of the relevant factors. Refer to accounting policy Note A4(i).
which do not enter the payment phase either through transfer out, withdrawal of funds or death.
The acquired value of in-force business is amortised on a basis that reflects the expected profit
For contracts that provide an investment return or investment-related service, the account balance
stream arising from the investment contracts acquired at the date of acquisition. The rate of
is generally considered the main driver for determining the amount of service provided in a period .
amortisation is therefore based on expected claims and the asset is expected to run-off over a period
For products that provide an insurance service the sum assured, in excess of any account balance,
of 30 years as at the balance sheet date.
is considered the main driver for determining the amount of insurance service provided in a period .
Impairment testing requires a degree of estimation and judgement. In particular, the value is sensitive
to the rate at which future cash flows are discounted and to the rates of return on invested
assets, which have been determined with reference to our review of the current market assessment
of the true value of money and the risks specific to the asset for which the cash flows have not
been adjusted. The actual (pre-tax) rate applied for the impairment test was 9.55% (31 December
2023: 11.45%).
166 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS The acquired value of in-force business for CASLP has been tested for recoverability as at (m) Future expenses 31 December 2024 and as a result of that test no impairment is required as at 31 December 2024 Best estimate assumptions regarding expenses used in the estimation of future cash flows are set (31 December 2023: \u00a321.0m, \u00a36.1m net of tax). The prior year impairment is reported in \u2018other at a level that reflects the Group\u2019s expectations as to future expenditure based on each entity\u2019s operating expenses\u2019 in the Group income statement and UK segmental income statement. cost base and annual budgeting process along with longer-term expectations as to how the business will run off net of any new business. Transition costs and major project expenses are reviewed on a A 200 bps increase in the effective discount rate would reduce the underlying value of in-force case-by-case basis as to whether they should be treated as non-attributable. Costs which are borne business in CASLP by \u00a32.8m (31 December 2023: \u00a32.0m). A 10% fall in projected future centrally for groupwide projects have been considered non-attributable. Expenses pertaining to profits would reduce the underlying value of in-force business in CASLP by \u00a32.8m (31 December investment costs on assets backing liabilities where no investment related service is provided to 2023: \u00a32.2m). policyholders, generally term assurance and annuities, are also excluded. Note B2 provides more information on the sensitivity of the income statement and balance sheet to changes in future (j) Investment in subsidiary CA expense assumptions. The Group applies accounting estimates and judgements in determining the holding value and recoverability of its investment in subsidiaries, in particular that of Countrywide Assured plc. An annual impairment test is performed which requires a degree of estimation and judgement, and for which recoverability is tested by reference to the fair value of existing assets and liabilities and expected future income and expense levels as calculated under EcV methodology. The EcV methodology assesses the future cash flows on a best-estimate basis, discounted at a risk-free rate, to measure the future profitability of the business. This assessment showed that as at the balance sheet date, there was a deficit of \u00a34.0m (31 December 2023: \u00a314.4m) against the carrying value of the investment in subsidiary value and hence the carrying value has been impaired by this amount, thereby impacting the Parent Company income statement and balance sheet but no impact to the Group Consolidated Financial Statements. A 200 bps increase in interest rates would reduce the EcV, and hence the carrying value, by \u00a39.5m (31 December 2023: \u00a32.7m). A 10% fall in equity values would reduce the carrying value by \u00a38.0m (31 December 2023: \u00a37.9m). A 10% mass lapse of policyholders would reduce the carrying value by \u00a310.6m (31 December 2023: \u00a311.1m). (k) Persistency Best estimate assumptions about policyholder behaviour, such as surrenders and lapses, used in estimating future cash flows are developed for homogeneous product types and groups of policyholders at a local entity level. Assumptions are generally based on a combination of the local entity\u2019s recent experience and future expectations. Experience is monitored through regular studies, the results of which are reflected both in the pricing of new products and in the measurement of existing contracts. Surrenders and lapses depend on the product and policy duration in force. Note B2 provides more information on lapse rates and the sensitivity of the income statement and balance sheet to changes in persistency assumptions. Key sources of estimation and uncertainty (l) Mortality/Longevity/Morbidity Best estimate assumptions about mortality, longevity and morbidity used in estimating future cash flows are developed for homogeneous product types and groups of policyholders at a local entity level. Assumptions are generally based on a combination of national data, standard industry tables, the local entity\u2019s recent experience and also future expectations. Experience is monitored through regular studies, the results of which are reflected both in the pricing of new products and in the measurement of existing contracts. Note B2 provides more information on mortality rates used and the sensitivity of the income statement and balance sheet to changes in mortality and morbidity assumptions. CHESNARAANNUALREPORTANDACCOUNTS2024167
IFRS FINANCIAL STATEMENTS
SECTION B RISK AND CAPITAL MANAGEMENT
B1 Risk Management Framework
The theory of probability is applied to the pricing and provisioning for a portfolio of insurance contracts.
The Group\u2019s Board of Directors has overall responsibility for the adequacy of the design and
Insured events are, by their nature, random, and the actual number and size of events during any
implementation of the Group\u2019s Risk Management Framework and its consistent application
1 year may vary from those estimated using established statistical techniques. It is noted that the
across divisions. The Group and its divisions operate within a defined risk strategy and supporting
annuity policies give exposure to longevity risk, which provides a partial natural hedge to the
Risk Appetite Framework. Risk preferences are approved by the Board of Directors and the risk
exposure to mortality risk.
position of the business is monitored against these preferences.
The Group manages its insurance risk through adoption of underwriting strategies, the aim of which
The Group\u2019s risk management policies are established to identify and analyse the risks faced by
is to avoid undue concentration of risk, approval procedures for new products, pricing guidelines
the Group, set appropriate risk limits and controls, and monitor adherence to risk limits. The risk
and adoption of reinsurance strategies, the aim of which is to reinforce the underwriting strategy
management policies are reviewed regularly to reflect changes in market conditions and the Group\u2019s
by avoiding the retention of undue concentration of risk.
activities whilst the Board of Directors approves the review, updates and attestation of these
Notwithstanding that the Group pursues common overarching objectives and employs similar
policies at least annually.
techniques in managing these risks, the range of product characteristics and the differing market
Risk is managed at local entity level where the business is transacted, based on the principles and
and regulatory environments of the UK, Swedish and Dutch businesses are such that insurance
policies established at Group level. The Group Audit & Risk Committee oversees how management
risk is managed separately for the separate operating segments and concentration of insurance risk
monitors compliance with the Group\u2019s risk management policies and procedures, and reviews
is mitigated. The UK segment consists of largely closed legacy books of business that are in run-off.
the adequacy of the Risk Management Framework in relation to the risks faced by the Group. It is
Within the Dutch business, the Waard Group operates as an acquisitive vehicle with a number of
assisted in its oversight role by internal audit, which undertakes both regular and ad hoc reviews
acquisitions of closed books in recent years whereas Scildon is a writer of new business. The Swedish
of risk management controls and procedures, the results of which are reported to the Group Audit
segment, Movestic, also writes new business however this predominantly comprises of investment
& Risk Committee.
contracts valued under IFRS 9. Accordingly, the information which follows (and also the quantitative
disclosures in Section F of the notes to the financial statements) differentiates these segments
The Group issues insurance contracts and investment contracts. The nature and extent of the
and sets out for each the key risks arising from insurance contracts and how those risks are measured
underwriting and financial risks arising from these contracts are determined by the contract design.
and managed.
The risks are evaluated for risk management purposes in conjunction with the risks mitigated by
related reinsurance contracts and the risks arising from financial assets held to fund the settlement
(a) UK business
of the liabilities.
The main insurance contract portfolios within the UK and the associated risks that have a material
effect on the amount, timing and uncertainty of future cash flows arising from the insurance contracts
B2 Underwriting risk
issued are as follows:
General
Underwriting risk consists of insurance risk, persistency risk (together demographic experience risk)
(i) Immediate annuities
and expense risk:
Immediate annuities provide regular income payments generally during the outstanding life of the
\u2013 Insurance risk: the risk transferred from the policyholder to the Group, other than financial risk.
policyholder, and in some cases that of a surviving spouse or partner. In certain cases, payments
Insurance risk arises from uncertainty regarding the occurrence, timing and amount of future claims.
may be guaranteed for a minimum period. These contracts expose the business to longevity risk.
\u2013 Persistency (or lapse) risk: the risk that a policyholder will cancel a contract, increase or reduce
(ii) Term assurances and other non-linked
premiums, withdraw deposits or annuitise a contract earlier or later than expected.
The principal insurance risk for these portfolios is mortality risk with some morbidity risk arising
from critical illness benefits. The policies generally provide fixed and guaranteed benefits and have
\u2013 Expense risk: the risk of unexpected increases in the administrative costs of servicing contracts.
fixed future premiums.
The Group is exposed to different aspects of insurance risk for life insurance policies issued:
(iii) Unit-linked/Index-linked/With-profits \u2013 GMM
\u2013 Mortality risk \u2013 the risk of losses arising from death of life insurance policyholders being earlier
The contracts in these portfolios are with-profits or unit-linked pensions and savings products which,
than expected
due to the presence of in the money guarantees or the charges applied, did not meet the criteria
\u2013 Morbidity risk \u2013 the risk of medical claims arising from the diagnosis of illness being higher
for measurement under VFA. The with-profits policies comprise a guaranteed sum assured payable
than expected
on death or at maturity, to which may be added a discretionary terminal bonus. The unit-linked
policies include guarantees in excess of the unit fund. The principal insurance risk for these contracts
\u2013 Longevity risk \u2013 the risk of losses due to policyholders living longer than expected
is mortality risk however some contracts also contain morbidity risk.
The Group\u2019s management of insurance risk is a critical aspect of its business. The primary insurance
activity carried out by the Group comprises the assumption of the risk of loss from persons that
are directly subject to the risk. As such, the Group is exposed to the uncertainty surrounding the
timing and severity of claims under the related contracts. The principal risk is that the frequency
and severity of claims is greater than expected.
168 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (iv) Unit-linked/Index-linked/With-profits \u2013 VFA Other underwriting risks on insurance contracts These portfolios contain unit-linked pensions, endowments and whole of life contracts and a small Expense risk number of with-profits policies. The contracts passed the criteria for measurement under VFA. The UK business outsources the majority of operational activities to third party administrators in The principal insurance risk for these contracts is mortality risk however some contracts also contain order to reduce the expense inefficiencies that would arise with fixed and semi-fixed costs on morbidity risk. a reducing policy base, although this is mitigated by acquisitions of business. There are, however, risks associated with the use of outsourcing. In particular, there will be a need for periodic Management of insurance risks renegotiations of the terms of the outsourcing arrangements as the existing agreements expire, the The risk at outset of a contract is managed through the pricing basis. Thereafter the risks associated outcome of which could potentially impact ongoing maintenance expenses and involve transition with these products are managed by reinsurance and, in some cases, by the ability to charge the costs. There is also a risk that, at some point in the future, third party administrators could default policyholder for the mortality benefits provided. on their obligations. The UK business monitors the financial soundness of third-party administrators For unit-linked contracts there is exposure to insurance risk only insofar as the value of the unit-linked and has retained step-in rights on the more significant of these agreements. There are also contractual fund is lower than the guaranteed minimum death benefit. arrangements in place which provide for financial penalties in the event of default by the administration service provider. The with-profits business which is measured using the VFA is reinsured to ReAssure Limited and hence the only risk retained for this business is the risk of default by the reinsurer and some Persistency risk expense risk. Persistency risk is the risk that the investor cancels the contract or discontinues paying new premiums into the contract, thereby exposing the UK business to the risk of a reduction in profits. The following table shows the breakdown of insurance and reinsurance contract values by major Persistency experience is actively monitored to allow early identification of trends. In addition, product type for contracts in the UK: reinsurance is in place to limit the impact arising from a mass lapse event on the long-term contracts. 31 December Restated Restated (b) Swedish business Type of contracts 2024 2023 Gross Reinsurance Total Gross Reinsurance Total The Movestic business is focused predominantly on unit-linked savings and pensions in the local \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Swedish market. IFRS 17 requires that contracts are separated according to the benefits selected. The majority of the benefits in Movestic are classified as investment contracts, with no significant Immediate annuities 102.0 (43.9 ) 58.1 113.4 (48.8 ) 64.6 insurance risk, and are therefore measured under IFRS 9, however some of the savings benefits Term assurance and other do however fall within the scope of IFRS 17 \u2018Insurance Contracts\u2019. In addition, there is some short-term non-linked 86.7 (61.1 ) 25.6 92.7 (68.0 ) 24.7 protection business, measured under PAA. Unit-linked/Index-linked/ With-profits \u2013 GMM 202.4 (0.3 ) 202.1 223.3 (0.2 ) 223.1 (i) Unit-linked/Index-linked/With-profits \u2013 VFA Unit-linked/Index-linked/ The insurance benefits within scope of IFRS 17 are unit-linked pension savings contracts where With-profits \u2013 VFA 915.6 (47.2 ) 868.4 949.7 (47.7 ) 902.0 the policyholder has selected to receive a payment on survival to a specified date but there are no Total 1,306.7 (152.5 ) 1,154.2 1,379.1 (164.7 ) 1,214.4 payments to beneficiaries on death before this date, with invested amounts instead becoming the property of Movestic. To compensate the insured for this risk, Movestic allocates inheritance gains on a monthly basis to surviving policyholders such that the gains broadly match the long-term Concentration of insurance risk average values retained due to death. At the individual beneficiary level there is insurance risk as The UK does not underwrite group insurance covers which tends to naturally limit geographic significant additional amounts are paid to the beneficiary on survival compared to receiving no concentrations. Exposures to material insurance risks, on individual cases, are avoided through payment on death. the use of quota share and surplus reinsurance and retained sums assured on any one life are generally under \u00a3250,000. (ii) Short-term protection These portfolios primarily include insurance contracts providing: Mortality assumptions A base mortality table is selected which is most appropriate for each type of contract taking into \u2013 Life cover on an individual or group contract basis account historical experience and where appropriate, reinsurers rates. The mortality rates reflected \u2013 Accident and sickness cover for group contracts in these tables are periodically adjusted, allowing for emerging experience. The mortality assumptions used on the blocks of business most sensitive to changes in mortality assumptions \u2013 Income protection benefits separated from group pension schemes are disclosed below. \u2013 Waiver of premium separated from group pension schemes Term assurance ex-Protection Life, Life Business: 65% TMN00 select (2023: 65%) and 65% TFN00 The principal risk for the life cover is mortality risk and the principal risk for the remaining products select (non-smokers) (2023: 65%), 65% TMS00 select (2023: 65%) and 65% TFS00 select (smokers) is morbidity risk. The above are 1-year contracts as Movestic has the practical ability to re-price all (2023: 65%). benefits within 1 year. Annuitant mortality (CA): 104% PMA08 table (2023: 104%) and 104% PFA08 table (2023: 104%), with 100% CMI_2023 improvements (2023: 100% CMI_2022 improvements) with a 1.5% long-term convergence rate from 31 December 2024 (2023: 1.5%). Annuitant mortality (CASLP conventional annuities): 120% PMA08 table (2023: 120%) and 120% PFA08 table (2023: 120%), with 100% CMI_2023 improvements (2023: 100% CMI_2022 improvements) with a 1.5% long-term convergence rate from 31 December 2024 (2023: 1.5%). CHESNARAANNUALREPORTANDACCOUNTS2024169
IFRS FINANCIAL STATEMENTS
SECTION B RISK AND CAPITAL MANAGEMENT
B2 Underwriting risk (continued)
(c) Waard Group
(b) Swedish business (continued)
The Waard Group comprises the original business acquired by the Chesnara Group in 2015 and the
(ii) Short-term protection (continued)
subsequent acquisitions of portfolios of business made by the Waard Group from 2019 onwards
Management of insurance risks
(see Note C1 for details). With the recent acquisitions there is now a mix of protection and savings
For linked contracts the investment risk is borne by the policyholder and there is limited exposure
business in the Waard Group and both the GMM and VFA measurement models are applied.
to insurance risk. In addition, the allocation of inheritance gains are reviewed regularly and are
The acquisition of Conservatrix in 2023 also contained contracts where no significant insurance risk
subject to change in order that the inheritance gains allocated broadly equals the amount paid to
remained at the date of acquisition and these contracts have consequently been classified as
Movestic on death, thereby reducing the risk to Movestic.
investment contacts.
For the contracts measured under the PAA the key risks are managed through appropriate product
(i) Immediate annuities
design and pricing of the policies to ensure that the potential cost to Movestic of these events (and
The Robein and Conservatrix blocks of business contain immediate annuities, where the risk
associated expenses of underwriting and administration) are reflected in the price charged to the
is longevity.
policyholder. These contracts are either 1-year contracts or Movestic has the practical ability to re-price
all benefits within 1 year, which allows Movestic to manage its risk exposure. In addition, risk is
(ii) Term assurance and other non-linked
further mitigated by the use of reinsurance.
Waard\u2019s original business includes term assurances, with further contracts added in subsequent
The following table shows the breakdown of insurance and reinsurance contract values by major
acquisitions most significantly for Argenta and Brand New Day. These portfolios are exposed to
product type for contracts in Sweden:
mortality risk.
The portfolio acquired from Monuta contained endowment and savings business, some with-profit
31 December 2024 2023
sharing conditions however there are separate portfolios for mortality and longevity risk depending
Type of contracts Gross Reinsurance Total Gross Reinsurance Total
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
on which is considered to be the predominant risk.
The Robein acquisition also included term assurance business.
Long-term with direct
participating features 142.1 \u2013 142.1 131.5 \u2013 131.5
The Robein book includes some term assurance business and Conservatrix includes pension,
Short-term protection 32.0 (12.4 ) 19.6 40.3 (14.5 ) 25.8
endowment and funeral plans all of which are exposed to mortality risk.
Total 174.1 (12.4 ) 161.7 171.8 (14.5 ) 157.3
(iii) Unit-linked/Index-linked/With-profits \u2013 GMM
The Argenta book includes a significant amount of mortgage savings which contain mortality risk.
Concentration of insurance risk
Robein contains unit-linked savings products with death cover as a percentage of fund value.
Regarding benefits assured for individual contracts, the combined effect of reinsurance and the
A significant amount of these policies had no insurance risk on acquisition (as over time the death
fact that the vast majority of the total benefit assured relates to numerous small value contracts
cover moves to 100% of the fund value) however as the acquisition was before the effective date
limits the level of concentration risk. The use of reinsurance means that exposures to material
of IFRS 17, the scope is determined at inception of the contract. For those policies with insurance
insurance risks on individual cases are avoided, with 96.9% of the business having retained sums
risk, the predominant risk is considered to be longevity risk. The unit-linked savings products have
assured of less than \u00a3250,000.
been allocated to two portfolios as only certain types of policy (execution only) passed all criteria
of the VFA eligibility test.
In respect of group contracts, the business is exposed to multiple employees of the same organisation
being involved in a single loss event. Movestic forecasts that its maximum loss would be of the
The Conservatrix book includes \u2018Natural Guarantee Plans\u2019 which provide varying degrees of death
order of SEK 666m (approximately \u00a348.1m) gross of reinsurance and SEK 33m (approximately \u00a32.4m)
benefit cover, ranging from 0% to 110%. These policies have been split between those with mortality
after reinsurance. The equivalent retention for 2023 was SEK 15m (approximately \u00a31.2m).
risk (where the death cover exceeds the fund value) and those with longevity risk (where the
death cover is lower than fund value). In addition Conservatrix also includes unit-linked products
Mortality assumptions
with mortality being the predominant risk.
These are not material for the long-term Swedish contracts as the inheritance gains allocated by
Movestic to the surviving policyholders are such that they broadly match the long-term average of
(iv) Unit-linked/Index-linked/With-profits \u2013 VFA
the amounts retained on death. Mortality assumptions are not material to the protection products
As noted above, the Robein book contains unit-linked savings contracts, for which the criteria for
due to the short-term nature of these contracts.
measurement under VFA are met. The principal insurance risk for these contracts is longevity risk.
Other underwriting risks on insurance contracts
Management of insurance risks
Expense risk
The portfolio is closed to new business and is in run-off and hence no significant underwriting occurs.
Expense risk is the risk that expenses are higher than expected hence leading to a reduction in profits.
For the existing portfolio, the division entered into an excess of loss and catastrophe (Life) and
Expenses are actively monitored and managed to reduce this risk.
quota share (Health) reinsurance agreement to mitigate the risk in excess of risk appetite for mortality,
disability and unemployment.
Persistency risk
Persistency risk is the risk that the investor cancels the contract or discontinues paying new
premiums into the contract, thereby exposing the Swedish business to the risk of a reduction
in profits. Persistency experience is actively monitored to allow early identification of trends.
In addition, reinsurance is in place to limit the impact arising from a mass lapse event on the
long-term contracts.
170 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS The following table shows the breakdown of insurance and reinsurance contract values by major (iii) Unit-linked/Index-linked/With-profits \u2013 GMM product type for contracts in the Waard Group: Scildon writes unit-linked and index-linked business, with most policies paying out 0%, 90% or 110% of the unit-value at death of the policyholder and 100% at maturity. When the death benefit is 31 December 2024 2023 greater than 100% of the unit fund value the principal risk is mortality and if the death benefit is less Type of contracts Gross Reinsurance Total Gross Reinsurance Total than 100% of the unit fund value the principal risk is longevity. These are allocated to two portfolios \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m as only policies allocating the majority of premiums to unit-linked holdings passed the criteria of the VFA eligibility test. Immediate annuities 61.3 \u2013 61.3 67.8 \u2013 67.8 Term assurance and other (iv) Unit-linked/Index-linked/With-profits \u2013 VFA non-linked 137.5 (2.7 ) 134.8 153.7 (4.4 ) 149.3 Unit-linked/Index-linked/ As noted above, Scildon contains unit-linked and index-linked savings contracts, for which the criteria With-profits \u2013 GMM 463.5 \u2013 463.5 496.9 \u2013 496.9 for measurement under VFA are met. Unit-linked/Index-linked/ The group pension contracts are also unit-linked in nature and pass the VFA eligibility criteria. With-profits \u2013 VFA 58.2 \u2013 58.2 67.0 \u2013 67.0 The principal risk for these contracts is mortality risk. Total 720.5 (2.7 ) 717.8 785.4 (4.4 ) 781.0 Management of insurance risks Term assurances are the main new business product type and significant underwriting occurs. Concentration of insurance risk For linked contracts the investment risk is borne by the policyholder, therefore there is exposure to The Waard portfolios do not include group contracts and hence do not have the concentration of insurance risk only insofar as the value of the unit-linked fund is lower than any guaranteed benefits. risk which may be presented by these contracts. For individual life contracts an excess of loss limit Quota share reinsurance agreements are in place with a maximum retention per policy, to of \u20ac100,000 is applied for life risk, hence concentration risk is limited. mitigate the risk in excess of risk appetite for mortality at the moment of underwriting. Catastrophe Mortality assumptions reinsurance is in place to mitigate the loss arising from a catastrophe risk event. Different assumptions are used for each portfolio. As an example, the most material portfolio (Argenta The following table shows the breakdown of insurance and reinsurance contract values by major Savings Mortgages) uses the following mortality assumptions: 80% of the generational prognosis product type for contracts in Scildon: table AG2018. The assumptions are subject to regular review to ensure that the assumption reflects the experience 31 December 2024 2023 incurred on the specific book. Type of contracts Gross Reinsurance Total Gross Reinsurance Total \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Persistency and expense risk The Waard portfolio is small relative to the Group which limits the risks presented to the Group. Immediate annuities 143.1 \u2013 143.1 146.7 \u2013 146.7 To mitigate the expense risk, management actively monitors the expenses incurred to keep costs Term assurance and other to an appropriate level. Management will continue with the current acquisition strategy to maintain non-linked 161.7 14.6 176.3 173.3 14.9 188.2 Unit-linked/Index-linked/ expenses efficiencies and in addition, expense risk will be further mitigated by the planned integration With-profits \u2013 GMM 242.2 \u2013 242.2 278.8 \u2013 278.8 of the Waard and Scildon businesses, as referred to in the risk management section of the Unit-linked/Index-linked/ Strategic Report. Persistency levels are moderate and largely depend on investment performance. With-profits \u2013 VFA 1,349.1 \u2013 1,349.1 1,264.0 \u2013 1,264.0 (d) Scildon Total 1,896.1 14.6 1,910.7 1,862.8 14.9 1,877.7 Scildon contains a mixture of unit-linked and traditional savings contracts with life cover, term assurance, annuities and group pension business. Concentration of insurance risk (i) Immediate annuities Scildon does write group pensions contracts with an excess of loss limit of \u20ac200,000 per life, hence Immediate annuities provide regular income payments for either the outstanding lifetime of the concentration risk is limited. Regarding benefits assured for individual contracts, the combined effect policyholder and in some cases the outstanding lifetime of a surviving spouse or partner or for of reinsurance and the fact that the vast majority of the total benefit assured relates to numerous the fixed term chosen by the policyholder. Payments are guaranteed for a minimum period. These small value contracts, limit the level of concentration risk. contracts expose the business to longevity risk. Mortality assumptions The assumptions differ by product type, and there are also different assumptions applied within (ii) Term assurance and other non-linked each product type depending on when the contract was written. The unit-linked contracts are the Scildon mainly writes term life contracts, sold as a regular premium policy. The current mass market largest product group and an example of the mortality tables used are the GBM 1976-1980 (males) product has no surrender value or profit sharing. The most significant factors that could increase and the GBV 1976-1980 (females). For annuities, an example of the mortality tables applied are the risk are epidemics and changes in lifestyle leading to higher mortality. GBM 1980-1985 (males) and GBV 1980-1985 (females) tables. There are also older traditional policies with-profit sharing conditions (before 2011) that allow for a Persistency and expense risk surrender value at lapse or profit sharing at maturity. These are split into separate portfolios reflecting To mitigate the expense risk, management actively monitor the expenses incurred to keep costs the principal risks of mortality or longevity. to an appropriate level. Persistency levels are moderate however they are actively monitored to allow early identification of trends. In addition, expense risk will be further mitigated by the planned integration of the Waard and Scildon businesses, as referred to in the risk management section of the Strategic Report. CHESNARAANNUALREPORTANDACCOUNTS2024 171
IFRS FINANCIAL STATEMENTS
SECTION B RISK AND CAPITAL MANAGEMENT
B2 Underwriting risk (continued)
The Group provides two types of investment contract: unit-linked savings and unit-linked pensions
(e) Sensitivity analysis
predominantly written in the UK and Sweden.
The following tables show the impact to the CSM, profit or loss after tax and shareholders\u2019 equity
(i) Unit-linked savings are single or regular premium contracts, with the premiums invested in
if changes in underwriting risk variables that were reasonably possible at the reporting date had
a pooled investment fund, where the policyholder\u2019s investment is represented by units or trust
occurred. The analysis has been prepared for a change in the stated variable, with all other assumptions
accounts where the policyholder decides where to invest. On certain contracts there is a
remaining constant and presents the impact both before and after reinsurance.
small additional benefit payable on death which is deemed not to transfer significant insurance
risk to the business for these contracts. The benefits payable at maturity or surrender of the
31 December 2024 CSM CSM Profit or Profit or Equity Equity
contracts are the underlying value of the investment in the unit-linked funds or trust accounts,
Variation in/arising from gross net loss gross loss net gross net
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
less surrender charges where applicable.
(ii) Unit-linked pensions are single or regular premium contracts with features similar to unit-linked
Mortality and morbidity
savings contracts. Benefits are payable on transfer, retirement or death.
combined \u2013 10% increase (35 .6 ) (11.0 ) (17.9 ) (11.6 ) (17.9 ) ( 11.6 )
Expenses \u2013 10% increase (1 0.5 ) (11.0 ) (5.2 ) (4.9 ) (5.2 ) (4.9 )
Lapse \u2013 10% decrease (1.0 ) (2 . 3 ) (0.3 ) 0.3 (0.3 ) 0.3
(a) Market risk
(i) Management of market risk
The Group businesses manage their market risks within Asset Liability Matching (ALM) frameworks
31 December 2023 CSM CSM Profit or Profit or Equity Equity
that have been developed to achieve long-term investment returns at least equal to their obligations
\u2013 restated gross net loss gross loss net gross net
under insurance and investment contracts, with minimal risk. Within the ALM frameworks the
Variation in/arising from \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
businesses produce quarterly reports at legal entity and asset and liability class level, which are
circulated to the businesses\u2019 key management. The principal technique of the ALM frameworks
Mortality and morbidity
is to match assets to the liabilities arising from insurance and investment contracts by reference to
combined \u2013 10% increase (34.1 ) (9. 2 ) (1 9.3 ) (11.9 ) ( 1 9. 3 ) (1 1 .9 )
the type of benefits payable to policyholders, with separate portfolios of assets being maintained
Expenses \u2013 10% increase ( 11.7 ) (12 . 3 ) (5 .9 ) (5.6 ) (5 .9 ) (5 .6 )
for linked and non-linked liabilities.
Lapse \u2013 10% decrease (1.9 ) (3.0 ) ( 1 .1 ) (0.5 ) (1 .1 ) (0.5 )
For non-unit-linked business, the Group\u2019s objective is to match the timing and nature of cash flows
The sensitivities to mortality and morbidity (critical illness) rates shown above are calculated on
from insurance and investment contract liabilities with the timing of cash flows from assets subject
the assumption that there would be no consequential change in rates to policyholders. In practice,
to identical or similar risks. By matching the cash flows of liabilities with those of suitable assets,
Group policy is to pass costs on to policyholders where it is contractually permitted and where
market risk is managed effectively, whilst liquidity risk is minimised. These processes to manage
it considers that the impact of the change is significant and subject to treating customers fairly.
the risks, which the Group has not changed from previous periods, ensure that the Group is able
to meet its obligations under its contractual liabilities as they fall due.
A 10% increase in mortality and morbidity rates in 2024 is expected to result in a lower fall in profits
compared to 2023 as Scildon, which has the highest exposure to mortality and morbidity risks,
Unit-linked and index-linked insurance contracts and investment contracts
has a higher CSM in 2024. This means that the CSM would absorb more of the impact of the stress.
The Group matches the financial liabilities relating to these contracts with units in the financial
This is partially offset by a higher fall in profits for CA (lower CSM for one of the protection books
assets of the funds to which the value of the liabilities is linked, such that the policyholders bear the
than 2023) and Waard (lower pvFCF than 2023).
principal market risk (being interest rate, equity price and foreign currency risks) and credit risk.
The impact of a 10% increase in expenses has increased from 2023 to 2024, driven by CA due to
Accordingly, this approach results in the Group having no significant direct market or credit risk on
a reduction in per policy expenses allocated to insurance contracts.
these contracts. Its primary exposure to market risk is the risk of volatility in asset-related fees
due to the impact of interest rate, equity price and foreign exchange rate movements on the fair
B3 Financial risk
value of the assets held in the linked funds, on which asset-related fees are based.
General
There is residual exposure to market risk on certain unit-linked contracts where the Group provides
The Group is exposed to a range of financial risks, principally through its insurance contracts, financial
to policyholders guarantees as to fund performance or additional benefits which are not dependent
assets, including assets representing shareholder assets, financial liabilities, including investment
on fund performance. This exposure is mitigated to the extent that the Group matches the obligations
contracts and borrowings, and its reinsurance assets. These risks are described at a high level in the
with suitable financial assets external to the unit-linked funds, such that the residual exposure is
risk management section of the Annual Report and Accounts under \u2018PR1 \u2013 Investment and
not considered to be material.
Liquidity Risk\u2019.
In particular, the key financial risk is that, in the long-term, proceeds from financial assets are not
With-profits contracts
sufficient to fund the obligations arising from its insurance and investment contracts and borrowings.
Some non-linked insurance contracts within the UK businesses include discretionary participation
The most important components of this financial risk are market risk (interest rate risk, equity and
features in the form of with-profits policies. For the CA business, where the policyholder benefits
property price risk and foreign currency exchange risk), liquidity risk and credit risk (including the risk
comprise a discretionary annual bonus and a discretionary terminal bonus, the with-profits business
of reinsurer default).
is wholly reinsured to ReAssure Limited and hence there is no market risk for this class of
business on a net basis.
The risks related to insurance contracts that have a material effect on the amount, timing and
uncertainty of future cash flows arising are set out in Note B2.
For the CA (S&P) business, the primary investment objective of the with-profits policyholder funds
is that the guaranteed minimum benefits of the with-profits policyholders should be met entirely
from the policyholder funds.
172 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS The secondary investment objective is, where possible, to provide a surplus in excess of the Shareholder funds guaranteed minimum benefits. The entire surplus in the policyholder fund accrues to the with-profits Shareholder funds at both Group Parent Company and operating subsidiary level, in accordance policyholders. Any deficit in the policyholder fund is ultimately borne by shareholders. Therefore, with corporate objectives and, in some instances, in accordance with local statutory solvency the Group has a significant exposure to market risk in relation to with-profits business should the requirements, are invested in order to protect capital and to minimise market and credit risk. with-profits policyholder assets be unable to fully meet the cost of guarantees. To achieve the Accordingly, they are generally invested in assets of a shorter-term liquid nature, which gives rise investment objectives, the funds may invest in a range of asset classes including property, equities, to the risk of lower returns on these investments due to changes in short-term interest rates. fixed interest securities, convertibles, cash and derivatives, both in UK and overseas. (ii) Interest rate risk Other insurance contracts As discussed in the management of market risk section the Group is exposed to interest rate risks Other non-linked contracts include contracts which pay guaranteed benefits on insured events, in regard to the assets backing non-linked contracts, such assets being primarily in the form of the terms being fixed at the inception of the contract. Exposure to market price risk is minimised interest-bearing debt securities. The exposure is managed by closely matching contracts written by generally investing in fixed-interest debt securities, while interest rate risk is generally managed with financial assets of suitable nature, yield, duration and currency. by closely matching contracts written with financial assets of suitable nature, yield, duration and currency. To the extent that the Group is unable to fully match its interest rate risk, it makes provision in respect of assumed shortfalls on guaranteed returns to policyholders as part of the present value of future cash flows of the contracts. The tables below show the impact of movements in per annum market rates of interest on the CSM, profit or loss after tax and on shareholder equity as at the balance sheet dates. We believe these interest rate risk variables, to which the Group results are sensitive, represent the ones that might reasonably occur in the future. 31 December 2024 Increase Decrease Increase Decrease Increase Decrease Variation in/arising from 100 basis points in market rate of interest Profit Profit Shareholder Shareholder CSM CSM or loss or loss equity equity \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Insurance and reinsurance contracts 1.0 (1.7 ) 71.3 (82.1 ) 71.3 (82.1 ) Financial instruments \u2013 \u2013 (79.4 ) 91.2 (79.4 ) 91.2 To t al 1 . 0 ( 1.7 ) ( 8.1 ) 9 . 1 (8.1 ) 9. 1 31 December 2023 \u2013 restated Increase Decrease Increase Decrease Increase Decrease Variation in/arising from 100 basis points in market rate of interest Profit Profit Shareholder Shareholder CSM CSM or loss or loss equity equity \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Insurance and reinsurance contracts 2.7 (2.6 ) 83.5 (101.5 ) 83.5 (101.5 ) Financial instruments \u2013 \u2013 (89.1 ) 99.1 (89.1 ) 99.1 To t al 2.7 (2.6 ) ( 5. 6 ) (2. 4 ) ( 5. 6 ) (2.4 ) The Group\u2019s exposure to interest rate risk principally comes from non-linked liabilities and the assets (iii) Equity price risk backing them. The change in exposure from 2023 to 2024 is primarily driven by Waard, in particular As discussed in the management of market risk section, the Group is exposed to equity and property due to a deferred tax asset which can be fully substantiated after a shock, whereas in 2023 this was price risks in regards to the asset related fees from the assets backing its unit-linked and index- not the case under a yield fall in particular, causing a reduction in net assets that isn\u2019t experienced linked insurance contracts and investment contracts and also in regards to policyholder guarantees this year. The Group\u2019s only material interest-bearing liability is in respect of the Tier 2 debt for which for these contracts. The exposure is mitigated somewhat by investing in suitable financial assets the interest rate is fixed and therefore no material exposure. outside of the unit-linked and index-linked funds. As also in the management of market risk section, the Group is exposed to equity and property price risks in regards to the UK with-profits. The exposure is mitigated by limiting these investments to back the surplus in the relevant funds and not the guaranteed minimum benefits. CHESNARAANNUALREPORTANDACCOUNTS2024 173
IFRS FINANCIAL STATEMENTS
SECTION B RISK AND CAPITAL MANAGEMENT
B3 Financial risk (continued)
(a) Market risk (continued)
(iii) Equity price risk (continued)
The tables below show the impact of movements in equity and property values on the CSM, profit or loss after tax and on shareholder equity as at the balance sheet date. We believe these equity and property
risk variables, to which the Group results are sensitive, are appropriate for the current year and represent the ones that might reasonably occur in the future.
31 December 2024 Increase Decrease Increase Decrease Increase Decrease
Variation in/arising from 10% in equity and property price Profit Profit Shareholder Shareholder
CSM CSM or loss or loss equity equity
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Insurance and reinsurance contracts 5. 8 (5.8 ) (149.5 ) 149.6 (149.5 ) 149.6
Financial instruments \u2013 \u2013 154.7 (154.8 ) 154.7 (154.8 )
Total 5.8 (5.8 ) 5.2 (5.2 ) 5.2 (5.2 )
31 December 2023 Increase Decrease Increase Decrease Increase Decrease
Variation in/arising from 10% in equity and property price Profit Profit Shareholder Shareholder
CSM CSM or loss or loss equity equity
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Insurance and reinsurance contracts 5. 8 (4.7 ) (142.4 ) 141.4 (142 .4 ) 141.4
Financial instruments \u2013 \u2013 152.5 (152.6 ) 152.5 (152.6 )
Total 5.8 (4.7 ) 10.1 (11.2 ) 10.1 (11.2)
A fall in equity and property values reduces policyholder fund values and so reduces the value of charge income. Thus, the profit and loss impact of a 10% decrease in equity and property values is negative.
This impact has increased in 2024 due to an increase in equity exposures following strong equity growth. Conversely, a 10% increase in equity and property values is now more positive than before.
(iv) Currency translation risk
Currency risk is the risk that the fair value or future cash flows of an asset or liability will change
Each business unit settles its material transactions in its functional currency, as such the Group\u2019s
as a result of movements in foreign exchange rates. The Group\u2019s exposure to currency risk is
exposure to currency risk is limited.
minimised to the extent that the risk on investments denominated in foreign currencies which
The following table sets out the Group\u2019s material exposure to assets and liabilities denominated
back unit-linked investment and insurance contracts is borne by policyholders. It is, however,
in foreign currencies, expressed in sterling, at the respective balance sheet date. This exposure
exposed to currency risk through:
reflects the translation risk faced by the Group as currency fluctuations can have significant impact
(i) its investment in Movestic, the assets and liabilities of which are principally denominated in
on the results of the Group:
Swedish krona; and
31 December 2024 2023
(ii) its investment in Waard and Scildon, the assets and liabilities of which are principally
\u00a3m \u00a3m
denominated in euros.
Swedish krona
The Group\u2019s currency risk through its ownership of Movestic, Scildon and Waard Group is reflected in:
Assets 5,259.1 4,507.1
(i) foreign exchange translation differences arising on the translation into sterling and consolidation
Liabilities (5,177.7 ) (4,442.0 )
of Movestic, Scildon and Waard Group\u2019s financial statements; and
Net assets 81.4 65.1
(ii) the impact of adverse exchange rate movements on cash flows between Chesnara plc and
its foreign subsidiaries: in the short-term these relate to cash flows from Movestic, Scildon and
Euro
Waard to Chesnara by way of dividend payments. The risk on cash flows is reduced by:
Assets 2,887.5 2,955.9
Liabilities (2,710.0 ) (2,761.6 )
(a) the foreign currency hedge held by Chesnara plc which mitigates against adverse
exchange rate impacts whilst also providing a dampening effect to a favourable currency
Net assets 177.5 194.3
movement, and;
(b) by closely monitoring exchange rate movements and buying forward foreign exchange
contracts, where deemed appropriate.
174 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS The tables below show the impact of movements in foreign currency exchange rates on profit before tax for the year under review and on shareholder equity as at the balance sheet date. We believe these currency risk variables, to which the Group results are sensitive, are appropriate for the current year and represent the ones that are most reasonably possible to occur in the future. 31 December 2024 Favourable Adverse Favourable Adverse Favourable Adverse Variation in/arising from 10% in SEK: sterling exchange rate Profit Profit Shareholder Shareholder CSM CSM or loss or loss equity equity \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Insurance and reinsurance contracts 0.8 (0.7 ) 0.6 (0.5 ) (18 .0 ) 14 .7 Financial instruments \u2013 \u2013 (6.9 ) 7.8 21.5 (16.0 ) Total 0.8 (0.7 ) (6.3 ) 7.3 3.5 (1.3 ) 31 December 2024 Favourable Adverse Favourable Adverse Favourable Adverse Variation in/arising from 10% in EUR: sterling exchange rate Profit Profit Shareholder Shareholder CSM CSM or loss or loss equity equity \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Insurance and reinsurance contracts 1 5.4 (1 2.6 ) (0. 3 ) 0.2 (292.0 ) 238.9 Financial instruments \u2013 \u2013 (13.1 ) 19.4 301.4 (240.1 ) Total 15.4 (12.6 ) (13.4 ) 19.6 9.4 (1.2 ) 31 December 2023 Favourable Adverse Favourable Adverse Favourable Adverse Variation in/arising from 10% in SEK: sterling exchange rate Profit Profit Shareholder Shareholder CSM CSM or loss or loss equity equity \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Insurance and reinsurance contracts 0.6 (0. 5 ) 0. 3 (0.3 ) (1 7.5 ) 14 .3 Financial instruments \u2013 \u2013 (7.2 ) 2.2 20.8 (20.0 ) Total 0.6 (0.5 ) (6.9 ) 1.9 3.3 (5.7 ) 31 December 2023 Favourable Adverse Favourable Adverse Favourable Adverse Variation in/arising from 10% in EUR: sterling exchange rate Profit Profit Shareholder Shareholder CSM CSM or loss or loss equity equity \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Insurance and reinsurance contracts 14.7 (1 2.0 ) (0. 3 ) 0. 3 (295.4 ) 241.7 Financial instruments \u2013 \u2013 (8.5 ) 7.4 308.2 (251.8 ) Total 14.7 (12.0 ) (8.8 ) 7.7 12.8 (10.1 ) (b) Credit risk (i) Management of 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. Key areas where the Group is exposed to credit risk are: \u2013 Counterparty risk with respect to debt securities and cash deposits; \u2013 The mortgage loan portfolio held by Waard with respect to the interest and capital repayments due from the borrowers; \u2013 Reinsurers\u2019 share of insurance liabilities; \u2013 Amounts deposited with reinsurers in relation to investment contracts; \u2013 Amounts due from reinsurers in respect of claims already paid; and \u2013 Other short-term receivables. CHESNARAANNUALREPORTANDACCOUNTS2024175
IFRS FINANCIAL STATEMENTS
SECTION B RISK AND CAPITAL MANAGEMENT
B3 Financial risk (continued)
Although the businesses hold a significant proportion of their financial assets in debt securities and
(b) Credit risk (continued)
cash deposits the risk of default on these is mitigated to the extent that any losses arising in
(i) Management of credit risk (continued)
respect of unit-linked assets backing the insurance and investment contracts which the businesses
In addition, there will be some exposures to individual policyholders, on amounts due on insurance
issue, would effectively be passed on to policyholders and investors through the unit-linked funds
contracts. These are tightly controlled, with contracts being terminated or benefits amended if
backing the insurance and investment contracts.
amounts owed are outstanding for more than a specified period of time, so that there is no significant
Reinsurance is used to manage insurance risk in the businesses. This does not, however, discharge
risk to the results of the businesses.
the businesses\u2019 liability as primary insurers. If a reinsurer fails to pay a claim for any reason,
The Group businesses structure the levels of credit risk they accept by placing limits on their exposure
the businesses remain liable for the payment to the policyholder. The Group limits its exposure
to a single counterparty, or group of counterparties. Such risks are subject to at least an annual
to reinsurance counterparties with a credit rating lower than BBB- and the creditworthiness of
review, while watch lists are maintained for exposures requiring additional review.
reinsurance exposures is regularly monitored as part of the Group\u2019s Risk Framework.
(ii) Exposure to Credit Risk
The following table presents the assets of the Group which are subject to credit risk and a reconciliation to the balance sheet carrying amount for each item, this amount representing the maximum credit
risk exposure:
31 December 2024 2023
Amount Balance sheet Amount Balance sheet
Policyholder subject to carrying Policyholder subject to carrying
linked credit risk value linked credit risk value
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Reinsurance contract assets \u2013 169.9 169.9 \u2013 185.7 185.7
Amounts deposited with reinsurers \u2013 34.3 34.3 \u2013 32.5 32.5
Holdings in collective investment schemes 8,333.3 328.3 8,661.6 8,025.4 350.8 8,376.2
Debt securities at fair value through profit or loss 15.1 1,075.8 1,090.9 14.8 1,222.3 1,237.1
Policyholders\u2019 funds held by the Group 1,825.8 \u2013 1,825.8 1,281.8 \u2013 1,281.8
Mortgage loan portfolio 346.9 \u2013 346.9 366.8 \u2013 366.8
Derivative financial instruments 0.1 \u2013 0.1 0.1 0.2 0.3
Other assets 26.9 41.8 68.7 12.6 45.1 57.7
Cash and cash equivalents 83.1 54.9 138.0 78.3 67.7 146.0
Total 10,631.2 1,705.0 12,336.2 9,779.8 1,904.3 11,684.1
The amounts presented above as policyholder linked represent unit-linked assets where there is a corresponding liability meaning that the risk is borne predominantly by the holders of unit-linked insurance
and investment contracts.
(iii) Credit quality analysis
The creditworthiness of major reinsurers is considered on an annual basis by reviewing their financial strength.
The Group\u2019s exposure to credit risk is summarised as:
Credit rating AAA AA A BBB Below BBB Unrated Total
As at 31 December 2024 \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Reinsurance contract assets \u2013 122.9 \u2013 \u2013 \u2013 47.0 169.9
Amounts deposited with reinsurers \u2013 32.5 \u2013 \u2013 \u2013 1.8 34.3
Debt securities at fair value through profit or loss 215.8 337.0 367.9 157.2 0.8 12.2 1,090.9
Policyholders\u2019 funds held by the Group \u2013 136.8 411.6 293.2 984.2 \u2013 1,825.8
Mortgage loan portfolio \u2013 \u2013 10.2 \u2013 \u2013 336.7 346.9
Derivative financial instruments \u2013 \u2013 \u2013 \u2013 \u2013 0.1 0.1
Other assets 0.6 0.4 0.4 0.2 \u2013 67.1 68.7
Cash and cash equivalents \u2013 3.4 73.0 39.8 \u2013 21.8 138.0
Total 216.4 633.0 863.1 490.4 985.0 486.7 3,674.6
176 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Credit rating AAA AA A BBB Below BBB Unrated Total As at 31 December 2023 \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Reinsurance contract assets \u2013 138.7 \u2013 \u2013 \u2013 47.0 185.7 Amounts deposited with reinsurers \u2013 32.5 \u2013 \u2013 \u2013 \u2013 32.5 Debt securities at fair value through profit or loss 409.6 349.1 338.4 128.2 1.2 10.6 1,237.1 Policyholders\u2019 funds held by the Group \u2013 101.9 353.3 167.3 659.7 (0.4 ) 1,281.8 Mortgage loan portfolio \u2013 \u2013 10.7 \u2013 \u2013 356.1 366.8 Derivative financial instruments \u2013 \u2013 0.3 \u2013 \u2013 \u2013 0.3 Other assets 0.7 0.5 0.5 0.2 \u2013 55.8 57.7 Cash and cash equivalents 0.1 3.2 89.7 41.2 \u2013 11.8 146.0 Total 410.4 625.9 792.9 336.9 660.9 480.9 3,307.9 Credit ratings have not been disclosed in the above tables for holdings in unconsolidated collective Monument Re makes up \u00a343.8m of the unrated exposure to reinsurers\u2019 share of insurance contract investment schemes and investments in associates totalling \u00a38,661.6m (31 December 2023: liabilities as at 31 December 2024 (31 December 2023: \u00a348.7m). Exposure is limited through the \u00a38,376.2m). The credit quality of the underlying debt securities within these vehicles is managed use of a funds withheld arrangement under which the reinsurer has deposited collateral to CA in by the investment managers in line with agreed investment guidelines. respect of the value of expected future reinsured claim payments. Included within reinsurers\u2019 share of insurance contract liabilities and amounts deposited with The \u2018Other assets\u2019 in the credit risk rating table are not held at fair value or managed on a fair value reinsurers (in respect of investment contracts) above, is a total exposure of \u00a373.4m as at basis. These assets generally consist of short-term receivables and are not considered to have a 31 December 2024 (31 December 2023: \u00a371.4m) to ReAssure, which has been included within low credit rating as at 31 December 2024. the \u2018AA\u2019 rating category. (iv) Concentration of credit risk Debt securities Policyholder Policyholder Non-linked/ Debt securities Policyholder Policyholder Non-linked/ As at 31 December 2024 linked with-profit shareholder Total As at 31 December 2023 linked with-profit shareholder Total \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Austria \u2013 \u2013 17.5 17.5 Austria \u2013 \u2013 24.8 24.8 Belgium \u2013 \u2013 32.1 32.1 Belgium \u2013 \u2013 37.1 37.1 France 0.6 2.7 219.5 222.8 France 0.7 2.7 200.1 203.5 Germany \u2013 0.4 90.9 91.3 Germany \u2013 0.4 210.7 211.1 Italy \u2013 \u2013 15.9 15.9 Italy \u2013 \u2013 12.3 12.3 Ireland \u2013 \u2013 13.1 13.1 Ireland \u2013 \u2013 14.4 14.4 Netherlands \u2013 2.5 179.7 182.2 Netherlands \u2013 2.5 230.6 233.1 Poland \u2013 \u2013 0.4 0.4 Poland \u2013 \u2013 0.4 0.4 Portugal \u2013 \u2013 0.3 0.3 Portugal \u2013 \u2013 3.3 3.3 Spain \u2013 0.5 38.8 39.3 Spain \u2013 0.5 37.1 37.6 UK 12.0 26.0 169.1 207.1 UK 11.4 25.9 181.9 219.2 Other 2.1 11.2 152.5 165.8 Other 2.2 13.4 117.4 133.0 Europe 14.7 43.3 929.8 987.8 Europe 14.3 45.4 1,070.1 1,129.8 USA 0.3 3.2 82.4 85.9 USA 0.5 3.2 82.4 86.1 Other \u2013 1.5 1.1 2.6 Other \u2013 1.7 1.4 3.1 North America 0.3 4.7 83.5 88.5 North America 0.5 4.9 83.8 89.2 Australia \u2013 \u2013 7.9 7.9 Australia \u2013 \u2013 11.3 11.3 Other \u2013 \u2013 6.7 6.7 Other \u2013 \u2013 6.8 6.8 Asia Pacific \u2013 \u2013 14.6 14.6 Asia Pacific \u2013 \u2013 18.1 18.1 Total 15.0 48.0 1,027.9 1,090.9 Total 14.8 50.3 1,172.0 1,237.1 There are no direct holdings in debt securities within Russia or Ukraine. CHESNARAANNUALREPORTANDACCOUNTS2024177
IFRS FINANCIAL STATEMENTS
SECTION B RISK AND CAPITAL MANAGEMENT
B3 Financial risk (continued)
(c) Liquidity risk
(i) Management of liquidity risk
Liquidity risk is the risk that adequate liquid funds are not available to settle liabilities as they fall due and is managed by forecasting cash requirements and by adjusting investment management strategies
to meet those requirements. Liquidity risk is generally mitigated by holding sufficient investments which are readily marketable in sufficiently short timeframes to allow the settlement of liabilities as they
fall due. Where liabilities are backed by less marketable assets, for example investment properties, there are provisions in contractual terms which allow deferral of redemptions in times of adverse market
conditions. The Group\u2019s substantial holdings of money market assets also serve to reduce liquidity risk.
(ii) Maturity analysis
The tables below present a maturity analysis of the Group\u2019s liabilities on discounted basis. The insurance and reinsurance contracts are presented on a discounted basis. Financial liabilities are presented on
an undiscounted basis.
31 December 2024 Contractual cash flows
Carrying values and cash Carrying value <1 yr 1-2 yrs 2-3 yrs 3-4 yrs 4-5 yrs 5-10 yrs >10 yrs Total
flows arising from: \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Insurance contract liabilities 4,099.1 704.4 301.8 264.3 245.6 249.9 813.0 1,322.1 3,901.1
Reinsurance contract liabilities 16.6 3.5 3.6 3.3 3.0 2.8 14.7 22.2 53.1
Total insurance and reinsurance contract liabilities (discounted) 4,115.7 707.9 305.4 267.6 248.6 252.7 827.7 1,344.3 3,954.2
Investment contract liabilities 6,116.7 6,070.3 4.6 5.4 4.4 5.0 21.2 5.8 6,116.7
Liabilities relating to policyholder\u2019s fund held by the Group 1,825.5 1,825.5 \u2013 \u2013 \u2013 \u2013 \u2013 \u2013 1,825.5
Lease contract liabilities 0.6 0.6 \u2013 \u2013 \u2013 \u2013 \u2013 \u2013 0.6
Borrowings 204.8 1.4 0.5 0.2 0.2 0.2 201.6 \u2013 204.1
Derivative financial instruments 0.6 0.6 \u2013 \u2013 \u2013 \u2013 \u2013 \u2013 0.6
Other current liabilities 129.7 116.8 \u2013 \u2013 \u2013 \u2013 \u2013 \u2013 116.8
Bank overdrafts 0.8 0.8 \u2013 \u2013 \u2013 \u2013 \u2013 \u2013 0.8
Total financial liabilities (undiscounted) 8,278.7 8,016.0 5.1 5.6 4.6 5.2 222.8 5.8 8,265.1
Total 12,394.4 8,723.9 310.5 273.2 253.2 257.9 1,050.5 1,350.1 12,219.3
31 December 2023 \u2013 restated Contractual cash flows
Carrying values and cash Carrying value <1 yr 1-2 yrs 2-3 yrs 3-4 yrs 4-5 yrs 5-10 yrs >10 yrs Total
flows arising from: \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Insurance contract liabilities 4,203.0 651.2 332.8 294.4 277.8 267.2 872.9 1,222.6 3,918.9
Reinsurance contract liabilities 17.1 3.2 3.6 3.5 3.2 2.9 15.1 24.7 56.2
Total insurance and reinsurance contract liabilities (discounted) 4,220.1 654.4 336.4 297.9 281.0 270.1 888.0 1,247.3 3,975.1
Investment contract liabilities 5,872.3 5,414.0 40.3 38.0 40.2 47.7 131.0 69.6 5,780.8
Liabilities relating to policyholder\u2019s fund held by the Group 1,281.8 1,281.8 \u2013 \u2013 \u2013 \u2013 \u2013 \u2013 1,281.8
Lease contract liabilities 1.2 1.0 0.2 \u2013 \u2013 \u2013 \u2013 \u2013 1.2
Borrowings 207.9 3.6 1.7 0.7 0.3 0.2 0.9 200.6 208.0
Derivative financial instruments 4.4 4.4 \u2013 \u2013 \u2013 \u2013 \u2013 \u2013 4.4
Other current liabilities 131.7 131.7 \u2013 \u2013 \u2013 \u2013 \u2013 \u2013 131.7
Bank overdrafts 0.2 0.2 \u2013 \u2013 \u2013 \u2013 \u2013 \u2013 0.2
Total financial liabilities (undiscounted) 7,499.5 7,037.3 42.2 38.7 40.5 47.9 131.9 69.6 7,408.1
Total 11,719.6 7,691.7 378.6 336.6 321.5 318.0 1,019.9 1,316.9 11,383.2
The values reported for insurance contract liabilities and reinsurance contract liabilities exclude the risk adjustment and contractual service margin as these are not considered to be financial liabilities subject
to liquidity risk. The carrying values in the table above are the balance sheet values.
The maturity analysis for unit-linked investment contracts presents all the liabilities as due in the earliest period in the table because they are repayable or transferable on demand, with no notice period.
178 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (ii) Maturity analysis (continued) Company law The table that follows shows the amounts from insurance contract assets and liabilities that are As well as complying with the Solvency II regime, each company within the Group is required payable on demand. In most cases the non-distinct investment component is considered to be to comply with relevant company law capital and distribution rules. appropriate as a proxy for the amount payable on demand. As per the maturity analysis table, the amounts presented exclude the risk adjustment and contractual service margin. The carrying (b) Objectives, policies and processes for managing capital amount is the full balance sheet value. (i) Objectives To manage compliance with the externally imposed capital requirements, the Group and its 31 December Restated subsidiaries have established capital management policies in place. The objectives of these Type of contracts 2024 2024 2023 2023 policies are: Payable on Carrying Payable on Carrying demand amount demand amount \u2013 to ensure that capital is managed in a way that is consistent with the business strategy of the Group \u00a3m \u00a3m \u00a3m \u00a3m and its subsidiaries, in that they: \u2013 promote fair customer outcomes through protecting policyholders; Immediate annuities 2.7 306.4 2.4 327.9 Term assurance and other non-linked 130.1 385.9 150.3 419.8 \u2013 provide protection to shareholders through ensuring that the business is adequately protected Unit-linked/Index-linked/With-profits \u2013 GMM 822.2 908.1 882.0 999.0 against stress events; and Unit-linked/Index-linked/With-profits \u2013 VFA 2,161.5 2,464.9 2,132.5 2,412.1 Short-term protection 29.1 32.0 36.9 40.3 \u2013 provide a framework to support the decision making process for returns to shareholders via dividends. Total 3,145.6 4,097.3 3,204.1 4,199.1 \u2013 to ensure that capital of the Group and its subsidiaries is managed in accordance with the Board\u2019s risk appetite, in particular each Board\u2019s aversion for Own Funds to fall below the SCR. B4 Capital management (a) Regulatory context (ii) Policies Solvency II In light of the objectives for the Group\u2019s and its subsidiaries\u2019 capital management policies, the On 31 December 2024 the PRA\u2019s restatement of Solvency II assimilated law came into force. following quantitative limits for managing Own Funds are applied across the Group: Throughout the document we refer to the new regime as Solvency II, in line with the name of the prudential regime in PRA policy material. Region Waard UK Movestic Group Scildon Group The Group is required to comply with the \u2018Solvency II\u2019 regime. Solvency II includes rules over the quantity and quality of capital (known as \u2018Own Funds\u2019) that insurance companies and groups need Dividend paying limit: in order to meet the required level of capital (known as the \u2018Solvency Capital Requirement\u2018). Own Funds stated as % of SCR 120% 120% 135% 175% 140% The Group operates exclusively within the UK and the EU and as a result, the Solvency II regime is applied to the Group and all regulated insurance companies within the Group in the financial year. Management actions limit: Own Funds stated as % of SCR 110% 110% 135% 175% 110% The Solvency II regime has specific rules regarding how Own Funds are recognised and valued. In a number of cases, the IFRS and Solvency II value of an asset and liability are the same, but in some cases there are differences. In particular, liabilities for insurance and investment contracts Dividend paying limit: This is the point at which a dividend would cease to be paid, until at such are valued differently, with insurance contracts valued according to IFRS 17 and therefore including time the solvency position was restored above this point. This limit is set by the relevant Board in a contractual service margin and investment contracts valued as per unit value under IFRS 9. In each division with reference to its respective risk appetite, as articulated in each division\u2019s Capital addition, Solvency II has differing treatments for certain intangible assets. A high-level reconciliation Management Policy. between the IFRS net assets and Solvency II Own Funds of the Group and its subsidiaries has been provided in section (c)(ii) of this Note. Management actions limit: This is the point at which, should Own Funds fall below this level, additional management actions would be considered to restore Own Funds back above this level. Regarding the Solvency Capital Requirement (SCR) of the Group and its subsidiaries, the Group has In essence this represents an internal \u2018ladder of intervention limit\u2019 that is set by the Group and elected to use the \u2018standard formula\u2019 approach for its calculation, which means we are applying the divisional Boards. formulae as included in the Solvency II framework. The calculations within the standard formula have been designed such that, on the basis that an insurance company holds Own Funds that are at To put the above table and definitions in context, and taking Group as an example, this means that least equal to its SCR, it will be able to withstand a 1 in 200 year event. An alternative would have the Group will not pay a dividend should the payment of the dividend take the Group Own Funds been to use an \u2018internal model\u2019 but this was not deemed appropriate for the size and complexity to below 140% of its SCR. Should Own Funds fall below 110% of SCR additional management actions of the Group. will be taken. The UK Treasury and EIOPA have both undertaken a review of Solvency II rules implementation. In the UK this resulted in a reduction in the Risk Margin from 31 December 2023 and similar is expected for the overseas entities from the EIOPA review. CHESNARAANNUALREPORTANDACCOUNTS2024179
IFRS FINANCIAL STATEMENTS
SECTION B RISK AND CAPITAL MANAGEMENT
B4 Capital management (continued)
\u2013 Recovery management protocol: A protocol for management actions has been designed which, in
(b) Objectives, policies and processes for managing capita (continued)
effect, represents an internally set \u2018ladder of intervention\u2019. The protocol includes items such as
(iii) Process for management of capital
solvency monitoring frequency, what level of escalations are required and what management actions
The following key processes and procedures are in place across the Group to manage adherence
need to be considered.
to the capital management policies in place:
\u2013 Monthly solvency monitoring: Full solvency calculations are performed on a quarterly basis. For
\u2013 Internal solvency reporting: A number of internal reports are produced that focus on the solvency
intra-quarter months, a monthly solvency estimate is produced. Where full estimation routines are
position of the Group/Company. These include the Own Risk & Solvency Assessment (ORSA)
not practical intra-valuation solvency can be monitored through trigger monitoring and sensitivity
Report, a quarterly actuarial report and a quarterly finance report. All of these are presented to and
analysis. In addition to the Group level indicators, the Chesnara Board will remain close to any
approved by the Board.
indications of divisional solvency movements by means of divisional MI and quarterly business reviews.
On at least a monthly basis, specific key risk indicators are monitored against pre-defined trigger
\u2013 Production of projections: On at least an annual basis, solvency projections are produced for the
points. The trigger points are set having regard for the sensitivity of the Group to certain scenarios.
Group and its subsidiaries. These projections are included in both the business plans and the ORSA
Trigger points and the list of risk indicators being monitored are assessed at least annually.
Report and show how management anticipates the solvency position to develop over time. The
projections process includes assessing the impact of a number of different stress scenarios to ensure
(iv) Compliance during year
that the sensitivities of the business are understood. Both the ORSA and the business plans are
The Group, and all insurance companies within the Group, held Own Funds above their respective
presented to and approved by the Board.
Solvency Capital Requirements at all times during the year.
\u2013 Regular review of internal limits in place: On at least an annual basis, the limits described in
section (b)(ii) of this Note are reviewed and assessed, having regard to the developments of
the business and any other changes that may have affected the Group\u2019s/divisions\u2019 risk appetite.
(c) Quantitative analysis
(i) Group solvency position
The unaudited solvency position of the Group and its divisions at 31 December 2024, and at 31 December 2023, has been shown in the tables below. They present a view of the solvency position which may
differ to the position of the individual insurance company(ies) within that division.
31 December 2024 (unaudited) Other
Region Group and
consolidation
UK Movestic Waard Group Scildon adjustments Group
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Own Funds (pre dividends) 175.4 186.0 88.3 139.8 76.7 666.2
Proposed dividend (45.0 ) (2 .5 ) (6.6 ) \u2013 30.6 (23.5 )
Own Funds (post dividends) 130.4 183.5 81.7 139.8 107.3 642.7
SCR 96.5 121.9 25.2 68.3 4.0 315.9
Solvency surplus 33.9 61.6 56.5 71.5 n/a 326.8
Solvency ratio 135% 151% 324% 205% n/a 203%
Dividend paying limit (% of SCR) 120% 120% 135% 175% n/a 140%
Dividend paying limit (\u00a3) 115.8 146.3 34.0 119.5 n/a 442.2
Surplus over dividend paying limit 14.6 37.2 47.7 20.3 n/a 200.4
180 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 December 2023 (unaudited) Other Region Group and consolidation UK Movestic Waard Group Scildon adjustments Group \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Own Funds (pre dividends) 187.5 178.7 105.3 133.7 102.0 707.2 Proposed dividend (35.0 ) (7.8 ) (6 .9 ) \u2013 26.2 (23.5 ) Own Funds (post dividends) 152.5 170.9 98.4 133.7 128.2 683.7 SCR 102.6 116.7 27.9 72.8 12.7 332.7 Solvency surplus 49.9 54.2 70.5 60.9 n/a 351.0 Solvency ratio 149% 147% 353% 184% n/a 205% Dividend paying limit (% of SCR) 120% 120% 135% 175% n/a 140% Dividend paying limit (\u00a3) 123.1 140.0 37.7 127.4 n/a 465.8 Surplus over dividend paying limit 29.4 30.9 60.7 6.2 n/a 217.9 (ii) Reconciliation between Solvency II Own Funds and IFRS net assets (unaudited) The tables below show the key differences between the Solvency II Own Funds reported in section (c)(i) of this Note and the Group\u2019s IFRS net assets. 31 December 2024 (unaudited) Other Region Group and consolidation UK Movestic Waard Group Scildon adjustments Group \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Solvency II Own Funds (post dividends) 130.4 183.5 81.7 139.8 107.3 642.7 Add Back: Ring-fenced fund surplus restrictions 1.9 \u2013 \u2013 \u2013 \u2013 1.9 Add Back: Intangible assets 20.4 66.8 \u2013 \u2013 \u2013 87.2 Add Back: Tier 2 debt and restriction \u2013 \u2013 16.4 \u2013 (184.8 ) (168.4 ) Add Back: Foreseeable dividends 45.0 2.5 6.6 \u2013 30.6 23.5 Add Back: Difference in valuation of technical provisions (66.8 ) (162.1 ) (60.4 ) (33.2 ) 34.5 (288.0 ) Add Back: Difference in deferred tax (3.2 ) \u2013 14.5 9.2 (8.4 ) 12.1 Add Back: Other valuation differences (1.1 ) 1.2 3.9 (0.8 ) 0.2 2.7 IFRS net assets 126.6 91.9 62.7 115.0 (81.8 ) 314.4 31 December 2023 (unaudited) Other Region Group and consolidation UK Movestic Waard Group Scildon adjustments Group \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Solvency II Own Funds (post dividends) 152.5 171.0 98.4 133.7 128.1 683.7 Add Back: Ring-fenced fund surplus restrictions 0.5 \u2013 \u2013 \u2013 \u2013 0.5 Add Back: Intangible assets 22.1 72.8 \u2013 \u2013 \u2013 94.9 Add Back: Tier 2 debt and restriction \u2013 \u2013 13.7 \u2013 (214.3 ) (200.6 ) Add Back: Foreseeable dividends 35.0 7.8 6.9 \u2013 (26.2 ) 23.5 Add Back: Difference in valuation of technical provisions (49.2 ) (153.4 ) (27.7 ) (25.6 ) 40.3 (215.4 ) Add Back: Difference in deferred tax (4.7 ) \u2013 16.5 6.5 (10.2 ) 8.1 Add Back: Other valuation differences (5.7 ) ( 1.0 ) (28.0 ) (0.2 ) 0.1 (34.8 ) IFRS net assets 150.5 97.2 79.8 114.4 (82.2 ) 359.9 Further information on how the Group uses Solvency II, and metrics derived from Solvency II, as Alternative Performance Measures can be found in the additional information section of the Annual Report and Accounts on page 261. CHESNARAANNUALREPORTANDACCOUNTS2024 181
IFRS FINANCIAL STATEMENTS
SECTION C SEGMENTAL INFORMATION
C1 Composition of operating segments
Scildon: This segment represents the Group\u2019s open Dutch life insurance business. Scildon\u2019s policy
The Group considers that it has no product or distribution-based business segments. It reports
base is predominantly made up of individual protection and savings contracts. It is open to
segmental information on the same basis as reported internally to the chief operating decision maker,
new business and sells protection, individual savings and group pension contracts via a broker-led
which is the Board of Directors of Chesnara plc.
distribution model.
The segments of the Group as at 31 December 2024 comprise:
The planned integration of the Waard and Scildon businesses, as referred to in the risk
management section of the Strategic Report has not been applied in the segmental reporting
UK: This segment comprises the UK\u2019s life insurance and pensions business within Countrywide
in these financial statements.
Assured plc (CA), the Group\u2019s principal UK operating subsidiary, and Sanlam Life & Pensions UK (SLP),
acquired by the Group on 28 April 2022 and subsequently renamed to CASLP Limited (CASLP).
Other Group activities: The functions performed by the Parent Company, Chesnara plc, are
The majority of the assets and liabilities of CASLP were transferred to CA in 2023 under a Part VII
defined under the operating segment analysis as other Group activities. Also included therein are
business transfer. CASLP was dissolved on 14 January 2025.
consolidation and elimination adjustments.
During the year, the Group reached an agreement to acquire the unit-linked bond and pension
The accounting policies of the segments are the same as those for the Group as a whole.
business of Canada Life Limited with the transaction initially in the form of a reinsurance agreement
Any transactions between the business segments are on normal commercial terms in normal
accepted by CA. See Note I7 for further details.
market conditions. The Group evaluates performance of operating segments on the basis of the
profit before tax attributable to shareholders of the reporting segments and the Group as a whole.
Movestic: This segment comprises the Group\u2019s Swedish life and pensions business, Movestic
There were no changes to the measurement basis for segment profit during the year ended
Livf\u00f6rs\u00e4kring AB (Movestic) and its subsidiary company Movestic Fonder AB (investment fund
31 December 2024.
management company). Movestic is open to new business and primarily comprises unit-linked
pension business and also providing some life and health product offerings.
Waard Group: This segment represents the Group\u2019s closed Dutch life insurance business and
comprises a number of acquisitions of closed insurance books of business since the acquisition
of the original Waard entities into the Group in 2015. The Waard Group comprises a mixture of
long-term savings and protection business and also contains some non-life business.
182 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS C2 Segmental performance and net assets (a) Segmental income statement for the year ended 31 December 2024 Movestic Waard Group Scildon Other Group UK ( Swe de n ) (Ne t he rl an d s ) ( N et he rl an d s ) act iv i ti e s (U K ) Total \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Insurance revenue 71.3 10.2 29.8 150.6 \u2013 261.9 Insurance service expense (64.9 ) (2.6 ) (31.4 ) (145. 2 ) \u2013 (244.1 ) Net expenses from reinsurance contracts held (0.9 ) ( 1.8 ) (2 .0 ) (4.5 ) \u2013 (9.2 ) Segmental insurance service result 5.5 5.8 (3.6 ) 0.9 \u2013 8.6 Net investment return 380.7 666.6 28.1 201.4 9.3 1,286.1 Net finance (expenses)/income from insurance contracts issued (98.4 ) (23.6 ) (23.2 ) (189.6 ) \u2013 (334.8 ) Net finance expenses from reinsurance contracts held 3.1 0.3 \u2013 (0.8 ) \u2013 2.6 Net change in investment contract liabilities (260.0 ) (479.6 ) (0.8 ) \u2013 \u2013 (740.4 ) Change in liabilities relating to policyholders\u2019 funds held by the Group \u2013 (160.8 ) \u2013 \u2013 \u2013 (160.8 ) Segmental investment result 25.4 2.9 4.1 11.0 9.3 52.7 Fee, commission and other operating income 37.4 65.5 0.3 \u2013 1.0 104.2 Segmental revenue, net of investment result 68.3 74.2 0.8 11.9 10.3 165.5 Other operating expenses (39.7 ) (54.9 ) (3.3 ) (4. 3 ) (22.0 ) (124.2 ) Financing costs (0.2 ) (0.4 ) \u2013 \u2013 (10.5 ) (1 1 .1 ) Profit/(loss) before tax and consolidation adjustments 28.4 18.9 (2.5 ) 7.6 (22.2 ) 30.2 Other operating expenses: Amortisation and impairment of intangible assets (0.1 ) (9.3 ) \u2013 \u2013 \u2013 (9.4 ) Segmental income less expenses 28.3 9.6 (2.5 ) 7.6 (22.2 ) 20.8 Post completion gain on portfolio acquisition \u2013 \u2013 \u2013 \u2013 \u2013 \u2013 (Loss)/profit before tax 28.3 9.6 (2.5 ) 7.6 (22.2 ) 20.8 Income tax credit/(charge) (17.0 ) (0.5 ) 0.8 (2.0 ) 1. 8 ( 16.9 ) (Loss)/profit after tax 11.3 9.1 (1.7 ) 5.6 (20.4 ) 3.9 (b) Segmental balance sheet as at 31 December 2024 Movestic Waard Group Scildon Other Group UK ( Swe de n ) (Ne t he rl an d s ) ( N et he rl an d s ) act iv i ti e s (U K ) Total \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Total assets 4,473.8 5,269.7 851.9 2,035.7 124.0 12,755.1 Total liabilities (4,347. 2 ) (5,177.8 ) (789.2 ) (1,920.7 ) (205.8 ) ( 12,440.7 ) Net assets 126.6 91.9 62.7 115.0 (81.8 ) 314.4 Investment in associates \u2013 \u2013 \u2013 \u2013 \u2013 \u2013 Additions to non-current assets \u2013 \u2013 \u2013 \u2013 \u2013 \u2013 CHESNARAANNUALREPORTANDACCOUNTS2024183
IFRS FINANCIAL STATEMENTS
SECTION C SEGMENTAL INFORMATION
C2 Segmental performance and net assets (continued)
(c) Segmental income statement for the year ended 31 December 2023
Restated Movestic Waard Group Scildon Other Group
UK ( Swe de n ) (Ne t he rl an d s ) ( N et he rl an d s ) act iv i ti e s (U K ) Total
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Insurance revenue 65.8 11.1 36.1 115.0 \u2013 228.0
Insurance service expense (65.7 ) (7.4 ) (37.8 ) (11 3.9 ) \u2013 (224.8 )
Net expenses from reinsurance contracts held (5.5 ) (0.6 ) 0.4 (2.7 ) \u2013 (8.4 )
Se gm e nt al i n su ra nc e s ervic e r es ul t (5.4 ) 3 .1 (1.3 ) ( 1. 6 ) \u2013 ( 5.2 )
Net investment return 339.3 432.5 63.2 181.2 7.3 1,023.5
Net finance (expenses)/income from insurance contracts issued (86.4 ) (16.0 ) (49.3 ) (163.2 ) \u2013 (314.9 )
Net finance expenses from reinsurance contracts held 9.3 0.7 0.1 (3.4 ) \u2013 6.7
Net change in investment contract liabilities (226.4 ) (299.6 ) (3.6 ) \u2013 \u2013 (529.6 )
Change in liabilities relating to policyholders\u2019 funds held by the Group \u2013 (114.0 ) \u2013 \u2013 \u2013 (114.0 )
Segmental investment result 35.8 3.6 10.4 14.6 7.3 71.7
Fee, commission and other operating income 39.8 50.3 2.9 \u2013 (3.6 ) 89.4
Segmental revenue, net of investment result 70.2 57.0 12.0 13.0 3.7 155.9
Other operating expenses (39.9 ) (40.0 ) (3.5 ) (5.5 ) (23.1 ) ( 112 .0 )
Financing costs (0.2 ) (0.5 ) \u2013 \u2013 (10.3 ) (11.0 )
Profit/(loss) before tax and consolidation adjustments 30.1 16.5 8.5 7.5 (29.7 ) 32.9
Other operating expenses:
Amortisation and impairment of intangible assets (26.7 ) (11.2 ) \u2013 \u2013 \u2013 (37.9 )
Segmental income less expenses 3.4 5.3 8.5 7.5 (29.7 ) (5.0 )
Post completion gain on portfolio acquisition \u2013 \u2013 6.7 \u2013 \u2013 6.7
(Loss)/profit before tax 3.4 5.3 15.2 7.5 (29.7 ) 1.7
Income tax credit/(charge) 20.5 \u2013 (1.6 ) (1.9 ) (0.1 ) 16.9
(Loss)/profit after tax 23.9 5.3 13.6 5.6 (29.8 ) 18.6
(d) Segmental balance sheet as at 31 December 2023
Restated Movestic Waard Group Scildon Other Group
UK ( Swe de n ) (Ne t he rl an d s ) ( N et he rl an d s ) act iv i ti e s (U K ) Total
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Total assets 4,527.1 4,519.4 946.8 2,009.1 127.3 12,129.8
Total liabilities (4,376.6 ) (4,422.2 ) (867.0 ) (1, 894.6 ) (209.5 ) (11,769.9 )
Net assets 150.5 97.2 79.8 114.5 (82.2 ) 359.9
Investment in associates \u2013 \u2013 \u2013 \u2013 \u2013 \u2013
Additions to non-current assets \u2013 \u2013 \u2013 \u2013 \u2013 \u2013
184 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS SECTION D PERFORMANCE IN THE YEAR D1 Insurance result Year ended 31 December 2024 Movestic Waard Group Scildon Insurance revenue UK (Sweden ) (Netherlands ) (Netherlands ) Total \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Contracts not measured under the PAA: Amounts relating to changes in the liability for remaining coverage: Expected incurred claims and other directly attributable expenses 65.6 0.3 22.1 133.7 221.7 Change in risk adjustment for non-financial risk for the risk expired 1.8 0.1 0.7 2.3 4.9 CSM recognised for the services provided 3.9 0.5 7.0 11.0 22.4 Insurance acquisition cash flows recovery \u2013 \u2013 \u2013 3.6 3.6 Insurance revenue for contracts not measured under the PAA 71.3 0.9 29.8 150.6 252.6 Insurance revenue for contracts measured under the PAA \u2013 9.3 \u2013 \u2013 9.3 Total insurance revenue 71.3 10.2 29.8 150.6 261.9 Insurance service expenses Incurred claims and other directly attributable expenses (60.5 ) (8.9 ) (28.6 ) (108.8 ) (206.8 ) Changes that relate to past service \u2013 changes in the FCF relating to the LIC \u2013 6.3 \u2013 \u2013 6.3 Losses on onerous contracts and reversals of those losses (4.4 ) \u2013 (2.8 ) (32.8 ) (40.0 ) Insurance acquisition cash flows amortisation \u2013 \u2013 \u2013 (3.6 ) (3.6 ) To t al i n su ra nc e s e r v i ce ex p en s e s (64.9 ) ( 2.6 ) (3 1.4 ) ( 14 5. 2 ) ( 2 44.1 ) Net income/(expenses) from reinsurance contracts held Reinsurance expenses (allocation of reinsurance premiums paid) \u2013 contracts not measured under the PAA Amounts relating to changes in the remaining coverage: Expected amount recoverable for claims and other insurance service expenses (22.9 ) \u2013 (4.3 ) (18.7 ) (45.9 ) Change in risk adjustment for non-financial risk for the risk expired (0.6 ) \u2013 (0.1 ) (0.9 ) (1.6 ) CSM recognised for the services received (0.4 ) \u2013 \u2013 (3.1 ) (3.5 ) Reinsurance expenses (allocation of reinsurance premiums paid) \u2013 contracts not measured under the PAA (23.9 ) \u2013 (4.4 ) (22.7 ) (51.0 ) Reinsurance expenses (allocation of reinsurance premiums paid) \u2013 contracts measured under the PAA \u2013 (1.3 ) \u2013 \u2013 (1.3 ) Amounts recoverable for incurred claims and other incurred insurance service expenses 23.0 2.0 2.4 19.0 46.4 Changes in amounts recoverable that relate to past service \u2013 adjustments to incurred claims \u2013 (2.5 ) \u2013 \u2013 (2.5 ) Recoveries of loss on recognition of onerous underlying contracts \u2013 \u2013 \u2013 0.5 0.5 Recoveries of losses on onerous underlying contracts and reversals of such losses \u2013 \u2013 \u2013 (1.3 ) (1.3 ) Total net expenses from reinsurance contracts held (0.9 ) (1.8 ) (2.0 ) (4.5 ) (9.2 ) Total insurance service result 5.5 5.8 (3.6 ) 0.9 8.6 CHESNARAANNUALREPORTANDACCOUNTS2024185 IFRS FINANCIAL STATEMENTS SECTION D PERFORMANCE IN THE YEAR D1 Insurance result (continued) Year ended 31 December 2023 Restated Movestic Waard Group Scildon Insurance revenue UK (Sweden ) (Netherlands ) (Netherlands ) Total \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Contracts not measured under the PAA: Amounts relating to changes in the liability for remaining coverage: Expected incurred claims and other directly attributable expenses 59.3 0.3 28.2 100.1 187.7 Change in risk adjustment for non-financial risk for the risk expired 1.9 0.1 0.9 2.4 5.3 CSM recognised for the services provided 4.6 0.3 7.0 9.0 20.9 Insurance acquisition cash flows recovery \u2013 \u2013 \u2013 3.5 3.5 Insurance revenue for contracts not measured under the PAA 65.8 0.7 36.1 115.0 217.6 Insurance revenue for contracts measured under the PAA \u2013 10.4 \u2013 \u2013 10.4 Total insurance revenue 65.8 11.1 36.1 115.0 228.0 Insurance service expenses Incurred claims and other directly attributable expenses (50.8 ) (11.0 ) (30.4 ) (75.1 ) (167.3 ) Changes that relate to past service \u2013 changes in the FCF relating to the LIC \u2013 3.6 \u2013 \u2013 3.6 Losses on onerous contracts and reversals of those losses (14.9 ) \u2013 (7.4 ) (35.4 ) (57.7 ) Insurance acquisition cash flows amortisation \u2013 \u2013 \u2013 (3.4 ) (3.4 ) To t al i n su ra nc e s e r v i ce ex p en s e s ( 6 5.7 ) (7.4 ) (3 7.8 ) ( 1 1 3.9 ) ( 2 2 4. 8 ) Net income/(expenses) from reinsurance contracts held Reinsurance expenses (allocation of reinsurance premiums paid) \u2013 contracts not measured under the PAA Amounts relating to changes in the remaining coverage: Expected amount recoverable for claims and other insurance service expenses (23.8 ) \u2013 (5.0 ) (17.7 ) (46.5 ) Change in risk adjustment for non-financial risk for the risk expired (0.7 ) \u2013 (0.2 ) (1.3 ) (2.2 ) CSM recognised for the services received (0.5 ) \u2013 2.2 (2.7 ) (1.0 ) Reinsurance expenses (allocation of reinsurance premiums paid) \u2013 contracts not measured under the PAA (25.0 ) \u2013 (3.0 ) (21.7 ) (49.7 ) Reinsurance expenses (allocation of reinsurance premiums paid) \u2013 contracts measured under the PAA \u2013 (2.5 ) \u2013 \u2013 (2.5 ) Amounts recoverable for incurred claims and other incurred insurance service expenses 19.5 3.2 3.4 17.3 43.4 Changes in amounts recoverable that relate to past service \u2013 adjustments to incurred claims \u2013 (1.3 ) \u2013 \u2013 (1.3 ) Recoveries of loss on recognition of onerous underlying contracts \u2013 \u2013 \u2013 0.5 0.5 Recoveries of losses on onerous underlying contracts and reversals of such losses \u2013 \u2013 \u2013 1.2 1.2 Total net expenses from reinsurance contracts held (5.5 ) (0.6 ) 0.4 (2.7 ) (8.4 ) To t al i n su ra nc e s e r v i ce r e su l t (5.4 ) 3 .1 (1.3 ) ( 1. 6 ) (5.2 ) 186 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS D2 Investment result In the tables that follow the investment return on surplus shareholder assets is included in the insurance contracts column. Net fair value gains and losses in respect of holdings in collective investment schemes are included in the line that is most appropriate taking into account the nature of the underlying investments. Year ended 31 December 2024 Investment Net Investment return Insurance contracts contracts UK Movestic Waard Scildon (without DPFs ) Chesnara plc Total \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Interest revenue from financial assets not measured at FVTPL \u2013 0.5 0.7 \u2013 \u2013 \u2013 1.2 Net gains on financial investments mandatorily measured as FVTPL 90.2 25.6 16.2 169.1 739.6 7.5 1,408.2 Net gains on financial investments designated as FVTPL 16.6 0.1 11.2 32.5 160.8 1.8 223.0 Net gains from fair value adjustments to investment properties 13.9 \u2013 \u2013 (0.2 ) \u2013 \u2013 13.7 Total net investment return 120.7 26.2 28.1 201.4 900.4 9.3 1,286.1 Finance income/(expenses) from insurance contracts issued Change in fair value of underlying assets of contracts measured under the VFA (99.8 ) (22.8 ) (5.8 ) (170.6 ) \u2013 \u2013 (299.0 ) Interest accreted (1 9.5 ) (1.0 ) (30.0 ) ( 19.8 ) \u2013 \u2013 (70.3 ) Effect of changes in interest rates and other financial assumptions 20.2 0.2 7.8 1.5 \u2013 \u2013 29.7 Effect of changes in fulfilment cash flows at current rates when CSM is unlocked at locked in rates 0.5 \u2013 4.8 (0.5 ) \u2013 \u2013 4.8 Total finance income from insurance contracts issued (98.6 ) (23.6 ) (23.2 ) (189.4 ) \u2013 \u2013 (334.8 ) Finance income from reinsurance contracts held Interest accreted 8.6 0.4 \u2013 (1.1 ) \u2013 \u2013 7.9 Effect of changes in interest rates and other financial assumptions (4.6 ) (0.1 ) \u2013 (0.1 ) \u2013 \u2013 (4.8 ) Effect of changes in fulfilment cash flows at current rates when CSM is unlocked at locked in rates (0.9 ) \u2013 \u2013 0.4 \u2013 \u2013 (0.5 ) Total finance expenses from reinsurance contracts held 3.1 0.3 \u2013 (0.8 ) \u2013 \u2013 2.6 Ne t in s ur an ce fina nc e exp e n s es (9 5 .5 ) ( 23.3 ) (2 3 .2 ) (190 .2 ) \u2013 \u2013 ( 3 3 2.2 ) Net gains/losses on investment contract liabilities \u2013 \u2013 \u2013 \u2013 (740.4 ) \u2013 (740.4 ) Net gains/losses on liabilities relating to policyholder funds held by the Group \u2013 \u2013 \u2013 \u2013 (160.8 ) \u2013 (160.8 ) Net investment result 25.2 2.9 4.9 11.2 (0.8 ) 9.3 52.7 CHESNARAANNUALREPORTANDACCOUNTS2024187 IFRS FINANCIAL STATEMENTS SECTION D PERFORMANCE IN THE YEAR D2 Investment result (continued) Year ended 31 December 2023 Investment Net Investment return Insurance contracts contracts UK Movestic Waard Scildon (without DPFs ) Chesnara plc Total \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Interest revenue from financial assets not measured at FVTPL 6.8 0.9 0.5 \u2013 \u2013 0.9 9.1 Net gains on financial investments mandatorily measured as FVTPL 63.0 18.1 21.4 129.6 527.7 6.3 766.1 Net gains on financial investments designated as FVTPL 41.9 \u2013 37.6 51.7 115.8 \u2013 247.0 Net gains from fair value adjustments to investment properties 1.2 \u2013 \u2013 \u2013 \u2013 \u2013 1.2 Total net investment return 112.9 19.0 59.5 181.3 643.5 7.2 1,023.4 Finance income/(expenses) from insurance contracts issued Change in fair value of underlying assets of contracts measured under the VFA (75.4 ) \u2013 (5.1 ) (132.6 ) \u2013 \u2013 (213.1 ) Interest accreted (18.2 ) \u2013 (30.0 ) (19.1 ) \u2013 \u2013 (67. 3 ) Effect of changes in interest rates and other financial assumptions 2.4 (16.0 ) (21.2 ) (14.2 ) \u2013 \u2013 (49.0 ) Effect of changes in fulfilment cash flows at current rates when CSM is unlocked at locked in rates 4.7 \u2013 6.9 2.9 \u2013 \u2013 14.5 Total finance income from insurance contracts issued (86.5 ) (16.0 ) (49.4 ) (163.0 ) \u2013 \u2013 (314.9 ) Finance income from reinsurance contracts held Interest accreted 8.8 \u2013 0.1 (1.1 ) \u2013 \u2013 7.8 Effect of changes in interest rates and other financial assumptions 1.5 0.7 \u2013 (1.6 ) \u2013 \u2013 0.6 Effect of changes in fulfilment cash flows at current rates when CSM is unlocked at locked in rates (1.0 ) \u2013 \u2013 (0.7 ) \u2013 \u2013 (1.7 ) Total finance expenses from reinsurance contracts held 9.3 0.7 0.1 (3.4 ) \u2013 \u2013 6.7 Ne t in s ur an ce fina nc e exp e n s es (7 7. 2 ) ( 1 5.3 ) (49 .3 ) ( 1 6 6. 4 ) \u2013 \u2013 (30 8.2 ) Net gains/(losses) on investment contract liabilities \u2013 \u2013 \u2013 \u2013 (529.6 ) \u2013 (529.6 ) Net gains/(losses) on liabilities relating to policyholder funds held by the Group \u2013 \u2013 \u2013 \u2013 (113.9 ) \u2013 (113.9 ) Net investment result 35.7 3.7 10.2 14.9 \u2013 7.2 71.7 D3 Fees, commission and other operating income Fund management-based fees recognised under IFRS 15 has been disaggregated based on the geographical region as follows: Year ended 31 December 2024 2023 Year ended 31 December \u00a3m \u00a3m 2024 2023 \u00a3m \u00a3m Policy-based fees 2.9 3.2 Fund management-based fees recognised under IFRS 15 44.1 45.5 UK 33.9 35.0 Change in deferred income \u2013 gross 0.2 0.6 Sweden 10.2 10.5 Commission income from investment contracts 22.4 20.4 Fee income from investment managers 1.3 1.3 Total fund management-based fees recognised under IFRS 15 44.1 45.5 Charges to policyholder funds for yield tax 30.8 17.9 Other types of operating income 2.5 0.5 Total fee, commission and other operating income 104.2 89.4 188 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS D4 Expenses by nature Year ended 31 December 2024 Insurance Other Other acquisition attributable operating cash flows expenses expenses Total Note \u00a3m \u00a3m \u00a3m \u00a3m Administrative expenses Personnel-related costs I1 2.7 13.6 26.8 43.1 Investment management fees \u2013 2.4 1.3 3.7 Costs paid to third-party administrators \u2013 10.6 2.4 13.0 Other goods and services 4.0 14.0 23.4 41.4 Depreciation charge on property and equipment 0.1 0.5 0.3 0.9 Depreciation of right-of-use assets \u2013 \u2013 0.8 0.8 Amortisation charge on software assets \u2013 \u2013 2.7 2.7 Sub-total 6.8 41.1 57.7 105.6 Commission, new business and renewal costs Insurance contracts \u2013 3.8 \u2013 3.8 Investment contracts \u2013 \u2013 32.6 32.6 Sub-total \u2013 3.8 32.6 36.4 Amortisation and Impairment of intangible assets Acquired value of in-force business \u2013 \u2013 4.8 4.8 Deferred acquisition costs \u2013 \u2013 7.7 7.7 Sub-total \u2013 \u2013 12.5 12.5 Other expenses Payment of yield tax relating to policyholders funds \u2013 \u2013 30.8 30.8 Other \u2013 2.2 \u2013 2.2 Sub-total \u2013 2.2 30.8 33.0 Total 6.8 47.1 133.6 187.5 Expenses classed as \u2018insurance acquisition cash flows\u2019 in the table above are offset against the CSM on initial recognition. The \u2018other attributable expenses\u2019 are reported in the \u2018Insurance service expense\u2019 line in the income statement. CHESNARAANNUALREPORTANDACCOUNTS2024189 IFRS FINANCIAL STATEMENTS SECTION D PERFORMANCE IN THE YEAR D4 Expenses by nature (continued) Year ended 31 December 2023 \u2013 restated Insurance Other Other acquisition attributable operating cash flows expenses expenses Total Note \u00a3m \u00a3m \u00a3m \u00a3m Administrative expenses Personnel-related costs I1 2.2 13.6 25.4 41.2 Investment management fees \u2013 2.3 1.3 3.6 Costs paid to third-party administrators \u2013 9.5 3.9 13.4 Other goods and services 3.3 13.0 28.9 45.2 Depreciation charge on property and equipment 0.1 0.5 0.2 0.8 Depreciation of right-of-use assets \u2013 \u2013 0.4 0.4 Amortisation charge on software assets \u2013 \u2013 2.0 2.0 Sub-total 5.6 38.9 62.1 106.6 Commission, new business and renewal costs Insurance contracts \u2013 3.8 \u2013 3.8 Investment contracts \u2013 \u2013 29.4 29.4 Sub-total \u2013 3.8 29.4 33.2 Amortisation and Impairment of intangible assets Acquired value of in-force business \u2013 \u2013 28.6 28.6 Deferred acquisition costs \u2013 \u2013 7.6 7.6 Sub-total \u2013 \u2013 36.2 36.2 Other expenses Payment of yield tax relating to policyholders funds \u2013 \u2013 17.9 17.9 Other \u2013 2.9 4.3 7.2 Sub-total \u2013 2.9 22.2 25.1 Total 5.6 45.5 149.9 201.1 Included in other goods and services above are the following amounts payable to the auditor and its associates, exclusive of VAT. 190 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS UK business Year ended 31 December 2024 2023 CA and other Group activities 2024 2023 \u00a3m \u00a3m Year ended 31 December \u00a3m \u00a3m Fees payable to the Company\u2019s auditor for the audit of the Company\u2019s Current tax financial statements 0.7 0.6 Current year expense 0.1 \u2013 Fees payable to the Company\u2019s auditor and its associates for Overseas tax \u2013 (0.3 ) other services to the Group: The audit of the Company\u2019s subsidiaries pursuant to legislation* 2.4 1.9 Net expense 0.1 (0.3 ) Audit-related assurance services** 0.2 2.0 Deferred tax Non-audit services \u2013 0.1 Origination and reversal of temporary differences (17.4 ) 20.7 Adjustment to prior years 2.1 \u2013 Total 3.3 4.6 Total income tax credit (expense)/credit (15.2 ) 20.4 *Includes \u00a31.0m (2023: \u00a31.6m) audit fees in respect of the Movestic, Waard and Scildon audit in the year performed by EY. **Includes \u00a30.1m (2023: \u00a30.1m) fees related to assurance services in respect of Waard and Scildon in Reconciliation of effective tax rate on profit before tax 2024 2023 Year ended 31 December \u00a3m \u00a3m the year performed by EY, \u00a30.2m (2023: \u00a30.2m) fees related to assurance services in respect of CASFS performed by Deloitte and \u00a30.1m (2023: \u00a30.1m) fees related to assurance services in respect Profit/(loss) before tax 2.1 (26.3 ) of Chesnara parent company performed by Deloitte. Income tax using the domestic corporation tax rate of 25.0% (2023: 23.5%) (0.5 ) 6.2 D5 Financing costs Non-taxable profit on acquisition of subsidiary (0.2 ) \u2013 Impact of small companies rate \u2013 (1.5 ) Year ended 31 December 2024 2023 Other permanent differences \u2013 (0.6 ) \u00a3m \u00a3m Effect of UK tax bases on insurance profits (15.8 ) (7.5 ) Offset of franked investment income 2.6 1.2 Interest expense on bank borrowings 1.0 0.7 Variation in rate of tax on amortisation of acquired in-force value 1.5 13.3 Interest expense on financial reinsurance 0.4 0.5 Foreign tax \u2013 (0.3 ) Interest expense on Tier 2 debt 9.7 9.8 Effect of deferred tax not recognised (4.8 ) 10.1 Effect of change in tax rate \u2013 (0.2 ) Total financing costs 11.1 11.0 Other 2.0 (0.3 ) Interest expense on bank borrowings and Tier 2 debt is calculated using the effective interest rate Total income tax credit (expense)/credit (15.2 ) 20.4 method and is the total interest expense for financial liabilities that are not designated at fair value through profit or loss. The Finance Act 2021 increased the rate of corporation tax from 19% to 25% from 1 April 2023. D6 Income tax Total income tax comprises 2024 2023 Year ended 31 December \u00a3m \u00a3m CA and other Group activities \u2013 net credit (15.2 ) 20.4 Movestic (0.5 ) \u2013 Waard Group \u2013 net expense/credit 0.8 (1.6 ) Scildon \u2013 net (expense)/credit (2.0 ) (1.9 ) Total net credit (16.9 ) 16.9 CHESNARAANNUALREPORTANDACCOUNTS2024 191
IFRS FINANCIAL STATEMENTS
SECTION D PERFORMANCE IN THE YEAR
D6 Income tax (continued)
Movestic
Movestic 2024 2023
Reconciliation of effective tax rate on profit before tax 2024 2023
Year ended 31 December \u00a3m \u00a3m
Year ended 31 December \u00a3m \u00a3m
Current tax
(Loss)/profit before tax (2.5 ) 14.7
Current year expense (0.5 ) \u2013
Income tax using the domestic corporation tax rate of 25.8% (2023: 25%) 0.7 (3.8 )
Net expenses (0.5 ) \u2013
Non-taxable fair value adjustment \u2013 1.7
Deferred tax
Temporary differences 0.1 1.0
Origination and reversal of temporary differences \u2013 \u2013
Reversal of temporary difference \u2013 (0.5 )
Total income tax expense (0.5 ) \u2013
Total income tax credit/(expense) 0.8 (1.6 )
Scildon
Reconciliation of effective tax rate on profit before tax 2024 2023
Year ended 31 December \u00a3m \u00a3m
Scildon 2024 2023
Year ended 31 December \u00a3m \u00a3m
Profit before tax 10.4 5.4
Current tax \u2013 4.8
Income tax using the domestic corporation tax rate of 20.6% (20.6%) (2.1 ) (1.1 )
Adjustments for prior year \u2013 \u2013
Non-taxable income in relation to unit-linked business 1.2 1.2
Unrecognised tax recoverable 0.8 (0.3 )
Net expense \u2013 4.8
Non-deductible expenses 0.1 0.2
Deferred tax
Under/(over) provided in prior years (0.5 ) \u2013
Origination and reversal of temporary differences (2.0 ) (6.7 )
Total income tax credit/(expense) (0.5 ) \u2013
Total income tax credit/(expense) (2.0 ) (1.9 )
Waard Group
Reconciliation of effective tax rate on profit before tax 2024 2023
Waard Group 2024 2023
Year ended 31 December \u00a3m \u00a3m
Year ended 31 December \u00a3m \u00a3m
Loss before tax 7.5 7.5
Current tax
Current year expense (0.9 ) (1.7 )
Income tax using the domestic corporation tax rate 25.8% (2023: 25%) (1.9 ) (1.9 )
Adjustment to prior years 0.6 4.7
Permanent differences 0.1 0.1
Temporary differences (0.1 ) (0.1 )
Net expenses (0.3 ) 3.0
Deferred tax
Total income tax credit/(expense) (1.9 ) (1.9 )
Origination and reversal of temporary differences 1.1 (4.6 )
Total income tax credit/(expense) 0.8 (1.6 )
192 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS SECTION E BALANCE SHEET ASSETS E1 Intangible assets Deferred acquisition costs Year ended 31 December 2024 Software Year ended 31 December 2024 2023 AVIF AVCR assets Total \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Balance at 1 January 50.6 51.2 Cost: Additions 9.2 8.3 Balance at 1 January 112.3 2.3 31.1 145.6 Amortisation charged to income (7.7 ) (7.6 ) Additions \u2013 \u2013 2.1 2.1 Foreign exchange translation difference (3.6 ) (1.3 ) Foreign exchange translation difference \u2013 \u2013 (2.4 ) (2.3 ) Balance at 31 December 48.4 50.6 Balance at 31 December 112.3 2.3 30.8 145.4 Current 6.3 11.1 Amortisation and impairment losses: Non-current 42.1 39.5 Balance at 1 January 76.1 2.1 21.7 99.9 Amortisation for the year 4.7 \u2013 2.7 7.4 Total 48.4 50.6 Impairment for the year \u2013 \u2013 \u2013 \u2013 Foreign exchange translation difference 1.0 \u2013 (1.7 ) (0.7 ) The amortisation charged to income is recognised in other operating expenses (see Note D4). Balance at 31 December 81.8 2.1 22.7 106.6 E2 Property and equipment Carrying amounts: 31 December 2024 2023 At 1 January 36.3 0.2 9.3 45.8 \u00a3m \u00a3m At 31 December 30.5 0.2 8.1 38.8 Cost: Balance at 1 January 20.6 19.0 Additions 0.8 1.9 Disposals (1.7 ) (0.3 ) Year ended 31 December 2023 Software Revaluation 0.7 0.3 AVIF AVCR assets Total Foreign exchange translation difference (0.8 ) (0.3 ) \u00a3m \u00a3m \u00a3m \u00a3m Balance at 31 December 19.6 20.6 Cost: Balance at 1 January 113.9 2.3 29.5 145.7 Amortisation and impairment losses: Additions \u2013 \u2013 2.3 2.3 Balance at 1 January 12.2 11.1 Foreign exchange translation difference (1.6 ) \u2013 (0.7 ) (2.3 ) Depreciation charge for the year 1.7 0.8 Disposals (1.7 ) \u2013 Balance at 31 December 112.3 2.3 31.1 145.7 Foreign exchange translation difference (0.4 ) 0.3 Amortisation and impairment losses: Balance at 31 December 11.7 12.2 Balance at 1 January 48.5 2.1 20.2 70.8 Amortisation for the year 7.5 \u2013 2.0 9.5 Carrying amounts at 31 December 7.9 8.4 Impairment for the year 21.0 \u2013 \u2013 21.0 Foreign exchange translation difference (0.9 ) \u2013 (0.5 ) (1.4 ) The Group leases several assets including office buildings, office equipment, IT equipment and motor Balance at 31 December 76.1 2.1 21.7 99.9 vehicles. The average lease term is 3 years. Carrying amounts: At 1 January 65.4 0.2 9.3 74.9 At 31 December 36.3 0.2 9.3 45.8 Section A5 (i) provides further details of the significant judgements applied and the sensitivities to those judgements in respect of the AVIF assets held in regard to CASLP within the UK segment of \u00a319.8m (31 December 2023: \u00a322.9m) and also in Movestic of \u00a310.7m (31 December 2023: \u00a313.4m). The AVCR asset and the software assets are held in respect of Movestic. The amortisation charged to the Consolidated Statement of Comprehensive Income is recognised in other operating expenses (see Note D4). CHESNARAANNUALREPORTANDACCOUNTS2024193
IFRS FINANCIAL STATEMENTS
SECTION E BALANCE SHEET ASSETS
E2 Property and equipment (continued)
E4 Financial investments
(a) Financial investments by classification
Right-of-use assets Non-investment 2024
The carrying amounts of the financial investments and other financial assets and liabilities held by
property Other Total
the Group at the balance sheet date are as follows:
\u00a3m \u00a3m \u00a3m
31 December 2024 Amortised FVTPL \u2013 FVTPL \u2013
Carrying amounts at 1 January 1.1 0.2 1.3
cost designated mandatory Total
Additions 0.1 \u2013 0.1
\u00a3m \u00a3m \u00a3m \u00a3m
Depreciation charge (0.6 ) (0.2 ) (0.8 )
Financial investments
Carrying amounts at 31 December 0.6 \u2013 0.6
Equity securities \u2013 \u2013 191.5 191.5
Holdings in collective investment schemes \u2013 \u2013 8,661.6 8,661.6
Amounts recognised in profit or loss are not considered to be material.
Debt securities \u2013 government bonds \u2013 446.1 \u2013 446.1
Debt securities \u2013 other \u2013 634.7 10.1 644.8
Policyholder funds help by the Group \u2013 1,825.8 \u2013 1,825.8
Right-of-use assets Non-investment 2023
Mortgage loan portfolio \u2013 346.9 \u2013 346.9
property Other Total
\u00a3m \u00a3m \u00a3m
Total \u2013 3,253.5 8,863.2 12,116.7
Carrying amounts at 1 January 1.2 0.1 1.3
Derivatives and other financial assets
Additions \u2013 0.8 0.8
Amounts deposited with reinsurer \u2013 34.3 \u2013 34.3
Depreciation charge (0.4 ) (0.4 ) (0.8 )
Derivative financial instruments \u2013 \u2013 0.1 0.1
Foreign exchange translation difference 0.3 (0.3 ) \u2013
Other assets 68.7 \u2013 \u2013 68.7
Cash and cash equivalents \u2013 138.0 \u2013 138.0
Carrying amounts at 31 December 1.1 0.2 1.3
Total financial investments and financial assets 68.7 3,425.8 8,863.3 12,357.8
Amounts recognised in profit or loss are not considered to be material.
Financial liabilities
E3 Investment properties
Investment contracts at fair value through
profit or loss \u2013 6,116.7 \u2013 6,116.7
31 December 2024 2023
Liabilities relating to policyholder funds
\u00a3m \u00a3m
help by the Group \u2013 1,825.5 \u2013 1,825.5
Derivative financial instruments \u2013 \u2013 0.6 0.6
Balance at 1 January 88.1 94.5
Borrowings 204.8 \u2013 \u2013 204.8
Additions 3.4 2.3
Other current liabilities 129.7 \u2013 \u2013 129.7
Disposals (7.9 ) (6.0 )
Revaluation 8.1 (2.7 )
Total financial liabilities 334.5 7,942.2 0.6 8,277.3
Balance at 31 December 91.7 88.1
Investment properties were bought for investment purposes in line with the investment strategy
of the Group. Detail on the property types and the frequency of valuations is provide in Note A4(k).
There is no observable input and therefore they are classed as Level 3 in the fair value hierarchy, see
Note E4(b).
The revaluation is disclosed within net investment return (see Note D2). Expenses incurred in the
operation and maintenance of investment properties are disclosed within other operating expenses
(see Note D4).
Rental income from investment properties was \u00a36.9m for the year (2023: \u00a36.8m). Operating expenses
incurred on investment properties was \u00a30.6m for the year (2023: \u00a31.0m).
194 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 December 2023 Amortised FVTPL \u2013 FVTPL \u2013 Fair value measurement at Level 1 Level 2 Level 3 Total cost designated mandatory Total 31 December 2024 \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Investment properties \u2013 \u2013 91.7 91.7 Financial investments Financial assets Equity securities \u2013 \u2013 194.2 194.2 Equities \u2013 Listed 191.5 \u2013 \u2013 191.5 Holdings in collective investment schemes \u2013 \u2013 8,376.2 8,376.2 Holdings in collective investment schemes 8,454.1 38.9 168.6 8,661.6 Debt securities \u2013 government bonds \u2013 716.5 \u2013 716.5 Debt securities \u2013 government bonds 446.1 \u2013 \u2013 446.1 Debt securities \u2013 other \u2013 520.6 \u2013 520.6 Debt securities \u2013 other debt securities 644.8 \u2013 \u2013 644.8 Policyholder funds help by the Group \u2013 1,281.8 \u2013 1,281.8 Policyholders\u2019 funds held by the Group 1,781.6 \u2013 44.2 1,825.8 Mortgage loan portfolio \u2013 366.8 \u2013 366.8 Mortgage loan portfolio \u2013 346.9 \u2013 346.9 Amounts deposited with reinsurers \u2013 34.3 \u2013 34.3 Total \u2013 2,885.7 8,570.4 11,456.1 Derivative financial instruments \u2013 0.1 \u2013 0.1 Derivatives and other financial assets Total 11,518.1 420.2 304.5 12,242.8 Amounts deposited with reinsurers \u2013 32.5 \u2013 32.5 Derivative financial instruments \u2013 \u2013 0.3 0.3 Financial liabilities Other assets 57.7 \u2013 \u2013 57.7 Investment contracts at fair value through Cash and cash equivalents \u2013 146.0 \u2013 146.0 profit or loss \u2013 6,116.7 \u2013 6,116.7 Liabilities related to policyholders\u2019 funds Total financial investments and financial assets 57.7 3,064.2 8,570.7 11,692.6 held by the Group \u2013 1,825.5 \u2013 1,825.5 Derivative financial instruments \u2013 0.6 \u2013 0.6 Financial liabilities Investment contracts at fair value through Total \u2013 7,942.8 \u2013 7,942.8 profit or loss \u2013 5,872.3 \u2013 5,872.3 Liabilities relating to policyholder funds help by the Group \u2013 1,281.8 \u2013 1,281.8 Derivative financial instruments \u2013 \u2013 4.4 4.4 Fair value measurement at Level 1 Level 2 Level 3 Total Borrowings 207.9 \u2013 \u2013 207.9 31 December 2023 \u00a3m \u00a3m \u00a3m \u00a3m Other current liabilities 131.7 \u2013 \u2013 131.7 Investment properties \u2013 \u2013 88.1 88.1 Total financial liabilities 339.6 7,154.1 4.4 7,498.1 Financial assets Equities \u2013 Listed 194.2 \u2013 \u2013 194.2 Holdings in collective investment schemes 8,189.2 44.5 142.5 8,376.2 Debt securities \u2013 government bonds 716.5 \u2013 \u2013 716.5 (b) Financial investment fair values Debt securities \u2013 other debt securities 520.6 \u2013 \u2013 520.6 Fair value is the amount for which an asset or liability could be exchanged between willing parties Policyholders\u2019 funds held by the Group 1,239.4 \u2013 42.4 1,281.8 in an arm\u2019s length transaction. The tables below show the determination of fair value according Mortgage loan portfolio \u2013 366.8 \u2013 366.8 to a three-level valuation hierarchy. Fair values are generally determined at prices quoted in active Amounts deposited with reinsurers \u2013 32.5 \u2013 \u2013 markets (Level 1). However, where such information is not available, the Group applies valuation Derivative financial instruments \u2013 0.3 \u2013 0.3 techniques to measure such instruments. These valuation techniques make use of market-observable data for all significant inputs where possible (Level 2), but in some cases it may be necessary to Total 10,859.9 444.1 273.0 11,577.0 estimate other than market-observable data within a valuation model for significant inputs (Level 3). Financial liabilities Investment contracts at fair value through profit or loss \u2013 5,872.3 \u2013 5,872.3 Liabilities related to policyholders\u2019 funds held by the Group 1,281.8 \u2013 \u2013 1,281.8 Derivative financial instruments \u2013 4.4 \u2013 4.4 Total 1,281.8 5,876.7 \u2013 7,158.5 CHESNARAANNUALREPORTANDACCOUNTS2024195
IFRS FINANCIAL STATEMENTS
SECTION E BALANCE SHEET ASSETS
E4 Financial investments (continued)
Investment contract liabilities
(b) Financial investment fair values (continued)
The investment contract liabilities in Level 2 of the valuation hierarchy represent the fair value
Investment properties
of linked and non-linked liabilities valued using established actuarial techniques utilising mark et
The investment properties are valued by external chartered surveyors using industry standard
observable data for all significant inputs, such as investment yields.
techniques based on guidance from the Royal Institute of Chartered Surveyors. The valuation
methodology includes an assessment of general market conditions and sector level transactions
Significant unobservable inputs in Level 3 instruments valuations
and takes account of expectations of occupancy rates, rental income and growth. Properties
The Level 3 instruments held in the Group are in relation to investments held in an Aegon manag ed
undergo individual scrutiny using cash flow analysis to factor in the timing of rental reviews, capital
Dutch Mortgage Fund that contains mortgage-backed assets in the Netherlands. The fair value
expenditure, lease incentives, dilapidation and operating expenses; these reviews utilise both
of the mortgage fund is determined by the fund manager on a monthly basis using an in-hou se
observable and unobservable inputs.
valuation model. The valuation model relies on a number of unobservable inputs, the most
significant being the assumed conditional prepayment rate, the discount rate and the impairme nt
Holdings in collective investment schemes
rate, all of which are applied to the anticipated modelled cash flows to derive the fair value of the
The holdings classified as Level 3 \u00a3168.6m (Dec 2023: \u00a3142.5m) also relate to Scildon, and
underlying asset.
represent investments held in a mortgage fund. These are classified as Level 3 as the fair
The assumed Conditional Prepayment Rate (CPR) is used to calculate the projected prepayme nt
value is derived from valuation techniques that include inputs that are not based on observable
cash flow per individual loan and reflects the anticipated early repayment of mortgage balances .
market data.
The CPR is based on four variables:
Policyholder funds held by the Group
\u2013 Contract age \u2013 The CPR for newly originated mortgage loans will initially be low, after which
There is also a small holding of assets classified as Level 3 \u00a344.2m (Dec 2023: \u00a342.4m) from
it increases for a couple of years to its maximum expected value, and subsequently diminishes
our Movestic operation which are unlisted. The valuation of the vast majority of these assets
over time.
is based on unobservable prices from trading on the over-the-counter market.
\u2013 Interest rate differential \u2013 The difference between the contractual rates and current interest rate s
are positively correlated with prepayments. When contractual rates are higher than interest rat es
Debt securities
of newly originated mortgages, we observe more prepayments and the vice versa.
The debt securities classified as Level 2 at 2023 and 2024 are traded in active markets with less
depth or wider bid-ask spreads. This does not meet the classification as Level 1 inputs. The fair
\u2013 Previous partial repayments \u2013 Borrowers who made a partial prepayment in the past, are more lik ely
values of debt securities not traded in active markets are determined using broker quotes or
to do so in the future.
valuation techniques with observable market inputs. Financial instruments valued using broker
\u2013 Burnout effect \u2013 Borrowers who have not made a prepayment in the past, while their option to prep ay
quotes are classified at Level 2, only where there is a sufficient range of available quotes.
was in the money, are less likely to prepay in the future.
These assets were valued using counterparty or broker quotes and were periodically validated
The projected prepayment cash flows per loan are then combined to derive an average expected
against third-party models.
lifetime CPR, which is then applied to the outstanding balance of the fund. The CPR used in t he
valuation of the fund as at 31 December 2024 was 3.7% (31 December 2023: 3.2%).
Derivative financial instruments
The derivatives financial instruments include a foreign currency hedge related to the Group.
The expected projected cash flows for each mortgage within the loan portfolio are discounted usi ng
This was obtained to manage the exposure to foreign exchange movements between sterling
rates that are derived using a matrix involving the following three parameters:
and both the euro and Swedish krona.
\u2013 The remaining fixed rate term of the mortgage
It includes an uncapped collar which consists of two hedges:
\u2013 Indexed Loan to Value (LTV) of each mortgage
\u2013 one hedge to protect against the downside (sterling strengthening) (starting at strike A), and one
\u2013 Current (Aegon) mortgage rates
to remove the upside (weakening) (strike B); with the strikes of these coordinated to result in
no upfront premium.
At 31 December 2024 this resulted in discounting the cash flows in each mortgage using a ran ge
from 4.06% to 4.26% (31 December 2023: 4.67% to 4.68%).
\u2013 the second hedge (strike B) creates an uncapped liquidity requirement when it bites.
An impairment percentage is applied to those loan cash flows which are in arrears, to reflect the
The capped collar comes with an additional leg which creates value and liquidity when exchange
chance of the loan actually going into default. For those loans which are 1, 2 or 3 months in arrea rs,
rates move beyond a certain point (strike C).
an impairment percentage is applied to reflect the chance of default. This percentage ranges from
Within derivative financial instruments is a financial reinsurance embedded derivative related
0.60% for 1 month in arrears to 13.70% for loans which are 3 months in arrears (31 December 20 23:
to our Movestic operation. The Group has entered into a reinsurance contract with a third party
0.60% for 1 month in arrears to 13.70% for loans which are 3 months in arrears). Loans which are
that has a section that is deemed to transfer significant insurance risk and a section that is
in default receive a 100% reduction in value.
deemed not to transfer significant insurance risk. The element of the contract that does not
The value of the fund has the potential to decrease or increase over time. This can be as a
transfer significant insurance risk has two components and has been accounted for as a
consequence of a periodic reassessment of the conditional prepayment rate and/or the discount
financial liability at amortised cost and an embedded derivative asset at fair value.
rate used in the valuation model.
The embedded derivative represents an option to repay the amounts due under the contract early
A 1 percent increase in the CPR would increase the value of the asset by \u00a32.0m
at a discount to the amortised cost, with its fair value being determined by reference to market
(31 December 2023: \u00a31.9m).
interest rate at the balance sheet date. It is, accordingly, determined at Level 2 in the three-level
fair value determination hierarchy set out above. Further detail can be found in Note E5.
A 1 percent decrease in the CPR would reduce the value of the asset by \u00a32.2m
(31 December 2023: \u00a32.1m).
196 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS A 1 percent increase in the discount rate would reduce the value of the asset by \u00a315.3m The fair value of the Tier 2 debt is calculated using quoted prices in active markets and they are (31 December 2023: \u00a311.4m). classified as Level 1 in the fair value hierarchy. The amount due in relation to financial reinsurance is fair valued with reference to market interest rates at the balance sheet date and is classed as A 1 percent decrease in the discount rate would increase the value of the asset by \u00a317.5m Level 2 in the fair value hierarchy. (31 December 2023: \u00a313.3m). There were no transfers between Levels 1, 2 and 3 during the year. The Group holds no Level 3 Reconciliation of Level 3 fair value measurements of financial instruments liabilities as at the balance sheet date. Level 3 movement E5 Derivative financial instruments 31 December 2024 Holdings in A currency hedge is held in the Parent Company in order to manage the exposure to foreign collective Policyholder exchange movements between sterling and both the euro and Swedish krona. The currency hedge Investment investment funds held is classed as Level 2 (2023: Level 2) in the three-level fair value determination hierarchy set out in properties schemes by Group Total Note E4(b). \u00a3m \u00a3m \u00a3m \u00a3m There are also derivatives held within the unit-linked and with-profits funds, except for an option At start of period 88.1 142.5 42.4 273.0 to repay a financial reinsurance contract early, which comprises an embedded derivative. Additions \u2013 acquisition of subsidiary \u2013 \u2013 \u2013 \u2013 Total gains and losses recognised in 31 December 2024 2023 the income statement 8.1 33.5 1.9 43.5 Asset Liability Asset Liability Purchases 3.4 \u2013 17.0 20.4 \u00a3m \u00a3m \u00a3m \u00a3m Settlements (7.9 ) \u2013 (13.9 ) (21.8 ) Exchange rate adjustment \u2013 (7.4 ) (3.2 ) (10.6 ) Exchange-traded futures \u2013 (0.3 ) 0.2 \u2013 Foreign currency hedge \u2013 (0.3 ) \u2013 (4.4 ) At the end of period 91.7 168.6 44.2 304.5 Financial reinsurance embedded derivative 0.1 \u2013 0.1 \u2013 Total 0.1 (0.6 ) 0.3 (4.4 ) 31 December 2023 Holdings in Current 0.1 (0.6 ) 0.3 (4.4 ) collective Policyholder Non-current \u2013 \u2013 \u2013 \u2013 Investment investment funds held properties schemes by Group Total Total 0.1 (0.6 ) 0.3 (4.4 ) \u00a3m \u00a3m \u00a3m \u00a3m Derivatives within unit-linked funds At start of period 93.3 145.4 35.1 273.8 As part of its investment management strategy, the Group purchases derivative financial instruments Additions \u2013 acquisition of subsidiary \u2013 \u2013 \u2013 \u2013 Total gains and losses recognised in as part of its investment portfolio for unit-linked investment funds, which match the liabilities arising the income statement (2.7 ) 0.5 (6.4 ) (8.6 ) on its unit-linked insurance and investment business. Purchases 2.3 \u2013 20.5 22.8 A variety of equity futures are part of the portfolio matching the unit-linked investment and Settlements (4.8 ) \u2013 (6.0 ) (10.8 ) insurance liabilities. Derivatives are used to facilitate more efficient portfolio management allowing Exchange rate adjustment \u2013 (3.4 ) (0.8 ) (4.2 ) changes in investment strategy to be reflected by futures transactions rather than a high volume At the end of period 88.1 142.5 42.4 273.0 of transactions in the underlying assets. All the contracts in the unit-linked funds are exchange-traded futures, with their fair value being the bid price at the balance sheet date. They are, accordingly, determined at Level 1 in the three-level 31 December Carrying amount Fair value fair value determination hierarchy set out in Note E4(b). 2024 2023 2024 2023 \u00a3m \u00a3m \u00a3m \u00a3m Exchange-traded futures 2024 2023 (by geographical investment market) Asset Liability Asset Liability Financial liabilities 31 December \u00a3m \u00a3m \u00a3m \u00a3m Borrowings 200.8 200.6 166.1 148.4 Amounts due in relation to Japan \u2013 \u2013 0.2 \u2013 financial reinsurance 2.4 5.3 2.3 5.1 USA \u2013 (0.2 ) \u2013 \u2013 Term finance 1.6 2.0 1.6 1.9 Total \u2013 (0.2 ) 0.2 \u2013 Total 204.8 207.9 170.0 155.4 CHESNARAANNUALREPORTANDACCOUNTS2024197 IFRS FINANCIAL STATEMENTS SECTION E BALANCE SHEET ASSETS E5 Derivative financial instruments (continued) E7 Cash and cash equivalents Financial reinsurance embedded derivative In respect of Movestic, the Group has a reinsurance contract with a third party that has an element 31 December 2024 2023 \u00a3m \u00a3m that is deemed to transfer significant insurance risk and an element that is deemed not to transfer significant insurance risk. This assessment has been determined by management based on the Bank and cash balances 127.4 135.7 contractual terms of the reinsurance agreement. The element of the contract that does not transfer Call deposits due after 1 month 10.6 10.3 significant insurance risk has two components and has been accounted for as a financial liability at amortised cost and an embedded derivative at fair value. Total cash and cash equivalents 138.0 146.0 The embedded derivative represents an option to repay the amounts due under the contract early Bank overdrafts (0.8 ) (0.2 ) at a discount to the amortised cost, with its fair value being determined by reference to market interest rates at the balance sheet date. It is, accordingly, determined at Level 2 in the three-level Cash and cash equivalents in the statement of cash flows 137.2 145.8 fair value determination hierarchy set out in Note E4(b). Deposits are subject to a combination of fixed and variable interest rates, with an average maturity Derivatives within CA (S&P with-profits funds) of 95 days (2023: 95 days). As part of its investment management strategy, CA enters into a limited range of derivative instruments to manage its exposure to various risks. Included in cash and cash equivalents held by the Group are balances totalling \u00a369.7m (2023: \u00a352.6m) held in unit-linked policyholders\u2019 funds. CA uses equity index futures in order to economically hedge equity market risk in the with-profit funds\u2019 investments. The following tables show the changes in liabilities arising from financing activities in the year. These liabilities are measured at amortised cost. The change in fair value of the futures contracts is intended to offset the change in fair value of the underlying equities being hedged. CA settles the market value of the futures contracts on a daily 31 December Foreign basis by paying or receiving a variation margin. The futures contracts are not discounted as this daily Financing exchange Other settlement is equal to the change in fair value of the futures. As a result, there is no additional fair 1 Jan cash translation changes 31 Dec value to recognise in relation to these derivatives on the balance sheet at the year end. 2024 flows (i) differences (ii) 2024 \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m CA also purchases exchange rate futures to mitigate exchange rate risk within its with-profits funds. Tier 2 debt 200.6 (9.5 ) \u2013 9.7 200.8 These contracts are exchange-traded contracts in active markets with their fair value being the Financial reinsurance 5.3 (2.6 ) (0.7 ) 0.4 2.4 bid price at the balance sheet date. They are, accordingly, determined at Level 1 in the three-level Lease liabilities 1.2 (0.3 ) (0.3 ) \u2013 0.6 fair value determination hierarchy set out in Note E4(b). Total 207.1 (12.4 ) (1.0 ) 10.1 203.8 E6 Other assets 31 December 2024 2023 \u00a3m \u00a3m 31 December Foreign Financing exchange Other Receivables arising from investment contracts 1 Jan cash translation changes 31 Dec Reinsurers share of accrued policyholder claims 1.9 1.9 2023 flows (i) differences (ii) 2023 Receivables from policyholders 6.3 3.5 \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Commission receivables 0.1 0.1 Tier 2 debt 200.4 \u2013 \u2013 0.2 200.6 Sub-total 8.3 5.5 Financial reinsurance 9.6 (3.9 ) (0.4 ) \u2013 5.3 Lease liabilities 1.2 (0.6 ) (0.1 ) 0.7 1.2 Other receivables Accrued interest income 10.2 10.2 Total 211.2 (4.5 ) (0.5 ) 0.9 207.1 Receivables from fund management companies 3.4 3.3 Prepayments 12.5 13.7 (i) The cash flows from bank loans and other borrowings make up the net amount of proceeds from Income tax balances 21.1 16.4 borrowings and repayments of borrowings in the cash flow statement. Other 13.1 8.6 (ii) Other changes include interest accruals. Sub-total 60.3 52.2 Total 68.6 57.7 Current 66.5 54.9 Non-current 2.1 2.8 Total 68.6 57.7 198 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS SECTION F INSURANCE AND REINSURANCE CONTRACTS F1 Insurance and reinsurance contracts 31 December 2023 \u2013 restated Waard The following notes provide a quantitative analysis of the insurance and reinsurance contract Movestic Group Scildon assets and liabilities and are disaggregated by the IFRS 8 operating segments. This disaggregation (UK ) (Sweden ) (N etherlands ) (Netherlands ) Total has been chosen for the following notes because it is management\u2019s view that together with the \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m information in the underwriting risk section, it provides the most relevant information for assessing the effect that contracts within the scope of IFRS 17 have on the entity\u2019s financial performance Insurance contracts and position. Insurance contract liabilities 1,383.0 171.8 785.3 1,862.9 4,203.0 Insurance contract assets (3.9 ) \u2013 \u2013 \u2013 (3.9 ) (a) Composition of the balance sheet Net insurance The following tables show the breakdown of the insurance and reinsurance contract assets and contract liabilities 1,379.1 171.8 785.3 1,862.9 4,199.1 liabilities for each of the operating segments within Chesnara. Note A4(a)(i) provides details regarding broad product groups and measurement models. Note B2 provides details for the values Reinsurance contracts of insurance and reinsurance contracts for the broad product groups within each segment. Reinsurance contract assets 166.8 14.5 4.4 \u2013 185.7 Reinsurance contract liabilities (2. 2 ) \u2013 \u2013 (14 .9 ) (17.1 ) 31 December 2024 Waard Movestic Group Scildon Net reinsurance (UK ) (Sweden ) (N etherlands ) (Netherlands ) Total contract assets 164.6 14.5 4.4 (14.9 ) 168.6 \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Insurance contracts Current Non-current Total Insurance contract liabilities 1,308.5 174.1 720.4 1,896.1 4,099.1 \u00a3m \u00a3m \u00a3m Insurance contract assets (1.8 ) \u2013 \u2013 \u2013 (1.8 ) Insurance contract liabilities 672.1 3,530.9 4,203.0 Net insurance Insurance contract assets \u2013 (3.9 ) (3.9 ) contract liabilities 1,306.7 174.1 720.4 1,896.1 4,097.3 Reinsurance contract assets 29.1 156.6 185.7 Reinsurance contract liabilities 2.1 (19.2 ) (17.1 ) Reinsurance contracts Reinsurance contract assets 154.8 12.4 2.7 \u2013 169.9 The prior year non-current and current insurance liabilities have been restated in respect of Scildon. Reinsurance contract liabilities (2 .0 ) \u2013 \u2013 (14.6 ) (16 .6 ) (b) Fair value of underlying items Net reinsurance The following table shows the fair value of the underlying items of the Group\u2019s direct participating contract assets 152.8 12.4 2.7 (14.6 ) 153.3 contracts for each reporting segment. Current Non-current Total Waard \u00a3m \u00a3m \u00a3m Movestic Group Scildon (UK ) (Sweden ) (N etherlands ) (Netherlands ) Total Insurance contract liabilities 730.5 3,368.6 4,099.1 \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Insurance contract assets (1.8 ) \u2013 (1.8 ) Reinsurance contract assets 29.9 140.0 169.9 Fair value of underlying items Reinsurance contract liabilities 0.5 (17.1 ) (16.6 ) as at 31 December 2024 711.0 142.4 54.9 1,322.8 2,231.1 Fair value of underlying items as at 31 December 2023 816.9 132.3 65.2 1,238.7 2,253.1 Composition of underlying items The majority of the fair value of underlying items across the Group are held in collective investment schemes. A small proportion is held in equities, debt securities and in cash and deposits . CHESNARAANNUALREPORTANDACCOUNTS2024199
IFRS FINANCIAL STATEMENTS
SECTION F INSURANCE AND REINSURANCE CONTRACTS
F2 Insurance and reinsurance contracts \u2013 quantitative analysis of recognised amounts \u2013 UK
(a) Insurance contract balances \u2013 analysis by remaining coverage and incurred claims
Liabilities for
remaining coverage
Excluding Liabilities
loss Loss for incurred
component component claims Total
\u00a3m \u00a3m \u00a3m \u00a3m
Insurance contract liabilities as at 1 January 2024 1,301.1 12.4 65.6 1,379.1
Changes in the statement of profit and loss
Insurance revenue
Contracts measured under the fair value approach (58.1 ) \u2013 \u2013 (58.1 )
Contracts measured under the full retrospective approach (13.2 ) \u2013 \u2013 (13.2 )
Insurance revenue total (71.3 ) \u2013 \u2013 (71.3 )
Insurance service expenses
Incurred claims and other directly attributable expenses \u2013 (1.8 ) 62.3 60.5
Losses and reversals of losses on onerous contracts \u2013 4.4 \u2013 4.4
Insurance service expense total \u2013 2.6 62.3 64.9
Insurance service result (71.3 ) 2.6 62.3 (6.4 )
Net finance expenses from insurance contracts 98.5 0.1 \u2013 98.6
Total amounts recognised in comprehensive income 27.2 2.7 62.3 92.2
Investment components (135.7 ) \u2013 135.7 \u2013
Cash flows
Premiums received 35.3 \u2013 \u2013 35.3
Claims and other directly attributable expenses paid \u2013 \u2013 (197.7 ) (197.7 )
Acquisitions 9.7 \u2013 (11.9 ) (2.2 )
Total cash flows 45.0 \u2013 (209.6 ) (164.6 )
Insurance contract liabilities as at 31 December 2024 1,237.6 15.1 54.0 1,306.7
200 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Restated Liabilities for remaining coverage Excluding Liabilities loss Loss for incurred component component claims Total \u00a3m \u00a3m \u00a3m \u00a3m Insurance contract liabilities as at 1 January 2023 1,382.3 \u2013 65.3 1,447.6 Changes in the statement of profit and loss Insurance revenue Contracts measured under the fair value approach (57.5 ) \u2013 \u2013 (57.5 ) Contracts measured under the full retrospective approach (8.3 ) \u2013 \u2013 (8.3 ) Insurance revenue total (65.8 ) \u2013 \u2013 (65.8 ) Insurance service expenses Incurred claims and other directly attributable expenses 0.2 (2.5 ) 53.1 50.8 Losses and reversals of losses on onerous contracts \u2013 14.9 \u2013 14.9 Insurance service expense total 0.2 12.4 53.1 65.7 Insurance service result (65.6 ) 12.4 53.1 (0.1 ) Net finance expenses from insurance contracts 86.5 \u2013 \u2013 86.5 Total amounts recognised in comprehensive income 20.9 12.4 53.1 86.4 Investment components (131.0 ) \u2013 131.0 \u2013 Cash flows Premiums received 37.9 \u2013 \u2013 37.9 Claims and other directly attributable expenses paid \u2013 \u2013 (183.8 ) (183.8 ) Acquisitions (9.0 ) \u2013 \u2013 (9.0 ) Total cash flows 28.9 \u2013 (183.8 ) (154.9 ) Insurance contract liabilities as at 31 December 2023 1,301.1 12.4 65.6 1,379.1 There is no PAA business in the UK segment. Note A5(a) sets out the fair value methodology applied at transition that has been applied for the CA contracts in the UK. CHESNARAANNUALREPORTANDACCOUNTS2024201
IFRS FINANCIAL STATEMENTS
SEC SECTION TIONF F INSUR INSURANCE ANCEAND ANDREINSU REINSUR RANCE ANCECONT CONTR RA AC CTS TS
F2 Insurance and reinsurance contracts \u2013 quantitative analysis of recognised amounts \u2013 UK (continued)
(b) Insurance contract balances \u2013 analysis by measurement component \u2013 contracts not measured under PAA
CSM (new
contracts and CSM
Present value contracts (contracts
of future Risk measured measured
cash flows adjustment under FRA ) under FVA ) Total
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Insurance contract liabilities as at 1 January 2024 1,340.9 12.5 3.2 22.5 1,379.1
Changes that relate to current service
CSM recognised for services provided \u2013 \u2013 (0.1 ) (3.8 ) (3.9 )
Change in risk adjustment for non-financial risk for risk expired \u2013 (1.8 ) \u2013 \u2013 (1.8 )
Experience adjustments (5.0 ) \u2013 \u2013 \u2013 (5.0 )
Revenue recognised for incurred policyholder tax expenses \u2013 \u2013 \u2013 \u2013 \u2013
Total changes that relate to current service (5.0 ) (1.8 ) (0.1 ) (3.8 ) (10.7 )
Changes that relate to future service
Contracts initially recognised in the period (0.8 ) 0.1 0.7 \u2013 \u2013
Changes in estimates that adjust the CSM (6.2 ) (4.9 ) (2.8 ) 13.9 \u2013
Changes in estimates that result in losses or reversals of losses on onerous underlying contracts 4.3 \u2013 \u2013 \u2013 4.3
Total changes that relate to future service (2.7 ) (4.8 ) (2.1 ) 13.9 4.3
Ins u ran c e s erv i ce res ul t (7.7 ) (6 . 6 ) ( 2.2 ) 1 0 . 1 (6 .4 )
Net finance expenses from insurance contracts 96.6 1.1 0.3 0.6 98.6
Total amounts recognised in comprehensive income 88.9 (5.5 ) (1.9 ) 10.7 92.2
Cash flows
Premiums received 35.3 \u2013 \u2013 \u2013 35.3
Claims and other directly attributable expenses paid (197.7 ) \u2013 \u2013 \u2013 (197.7 )
Acquisitions (2.2 ) \u2013 \u2013 \u2013 (2.2 )
Total cash flows (164.6 ) \u2013 \u2013 \u2013 (164.6 )
Insurance contract liabilities as at 31 December 2024 1,265.2 7.0 1.3 33.2 1,306.7
The contracts initially recognised in the period relate to the acquisition of the unit-linked bond and pension portfolio from Canada Life.
202 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Restated CSM (new contracts and CSM Present value contracts (contracts of future Risk measured measured cash flows adjustment under FRA ) under FVA ) Total \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Insurance contract liabilities as at 1 January 2023 1,397.1 13.2 1.1 36.2 1,447.6 Changes that relate to current service CSM recognised for services provided \u2013 \u2013 (1.5 ) (3.1 ) (4.6 ) Change in risk adjustment for non-financial risk for risk expired \u2013 (2.0 ) \u2013 \u2013 (2.0 ) Experience adjustments (8.3 ) \u2013 \u2013 \u2013 (8.3 ) Revenue recognised for incurred policyholder tax expenses (0.1 ) \u2013 \u2013 \u2013 (0.1 ) Total changes that relate to current service (8.4 ) (2.0 ) (1.5 ) (3.1 ) (15.0 ) Changes that relate to future service Contracts initially recognised in the period (1.7 ) 0.2 1.5 \u2013 \u2013 Changes in estimates that adjust the CSM 9.0 0.5 1.8 (11.3 ) \u2013 Changes in estimates that result in losses or reversals of losses on onerous underlying contracts 14.9 \u2013 \u2013 \u2013 14.9 Total changes that relate to future service 22.2 0.7 3.3 (11.3 ) 14.9 Insurance service result 13.8 (1.3 ) 1.8 (14.4 ) (0.1 ) Net finance expenses from insurance contracts 84.9 0.6 0.3 0.7 86.5 Total amounts recognised in comprehensive income 98.7 (0.7 ) 2.1 (13.7 ) 86.4 Cash flows Premiums received 37.9 \u2013 \u2013 \u2013 37.9 Claims and other directly attributable expenses paid (183.8 ) \u2013 \u2013 \u2013 (183.8 ) Acquisitions (9.0 ) \u2013 \u2013 \u2013 (9.0 ) Total cash flows (154.9 ) \u2013 \u2013 \u2013 (154.9 ) Insurance contract liabilities as at 31 December 2023 1,340.9 12.5 3.2 22.5 1,379.1 The contracts initially recognised in the period relate to the acquisition of the term assurance portfolio from Canada Life. CHESNARAANNUALREPORTANDACCOUNTS2024203
IFRS FINANCIAL STATEMENTS
SECTION F INSURANCE AND REINSURANCE CONTRACTS
F2 Insurance and reinsurance contracts \u2013 quantitative analysis of recognised amounts \u2013 UK (continued)
(c) Reinsurance contract balances \u2013 analysis by remaining coverage and incurred claims
Assets for Assets for
remaining incurred
coverage claims Total
\u00a3m \u00a3m \u00a3m
Reinsurance contract assets as at 1 January 2024 150.8 13.8 164.6
Reinsurance expenses \u2013 allocation of reinsurance premiums paid (23.9 ) \u2013 (23.9 )
Amounts recoverable from reinsurers
Recoveries of incurred claims and other directly attributable expenses \u2013 23.0 23.0
Net (expenses)/income from reinsurance contracts held (23.9 ) 23.0 (0.9 )
Net finance expenses from reinsurance contracts 3.1 \u2013 3.1
Total amounts recognised in comprehensive income (20.8 ) 23.0 2.2
Investment components (2.8 ) 2.8 \u2013
Cash flows
Premiums paid 11.4 \u2013 11.4
Recoveries from reinsurance contracts held \u2013 (25.4 ) (25.4 )
Total cash flows 11.4 (25.4 ) (14.0 )
Reinsurance contract assets as at 31 December 2024 138.6 14.2 152.8
Assets for Assets for
remaining incurred
coverage claims Total
\u00a3m \u00a3m \u00a3m
Reinsurance contract assets as at 1 January 2023 156.6 16.0 172.6
Reinsurance expenses \u2013 allocation of reinsurance premiums paid (25.0 ) \u2013 (25.0 )
Amounts recoverable from reinsurers
Recoveries of incurred claims and other directly attributable expenses \u2013 19.5 19.5
Net (expenses)/income from reinsurance contracts held (25.0 ) 19.5 (5.5 )
Net finance expenses from reinsurance contracts 9.3 \u2013 9.3
Total amounts recognised in comprehensive income (15.7 ) 19.5 3.8
Investment components (2.6 ) 2.6 \u2013
Cash flows
Premiums paid 12.5 \u2013 12.5
Recoveries from reinsurance contracts held \u2013 (24.3 ) (24.3 )
Total cash flows 12.5 (24.3 ) (11.8 )
Reinsurance contract assets as at 31 December 2023 150.8 13.8 164.6
204 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (d) Reinsurance contract balances \u2013 analysis by measurement component \u2013 contracts not measured under PAA CSM (new contracts and CSM Present value contracts (contracts of future Risk measured measured cash flows adjustment under FRA ) under FVA ) Total \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Reinsurance contract assets as at 1 January 2024 155.6 3.0 0.4 5.6 164.6 Changes that relate to current service CSM recognised for services received \u2013 \u2013 \u2013 (0.3 ) (0.3 ) Change in risk adjustment for non-financial risk for risk expired \u2013 (0.6 ) \u2013 \u2013 (0.6 ) Experience adjustments 0.1 \u2013 \u2013 \u2013 0.1 Total changes that relate to current service 0.1 (0.6 ) \u2013 (0.3 ) (0.8 ) Changes that relate to future service Changes in estimates that adjust the CSM 0.8 \u2013 \u2013 (0.9 ) (0.1 ) Total changes that relate to future service 0.8 \u2013 \u2013 (0.9 ) (0.1 ) Net (expense)/income from reinsurance contracts held 0.9 (0.6 ) \u2013 (1.2 ) (0.9 ) Net finance income from reinsurance contracts held 3.0 \u2013 \u2013 0.1 3.1 Total amounts recognised in comprehensive income 3.9 (0.6 ) \u2013 (1.1 ) 2.2 Cash flows Premiums paid 11.3 \u2013 \u2013 \u2013 11.3 Recoveries from reinsurance contracts held (25.3 ) \u2013 \u2013 \u2013 (25.3 ) Total cash flows (14.0 ) \u2013 \u2013 \u2013 (14.0 ) Reinsurance contract assets as at 31 December 2024 145.5 2.4 0.4 4.5 152.8 CHESNARAANNUALREPORTANDACCOUNTS2024205
IFRS FINANCIAL STATEMENTS
SECTION F INSURANCE AND REINSURANCE CONTRACTS
F2 Insurance and reinsurance contracts \u2013 quantitative analysis of recognised amounts \u2013 UK (continued)
(d) Reinsurance contract balances \u2013 analysis by measurement component \u2013 contracts not measured under PAA (continued)
CSM (new
contracts and CSM
Present value contracts (contracts
of future Risk measured measured
cash flows adjustment under FRA ) under FVA ) Total
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Reinsurance contract assets as at 1 January 2023 161.1 3.1 0.5 7.9 172.6
Changes that relate to current service
CSM recognised for services received \u2013 \u2013 \u2013 (0.5 ) (0.5 )
Change in risk adjustment for non-financial risk for risk expired \u2013 (0.7 ) \u2013 \u2013 (0.7 )
Experience adjustments (4.3 ) \u2013 \u2013 \u2013 (4.3 )
Total changes that relate to current service (4.3 ) (0.7 ) \u2013 (0.5 ) (5.5 )
Changes that relate to future service
Changes in estimates that adjust the CSM 1.5 0.5 (0.1 ) (1.9 ) \u2013
Total changes that relate to future service 1.5 0.5 (0.1 ) (1.9 ) \u2013
Ne t (exp e ns e)/ i n co me fro m re in s ur an ce con tr act s hel d (2.8 ) ( 0 .2 ) (0 .1 ) (2. 4 ) ( 5.5 )
Net finance income from reinsurance contracts held 9.1 0.1 \u2013 0.1 9.3
Total amounts recognised in comprehensive income 6.3 (0.1 ) (0.1 ) (2.3 ) 3.8
Cash flows
Premiums paid 12.5 \u2013 \u2013 \u2013 12.5
Recoveries from reinsurance contracts held (24.3 ) \u2013 \u2013 \u2013 (24.3 )
Total cash flows (11.8 ) \u2013 \u2013 \u2013 (11.8 )
Reinsurance contract assets as at 31 December 2023 155.6 3.0 0.4 5.6 164.6
206 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (e) Insurance contracts recognised in the period (g) Expected recognition of CSM In the tables that follow the CSM accrues interest at the locked-in rate for GMM portfolios and at Restated current rates for VFA portfolios from the balance sheet date and is then amortised based on the 2024 2023 coverage units of the contract groups to give the timeline of the expected recognition. \u00a3m \u00a3m 31 December 2024 Insurance Reinsurance Estimates of the present value of future cash inflows (12.5 ) (7.3 ) contracts contracts \u00a3m \u00a3m Estimates of the present value of future cash outflows Claims and other insurance service expenses payable 11.7 5.6 Not later than one year 3.5 (0.3 ) Insurance acquisition cash flows \u2013 \u2013 Later than one year and not later than two years 2.5 (0.3 ) Later than two years and not later than three years 2.2 (0.3 ) Total estimates of the present value of net future cash inflows/(outflows) 11.7 5.6 Later than three years and not later than four years 2.0 (0.3 ) Later than four years and not later than five years 1.8 (0.3 ) Risk adjustment for non-financial risk 0.1 0.2 Later than five years and not later than ten years 6.6 (1.3 ) CSM 0.7 1.5 Later than ten years 16.0 (1.9 ) Losses recognised on initial recognition \u2013 \u2013 Total 34.6 (4.7 ) Insurance contracts recognised in the period relate to the acquisition of the unit-linked bond and pension business from Canada Life in the current year and the term assurance portfolio from 31 December 2023 \u2013 restated Insurance Reinsurance Canada Life in the prior year. None of the acquired portfolios were onerous at initial recognition. contracts contracts \u00a3m \u00a3m (f) Reinsurance contracts recognised in the period There are no material new insurance contracts recognised in the period for the UK. Not later than one year 3.4 (0.5 ) Later than one year and not later than two years 1.9 (0.5 ) Later than two years and not later than three years 1.9 (0.5 ) Later than three years and not later than four years 1.7 (0.4 ) Later than four years and not later than five years 1.5 (0.4 ) Later than five years and not later than ten years 5.0 (1.6 ) Later than ten years 10.3 (2.1 ) Total 25.7 (6.0 ) CHESNARAANNUALREPORTANDACCOUNTS2024207
IFRS FINANCIAL STATEMENTS
SECTION F INSURANCE AND REINSURANCE CONTRACTS
F3 Insurance and reinsurance contracts \u2013 quantitative analysis of recognised amounts \u2013 Movestic
(a) Insurance contract balances \u2013 analysis by remaining coverage and incurred claims
Liabilities for incurred claims
Contracts under PAA
Liabilities for For contracts PV of
remaining not under future Risk
coverage PAA cash flows adjustment Total
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Insurance contract liabilities as at 1 January 2024 133.5 \u2013 37.1 1.2 171.8
Changes in the statement of profit and loss
Insurance revenue
Contracts measured under the fair value approach (0.9 ) \u2013 \u2013 \u2013 (0.9 )
Contracts measured under the full retrospective approach (9.3 ) \u2013 \u2013 \u2013 (9.3 )
Insurance revenue total (10.2 ) \u2013 \u2013 \u2013 (10.2 )
Insurance service expenses
Incurred claims and other directly attributable expenses \u2013 0.6 8.2 0.1 8.9
Adjustments to liabilities for incurred claims \u2013 \u2013 (6.0 ) (0.3 ) (6.3 )
Insurance service expense total \u2013 0.6 2.2 (0.2 ) 2.6
Insurance service result (10.2) 0.6 2.2 (0.2 ) (7.6 )
Net finance expenses from insurance contracts 22.8 \u2013 \u2013 0.8 23.6
Effect of movements in exchange rates (10.1 ) \u2013 (2.5 ) (0.1 ) (12.7 )
Total amounts recognised in comprehensive income 2.5 0.6 (0.3 ) 0.5 3.3
Investment components (9.4 ) 9.4 \u2013 \u2013 \u2013
Cash flows
Premiums received 17.4 \u2013 \u2013 \u2013 17.4
Claims and other directly attributable expenses paid \u2013 (10.1 ) (8.3 ) \u2013 (18.4 )
Total cash flows 17.4 (10.1 ) (8.3 ) \u2013 (1.0 )
Insurance contract liabilities as at 31 December 2024 144.0 (0.1 ) 28.5 1.7 174.1
208 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Liabilities for incurred claims Contracts under PAA Liabilities for For contracts PV of remaining not under future Risk coverage PAA cash flows adjustment Total \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Insurance contract liabilities as at 1 January 2023 119.1 \u2013 38.2 1.6 158.9 Changes in the statement of profit and loss Insurance revenue Contracts measured under the fair value approach (0.7 ) \u2013 \u2013 \u2013 (0.7 ) Contracts measured under the full retrospective approach (10.4 ) \u2013 \u2013 \u2013 (10.4 ) Insurance revenue total (11.1 ) \u2013 \u2013 \u2013 (11.1 ) Insurance service expenses Incurred claims and other directly attributable expenses \u2013 0.6 10.3 0.1 11.0 Adjustments to liabilities for incurred claims \u2013 \u2013 (3.4 ) (0.2 ) (3.6 ) Insurance service expense total \u2013 0.6 6.9 (0.1 ) 7.4 Insurance service result (11.1 ) 0.6 6.9 (0.1 ) (3.7 ) Net finance expenses from insurance contracts 14.2 \u2013 2.0 (0.2 ) 16.0 Effect of movements in exchange rates (2.8 ) \u2013 (1.1 ) (0.1 ) (4.0 ) Total amounts recognised in comprehensive income 0.3 0.6 7.8 (0.4 ) 8.3 Investment components (6.1 ) 6.1 \u2013 \u2013 \u2013 Cash flows Premiums received 20.2 \u2013 \u2013 \u2013 20.2 Claims and other directly attributable expenses paid \u2013 (6.7 ) (8.9 ) \u2013 (15.6 ) Total cash flows 20.2 (6.7 ) (8.9 ) \u2013 4.6 Insurance contract liabilities as at 31 December 2023 133.5 \u2013 37.1 1.2 171.8 The fair value approach was applied to all insurance contracts not measured under PAA in Movestic at transition. Note A5(a) provides further details relating to fair value methodology applied for contracts in Movestic. CHESNARAANNUALREPORTANDACCOUNTS2024209
IFRS FINANCIAL STATEMENTS
SECTION F INSURANCE AND REINSURANCE CONTRACTS
F3 Insurance and reinsurance contracts \u2013 quantitative analysis of recognised amounts \u2013 Movestic (continued)
(b) Insurance contract balances \u2013 analysis by measurement component \u2013 contracts not measured under PAA
Present value
of future Risk
cash flows adjustment CSM Total
\u00a3m \u00a3m \u00a3m \u00a3m
Insurance contract liabilities as at 1 January 2024 125.4 1.1 5.0 131.5
Changes that relate to current service
CSM recognised for services provided \u2013 \u2013 (0.5 ) (0.5 )
Change in risk adjustment for non-financial risk for risk expired \u2013 (0.1 ) \u2013 (0.1 )
Experience adjustments 0.3 \u2013 \u2013 0.3
Total changes that relate to current service 0.3 (0.1 ) (0.5 ) (0.3 )
Changes that relate to future service
Changes in estimates that adjust the CSM (3.4 ) 0.2 3.3 0.1
Total changes that relate to future service (3.4 ) 0.2 3.3 0.1
Insurance service result (3.1 ) 0.1 2.8 (0.2 )
Net finance expenses from insurance contracts 22.6 \u2013 0.2 22.8
Effect of movements in exchange rates (9.5 ) (0.1 ) (0.4 ) (10.0 )
Total amounts recognised in comprehensive income 10.0 \u2013 2.6 12.6
Cash flows
Premiums received 8.1 \u2013 \u2013 8.1
Claims and other directly attributable expenses paid (10.1 ) \u2013 \u2013 (10.1 )
Total cash flows (2.0 ) \u2013 \u2013 (2.0 )
Insurance contract liabilities as at 31 December 2024 133.4 1.1 7.6 142.1
210 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Present value of future Risk cash flows adjustment CSM Total \u00a3m \u00a3m \u00a3m \u00a3m Insurance contract liabilities as at 1 January 2023 111.4 1.1 4.5 117.0 Changes that relate to current service CSM recognised for services provided \u2013 \u2013 (0.3 ) (0.3 ) Change in risk adjustment for non-financial risk for risk expired \u2013 (0.1 ) \u2013 (0.1 ) Experience adjustments 0.3 \u2013 \u2013 0.3 Total changes that relate to current service 0.3 (0.1 ) (0.3 ) (0.1 ) Changes that relate to future service Changes in estimates that adjust the CSM (0.8 ) 0.1 0.7 \u2013 Total changes that relate to future service (0.8 ) 0.1 0.7 \u2013 Insurance service result (0.5 ) \u2013 0.4 (0.1 ) Net finance expenses from insurance contracts 14.0 \u2013 0.2 14.2 Effect of movements in exchange rates (2.6 ) \u2013 (0.1 ) (2.7 ) Total amounts recognised in comprehensive income 10.9 \u2013 0.5 11.4 Cash flows Premiums received 9.8 \u2013 \u2013 9.8 Claims and other directly attributable expenses paid (6.7 ) \u2013 \u2013 (6.7 ) Total cash flows 3.1 \u2013 \u2013 3.1 Insurance contract liabilities as at 31 December 2023 125.4 1.1 5.0 131.5 CHESNARAANNUALREPORTANDACCOUNTS2024 211
IFRS FINANCIAL STATEMENTS
SECTION F INSURANCE AND REINSURANCE CONTRACTS
F3 Insurance and reinsurance contracts \u2013 quantitative analysis of recognised amounts \u2013 Movestic (continued)
(c) Reinsurance contract balances \u2013 analysis by remaining coverage and incurred claims
Contracts under PAA
Assets for incurred claims
Assets for PV of
remaining future Risk
coverage cash flows adjustment Total
\u00a3m \u00a3m \u00a3m \u00a3m
Reinsurance contract assets as at 1 January 2024 (0.6 ) 14.9 0.2 14.5
Reinsurance expenses \u2013 allocation of reinsurance (1.3 ) \u2013 \u2013 (1.3 )
Amounts recoverable from reinsurers
Recoveries of incurred claims and other directly attributable expenses \u2013 1.9 \u2013 1.9
Changes in the expected recoveries for past claims \u2013 (2.3 ) (0.1 ) (2.4 )
Net (expenses)/income from reinsurance contracts held (1.3 ) (0.4 ) (0.1 ) (1.8 )
Net finance expenses from reinsurance contracts \u2013 0.3 \u2013 0.3
Effect of movements in exchange rates \u2013 (1.0 ) \u2013 (1.0 )
Total amounts recognised in comprehensive income (1.3 ) (1.1 ) (0.1 ) (2.5 )
Cash flows
Premiums paid net of ceding commission 2.6 \u2013 \u2013 2.6
Recoveries from reinsurance contacts held \u2013 (2.2 ) \u2013 (2.2 )
Total cash flows 2.6 (2.2 ) \u2013 0.4
Reinsurance contract assets as at 31 December 2024 0.7 11.6 0.1 12.4
212 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Contracts under PAA Assets for incurred claims Assets for PV of remaining future Risk coverage cash flows adjustment Total \u00a3m \u00a3m \u00a3m \u00a3m Reinsurance contract assets as at 1 January 2023 0.3 15.2 0.3 15.8 Reinsurance expenses \u2013 allocation of reinsurance (2.5 ) \u2013 \u2013 (2.5 ) Amounts recoverable from reinsurers Recoveries of incurred claims and other directly attributable expenses \u2013 3.1 0.1 3.2 Changes in the expected recoveries for past claims \u2013 (1.2 ) (0.1 ) (1.3 ) Net (expenses)/income from reinsurance contracts held (2.5 ) 1.9 \u2013 (0.6 ) Net finance expenses from reinsurance contracts \u2013 0.8 (0.1 ) 0.7 Effect of movements in exchange rates \u2013 (0.4 ) \u2013 (0.4 ) Total amounts recognised in comprehensive income (2.5 ) 2.3 (0.1 ) (0.3 ) Cash flows Premiums paid net of ceding commission 1.6 \u2013 \u2013 1.6 Recoveries from reinsurance contacts held \u2013 (2.6 ) \u2013 (2.6 ) Total cash flows 1.6 (2.6 ) \u2013 (1.0 ) Reinsurance contract assets as at 31 December 2023 (0.6 ) 14.9 0.2 14.5 (d) Reinsurance contract balances \u2013 analysis by measurement component \u2013 31 December 2024 Insurance Reinsurance contracts not measured under PAA contracts contracts All Movestic reinsurance is measured as PAA, therefore no table is presented for analysis \u00a3m \u00a3m of reinsurance contracts by measurement component. Not later than one year 0.3 \u2013 (e) Insurance contracts recognised in the period Later than one year and not later than two years 0.3 \u2013 There are no material new insurance contracts recognised in the period for Movestic. Later than two years and not later than three years 0.3 \u2013 Later than three years and not later than four years 0.3 \u2013 Later than four years and not later than five years 0.3 (f) Reinsurance contracts recognised in the period Later than five years and not later than ten years 1.4 \u2013 There are no material new reinsurance contracts recognised in the period for Movestic. Later than ten years 4.6 \u2013 (g) Expected recognition of CSM Total 7.5 \u2013 In the tables that follow the CSM accrues interest at the locked-in rate for GMM portfolios and at current rates for VFA portfolios from the balance sheet date and is then amortised based on the coverage units of the contract groups to give the timeline of the expected recognition. 31 December 2023 Insurance Reinsurance contracts contracts \u00a3m \u00a3m Not later than one year 0.1 \u2013 Later than one year and not later than two years 0.2 \u2013 Later than two years and not later than three years 0.2 \u2013 Later than three years and not later than four years 0.2 \u2013 Later than four years and not later than five years 0.2 \u2013 Later than five years and not later than ten years 0.9 \u2013 Later than ten years 3.2 \u2013 Total 5.0 \u2013 CHESNARAANNUALREPORTANDACCOUNTS2024213
IFRS FINANCIAL STATEMENTS
SECTION F INSURANCE AND REINSURANCE CONTRACTS
F4 Insurance and reinsurance contracts \u2013 quantitative analysis of recognised amounts \u2013 Waard Group
(a) Insurance contract balances \u2013 analysis by remaining coverage and incurred claims
Liabilities for
remaining coverage
Excluding Liabilities
loss Loss for incurred
component component claims Total
\u00a3m \u00a3m \u00a3m \u00a3m
Insurance contract liabilities as at 1 January 2024 761.8 12.4 11.1 785.3
Changes in the statement of profit and loss
Insurance revenue total (29.8 ) \u2013 \u2013 (29.8)
Insurance service expenses
Incurred claims and other directly attributable expenses \u2013 (1.3 ) 29.9 28.6
Losses and reversals of losses on onerous contracts \u2013 2.8 \u2013 2.8
Insurance service expense total \u2013 1.5 29.9 31.4
Insurance service result (29.8 ) 1.5 29.9 1.6
Net finance expenses from insurance contracts 23.1 0.1 \u2013 23.2
Effect of movements in exchange rates (34.6 ) (0.6 ) (0.5 ) (35.7 )
Total amounts recognised in comprehensive income (41.3 ) 1.0 29.4 (10.9 )
Investment components (54.5 ) \u2013 54.5 \u2013
Cash flows
Premiums received 31.0 \u2013 \u2013 31.0
Claims and other directly attributable expenses paid \u2013 \u2013 (85.0 ) (85.0 )
Total cash flows 31.0 \u2013 (85.0 ) (54.0 )
Insurance contract liabilities as at 31 December 2024 697.0 13.4 10.0 720.4
214 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Liabilities for remaining coverage Excluding Liabilities loss Loss for incurred component component claims Total \u00a3m \u00a3m \u00a3m \u00a3m Insurance contract liabilities as at 1 January 2023 447.7 7.3 8.7 463.7 Changes in the statement of profit and loss Insurance revenue total (36.1 ) \u2013 \u2013 (36.1 ) Insurance service expenses Incurred claims and other directly attributable expenses \u2013 (2.1 ) 32.5 30.4 Losses and reversals of losses on onerous contracts \u2013 7.4 \u2013 7.4 Insurance service expense total \u2013 5.3 32.5 37.8 Insurance service result (36.1 ) 5.3 32.5 1.7 Net finance expenses from insurance contracts 49.4 \u2013 \u2013 49.4 Effect of movements in exchange rates (11.3 ) (0.2 ) (0.2 ) (11.7 ) Total amounts recognised in comprehensive income 2.0 5.1 32.3 39.4 Investment components (62.1 ) \u2013 62.1 \u2013 Acquisitions \u2013 estimate of the present value of future cash inflows 346.6 \u2013 \u2013 346.6 Cash flows Premiums received 27.6 \u2013 \u2013 27.6 Claims and other directly attributable expenses paid \u2013 \u2013 (92.0 ) (92.0 ) Total cash flows 27.6 \u2013 (92.0 ) (64.4 ) Insurance contract liabilities as at 31 December 2023 761.8 12.4 11.1 785.3 For the Waard Group, the full retrospective approach at transition has been applied to all insurance contracts. CHESNARAANNUALREPORTANDACCOUNTS2024215
IFRS FINANCIAL STATEMENTS
SECTION F INSURANCE AND REINSURANCE CONTRACTS
F4 Insurance and reinsurance contracts \u2013 quantitative analysis of recognised amounts \u2013 Waard Group (continued)
(b) Insurance contract balances \u2013 analysis by measurement component \u2013 contracts not measured under PAA
Present value
of future Risk
cash flows adjustment CSM Total
\u00a3m \u00a3m \u00a3m \u00a3m
Insurance contract liabilities as at 1 January 2024 699.2 7.9 78.2 785.3
Changes that relate to current service
CSM recognised for services provided \u2013 \u2013 (7.0 ) (7.0 )
Change in risk adjustment for non-financial risk for risk expired \u2013 (0.7 ) \u2013 (0.7 )
Experience adjustments 6.5 \u2013 \u2013 6.5
Total changes that relate to current service 6.5 (0.7 ) (7.0 ) (1.2 )
Changes that relate to future service
Contracts initially recognised in the period \u2013 \u2013 \u2013 \u2013
Changes in estimates that adjust the CSM (0.8 ) (3.3 ) 4.1 \u2013
Changes in estimates that result in losses or reversals of losses on onerous underlying contracts 2.7 0.1 \u2013 2.8
Total changes that relate to future service 1.9 (3.2 ) 4.1 2.8
Insurance service result 8.4 (3.9 ) (2.9 ) 1.6
Net finance expenses from insurance contracts 20.5 0.1 2.6 23.2
Effect of movements in exchange rates (31.8 ) (0.3 ) (3.6 ) (35.7 )
Total amounts recognised in comprehensive income (2.9 ) (4.1 ) (3.9 ) (10.9 )
Cash flows
Premiums received 31.0 \u2013 \u2013 31.0
Claims and other directly attributable expenses paid (85.0 ) \u2013 \u2013 (85.0 )
Total cash flows (54.0 ) \u2013 \u2013 (54.0 )
Insurance contract liabilities as at 31 December 2024 642.3 3.8 74.3 720.4
216 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Present value of future Risk cash flows adjustment CSM Total \u00a3m \u00a3m \u00a3m \u00a3m Insurance contract liabilities as at 1 January 2023 439.3 3.2 21.2 463.7 Changes that relate to current service CSM recognised for services provided \u2013 \u2013 (7.0 ) (7.0 ) Change in risk adjustment for non-financial risk for risk expired \u2013 (0.9 ) \u2013 (0.9 ) Experience adjustments 2.3 \u2013 \u2013 2.3 Total changes that relate to current service 2.3 (0.9 ) (7.0 ) (5.6 ) Changes that relate to future service Contracts initially recognised in the period (52.6 ) 6.4 46.2 \u2013 Changes in estimates that adjust the CSM (15.4 ) (2.2 ) 17.6 \u2013 Changes in estimates that result in losses or reversals of losses on onerous underlying contracts 6.7 0.6 \u2013 7.3 Total changes that relate to future service (61.3 ) 4.8 63.8 7.3 Insurance service result (59.0 ) 3.9 56.8 1.7 Net finance expenses from insurance contracts 46.6 1.0 1.8 49.4 Effect of movements in exchange rates (9.9 ) (0.2 ) (1.6 ) (11.7 ) Total amounts recognised in comprehensive income (22.3 ) 4.7 57.0 39.4 Acquisitions \u2013 estimate of the present value of future cash inflows 346.6 \u2013 \u2013 346.6 Cash flows Premiums received 27.6 \u2013 \u2013 27.6 Claims and other directly attributable expenses paid (92.0 ) \u2013 \u2013 (92.0 ) Total cash flows (64.4 ) \u2013 \u2013 (64.4 ) Insurance contract liabilities as at 31 December 2023 699.2 7.9 78.2 785.3 The contracts initially recognised in the prior year relate to the acquisition of Conservatrix . CHESNARAANNUALREPORTANDACCOUNTS2024217 IFRS FINANCIAL STATEMENTS SECTION F INSURANCE AND REINSURANCE CONTRACTS F4 Insurance and reinsurance contracts \u2013 quantitative analysis of recognised amounts \u2013 Waard Group (continued) (c) Reinsurance contract balances \u2013 analysis by remaining coverage and incurred claims Assets for Assets for remaining incurred coverage claims Total \u00a3m \u00a3m \u00a3m Reinsurance contract assets as at 1 January 2024 2.8 1.6 4.4 Reinsurance expenses \u2013 allocation of reinsurance premiums paid (4.4 ) \u2013 (4.4 ) Amounts recoverable from reinsurers Recoveries of incurred claims and other directly attributable expenses \u2013 2.4 2.4 Net (expenses)/income from reinsurance contracts held (4.4 ) 2.4 (2.0 ) Net finance expenses from reinsurance contracts \u2013 \u2013 \u2013 Effect of movements in exchange rates (0.1 ) (0.1 ) (0.2 ) Total amounts recognised in comprehensive income (4.5 ) 2.3 (2.2 ) Cash flows Premiums paid 3.5 \u2013 3.5 Recoveries from reinsurance contracts held \u2013 (3.0 ) (3.0 ) Total cash flows 3.5 (3.0 ) 0.5 Reinsurance contract assets as at 31 December 2024 1.8 0.9 2.7 Assets for Assets for remaining incurred coverage claims Total \u00a3m \u00a3m \u00a3m Reinsurance contract assets as at 1 January 2023 1.6 1.9 3.5 Reinsurance expenses \u2013 allocation of reinsurance premiums paid (3.0 ) \u2013 (3.0 ) Amounts recoverable from reinsurers Recoveries of incurred claims and other directly attributable expenses \u2013 3.4 3.4 Net (expenses)/income from reinsurance contracts held (3.0 ) 3.4 0.4 Net finance expenses from reinsurance contracts 0.1 \u2013 0.1 Total amounts recognised in comprehensive income (2.9 ) 3.4 0.5 Cash flows Premiums paid 4.1 \u2013 4.1 Recoveries from reinsurance contracts held \u2013 (3.7 ) (3.7 ) Total cash flows 4.1 (3.7 ) 0.4 Reinsurance contract assets as at 31 December 2023 2.8 1.6 4.4 For the Waard Group, the full retrospective approach at transition has been applied to all reinsurance contracts. 218 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (d) Reinsurance contract balances \u2013 analysis by measurement component \u2013 contracts not measured under PAA Present value of future Risk cash flows adjustment CSM Total \u00a3m \u00a3m \u00a3m \u00a3m Reinsurance contract assets as at 1 January 2024 3.1 0.2 1.1 4.4 Changes that relate to current service CSM recognised for services received \u2013 \u2013 \u2013 \u2013 Change in risk adjustment for non-financial risk for risk expired \u2013 (0.1 ) \u2013 (0.1 ) Experience adjustments (1.4 ) \u2013 \u2013 (1.4 ) Total changes that relate to current service (1.4 ) (0.1 ) \u2013 (1.5 ) Changes that relate to future service Changes in estimates that adjust the CSM (0.2 ) 0.1 (0.3 ) \u2013 CSM adjustment for income on initial recognition of onerous underlying contracts \u2013 \u2013 (0.5 ) (0.5 ) Total changes that relate to future service 0.2 0.1 (0.8 ) (0.5 ) Net (expense)/income from reinsurance contracts held (1.2 ) \u2013 (0.8 ) (2.0 ) Net finance income from reinsurance contracts held \u2013 \u2013 \u2013 \u2013 Effect of movements in exchange rates (0.2 ) \u2013 \u2013 (0.2 ) Total amounts recognised in comprehensive income (1.4 ) \u2013 (0.8 ) (2.2 ) Cash flows Premiums paid 3.5 \u2013 \u2013 3.5 Recoveries from reinsurance contracts held (3.0 ) \u2013 \u2013 (3.0 ) Total cash flows 0.5 \u2013 \u2013 0.5 Reinsurance contract assets as at 31 December 2024 2.2 0.2 0.3 2.7 CHESNARAANNUALREPORTANDACCOUNTS2024219
IFRS FINANCIAL STATEMENTS
SECTION F INSURANCE AND REINSURANCE CONTRACTS
F4 Insurance and reinsurance contracts \u2013 quantitative analysis of recognised amounts \u2013 Waard Group (continued)
(d) Reinsurance contract balances \u2013 analysis by measurement component \u2013 contracts not measured under PAA (continued)
Present value
of future Risk
cash flows adjustment CSM Total
\u00a3m \u00a3m \u00a3m \u00a3m
Reinsurance contract assets as at 1 January 2023 3.6 0.5 (0.6 ) 3.5
Changes that relate to current service
CSM recognised for services received \u2013 \u2013 2.2 2.2
Change in risk adjustment for non-financial risk for risk expired \u2013 (0.2 ) \u2013 (0.2 )
Experience adjustments (0.8 ) \u2013 \u2013 (0.8 )
Total changes that relate to current service (0.8 ) (0.2 ) 2.2 1.2
Changes that relate to future service
Changes in estimates that adjust the CSM (0.2 ) (0.1 ) 0.3 \u2013
CSM adjustment for income on initial recognition of onerous underlying contracts \u2013 \u2013 (0.8 ) (0.8 )
Total changes that relate to future service (0.2 ) (0.1 ) (0.5 ) (0.8 )
Net (expense)/income from reinsurance contracts held (1.0 ) (0.3 ) 1.7 0.4
Net finance income from reinsurance contracts held 0.1 \u2013 \u2013 0.1
Total amounts recognised in comprehensive income (0.9 ) (0.3 ) 1.7 0.5
Cash flows
Premiums paid 4.1 \u2013 \u2013 4.1
Recoveries from reinsurance contracts held (3.7 ) \u2013 \u2013 (3.7 )
Total cash flows 0.4 \u2013 \u2013 0.4
Reinsurance contract assets as at 31 December 2023 3.1 0.2 1.1 4.4
220 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (e) Insurance contracts recognised in the period (g) Expected recognition of CSM All insurance and reinsurance contracts recognised in 2023 are in respect of the Conservatrix In the tables that follow the CSM accrues interest at the locked-in rate for GMM portfolios and acquisition. There were no new contracts recognised in 2024. at current rates for VFA portfolios from the balance sheet date and is then amortised based on the coverage units of the contract groups to give the timeline of the expected recognition. Year Ended 31 December 2023 Non-onerous Onerous contracts contracts Total 31 December 2024 Insurance Reinsurance \u00a3m \u00a3m \u00a3m contracts contracts \u00a3m \u00a3m Estimates of the present value of future cash inflows (346.6 ) \u2013 (346.6 ) Not later than one year 4.1 (0.4 ) Estimates of the present value of future cash outflows Later than one year and not later than two years 3.7 0.4 Claims and other insurance service expenses payable 294.1 \u2013 294.1 Later than two years and not later than three years 3.5 (0.1 ) Later than three years and not later than four years 3.2 (0.1 ) Total estimates of the present value of future net outflows (52.5 ) \u2013 (52.5 ) Later than four years and not later than five years 3.0 (0.1 ) Later than five years and not later than ten years 12.2 (0.2 ) Risk adjustment for non-financial risk 6.3 \u2013 6.3 Later than ten years 44.6 \u2013 CSM 46.2 \u2013 46.2 Total 74.3 (0.5 ) Losses recognised on initial recognition \u2013 \u2013 \u2013 (f) Reinsurance contracts recognised in the period 31 December 2023 Insurance Reinsurance contracts contracts There are no new reinsurance contracts recognised in the period for Waard. \u00a3m \u00a3m Not later than one year 4.9 (1.0 ) Later than one year and not later than two years 4.4 0.6 Later than two years and not later than three years 4.0 (0.2 ) Later than three years and not later than four years 3.7 (0.1 ) Later than four years and not later than five years 3.4 (0.1 ) Later than five years and not later than ten years 13.0 (0.3 ) Later than ten years 44.8 \u2013 Total 78.2 (1.1 ) CHESNARAANNUALREPORTANDACCOUNTS2024221
IFRS FINANCIAL STATEMENTS
SECTION F INSURANCE AND REINSURANCE CONTRACTS
F5 Insurance and reinsurance contracts \u2013 quantitative analysis of recognised amounts \u2013 Scildon
(a) Insurance contract balances \u2013 analysis by remaining coverage and incurred claims
Liabilities for
remaining coverage
Excluding Liabilities
loss Loss for incurred
component component claims Total
\u00a3m \u00a3m \u00a3m \u00a3m
Insurance contract liabilities as at 1 January 2023 1,761.7 64.6 36.6 1,862.9
Changes in the statement of profit and loss
Insurance revenue total (150.6 ) \u2013 \u2013 (150.6)
Insurance service expenses
Incurred claims and other directly attributable expenses \u2013 (20.9 ) 129.6 108.7
Losses and reversals of losses on onerous contracts \u2013 32.8 \u2013 32.8
Amortisation of insurance acquisition cash flows 3.7 \u2013 \u2013 3.7
Insurance service expense total 3.7 11.9 129.6 145.2
Insurance service result (146.9 ) 11.9 129.6 (5.4)
Net finance expenses from insurance contracts 188.9 0.5 \u2013 189.4
Effect of movements in exchange rates (84.1 ) (3.3 ) (1.7 ) (89.1 )
Total amounts recognised in comprehensive income (42.1 ) 9.1 127.9 94.9
Investment components (133.2 ) \u2013 133.2 \u2013
Cash flows
Premiums received 208.2 \u2013 \u2013 208.2
Claims and other directly attributable expenses paid - \u2013 (263.1 ) (263.1 )
Insurance acquisition cash flows (6.8 ) \u2013 \u2013 (6.8 )
Total cash flows 201.4 \u2013 (263.1 ) (61.7 )
Insurance contract liabilities as at 31 December 2024 1,787.8 73.7 34.6 1,896.1
222 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Liabilities for remaining coverage Excluding Liabilities loss Loss for incurred component component claims Total \u00a3m \u00a3m \u00a3m \u00a3m Insurance contract liabilities as at 1 January 2023 1,633.1 76.3 42.0 1,751.4 Changes in the statement of profit and loss Insurance revenue total (115.0 ) \u2013 \u2013 (115.0 ) Insurance service expenses Incurred claims and other directly attributable expenses \u2013 (45.8 ) 120.9 75.1 Losses and reversals of losses on onerous contracts \u2013 35.4 \u2013 35.4 Amortisation of insurance acquisition cash flows 3.4 \u2013 \u2013 3.4 Insurance service expense total 3.4 (10.4 ) 120.9 113.9 Insurance service result (111.6 ) (10.4 ) 120.9 (1.1 ) Net finance expenses from insurance contracts 162.6 0.4 \u2013 163.0 Effect of movements in exchange rates (37.5 ) (1.7 ) (0.9 ) (40.1 ) Total amounts recognised in comprehensive income 13.5 (11.7 ) 120.0 121.8 Investment components (110.6 ) \u2013 110.6 \u2013 Cash flows Premiums received 231.3 \u2013 \u2013 231.3 Claims and other directly attributable expenses paid \u2013 \u2013 (236.0 ) (236.0 ) Insurance acquisition cash flows (5.6 ) \u2013 \u2013 (5.6 ) Total cash flows 225.7 \u2013 (236.0 ) (10.3 ) Insurance contract liabilities as at 31 December 2023 1,761.7 64.6 36.6 1,862.9 For Scildon, the full retrospective approach at transition has been applied to all insurance contracts. CHESNARAANNUALREPORTANDACCOUNTS2024223 IFRS FINANCIAL STATEMENTS SECTION F INSURANCE AND REINSURANCE CONTRACTS F5 Insurance and reinsurance contracts \u2013 quantitative analysis of recognised amounts \u2013 Scildon (continued) ( b) Insurance contract balances \u2013 analysis by measurement component \u2013 contracts not measured under PAA Present value of future Risk cash flows adjustment CSM Total \u00a3m \u00a3m \u00a3m \u00a3m Insurance contract liabilities as at 1 January 2024 1,753.1 30.2 79.6 1,862.9 Changes that relate to current service CSM recognised for services provided \u2013 \u2013 (11.0 ) (11.0) Change in risk adjustment for non-financial risk for risk expired \u2013 (2.3 ) \u2013 (2.3) Experience adjustments (24.8 ) \u2013 \u2013 (24.8) Total changes that relate to current service (24.8 ) (2.3 ) (11.0 ) (38.1 ) Changes that relate to future service Contracts initially recognised in the period (7.7 ) 1.6 8.8 2.7 Changes in estimates that adjust the CSM (7.2 ) (10.7 ) 17.9 \u2013 Changes in estimates that result in losses or reversals of losses on onerous underlying contracts 31.1 (1.1 ) \u2013 30.0 Total changes that relate to future service 16.2 (10.2 ) 26.7 32.7 Insurance service result (8.6 ) (12.5 ) 15.7 (5.4 ) Net finance expenses from insurance contracts 186.7 1.6 1.1 189.4 Effect of movements in exchange rates (83.9 ) (1.1 ) (4.1 ) (89.1 ) Total amounts recognised in comprehensive income 94.2 (12.0 ) 12.7 94.9 Cash flows Premiums received 208.2 \u2013 \u2013 208.2 Claims and other directly attributable expenses paid (263.1 ) \u2013 \u2013 (263.1 ) Insurance acquisition cash flows (6.8 ) \u2013 \u2013 (6.8 ) Total cash flows (61.7 ) \u2013 \u2013 (61.7 ) Insurance contract liabilities as at 31 December 2024 1,785.6 18.2 92.3 1,896.1 224 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Present value of future Risk cash flows adjustment CSM Total \u00a3m \u00a3m \u00a3m \u00a3m Insurance contract liabilities as at 1 January 2023 1,639.5 28.5 83.4 1,751.4 Changes that relate to current service CSM recognised for services provided \u2013 \u2013 (9.0 ) (9.0 ) Change in risk adjustment for non-financial risk for risk expired \u2013 (3.5 ) \u2013 (3.5 ) Experience adjustments (24.0 ) \u2013 \u2013 (24.0 ) Total changes that relate to current service (24.0 ) (3.5 ) (9.0 ) (36.5 ) Changes that relate to future service Contracts initially recognised in the period (11.2 ) 2.6 11.5 2.9 Changes in estimates that adjust the CSM 3.6 1.7 (5.3 ) \u2013 Changes in estimates that result in losses or reversals of losses on onerous underlying contracts 33.1 (0.6 ) \u2013 32.5 Total changes that relate to future service 25.5 3.7 6.2 35.4 Insurance service result 1.5 0.2 (2.8 ) (1.1 ) Net finance expenses from insurance contracts 159.9 2.2 0.9 163.0 Effect of movements in exchange rates (37.5 ) (0.7 ) (1.9 ) (40.1 ) Total amounts recognised in comprehensive income 123.9 1.7 (3.8 ) 121.8 Cash flows Premiums received 231.3 \u2013 \u2013 231.3 Claims and other directly attributable expenses paid (236.0 ) \u2013 \u2013 (236.0 ) Insurance acquisition cash flows (5.6 ) \u2013 \u2013 (5.6 ) Total cash flows (10.3 ) \u2013 \u2013 (10.3 ) Insurance contract liabilities as at 31 December 2023 1,753.1 30.2 79.6 1,862.9 CHESNARAANNUALREPORTANDACCOUNTS2024225
IFRS FINANCIAL STATEMENTS
SECTION F INSURANCE AND REINSURANCE CONTRACTS
F5 Insurance and reinsurance contracts \u2013 quantitative analysis of recognised amounts \u2013 Scildon (continued)
(c) Reinsurance contract balances \u2013 analysis by remaining coverage and incurred claims
Assets for
remaining coverage
Excluding Loss- Assets for
loss-recovery recovery incurred
component component claims Total
\u00a3m \u00a3m \u00a3m \u00a3m
Reinsurance contract assets as at 1 January 2024 (29.0 ) 6.2 7.9 (14.9 )
Reinsurance expenses \u2013 allocation of reinsurance premiums paid (22.7 ) \u2013 \u2013 (22.7 )
Amounts recoverable from reinsurers
Recoveries of incurred claims and other directly attributable expenses \u2013 \u2013 19.0 19.0
Changes in the loss-recovery component \u2013 (0.8 ) \u2013 (0.8 )
Net (expenses)/income from reinsurance contracts held (22.7 ) (0.8 ) 19.0 (4.5 )
Net finance expenses from reinsurance contracts (0.8 ) \u2013 \u2013 (0.8 )
Effect of movements in exchange rates 1.2 (0.3 ) (0.2 ) 0.7
Total amounts recognised in comprehensive income (22.3 ) (1.1 ) 18.8 (4.6 )
Cash flows
Premiums paid 30.8 \u2013 \u2013 30.8
Recoveries from reinsurance contracts held \u2013 \u2013 (25.9 ) (25.9 )
Total cash flows 30.8 \u2013 (25.9 ) 4.7
Reinsurance contract assets as at 31 December 2024 (20.5 ) 5.1 0.8 (14.6 )
Assets for
remaining coverage
Excluding Loss- Assets for
loss-recovery recovery incurred
component component claims Total
\u00a3m \u00a3m \u00a3m \u00a3m
Reinsurance contract assets as at 1 January 2023 (28.4 ) 4.5 8.7 (15.2 )
Reinsurance expenses \u2013 allocation of reinsurance premiums paid (21.8 ) \u2013 \u2013 (21.8 )
Amounts recoverable from reinsurers
Recoveries of incurred claims and other directly attributable expenses \u2013 \u2013 17.3 17.3
Changes in the loss-recovery component \u2013 1.8 \u2013 1.8
Net (expenses)/income from reinsurance contracts held (21.8 ) 1.8 17.3 (2.7 )
Net finance expenses from reinsurance contracts (3.4 ) \u2013 \u2013 (3.4 )
Effect of movements in exchange rates 0.6 (0.1 ) (0.2 ) 0.3
Total amounts recognised in comprehensive income (24.6 ) 1.7 17.1 (5.8 )
Cash flows
Premiums paid 24.0 \u2013 \u2013 24.0
Recoveries from reinsurance contracts held \u2013 \u2013 (17.9 ) (17.9 )
Total cash flows 24.0 \u2013 (17.9 ) 6.1
Reinsurance contract assets as at 31 December 2023 (29.0 ) 6.2 7.9 (14.9 )
For Scildon, the full retrospective approach at transition has been applied to all reinsurance contracts.
226 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (d) Reinsurance contract balances \u2013 analysis by measurement component \u2013 contracts not measured under PAA Present value of future Risk cash flows adjustment CSM Total \u00a3m \u00a3m \u00a3m \u00a3m Reinsurance contract assets as at 1 January 2024 (51.8 ) 12.0 24.9 (14.9 ) Changes that relate to current service CSM recognised for services received \u2013 \u2013 (3.1 ) (3.1 ) Change in risk adjustment for non-financial risk for risk expired \u2013 (0.9 ) \u2013 (0.9 ) Experience adjustments (0.1 ) \u2013 \u2013 (0.1 ) Total changes that relate to current service (0.1 ) (0.9 ) (3.1 ) (4.1 ) Changes that relate to future service Contracts initially recognised in the period (2.3 ) 0.5 1.9 0.1 Changes in estimates that adjust the CSM (1.4 ) (4.1 ) 4.0 (1.5 ) CSM adjustment for income on initial recognition of onerous underlying contracts \u2013 \u2013 0.5 0.5 Changes in recoveries of losses on onerous underlying contracts that adjust the CSM \u2013 \u2013 0.5 0.5 Total changes that relate to future service (3.7 ) (3.6 ) 6.9 (0.4 ) Net (expense)/income from reinsurance contracts held (3.8 ) (4.5 ) 3.8 (4.5 ) Net finance income from reinsurance contracts held (1.8 ) 0.6 0.4 (0.8 ) Effect of movements in exchange rates 2.4 (0.5 ) (1.2 ) 0.7 Total amounts recognised in comprehensive income (3.2 ) (4.4 ) 3.0 (4.6 ) Cash flows Premiums paid 30.8 \u2013 \u2013 30.8 Recoveries from reinsurance contracts held (25.9 ) \u2013 \u2013 (25.9 ) Total cash flows 4.9 \u2013 \u2013 4.9 Reinsurance contract assets as at 31 December 2024 (50.1 ) 7.6 27.9 (14.6 ) CHESNARAANNUALREPORTANDACCOUNTS2024227
IFRS FINANCIAL STATEMENTS
SECTION F INSURANCE AND REINSURANCE CONTRACTS
F5 Insurance and reinsurance contracts \u2013 quantitative analysis of recognised amounts \u2013 Scildon (continued)
(d) Reinsurance contract balances \u2013 analysis by measurement component \u2013 contracts not measured under PAA (continued)
Present value
of future Risk
cash flows adjustment CSM Total
\u00a3m \u00a3m \u00a3m \u00a3m
Reinsurance contract assets as at 1 January 2023 (52.1 ) 10.7 26.2 (15.2 )
Changes that relate to current service
CSM recognised for services received \u2013 \u2013 (2.7 ) (2.7 )
Change in risk adjustment for non-financial risk for risk expired \u2013 (1.3 ) \u2013 (1.3 )
Experience adjustments (1.0 ) \u2013 \u2013 (1.0 )
Total changes that relate to current service (1.0 ) (1.3 ) (2.7 ) (5.0 )
Changes that relate to future service
Contracts initially recognised in the period (3.1 ) 0.9 2.2 \u2013
Changes in estimates that adjust the CSM 1.5 1.3 (2.8 ) \u2013
CSM adjustment for income on initial recognition of onerous underlying contracts \u2013 \u2013 0.5 0.5
Changes in recoveries of losses on onerous underlying contracts that adjust the CSM \u2013 \u2013 1.8 1.8
Total changes that relate to future service (1.6 ) 2.2 1.7 2.3
Net (expense)/income from reinsurance contracts held (2.6 ) 0.9 (1.0 ) (2.7 )
Net finance income from reinsurance contracts held (4.3 ) 0.6 0.3 (3.4 )
Effect of movements in exchange rates 1.1 (0.2 ) (0.6 ) 0.3
Total amounts recognised in comprehensive income (5.8 ) 1.3 (1.3 ) (5.8 )
Cash flows
Premiums paid 24.0 \u2013 \u2013 24.0
Recoveries from reinsurance contracts held (17.9 ) \u2013 \u2013 (17.9 )
Total cash flows 6.1 \u2013 \u2013 6.1
Reinsurance contract assets as at 31 December 2023 (51.8 ) 12.0 24.9 (14.9 )
228 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (e) Insurance contracts recognised in the period (f) Reinsurance contracts recognised in the period Year Ended 31 December 2024 Non-onerous Onerous 2024 2023 contracts contracts Total \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Estimates of the present value of future cash inflows 11.2 12.5 Estimates of the present value of future cash inflows (92.5 ) (40.1 ) (132.6 ) Estimates of the present value of future cash outflows (13.6 ) (15.6 ) Risk adjustment for non-financial risk 0.5 0.9 Estimates of the present value of future cash outflows CSM 1.9 2.2 Claims and other insurance service expenses payable 1.2 1.0 2.2 Insurance acquisition cash flows 81.6 41.2 122.8 Total value of reinsurance contracts recognised in the period \u2013 \u2013 Total estimates of the present value of future cash outflows 82.8 42.2 125.0 All reinsurance contracts above are in respect of new business written and all contract groups were originally in a net cost position. Risk adjustment for non-financial risk 1.0 0.6 1.6 CSM 8.7 \u2013 8.7 (g) Expected recognition of CSM In the tables that follow the CSM accrues interest at the locked-in rate for GMM portfolios and at Losses recognised on initial recognition \u2013 2.7 2.7 current rates for VFA portfolios from the balance sheet date and is then amortised based on the coverage units of the contract groups to give the timeline of the expected recognition. Year Ended 31 December 2023 Non-onerous Onerous 31 December 2024 Insurance Reinsurance contracts contracts Total contracts contracts \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Estimates of the present value of future cash inflows (113.1 ) (46.2 ) (159.3 ) Not later than one year 9.4 (2.6 ) Later than one year and not later than two years 8.6 (2.4 ) Estimates of the present value of future cash outflows Later than two years and not later than three years 7.9 (2.2 ) Claims and other insurance service expenses payable 98.3 47.3 145.6 Later than three years and not later than four years 7.2 (2.1 ) Insurance acquisition cash flows 1.4 1.0 2.4 Later than four years and not later than five years 6.6 (1.9 ) Later than five years and not later than ten years 24.5 (7.7 ) Total estimates of the present value of future cash outflows 99.7 48.3 148.0 Later than ten years 28.1 (9.0 ) Risk adjustment for non-financial risk 1.9 0.8 2.7 Total 92.4 (27.9 ) CSM 11.5 \u2013 11.5 Losses recognised on initial recognition \u2013 2.9 2.9 31 December 2023 Insurance Reinsurance All insurance contracts above are in respect of new business written. contracts contracts \u00a3m \u00a3m Not later than one year 8.1 (2.3 ) Later than one year and not later than two years 7.5 (2.1 ) Later than two years and not later than three years 6.9 (2.0 ) Later than three years and not later than four years 6.3 (1.9 ) Later than four years and not later than five years 5.7 (1.7 ) Later than five years and not later than ten years 21.1 (6.9 ) Later than ten years 24.0 (8.0 ) Total 79.6 (24.9 ) CHESNARAANNUALREPORTANDACCOUNTS2024229
IFRS FINANCIAL STATEMENTS
SECTION G BALANCE SHEET LIABILITIES
G1 Other provisions
G2 Lease liabilities
The Group leases several assets including office buildings and an immaterial amount of office and
2024 2023
IT equipment and motor vehicles.
\u00a3m \u00a3m
Maturity analysis Carrying
Balance at I January 23.2 8.7
31 December 2024 value 0-1 year 1-2 years 2-5 years Total
Additions \u2013 Arising on acquisition \u2013 12.3
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Charge in the year 0.7 7.1
Amounts utilised during the year (3.0 ) (4.8 )
Non-investment property 0.6 0.3 0.1 0.2 0.6
Foreign exchange translation difference (0.6 ) (0.1 )
Total 0.6 0.3 0.1 0.2 0.6
Balance at 3I December 20.3 23.2
Current 0.3
The other provisions balance includes the following significant items:
Non-current 0.3
(i) Liabilities acquired as part of the Conservatrix acquisition
Total 0.6
The contracts acquired in the acquisition of Conservatrix by Waard Leven in the prior year include
\u00a312.5m as at 31 December 2024 (31 December 2023: \u00a312.6m) of liabilities relating to obligations
to former employees of Conservatrix under a now closed defined benefit pension scheme.
Maturity analysis Carrying
The liabilities are valued under IAS 19.
31 December 2023 value 0-1 year 1-2 years 2-5 years Total
The pension scheme is closed to new entrants with no further benefits accruing and as such the
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
exposure for Waard Leven is limited to the longevity risk of the contracts. Waard Leven is regulated
Non-investment property 1.2 0.6 0.3 0.3 1.2
by De Nederlandsche Bank (DNB) and the Netherlands Authority for financial markets. As such,
there is no requirement to hold plan assets against these liabilities, instead the liabilities are assessed
Total 1.2 0.6 0.3 0.3 1.2
as part of the SII requirements and as a result of this assessment there are considered to be
sufficient general account assets to meet the obligation related to these pension policies.
Current 0.6
Non-current 0.6
(ii) Provision established for the costs associated with outsourced UK administration services
During 2023, Chesnara initiated a Transition and Transformation (T&T) programme in respect of its
Total 1.2
UK business. This programme includes activities and costs related to both (i) the integration of
the acquired CASLP and Canada Life businesses into the standard UK model and (ii) the restructure
of the administration outsourcing arrangements for the rest of the legacy UK business, including
G3 Borrowings
the migration of the policies onto a new platform architecture with SS&C.
Group 2024 2023
An ongoing assessment of the proposed project costs at 31 December 2024 has been conducted
31 December \u00a3m \u00a3m
in accordance with the requirements of IAS 37 and as a result of this assessment a provision of \u00a32.9m
is held in the balance sheet (31 December 2023: \u00a34.6m). The timing of the outflow of economic
Tier 2 debt 200.8 200.6
benefits is subject to the phased delivery of the programme, however as the majority of the costs
Amount due in relation to financial reinsurance 2.4 5.3
provided for are in respect of contractual obligations with third parties, then the amount is not
Term finance 1.6 2.0
expected to material change due to any required rephasing.
Total 204.8 207.9
There are also provisions at the year end relating to the mis-selling of contracts in the UK \u00a31.9m
(31 December 2023: \u00a32.7m).
Current 1.4 2.8
Non-current 203.4 205.1
Total 204.8 207.9
The fair value of amounts due in relation to Tier 2 debt at 31 December 2024 was \u00a3166.1m
(31 December 2023: \u00a3148.0m).
The fair value of amounts due in relation to financial reinsurance at 31 December 2024 was \u00a32.3m
(31 December 2023: \u00a35.1m).
Term finance comprises capital amounts outstanding on mortgage bonds taken out over properties
held in the unit-linked policyholder funds in the UK. The mortgage over each such property is
negotiated separately, varies in term from 5 to 20 years, and bears interest at fixed or floating rates
that are agreed at the time of inception of the mortgage. The fair value of the term finance is not
materially different to the carrying value shown above.
230 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS G4 Deferred tax assets and liabilities 31 December 2022 Credit/ Recognised 2023 Deferred tax assets and liabilities comprise: Assets / (charge ) through Assets / (liabilities ) in year equity (liabilities ) 31 December 2024 2023 \u00a3m \u00a3m \u00a3m \u00a3m Asset Liability Asset Liability \u00a3m \u00a3m \u00a3m \u00a3m Deferred acquisition costs 1.5 (0.5 ) \u2013 1.0 Deferred income 0.5 (0.1 ) \u2013 0.4 Net deferred tax liabilities: Acquired value in-force (33.6 ) 19.6 \u2013 (14.0 ) UK and other Group activities 1.6 (24.7 ) 16.0 (24.3 ) Property, plant and equipment 0.1 \u2013 \u2013 0.1 Movestic \u2013 \u2013 \u2013 \u2013 Tax losses on pensions business 1.2 (0.1 ) \u2013 1.1 Waard Group 34.5 \u2013 35.0 \u2013 Unrealised and deferred investment gains (13.7 ) (9.5 ) \u2013 (23.2 ) Scildon 2.8 \u2013 3.6 \u2013 Excess expenses of management 12.5 14.4 \u2013 26.9 Share-based payments 0.9 0.1 \u2013 1.0 Total 38.9 (24.7 ) 54.6 (24.3 ) Right-of-use assets/lease liabilities 0.1 (0.1 ) \u2013 \u2013 Tax losses 4.7 (4.5 ) \u2013 0.2 Current \u2013 \u2013 \u2013 \u2013 Difference in IFRS 4 and IFRS 17 reserves (3.1 ) 1.3 \u2013 (1.8 ) Non-current 38.9 (24.7 ) 54.6 (24.3 ) Total (28.9 ) 20.6 \u2013 (8.3 ) Total 38.9 (24.7 ) 54.6 (24.3 ) Comprising: Net deferred tax liabilities (28.9 ) 20.6 \u2013 (8.3 ) (a) CA and other Group activities: Recognised deferred tax assets and liabilities Total (28.9 ) 20.6 \u2013 (8.3 ) 31 December 2023 Credit/ Recognised 2024 Assets / (charge ) through Assets / On 31 December 2023, the long-term business of CASLP, along with the majority of the assets of (liabilities ) in year equity (liabilities ) the Company were transferred into CA via a Business Transfer Scheme under Part VII of the Financial \u00a3m \u00a3m \u00a3m \u00a3m Services and Markets Act 2000. Consequently, previously unrecognised losses (excess expenses of management) of CA have been recognised as deferred tax assets at 31 December 2023. This has Deferred acquisition costs 1.0 (0.3 ) \u2013 0.7 Deferred income 0.4 (0.1 ) \u2013 0.3 resulted in a \u00a311.9m additional deferred tax asset being recognised at the balance sheet date. Acquired value in-force (14.0 ) 2.3 \u2013 (11.7 ) The 2024 IFRS 17 transitional adjustment liability is inclusive of a prior year adjustment of \u00a30.4m Property, plant and equipment 0.1 \u2013 \u2013 0.1 following refinement of this calculation on submission of the 2023 tax computation. Tax losses on pensions business 1.1 0.4 \u2013 1.5 Unrealised and deferred investment gains (23.2 ) (10.3 ) \u2013 (33.5 ) The Finance Act 2021 increased the rate of corporation tax from 19% to 25% from 1 April 2023. Excess expenses of management and The enacted tax rate of 25% has been used in the calculation of UK deferred tax assets and liabilities recognised trade losses 26.9 (6.5 ) \u2013 20.4 where relevant, being the rate of corporation tax that is expected to apply when the majority of Share-based payments 1.0 \u2013 0.5 1.5 those deferred tax balances reverse. Tax losses 0.2 (0.2 ) \u2013 \u2013 IFRS 17 transitional adjustment (1.8 ) (0.6 ) \u2013 (2.4 ) Deferred tax balances have been updated to reflect changes to equity on transition to IFRS 17. The tax rate applied is that which is expected at the time of realisation. Total (8.3 ) (15.3 ) 0.5 (23.1) The deferred tax (charge)/credit to the Consolidated Statement of Comprehensive Income for the Comprising: year is classified as follows: Net deferred tax liabilities (8.3 ) (15.3 ) 0.5 (23.1) Year ended 31 December 2024 2023 Total (8.3 ) (15.3 ) 0.5 (23.1) \u00a3m \u00a3m Income tax (charge)/credit (15.3 ) 20.7 (b) CA and other Group activities: Items for which no deferred tax asset is recognised 31 December 2024 2023 \u00a3m \u00a3m Tax losses on pensions business 12.8 20.7 Trade losses 53.5 28.7 Total 66.3 49.4 CHESNARAANNUALREPORTANDACCOUNTS2024231
IFRS FINANCIAL STATEMENTS
SECTION G BALANCE SHEET LIABILITIES
G4 Deferred tax assets and liabilities (continued)
(b) CA and other group activities: Items for which no deferred tax asset is recognised (continued)
A deferred tax asset has not been recognised in respect of trading losses due to the uncertainty of future trading profits against which the losses could be offset.
There are no aggregate temporary differences arising on the acquisition of subsidiaries or associated undertakings, for which deferred tax has not been recognised.
(c) Movestic: Recognised deferred tax assets and liabilities
As at the balance sheet date, Movestic had a recognised deferred tax liability of \u00a3Nil (31 December 2023: \u00a3Nil), in respect of fair value adjustments arising upon acquisition. Unrecognised deferred tax assets
were \u00a3Nil at the balance sheet date in respect of corporation tax recoverable (31 December 2023: \u00a3Nil).
(d) Waard Group: Recognised deferred tax assets and liabilities
31 December Foreign
2023 Credit / exchange 2024
Assets / Arising on (charge ) translation Assets /
(liabilities ) acquisition in year difference (liabilities )
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Fair value adjustments on acquisition 27.1 \u2013 (26.5 ) (0.6 ) \u2013
Defined benefit scheme obligations 1.2 \u2013 (0.1 ) (0.1 ) 1.0
Valuation differences 1.0 \u2013 10.2 (0.2 ) 11.0
Valuation differences on investments 5.7 \u2013 17.5 (0.7 ) 22.5
Total 35.0 \u2013 1.1 (1.6 ) 34.5
Comprising:
Net deferred tax asset 40.0 \u2013 (3.8 ) (1.7 ) 34.5
Net deferred tax liabilities (5.0 ) \u2013 4.9 0.1 \u2013
Total 35.0 \u2013 1.1 (1.6 ) 34.5
31 December Foreign
2022 Credit / exchange 2023
Assets / Arising on (charge ) translation Assets /
(liabilities ) acquisition in year difference (liabilities )
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Fair value adjustments on acquisition 2.1 28.9 (3.8 ) (0.1 ) 27.1
Defined benefit scheme obligations \u2013 1.1 0.1 \u2013 1.2
Valuation differences 2.0 \u2013 (0.9 ) (0.1 ) 1.0
Valuation differences on investments \u2013 5.8 (0.1 ) \u2013 5.7
Total 4.1 35.8 (4.7 ) (0.2 ) 35.0
Comprising:
Net deferred tax asset 4.1 35.8 0.1 \u2013 40.0
Net deferred tax liabilities \u2013 \u2013 (4.8 ) (0.2 ) (5.0 )
Total 4.1 35.8 (4.7 ) (0.2 ) 35.0
232 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (e) Scildon: Recognised deferred tax assets and liabilities 31 December Foreign 2023 (Charge) / Recognised exchange 2024 Assets / credit through translation Assets / (liabilities ) in year equity difference (liabilities ) \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Deferred acquisition costs 6.1 \u2013 \u2013 (0.3 ) 5.8 Revaluation of buildings and investment properties (0.7 ) (0.1 ) \u2013 \u2013 (0.8 ) Valuation differences on technical provisions (30.4 ) (0.3 ) \u2013 1.4 (29.3 ) Valuation differences on investments at fair value through profit and loss 23.0 (5.9 ) \u2013 (0.9 ) 16.2 Non-compensable losses within fiscal unity 5.6 4.3 1.3 (0.4 ) 10.8 Total 3.6 (2.0 ) 1.3 (0.2 ) 2.7 Comprising: Net deferred tax assets 10.5 5.5 1.3 (0.6 ) 16.7 Net deferred tax liabilities (6.9 ) (7.5 ) \u2013 0.5 13.9 Total 3.6 (2.0 ) 1.3 (0.2 ) 2.7 31 December Foreign 2022 (Charge) / Recognised exchange 20243 Assets / credit through translation Assets / (liabilities ) in year equity difference (liabilities ) \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Deferred acquisition costs 6.1 0.1 \u2013 (0.1 ) 6.1 LAT reserve (1.8 ) 1.8 \u2013 \u2013 \u2013 Revaluation of buildings and investment properties (0.8 ) (0.1 ) \u2013 0.2 (0.7 ) Valuation differences on technical provisions (35.5 ) 4.3 \u2013 0.8 (30.4 ) Valuation differences on investments at fair value through profit and loss 36.9 (13.0 ) \u2013 (0.9 ) 23.0 Non-compensable losses within fiscal unity \u2013 \u2013 \u2013 5.6 5.6 Total 4.9 (6.9 ) \u2013 5.6 3.6 Comprising: Net deferred tax assets 4.9 \u2013 \u2013 5.6 10.5 Net deferred tax liabilities \u2013 (6.9 ) \u2013 \u2013 (6.9 ) Total 4.9 (6.9 ) \u2013 5.6 3.6 CHESNARAANNUALREPORTANDACCOUNTS2024233 IFRS FINANCIAL STATEMENTS SECTION G BALANCE SHEET LIABILITIES G5 Deferred income G6 Other current liabilities 31 December 2024 2023 31 December Restated \u00a3m \u00a3m 2024 2023 \u00a3m \u00a3m Balance at 1 January 2.8 3.5 Release to income (0.2 ) (0.6 ) Reinsurance payables Settlements (1.3 ) \u2013 Payables in respect of investment contracts 0.6 0.9 Foreign exchange translation difference \u2013 (0.1 ) Liabilities for assets withheld 40.0 45.5 Reinsurers share of deferred acquisition costs and claims deposits 0.1 0.1 Balance at 31 December 1.3 2.8 Sub-total 40.7 46.5 Current 0.2 0.2 Non-current 1.1 2.6 Payables related to investment contracts Accrued claims 21.0 19.9 Total 1.3 2.8 Policyholder liabilities 3.7 2.6 The release to income is included in fees and commission income (see Note D3). These are Sub-total 24.7 22.5 initial fees that relate to future provision of services that are deferred and amortised over the Other payables anticipated period. Accrued expenses 13.4 13.9 VAT 0.3 0.2 Employee tax 2.3 2.1 Other 21.8 27.7 Sub-total 37.8 43.9 Income taxes 26.5 18.8 Total 129.7 131.7 Current 74.5 131.7 Non-current 55.2 \u2013 Total 129.7 131.7 The carrying value of other payables is a reasonable approximation of fair value. 234 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS SECTION H SHAREHOLDER EQUITY H1 Share capital and share premium H3 Retained earnings Group 2024 2023 Group 2023 2023 31 December Number Share Number Share Year ended 31 December \u00a3m \u00a3m of shares capital of shares capital issued \u00a3m issued \u00a3m Retained earnings attributable to equity holders of the Parent Company comprise: Share capital 150,991,019 7.5 150,849,587 7.5 Balance at 1 January 167.0 183.1 Profit/(loss) for the year 3.9 18.6 Share-based payment 2.1 0.7 Share Share Dividends premium premium Final approved and paid for 2022 \u2013 (22.8 ) \u00a3m \u00a3m Interim approved and paid for 2023 \u2013 (12.6 ) Final approved and paid for 2023 (23.5 ) \u2013 142.5 142.5 Interim approved and paid for 2024 (13.0 ) \u2013 Balance at 31 December 136.5 167.0 Merger Merger reserve reserve The interim dividend in respect of 2023, approved and paid in 2023, was paid at the rate of 8.36p \u00a3m \u00a3m per share. The final dividend in respect of 2023, approved and paid in 2024, was paid at the rate of 15.61p per share so that the total dividend paid to the equity shareholders of the Parent Company 36.3 36.3 in respect of the year ended 31 December 2023 was made at the rate of 23.97p per share. The number of shares in issue at the balance sheet date included Nil shares held in treasury The interim dividend in respect of 2024, approved and paid in 2024, was paid at the rate of 8.61p (31 December 2023: Nil). per share to equity shareholders of the Parent Company registered at the close of business on 20 September 2024, the dividend record date. The merger reserve is for presentation purposes only in order to show the correct share capital of Chesnara plc following the reverse acquisition in 2004. A final dividend of 16.08p per share in respect of the year ended 31 December 2024 payable on 20 May 2025 to equity shareholders of the Parent Company registered at the close of business on H2 Other reserves 4 April 2025, the dividend record date, was approved by the directors after the balance sheet date. The resulting total final dividend of \u00a323.5m has not been provided for in these financial statements Group 2024 2023 and there are no income tax consequences. 31 December \u00a3m \u00a3m The following summarises dividends per share in respect of the year ended 31 December 2023 and Capital redemption reserve 0.1 0.1 31 December 2024: Foreign exchange translation differences (9.4 ) 5.9 Other items of comprehensive income 0.9 0.5 Year ended 31 December 2024 2023 P P Balance at 31 December (8.4 ) 6.5 Interim \u2013 approved and paid 8.61 8.36 The foreign exchange translation reserve represents the cumulative impact of exchange differences Final \u2013 proposed/paid 16.08 15.61 arising on translation of the financial results of Movestic, Scildon and Waard to sterling, with these Total 24 .6 9 2 3 . 97 exchange differences reported as other comprehensive income within each reporting period. The movement in the year is due to the strengthening of sterling against the euro and Swedish krona. CHESNARAANNUALREPORTANDACCOUNTS2024235 IFRS FINANCIAL STATEMENTS SECTION I ADDITIONAL DISCLOSURES I1 Employee benefit expense, including directors Year ended 31 December Waard Other Group UK Movestic Group Scildon activities 2024 2023 \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Wages and salaries 3.6 7.8 4.0 8.2 8.5 32.1 31.0 Social security costs 0.6 2.9 0.4 1.1 1.2 6.2 5.8 Pension costs-defined contribution plans 0.4 1.7 0.5 1.2 1.0 4.8 4.4 Total 4.6 12.4 4.9 10.5 10.7 43.1 41.2 Monthly average number of employees Company 82 62 Subsidiaries 273 325 Total 355 387 Directors Under the Company\u2019s new defined contribution scheme, Scildon pays a contribution to the The Directors\u2019 Remuneration Report and Note I2 provides detail of compensation to directors of scheme and subsequently has no further financial obligations with respect to this part of the scheme. the Company. This contribution is recognised as an expense when paid. UK Movestic UK-based employees are all employed by Chesnara plc. The Swedish business participates in a combined defined benefit and defined contribution scheme operated by F\u00f6rs\u00e4kringsbranschens Pensionskassa, \u2018FPK\u2019. (the Scheme). The Scheme is At the end of May 2005, the Group allowed eligible employees to enter a pension scheme known as a multi-employer scheme with participants including other Swedish insurance companies not the Chesnara plc Stakeholder Scheme, on a basis where employer contributions are made to the related to the Group. The Scheme provides, for those born in 1971 or earlier, benefits to employees Scheme at the same rate as would be payable had their membership of their predecessor scheme which are linked to their final salary and to the amount of time working for companies which continued, provided that employee contributions also continued to be made at the same rate. The are members of the Scheme. For those employees born in 1972 or later, the Scheme operates employee may opt to request the Company to pay employer contributions into a personal pension on a defined contribution basis. plan, in which instance, employer contributions will be made on the same terms as for the Chesnara plc Stakeholder Scheme. Assets and liabilities are held on a pooled basis and are not allocated by the Trustee to any individual company. Consequently, reliable information is not available to account for the Scheme as a The Group has, for the period covered by these financial statements, only made contributions to defined benefit scheme and therefore, in accordance with IAS 19 Employee Benefits, the Scheme defined contribution plans to provide pension benefits for employees upon retirement and, otherwise, is accounted for as a defined contribution scheme. has no residual obligation or commitments in respect of any defined benefit scheme. Contributions to the Scheme are based on the funding recommendations of the independent The Group has established frameworks for approved and unapproved discretionary share option qualified actuary: the contributions paid to the Scheme subsequent to the acquisition of the Swedish plans which may, at the discretion of the Remuneration Committee, be utilised for granting options business on 23 July 2009 and up to 31 December 2023, totalled \u00a35.4m (SEK 74.2m). to executive directors and to other Group employees. Options have been granted to executive directors in the period, in relation to the share-based payment components of the new executive During 2024 further contributions of \u00a30.4m were made. incentive schemes that was introduced under the 2014 terms. Further details can be found in the The employers within the Scheme are collectively responsible for the funding of the Scheme as a Directors\u2019 Remuneration Report section and in Note I2. whole and therefore in the event that other employers exit from the Scheme, remaining employers Waard would be responsible for the ongoing funding. The collective nature of the Scheme results in all The Waard business participates in a defined contribution scheme. As a result of the Conservatrix participating entities sharing the actuarial risk associated with the Scheme. acquisition, Waard Leven assumed the obligations under a defined benefit pension scheme for F\u00f6rs\u00e4kringsbranschens Pensionskassa, \u2018FPK\u2019, issues an audited Annual Report (under Swedish a small number of former Conservatrix employees. This scheme is closed to new entrants with no law-limited IFRS) each year. The last available published report was as at 31 December 2022. further benefits accruing and as such the exposure for Waard Leven is limited to the longevity risk of the contracts. The liability is valued under IAS 19 and reported under \u2018Other provisions\u2019 in the The Annual Report states that the Scheme\u2019s surplus is \u00a3260.1m (\u00a3339.3m as at 31 December 2023). balance sheet. As at 31 December 2023, the fund had assets under management of \u00a31.3bn (31 December 2022: Scildon \u00a31.3bn). During 2023 there were 97 (2022: 97) employer insurance companies participating in the Scildon operated a defined benefit pension scheme for the benefit of its present and past employees. Scheme and 22,000 (31 December 2022: 22,000) insured individuals. From the available information, This scheme was closed during 2019 and transferred into a defined contribution scheme. From it cannot be determined with certainty as to whether there would be a change in the required 1 October 2019, Scildon no longer bears any risks relating to the funding of the plan and all pension employer funding rate, although there is currently no deficit in the Scheme. assets were transferred to another administrator in 2020. Until that point, Scildon continued to bear only the fund administration costs. 236 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS I2 Share-based payments (b) 2024 award made under the Long-Term Incentive Plan (LTIP) The Group issues equity-settled share-based payments to the executive directors and members of In 2024, the Group granted 708,094 Nil priced share options with a vesting period of 3 years. the senior management team based on the 2014 terms. Equity settled share-based payments are These awards were subject to performance conditions tied to the Company\u2019s financial performance measured at fair value at the date of the grant, and expensed on a straight-line over the vesting in respect of growth in Economic Value, Commercial Cash Generation and Total Shareholder period, based on the Group\u2019s estimate of shares that will eventually vest. The bonus scheme consists Return (TSR). of two components: The fair value of the non-market base condition was determined to be 150.26p, which was the average (a) Short-Term Incentive Scheme (STIS) weighted share price as at the grant date of the options. (b) Long-Term Incentive Plan (LTIP) Details of the share options outstanding during the year are as follows: The STIS is based upon a 1 year performance period measured against cash generation, EcV Earnings 2024 Long-Term Incentive Plan (LTIP) 2024 and strategic Group objectives. In relation to 2024, upon meeting the necessary performance Weighted targets, the Company granted an award in the form of a right to receive a cash amount of up to average 100% of the gross salary. In the event that the gross cash payment due is greater than \u00a320,000, Options exercise a mandatory 35% of the cash award was deferred into shares, which had a vesting period of 3 years. number price Therefore the award was 65% settled in cash and 35% settled by a share option award, which 000 \u00a3 cannot be exercised for 3 years. Outstanding at the beginning of the year \u2013 \u2013 Under the LTIP, options are granted with a vesting period of 3 years. These awards are subject to Granted during the year 708,094 \u2013 performance conditions tied to the Company\u2019s financial performance in respect of growth in EcV, Lapsed during the year \u2013 \u2013 Commercial Cash Generation and Total Shareholder Return (TSR). Outstanding at the end of the year 708,094 \u2013 For schemes with market performance criteria, the number of options expected to invest is adjusted only for expectations of leavers prior to vesting. Fair value of the options is measured by use of The weighted average contractual life is 10 years. the Monte Carlo model at the issuing date. The inputs into the Monte Carlo model are as follows: The LTIP also contains a target of EcV growth and Commercial Cash Generation. As these are non-market performance conditions, the number of options expected to vest is recalculated at each Valuation method Monte Carlo balance sheet date based on expectations of performance against target. The movement in Weighted average share price (pence) 266.50 cumulative expense since the previous balance sheet date is recognised in the income statement, Weighted average exercise price (pence) Nil with a corresponding entry in reserves. Weighted average fair value of options granted (pence) 152.46 Expected volatility 28.19 If the options remain unexercised after a period of 10 years from the date of grant, the options expire. Expected life 3 years Furthermore, options are forfeited if the employee leaves the Group before options vest and is Risk-free rate 4.57% deemed to be a \u2018Bad Leaver\u2019. Expected dividend yield 0% (a) 2024 award made under the Short-Term Incentive Scheme (STIS) Expected volatility was determined by calculating the historical volatility of the Company\u2019s share Details of the short-term incentive awards made in the year are as follows: price over the previous 10 years. The Group recognised total expense of \u00a3334,219 related to equity-settled share-based payments 2024 Short-Term Incentive Scheme (STIS) 2024 2023 transactions in 2024. Awards made in year \u00a3m \u00a3m Amount paid as cash bonus through the income statement (65%) 0.6 0.5 (c) 2023 award made under the Short-Term Incentive Scheme (STIS) Amount deferred into shares for 3 years and subject to forfeiture (35%) 0.3 0.3 The Group has recorded an expense of \u00a360,825 (2023: \u00a360,825) with regards to the 35% element that has been deferred over the vesting period. Total bonus award for the year 0.9 0.8 Amount of deferred expense recorded in the current year 0.1 0.1 The deferred share award will be made following the end of the performance period by the Remuneration Committee. The deferred amount will be divided by the share price on the award date and the number of share awards will be awarded. The share awards will be accounted for per IFRS 2, under Equity Settled share-based payments. CHESNARAANNUALREPORTANDACCOUNTS2024237
IFRS FINANCIAL STATEMENTS
SECTION I ADDITIONAL DISCLOSURES
(d) 2023 award made under the Long-Term Incentive Plan (LTIP)
Details of the share options outstanding during the year are as follows:
In 2023, the Group granted 571,645 Nil priced share options with a vesting period of 3 years.
These awards were subject to performance conditions tied to the Company\u2019s financial performanc e
2022 Long-Term Incentive Plan (LTIP) 2024 2023
in respect of growth in Economic Value, Commercial Cash Generation and Total Shareholder
Weighted Weighted
average average
Return (TSR).
Options exercise Options exercise
The fair value of the non-market base condition was determined to be 154.53p, which was the
number price number price
average weighted share price as at the grant date of the options.
000 \u00a3 000 \u00a3
Details of the share options outstanding during the year are as follows:
Outstanding at the beginning of the year 253 \u2013 253 \u2013
Granted during the year \u2013 \u2013 \u2013 \u2013
2023 Long-Term Incentive Plan (LTIP) 2024 2023
Lapsed during the year (3 ) \u2013 \u2013 \u2013
Weighted Weighted
average average
Outstanding at the end of the year 250 \u2013 253 \u2013
Options exercise Options exercise
number price number price
The weighted average contractual life is 10 years.
000 \u00a3 000 \u00a3
The inputs into the Monte Carlo model are as follows:
Outstanding at the beginning of the year 572 \u2013 \u2013 \u2013
Granted during the year \u2013 \u2013 572 \u2013
Valuation method Monte Carlo
Lapsed during the year (42 ) \u2013 \u2013 \u2013
Weighted average share price (pence) 284.00
Weighted average exercise price (pence) Nil
Outstanding at the end of the year 530 \u2013 572 \u2013
Weighted average fair value of options granted (pence) 162.50
Expected volatility 29.04
The weighted average contractual life is 10 years.
Expected life 3 years
Risk-free rate 2.24%
The inputs into the Monte Carlo model are as follows:
Expected dividend yield 0%
Valuation method Monte Carlo
Expected volatility was determined by calculating the historical volatility of the Company\u2019s share
Weighted average share price (pence) 268.00
price over the previous 10 years.
Weighted average exercise price (pence) Nil
Weighted average fair value of options granted (pence) 154.53
The Group recognised total expense of \u00a3115,033 (2023: \u00a355,714) related to equity-settled
Expected volatility 29.39
share-based payments transactions in 2023.
Expected life 3 years
Risk-free rate 5.70%
(g) 2021 award made under the Short-Term Incentive Scheme (STIS)
Expected dividend yield 0%
The Group has recorded an expense of \u00a376,913 (2023: \u00a376,913) with regards to the 35% element
that has been deferred over the vesting period.
Expected volatility was determined by calculating the historical volatility of the Company\u2019s share
price over the previous 10 years.
(h) 2021 award made under the Long-Term Incentive Plan (LTIP)
The Group recognised total expense of \u00a3335,807 (2023: \u00a388,222) related to equity-settled
In April 2021, the Group granted 260,000 Nil priced share options with a vesting period of 3 years.
share-based payments transactions in 2024.
These awards were subject to performance conditions tied to the Company\u2019s financial performance
in respect of growth in Economic Value and Total Shareholder Return (TSR).
(e) 2022 award made under the Short-Term Incentive Scheme (STIS)
The fair value of the non-market base condition was determined to be 278.50p, which was the share
The Group has recorded an expense of \u00a359,319 (2023: \u00a359,319) with regards to the 35% elemen t
price as at 28 April 2021, the grant date of the options.
that has been deferred over the vesting period.
Details of the share options outstanding during the year are as follows:
(f) 2022 award made under the Long-Term Incentive Plan (LTIP)
In April 2022, the Group granted 253,000 Nil priced share options with a vesting period of 3 years.
2021 Long-Term Incentive Plan (LTIP) 2024 2023
These awards were subject to performance conditions tied to the Company\u2019s financial performanc e
Weighted Weighted
average average
in respect of growth in Economic Value and Total Shareholder Return (TSR).
Options exercise Options exercise
The fair value of the non-market base condition was determined to be 284.00p, which was the
number price number price
share price as at 28 April 2022, the grant date of the options.
000 \u00a3 000 \u00a3
Outstanding at the beginning of the year 342 \u2013 532 \u2013
Exercised during the year (113 ) 2.54 (123 ) 2.78
Lapsed during the year (203 ) \u2013 (67 ) \u2013
Outstanding at the end of the year 26 \u2013 342 \u2013
The weighted average contractual life is 10 years.
238 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS The inputs into the Monte Carlo model are as follows: (k) 2019 award made under the Short-Term Incentive Scheme (STIS) The Group has recorded an expense of \u00a3nil (2023: \u00a314,289) with regards to the 35% element that Valuation method Monte Carlo has been deferred over the vesting period. Weighted average share price (pence) 278.50 Weighted average exercise price (pence) Nil (l) 2019 award made under the Long-Term Incentive Plan (LTIP) Weighted average fair value of options granted (pence) 160.56 In April 2019, the Group granted 196,000 Nil priced share options with a vesting period of 3 years. Expected volatility 30.01 These awards were subject to performance conditions tied to the Company\u2019s financial performance Expected life 3 years in respect of growth in Economic Value and Total Shareholder Return (TSR). Risk-free rate 0.48% Expected dividend yield 0% The fair value of the non-market base condition was determined to be 358.50p, which was the share price as at 28 April 2019, the grant date of the options. Expected volatility was determined by calculating the historical volatility of the Company\u2019s share price over the previous 10 years. Details of the share options outstanding during the year are as follows: The Group recognised total expense of \u00a348,603 (2023: \u00a345,085) related to equity-settled 2019 Long-Term Incentive Plan (LTIP) 2024 2023 share-based payments transactions in 2024. Weighted Weighted average average (i) 2020 award made under the Short-Term Incentive Scheme (STIS) Options exercise Options exercise The Group has recorded an expense of \u00a314,775 (2023: \u00a359,099) with regards to the 35% element number price number price 000 \u00a3 000 \u00a3 that has been deferred over the vesting period. Outstanding at the beginning of the year \u2013 \u2013 \u2013 \u2013 (j) 2020 award made under the Long-Term Incentive Plan (LTIP) Lapsed during the year \u2013 \u2013 \u2013 \u2013 In April 2020, the Group granted 224,000 Nil priced share options with a vesting period of 3 years. These awards were subject to performance conditions tied to the Company\u2019s financial performance Outstanding at the end of the year \u2013 \u2013 \u2013 \u2013 in respect of growth in Economic Value and Total Shareholder Return (TSR). The weighted average contractual life is 10 years. The fair value of the non-market base condition was determined to be 323.50p, which was the share price as at 28 April 2020, the grant date of the options. The inputs into the Monte Carlo model are as follows: Details of the share options outstanding during the year are as follows: Valuation method Monte Carlo Weighted average share price (pence) 358.50 2020 Long-Term Incentive Plan (LTIP) 2024 2023 Weighted average exercise price (pence) Nil Weighted Weighted Weighted average fair value of options granted (pence) 202.74 average average Expected volatility 25.35 Options exercise Options exercise Expected life 3 years number price number price Risk-free rate 1.110% 000 \u00a3 000 \u00a3 Expected dividend yield 0% Outstanding at the beginning of the year 38 \u2013 192 \u2013 Exercised during the year \u2013 \u2013 (28 ) 2.82 Expected volatility was determined by calculating the historical volatility of the Company\u2019s share Lapsed during the year \u2013 \u2013 (126 ) \u2013 price over the previous 10 years. The Group recognised no expense related to equity-settled share-based payments transactions Outstanding at the end of the year 38 \u2013 38 \u2013 in 2024. The weighted average contractual life is 10 years. (m) 2018 award made under the Short-Term Incentive Scheme (STIS) The inputs into the Monte Carlo model are as follows: The Group has recorded no expense with regards to the 35% element that has been deferred over the vesting period. Valuation method Monte Carlo Weighted average share price (pence) 323.50 (n) 2018 award made under the Long-Term Incentive Plan (LTIP) Weighted average exercise price (pence) Nil In April 2018, the Group granted 168,000 Nil priced share options with a vesting period of 3 years. Weighted average fair value of options granted (pence) 184.04 These awards were subject to performance conditions tied to the Company\u2019s financial performance Expected volatility 28.51 in respect of growth in Economic Value and Total Shareholder Return (TSR). Expected life 3 years Risk-free rate 0.42% The fair value of the non-market base condition was determined to be 410.00p, which was the share Expected dividend yield 0% price as at 28 April 2018, the grant date of the options. Expected volatility was determined by calculating the historical volatility of the Company\u2019s share price over the previous 10 years. The Group recognised total expense of \u00a3nil (2023: \u00a318,750) related to equity-settled share-based payments transactions in 2023. CHESNARAANNUALREPORTANDACCOUNTS2024239
IFRS FINANCIAL STATEMENTS
SECTION I ADDITIONAL DISCLOSURES
I2 Share-based payments (continued)
The inputs into the Monte Carlo model are as follows:
(n) 2018 award made under the Long-Term Incentive Plan (LTIP) (continued)
Details of the share options outstanding during the year are as follows:
Valuation method Monte Carlo
Weighted average share price (pence) 382.75
2019 Long-Term Incentive Plan (LTIP) 2024 2023
Weighted average exercise price (pence) Nil
Weighted Weighted
Weighted average fair value of options granted (pence) 211.73
average average
Expected volatility 26.97
Options exercise Options exercise
Expected life 3 years
number price number price
Risk-free rate 0.70%
000 \u00a3 000 \u00a3
Expected dividend yield 0%
Outstanding at the beginning of the year \u2013 \u2013 \u2013 \u2013
Expected volatility was determined by calculating the historical volatility of the Company\u2019s share
Lapsed during the year \u2013 \u2013 \u2013 \u2013
price over the previous 10 years.
Outstanding at the end of the year \u2013 \u2013 \u2013 \u2013
The Group recognised no expense related to equity-settled share-based payments transactions in
2024 and 2023.
The weighted average contractual life is 10 years.
(p) 2016 award made under the Long-Term Incentive Plan (LTIP)
The inputs into the Monte Carlo model are as follows:
In April 2016, the Group granted 255,000 Nil priced share options with a vesting period of 3 years.
These awards were subject to performance conditions tied to the Company\u2019s financial performance
Valuation method Monte Carlo
in respect of growth in Economic Value and Total Shareholder Return (TSR).
Weighted average share price (pence) 410.00
Weighted average exercise price (pence) Nil
The fair value of the non-market base condition was determined to be 312.00p, which was the share
Weighted average fair value of options granted (pence) 229.78
price as at 28 April 2016, the grant date of the options.
Expected volatility 25.77
Expected life 3 years
Details of the share options outstanding during the year are as follows:
Risk-free rate 1.190%
Expected dividend yield 0%
2016 Long-Term Incentive Plan (LTIP) 2024 2023
Weighted Weighted
Expected volatility was determined by calculating the historical volatility of the Company\u2019s share
average average
Options exercise Options exercise
price over the previous 10 years.
number price number price
The Group recognised no expense related to equity-settled share-based payments transactions
000 \u00a3 000 \u00a3
in 2024.
Outstanding at the beginning of the year \u2013 \u2013 90 \u2013
Exercised during the year \u2013 \u2013 (90 ) 2.63
(o) 2017 award made under the Long-Term Incentive Plan (LTIP)
In April 2017, the Group granted 174,000 Nil priced share options with a vesting period of 3 years.
Outstanding at the end of the year \u2013 \u2013 \u2013 \u2013
These awards were subject to performance conditions tied to the Company\u2019s financial performance
in respect of growth in Economic Value and Total Shareholder Return (TSR).
The weighted average contractual life is 10 years.
The fair value of the non-market base condition was determined to be 382.75p, which was the share
The inputs into the Monte Carlo model are as follows:
price as at 28 April 2017, the grant date of the options.
Details of the share options outstanding during the year are as follows:
Valuation method Monte Carlo
Weighted average share price (pence) 312.00
2017 Long-Term Incentive Plan (LTIP) 2024 2023
Weighted average exercise price (pence) Nil
Weighted Weighted
Weighted average fair value of options granted (pence) 179.72
average average
Expected volatility 28.07
Options exercise Options exercise
Expected life 3 years
number price number price
Risk-free rate 0.86%
000 \u00a3 000 \u00a3
Expected dividend yield 0%
Outstanding at the beginning of the year \u2013 \u2013 26 \u2013
Expected volatility was determined by calculating the historical volatility of the Company\u2019s share
Exercised during the year \u2013 \u2013 (26 ) 2.63
price over the previous 10 years.
Outstanding at the end of the year \u2013 \u2013 \u2013 \u2013
The Group recognised no expense related to equity-settled share-based payments transactions in
2024 and 2023.
The weighted average contractual life is 10 years.
240 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS I3 Earnings per share In addition to their salaries, the Company also provides non-cash benefits to directors and contributes Earnings per share are based on the following: to a post-employment defined contribution pension plan on their behalf, or where regulatory contribution limits are reached, pay an equivalent amount as an addition to base salary. Year ended 31 December Restated The following amounts were payable to directors in respect of bonuses and incentives: 2024 2023 (Loss)/profit for the year attributable to shareholders (\u00a3m) 3.9 18.7 2024 2023 Weighted average number of ordinary shares 150,938,024 150,528,597 \u00a3m \u00a3m Basic earnings per share 2.56 p 12.41 p Diluted earnings per share 2.52 p 12.29 p Annual bonus scheme (included in the short-term employee benefits above) 0.9 0.7 The weighted average number of ordinary shares in respect of the year ended 31 December 2024 These amounts have been included in accrued expenses as disclosed in Note G6. The amounts is based upon 150,991,019 shares. No shares were held in treasury. payable under the annual bonus scheme were payable within 1 year. The terms and conditions There were 2,330,118 share options outstanding at 31 December 2024 (2023: 1,537,582). attached to the annual bonus scheme can be found in the Remuneration section of the Corporate Accordingly, there is dilution of the average number of ordinary shares in issue in respect of 2024 Governance section of the Annual Report and Accounts. and 2023. (ii) Transactions with subsidiaries The Company undertakes centralised administration functions, the costs of which it charges back I4 Capital commitments to its operating subsidiaries. The following amounts which effectively comprised a recovery of There were no capital commitments as at 31 December 2024 or as at 31 December 2023. expenses at no mark-up were credited to the Statement of Comprehensive Income of the Company for the respective periods: I5 Related parties (a) Identity of related parties Year ended 31 December 2024 2023 The shares of the Company were widely held and no single shareholder exercised significant \u00a3m \u00a3m influence or control over the Company. The Company has related party relationships with: Recovery of expenses 7.2 5.4 (i) key management personnel who comprise the directors (including non-executive directors) (iii) Transactions between subsidiaries of the Company; In the Netherlands, Scildon owns a commercial property that has been occupied by its fellow Dutch (ii) its subsidiary companies; subsidiary Waard since October 2022. The following amounts of rental income were received from Waard by Scildon during the respective periods: (iii) other companies over which the directors have significant influence; and Year ended 31 December 2024 2023 (iv) transactions with persons related to key management personnel. \u00a3m \u00a3m (b) Related party transactions Rental income 0.1 0.1 (i) Transactions with key management personnel. Key management personnel comprise of the directors of the Company. This is on the basis that the (iv) Transactions with persons related to key management personnel Group\u2019s governance map requires all strategically significant decisions to be approved by the Group During the year, there were no transactions with persons related to key management personnel Board. As such, they have the authority and responsibility for planning, directing and controlling the (31 December 2023: \u00a3Nil). activities of the Group. Key management compensation is as follows: 2024 2023 \u00a3m \u00a3m Short-term employee benefits 3.1 2.1 Post-employment benefits 0.1 0.1 Share-based payments 1.5 0.6 Total 4.7 2.8 The share-based payments charge comprises \u00a30.3m (2023: \u00a30.3m) of Short-Term Incentive Scheme (STIS), and \u00a31.3m (2023: \u00a30.2m) related to Long-Term Incentive Plan (LTIP), which is determined in accordance with IFRS 2 \u2018Share-based Payment\u2019. Further details on the share-based payment are disclosed in Note I2. CHESNARAANNUALREPORTANDACCOUNTS2024241 IFRS FINANCIAL STATEMENTS SECTION I ADDITIONAL DISCLOSURES I6 Group entities Control of the Group The issued share capital of Chesnara plc, the Group Parent Company, is widely held, with no single party able to control 20% or more of such capital or of the rights which such ownership confers. Group subsidiary companies Country of Ownership interest Ownership interest Functional Name incorporation 31 December 2024 31 December 2023 Currency Countrywide Assured plc United Kingdom 100% of all share capital (1) 100% of all share capital (1) Sterling Countrywide Assured Life Holdings Limited United Kingdom 100% of all share capital 100% of all share capital Sterling Countrywide Assured Services Limited United Kingdom 100% of all share capital (1) 100% of all share capital (1) Sterling Countrywide Assured Trustee Company Limited United Kingdom 100% of all share capital (1) 100% of all share capital (1) Sterling CASLP Limited United Kingdom 100% of all share capital 100% of all share capital Sterling CASFS Limited United Kingdom 100% of all share capital (2) 100% of all share capital (2) Sterling CASLPTS Limited United Kingdom 100% of all share capital (2) 100% of all share capital (2) Sterling Registered address 2nd Floor, Building 4, West Strand Business Park, West Strand Road, Preston, Lancashire PR1 8UY Movestic Livf\u00f6rs\u00e4kring AB Sweden 100% of all share capital 100% of all share capital Swedish krona Movestic Fonder AB Sweden 100% of all share capital (3) 100% of all share capital (3) Swedish krona Registered address Box 7853, S-103 99 Stockholm, Sweden Waard Leven N.V. Netherlands 100% of all share capital 100% of all share capital Euro Waard Schade N.V. Netherlands 100% of all share capital 100% of all share capital Euro Waard Verzekeringen B.V. Netherlands 100% of all share capital (4) 100% of all share capital (4) Euro Robein Leven N.V. Netherlands 100% of all share capital (4) 100% of all share capital (4) Euro Robein Effectendienstveriening N.V. Netherlands 100% of all share capital (4) 100% of all share capital (4) Euro Registered address Geert Scholtenslaan II 1687 CL Wognum, Netherlands Scildon N.V Netherlands 100% of all share capital 100% of all share capital Euro Registered address Laapersveld 68 Hilversum, Netherlands (1) Held indirectly through Countrywide Assured Life Holdings Limited. (2) Held indirectly through Countrywide Assured plc. (3) Held indirectly through Movestic Livf\u00f6rs\u00e4kring AB. (4) Held indirectly through Waard Leven N.V. CASLP Limited was dissolved on 14 January 2025. CASFS Limited (registered number: 02354894) and CASLPTS Limited (registered number: 01489455) are exempt from the requirements of the Companies Act 2006 relating to the audit of individual financial statements by virtue of s.479A of the Companies Act 2006. 242 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024 I7 Portfolio acquisition On 23 December 2024, Chesnara announced it had reached an agreement to acquire the UK unit-linked bond and pension business of Canada Life Limited, representing approximately 17,000 policies. The transaction is initially in the form of a reinsurance agreement with the non-unit cash flows of the unit-linked policies ceded by Canada Life Limited and accepted by CA. The date of recognition of the reinsurance contract under IFRS 17 is 23 December 2024, however under the terms of the contract the economic impacts are backdated to 1 January 2024 and the cash flows from this date are accordingly recognised as a receivable in the December 2024 balance sheet. The initial commission paid by CA to Canada Life Limited for this reinsurance inwards transaction was \u00a32.2m and was funded from internal group resources. As no inputs and processes have been transferred as part of the transaction it is not accounted for as a business combination, instead it is recognised at cost. The CSM on initial recognition has been calculated as \u00a30.7m as at 31 December 2024. Customers\u2019 policies are expected to transfer to CA in the future via a Part VII transfer, following Court approval. I8 Post balance sheet event The directors are not aware of any significant post balance sheet events that require disclosure in the financial statements.", "dimensions": { "concept": "ifrs-full:DisclosureOfNotesAndOtherExplanatoryInformationExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-408": { "value": " A1 General information Chesnara plc (Registered number 4947166) (the Company) is a limited liability company, incorporated in the United Kingdom and registered in England and Wales. The Company is limited by shares and has a primary listing on the London Stock Exchange. The address of the registered office is 2nd Floor, Building 4, West Strand Business Park, West Strand Road, Preston, England, PR1 8UY, UK. The Company and its subsidiaries, together forming the Group, comprise UK, Swedish and Dutch life and pensions businesses. The UK segment comprises a number of legacy books consisting of a mix of unit-linked, with-profits and non-linked business and is substantially closed to new business, such that new insurance contracts are only issued to existing customers, dependent on their changing needs. On 23 December 2024, Chesnara announced the acquisition of a block of unit-linked bond and pension business from Canada Life Limited. Further details regarding this transaction are disclosed in Note I7. The Swedish segment comprises the Movestic business, as described in Note C1. Its activities are performed predominantly in Sweden, where it underwrites life, accident and health risks and provides a portfolio of investment contracts. It is open to new business, distributing its products principally through independent financial advisors. The Dutch segment comprises the Waard Group and Scildon businesses, as described in Note C1. The Group\u2019s Dutch life businesses contain a mix of term life, unit-linked, index-linked and non-linked business. Scildon is open to new business for some of its products, whilst the Waard Group has seen growth in recent years through a number of acquisitions of closed-book portfolios. These financial statements are presented in pounds sterling, which is the functional currency of the Parent Company. Foreign operations are included in accordance with the policies set out in Note A4. The results and cash flows of these operations have been translated into sterling at an average rate for the year of \u00a31 = SEK 13.51 (2023: \u00a31 = SEK 13.20) for the Swedish business and \u00a31 = EUR 1.18 (2023: \u00a31 = EUR 1.15) for the Dutch business. Assets and liabilities have been translated at the year end rate of \u00a31 = SEK 13.84 (31 December 2023: \u00a31 = SEK 12.84) for the Swedish business and \u00a31 = EUR 1.21 (31 December 2023: \u00a31 = EUR 1.15) for the Dutch business. Total foreign currency exchange rate loss for the year ended 31 December 2024 recognised in the Consolidated Statement of Comprehensive Income of \u00a315.3m (year ended 31 December 2023: loss of \u00a37.8m). The financial statements were authorised for issue by the directors on 26 March 2025. ", "dimensions": { "concept": "ifrs-full:DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-7": { "value": " A3 Basis of preparation The consolidated and Parent Company financial statements have been prepared on a going concern basis. The directors believe that they have a reasonable expectation that the Group has adequate resources to continue in operational existence for a minimum of 12 months from the date of signing. In making this assessment, the directors have taken into consideration the points as set out in the financial management section of the Annual Report and Accounts under the heading \u2018Maintain the Group as a going concern\u2019. The financial statements are presented in pounds sterling, rounded to the nearest one hundred thousand, and are prepared on the historical cost basis except for insurance and reinsurance contracts which are stated at their fulfilment value in accordance with IFRS 17 and the following assets and liabilities which are stated at their fair value: derivative financial instruments; financial instruments at fair value through profit or loss; investment property; and investment contract liabilities at fair value through profit or loss. Assets and liabilities are presented in order of increasing liquidity in the balance sheet. In addition, amounts expected to be recovered or settled within a year are classified as current in the notes to the accounts. If they are expected to be recovered or settled in more than 1 year, they are classified as non-current in the notes to the accounts. Assets and liabilities are presented on a current and non-current basis in the Company Balance Sheet. The preparation of financial statements in conformity with IFRSs requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Judgements made by management in the process of applying the Group\u2019s accounting policies that have a significant effect on the financial statements and estimates with a significant risk of material adjustment in the next year are set out in Note A5. The Group prepares interim financial statements at half year and as permitted by IFRS 17 has elected to apply the \u2018year-to-date\u2019 method and restate estimates in respect of insurance contracts made in the previous interim financial statements, in these year end financial statements. This accounting policy election applies to all groups of insurance and reinsurance contracts. The accounting policies set in Note A4, unless otherwise stated, have been applied consistently to all years presented in these Consolidated Financial Statements. The Consolidated Financial Statements have been prepared in accordance with United Kingdom adopted international accounting standards in conformity with the requirements of the Companies Act 2006. Both the Parent Company financial statements and the Group financial statements have been prepared and approved by the directors in accordance with United Kingdom adopted international accounting standards. ", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfPreparationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-1": { "value": "Chesnara plc", "dimensions": { "concept": "ifrs-full:NameOfReportingEntityOrOtherMeansOfIdentification", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-2": { "value": " limited liability company", "dimensions": { "concept": "ifrs-full:LegalFormOfEntity", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-379": { "value": "The consolidated and Parent Company financial statements have been prepared on a going concern basis. The directors believe that they have a reasonable expectation that the Group has adequate resources to continue in operational existence for a minimum of 12 months from the date of signing. In making this assessment, the directors have taken into consideration the points as set out in the financial management section of the Annual Report and Accounts under the heading \u2018Maintain the Group as a going concern\u2019. ", "dimensions": { "concept": "ifrs-full:DisclosureOfGoingConcernExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-3": { "value": "United Kingdom", "dimensions": { "concept": "ifrs-full:CountryOfIncorporation", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-4": { "value": " 2nd Floor, Building 4, West Strand Business Park, West Strand Road, Preston, England, PR1 8UY, UK", "dimensions": { "concept": "ifrs-full:AddressOfRegisteredOfficeOfEntity", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-5": { "value": "The Company and its subsidiaries, together forming the Group, comprise UK, Swedish and Dutch life and pensions businesses. The UK segment comprises a number of legacy books consisting of a mix of unit-linked, with-profits and non-linked business and is substantially closed to new business, such that new insurance contracts are only issued to existing customers, dependent on their changing needs. On 23 December 2024, Chesnara announced the acquisition of a block of unit-linked bond and pension business from Canada Life Limited. Further details regarding this transaction are disclosed in Note I7. The Swedish segment comprises the Movestic business, as described in Note C1. Its activities are performed predominantly in Sweden, where it underwrites life, accident and health risks and provides a portfolio of investment contracts. It is open to new business, distributing its products principally through independent financial advisors. The Dutch segment comprises the Waard Group and Scildon businesses, as described in Note C1. The Group\u2019s Dutch life businesses contain a mix of term life, unit-linked, index-linked and non-linked business. Scildon is open to new business for some of its products, whilst the Waard Group has seen growth in recent years through a number of acquisitions of closed-book portfolios. ", "dimensions": { "concept": "ifrs-full:DescriptionOfNatureOfEntitysOperationsAndPrincipalActivities", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-377": { "value": "The Company and its subsidiaries, together forming the Group, comprise UK, Swedish and Dutch life and pensions businesses. ", "dimensions": { "concept": "ifrs-full:PrincipalPlaceOfBusiness", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-381": { "value": "These financial statements are presented in pounds sterling, which is the functional currency of the Parent Company. Foreign operations are included in accordance with the policies set out in Note A4. The results and cash flows of these operations have been translated into sterling at an average rate for the year of \u00a31 = SEK 13.51 (2023: \u00a31 = SEK 13.20) for the Swedish business and \u00a31 = EUR 1.18 (2023: \u00a31 = EUR 1.15) for the Dutch business. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFunctionalCurrencyExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-382": { "value": "
The financial statements were authorised for issue by the directors on 26 March 2025.
", "dimensions": { "concept": "ifrs-full:DisclosureOfAuthorisationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-6": { "value": " A2 Basis of consolidation The Consolidated Financial Statements incorporate the financial statements of the Company and of entities controlled by the Company (its subsidiaries), made up to 31 December each year. Control is achieved when the Company is exposed or has rights to the variable returns from the involvement with the entity and has the ability to affect those returns through its power over the entity. The Parent Company financial statements present information about the Company as a separate entity and not about its Group. There are no non-controlling interests in the net assets of the Group and all total comprehensive income is attributed to the Company shareholders. The results of subsidiaries acquired or disposed of during the year are included in the Consolidated Statement of Comprehensive Income from the effective date of acquisition or up to the effective date of disposal. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by the Group. All intra-group transactions, balances, income and expenses are eliminated on consolidation.", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfConsolidationExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-378": { "value": "The Consolidated Financial Statements incorporate the financial statements of the Company and of entities controlled by the Company (its subsidiaries), made up to 31 December each year. Control is achieved when the Company is exposed or has rights to the variable returns from the involvement with the entity and has the ability to affect those returns through its power over the entity. The Parent Company financial statements present information about the Company as a separate entity and not about its Group. There are no non-controlling interests in the net assets of the Group and all total comprehensive income is attributed to the Company shareholders. The results of subsidiaries acquired or disposed of during the year are included in the Consolidated Statement of Comprehensive Income from the effective date of acquisition or up to the effective date of disposal. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by the Group. All intra-group transactions, balances, income and expenses are eliminated on consolidation.", "dimensions": { "concept": "ifrs-full:DisclosureOfConsolidatedAndSeparateFinancialStatementsExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-380": { "value": "The Consolidated Financial Statements have been prepared in accordance with United Kingdom adopted international accounting standards in conformity with the requirements of the Companies Act 2006. Both the Parent Company financial statements and the Group financial statements have been prepared and approved by the directors in accordance with United Kingdom adopted international accounting standards. ", "dimensions": { "concept": "ifrs-full:StatementOfIFRSCompliance", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-8": { "value": "Restatement of prior year numbers A prior year restatement has been applied in respect of the accounting treatment of the Canada Life portfolio in 2023. In the previously reported financial statements for December 2023, a long contract boundary was applied in valuing the future cash flows beyond the expected termination of the reinsurance contract. On further assessment, as there is no executable right under the reinsurance agreement itself to the underlying policies, then under IFRS 17 requirements a short contract boundary should have been applied. This accounting change means that the resulting CSM reflects only the profit to be realised in the reinsurance contract timeframe. Following the legal transfer of the underlying policies, the CSM is recalculated to reflect the profit to be earned on the full remaining duration of the policies. Balance sheet: As reported Restated \u00a3m \u00a3m Present value of future cash flows 15.7 5.0 Risk adjustment (0.9 ) \u2013 CSM (11.2 ) (1.5 ) Assets for incurred claims 0.4 0.4 Insurance contract assets total 4.0 3.9 The total net assets reported at 31 December 2023 of \u00a3359.9m have therefore been restated to \u00a3359.8m from \u00a3359.9m as previously reported. Income statement: As reported Restated \u00a3m \u00a3m Insurance revenue 228.0 228.0 Insurance service expense (224.7 ) (224.8 ) The total comprehensive income reported for 2023 of \u00a310.3m has therefore been restated to \u00a310.2m. Basic earnings per share has been restated from 12.41p to 12.36p. Diluted earnings per share has been restated from 12.29p to 12.24p. The Part VII business transfer for the transaction received court approval on the 3 February 2025. ", "dimensions": { "concept": "ifrs-full:DisclosureOfReclassificationsOrChangesInPresentationExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-10": { "value": "BEPS 2.0 The Organisation for Economic Cooperation and Development (OECD) has introduced international tax reform measures under the Two-Pillar solution, including the Global Anti-Base Erosion (GloBE) rules, which establish a 15% global minimum tax for multinational groups with a consolidated turnover of at least EUR 750m in at least 2 of the past 4 years. The Group operates in the United Kingdom, Sweden and the Netherlands, all of which have enacted legislation implementing BEPS Pillar II effective from 1 January 2024. Based on the latest available guidance and the Group\u2019s financial position, Chesnara remains below the EUR 750m threshold and is not in scope of the GloBE rules for 2024. The Group continues to monitor interpretations of BEPS legislation in each jurisdiction to assess potential for future exposure, particularly the treatment of policyholder investment returns in the UK and the application of OECD guidance in Sweden in connection with insurance investment funds, together with the classification of taxes paid therefrom. Although Chesnara remains below the threshold, the Group continues to assess potential future exposure, including the impact of business growth and future acquisitions; effective tax rates across jurisdictions; and the interaction of local tax regimes with GloBE rules. Discussions with relevant tax authorities and industry bodies are ongoing to ensure continued compliance with evolving published and draft guidance. Based on our assessment that Chesnara remains below the EUR 750m threshold, and is not in scope for BEPS in 2024, no adjustments to current or deferred tax have been made in respect of BEPS Pillar II, and no additional disclosures are required necessary under IAS 12.", "dimensions": { "concept": "ifrs-full:DisclosureOfAdditionalInformationExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-11": { "value": " A4 Material accounting policy information The following accounting policy information is in respect of the Group and also for the Parent Company where it is applicable. The material accounting policies that relate to the Parent Company as well as to the Group are in respect of: Investment return, Other operating expenses, Financing costs, Income taxes, Financial investments, Derivative financial instruments, Other assets, Cash and cash equivalents, Lease contract liabilities, Borrowings, Other current liabilities and Employee benefits. The material accounting policies that relate to the Parent Company and not the Group are: Investment in subsidiary, Share-based payments, Share capital and shares held in treasury and Dividends. ", "dimensions": { "concept": "ifrs-full:DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-383": { "value": "(a) Insurance contracts and reinsurance contracts (i) Scope and classification Contracts under which the Group accepts significant insurance risk are classified as insurance contracts. Contracts held by the Group under which it transfers significant insurance risk related to underlying insurance contracts are classified as reinsurance contracts. Insurance and reinsurance contracts also expose the Group to financial risk. Insurance contracts may be issued, and reinsurance contracts may be initiated by the Group, or they may be acquired in a business combination or in a transfer of contracts that does form a business. All references in these accounting policies to \u2018insurance contracts\u2019 and \u2018reinsurance contracts\u2019 include contracts issued, reinsurance contracts initiated or insurance or reinsurance contracts acquired by the Group, unless otherwise stated. Some contracts entered into by the Group have the legal form of insurance contracts but do not transfer significant insurance risk. These contracts are classified as financial liabilities and are referred to as \u2018investment contracts\u2019 (see Note A4(b)). Similarly financial reinsurance contracts do not transfer significant insurance risk and are accounted for under IFRS 9. Mass lapse reinsurance contracts also contain no insurance risk and are accounted for under IAS 37. Contracts within a portfolio that would fall into different groups only because law or regulation specifically constrains the Group\u2019s practical ability to set a different price or level of benefits for policyholders with different characteristics can be included in the same group, however the Group has not taken advantage of this. Portfolios of reinsurance contracts held are assessed separately from insurance contracts issued and are assessed for aggregation on an individual contract basis. Some reinsurance contracts provide cover for underlying contracts that are included in different groups. As per the gross insurance contracts the reinsurance contracts are divided into profitability groupings as follows: \u2013 any contracts on which there is a net gain on initial recognition; \u2013 any contracts that, on initial recognition, have no significant possibility of showing a net gain subsequently; and \u2013 any remaining contracts in the annual cohort. All reinsurance contracts within the Group fall into the third profitability category above. (iv) Recognition and derecognition of insurance and reinsurance contracts An insurance contract issued by the Group is recognised from the earliest of: \u2013 the beginning of its coverage period (i.e. the period during which the Group provides services in respect of any premiums within the boundary of the contract); \u2013 when the first payment from the policyholder becomes due or, if there is no contractual due date, when it is received from the policyholder; and \u2013 when a group of contracts becomes onerous or if the facts and circumstances indicate that a group of contracts is onerous for those contracts measured using the PAA. An insurance contract acquired in a transfer of contracts, or a business combination is recognised on the date of acquisition. When the contract is recognised, it is added to an existing group of contracts or, if the contract does not qualify for inclusion in an existing group, it forms a new group to which future contracts are added. Groups of contracts are established on initial recognition and their composition is not revised once all contracts have been added to the group. Non-proportionate reinsurance contracts are recognised at the earlier of: (a) the beginning of the coverage period of the group of reinsurance contracts; or (b) the date the entity recognises an onerous group of underlying insurance contracts if the entity entered into the related reinsurance contract held at or before that date. The recognition of proportionate reinsurance contracts is delayed until the date that any underlying insurance contract is initially recognised, if that date is later than the beginning of the coverage period of the group of reinsurance contracts held. Reinsurance contracts acquired as recognised at the date of acquisition. The Group derecognises a contract when it is extinguished \u2013 i.e. when the specified obligations in the contract expire or are discharged or cancelled. The Group also derecognises a contract if its terms are modified in a way that would have changed the accounting for the contract significantly had the new terms always existed, in which case a new contract based on the modified terms is recognised. If a contract modification does not result in derecognition, then the Group treats the changes in cash flows caused by the modification as changes in estimates of fulfilment cash flows. (a) Insurance contracts and reinsurance contracts (continued) (i) Scope and classification (continued) Insurance contracts are classified as direct participating contracts or contracts without direct participating features. Direct participating contracts are contracts for which, at inception: \u2013 the contractual terms specify that the policyholder participates in a share of a clearly identified pool of underlying items; \u2013 the Group expects to pay to the policyholder an amount equal to a substantial share of the fair value returns on the underlying items; and \u2013 the Group 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. All other insurance contracts and all reinsurance contracts are classified as contracts without direct participating features. Some of these contracts are measured under the PAA. The following table provides a summary of the broad product categories and the measurement model approach applied. Classification Product category Long-term contracts without direct Immediate annuities GMM)participating features ( Term assurance and other non-linked Unit-linked/index-linked/with-profits \u2013 GMM Long-term contracts with direct Unit-linked/index-linked/with-profits \u2013 VFA VFAparticipating features ( ) Short-term contracts (PAA ) Short-term protection (ii) Separating components from insurance and reinsurance contracts The Group does not have any distinct investment components which require separation from the insurance or reinsurance contract. Distinct investment components are 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 Group does not have any insurance contracts containing embedded derivatives or have any insurance contracts which transfer distinct goods and services other than insurance contract services which require separation from the host contract. (iii) Aggregation of insurance and reinsurance contracts Insurance contracts are aggregated into groups for measurement purposes. Groups of insurance contracts are determined by identifying portfolios of insurance contracts, each comprising contracts that are subject to similar risks and are managed together. Each portfolio is divided into annual cohorts (i.e. by year of issue) and each annual cohort into a maximum of three groups based on the profitability of contracts: \u2013 any contracts that are onerous on initial recognition; \u2013 any contracts that, on initial recognition, have no significant possibility of becoming onerous subsequently; and \u2013 any remaining contracts in the annual cohort. Further detail regarding the judgements involved in the defining portfolios and profitability groups can be found in Note A5(c). (v) Fulfilment Cash Flows The Fulfilment Cash Flows (FCF) are the current estimates of the future cash flows within the contract boundary of a group of contracts and: \u2013 are unbiased estimates of the future cash flows; \u2013 are determined from the perspective of the Group, provided that the estimates are consistent with observable market practises and variables; and \u2013 reflect conditions existing at the period-end date. An explicit risk adjustment for non-financial risk is estimated separately from the other estimates and reflects the compensation that the Group requires for bearing the uncertainty about the amount and timing of the cash flows from non-financial risk as the Group fulfils insurance contracts. For reinsurance contracts held, the risk adjustment for non financial risk represents the amount of risk being transferred by the Group to the reinsurer. Methods and assumptions used to determine the risk adjustment for non-financial risk are discussed in Note A5(e). The estimates of the future cash flows are adjusted using current discount rates to reflect the time value of money and the financial risks related to those cash flows. The discount rates reflect the characteristics of the cash flows arising from the groups of insurance contracts, including timing, currency and liquidity of cash flows. The determination of the discount rate that reflects the characteristics of the cash flows and liquidity characteristics of the insurance contracts requires significant judgement and estimation (See Note A5(d)). The Group estimates certain FCF at the portfolio level or higher and then allocates such estimates to groups of contracts. The Group uses consistent assumptions to measure the estimates of the present value of future cash flows for the group of reinsurance contracts held and such estimates for the groups of underlying insurance contracts. (vi) Contract boundaries The measurement of a group of contracts includes all of the future cash flows within the boundary of each contract in the Group. For insurance contracts, cash flows are within the contract boundary if they arise from substantive rights and obligations that exist during the reporting period in which the Group can compel the policyholder to pay premiums or has a substantive obligation to provide services (including insurance coverage and any investment related services). A substantive obligation to provide insurance contract services ends when either: \u2013 the Group 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 \u2013 the Group 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 unless the pricing of the premiums up to the date when the risks are reassessed takes into account the risks that relate to periods after the assessment. For reinsurance contracts cash flows are within the contract boundary if they arise from substantive rights and obligations that exist during the reporting period in which the Group is compelled to pay amounts to the reinsurer or has a substantive right to receive services from the reinsurer. vii) Insurance acquisition cash flows Insurance acquisition cash flows are cash flows arising 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 are allocated to 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. Insurance acquisition cash flows arising before the recognition of the related group of contracts are recognised as an asset and the asset is derecognised, when the insurance acquisition cash flows are included in the measurement of the group of contracts. The Group derecognises the assets for insurance acquisition cash flows in the year within the reporting period in which the expenses are incurred and therefore does not have any assets for insurance acquisition cash flows on the balance sheet at the reporting date. viii) Initial measurement \u2013 insurance contracts not measured under the PAA The CSM is a component of the carrying amount of the asset or liability for a group of insurance contracts issued representing the unearned profit that the Group will recognise as it provides insurance contract services in the future. At initial recognition, the CSM is an amount that results in no income or expenses (unless a group of contracts is onerous) arising from: (a) the initial recognition of the FCF; and (b) cash flows arising from the contracts in the group at that date. When the above calculation results in a net outflow, the group of insurance contracts issued is onerous. A loss from onerous insurance contracts is recognised in profit or loss immediately, with no CSM recognised on the balance sheet on initial recognition, and a loss component is established in the amount of loss recognised (see Note A4(a)(xi)). (ix) Initial measurement \u2013 reinsurance contracts not measured under the PAA For groups of reinsurance contracts held, any net gain or loss at initial recognition is recognised as the CSM unless the net cost of purchasing reinsurance relates to past events, in which case the Group recognises the net cost immediately in profit or loss. For reinsurance contracts held, the CSM represents a deferred gain or loss that the Group will recognise as a reinsurance expense as it receives insurance contract services from the reinsurer in the future and is calculated as the sum of: (a) the initial recognition of the FCF; (b) cash flows arising from the contracts in the group at that date; and (c) any income recognised in profit or loss when the entity recognises a loss on initial recognition of an onerous group of underlying insurance contracts or on addition of onerous underlying insurance contracts to that group. A loss-recovery component is established or adjusted within the remaining coverage for reinsurance contracts held for the amount of income recognised in (c) above. This amount is calculated by multiplying the loss recognised on underlying insurance contracts by the percentage of claims on underlying insurance contracts that the Group expects to recover from the reinsurance contracts held that are entered into before or at the same time as the loss is recognised on the underlying insurance contracts. When underlying insurance contracts are included in the same group with insurance contracts issued that are not reinsured, the Group applies a systematic and rational method of allocation to determine the portion of losses that relates to underlying insurance contracts. (x) Contracts acquired in a business combination or portfolio transfer For groups of contracts acquired in a transfer of contracts or a business combination, the consideration received for the contracts is included in the fulfilment cash flows as a proxy for the premiums received at the date of acquisition. In a business combination, the consideration received is the fair value of the contracts at that date. 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, or as an adjustment to goodwill or the gain on a bargain purchase if the contracts are acquired in a business combination. 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 and instead reported within \u2018insurance service expense\u2019. The Group has not applied the risk mitigation option that is available under IFRS 17.B115 regarding offsetting the impacts of derivatives and reinsurance contracts and therefore recognises all changes in financial risk and the time value of money against the CSM for direct participating contracts. The following adjustments relate to future service and thus adjust the CSM: (a) changes in the amount of the Group\u2019s share of the fair value of the underlying items; and (b) changes in the FCF that do not vary based on the returns of underlying items: (i) changes in the effect of the time value of money and financial risks including the effect of financial guarantees; (ii) changes in estimates of the present value of future cash flows in the LRC; and (iii) changes in the risk adjustment for non-financial risk that relate to future service. Adjustments are measured using the current discount rates. For insurance contracts under the VFA, the following adjustments do not adjust the CSM: (a) changes in the obligation to pay the policyholder the amount equal to the fair value of the underlying items; (b) changes in the FCF that do not vary based on the returns of underlying items: (i) changes in the FCF relating to the LIC; and (ii) experience adjustments relating to insurance service expenses (excluding insurance acquisition cash flows). The Group does not classify any premiums received in the period as relating to current service on materiality grounds. Changes to the CSM for insurance contracts: For insurance contracts, the carrying amount of the CSM at each reporting date is the carrying amount at the start of the year, adjusted for: (i) the CSM of any new contracts that are added to the Group in the year; (ii) interest accreted on the carrying amount of the CSM during the year (for contracts under the GMM, using discount rates determined at initial recognition that are applied to nominal cash flows that do not vary based on the returns of underlying items); (iii) as detailed above, changes in fulfilment cash flows that relate to future services, to the extent that there is a CSM available. When an increase in the FCF exceeds the carrying amount of the CSM, the CSM is reduced to zero, the excess is recognised in insurance service expenses and a loss component is recognised within the LRC. When the CSM is zero, changes in the FCF adjust the loss component within the LRC with the impact going to insurance service expenses. The excess of any decrease in the FCF over the loss component reduces the loss component to zero and reinstates the CSM; (iv) the effect of any currency exchange differences on the CSM; and (v) the amount recognised as insurance revenue for insurance services provided in the year, determined after all other adjustments above. The CSM for Movestic, Scildon in Waard is calculated in the Swedish krona and euro respectively and translated into sterling on consolidation into the Group financial statements. Release of the CSM to profit or loss for insurance contracts \u2013 coverage units The amount of the CSM recognised in profit or loss for insurance contract services in the period is determined by the allocation of the CSM remaining at the end of the reporting period over the current and remaining expected coverage period of the group of insurance contracts based on coverage units. The coverage period is defined as a period during which the entity provides insurance contract (a) Insurance contracts and reinsurance contracts (continued) (xi) Subsequent measurement \u2013 insurance contracts not measured under the PAA The carrying amount of a group of insurance contracts at each reporting date is the sum of the Liability for Remaining Coverage (LRC) and the Liability for Incurred Claims (LIC). The LRC comprises the FCF that relate to services that will be provided under the contracts in future periods and any remaining CSM at that date. The LIC includes the FCF for incurred claims and expenses that have not yet been paid, including claims that have been incurred but not yet reported. The FCF of groups of insurance contracts are updated by the Group for current assumptions at the end of every reporting period, using the current estimates of the amount, timing and uncertainty of future cash flows and of discount rates. The way in which the changes in estimates of the FCF are treated follow the general principle below: (a) changes that relate to current or past service are recognised in profit or loss; and (b) changes that relate to future service are recognised by adjusting the CSM or the loss component within the LRC as per the policy below. For insurance contracts under the GMM: The following adjustments relate to future service and thus adjust the CSM: (a) experience adjustments \u2013 arising from premiums received in the period that relate to future service and related cash flows such as insurance acquisition cash flows and premium-based taxes; (b) changes in estimates of the present value of future cash flows in the LRC, except those described in the following paragraph; (c) differences between any investment component expected to become payable in the period and the actual investment component that becomes payable in the period, determined by comparing (i) the actual investment component that becomes payable in a period with (ii) the payment in the period that was expected at the start of the period plus any insurance finance income or expenses related to that expected payment before it becomes payable; and (d) changes in the risk adjustment for non-financial risk that relate to future service. Adjustments (a), (b) and (d) above are measured using discount rates determined on initial recognition (the locked-in discount rates). For insurance contracts under the GMM, the following adjustments do not adjust the CSM: (a) changes in the FCF for the effect of the time value of money and the effect of financial risk and changes thereof; (b) changes in the FCF relating to the LIC; and (c) experience adjustments relating to insurance service expenses (excluding insurance acquisition cash flows). The Group does not classify any premiums received in the period as relating to current service on materiality grounds. For insurance contracts under the VFA: Direct participating contracts are contracts under which the Group\u2019s obligation to the policyholder is the net of: \u2013 the obligation to pay the policyholder an amount equal to the fair value of the underlying items; and \u2013 a variable fee in exchange for future services provided by the contracts, being the amount of the Group\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. The Group provides investment related services under these contracts by promising an investment return based on underlying items, in addition to insurance coverage. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForReinsuranceExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-12": { "value": "a) Insurance contracts and reinsurance contracts (i) Scope and classification Contracts under which the Group accepts significant insurance risk are classified as insurance contracts. Contracts held by the Group under which it transfers significant insurance risk related to underlying insurance contracts are classified as reinsurance contracts. Insurance and reinsurance contracts also expose the Group to financial risk. Insurance contracts may be issued, and reinsurance contracts may be initiated by the Group, or they may be acquired in a business combination or in a transfer of contracts that does form a business. All references in these accounting policies to \u2018insurance contracts\u2019 and \u2018reinsurance contracts\u2019 include contracts issued, reinsurance contracts initiated or insurance or reinsurance contracts acquired by the Group, unless otherwise stated. Some contracts entered into by the Group have the legal form of insurance contracts but do not transfer significant insurance risk. These contracts are classified as financial liabilities and are referred to as \u2018investment contracts\u2019 (see Note A4(b)). Similarly financial reinsurance contracts do not transfer significant insurance risk and are accounted for under IFRS 9. Mass lapse reinsurance contracts also contain no insurance risk and are accounted for under IAS 37. Contracts within a portfolio that would fall into different groups only because law or regulation specifically constrains the Group\u2019s practical ability to set a different price or level of benefits for policyholders with different characteristics can be included in the same group, however the Group has not taken advantage of this. Portfolios of reinsurance contracts held are assessed separately from insurance contracts issued and are assessed for aggregation on an individual contract basis. Some reinsurance contracts provide cover for underlying contracts that are included in different groups. As per the gross insurance contracts the reinsurance contracts are divided into profitability groupings as follows: any contracts on which there is a net gain on initial recognition; any contracts that, on initial recognition, have no significant possibility of showing a net gain subsequently; and any remaining contracts in the annual cohort. All reinsurance contracts within the Group fall into the third profitability category above. Recognition and derecognition of insurance and reinsurance contracts An insurance contract issued by the Group is recognised from the earliest of: the beginning of its coverage period (i.e. the period during which the Group provides services in respect of any premiums within the boundary of the contract); when the first payment from the policyholder becomes due or, if there is no contractual due date, when it is received from the policyholder; and when a group of contracts becomes onerous or if the facts and circumstances indicate that a group of contracts is onerous for those contracts measured using the PAA. An insurance contract acquired in a transfer of contracts, or a business combination is recognised on the date of acquisition. When the contract is recognised, it is added to an existing group of contracts or, if the contract does not qualify for inclusion in an existing group, it forms a new group to which future contracts are added. Groups of contracts are established on initial recognition and their composition is not revised once all contracts have been added to the group. Non-proportionate reinsurance contracts are recognised at the earlier of: (a) the beginning of the coverage period of the group of reinsurance contracts; or (b) the date the entity recognises an onerous group of underlying insurance contracts if the entity entered into the related reinsurance contract held at or before that date. The recognition of proportionate reinsurance contracts is delayed until the date that any underlying insurance contract is initially recognised, if that date is later than the beginning of the coverage period of the group of reinsurance contracts held. Reinsurance contracts acquired as recognised at the date of acquisition. The Group derecognises a contract when it is extinguished \u2013 i.e. when the specified obligations in the contract expire or are discharged or cancelled. The Group also derecognises a contract if its terms are modified in a way that would have changed the accounting for the contract significantly had the new terms always existed, in which case a new contract based on the modified terms is recognised. If a contract modification does not result in derecognition, then the Group treats the changes in cash flows caused by the modification as changes in estimates of fulfilment cash flows. (a) Insurance contracts and reinsurance contracts (continued) (i) Scope and classification (continued) Insurance contracts are classified as direct participating contracts or contracts without direct participating features. Direct participating contracts are contracts for which, at inception: \u2013 the contractual terms specify that the policyholder participates in a share of a clearly identified pool of underlying items; \u2013 the Group expects to pay to the policyholder an amount equal to a substantial share of the fair value returns on the underlying items; and \u2013 the Group 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. All other insurance contracts and all reinsurance contracts are classified as contracts without direct participating features. Some of these contracts are measured under the PAA. The following table provides a summary of the broad product categories and the measurement model approach applied. Classification Product category Long-term contracts without direct Immediate annuities GMM)participating features ( Term assurance and other non-linked Unit-linked/index-linked/with-profits \u2013 GMM Long-term contracts with direct Unit-linked/index-linked/with-profits \u2013 VFA VFAparticipating features ( ) Short-term contracts (PAA ) Short-term protection (ii) Separating components from insurance and reinsurance contracts The Group does not have any distinct investment components which require separation from the insurance or reinsurance contract. Distinct investment components are 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 Group does not have any insurance contracts containing embedded derivatives or have any insurance contracts which transfer distinct goods and services other than insurance contract services which require separation from the host contract. (iii) Aggregation of insurance and reinsurance contracts Insurance contracts are aggregated into groups for measurement purposes. Groups of insurance contracts are determined by identifying portfolios of insurance contracts, each comprising contracts that are subject to similar risks and are managed together. Each portfolio is divided into annual cohorts (i.e. by year of issue) and each annual cohort into a maximum of three groups based on the profitability of contracts: \u2013 any contracts that are onerous on initial recognition; \u2013 any contracts that, on initial recognition, have no significant possibility of becoming onerous subsequently; and \u2013 any remaining contracts in the annual cohort. Further detail regarding the judgements involved in the defining portfolios and profitability groups can be found in Note A5(c). (v) Fulfilment Cash Flows The Fulfilment Cash Flows (FCF) are the current estimates of the future cash flows within the contract boundary of a group of contracts and: \u2013 are unbiased estimates of the future cash flows; \u2013 are determined from the perspective of the Group, provided that the estimates are consistent with observable market practises and variables; and \u2013 reflect conditions existing at the period-end date. An explicit risk adjustment for non-financial risk is estimated separately from the other estimates and reflects the compensation that the Group requires for bearing the uncertainty about the amount and timing of the cash flows from non-financial risk as the Group fulfils insurance contracts. For reinsurance contracts held, the risk adjustment for non financial risk represents the amount of risk being transferred by the Group to the reinsurer. Methods and assumptions used to determine the risk adjustment for non-financial risk are discussed in Note A5(e). The estimates of the future cash flows are adjusted using current discount rates to reflect the time value of money and the financial risks related to those cash flows. The discount rates reflect the characteristics of the cash flows arising from the groups of insurance contracts, including timing, currency and liquidity of cash flows. The determination of the discount rate that reflects the characteristics of the cash flows and liquidity characteristics of the insurance contracts requires significant judgement and estimation (See Note A5(d)). The Group estimates certain FCF at the portfolio level or higher and then allocates such estimates to groups of contracts. The Group uses consistent assumptions to measure the estimates of the present value of future cash flows for the group of reinsurance contracts held and such estimates for the groups of underlying insurance contracts. (vi) Contract boundaries The measurement of a group of contracts includes all of the future cash flows within the boundary of each contract in the Group. For insurance contracts, cash flows are within the contract boundary if they arise from substantive rights and obligations that exist during the reporting period in which the Group can compel the policyholder to pay premiums or has a substantive obligation to provide services (including insurance coverage and any investment related services). A substantive obligation to provide insurance contract services ends when either: \u2013 the Group 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 \u2013 the Group 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 unless the pricing of the premiums up to the date when the risks are reassessed takes into account the risks that relate to periods after the assessment. For reinsurance contracts cash flows are within the contract boundary if they arise from substantive rights and obligations that exist during the reporting period in which the Group is compelled to pay amounts to the reinsurer or has a substantive right to receive services from the reinsurer. (vii) Insurance acquisition cash flows Insurance acquisition cash flows are cash flows arising 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 are allocated to 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. Insurance acquisition cash flows arising before the recognition of the related group of contracts are recognised as an asset and the asset is derecognised, when the insurance acquisition cash flows are included in the measurement of the group of contracts. The Group derecognises the assets for insurance acquisition cash flows in the year within the reporting period in which the expenses are incurred and therefore does not have any assets for insurance acquisition cash flows on the balance sheet at the reporting date. viii) Initial measurement \u2013 insurance contracts not measured under the PAA The CSM is a component of the carrying amount of the asset or liability for a group of insurance contracts issued representing the unearned profit that the Group will recognise as it provides insurance contract services in the future. At initial recognition, the CSM is an amount that results in no income or expenses (unless a group of contracts is onerous) arising from: (a) the initial recognition of the FCF; and (b) cash flows arising from the contracts in the group at that date. When the above calculation results in a net outflow, the group of insurance contracts issued is onerous. A loss from onerous insurance contracts is recognised in profit or loss immediately, with no CSM recognised on the balance sheet on initial recognition, and a loss component is established in the amount of loss recognised (see Note A4(a)(xi)). (ix) Initial measurement \u2013 reinsurance contracts not measured under the PAA For groups of reinsurance contracts held, any net gain or loss at initial recognition is recognised as the CSM unless the net cost of purchasing reinsurance relates to past events, in which case the Group recognises the net cost immediately in profit or loss. For reinsurance contracts held, the CSM represents a deferred gain or loss that the Group will recognise as a reinsurance expense as it receives insurance contract services from the reinsurer in the future and is calculated as the sum of: (a) the initial recognition of the FCF; (b) cash flows arising from the contracts in the group at that date; and (c) any income recognised in profit or loss when the entity recognises a loss on initial recognition of an onerous group of underlying insurance contracts or on addition of onerous underlying insurance contracts to that group. A loss-recovery component is established or adjusted within the remaining coverage for reinsurance contracts held for the amount of income recognised in (c) above. This amount is calculated by multiplying the loss recognised on underlying insurance contracts by the percentage of claims on underlying insurance contracts that the Group expects to recover from the reinsurance contracts held that are entered into before or at the same time as the loss is recognised on the underlying insurance contracts. When underlying insurance contracts are included in the same group with insurance contracts issued that are not reinsured, the Group applies a systematic and rational method of allocation to determine the portion of losses that relates to underlying insurance contracts. (x) Contracts acquired in a business combination or portfolio transfer For groups of contracts acquired in a transfer of contracts or a business combination, the consideration received for the contracts is included in the fulfilment cash flows as a proxy for the premiums received at the date of acquisition. In a business combination, the consideration received is the fair value of the contracts at that date. 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, or as an adjustment to goodwill or the gain on a bargain purchase if the contracts are acquired in a business combination. 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 and instead reported within \u2018insurance service expense\u2019. A4 Material accounting policy information (continued) (a) Insurance contracts and reinsurance contracts (continued) (xi) Subsequent measurement \u2013 insurance contracts not measured under the PAA The carrying amount of a group of insurance contracts at each reporting date is the sum of the Liability for Remaining Coverage (LRC) and the Liability for Incurred Claims (LIC). The LRC comprises the FCF that relate to services that will be provided under the contracts in future periods and any remaining CSM at that date. The LIC includes the FCF for incurred claims and expenses that have not yet been paid, including claims that have been incurred but not yet reported. The FCF of groups of insurance contracts are updated by the Group for current assumptions at the end of every reporting period, using the current estimates of the amount, timing and uncertainty of future cash flows and of discount rates. The way in which the changes in estimates of the FCF are treated follow the general principle below: (a) changes that relate to current or past service are recognised in profit or loss; and (b) changes that relate to future service are recognised by adjusting the CSM or the loss component within the LRC as per the policy below. For insurance contracts under the GMM: The following adjustments relate to future service and thus adjust the CSM: (a) experience adjustments \u2013 arising from premiums received in the period that relate to future service and related cash flows such as insurance acquisition cash flows and premium-based taxes; (b) changes in estimates of the present value of future cash flows in the LRC, except those described in the following paragraph; (c) differences between any investment component expected to become payable in the period and the actual investment component that becomes payable in the period, determined by comparing (i) the actual investment component that becomes payable in a period with (ii) the payment in the period that was expected at the start of the period plus any insurance finance income or expenses related to that expected payment before it becomes payable; and (d) changes in the risk adjustment for non-financial risk that relate to future service. Adjustments (a), (b) and (d) above are measured using discount rates determined on initial recognition (the locked-in discount rates). For insurance contracts under the GMM, the following adjustments do not adjust the CSM: (a) changes in the FCF for the effect of the time value of money and the effect of financial risk and changes thereof; (b) changes in the FCF relating to the LIC; and (c) experience adjustments relating to insurance service expenses (excluding insurance acquisition cash flows). The Group does not classify any premiums received in the period as relating to current service on materiality grounds. For insurance contracts under the VFA: Direct participating contracts are contracts under which the Group\u2019s obligation to the policyholder is the net of: \u2013 the obligation to pay the policyholder an amount equal to the fair value of the underlying items; and \u2013 a variable fee in exchange for future services provided by the contracts, being the amount of the Group\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. The Group provides investment related services under these contracts by promising an investment return based on underlying items, in addition to insurance coverage. The Group has not applied the risk mitigation option that is available under IFRS 17.B115 regarding offsetting the impacts of derivatives and reinsurance contracts and therefore recognises all changes in financial risk and the time value of money against the CSM for direct participating contracts. The following adjustments relate to future service and thus adjust the CSM: (a) changes in the amount of the Group\u2019s share of the fair value of the underlying items; and (b) changes in the FCF that do not vary based on the returns of underlying items: (i) changes in the effect of the time value of money and financial risks including the effect of financial guarantees; (ii) changes in estimates of the present value of future cash flows in the LRC; and (iii) changes in the risk adjustment for non-financial risk that relate to future service. Adjustments are measured using the current discount rates. For insurance contracts under the VFA, the following adjustments do not adjust the CSM: (a) changes in the obligation to pay the policyholder the amount equal to the fair value of the underlying items; (b) changes in the FCF that do not vary based on the returns of underlying items: (i) changes in the FCF relating to the LIC; and (ii) experience adjustments relating to insurance service expenses (excluding insurance acquisition cash flows). The Group does not classify any premiums received in the period as relating to current service on materiality grounds. Changes to the CSM for insurance contracts: For insurance contracts, the carrying amount of the CSM at each reporting date is the carrying amount at the start of the year, adjusted for: (i) the CSM of any new contracts that are added to the Group in the year; (ii) interest accreted on the carrying amount of the CSM during the year (for contracts under the GMM, using discount rates determined at initial recognition that are applied to nominal cash flows that do not vary based on the returns of underlying items); (iii) as detailed above, changes in fulfilment cash flows that relate to future services, to the extent that there is a CSM available. When an increase in the FCF exceeds the carrying amount of the CSM, the CSM is reduced to zero, the excess is recognised in insurance service expenses and a loss component is recognised within the LRC. When the CSM is zero, changes in the FCF adjust the loss component within the LRC with the impact going to insurance service expenses. The excess of any decrease in the FCF over the loss component reduces the loss component to zero and reinstates the CSM; (iv) the effect of any currency exchange differences on the CSM; and (v) the amount recognised as insurance revenue for insurance services provided in the year, determined after all other adjustments above. The CSM for Movestic, Scildon in Waard is calculated in the Swedish krona and euro respectively and translated into sterling on consolidation into the Group financial statements. Release of the CSM to profit or loss for insurance contracts \u2013 coverage units The amount of the CSM recognised in profit or loss for insurance contract services in the period is determined by the allocation of the CSM remaining at the end of the reporting period over the current and remaining expected coverage period of the group of insurance contracts based on coverage units. The coverage period is defined as a period during which the entity provides insurance contract services. Insurance contract services include coverage for an insured event (insurance coverage), the generation of an investment return for the policyholder, if applicable (investment-return service) for the contracts under the GMM, and the management of underlying items on behalf of the policyholder (investment-related service) for the contracts under the VFA. Investment-return services are provided only when an investment component exists in insurance contracts or the policyholder has a right to withdraw an amount, and the Group expects these amounts to include an investment return that is achieved by the Group by performing investment activities to generate that investment return. Note A5(g) sets out the coverage units that are applied to the products within the Group. Insurance contracts \u2013 loss component When the negative adjustments to the CSM exceed the amount of the CSM, the group of contracts becomes onerous, and the Group recognises the excess in insurance service expenses and records the excess as a loss component of the LRC. Both additions and reversals to the loss component are measured at locked-in discount rates and allocations are made at the beginning of the period. The systematic allocation is calculated as the opening loss component of the LRC divided by the sum of the total opening present value of future cash flows and adjustment for future non-financial risk. When a loss component exists, the Group allocates between the loss component and the remaining component of the LRC for the respective group of contracts, on a systematic and rational basis for: (a) expected incurred claims and other directly attributable expenses for the period; (b) changes in the risk adjustment for non-financial risk for the risk expired; and (c) finance income (expenses) from insurance contracts issued. The amounts of loss component allocation in (a) and (b) above reduce the respective components of insurance revenue and are reflected in insurance service expenses. Decreases in the FCF in subsequent periods that relate to future service reduce the remaining loss component and reinstate the CSM after the loss component is reduced to zero. Increases in the FCF in subsequent periods that relate to future service increase the loss component. Movement in the loss component comprises changes in experience and systematic allocation. Changes relating to experience and assumptions are presented as \u2018Losses and reversals of losses on onerous contracts\u2019 and changes relating to systematic allocation are presented as \u2018Incurred claims and other directly attributable expenses\u2019 in the loss component column of the \u2018analysis by remaining coverage and incurred claims\u2019 tables in the insurance and reinsurance contracts notes in Section F. Subsequent measurement \u2013 reinsurance contracts not measured under the PAA The carrying amount of a group of insurance contracts at each reporting date is the sum of the Asset for Remaining Coverage (ARC) and the Asset for Incurred Claims (AIC). The ARC comprises the FCF that relates to services that will be received under the reinsurance contracts held in future periods and any remaining CSM at that date. The AIC comprises the FCF related to past service for incurred claims that have not yet been received. Changes to the CSM for reinsurance contracts: For reinsurance contracts, the carrying amount of the CSM at each reporting date is the carrying amount at the start of the year, adjusted for: (i) the CSM of any new contracts that are added to the Group in the year; (ii) Interest accreted on the carrying amount of the CSM during the year, measured at the discount rates on nominal cash flows that do not vary based on the returns on any underlying items determined on initial recognition; (iii) Income recognised in profit or loss in the year on initial recognition of onerous underlying contracts; (iv) reversals of a loss-recovery component to the extent that they are not changes in the fulfilment cash flows of the group of reinsurance contracts; (v) changes 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; (vi) the effect of any currency exchange differences on the CSM; and (vii) the amount recognised in profit or loss because of the services received in the year. Income referred to in (iii) above is calculated by multiplying the loss recognised on underlying insurance contracts by the percentage of claims on underlying insurance contracts that the Group expects to recover from the reinsurance contract held that is entered into before or at the same time as the loss is recognised on the underlying insurance contracts. For the purposes of (iii) to (v) above, when underlying insurance contracts are included in the same group with insurance contracts issued that are not reinsured, the Group applies a systematic and rational method of allocation to determine the portion of losses that relates to underlying insurance contracts. Release of the CSM to profit or loss for reinsurance contracts \u2013 coverage units For reinsurance contracts held, the CSM is released to profit or loss as insurance contract services are received from the reinsurer in the period. Note A5(g) sets out the coverage units that are applied to the reinsurance contracts held within the Group. Reinsurance contracts held \u2013 loss-recovery component A loss-recovery component is established or adjusted within the asset for remaining coverage for reinsurance contracts held for the amount of income recognised in profit or loss when the Group recognises a loss on initial recognition of an onerous group of underlying insurance contracts or on addition of onerous underlying insurance contracts to that group. Subsequently, the loss-recovery component is adjusted to reflect changes in the loss component of an onerous group of underlying insurance contracts. The loss-recovery component is further adjusted, if required, to ensure that it does not exceed the portion of the carrying amount of the loss component of the onerous group of underlying insurance contracts that the Group expects to recover from the group of reinsurance contracts held. The loss-recovery component determines the amounts that are presented as a reduction of incurred claims recovery from reinsurance contracts held and are consequently excluded from the reinsurance expenses determination. iii) Insurance and reinsurance contracts measured under PAA The Group uses PAA to simplify the measurement of groups of contracts where the coverage period of each contract in the group is 1 year or less. This approach is used for stand-alone short-term protection products in Movestic. On initial recognition of each group of insurance contracts, the carrying amount of the LRC is measured at the premiums received. The Group has chosen to expense insurance acquisition cash flows when they are incurred. Subsequently, the carrying amount of the LRC is increased by any premiums received and decreased by the amount recognised as insurance revenue for services provided. On initial recognition of each group of contracts, the Group 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 Group has chosen not to adjust the LRC to reflect the time value of money and the effect of financial risk. For contracts measured under the PAA, the LIC is adjusted for the time value of money, as the contracts issued and measured under the PAA typically have a settlement period of over 1 year. A risk adjustment for non-financial risk is also calculated. There are no investment components within insurance contracts issued and reinsurance contracts held that are measured under the PAA. The Group disaggregates changes in the risk adjustment for non-financial risk between the insurance service result and insurance finance income or expenses so that the impact of measuring the risk adjustment for non-financial risk at current discount rates is reported within insurance finance income or expense. Portfolios of insurance contracts that are assets and those that are liabilities, and portfolios of reinsurance contracts that are assets and those that are liabilities, are presented separately in the balance sheet. Any assets or liabilities recognised for cash flows arising before the recognition of the related group of contracts (including any assets for insurance acquisition cash flows) are included in the carrying amount of the related portfolios of contracts. (a) Insurance contracts and reinsurance contracts (continued) (xiv) Non-distinct investment components Insurance revenue and insurance service expenses exclude any Non-Distinct Investment Components (NDIC). The Group identifies the investment component of a contract by determining the amount that it would be required to repay to the policyholder in all scenarios with commercial substance. These include circumstances in which an insured event occurs, or the contract matures or is terminated without an insured event occurring. Investment components are excluded from insurance revenue and insurance service expenses, being recognised instead directly in the balance sheet. The table that follows details the source of the NDICs for the broad product categories. Product category Typical NDIC Immediate annuities None Term assurance and other non-linked Term assurance: None Other non-linked: Lower of death, surrender and maturity benefit Unit-linked/index-linked/with-profits \u2013 GMM Lower of death, surrender and maturity benefit Unit-linked/index-linked/with-profits \u2013 VFA Lower of death, surrender and maturity benefit Short-term protection None (xv) Presentation in the profit and loss and balance sheet Under IFRS 17, for contracts not measured under the PAA, the Group recognises insurance revenue as it satisfies its performance obligations \u2013 i.e. as it provides services under groups of insurance contracts. The insurance revenue relating to services provided for each year represents the total of the changes in the LRC that relate to services for which the Group expects to receive consideration. This mainly comprises the release of expected claims, the risk adjustment expired and the CSM amortised in the period. For contracts measured under the PAA, the insurance revenue for each period equates to the amount of expected premium receipts for providing services in the period. \u2018Insurance service expenses\u2019 in each reporting period represents the cost of providing those services, broadly comprising incurred claims and benefits and expenses that are directly attributable to providing the service in the period. Incurred claims and benefits include lapse amounts but exclude NDICs per note above. \u2018Net income/(expenses) from reinsurance contracts\u2019 generally comprises reinsurance expenses and the recovery of incurred claims. Reinsurance expenses are recognised similarly to insurance revenue, with the amount of reinsurance expenses representing an allocation of the premiums paid to reinsurers that depicts the received insurance contract services in the period. Income and expenses from reinsurance contracts are presented separately from income and expenses from insurance contracts issued. Income and expenses from reinsurance contracts, other than insurance finance income or expenses, are presented on a net basis on the face of the income statement as \u2018net expenses from reinsurance contracts\u2019 in the insurance service result. Together, the insurance revenue, insurance service expenses and net income/(expenses) from reinsurance contracts make up the insurance service result, presented on the face of the income statement. The \u2018investment result\u2019 comprises the \u2018net investment return\u2019, changes in investment contract liabilities and policyholder funds held by the Group and insurance finance income or expenses (IFIE) for both insurance and reinsurance contracts. The IFIE broadly includes the effect of changes in the time value of money and the effect of financial risk and changes in financial risk. The Group includes all IFIE in the profit or loss, with no disaggregation into Other Comprehensive Income. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInsuranceContracts", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-9": { "value": "Standards and amendments issued but not yet effective At the date of authorisation of these financial statements the following standards and interpretations, which are applicable to the Group, and which have not been applied in these financial statements, were in issue but not yet effective: Title Effective date IFRS 9/IFRS 7 Amendments to the classification and measurement of financial instruments 1 January 2026 IFRS 18 Presentation and disclosure financial statements 1 January 2027 The directors do not expect that the adoption of the IFRS 9/IFRS 7 amendments have a material impact on the financial statements of the Group in future periods. The directors expect that the adoption of IFRS 18 will have a material impact on the presentation of the primary statements in future periods. ", "dimensions": { "concept": "ifrs-full:DisclosureOfChangesInAccountingPoliciesAccountingEstimatesAndErrorsExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-13": { "value": "b) Investment contracts Investment contracts are contracts that carry financial risk, with no significant insurance risk and are accounted for under IFRS 9. Where contracts contain both insurance and investment components the investment component can only be separated if it meets the requirements of a \u2018distinct investment component\u2019. Distinct in this sense is where the investment component is not highly inter-related with the insurance component and for which contracts with equivalent terms are sold, or could be sold, separately in the same market or the same jurisdiction. All investment contract liabilities are designated on initial recognition as held at fair value through profit or loss. The Group has designated investment contract liabilities at fair value through profit or loss as this more closely reflects the basis on which the businesses are managed. The financial liability in respect of unit-linked contracts is measured by reference to the value of the underlying net asset value of the unitised investment funds, determined on a bid value, at the balance sheet date. For the UK business, the impact of deferred tax on unrealised capital gains is passed to the policyholder and for the Swedish business a policyholder yield tax in respect of an estimate of the investment return on the underlying investments in the unitised funds are also reflected in the measurement of the respective unit-linked liabilities. Investment contract liabilities are managed together with related investment assets on a fair value basis as part of the documented risk management strategy. The fair value of other investment contracts is measured by discounting current estimates of all contractual cash flows that are expected to arise under contracts. Amounts collected on investment contracts are accounted for using deposit accounting, under which the amounts collected, less any initial fees deducted, are credited directly to the balance sheet as an adjustment to the liability to the investor. Similarly, benefits paid are not included in the income statement but are instead deducted from investment contract liabilities in the accounting period in which they are paid. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinanceIncomeAndCostsExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-15": { "value": "c) Amounts deposited with reinsurers Amounts deposited with reinsurers are investment contract assets under reinsurance arrangements, which primarily involve the transfer of financial risk with no significant insurance risk. These assets are designated on initial recognition as at fair value through profit or loss in order to significantly reduce the accounting mismatch with the corresponding liabilities which these assets share a risk with and tend to offset. These assets are accounted for under IFRS 9 in line with the corresponding gross investment contracts. (n) Policyholders\u2019 funds held by the Group and liabilities relating to policyholders\u2019 funds held by the Group Policyholders\u2019 funds held by the Group and liabilities relating to policyholders\u2019 funds held by the Group are investment contracts that are recognised at fair value and accounted for under IFRS 9. (i) Policyholders\u2019 funds held by the Group The policyholders\u2019 funds held by the Group represent the assets associated with an investment product in the Swedish business, where the assets are held on behalf of the policyholder, for which the group holds a corresponding liability as noted in (ii) below. The policyholders\u2019 funds held by the Group are held for investment purposes on behalf of the policyholders and are designated as at fair value through profit or loss. The fair values of the policyholders\u2019 funds held by the Group are the accumulation of the bid prices of the underlying assets at the balance sheet date. Transactions in these financial assets are recognised on the trade date, which is when the Group commits (on behalf of the policyholder) to purchase or sell the assets. (ii) Liabilities relating to policyholders\u2019 funds held by the Group The liability relating to policyholders\u2019 funds held by the Group represents the liability that matches the asset policyholders\u2019 funds held by the Group. (u) Deferred income Deferred income is in respect of initial fees that relate to the future provision of services that are deferred and amortised over the anticipated period. (ac) Portfolio transfers Where a transaction is not deemed to be a business combination it is accounted for as an asset and liability purchase. In this scenario the Group identifies and recognises the individual identifiable assets acquired (including those assets that meet the definition of, and recognition criteria for, intangible assets in IAS 38 Intangible Assets) and liabilities assumed. The cost of the transaction to the Group shall be allocated to the individual identifiable assets and liabilities on the basis of their relative fair values at the date of purchase. ", "dimensions": { "concept": "ifrs-full:DescriptionOfOtherAccountingPoliciesRelevantToUnderstandingOfFinancialStatements", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-14": { "value": "d) Investment return Investment return comprises investment income from financial assets and rental income from investment properties. Income from financial assets comprises dividend and interest income, net fair value gains and losses (both unrealised and realised) in respect of financial assets classified as fair value through profit or loss, and realised gains on financial assets classified as measured at amortised cost. Dividends are accrued on an ex-dividend basis. Interest received and receivable in respect of interest-bearing financial assets classified as fair value through profit or loss is included in net fair value gains and losses. For financial assets measured at amortised cost, interest income is calculated using the effective interest method. Rental income from investment properties under operating leases is recognised in the Consolidated Statement of Comprehensive Income on a straight-line basis over the term of each lease. Lease incentives are recognised in the Consolidated Statement of Comprehensive Income as an integral part of the total lease income. The investment return in respect of assets backing investment contracts is disclosed separately from the investment return for those assets backing insurance contracts in order to meet the IFRS 17 requirement to illustrate the relationship between insurance finance income or expenses and the corresponding return on the assets. (e) Fee, commission income and other operating income Fee and commission income for investment contracts: In accordance with IFRS 15, fees charged for investment management services provided in connection with investment contracts are recognised as revenue over time, as the services are provided. Initial fees which exceed the level of recurring fees and relate to the future provision of services are deferred and amortised over the anticipated period over time in which services will be provided. Initial fees, annual management charges and contract administration charges are recognised over time as revenue on an accruals basis. Surrender charges are recognised as a reduction to policyholder claims and benefits incurred when the surrender benefits are paid and as such are not reported in the income statement. Commissions received or receivable which do not require the Group to render further services are recognised at the point at which the commission becomes due. However, when it is probable that the Group will be required to render further services during the life of the contract, the commission, or part thereof, is deferred and recognised over time as revenue over the period in which services are rendered. All fees in respect of insurance contracts are now recognised within insurance revenue. Other operating income: Fee income from investment managers is recognised in accordance with IFRS 15 and are in relation to Movestic, and are received from the fund companies, based on the value of the managed assets. The fee income is recognised and adjusted on an ongoing basis, as Movestic meets its commitments. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForRecognitionOfRevenue", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-17": { "value": " (g) Financing costs Financing costs comprise interest payable on borrowings and on reinsurance claims deposits included within reinsurance payables, calculated using the effective interest rate method. Under IFRS 16, interest on lease liabilities is recognised in the Statement of Comprehensive Income as finance costs. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinanceCostsExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-387": { "value": "(g) Financing costs Financing costs comprise interest payable on borrowings and on reinsurance claims deposits included within reinsurance payables, calculated using the effective interest rate method. Under IFRS 16, interest on lease liabilities is recognised in the Statement of Comprehensive Income as finance costs. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInterestIncomeAndExpenseExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-18": { "value": " (h) Income taxes Income tax on the profit or loss for the year comprises current and deferred tax and is recognised in the Consolidated Statement of Comprehensive Income. Tax that relates directly to transactions reflected within equity is also presented within equity. (i) Current tax Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years. (ii) Deferred tax Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date. A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised. In accordance with IAS 12, deferred tax assets and deferred tax liabilities arising from different tax jurisdictions in which the Group operates are not offset against each other. (iii) Policyholders\u2019 fund yield tax Certain of the Group\u2019s policyholders within the Swedish business are subject to a yield tax which is calculated based on an estimate of the investment return on underlying investments within their unitised funds. The Group is under an obligation to deduct the yield tax from the policyholders\u2019 unitised funds and to remit these deductions to the tax authorities. The remittance of this tax payment is included in other operating expenses as it does not comprise a tax charge on Group profits. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIncomeTaxExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-385": { "value": "(ii) Deferred tax Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date. A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised. In accordance with IAS 12, deferred tax assets and deferred tax liabilities arising from different tax jurisdictions in which the Group operates are not offset against each other. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDeferredIncomeTaxExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-386": { "value": "Fee and commission income for investment contracts: In accordance with IFRS 15, fees charged for investment management services provided in connection with investment contracts are recognised as revenue over time, as the services are provided. Initial fees which exceed the level of recurring fees and relate to the future provision of services are deferred and amortised over the anticipated period over time in which services will be provided. Initial fees, annual management charges and contract administration charges are recognised over time as revenue on an accruals basis. Surrender charges are recognised as a reduction to policyholder claims and benefits incurred when the surrender benefits are paid and as such are not reported in the income statement. Commissions received or receivable which do not require the Group to render further services are recognised at the point at which the commission becomes due. However, when it is probable that the Group will be required to render further services during the life of the contract, the commission, or part thereof, is deferred and recognised over time as revenue over the period in which services are rendered. All fees in respect of insurance contracts are now recognised within insurance revenue. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFeeAndCommissionIncomeAndExpenseExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-19": { "value": "(i) Intangible assets (i) Acquired value of in-force business (AVIF) Acquired in-force investment contracts are in respect of investment contracts acquired under business combinations and are measured at fair value at the time of acquisition. The present value of in-force investment contracts recognised under IFRS 9 is stated at cost less accumulated amortisation and impairment losses. The initial cost is deemed to be the fair value of the contractual customer relationships acquired. The acquired present value of the in-force investment contracts is carried gross of tax and is amortised against income on a time profile which, it is intended, will broadly match the profile of the underlying emergence of profit from the contracts. The recoverable amount is estimated at each balance sheet date. If the recoverable amount is less than the carrying amount, an impairment loss is recognised in the Consolidated Statement of Comprehensive Income and the carrying amount is reduced to its recoverable amount. (ii) Acquired value of customer relationships (AVCR) The acquired value of customer relationships arising from business combinations is measured at fair value at the time of acquisition. This comprises the discounted cash flows relating to new insurance and investment contracts which are expected to arise from existing customer relationships. These are carried gross of tax, are amortised in accordance with the expected emergence of profit from the new contracts and are tested for recoverability if there is an indication of impairment. (i) Intangible assets (continued) (iii) Software assets An intangible asset in respect of internal development software costs is only recognised if all of the following conditions are met: (i) an asset is created that can be identified; (ii) it is probable that the asset created will generate future economic benefits; and (iii) the development costs of the asset can be measured reliably. Where no internally generated intangible asset can be recognised, development expenditure is recognised as an expense in the period in which it is incurred. Software assets, including internally developed software, are amortised on a straight-line basis over their estimated useful life, which typically varies between 3 and 5 years. (iv) Deferred acquisition costs Acquisition costs relating to investment contracts comprise directly attributable incremental acquisition costs, which vary with, and are related to, securing new contracts, and are recognised as an asset under IFRS 15 to the extent that they represent the contractual right to benefit from the provision of investment management services. The asset is presented as a deferred acquisition cost asset and is amortised over the expected term of the contract, as the fees relating to the provision of the services are recognised. All other costs are recognised as expenses when incurred. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsAndGoodwillExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-384": { "value": "(i) Acquired value of in-force business (AVIF) Acquired in-force investment contracts are in respect of investment contracts acquired under business combinations and are measured at fair value at the time of acquisition. The present value of in-force investment contracts recognised under IFRS 9 is stated at cost less accumulated amortisation and impairment losses. The initial cost is deemed to be the fair value of the contractual customer relationships acquired. The acquired present value of the in-force investment contracts is carried gross of tax and is amortised against income on a time profile which, it is intended, will broadly match the profile of the underlying emergence of profit from the contracts. The recoverable amount is estimated at each balance sheet date. If the recoverable amount is less than the carrying amount, an impairment loss is recognised in the Consolidated Statement of Comprehensive Income and the carrying amount is reduced to its recoverable amount. (ii) Acquired value of customer relationships (AVCR) The acquired value of customer relationships arising from business combinations is measured at fair value at the time of acquisition. This comprises the discounted cash flows relating to new insurance and investment contracts which are expected to arise from existing customer relationships. These are carried gross of tax, are amortised in accordance with the expected emergence of profit from the new contracts and are tested for recoverability if there is an indication of impairment. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsAndGoodwillExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-16": { "value": "f) Other operating expenses Actual incurred expenses within the Group are assessed according to the Group\u2019s guidelines to consider whether they are attributable to fulfilling insurance contracts and those meeting this requirement are reported as \u2018insurance service expenses\u2019. As part of this assessment, the eligible expenses are apportioned between investment and insurance contracts on a systematic and rational basis. Certain expenses such as project expenses and one-off expenses are considered to be non-attributable and are therefore excluded from the apportionment and directly allocated to \u2018other operating expenses\u2019. The \u2018other operating expenses\u2019 therefore include all expenses that are not attributable to insurance contracts, as they are either not eligible or have been apportioned to investment contracts. Operating lease payments Under IFRS 16, the deprecation of right-of-use assets is recognised in the Statement of Comprehensive Income as an administration expense. Payments made in relation to lease commitments are reflected in the balance sheet as a reduction to the corresponding lease liability. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForExpensesExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-409": { "value": "(iii) Software assets An intangible asset in respect of internal development software costs is only recognised if all of the following conditions are met: (i) an asset is created that can be identified; (ii) it is probable that the asset created will generate future economic benefits; and (iii) the development costs of the asset can be measured reliably. Where no internally generated intangible asset can be recognised, development expenditure is recognised as an expense in the period in which it is incurred. Software assets, including internally developed software, are amortised on a straight-line basis over their estimated useful life, which typically varies between 3 and 5 years. (iv) Deferred acquisition costs Acquisition costs relating to investment contracts comprise directly attributable incremental acquisition costs, which vary with, and are related to, securing new contracts, and are recognised as an asset under IFRS 15 to the extent that they represent the contractual right to benefit from the provision of investment management services. The asset is presented as a deferred acquisition cost asset and is amortised over the expected term of the contract, as the fees relating to the provision of the services are recognised. All other costs are recognised as expenses when incurred. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsOtherThanGoodwillExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-388": { "value": "(iv) Deferred acquisition costs Acquisition costs relating to investment contracts comprise directly attributable incremental acquisition costs, which vary with, and are related to, securing new contracts, and are recognised as an asset under IFRS 15 to the extent that they represent the contractual right to benefit from the provision of investment management services. The asset is presented as a deferred acquisition cost asset and is amortised over the expected term of the contract, as the fees relating to the provision of the services are recognised. All other costs are recognised as expenses when incurred. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDeferredAcquisitionCostsArisingFromInsuranceContractsExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-22": { "value": " (l) Financial investments, assets and liabilities IFRS 9 requires financial investments to be classified into measurement categories using the \u2018business model\u2019 test and the \u2018solely payment of principal and interest\u2019 test. The measurement categories under IFRS 9 are: (i) Amortised Cost (AC); (ii) Fair Value Through Other Comprehensive Income (FVOCI); and (iii) Fair Value Through Profit or Loss (FVTPL). IFRS 9 also permits the application of a \u2018fair value option\u2019 in instances where the outcome of the business model and SPPI tests would lead to a classification of financial assets that would result in an accounting mismatch with the corresponding liabilities. The Group has accordingly classified all financial assets held for investment purposes and derivative financial instruments as FVTPL either mandatorily as a result of the business model and SPPI tests or has designated as FVTPL as permitted by the \u2018fair value option\u2019. The fair values of financial assets quoted in an active market are their bid prices at the balance sheet date. Asset groups to which the fair value option has been applied are debt securities, the mortgage loan portfolio and cash and cash equivalents. The mortgage loan portfolio includes the savings mortgage books for Argenta which encompass both insurance and investment components. As a separate contractional relationship exists, the mortgage assets are accounted for separately to the liabilities. For the liabilities, the investment component and the insurance component are not separated but accounted for as a single unit of account. The present value of the insurance liabilities associated with the mortgage loan and debt securities are strongly dependent on discount rates sourced from market data and therefore a classification of AC for these assets would lead to a large mismatch with the insurance liability. Investments in subsidiaries are carried in the Company Balance Sheet at cost less impairment and all short-term receivables are classified as AC. Financial assets are derecognised when contractual rights to receive cash flows from the financial assets expire, or where the financial assets have been transferred together with substantially all the risks and rewards of ownership. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialAssetsExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-20": { "value": "(j) Property and equipment Items of property and equipment are stated at cost less accumulated depreciation and impairment losses. Depreciation is charged to the Consolidated Statement of Comprehensive Income on a straight-line basis over the estimated useful economic lives of the property and equipment on the following basis: Computers and similar equipment 3 to 5 years Fixtures and other equipment 5 years Assets held under leases, as right-of-use assets, are depreciated over their useful economic lives on the same basis as owned assets, or where shorter, over the term of the relevant lease. These include office buildings, office and IT equipment and motor vehicles. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-389": { "value": "Depreciation is charged to the Consolidated Statement of Comprehensive Income on a straight-line basis over the estimated useful economic lives of the property and equipment on the following basis: Computers and similar equipment 3 to 5 years Fixtures and other equipment 5 years Assets held under leases, as right-of-use assets, are depreciated over their useful economic lives on the same basis as owned assets, or where shorter, over the term of the relevant lease. These include office buildings, office and IT equipment and motor vehicles. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDepreciationExpenseExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-21": { "value": " (k) Investment properties Investment properties consist of properties held in the Unit-Linked Property Investment Fund and SIPP Commercial Property (Directly Held) in our UK division, as described below. Unit-Linked Property Investment Fund The properties held in the unit-linked property fund are valued on a monthly basis by Jones Lang Lasalle (JLL), an independent property valuer, on an open-market basis. Their valuation is prepared in accordance with the Practice Statements in the RICS Appraisal and Valuation Standards (5th Edition). The properties are measured initially at cost. The carrying amount includes the cost of replacing part of an existing property at the time that cost is incurred if the recognition criteria are met; and excludes the costs of day-to-day servicing of a property. Subsequent to initial recognition, properties are stated at fair value, which reflects market conditions at the reporting date. Gains or losses arising from changes in the fair values of properties are included within investment income in the Statement of Comprehensive Income in the year in which they arise. Rental income from investment property is accounted for as described in Accounting Policy (l). 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. Fair value is understood as the value of a property estimated without regard to costs of sale or purchase, and without offset for any associated taxes. All such valuations are prepared and expressed exclusive of VAT payments, unless otherwise stated. The properties are derecognised either when they have been disposed of, or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gains or losses on the retirement or disposal of an investment property are recognised within investment income in the Statement of Comprehensive Income in the year of retirement or disposal. SIPP Commercial Property (Directly Held) The self-invested fund properties are initially recorded at purchase price and then valued triennially, by an independent professional valuer, on an open market basis, using valuation models in accordance with the Practice Statements in the RICS Appraisal and Valuation Standards (5th Edition). The portfolio s revalued annually using an index valuation on each property. Any funds in receipt of the sale of he property are for the benefit of the respective pension fund members. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentPropertyExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-23": { "value": "Financial liabilities \u2018Investment contract liabilities\u2019 and \u2018Liabilities relating to policyholder funds held by the Group\u2019 are designated as FVTPL, since the liabilities are managed together with the investment assets on a fair value basis as part of the documented risk management strategy. Purchases and sales of \u2018regular way\u2019 financial assets are recognised on the trade date, which is when the Group commits to purchase, or sell, the assets. Borrowings and short-term payables are classified as AC. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialLiabilitiesExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-24": { "value": "m) Impairment and Expected Credit Loss provisioning IFRS 9 utilises a forward-looking Expected Credit Loss (ECL) impairment model which applies to financial assets measured at amortised cost, debt investments at FVOCI and lease receivables. As stated above, for the Group all financial assets held for investment purposes are classified as FVTPL. Financial assets that are subject to ECL provisioning are limited to short-term receivables only. The simplified approach under IFRS 9 has been applied in assessing full lifetime loss provisions for these assets. Due to the short-term nature of these instruments and the minimal historical losses on these asset classes, the resulting provisions that would be required are not considered to be material and therefore no provision is made. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfFinancialAssetsExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-391": { "value": "m) Impairment and Expected Credit Loss provisioning IFRS 9 utilises a forward-looking Expected Credit Loss (ECL) impairment model which applies to financial assets measured at amortised cost, debt investments at FVOCI and lease receivables. As stated above, for the Group all financial assets held for investment purposes are classified as FVTPL. Financial assets that are subject to ECL provisioning are limited to short-term receivables only. The simplified approach under IFRS 9 has been applied in assessing full lifetime loss provisions for these assets. Due to the short-term nature of these instruments and the minimal historical losses on these asset classes, the resulting provisions that would be required are not considered to be material and therefore no provision is made. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfAssetsExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-28": { "value": " (r) Other provisions Provisions are recognised when the Group has a present, legal or constructive obligation as a result of past events such that it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate of the amount of the obligation can be made. Where the effect of the time value of money is material, the amount of the provision is the present value of the expenditure expected to be required to settle the obligation. The Group recognises provisions for onerous contracts when the expected benefits to be derived from a contract are less than the unavoidable costs of meeting the obligations under the contract. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForProvisionsExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-29": { "value": "s) Lease contract liabilities The Group assesses whether a contract is or contains a lease, at inception of the contract. The Group recognises a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets (such as tablets and personal computers, small items of office furniture and telephones). For these leases, the Group recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses its incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise: \u2013 Fixed lease payments \u2013 Variable lease payments \u2013 The amount expected to be payable by the lessee under residual value guarantees \u2013 The exercise price of purchase options \u2013 The payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease The lease liability is presented as a separate line in the Consolidated Balance Sheet. The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made. The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses. (s) Lease contract liabilities (continued) The right-of-use assets are depreciated over the shorter of the lease term and the useful life of the underlying asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Group expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease. The Group does not have any leases that include purchase options or transfer ownership of the underlying asset. The right-of-use assets are presented within the same line item as that within which the corresponding underlying assets would be presented if these were owned. For the Group this is \u2018Property and Equipment\u2019. For short-term leases (lease of than 12 months or less) and leases of low-value assets (such as personal computers and office furniture) the Group has opted to recognise a lease expense on a straight-line basis as permitted by IFRS 16. This expense is presented within \u2018Other operating expenses\u2019 in the Consolidated Income Statement. As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead account for any lease and associated non-lease components as a single arrangement. The Group has not used this practical expedient. The Group\u2019s weighted average incremental borrowing rate applied to lease liabilities during 2024 is 4.7% for the UK division, 2.1% or the Swedish division and 2.0% for the Dutch division. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForLeasesExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-390": { "value": " (o) Derivative financial instruments Derivative financial instruments are recognised at fair value. The gain or loss on re-measurement to fair value is recognised immediately in profit or loss. Hedge accounting has not been applied. The fair value of interest rate swaps is the estimated amount that the Group would receive or pay to terminate the swap at the balance sheet date, taking into account current interest rates and the current creditworthiness of the swap counterparties. The fair value of forward exchange contracts is their quoted market price at the balance sheet date, being the present value of the quoted forward price. Embedded derivatives which are not closely related to their host contracts, and which meet the definition of a derivative are separated and fair valued through profit or loss.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsAndHedgingExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-25": { "value": "(o) Derivative financial instruments Derivative financial instruments are recognised at fair value. The gain or loss on re-measurement to fair value is recognised immediately in profit or loss. Hedge accounting has not been applied. The fair value of interest rate swaps is the estimated amount that the Group would receive or pay to terminate the swap at the balance sheet date, taking into account current interest rates and the current creditworthiness of the swap counterparties. The fair value of forward exchange contracts is their quoted market price at the balance sheet date, being the present value of the quoted forward price. Embedded derivatives which are not closely related to their host contracts, and which meet the definition of a derivative are separated and fair valued through profit or loss.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-26": { "value": "p) Other assets \u2018Other assets\u2019 comprise receivables arising from investment contracts and other receivables such as accrued interest, receivables from fund management companies and income tax balances. Financial assets classified as \u2018other assets\u2019, other than accrued interest, are stated at amortised cost less impairment losses. These assets are subject to an expected credit loss assessment under IFRS 9 and are assessed as being immaterial given the typically short-term nature of these balances. The majority of the accrued interest relates to financial assets that are measured at FVTPL and are therefore not subject to the expected credit loss assessment. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTradeAndOtherReceivablesExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-27": { "value": "(q) Cash and cash equivalents Cash and cash equivalents include cash in hand, deposits held at call with banks and other short-term highly liquid investments. Highly liquid is defined as having a short maturity of 3 months or less at their acquisition. Operating activities cash flows include loans and financial investments. The purchases are funded from cash flows associated with the origination of insurance and investment contracts, net of payments of related benefits and claims. This is due to the cash receipts and payments made on behalf of the customers for which their funds are held by the entity. Dividends and interest received from the financial investments are captured within the operating activities. Investing activities cash flows include cash payments to acquire property, plant and equipment, intangibles, and other long-term assets. These payments include those relating to capitalised development costs. Financing activities cash flows include cash proceeds from issuing share capital, cash payments to owners to acquire or redeem the entity\u2019s shares, cash repayments of amounts borrowed, cash payments by a lessee for the reduction of the outstanding liability relating to a finance lease, dividends paid out to shareholders, and interest paid on the borrowings.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyToDetermineComponentsOfCashAndCashEquivalents", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-30": { "value": " (t) Borrowings Borrowings are recognised initially at fair value, less transaction costs, and are subsequently measured at amortised cost using the effective interest rate method, with interest expense recognised in the Consolidated Statement of Comprehensive Income on an effective yield basis. The effective interest rate method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts future cash payments through the expected life of the financial liability.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBorrowingsExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-33": { "value": "(x) Share-based payments (Parent Company only) The value of employee share options and other equity settled share-based payments is calculated at fair value at the grant date using appropriate and recognised option pricing models. Vesting conditions, which comprise service conditions and performance conditions, other than those based upon market conditions, are not taken into account when estimating the fair value of such awards but are taken into account by adjusting the number of equity instruments included in the ultimate measurement of the transaction amount. The value of the awards is recognised as an expense on a systematic basis over the period during which the employment services are provided. Where an award of options is cancelled by an employee, the full value of the award (less any value previously recognised) is recognised at the cancellation date.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSharebasedPaymentTransactionsExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-31": { "value": " (v) Other current liabilities \u2018Other current liabilities,\u2019 comprising investment contract payables and other payables, are recognised when due and are measured on initial recognition at the fair value of the consideration paid. Current liabilities in respect of insurance contracts are reported as part of the Liability for Incurred Claims. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTradeAndOtherPayablesExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-32": { "value": "(w) Employee benefits (i) Pension obligations UK businesses Group companies operate defined contribution pension schemes, which are funded through payments to insurance companies, to which Group companies pay fixed contributions. There are no legal or constructive obligations on Group companies to pay further contributions if the fund does not hold sufficient assets to pay employee benefits relating to service in current and prior periods. Accordingly, Group companies have no further payment obligations once the contributions have been paid. Contributions to defined contribution pension schemes are recognised in the Consolidated Statement of Comprehensive Income when due. Swedish business The Group participates in a combined defined benefit and defined contribution scheme for the benefit of its employees. However, the Scheme is a multi-employer scheme, with the associated assets and liabilities maintained on a pooled basis. There is limited information available to the Group to allow it to account for the Scheme as a defined benefit scheme and, in accordance with IAS 19 Employee Benefits, it is, therefore, accounted for as a defined contribution scheme. Contributions paid to the Scheme are recognised in the Consolidated Statement of Comprehensive Income when due. Dutch business (Waard) Group companies operate defined contribution pension schemes, which are funded through payments to insurance companies, to which Group companies pay fixed contributions. There are no legal or constructive obligations on Group companies to pay further contributions if the fund does not hold sufficient assets to pay employee benefits relating to service in current and prior periods. Accordingly, Group companies have no further payment obligations once the contributions have been paid. Contributions to defined contribution pension schemes are recognised in the Consolidated Statement of Comprehensive Income when due. As a result of the Conservatrix acquisition, Waard Leven assumed the obligations under a defined benefit pension scheme for a small number of former Conservatrix employees. This scheme is closed to new entrants with no further benefits accruing and as such the exposure for Waard Leven is limited to the longevity risk of the contracts. The liability is valued under IAS 19 and reported under \u2018Other provisions\u2019 in the balance sheet. Dutch business (Scildon) Scildon had a defined benefit plan which was closed and transferred into a defined contribution pension plan during 2019. The defined benefit pension scheme was administered by Stichting Pensionfonds Legal & General Nederland. The Company had agreed to contribute to the premium for the unconditional part of the pension. The Company paid a contribution to the Scheme and subsequently had no further financial obligations with respect to this part of the Scheme. During 2019, a new defined contribution pension scheme was established for the benefit of Scildon employees. (ii) Bonus plans The Group recognises a liability and an expense for bonuses based on a formula that takes into consideration the profit attributable to the Company\u2019s shareholders after certain adjustments. The expense is recognised in the Consolidated Statement of Comprehensive Income on an accruals basis. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-34": { "value": "(i) Share capital Shares are classified as equity when there is no obligation to transfer cash or other assets. Incremental costs directly attributable to the issue of equity instruments are shown in equity as a deduction from the proceeds, net of tax. Incremental costs directly attributable to the issue of equity instruments, as consideration for the acquisition of a business, are included in the cost of acquisition. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIssuedCapitalExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-35": { "value": "(ii) Shares held in treasury Where the Company purchases its own equity share capital, the consideration paid, including directly attributable costs, is deducted from total shareholders\u2019 equity and shown separately as \u2018treasury shares\u2019 until they are cancelled. Where such shares are subsequently sold, any consideration received is credited to the share premium account. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTreasurySharesExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-36": { "value": " (z) Dividends (Parent Company only) Dividend distributions to the Company\u2019s shareholders are recognised in the period in which the dividends are paid, and, for the final dividend, when approved by the Company\u2019s shareholders at the Annual General Meeting. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDividendsExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-37": { "value": "(aa) Investment in subsidiaries (Parent Company only) Investments in subsidiaries are carried in the balance sheet at cost less impairment. The Company assesses at each reporting date whether an investment is impaired by assessing whether any indicators of impairment exist. If objective evidence of impairment exists, the Company calculates the amount of impairment as the difference between the recoverable amount of the Group entity and its carrying value and recognises the amount as an expense in the income statement. The recoverable amount is determined based on the cash flow projections of the underlying entities. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSubsidiariesExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-40": { "value": " (ae) Climate change In our Climate-related Financial Disclosures on pages 74 to 91, we note that climate change-related risks are potentially material and as such we have made commitments to transition to net zero by 2050. Primarily for Chesnara, climate change risk would be expected to arise through other financial risks e.g. equity risk, credit risk etc (PR1 \u2013 Investment and Liquidity risk) and also regulatory risk given the level of ongoing change. The Group is also exposed to strategic and reputational risks (PR9 \u2013 Reputational risk) arising from its action or inaction in response to climate change. The year end balance sheet does not include any explicit adjustments in relation to climate risk related impacts. This is based on the expectation that financial markets will factor into their pricing the potential risks and impacts of climate change and other sustainability risks. The market approach to this will continue to develop as the methodology and underlying data to quantify the potential risk becomes better understood. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForEnvironmentRelatedExpenseExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-38": { "value": "(ab) Business combinations Acquisitions meeting the definition of a \u2018business\u2019 are accounted for under IFRS 3 \u2018Business combinations\u2018. This requires management to perform an assessment of the fair value of the assets and liabilities acquired and consideration paid at the point of acquisition. The acquiree\u2019s identifiable assets, liabilities, and contingent liabilities, are classified according to the relevant accounting standard and are measured initially at their fair values at the acquisition date. Expenses directly attributable to the acquisition are expensed as incurred unless determined to be attributable to future insurance contracts. Gains arising on a bargain purchase, where the net fair value of the identifiable assets acquired and the liabilities and contingent liabilities assumed exceeds the fair value of the consideration for the acquisition, are recognised in the Consolidated Statement of Comprehensive Income. Where the fair value of the consideration exceeds the fair value of the assets and liabilities acquired it is recognised as a goodwill intangible asset on the Group balance sheet. The non-controlling interest in the acquiree is initially measured at the non-controlling interest\u2019s proportion of the net fair value of the assets, liabilities and contingent liabilities recognised.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-41": { "value": " A5 Significant accounting judgements and estimates In preparing the financial statements, the Group makes judgements and applies estimates and assumptions that affect the application of accounting policies and reported amounts of assets and liabilities, income and expenses. Disclosures of judgements made by the Group in applying the accounting policies include those that have the most significant effect on the amounts that are recognised in the Consolidated Financial Statements. Such estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable. Details of all critical accounting judgements and estimates are set out in the notes that follow. IFRS 17 significant judgements applied in determining the transition amounts (a) Judgement in applying the IFRS 17 fair value approach at transition IFRS 17 became effective from 1 January 2023 with a transition date of 1 January 2022. The Group applied the full retrospective approach where practical to measure each group of insurance contracts on transition which means IFRS 17 has been applied since acquisition into the Group. Where it was impractical to apply the full retrospective approach a fair value approach was used. The transition approach was determined at the level of a group of insurance contracts, however due to the factors under consideration (such as the length of time since acquisition and availability of data) the outcome of the practicability assessment resulted in a transition approach being applied for the operating segment as a whole, with the exception of Movestic. Operating segment Transition approach UK \u2013 CA Fair value Movestic Fair value* Waard Group Full retrospective Scildon Full retrospective Other Group activities N/A *For PAA contracts in Movestic the Group has concluded that it is practicable to apply the full retrospective approach and hence this was applied. However, it was concluded that the full retrospective approach could not be applied to the majority of the pension benefits in scope of IFRS 17, and hence the fair value approach has been applied. Note F2 provides information relating to the disaggregation of insurance revenue and CSM by transition approach. A5 Significant accounting judgements and estimates (continued) IFRS 17 significant judgements applied in determining the transition amounts (continued) (a) Judgement in applying the IFRS 17 fair value approach at transition (continued) The Group determined that it would be impracticable to apply the full retrospective approach where the following applied: (i) Historical cash flow information was unavailable at the required level of aggregation (ii) Historical actuarial models were unavailable (iii) Information relating to historical assumptions that reflected the conditions existing at the relevant date was unavailable or not possible to create without the use of hindsight Chesnara has been able to apply the full retrospective approach to all material business acquired or written since 2016 when SII was introduced. There was no material new business in the UK or Sweden from 2016 to the transition date. In addition the full retrospective approach has been applied to all of the contracts within Waard, which includes business acquired in 2015. Note A5 provides information relating to the key accounting judgements applied to business that has transitioned under the full retrospective approach. In applying the fair value approach, the Group determined the CSM to be the difference between the fair value of a group of insurance contracts, measured in accordance with IFRS 13, \u2018Fair Value Measurement\u2019 (IFRS 13), and its FCF at the transition date. The fair value of an insurance liability is the price that a market participant would be willing to pay to assume the obligation and the remaining risks of the in-force contracts as at the transition date. In the absence of recent market transactions for similar contracts, a present value technique was used to determine the fair value of the groups of contracts. IFRS 13 defines fair value accounting techniques according to the inputs used. The lack of observable market prices for the liabilities under consideration and hence the reliance on significant judgement to determine a market participant\u2019s view results in the present value technique being considered a Level 3 technique. The significant judgements to determine a market participant\u2019s view include: (a) a market participant\u2019s view of the expected future cash flows and risk allowances would align to Chesnara\u2019s view; (b) only future cash flows within the boundaries of the insurance contracts were included in the market participant\u2019s fair value estimation; (c) a market participant would require a compensation for the cost of holding capital in respect of the liabilities which has been determined based on market rates; and (d) a market participant would determine the compensation for the cost of holding capital based on a buffer in excess of the SII regulatory capital requirements. The buffer assumed is in the range of 130% -140% reflecting the specifics of the underlying business. A number of specific modifications are permitted when using the fair value approach. The Group has adopted the following modifications: (i) Level of aggregation \u2013 to use information at the transition date to identify groups of insurance contracts; (ii) Level of aggregation \u2013 to group annual cohorts of business; (iii) Level of aggregation \u2013 the assessment for profitability was made at the transition date; and (iv) Measurement model \u2013 to use information at the transition date to assess eligibility for the VFA. Fulfilment cash flows were estimated prospectively at the transition date and discount rates were determined at the transition date. IFRS 17 accounting judgements (b) Separation of contracts and classification Judgement has been exercised across the Group in determining whether contracts issued contain significant insurance risk and whether contracts including investment components and insurance components can be separated. Once any investment components are separated, the Group assesses whether the contract should be separated into several insurance components that, in substance, should be treated as separate contracts to reflect the substance of the transaction. To determine whether insurance components should be recognised and measured separately, the Group 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 Group enters into one legal contract with different insurance components operating independently of each other, insurance components are recognised and measured separately applying IFRS 17. Generally, the contracts identified as insurance contracts under IFRS 17 at transition were the same as those under IFRS 4. However, there are some contracts, in the Swedish business, where under IFRS 17 the investment and insurance components can no longer be separated resulting in certain pension benefits becoming in scope of IFRS 17. No contracts have been switched from insurance to investment contracts at transition. Many contracts issued include \u2018rider\u2019 benefits in addition to the base policy, however having considered the facts and circumstances of these products it has been determined that these components should not be separated and that the contract is measured as one contract. The assessment as to whether insurance contracts have direct participating features qualify for the VFA requires an element of judgement to determine whether the proportion of the underlying item to be paid to the policyholder is substantial and whether the policyholder liability varies substantially with the movement in the fair value of the underlying item. (c) Level of aggregation Judgement is required in applying the requirement to group portfolios of insurance contracts that have similar risks and are managed together. The Group has considered the following factors (to the extent that they are relevant for the entity) in order to group contracts by similar risks and those that are managed together: principal insurance risk, product type, tax status, legacy book/outsource provider and measurement model. Further judgement is required in determining the profitability grouping that applies to portfolios of contracts. For the new business cohorts in Scildon, a policy level test is applied and contracts are allocated to the relevant profitability group. To date, this has not resulted in any contracts being classified as \u2018no significant risk of becoming onerous\u2019. Where portfolios of contracts are acquired in a business combination or a portfolio transfer, the purchase terms have been such that to date all contracts have been allocated to the \u2018other\u2019 profitable cohort. (d) Discount rates Cash flows are discounted using currency-specific, risk-free yield curves adjusted for the characteristics of the cash flows and the liquidity of the insurance contracts. The Group applies a \u2018bottom-up\u2019 approach to determining discount rates and follows the methodology used by the PRA and EIOPA to determine risk-free yield curves and ultimate forward rates for regulatory solvency calculations. To reflect the liquidity or otherwise of the insurance contracts, the risk-free yield curves are adjusted by an illiquidity premium, which is aligned to the SII Volatility Adjustment. For certain Dutch \u2018savings mortgage\u2019 products, there is a direct connection to the policyholder\u2019s mortgage loan and the premiums to repay the loan in that the crediting rate is set such that the account value will be equal to the balance on the loan at maturity. For this product, the cash flows are discounted using the same curve used to value the corresponding mortgage assets which itself is derived from mortgage rates available in the market. The cash flows are discounted using a discount rate that adjusts risk-free yields for portfolio specific characteristics, with differences in liquidity characteristics between the financial assets used to derive the risk-free yield and the relevant liability cash flows (known as an illiquidity premium). Inflation rates mainly relate to expense inflation. The assumptions in respect of expense inflation reflect the Group\u2019s best estimate view incorporating market consistent data such as earnings indices and central bank inflation targets. The yield curves that were used to discount the estimates of future cash flows that were modelled deterministically are shown in the table below: 2024 2023 Yield curve Broad product category Currency 1 yr 5 yrs 10 yrs 20 yrs 30 yrs 1 yr 5 yrs 10 yrs 20 yrs 30 yrs RFR Unit-linked/index-linked/with-profits \u2013 VFA EUR 2.24% 2.14% 2.27% 2.26% 2.39% 3.36% 2.32% 2.39% 2.41% 2.53% Unit-linked/index-linked/with-profits \u2013 GMM GBP 4.46% 4.04% 4.07% 4.30% 4.23% 4.74% 3.36% 3.28% 3.43% 3.36% (with high liquidity) Short-term protection SEK 2.25% 2.41% 2.63% 2.93% 3.05% 3.03% 2.26% 2.25% 2.76% 2.99% RFR + VA Immediate annuities EUR 2.47% 2.37% 2.50% 2.49% 2.58% 3.56% 2.52% 2.59% 2.61% 2.70% Term assurance and other non-linked Unit-linked/index-linked/with-profits \u2013 GMM GBP 4.70% 4.28% 4.31% 4.54% 4.47% 5.05% 3.67% 3.59% 3.74% 3.67% (with medium liquidity) Market Mortgage Rates Waard Savings Mortgage EUR 3.36% 3.32% 3.43% 3.39% 3.51% 4.77% 3.73% 3.80% 3.82% 3.94% The sensitivity of the income statement and balance sheet to movements in the yield curve is shown in Note B3(a)(ii). (e) Methods used to measure the risk adjustment for non-financial risk The Group calculates the risk adjustment using a Cost of Capital (CoC) methodology similar to the PRA and EIOPA Solvency II Risk Margin approach. The differences between the Solvency II Risk Margin and the IFRS 17 risk adjustment for non-financial risk include: (a) the risk adjustment for non-financial risk only includes risks within the IFRS 17 contract boundary which may differ to the contract boundary assumed in Solvency II; (b) the Solvency II risk margin makes allowance for counterparty default risk and operational risk, but these are not permitted in the risk adjustment for non-financial risk; and (c) the Solvency II risk margin does not apply a tapering factor for the overseas divisions. The tapering factor reduces the liabilities within the Group and was introduced to the risk margin calculation in the UK SII reforms at December 2023. The same methodology and parameters have been applied for the first time to the risk adjustment calculation for IFRS 17 at 31 December 2024 as a result of the Group also adopting the tapering factor in its EcV reporting, from which the CoC is also derived. The impact of this change in accounting estimate in the year has been a reduction in the risk adjustment of \u00a315.0m and an increase in the CSM of \u00a313.8m. In determining the risk adjustment for non-financial risk each entity allows for diversification between the risks in a consistent manner to that applied in the Solvency II risk margin. Diversification is allowed for within each entity, but not across the entities, and is allocated to groups of insurance contracts in proportion to the undiversified risk capital amounts. The risk adjustment is then determined by applying a CoC rate to the amount of capital required for each future reporting date and discounting the result using the appropriate portfolio level risk-free rates adjusted for illiquidity. The required capital is determined using stresses and diversification factors aligned to the relevant Solvency II methodologies and allocated to groups of contracts in a way that is consistent with the risk profiles of the groups. The CoC rate reflects that used in the Group\u2019s own EcV reporting, currently 3.25%pa (2023: 3.25%). To determine the risk adjustments for non-financial risk for reinsurance contracts, the Group applies these techniques both gross and net of reinsurance and derives the amount of risk being transferred to the reinsurer as the difference between the two results. Over a 1 year time horizon and on a net of reinsurance basis, this risk adjustment corresponds to a confidence level of 66.5% (2023: 75.9%). This is equivalent to estimating that the probability that any changes in best estimate liabilities from non-financial risk over the next year exceed the amount of the risk adjustment is less than 33.5%. Using statistical approximations, the 1-year figure can be transformed into an equivalent confidence level over the expected lifetime of in-force policies of 59.6% (2023: 61.9%). A5 Significant accounting judgements and estimates (continued) IFRS 17 accounting judgements (continued) (f) Expense allocations Expenses cash flows are assessed as to whether they are attributable to the fulfilment or acquisition of insurance contracts. Where estimates of expenses-related cash flows are determined at the portfolio level or higher, they are allocated to groups of contracts on a systematic basis, such as activity-based costing method. The Group has determined that this method results in a systematic and rational allocation. (g) Coverage period and units Judgement is required in determining the expected coverage period over which the CSM is allocated into profit or loss for the services provided or received. For contracts issued, the Group determines the coverage period for the CSM recognition as follows (a) for non-participating contracts, the coverage period corresponds to the policy coverage for mortality and/or morbidity risk and investment return services; (b) for contracts with direct participating features, the coverage period corresponds to the period in which insurance or investment related services are expected to be provided. The coverage period for reinsurance contracts is determined based on the coverage period of all underlying contracts whose cash flows are included in the reinsurance contract boundary. The CSM at the end of the reporting period is allocated to profit and loss based on the relevant underlying coverage units where the number of coverage units in a group is determined by considering, for each contract, the quantity of the benefits provided under a contract and its expected coverage period. The quantity of benefits provided includes insurance, investment return and investment-related services and hence the coverage unit is based on the maximum benefit paymen (including insurance, investment return and investment-related services) which may become due in a period. Where a specific unit of account contains a mixture of services, and therefore coverage units, it is necessary to weight the coverage units so that the resulting profile of CSM release reflects the overall package of benefits provided. This is particularly pertinent to units of account incorporating a combination of immediate and deferred annuities. Under IFRS 17, deferred annuities usually provide multiple services, split between the two phases of benefit provision (the deferral phase and the payment phase). Judgement is therefore required to combine the different coverage units so that they fairly reflect the services provided. The weighting between the deferral phase and the payment phase coverage units is calculated so that the services provided in the deferral phase reflect the investment return provided and the probability weighted delivery of any lump sum death benefits, both adjusted so that all of the CSM is earned in the deferral phase for all contracts which do not enter the payment phase either through transfer out, withdrawal of funds or death. For contracts that provide an investment return or investment-related service, the account balance is generally considered the main driver for determining the amount of service provided in a period For products that provide an insurance service the sum assured, in excess of any account balance, is considered the main driver for determining the amount of insurance service provided in a period The following table provides details of the coverage units applied for the broad product categories: Product category Typical coverage unit Immediate annuities Annuity face amount Term assurance and other non-linked Term assurance: Sum insured Other non-linked: Higher of death and maturity benefit Unit-linked/index-linked/with-profits \u2013 GMM Higher of death benefit, account value and maturity benefit Unit-linked/index-linked/with-profits \u2013 VFA Higher of death benefit, account value and maturity benefit Short-term protection N/A Notes F2 to F5 provide information regarding the timing of the future release of the CSM to the profit and loss account, based on the CSM at the balance sheet date. (h) Non-distinct investment components Insurance revenue and insurance service expenses exclude any NDIC. The Group identifies the investment component of a contract by determining the amount that it would be required to repay to the policyholder in all scenarios with commercial substance. In so doing a judgement that this is from the perspective of the policyholder has been applied. These include circumstances in which an insured event occurs or the contract matures or is terminated without an insured event occurring. Investment components are excluded from insurance revenue and insurance service expenses. Where the required information for the actual NDIC is unavailable at a policy level, the Group applies estimation techniques based on expected data. Typical non-distinct investment components are outlined in Note A4(a)(xiv). Other significant accounting estimates (i) Acquired value of in-force business (CASLP) The Group applies accounting estimates and judgements in determining the fair value, amortisation and recoverability of acquired in-force business. In the initial determination of the acquired value of in-force business, the Group uses actuarial models to determine the expected net cash flows (on a discounted basis) of the policies acquired. The key assumptions applied in the models are driven by the expected behaviour of policyholders on termination rates, expenses of management and age of individual contract holders as well as global estimates of investment growth, based on recent experience at the date of acquisition. The assumptions applied within the models are considered against historical experience of each of the relevant factors. Refer to accounting policy Note A4(i). The acquired value of in-force business is amortised on a basis that reflects the expected profit stream arising from the investment contracts acquired at the date of acquisition. The rate of amortisation is therefore based on expected claims and the asset is expected to run-off over a period of 30 years as at the balance sheet date. Impairment testing requires a degree of estimation and judgement. In particular, the value is sensitive to the rate at which future cash flows are discounted and to the rates of return on invested assets, which have been determined with reference to our review of the current market assessment of the true value of money and the risks specific to the asset for which the cash flows have not been adjusted. The actual (pre-tax) rate applied for the impairment test was 9.55% (31 December 2023: 11.45%). The acquired value of in-force business for CASLP has been tested for recoverability as at 31 December 2024 and as a result of that test no impairment is required as at 31 December 2024 (31 December 2023: \u00a321.0m, \u00a36.1m net of tax). The prior year impairment is reported in \u2018other operating expenses\u2019 in the Group income statement and UK segmental income statement. A 200 bps increase in the effective discount rate would reduce the underlying value of in-force business in CASLP by \u00a32.8m (31 December 2023: \u00a32.0m). A 10% fall in projected future profits would reduce the underlying value of in-force business in CASLP by \u00a32.8m (31 December 2023: \u00a32.2m). (j) Investment in subsidiary CA The Group applies accounting estimates and judgements in determining the holding value and recoverability of its investment in subsidiaries, in particular that of Countrywide Assured plc. An annual impairment test is performed which requires a degree of estimation and judgement, and for which recoverability is tested by reference to the fair value of existing assets and liabilities and expected future income and expense levels as calculated under EcV methodology. The EcV methodology assesses the future cash flows on a best-estimate basis, discounted at a risk-free rate, to measure the future profitability of the business. This assessment showed that as at the balance sheet date, there was a deficit of \u00a34.0m (31 December 2023: \u00a314.4m) against the carrying value of the investment in subsidiary value and hence the carrying value has been impaired by this amount, thereby impacting the Parent Company income statement and balance sheet but no impact to the Group Consolidated Financial Statements. A 200 bps increase in interest rates would reduce the EcV, and hence the carrying value, by \u00a39.5m (31 December 2023: \u00a32.7m). A 10% fall in equity values would reduce the carrying value by \u00a38.0m (31 December 2023: \u00a37.9m). A 10% mass lapse of policyholders would reduce the carrying value by \u00a310.6m (31 December 2023: \u00a311.1m). (k) Persistency Best estimate assumptions about policyholder behaviour, such as surrenders and lapses, used in estimating future cash flows are developed for homogeneous product types and groups of policyholders at a local entity level. Assumptions are generally based on a combination of the local entity\u2019s recent experience and future expectations. Experience is monitored through regular studies, the results of which are reflected both in the pricing of new products and in the measurement of existing contracts. Surrenders and lapses depend on the product and policy duration in force. Note B2 provides more information on lapse rates and the sensitivity of the income statement and balance sheet to changes in persistency assumptions. Key sources of estimation and uncertainty (l) Mortality/Longevity/Morbidity Best estimate assumptions about mortality, longevity and morbidity used in estimating future cash flows are developed for homogeneous product types and groups of policyholders at a local entity level. Assumptions are generally based on a combination of national data, standard industry tables, the local entity\u2019s recent experience and also future expectations. Experience is monitored through regular studies, the results of which are reflected both in the pricing of new products and in the measurement of existing contracts. Note B2 provides more information on mortality rates used and the sensitivity of the income statement and balance sheet to changes in mortality and morbidity assumptions. (m) Future expenses Best estimate assumptions regarding expenses used in the estimation of future cash flows are set at a level that reflects the Group\u2019s expectations as to future expenditure based on each entity\u2019s cost base and annual budgeting process along with longer-term expectations as to how the business will run off net of any new business. Transition costs and major project expenses are reviewed on a case-by-case basis as to whether they should be treated as non-attributable. Costs which are borne centrally for groupwide projects have been considered non-attributable. Expenses pertaining to investment costs on assets backing liabilities where no investment related service is provided to policyholders, generally term assurance and annuities, are also excluded. Note B2 provides more information on the sensitivity of the income statement and balance sheet to changes in future expense assumptions. ", "dimensions": { "concept": "ifrs-full:DisclosureOfAccountingJudgementsAndEstimatesExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-392": { "value": "Where the fair value of the consideration exceeds the fair value of the assets and liabilities acquired it is recognised as a goodwill intangible asset on the Group balance sheet. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForGoodwillExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-39": { "value": "(ad) Foreign currencies The individual financial statements of each Group company are presented in the currency of the primary economic environment in which it operates, being its functional currency. For the purpose of these Consolidated Financial Statements, the results and balance sheet of each Group company are expressed in pounds sterling, which is the functional currency of the Parent Company and the presentation currency of the Consolidated Financial Statements. In preparing the financial statements of the individual companies, transactions in currencies other than the entity\u2019s functional currency, being foreign currencies, are recorded at the rates of exchange prevailing on the dates of the transactions. Income and expense items are translated at the average exchange rates for the year, unless exchange rates fluctuate significantly during the period, in which case the exchange rates at the dates of transactions are used. At each balance sheet date, monetary assets and liabilities which are denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet date and exchange differences are recognised in profit or loss. Non-monetary items carried at fair value, which are denominated in foreign currencies, are translated at the rates prevailing when the fair value was determined. For the purpose of presenting Consolidated Financial Statements, the assets and liabilities of the Group\u2019s foreign operations are translated at exchange rates prevailing on the balance sheet date. Income and expense items are translated at the average exchange rates for the year, unless exchange rates fluctuate significantly during the period, in which case the exchange rates at the dates of transactions are used. Exchange differences arising are classified as other comprehensive income and are recognised in the Group\u2019s foreign currency translation reserve. Such translation differences are recognised as income or as expense in the year in which the operation is disposed of. Transactions relating to business combinations denominated in foreign currencies are translated into sterling at the exchange rates prevailing on the transaction date. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-42": { "value": " B2 Underwriting risk General Underwriting risk consists of insurance risk, persistency risk (together demographic experience risk) and expense risk: \u2013 Insurance risk: the risk transferred from the policyholder to the Group, other than financial risk. Insurance risk arises from uncertainty regarding the occurrence, timing and amount of future claims. \u2013 Persistency (or lapse) risk: the risk that a policyholder will cancel a contract, increase or reduce premiums, withdraw deposits or annuitise a contract earlier or later than expected. \u2013 Expense risk: the risk of unexpected increases in the administrative costs of servicing contracts. The Group is exposed to different aspects of insurance risk for life insurance policies issued: \u2013 Mortality risk \u2013 the risk of losses arising from death of life insurance policyholders being earlier than expected \u2013 Morbidity risk \u2013 the risk of medical claims arising from the diagnosis of illness being higher than expected \u2013 Longevity risk \u2013 the risk of losses due to policyholders living longer than expected The Group\u2019s management of insurance risk is a critical aspect of its business. The primary insurance activity carried out by the Group comprises the assumption of the risk of loss from persons that are directly subject to the risk. As such, the Group is exposed to the uncertainty surrounding the timing and severity of claims under the related contracts. The principal risk is that the frequency and severity of claims is greater than expected. The theory of probability is applied to the pricing and provisioning for a portfolio of insurance contracts. Insured events are, by their nature, random, and the actual number and size of events during any 1 year may vary from those estimated using established statistical techniques. It is noted that the annuity policies give exposure to longevity risk, which provides a partial natural hedge to the exposure to mortality risk. The Group manages its insurance risk through adoption of underwriting strategies, the aim of which is to avoid undue concentration of risk, approval procedures for new products, pricing guidelines and adoption of reinsurance strategies, the aim of which is to reinforce the underwriting strategy by avoiding the retention of undue concentration of risk. Notwithstanding that the Group pursues common overarching objectives and employs similar techniques in managing these risks, the range of product characteristics and the differing market and regulatory environments of the UK, Swedish and Dutch businesses are such that insurance risk is managed separately for the separate operating segments and concentration of insurance risk is mitigated. The UK segment consists of largely closed legacy books of business that are in run-off. Within the Dutch business, the Waard Group operates as an acquisitive vehicle with a number of acquisitions of closed books in recent years whereas Scildon is a writer of new business. The Swedish segment, Movestic, also writes new business however this predominantly comprises of investment contracts valued under IFRS 9. Accordingly, the information which follows (and also the quantitative disclosures in Section F of the notes to the financial statements) differentiates these segments and sets out for each the key risks arising from insurance contracts and how those risks are measured and managed. UK business The main insurance contract portfolios within the UK and the associated risks that have a material effect on the amount, timing and uncertainty of future cash flows arising from the insurance contracts issued are as follows: Immediate annuities Immediate annuities provide regular income payments generally during the outstanding life of the policyholder, and in some cases that of a surviving spouse or partner. In certain cases, payments may be guaranteed for a minimum period. These contracts expose the business to longevity risk. Term assurances and other non-linked The principal insurance risk for these portfolios is mortality risk with some morbidity risk arising from critical illness benefits. The policies generally provide fixed and guaranteed benefits and have fixed future premiums. Unit-linked/Index-linked/With-profits \u2013 GMM The contracts in these portfolios are with-profits or unit-linked pensions and savings products which, due to the presence of in the money guarantees or the charges applied, did not meet the criteria for measurement under VFA. The with-profits policies comprise a guaranteed sum assured payable on death or at maturity, to which may be added a discretionary terminal bonus. The unit-linked policies include guarantees in excess of the unit fund. The principal insurance risk for these contracts is mortality risk however some contracts also contain morbidity risk. (iv) Unit-linked/Index-linked/With-profits \u2013 VFA These portfolios contain unit-linked pensions, endowments and whole of life contracts and a small number of with-profits policies. The contracts passed the criteria for measurement under VFA. The principal insurance risk for these contracts is mortality risk however some contracts also contain morbidity risk. Management of insurance risks The risk at outset of a contract is managed through the pricing basis. Thereafter the risks associated with these products are managed by reinsurance and, in some cases, by the ability to charge the policyholder for the mortality benefits provided. For unit-linked contracts there is exposure to insurance risk only insofar as the value of the unit-linked fund is lower than the guaranteed minimum death benefit. The with-profits business which is measured using the VFA is reinsured to ReAssure Limited and hence the only risk retained for this business is the risk of default by the reinsurer and some expense risk. The following table shows the breakdown of insurance and reinsurance contract values by major product type for contracts in the UK: 31 December Restated Restated Type of contracts 2024 2023 Gross Reinsurance Total Gross Reinsurance Total \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Immediate annuities 102.0 (43.9 ) 58.1 113.4 (48.8 ) 64.6 Term assurance and other non-linked 86.7 (61.1 ) 25.6 92.7 (68.0 ) 24.7 Unit-linked/Index-linked/ With-profits \u2013 GMM 202.4 (0.3 ) 202.1 223.3 (0.2 ) 223.1 Unit-linked/Index-linked/ With-profits \u2013 VFA 915.6 (47.2 ) 868.4 949.7 (47.7 ) 902.0 Total 1,306.7 (152.5 ) 1,154.2 1,379.1 (164.7 ) 1,214.4 Concentration of insurance risk The UK does not underwrite group insurance covers which tends to naturally limit geographic concentrations. Exposures to material insurance risks, on individual cases, are avoided through the use of quota share and surplus reinsurance and retained sums assured on any one life are generally under \u00a3250,000. Mortality assumptions A base mortality table is selected which is most appropriate for each type of contract taking into account historical experience and where appropriate, reinsurers rates. The mortality rates reflected in these tables are periodically adjusted, allowing for emerging experience. The mortality assumptions used on the blocks of business most sensitive to changes in mortality assumptions are disclosed below. Term assurance ex-Protection Life, Life Business: 65% TMN00 select (2023: 65%) and 65% TFN00 select (non-smokers) (2023: 65%), 65% TMS00 select (2023: 65%) and 65% TFS00 select (smokers) (2023: 65%). Annuitant mortality (CA): 104% PMA08 table (2023: 104%) and 104% PFA08 table (2023: 104%), with 100% CMI_2023 improvements (2023: 100% CMI_2022 improvements) with a 1.5% long-term convergence rate from 31 December 2024 (2023: 1.5%). Annuitant mortality (CASLP conventional annuities): 120% PMA08 table (2023: 120%) and 120% PFA08 table (2023: 120%), with 100% CMI_2023 improvements (2023: 100% CMI_2022 improvements) with a 1.5% long-term convergence rate from 31 December 2024 (2023: 1.5%). Other underwriting risks on insurance contracts Expense risk The UK business outsources the majority of operational activities to third party administrators in order to reduce the expense inefficiencies that would arise with fixed and semi-fixed costs on a reducing policy base, although this is mitigated by acquisitions of business. There are, however, risks associated with the use of outsourcing. In particular, there will be a need for periodic renegotiations of the terms of the outsourcing arrangements as the existing agreements expire, the outcome of which could potentially impact ongoing maintenance expenses and involve transition costs. There is also a risk that, at some point in the future, third party administrators could default on their obligations. The UK business monitors the financial soundness of third-party administrators and has retained step-in rights on the more significant of these agreements. There are also contractual arrangements in place which provide for financial penalties in the event of default by the administration service provider. Persistency risk Persistency risk is the risk that the investor cancels the contract or discontinues paying new premiums into the contract, thereby exposing the UK business to the risk of a reduction in profits. Persistency experience is actively monitored to allow early identification of trends. In addition, reinsurance is in place to limit the impact arising from a mass lapse event on the long-term contracts. Swedish business The Movestic business is focused predominantly on unit-linked savings and pensions in the local Swedish market. IFRS 17 requires that contracts are separated according to the benefits selected. The majority of the benefits in Movestic are classified as investment contracts, with no significant insurance risk, and are therefore measured under IFRS 9, however some of the savings benefits do however fall within the scope of IFRS 17 \u2018Insurance Contracts\u2019. In addition, there is some short-term protection business, measured under PAA. Unit-linked/Index-linked/With-profits \u2013 VFA The insurance benefits within scope of IFRS 17 are unit-linked pension savings contracts where the policyholder has selected to receive a payment on survival to a specified date but there are no payments to beneficiaries on death before this date, with invested amounts instead becoming the property of Movestic. To compensate the insured for this risk, Movestic allocates inheritance gains on a monthly basis to surviving policyholders such that the gains broadly match the long-term average values retained due to death. At the individual beneficiary level there is insurance risk as significant additional amounts are paid to the beneficiary on survival compared to receiving no payment on death. Short-term protection These portfolios primarily include insurance contracts providing: Life cover on an individual or group contract basis Accident and sickness cover for group contracts Income protection benefits separated from group pension schemes Waiver of premium separated from group pension schemes The principal risk for the life cover is mortality risk and the principal risk for the remaining products is morbidity risk. The above are 1-year contracts as Movestic has the practical ability to re-price all benefits within 1 year. B2 Underwriting risk (continued) (b) Swedish business (continued) (ii) Short-term protection (continued) Management of insurance risks For linked contracts the investment risk is borne by the policyholder and there is limited exposure to insurance risk. In addition, the allocation of inheritance gains are reviewed regularly and are subject to change in order that the inheritance gains allocated broadly equals the amount paid to Movestic on death, thereby reducing the risk to Movestic. For the contracts measured under the PAA the key risks are managed through appropriate product design and pricing of the policies to ensure that the potential cost to Movestic of these events (and associated expenses of underwriting and administration) are reflected in the price charged to the policyholder. These contracts are either 1-year contracts or Movestic has the practical ability to re-price all benefits within 1 year, which allows Movestic to manage its risk exposure. In addition, risk is further mitigated by the use of reinsurance. The following table shows the breakdown of insurance and reinsurance contract values by major product type for contracts in Sweden: 31 December 2024 2023 Type of contracts Gross Reinsurance Total Gross Reinsurance Total \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Long-term with direct participating features 142.1 \u2013 142.1 131.5 \u2013 131.5 Short-term protection 32.0 (12.4 ) 19.6 40.3 (14.5 ) 25.8 Total 174.1 (12.4 ) 161.7 171.8 (14.5 ) 157.3 Concentration of insurance risk Regarding benefits assured for individual contracts, the combined effect of reinsurance and the fact that the vast majority of the total benefit assured relates to numerous small value contracts limits the level of concentration risk. The use of reinsurance means that exposures to material insurance risks on individual cases are avoided, with 96.9% of the business having retained sums assured of less than \u00a3250,000. In respect of group contracts, the business is exposed to multiple employees of the same organisation being involved in a single loss event. Movestic forecasts that its maximum loss would be of the order of SEK 666m (approximately \u00a348.1m) gross of reinsurance and SEK 33m (approximately \u00a32.4m) after reinsurance. The equivalent retention for 2023 was SEK 15m (approximately \u00a31.2m). Mortality assumptions These are not material for the long-term Swedish contracts as the inheritance gains allocated by Movestic to the surviving policyholders are such that they broadly match the long-term average of the amounts retained on death. Mortality assumptions are not material to the protection products due to the short-term nature of these contracts. Other underwriting risks on insurance contracts Expense risk Expense risk is the risk that expenses are higher than expected hence leading to a reduction in profits. Expenses are actively monitored and managed to reduce this risk. Persistency risk Persistency risk is the risk that the investor cancels the contract or discontinues paying new premiums into the contract, thereby exposing the Swedish business to the risk of a reduction in profits. Persistency experience is actively monitored to allow early identification of trends. In addition, reinsurance is in place to limit the impact arising from a mass lapse event on the c) Waard Group The Waard Group comprises the original business acquired by the Chesnara Group in 2015 and the subsequent acquisitions of portfolios of business made by the Waard Group from 2019 onwards (see Note C1 for details). With the recent acquisitions there is now a mix of protection and savings business in the Waard Group and both the GMM and VFA measurement models are applied. The acquisition of Conservatrix in 2023 also contained contracts where no significant insurance risk remained at the date of acquisition and these contracts have consequently been classified as investment contacts. (i) Immediate annuities The Robein and Conservatrix blocks of business contain immediate annuities, where the risk is longevity. ii) Term assurance and other non-linked Waard\u2019s original business includes term assurances, with further contracts added in subsequent acquisitions most significantly for Argenta and Brand New Day. These portfolios are exposed to mortality risk. The portfolio acquired from Monuta contained endowment and savings business, some with-profit sharing conditions however there are separate portfolios for mortality and longevity risk depending on which is considered to be the predominant risk. The Robein acquisition also included term assurance business. The Robein book includes some term assurance business and Conservatrix includes pension, endowment and funeral plans all of which are exposed to mortality risk. ii) Unit-linked/Index-linked/With-profits \u2013 GMM The Argenta book includes a significant amount of mortgage savings which contain mortality risk. Robein contains unit-linked savings products with death cover as a percentage of fund value. A significant amount of these policies had no insurance risk on acquisition (as over time the death cover moves to 100% of the fund value) however as the acquisition was before the effective date of IFRS 17, the scope is determined at inception of the contract. For those policies with insurance risk, the predominant risk is considered to be longevity risk. The unit-linked savings products have been allocated to two portfolios as only certain types of policy (execution only) passed all criteria of the VFA eligibility test. The Conservatrix book includes \u2018Natural Guarantee Plans\u2019 which provide varying degrees of death benefit cover, ranging from 0% to 110%. These policies have been split between those with mortality risk (where the death cover exceeds the fund value) and those with longevity risk (where the death cover is lower than fund value). In addition Conservatrix also includes unit-linked products with mortality being the predominant risk. v) Unit-linked/Index-linked/With-profits \u2013 VFA As noted above, the Robein book contains unit-linked savings contracts, for which the criteria for measurement under VFA are met. The principal insurance risk for these contracts is longevity risk. Management of insurance risks The portfolio is closed to new business and is in run-off and hence no significant underwriting occurs. For the existing portfolio, the division entered into an excess of loss and catastrophe (Life) and quota share (Health) reinsurance agreement to mitigate the risk in excess of risk appetite for mortality, disability and unemployment. The following table shows the breakdown of insurance and reinsurance contract values by major product type for contracts in the Waard Group: 31 December 2024 2023 Type of contracts Gross Reinsurance Total Gross Reinsurance Total \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Immediate annuities 61.3 \u2013 61.3 67.8 \u2013 67.8 Term assurance and other non-linked 137.5 (2.7 ) 134.8 153.7 (4.4 ) 149.3 Unit-linked/Index-linked/ With-profits \u2013 GMM 463.5 \u2013 463.5 496.9 \u2013 496.9 Unit-linked/Index-linked/ With-profits \u2013 VFA 58.2 \u2013 58.2 67.0 \u2013 67.0 Total 720.5 (2.7 ) 717.8 785.4 (4.4 ) 781.0 Concentration of insurance risk The Waard portfolios do not include group contracts and hence do not have the concentration of risk which may be presented by these contracts. For individual life contracts an excess of loss limit of \u20ac100,000 is applied for life risk, hence concentration risk is limited. Mortality assumptions Different assumptions are used for each portfolio. As an example, the most material portfolio (Argenta Savings Mortgages) uses the following mortality assumptions: 80% of the generational prognosis table AG2018. The assumptions are subject to regular review to ensure that the assumption reflects the experience incurred on the specific book. Persistency and expense risk The Waard portfolio is small relative to the Group which limits the risks presented to the Group. To mitigate the expense risk, management actively monitors the expenses incurred to keep costs to an appropriate level. Management will continue with the current acquisition strategy to maintain expenses efficiencies and in addition, expense risk will be further mitigated by the planned integration of the Waard and Scildon businesses, as referred to in the risk management section of the Strategic Report. Persistency levels are moderate and largely depend on investment performance. d) Scildon Scildon contains a mixture of unit-linked and traditional savings contracts with life cover, term assurance, annuities and group pension business. i) Immediate annuities Immediate annuities provide regular income payments for either the outstanding lifetime of the policyholder and in some cases the outstanding lifetime of a surviving spouse or partner or for the fixed term chosen by the policyholder. Payments are guaranteed for a minimum period. These contracts expose the business to longevity risk. i) Term assurance and other non-linked Scildon mainly writes term life contracts, sold as a regular premium policy. The current mass market product has no surrender value or profit sharing. The most significant factors that could increase risk are epidemics and changes in lifestyle leading to higher mortality. There are also older traditional policies with-profit sharing conditions (before 2011) that allow for a surrender value at lapse or profit sharing at maturity. These are split into separate portfolios reflecting the principal risks of mortality or longevity. (iii) Unit-linked/Index-linked/With-profits \u2013 GMM Scildon writes unit-linked and index-linked business, with most policies paying out 0%, 90% or 110% of the unit-value at death of the policyholder and 100% at maturity. When the death benefit is greater than 100% of the unit fund value the principal risk is mortality and if the death benefit is less than 100% of the unit fund value the principal risk is longevity. These are allocated to two portfolios as only policies allocating the majority of premiums to unit-linked holdings passed the criteria of the VFA eligibility test. (iv) Unit-linked/Index-linked/With-profits \u2013 VFA As noted above, Scildon contains unit-linked and index-linked savings contracts, for which the criteria for measurement under VFA are met. The group pension contracts are also unit-linked in nature and pass the VFA eligibility criteria. The principal risk for these contracts is mortality risk. Management of insurance risks Term assurances are the main new business product type and significant underwriting occurs. For linked contracts the investment risk is borne by the policyholder, therefore there is exposure to insurance risk only insofar as the value of the unit-linked fund is lower than any guaranteed benefits. Quota share reinsurance agreements are in place with a maximum retention per policy, to mitigate the risk in excess of risk appetite for mortality at the moment of underwriting. Catastrophe reinsurance is in place to mitigate the loss arising from a catastrophe risk event. The following table shows the breakdown of insurance and reinsurance contract values by major product type for contracts in Scildon: 31 December 2024 2023 Type of contracts Gross Reinsurance Total Gross Reinsurance Total \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Immediate annuities 143.1 \u2013 143.1 146.7 \u2013 146.7 Term assurance and other non-linked 161.7 14.6 176.3 173.3 14.9 188.2 Unit-linked/Index-linked/ With-profits \u2013 GMM 242.2 \u2013 242.2 278.8 \u2013 278.8 Unit-linked/Index-linked/ With-profits \u2013 VFA 1,349.1 \u2013 1,349.1 1,264.0 \u2013 1,264.0 Total 1,896.1 14.6 1,910.7 1,862.8 14.9 1,877.7 Concentration of insurance risk Scildon does write group pensions contracts with an excess of loss limit of \u20ac200,000 per life, hence concentration risk is limited. Regarding benefits assured for individual contracts, the combined effect of reinsurance and the fact that the vast majority of the total benefit assured relates to numerous small value contracts, limit the level of concentration risk. Mortality assumptions The assumptions differ by product type, and there are also different assumptions applied within each product type depending on when the contract was written. The unit-linked contracts are the largest product group and an example of the mortality tables used are the GBM 1976-1980 (males) and the GBV 1976-1980 (females). For annuities, an example of the mortality tables applied are the GBM 1980-1985 (males) and GBV 1980-1985 (females) tables. Persistency and expense risk To mitigate the expense risk, management actively monitor the expenses incurred to keep costs to an appropriate level. Persistency levels are moderate however they are actively monitored to allow early identification of trends. In addition, expense risk will be further mitigated by the planned integration of the Waard and Scildon businesses, as referred to in the risk management section of the Strategic Report. B2 Underwriting risk (continued) e) Sensitivity analysis The following tables show the impact to the CSM, profit or loss after tax and shareholders\u2019 equity if changes in underwriting risk variables that were reasonably possible at the reporting date had occurred. The analysis has been prepared for a change in the stated variable, with all other assumptions remaining constant and presents the impact both before and after reinsurance. 31 December 2024 CSM CSM Profit or Profit or Equity Equity Variation in/arising from gross net loss gross loss net gross net \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Mortality and morbidity combined \u2013 10% increase (35 .6 ) (11.0 ) (17.9 ) (11.6 ) (17.9 ) ( 11.6 ) Expenses \u2013 10% increase (1 0.5 ) (11.0 ) (5.2 ) (4.9 ) (5.2 ) (4.9 ) Lapse \u2013 10% decrease (1.0 ) (2 . 3 ) (0.3 ) 0.3 (0.3 ) 0.3 31 December 2023 CSM CSM Profit or Profit or Equity Equity \u2013 restated gross net loss gross loss net gross net Variation in/arising from \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Mortality and morbidity combined \u2013 10% increase (34.1 ) (9. 2 ) (1 9.3 ) (11.9 ) ( 1 9. 3 ) (1 1 .9 ) Expenses \u2013 10% increase ( 11.7 ) (12 . 3 ) (5 .9 ) (5.6 ) (5 .9 ) (5 .6 ) Lapse \u2013 10% decrease (1.9 ) (3.0 ) ( 1 .1 ) (0.5 ) (1 .1 ) (0.5 ) The sensitivities to mortality and morbidity (critical illness) rates shown above are calculated on the assumption that there would be no consequential change in rates to policyholders. In practice, Group policy is to pass costs on to policyholders where it is contractually permitted and where it considers that the impact of the change is significant and subject to treating customers fairly. A 10% increase in mortality and morbidity rates in 2024 is expected to result in a lower fall in profits compared to 2023 as Scildon, which has the highest exposure to mortality and morbidity risks, has a higher CSM in 2024. This means that the CSM would absorb more of the impact of the stress. This is partially offset by a higher fall in profits for CA (lower CSM for one of the protection books than 2023) and Waard (lower pvFCF than 2023). The impact of a 10% increase in expenses has increased from 2023 to 2024, driven by CA due to a reduction in per policy expenses allocated to insurance contracts. ", "dimensions": { "concept": "ifrs-full:DisclosureOfNatureAndExtentOfRisksArisingFromInsuranceContractsExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-44": { "value": " (a) Market risk (i) Management of market risk The Group businesses manage their market risks within Asset Liability Matching (ALM) frameworks that have been developed to achieve long-term investment returns at least equal to their obligations under insurance and investment contracts, with minimal risk. Within the ALM frameworks the businesses produce quarterly reports at legal entity and asset and liability class level, which are circulated to the businesses\u2019 key management. The principal technique of the ALM frameworks is to match assets to the liabilities arising from insurance and investment contracts by reference to the type of benefits payable to policyholders, with separate portfolios of assets being maintained for linked and non-linked liabilities. For non-unit-linked business, the Group\u2019s objective is to match the timing and nature of cash flows from insurance and investment contract liabilities with the timing of cash flows from assets subject to identical or similar risks. By matching the cash flows of liabilities with those of suitable assets, market risk is managed effectively, whilst liquidity risk is minimised. These processes to manage the risks, which the Group has not changed from previous periods, ensure that the Group is able to meet its obligations under its contractual liabilities as they fall due. Unit-linked and index-linked insurance contracts and investment contracts The Group matches the financial liabilities relating to these contracts with units in the financial assets of the funds to which the value of the liabilities is linked, such that the policyholders bear the principal market risk (being interest rate, equity price and foreign currency risks) and credit risk. Accordingly, this approach results in the Group having no significant direct market or credit risk on these contracts. Its primary exposure to market risk is the risk of volatility in asset-related fees due to the impact of interest rate, equity price and foreign exchange rate movements on the fair value of the assets held in the linked funds, on which asset-related fees are based. There is residual exposure to market risk on certain unit-linked contracts where the Group provides to policyholders guarantees as to fund performance or additional benefits which are not dependent on fund performance. This exposure is mitigated to the extent that the Group matches the obligations with suitable financial assets external to the unit-linked funds, such that the residual exposure is not considered to be material. With-profits contracts Some non-linked insurance contracts within the UK businesses include discretionary participation features in the form of with-profits policies. For the CA business, where the policyholder benefits comprise a discretionary annual bonus and a discretionary terminal bonus, the with-profits business is wholly reinsured to ReAssure Limited and hence there is no market risk for this class of business on a net basis. For the CA (S&P) business, the primary investment objective of the with-profits policyholder funds is that the guaranteed minimum benefits of the with-profits policyholders should be met entirely from the policyholder funds. The secondary investment objective is, where possible, to provide a surplus in excess of the guaranteed minimum benefits. The entire surplus in the policyholder fund accrues to the with-profits policyholders. Any deficit in the policyholder fund is ultimately borne by shareholders. Therefore, the Group has a significant exposure to market risk in relation to with-profits business should the with-profits policyholder assets be unable to fully meet the cost of guarantees. To achieve the investment objectives, the funds may invest in a range of asset classes including property, equities, fixed interest securities, convertibles, cash and derivatives, both in UK and overseas. Other insurance contracts Other non-linked contracts include contracts which pay guaranteed benefits on insured events, the terms being fixed at the inception of the contract. Exposure to market price risk is minimised by generally investing in fixed-interest debt securities, while interest rate risk is generally managed by closely matching contracts written with financial assets of suitable nature, yield, duration and currency. To the extent that the Group is unable to fully match its interest rate risk, it makes provision in respect of assumed shortfalls on guaranteed returns to policyholders as part of the present value of future cash flows of the contracts. Shareholder funds Shareholder funds at both Group Parent Company and operating subsidiary level, in accordance with corporate objectives and, in some instances, in accordance with local statutory solvency requirements, are invested in order to protect capital and to minimise market and credit risk. Accordingly, they are generally invested in assets of a shorter-term liquid nature, which gives rise to the risk of lower returns on these investments due to changes in short-term interest rates. (ii) Interest rate risk As discussed in the management of market risk section the Group is exposed to interest rate risks in regard to the assets backing non-linked contracts, such assets being primarily in the form of interest-bearing debt securities. The exposure is managed by closely matching contracts written with financial assets of suitable nature, yield, duration and currency. The tables below show the impact of movements in per annum market rates of interest on the CSM, profit or loss after tax and on shareholder equity as at the balance sheet dates. We believe these interest rate risk variables, to which the Group results are sensitive, represent the ones that might reasonably occur in the future. 31 December 2024 Increase Decrease Increase Decrease Increase Decrease Variation in/arising from 100 basis points in market rate of interest Profit Profit Shareholder Shareholder CSM CSM or loss or loss equity equity \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Insurance and reinsurance contracts 1.0 (1.7 ) 71.3 (82.1 ) 71.3 (82.1 ) Financial instruments \u2013 \u2013 (79.4 ) 91.2 (79.4 ) 91.2 To t al 1 . 0 ( 1.7 ) ( 8.1 ) 9 . 1 (8.1 ) 9. 1 31 December 2023 \u2013 restated Increase Decrease Increase Decrease Increase Decrease Variation in/arising from 100 basis points in market rate of interest Profit Profit Shareholder Shareholder CSM CSM or loss or loss equity equity \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Insurance and reinsurance contracts 2.7 (2.6 ) 83.5 (101.5 ) 83.5 (101.5 ) Financial instruments \u2013 \u2013 (89.1 ) 99.1 (89.1 ) 99.1 To t al 2.7 (2.6 ) ( 5. 6 ) (2. 4 ) ( 5. 6 ) (2.4 ) The Group\u2019s exposure to interest rate risk principally comes from non-linked liabilities and the assets backing them. The change in exposure from 2023 to 2024 is primarily driven by Waard, in particular due to a deferred tax asset which can be fully substantiated after a shock, whereas in 2023 this was not the case under a yield fall in particular, causing a reduction in net assets that isn\u2019t experienced this year. The Group\u2019s only material interest-bearing liability is in respect of the Tier 2 debt for which the interest rate is fixed and therefore no material exposure. (iii) Equity price risk As discussed in the management of market risk section, the Group is exposed to equity and property price risks in regards to the asset related fees from the assets backing its unit-linked and index- linked insurance contracts and investment contracts and also in regards to policyholder guarantees for these contracts. The exposure is mitigated somewhat by investing in suitable financial assets outside of the unit-linked and index-linked funds. As also in the management of market risk section, the Group is exposed to equity and property price risks in regards to the UK with-profits. The exposure is mitigated by limiting these investments to back the surplus in the relevant funds and not the guaranteed minimum benefits. (a) Market risk (continued) (iii) Equity price risk (continued) The tables below show the impact of movements in equity and property values on the CSM, profit or loss after tax and on shareholder equity as at the balance sheet date. We believe these equity and property risk variables, to which the Group results are sensitive, are appropriate for the current year and represent the ones that might reasonably occur in the future. 31 December 2024 Increase Decrease Increase Decrease Increase Decrease Variation in/arising from 10% in equity and property price Profit Profit Shareholder Shareholder CSM CSM or loss or loss equity equity \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Insurance and reinsurance contracts 5. 8 (5.8 ) (149.5 ) 149.6 (149.5 ) 149.6 Financial instruments \u2013 \u2013 154.7 (154.8 ) 154.7 (154.8 ) Total 5.8 (5.8 ) 5.2 (5.2 ) 5.2 (5.2 ) 31 December 2023 Increase Decrease Increase Decrease Increase Decrease Variation in/arising from 10% in equity and property price Profit Profit Shareholder Shareholder CSM CSM or loss or loss equity equity \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Insurance and reinsurance contracts 5. 8 (4.7 ) (142.4 ) 141.4 (142 .4 ) 141.4 Financial instruments \u2013 \u2013 152.5 (152.6 ) 152.5 (152.6 ) Total 5.8 (4.7 ) 10.1 (11.2 ) 10.1 (11.2) A fall in equity and property values reduces policyholder fund values and so reduces the value of charge income. Thus, the profit and loss impact of a 10% decrease in equity and property values is negative. This impact has increased in 2024 due to an increase in equity exposures following strong equity growth. Conversely, a 10% increase in equity and property values is now more positive than before. iv) Currency translation risk Currency risk is the risk that the fair value or future cash flows of an asset or liability will change as a result of movements in foreign exchange rates. The Group\u2019s exposure to currency risk is minimised to the extent that the risk on investments denominated in foreign currencies which back unit-linked investment and insurance contracts is borne by policyholders. It is, however, exposed to currency risk through: (i) its investment in Movestic, the assets and liabilities of which are principally denominated in Swedish krona; and (ii) its investment in Waard and Scildon, the assets and liabilities of which are principally denominated in euros. The Group\u2019s currency risk through its ownership of Movestic, Scildon and Waard Group is reflected in: (i) foreign exchange translation differences arising on the translation into sterling and consolidation of Movestic, Scildon and Waard Group\u2019s financial statements; and (ii) the impact of adverse exchange rate movements on cash flows between Chesnara plc and its foreign subsidiaries: in the short-term these relate to cash flows from Movestic, Scildon and Waard to Chesnara by way of dividend payments. The risk on cash flows is reduced by: (a) the foreign currency hedge held by Chesnara plc which mitigates against adverse exchange rate impacts whilst also providing a dampening effect to a favourable currency movement, and; (b) by closely monitoring exchange rate movements and buying forward foreign exchange contracts, where deemed appropriate. Each business unit settles its material transactions in its functional currency, as such the Group\u2019s exposure to currency risk is limited. The following table sets out the Group\u2019s material exposure to assets and liabilities denominated in foreign currencies, expressed in sterling, at the respective balance sheet date. This exposure reflects the translation risk faced by the Group as currency fluctuations can have significant impact on the results of the Group: 31 December 2024 2023 \u00a3m \u00a3m Swedish krona Assets 5,259.1 4,507.1 Liabilities (5,177.7 ) (4,442.0 ) Net assets 81.4 65.1 Euro Assets 2,887.5 2,955.9 Liabilities (2,710.0 ) (2,761.6 ) Net assets 177.5 194.3 The tables below show the impact of movements in foreign currency exchange rates on profit before tax for the year under review and on shareholder equity as at the balance sheet date. We believe these currency risk variables, to which the Group results are sensitive, are appropriate for the current year and represent the ones that are most reasonably possible to occur in the future. 31 December 2024 Favourable Adverse Favourable Adverse Favourable Adverse Variation in/arising from 10% in SEK: sterling exchange rate Profit Profit Shareholder Shareholder CSM CSM or loss or loss equity equity \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Insurance and reinsurance contracts 0.8 (0.7 ) 0.6 (0.5 ) (18 .0 ) 14 .7 Financial instruments \u2013 \u2013 (6.9 ) 7.8 21.5 (16.0 ) Total 0.8 (0.7 ) (6.3 ) 7.3 3.5 (1.3 ) 31 December 2024 Favourable Adverse Favourable Adverse Favourable Adverse Variation in/arising from 10% in EUR: sterling exchange rate Profit Profit Shareholder Shareholder CSM CSM or loss or loss equity equity \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Insurance and reinsurance contracts 1 5.4 (1 2.6 ) (0. 3 ) 0.2 (292.0 ) 238.9 Financial instruments \u2013 \u2013 (13.1 ) 19.4 301.4 (240.1 ) Total 15.4 (12.6 ) (13.4 ) 19.6 9.4 (1.2 ) 31 December 2023 Favourable Adverse Favourable Adverse Favourable Adverse Variation in/arising from 10% in SEK: sterling exchange rate Profit Profit Shareholder Shareholder CSM CSM or loss or loss equity equity \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Insurance and reinsurance contracts 0.6 (0. 5 ) 0. 3 (0.3 ) (1 7.5 ) 14 .3 Financial instruments \u2013 \u2013 (7.2 ) 2.2 20.8 (20.0 ) Total 0.6 (0.5 ) (6.9 ) 1.9 3.3 (5.7 ) 31 December 2023 Favourable Adverse Favourable Adverse Favourable Adverse Variation in/arising from 10% in EUR: sterling exchange rate Profit Profit Shareholder Shareholder CSM CSM or loss or loss equity equity \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Insurance and reinsurance contracts 14.7 (1 2.0 ) (0. 3 ) 0. 3 (295.4 ) 241.7 Financial instruments \u2013 \u2013 (8.5 ) 7.4 308.2 (251.8 ) Total 14.7 (12.0 ) (8.8 ) 7.7 12.8 (10.1 )", "dimensions": { "concept": "ifrs-full:DisclosureOfMarketRiskExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-43": { "value": "3 Financial risk General The Group is exposed to a range of financial risks, principally through its insurance contracts, financial assets, including assets representing shareholder assets, financial liabilities, including investment contracts and borrowings, and its reinsurance assets. These risks are described at a high level in the risk management section of the Annual Report and Accounts under \u2018PR1 \u2013 Investment and Liquidity Risk\u2019. In particular, the key financial risk is that, in the long-term, proceeds from financial assets are not sufficient to fund the obligations arising from its insurance and investment contracts and borrowings. The most important components of this financial risk are market risk (interest rate risk, equity and property price risk and foreign currency exchange risk), liquidity risk and credit risk (including the risk of reinsurer default). The risks related to insurance contracts that have a material effect on the amount, timing and uncertainty of future cash flows arising are set out in Note B2. The Group provides two types of investment contract: unit-linked savings and unit-linked pensions predominantly written in the UK and Sweden. i) Unit-linked savings are single or regular premium contracts, with the premiums invested in a pooled investment fund, where the policyholder\u2019s investment is represented by units or trust accounts where the policyholder decides where to invest. On certain contracts there is a small additional benefit payable on death which is deemed not to transfer significant insurance risk to the business for these contracts. The benefits payable at maturity or surrender of the contracts are the underlying value of the investment in the unit-linked funds or trust accounts, less surrender charges where applicable. ii) Unit-linked pensions are single or regular premium contracts with features similar to unit-linked savings contracts. Benefits are payable on transfer, retirement or death. ", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialRiskManagementExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-45": { "value": " (b) Credit risk (i) Management of 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. Key areas where the Group is exposed to credit risk are: \u2013 Counterparty risk with respect to debt securities and cash deposits; \u2013 The mortgage loan portfolio held by Waard with respect to the interest and capital repayments due from the borrowers; \u2013 Reinsurers\u2019 share of insurance liabilities; \u2013 Amounts deposited with reinsurers in relation to investment contracts; \u2013 Amounts due from reinsurers in respect of claims already paid; and \u2013 Other short-term receivables. Although the businesses hold a significant proportion of their financial assets in debt securities and cash deposits the risk of default on these is mitigated to the extent that any losses arising in respect of unit-linked assets backing the insurance and investment contracts which the businesses issue, would effectively be passed on to policyholders and investors through the unit-linked funds backing the insurance and investment contracts. Reinsurance is used to manage insurance risk in the businesses. This does not, however, discharge the businesses\u2019 liability as primary insurers. If a reinsurer fails to pay a claim for any reason, the businesses remain liable for the payment to the policyholder. The Group limits its exposure to reinsurance counterparties with a credit rating lower than BBB- and the creditworthiness of reinsurance exposures is regularly monitored as part of the Group\u2019s Risk Framework. (b) Credit risk (continued) (i) Management of credit risk (continued) In addition, there will be some exposures to individual policyholders, on amounts due on insurance contracts. These are tightly controlled, with contracts being terminated or benefits amended if amounts owed are outstanding for more than a specified period of time, so that there is no significant risk to the results of the businesses. The Group businesses structure the levels of credit risk they accept by placing limits on their exposure to a single counterparty, or group of counterparties. Such risks are subject to at least an annual review, while watch lists are maintained for exposures requiring additional review. (ii) Exposure to Credit Risk The following table presents the assets of the Group which are subject to credit risk and a reconciliation to the balance sheet carrying amount for each item, this amount representing the maximum credit risk exposure: 31 December 2024 2023 Amount Balance sheet Amount Balance sheet Policyholder subject to carrying Policyholder subject to carrying linked credit risk value linked credit risk value \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Reinsurance contract assets \u2013 169.9 169.9 \u2013 185.7 185.7 Amounts deposited with reinsurers \u2013 34.3 34.3 \u2013 32.5 32.5 Holdings in collective investment schemes 8,333.3 328.3 8,661.6 8,025.4 350.8 8,376.2 Debt securities at fair value through profit or loss 15.1 1,075.8 1,090.9 14.8 1,222.3 1,237.1 Policyholders\u2019 funds held by the Group 1,825.8 \u2013 1,825.8 1,281.8 \u2013 1,281.8 Mortgage loan portfolio 346.9 \u2013 346.9 366.8 \u2013 366.8 Derivative financial instruments 0.1 \u2013 0.1 0.1 0.2 0.3 Other assets 26.9 41.8 68.7 12.6 45.1 57.7 Cash and cash equivalents 83.1 54.9 138.0 78.3 67.7 146.0 Total 10,631.2 1,705.0 12,336.2 9,779.8 1,904.3 11,684.1 The amounts presented above as policyholder linked represent unit-linked assets where there is a corresponding liability meaning that the risk is borne predominantly by the holders of unit-linked insurance and investment contracts. (iii) Credit quality analysis The creditworthiness of major reinsurers is considered on an annual basis by reviewing their financial strength. The Group\u2019s exposure to credit risk is summarised as: Credit rating AAA AA A BBB Below BBB Unrated Total As at 31 December 2024 \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Reinsurance contract assets \u2013 122.9 \u2013 \u2013 \u2013 47.0 169.9 Amounts deposited with reinsurers \u2013 32.5 \u2013 \u2013 \u2013 1.8 34.3 Debt securities at fair value through profit or loss 215.8 337.0 367.9 157.2 0.8 12.2 1,090.9 Policyholders\u2019 funds held by the Group \u2013 136.8 411.6 293.2 984.2 \u2013 1,825.8 Mortgage loan portfolio \u2013 \u2013 10.2 \u2013 \u2013 336.7 346.9 Derivative financial instruments \u2013 \u2013 \u2013 \u2013 \u2013 0.1 0.1 Other assets 0.6 0.4 0.4 0.2 \u2013 67.1 68.7 Cash and cash equivalents \u2013 3.4 73.0 39.8 \u2013 21.8 138.0 Total 216.4 633.0 863.1 490.4 985.0 486.7 3,674.6 Credit rating AAA AA A BBB Below BBB Unrated Total As at 31 December 2023 \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Reinsurance contract assets \u2013 138.7 \u2013 \u2013 \u2013 47.0 185.7 Amounts deposited with reinsurers \u2013 32.5 \u2013 \u2013 \u2013 \u2013 32.5 Debt securities at fair value through profit or loss 409.6 349.1 338.4 128.2 1.2 10.6 1,237.1 Policyholders\u2019 funds held by the Group \u2013 101.9 353.3 167.3 659.7 (0.4 ) 1,281.8 Mortgage loan portfolio \u2013 \u2013 10.7 \u2013 \u2013 356.1 366.8 Derivative financial instruments \u2013 \u2013 0.3 \u2013 \u2013 \u2013 0.3 Other assets 0.7 0.5 0.5 0.2 \u2013 55.8 57.7 Cash and cash equivalents 0.1 3.2 89.7 41.2 \u2013 11.8 146.0 Total 410.4 625.9 792.9 336.9 660.9 480.9 3,307.9 Credit ratings have not been disclosed in the above tables for holdings in unconsolidated collective investment schemes and investments in associates totalling \u00a38,661.6m (31 December 2023: \u00a38,376.2m). The credit quality of the underlying debt securities within these vehicles is managed by the investment managers in line with agreed investment guidelines. Included within reinsurers\u2019 share of insurance contract liabilities and amounts deposited with reinsurers (in respect of investment contracts) above, is a total exposure of \u00a373.4m as at 31 December 2024 (31 December 2023: \u00a371.4m) to ReAssure, which has been included within the \u2018AA\u2019 rating category. Monument Re makes up \u00a343.8m of the unrated exposure to reinsurers\u2019 share of insurance contract liabilities as at 31 December 2024 (31 December 2023: \u00a348.7m). Exposure is limited through the use of a funds withheld arrangement under which the reinsurer has deposited collateral to CA in respect of the value of expected future reinsured claim payments. The \u2018Other assets\u2019 in the credit risk rating table are not held at fair value or managed on a fair value basis. These assets generally consist of short-term receivables and are not considered to have a low credit rating as at 31 December 2024. (iv) Concentration of credit risk Debt securities Policyholder Policyholder Non-linked/ Debt securities Policyholder Policyholder Non-linked/ As at 31 December 2024 linked with-profit shareholder Total As at 31 December 2023 linked with-profit shareholder Total \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Austria \u2013 \u2013 17.5 17.5 Austria \u2013 \u2013 24.8 24.8 Belgium \u2013 \u2013 32.1 32.1 Belgium \u2013 \u2013 37.1 37.1 France 0.6 2.7 219.5 222.8 France 0.7 2.7 200.1 203.5 Germany \u2013 0.4 90.9 91.3 Germany \u2013 0.4 210.7 211.1 Italy \u2013 \u2013 15.9 15.9 Italy \u2013 \u2013 12.3 12.3 Ireland \u2013 \u2013 13.1 13.1 Ireland \u2013 \u2013 14.4 14.4 Netherlands \u2013 2.5 179.7 182.2 Netherlands \u2013 2.5 230.6 233.1 Poland \u2013 \u2013 0.4 0.4 Poland \u2013 \u2013 0.4 0.4 Portugal \u2013 \u2013 0.3 0.3 Portugal \u2013 \u2013 3.3 3.3 Spain \u2013 0.5 38.8 39.3 Spain \u2013 0.5 37.1 37.6 UK 12.0 26.0 169.1 207.1 UK 11.4 25.9 181.9 219.2 Other 2.1 11.2 152.5 165.8 Other 2.2 13.4 117.4 133.0 Europe 14.7 43.3 929.8 987.8 Europe 14.3 45.4 1,070.1 1,129.8 USA 0.3 3.2 82.4 85.9 USA 0.5 3.2 82.4 86.1 Other \u2013 1.5 1.1 2.6 Other \u2013 1.7 1.4 3.1 North America 0.3 4.7 83.5 88.5 North America 0.5 4.9 83.8 89.2 Australia \u2013 \u2013 7.9 7.9 Australia \u2013 \u2013 11.3 11.3 Other \u2013 \u2013 6.7 6.7 Other \u2013 \u2013 6.8 6.8 Asia Pacific \u2013 \u2013 14.6 14.6 Asia Pacific \u2013 \u2013 18.1 18.1 Total 15.0 48.0 1,027.9 1,090.9 Total 14.8 50.3 1,172.0 1,237.1 There are no direct holdings in debt securities within Russia or Ukraine. ", "dimensions": { "concept": "ifrs-full:DisclosureOfCreditRiskExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-46": { "value": " (c) Liquidity risk (i) Management of liquidity risk Liquidity risk is the risk that adequate liquid funds are not available to settle liabilities as they fall due and is managed by forecasting cash requirements and by adjusting investment management strategies to meet those requirements. Liquidity risk is generally mitigated by holding sufficient investments which are readily marketable in sufficiently short timeframes to allow the settlement of liabilities as they fall due. Where liabilities are backed by less marketable assets, for example investment properties, there are provisions in contractual terms which allow deferral of redemptions in times of adverse market conditions. The Group\u2019s substantial holdings of money market assets also serve to reduce liquidity risk. (ii) Maturity analysis The tables below present a maturity analysis of the Group\u2019s liabilities on discounted basis. The insurance and reinsurance contracts are presented on a discounted basis. Financial liabilities are presented on an undiscounted basis. 31 December 2024 Contractual cash flows Carrying values and cash Carrying value <1 yr 1-2 yrs 2-3 yrs 3-4 yrs 4-5 yrs 5-10 yrs >10 yrs Total flows arising from: \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Insurance contract liabilities 4,099.1 704.4 301.8 264.3 245.6 249.9 813.0 1,322.1 3,901.1 Reinsurance contract liabilities 16.6 3.5 3.6 3.3 3.0 2.8 14.7 22.2 53.1 Total insurance and reinsurance contract liabilities (discounted) 4,115.7 707.9 305.4 267.6 248.6 252.7 827.7 1,344.3 3,954.2 Investment contract liabilities 6,116.7 6,070.3 4.6 5.4 4.4 5.0 21.2 5.8 6,116.7 Liabilities relating to policyholder\u2019s fund held by the Group 1,825.5 1,825.5 \u2013 \u2013 \u2013 \u2013 \u2013 \u2013 1,825.5 Lease contract liabilities 0.6 0.6 \u2013 \u2013 \u2013 \u2013 \u2013 \u2013 0.6 Borrowings 204.8 1.4 0.5 0.2 0.2 0.2 201.6 \u2013 204.1 Derivative financial instruments 0.6 0.6 \u2013 \u2013 \u2013 \u2013 \u2013 \u2013 0.6 Other current liabilities 129.7 116.8 \u2013 \u2013 \u2013 \u2013 \u2013 \u2013 116.8 Bank overdrafts 0.8 0.8 \u2013 \u2013 \u2013 \u2013 \u2013 \u2013 0.8 Total financial liabilities (undiscounted) 8,278.7 8,016.0 5.1 5.6 4.6 5.2 222.8 5.8 8,265.1 Total 12,394.4 8,723.9 310.5 273.2 253.2 257.9 1,050.5 1,350.1 12,219.3 31 December 2023 \u2013 restated Contractual cash flows Carrying values and cash Carrying value <1 yr 1-2 yrs 2-3 yrs 3-4 yrs 4-5 yrs 5-10 yrs >10 yrs Total flows arising from: \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Insurance contract liabilities 4,203.0 651.2 332.8 294.4 277.8 267.2 872.9 1,222.6 3,918.9 Reinsurance contract liabilities 17.1 3.2 3.6 3.5 3.2 2.9 15.1 24.7 56.2 Total insurance and reinsurance contract liabilities (discounted) 4,220.1 654.4 336.4 297.9 281.0 270.1 888.0 1,247.3 3,975.1 Investment contract liabilities 5,872.3 5,414.0 40.3 38.0 40.2 47.7 131.0 69.6 5,780.8 Liabilities relating to policyholder\u2019s fund held by the Group 1,281.8 1,281.8 \u2013 \u2013 \u2013 \u2013 \u2013 \u2013 1,281.8 Lease contract liabilities 1.2 1.0 0.2 \u2013 \u2013 \u2013 \u2013 \u2013 1.2 Borrowings 207.9 3.6 1.7 0.7 0.3 0.2 0.9 200.6 208.0 Derivative financial instruments 4.4 4.4 \u2013 \u2013 \u2013 \u2013 \u2013 \u2013 4.4 Other current liabilities 131.7 131.7 \u2013 \u2013 \u2013 \u2013 \u2013 \u2013 131.7 Bank overdrafts 0.2 0.2 \u2013 \u2013 \u2013 \u2013 \u2013 \u2013 0.2 Total financial liabilities (undiscounted) 7,499.5 7,037.3 42.2 38.7 40.5 47.9 131.9 69.6 7,408.1 Total 11,719.6 7,691.7 378.6 336.6 321.5 318.0 1,019.9 1,316.9 11,383.2 The values reported for insurance contract liabilities and reinsurance contract liabilities exclude the risk adjustment and contractual service margin as these are not considered to be financial liabilities subject to liquidity risk. The carrying values in the table above are the balance sheet values. The maturity analysis for unit-linked investment contracts presents all the liabilities as due in the earliest period in the table because they are repayable or transferable on demand, with no notice period. (ii) Maturity analysis (continued) The table that follows shows the amounts from insurance contract assets and liabilities that are payable on demand. In most cases the non-distinct investment component is considered to be appropriate as a proxy for the amount payable on demand. As per the maturity analysis table, the amounts presented exclude the risk adjustment and contractual service margin. The carrying amount is the full balance sheet value. 31 December Restated Type of contracts 2024 2024 2023 2023 Payable on Carrying Payable on Carrying demand amount demand amount \u00a3m \u00a3m \u00a3m \u00a3m Immediate annuities 2.7 306.4 2.4 327.9 Term assurance and other non-linked 130.1 385.9 150.3 419.8 Unit-linked/Index-linked/With-profits \u2013 GMM 822.2 908.1 882.0 999.0 Unit-linked/Index-linked/With-profits \u2013 VFA 2,161.5 2,464.9 2,132.5 2,412.1 Short-term protection 29.1 32.0 36.9 40.3 Total 3,145.6 4,097.3 3,204.1 4,199.1", "dimensions": { "concept": "ifrs-full:DisclosureOfLiquidityRiskExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-47": { "value": " B4 Capital management (a) Regulatory context Solvency II On 31 December 2024 the PRA\u2019s restatement of Solvency II assimilated law came into force. Throughout the document we refer to the new regime as Solvency II, in line with the name of the prudential regime in PRA policy material. The Group is required to comply with the \u2018Solvency II\u2019 regime. Solvency II includes rules over the quantity and quality of capital (known as \u2018Own Funds\u2019) that insurance companies and groups need in order to meet the required level of capital (known as the \u2018Solvency Capital Requirement\u2018). The Group operates exclusively within the UK and the EU and as a result, the Solvency II regime is applied to the Group and all regulated insurance companies within the Group in the financial year. The Solvency II regime has specific rules regarding how Own Funds are recognised and valued. In a number of cases, the IFRS and Solvency II value of an asset and liability are the same, but in some cases there are differences. In particular, liabilities for insurance and investment contracts are valued differently, with insurance contracts valued according to IFRS 17 and therefore including a contractual service margin and investment contracts valued as per unit value under IFRS 9. In addition, Solvency II has differing treatments for certain intangible assets. A high-level reconciliation between the IFRS net assets and Solvency II Own Funds of the Group and its subsidiaries has been provided in section (c)(ii) of this Note. Regarding the Solvency Capital Requirement (SCR) of the Group and its subsidiaries, the Group has elected to use the \u2018standard formula\u2019 approach for its calculation, which means we are applying the formulae as included in the Solvency II framework. The calculations within the standard formula have been designed such that, on the basis that an insurance company holds Own Funds that are at least equal to its SCR, it will be able to withstand a 1 in 200 year event. An alternative would have been to use an \u2018internal model\u2019 but this was not deemed appropriate for the size and complexity of the Group. The UK Treasury and EIOPA have both undertaken a review of Solvency II rules implementation. In the UK this resulted in a reduction in the Risk Margin from 31 December 2023 and similar is expected for the overseas entities from the EIOPA review. Company law As well as complying with the Solvency II regime, each company within the Group is required to comply with relevant company law capital and distribution rules. (b) Objectives, policies and processes for managing capital (i) Objectives To manage compliance with the externally imposed capital requirements, the Group and its subsidiaries have established capital management policies in place. The objectives of these policies are: \u2013 to ensure that capital is managed in a way that is consistent with the business strategy of the Group and its subsidiaries, in that they: \u2013 promote fair customer outcomes through protecting policyholders; \u2013 provide protection to shareholders through ensuring that the business is adequately protected against stress events; and \u2013 provide a framework to support the decision making process for returns to shareholders via dividends. \u2013 to ensure that capital of the Group and its subsidiaries is managed in accordance with the Board\u2019s risk appetite, in particular each Board\u2019s aversion for Own Funds to fall below the SCR. (ii) Policies In light of the objectives for the Group\u2019s and its subsidiaries\u2019 capital management policies, the following quantitative limits for managing Own Funds are applied across the Group: Region Waard UK Movestic Group Scildon Group Dividend paying limit: Own Funds stated as % of SCR 120% 120% 135% 175% 140% Management actions limit: Own Funds stated as % of SCR 110% 110% 135% 175% 110% Dividend paying limit: This is the point at which a dividend would cease to be paid, until at such time the solvency position was restored above this point. This limit is set by the relevant Board in each division with reference to its respective risk appetite, as articulated in each division\u2019s Capital Management Policy. Management actions limit: This is the point at which, should Own Funds fall below this level, additional management actions would be considered to restore Own Funds back above this level. In essence this represents an internal \u2018ladder of intervention limit\u2019 that is set by the Group and divisional Boards. To put the above table and definitions in context, and taking Group as an example, this means that the Group will not pay a dividend should the payment of the dividend take the Group Own Funds to below 140% of its SCR. Should Own Funds fall below 110% of SCR additional management actions will be taken. \u2013 Recovery management protocol: A protocol for management actions has been designed which, in effect, represents an internally set \u2018ladder of intervention\u2019. The protocol includes items such as solvency monitoring frequency, what level of escalations are required and what management actions need to be considered. \u2013 Monthly solvency monitoring: Full solvency calculations are performed on a quarterly basis. For intra-quarter months, a monthly solvency estimate is produced. Where full estimation routines are not practical intra-valuation solvency can be monitored through trigger monitoring and sensitivity analysis. In addition to the Group level indicators, the Chesnara Board will remain close to any indications of divisional solvency movements by means of divisional MI and quarterly business reviews. On at least a monthly basis, specific key risk indicators are monitored against pre-defined trigger points. The trigger points are set having regard for the sensitivity of the Group to certain scenarios. Trigger points and the list of risk indicators being monitored are assessed at least annually. (iv) Compliance during year The Group, and all insurance companies within the Group, held Own Funds above their respective Solvency Capital Requirements at all times during the year. b) Objectives, policies and processes for managing capita (continued) ii) Process for management of capital The following key processes and procedures are in place across the Group to manage adherence to the capital management policies in place: \u2013 Internal solvency reporting: A number of internal reports are produced that focus on the solvency position of the Group/Company. These include the Own Risk & Solvency Assessment (ORSA) Report, a quarterly actuarial report and a quarterly finance report. All of these are presented to and approved by the Board. \u2013 Production of projections: On at least an annual basis, solvency projections are produced for the Group and its subsidiaries. These projections are included in both the business plans and the ORSA Report and show how management anticipates the solvency position to develop over time. The projections process includes assessing the impact of a number of different stress scenarios to ensure that the sensitivities of the business are understood. Both the ORSA and the business plans are presented to and approved by the Board. \u2013 Regular review of internal limits in place: On at least an annual basis, the limits described in section (b)(ii) of this Note are reviewed and assessed, having regard to the developments of the business and any other changes that may have affected the Group\u2019s/divisions\u2019 risk appetite. (c) Quantitative analysis (i) Group solvency position The unaudited solvency position of the Group and its divisions at 31 December 2024, and at 31 December 2023, has been shown in the tables below. They present a view of the solvency position which may differ to the position of the individual insurance company(ies) within that division. 31 December 2024 (unaudited) Other Region Group and consolidation UK Movestic Waard Group Scildon adjustments Group \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Own Funds (pre dividends) 175.4 186.0 88.3 139.8 76.7 666.2 Proposed dividend (45.0 ) (2 .5 ) (6.6 ) \u2013 30.6 (23.5 ) Own Funds (post dividends) 130.4 183.5 81.7 139.8 107.3 642.7 SCR 96.5 121.9 25.2 68.3 4.0 315.9 Solvency surplus 33.9 61.6 56.5 71.5 n/a 326.8 Solvency ratio 135% 151% 324% 205% n/a 203% Dividend paying limit (% of SCR) 120% 120% 135% 175% n/a 140% Dividend paying limit (\u00a3) 115.8 146.3 34.0 119.5 n/a 442.2 Surplus over dividend paying limit 14.6 37.2 47.7 20.3 n/a 200.4 31 December 2023 (unaudited) Other Region Group and consolidation UK Movestic Waard Group Scildon adjustments Group \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Own Funds (pre dividends) 187.5 178.7 105.3 133.7 102.0 707.2 Proposed dividend (35.0 ) (7.8 ) (6 .9 ) \u2013 26.2 (23.5 ) Own Funds (post dividends) 152.5 170.9 98.4 133.7 128.2 683.7 SCR 102.6 116.7 27.9 72.8 12.7 332.7 Solvency surplus 49.9 54.2 70.5 60.9 n/a 351.0 Solvency ratio 149% 147% 353% 184% n/a 205% Dividend paying limit (% of SCR) 120% 120% 135% 175% n/a 140% Dividend paying limit (\u00a3) 123.1 140.0 37.7 127.4 n/a 465.8 Surplus over dividend paying limit 29.4 30.9 60.7 6.2 n/a 217.9 (ii) Reconciliation between Solvency II Own Funds and IFRS net assets (unaudited) The tables below show the key differences between the Solvency II Own Funds reported in section (c)(i) of this Note and the Group\u2019s IFRS net assets. 31 December 2024 (unaudited) Other Region Group and consolidation UK Movestic Waard Group Scildon adjustments Group \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Solvency II Own Funds (post dividends) 130.4 183.5 81.7 139.8 107.3 642.7 Add Back: Ring-fenced fund surplus restrictions 1.9 \u2013 \u2013 \u2013 \u2013 1.9 Add Back: Intangible assets 20.4 66.8 \u2013 \u2013 \u2013 87.2 Add Back: Tier 2 debt and restriction \u2013 \u2013 16.4 \u2013 (184.8 ) (168.4 ) Add Back: Foreseeable dividends 45.0 2.5 6.6 \u2013 30.6 23.5 Add Back: Difference in valuation of technical provisions (66.8 ) (162.1 ) (60.4 ) (33.2 ) 34.5 (288.0 ) Add Back: Difference in deferred tax (3.2 ) \u2013 14.5 9.2 (8.4 ) 12.1 Add Back: Other valuation differences (1.1 ) 1.2 3.9 (0.8 ) 0.2 2.7 IFRS net assets 126.6 91.9 62.7 115.0 (81.8 ) 314.4 31 December 2023 (unaudited) Other Region Group and consolidation UK Movestic Waard Group Scildon adjustments Group \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Solvency II Own Funds (post dividends) 152.5 171.0 98.4 133.7 128.1 683.7 Add Back: Ring-fenced fund surplus restrictions 0.5 \u2013 \u2013 \u2013 \u2013 0.5 Add Back: Intangible assets 22.1 72.8 \u2013 \u2013 \u2013 94.9 Add Back: Tier 2 debt and restriction \u2013 \u2013 13.7 \u2013 (214.3 ) (200.6 ) Add Back: Foreseeable dividends 35.0 7.8 6.9 \u2013 (26.2 ) 23.5 Add Back: Difference in valuation of technical provisions (49.2 ) (153.4 ) (27.7 ) (25.6 ) 40.3 (215.4 ) Add Back: Difference in deferred tax (4.7 ) \u2013 16.5 6.5 (10.2 ) 8.1 Add Back: Other valuation differences (5.7 ) ( 1.0 ) (28.0 ) (0.2 ) 0.1 (34.8 ) IFRS net assets 150.5 97.2 79.8 114.4 (82.2 ) 359.9 Further information on how the Group uses Solvency II, and metrics derived from Solvency II, as Alternative Performance Measures can be found in the additional information section of the Annual Report and Accounts on page 261. ", "dimensions": { "concept": "ifrs-full:DisclosureOfObjectivesPoliciesAndProcessesForManagingCapitalExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-48": { "value": " C1 Composition of operating segments The Group considers that it has no product or distribution-based business segments. It reports segmental information on the same basis as reported internally to the chief operating decision maker, which is the Board of Directors of Chesnara plc. The segments of the Group as at 31 December 2024 comprise: UK: This segment comprises the UK\u2019s life insurance and pensions business within Countrywide Assured plc (CA), the Group\u2019s principal UK operating subsidiary, and Sanlam Life & Pensions UK (SLP), acquired by the Group on 28 April 2022 and subsequently renamed to CASLP Limited (CASLP). The majority of the assets and liabilities of CASLP were transferred to CA in 2023 under a Part VII business transfer. CASLP was dissolved on 14 January 2025. During the year, the Group reached an agreement to acquire the unit-linked bond and pension business of Canada Life Limited with the transaction initially in the form of a reinsurance agreement accepted by CA. See Note I7 for further details. Movestic: This segment comprises the Group\u2019s Swedish life and pensions business, Movestic Livf\u00f6rs\u00e4kring AB (Movestic) and its subsidiary company Movestic Fonder AB (investment fund management company). Movestic is open to new business and primarily comprises unit-linked pension business and also providing some life and health product offerings. Waard Group: This segment represents the Group\u2019s closed Dutch life insurance business and comprises a number of acquisitions of closed insurance books of business since the acquisition of the original Waard entities into the Group in 2015. The Waard Group comprises a mixture of long-term savings and protection business and also contains some non-life business. Scildon: This segment represents the Group\u2019s open Dutch life insurance business. Scildon\u2019s policy base is predominantly made up of individual protection and savings contracts. It is open to new business and sells protection, individual savings and group pension contracts via a broker-led distribution model. The planned integration of the Waard and Scildon businesses, as referred to in the risk management section of the Strategic Report has not been applied in the segmental reporting in these financial statements. Other Group activities: The functions performed by the Parent Company, Chesnara plc, are defined under the operating segment analysis as other Group activities. Also included therein are consolidation and elimination adjustments. The accounting policies of the segments are the same as those for the Group as a whole. Any transactions between the business segments are on normal commercial terms in normal market conditions. The Group evaluates performance of operating segments on the basis of the profit before tax attributable to shareholders of the reporting segments and the Group as a whole. There were no changes to the measurement basis for segment profit during the year ended 31 December 2024. C2 Segmental performance and net assets (a) Segmental income statement for the year ended 31 December 2024 Movestic Waard Group Scildon Other Group UK ( Swe de n ) (Ne t he rl an d s ) ( N et he rl an d s ) act iv i ti e s (U K ) Total \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Insurance revenue 71.3 10.2 29.8 150.6 \u2013 261.9 Insurance service expense (64.9 ) (2.6 ) (31.4 ) (145. 2 ) \u2013 (244.1 ) Net expenses from reinsurance contracts held (0.9 ) ( 1.8 ) (2 .0 ) (4.5 ) \u2013 (9.2 ) Segmental insurance service result 5.5 5.8 (3.6 ) 0.9 \u2013 8.6 Net investment return 380.7 666.6 28.1 201.4 9.3 1,286.1 Net finance (expenses)/income from insurance contracts issued (98.4 ) (23.6 ) (23.2 ) (189.6 ) \u2013 (334.8 ) Net finance expenses from reinsurance contracts held 3.1 0.3 \u2013 (0.8 ) \u2013 2.6 Net change in investment contract liabilities (260.0 ) (479.6 ) (0.8 ) \u2013 \u2013 (740.4 ) Change in liabilities relating to policyholders\u2019 funds held by the Group \u2013 (160.8 ) \u2013 \u2013 \u2013 (160.8 ) Segmental investment result 25.4 2.9 4.1 11.0 9.3 52.7 Fee, commission and other operating income 37.4 65.5 0.3 \u2013 1.0 104.2 Segmental revenue, net of investment result 68.3 74.2 0.8 11.9 10.3 165.5 Other operating expenses (39.7 ) (54.9 ) (3.3 ) (4. 3 ) (22.0 ) (124.2 ) Financing costs (0.2 ) (0.4 ) \u2013 \u2013 (10.5 ) (1 1 .1 ) Profit/(loss) before tax and consolidation adjustments 28.4 18.9 (2.5 ) 7.6 (22.2 ) 30.2 Other operating expenses: Amortisation and impairment of intangible assets (0.1 ) (9.3 ) \u2013 \u2013 \u2013 (9.4 ) Segmental income less expenses 28.3 9.6 (2.5 ) 7.6 (22.2 ) 20.8 Post completion gain on portfolio acquisition \u2013 \u2013 \u2013 \u2013 \u2013 \u2013 (Loss)/profit before tax 28.3 9.6 (2.5 ) 7.6 (22.2 ) 20.8 Income tax credit/(charge) (17.0 ) (0.5 ) 0.8 (2.0 ) 1. 8 ( 16.9 ) (Loss)/profit after tax 11.3 9.1 (1.7 ) 5.6 (20.4 ) 3.9 (b) Segmental balance sheet as at 31 December 2024 Movestic Waard Group Scildon Other Group UK ( Swe de n ) (Ne t he rl an d s ) ( N et he rl an d s ) act iv i ti e s (U K ) Total \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Total assets 4,473.8 5,269.7 851.9 2,035.7 124.0 12,755.1 Total liabilities (4,347. 2 ) (5,177.8 ) (789.2 ) (1,920.7 ) (205.8 ) ( 12,440.7 ) Net assets 126.6 91.9 62.7 115.0 (81.8 ) 314.4 Investment in associates \u2013 \u2013 \u2013 \u2013 \u2013 \u2013 Additions to non-current assets \u2013 \u2013 \u2013 \u2013 \u2013 \u2013 C2 Segmental performance and net assets (continued) (c) Segmental income statement for the year ended 31 December 2023 Restated Movestic Waard Group Scildon Other Group UK ( Swe de n ) (Ne t he rl an d s ) ( N et he rl an d s ) act iv i ti e s (U K ) Total \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Insurance revenue 65.8 11.1 36.1 115.0 \u2013 228.0 Insurance service expense (65.7 ) (7.4 ) (37.8 ) (11 3.9 ) \u2013 (224.8 ) Net expenses from reinsurance contracts held (5.5 ) (0.6 ) 0.4 (2.7 ) \u2013 (8.4 ) Se gm e nt al i n su ra nc e s ervic e r es ul t (5.4 ) 3 .1 (1.3 ) ( 1. 6 ) \u2013 ( 5.2 ) Net investment return 339.3 432.5 63.2 181.2 7.3 1,023.5 Net finance (expenses)/income from insurance contracts issued (86.4 ) (16.0 ) (49.3 ) (163.2 ) \u2013 (314.9 ) Net finance expenses from reinsurance contracts held 9.3 0.7 0.1 (3.4 ) \u2013 6.7 Net change in investment contract liabilities (226.4 ) (299.6 ) (3.6 ) \u2013 \u2013 (529.6 ) Change in liabilities relating to policyholders\u2019 funds held by the Group \u2013 (114.0 ) \u2013 \u2013 \u2013 (114.0 ) Segmental investment result 35.8 3.6 10.4 14.6 7.3 71.7 Fee, commission and other operating income 39.8 50.3 2.9 \u2013 (3.6 ) 89.4 Segmental revenue, net of investment result 70.2 57.0 12.0 13.0 3.7 155.9 Other operating expenses (39.9 ) (40.0 ) (3.5 ) (5.5 ) (23.1 ) ( 112 .0 ) Financing costs (0.2 ) (0.5 ) \u2013 \u2013 (10.3 ) (11.0 ) Profit/(loss) before tax and consolidation adjustments 30.1 16.5 8.5 7.5 (29.7 ) 32.9 Other operating expenses: Amortisation and impairment of intangible assets (26.7 ) (11.2 ) \u2013 \u2013 \u2013 (37.9 ) Segmental income less expenses 3.4 5.3 8.5 7.5 (29.7 ) (5.0 ) Post completion gain on portfolio acquisition \u2013 \u2013 6.7 \u2013 \u2013 6.7 (Loss)/profit before tax 3.4 5.3 15.2 7.5 (29.7 ) 1.7 Income tax credit/(charge) 20.5 \u2013 (1.6 ) (1.9 ) (0.1 ) 16.9 (Loss)/profit after tax 23.9 5.3 13.6 5.6 (29.8 ) 18.6 (d) Segmental balance sheet as at 31 December 2023 Restated Movestic Waard Group Scildon Other Group UK ( Swe de n ) (Ne t he rl an d s ) ( N et he rl an d s ) act iv i ti e s (U K ) Total \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Total assets 4,527.1 4,519.4 946.8 2,009.1 127.3 12,129.8 Total liabilities (4,376.6 ) (4,422.2 ) (867.0 ) (1, 894.6 ) (209.5 ) (11,769.9 ) Net assets 150.5 97.2 79.8 114.5 (82.2 ) 359.9 Investment in associates \u2013 \u2013 \u2013 \u2013 \u2013 \u2013 Additions to non-current assets \u2013 \u2013 \u2013 \u2013 \u2013 \u2013 ", "dimensions": { "concept": "ifrs-full:DisclosureOfEntitysReportableSegmentsExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-49": { "value": " D1 Insurance result Year ended 31 December 2024 Movestic Waard Group Scildon Insurance revenue UK (Sweden ) (Netherlands ) (Netherlands ) Total \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Contracts not measured under the PAA: Amounts relating to changes in the liability for remaining coverage: Expected incurred claims and other directly attributable expenses 65.6 0.3 22.1 133.7 221.7 Change in risk adjustment for non-financial risk for the risk expired 1.8 0.1 0.7 2.3 4.9 CSM recognised for the services provided 3.9 0.5 7.0 11.0 22.4 Insurance acquisition cash flows recovery \u2013 \u2013 \u2013 3.6 3.6 Insurance revenue for contracts not measured under the PAA 71.3 0.9 29.8 150.6 252.6 Insurance revenue for contracts measured under the PAA \u2013 9.3 \u2013 \u2013 9.3 Total insurance revenue 71.3 10.2 29.8 150.6 261.9 Insurance service expenses Incurred claims and other directly attributable expenses (60.5 ) (8.9 ) (28.6 ) (108.8 ) (206.8 ) Changes that relate to past service \u2013 changes in the FCF relating to the LIC \u2013 6.3 \u2013 \u2013 6.3 Losses on onerous contracts and reversals of those losses (4.4 ) \u2013 (2.8 ) (32.8 ) (40.0 ) Insurance acquisition cash flows amortisation \u2013 \u2013 \u2013 (3.6 ) (3.6 ) To t al i n su ra nc e s e r v i ce ex p en s e s (64.9 ) ( 2.6 ) (3 1.4 ) ( 14 5. 2 ) ( 2 44.1 ) Net income/(expenses) from reinsurance contracts held Reinsurance expenses (allocation of reinsurance premiums paid) \u2013 contracts not measured under the PAA Amounts relating to changes in the remaining coverage: Expected amount recoverable for claims and other insurance service expenses (22.9 ) \u2013 (4.3 ) (18.7 ) (45.9 ) Change in risk adjustment for non-financial risk for the risk expired (0.6 ) \u2013 (0.1 ) (0.9 ) (1.6 ) CSM recognised for the services received (0.4 ) \u2013 \u2013 (3.1 ) (3.5 ) Reinsurance expenses (allocation of reinsurance premiums paid) \u2013 contracts not measured under the PAA (23.9 ) \u2013 (4.4 ) (22.7 ) (51.0 ) Reinsurance expenses (allocation of reinsurance premiums paid) \u2013 contracts measured under the PAA \u2013 (1.3 ) \u2013 \u2013 (1.3 ) Amounts recoverable for incurred claims and other incurred insurance service expenses 23.0 2.0 2.4 19.0 46.4 Changes in amounts recoverable that relate to past service \u2013 adjustments to incurred claims \u2013 (2.5 ) \u2013 \u2013 (2.5 ) Recoveries of loss on recognition of onerous underlying contracts \u2013 \u2013 \u2013 0.5 0.5 Recoveries of losses on onerous underlying contracts and reversals of such losses \u2013 \u2013 \u2013 (1.3 ) (1.3 ) Total net expenses from reinsurance contracts held (0.9 ) (1.8 ) (2.0 ) (4.5 ) (9.2 ) Total insurance service result 5.5 5.8 (3.6 ) 0.9 8.6 D1 Insurance result (continued) Year ended 31 December 2023 Restated Movestic Waard Group Scildon Insurance revenue UK (Sweden ) (Netherlands ) (Netherlands ) Total \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Contracts not measured under the PAA: Amounts relating to changes in the liability for remaining coverage: Expected incurred claims and other directly attributable expenses 59.3 0.3 28.2 100.1 187.7 Change in risk adjustment for non-financial risk for the risk expired 1.9 0.1 0.9 2.4 5.3 CSM recognised for the services provided 4.6 0.3 7.0 9.0 20.9 Insurance acquisition cash flows recovery \u2013 \u2013 \u2013 3.5 3.5 Insurance revenue for contracts not measured under the PAA 65.8 0.7 36.1 115.0 217.6 Insurance revenue for contracts measured under the PAA \u2013 10.4 \u2013 \u2013 10.4 Total insurance revenue 65.8 11.1 36.1 115.0 228.0 Insurance service expenses Incurred claims and other directly attributable expenses (50.8 ) (11.0 ) (30.4 ) (75.1 ) (167.3 ) Changes that relate to past service \u2013 changes in the FCF relating to the LIC \u2013 3.6 \u2013 \u2013 3.6 Losses on onerous contracts and reversals of those losses (14.9 ) \u2013 (7.4 ) (35.4 ) (57.7 ) Insurance acquisition cash flows amortisation \u2013 \u2013 \u2013 (3.4 ) (3.4 ) To t al i n su ra nc e s e r v i ce ex p en s e s ( 6 5.7 ) (7.4 ) (3 7.8 ) ( 1 1 3.9 ) ( 2 2 4. 8 ) Net income/(expenses) from reinsurance contracts held Reinsurance expenses (allocation of reinsurance premiums paid) \u2013 contracts not measured under the PAA Amounts relating to changes in the remaining coverage: Expected amount recoverable for claims and other insurance service expenses (23.8 ) \u2013 (5.0 ) (17.7 ) (46.5 ) Change in risk adjustment for non-financial risk for the risk expired (0.7 ) \u2013 (0.2 ) (1.3 ) (2.2 ) CSM recognised for the services received (0.5 ) \u2013 2.2 (2.7 ) (1.0 ) Reinsurance expenses (allocation of reinsurance premiums paid) \u2013 contracts not measured under the PAA (25.0 ) \u2013 (3.0 ) (21.7 ) (49.7 ) Reinsurance expenses (allocation of reinsurance premiums paid) \u2013 contracts measured under the PAA \u2013 (2.5 ) \u2013 \u2013 (2.5 ) Amounts recoverable for incurred claims and other incurred insurance service expenses 19.5 3.2 3.4 17.3 43.4 Changes in amounts recoverable that relate to past service \u2013 adjustments to incurred claims \u2013 (1.3 ) \u2013 \u2013 (1.3 ) Recoveries of loss on recognition of onerous underlying contracts \u2013 \u2013 \u2013 0.5 0.5 Recoveries of losses on onerous underlying contracts and reversals of such losses \u2013 \u2013 \u2013 1.2 1.2 Total net expenses from reinsurance contracts held (5.5 ) (0.6 ) 0.4 (2.7 ) (8.4 ) To t al i n su ra nc e s e r v i ce r e su l t (5.4 ) 3 .1 (1.3 ) ( 1. 6 ) (5.2 ) D2 Investment result In the tables that follow the investment return on surplus shareholder assets is included in the insurance contracts column. Net fair value gains and losses in respect of holdings in collective investment schemes are included in the line that is most appropriate taking into account the nature of the underlying investments. Year ended 31 December 2024 Investment Net Investment return Insurance contracts contracts UK Movestic Waard Scildon (without DPFs ) Chesnara plc Total \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Interest revenue from financial assets not measured at FVTPL \u2013 0.5 0.7 \u2013 \u2013 \u2013 1.2 Net gains on financial investments mandatorily measured as FVTPL 90.2 25.6 16.2 169.1 739.6 7.5 1,408.2 Net gains on financial investments designated as FVTPL 16.6 0.1 11.2 32.5 160.8 1.8 223.0 Net gains from fair value adjustments to investment properties 13.9 \u2013 \u2013 (0.2 ) \u2013 \u2013 13.7 Total net investment return 120.7 26.2 28.1 201.4 900.4 9.3 1,286.1 Finance income/(expenses) from insurance contracts issued Change in fair value of underlying assets of contracts measured under the VFA (99.8 ) (22.8 ) (5.8 ) (170.6 ) \u2013 \u2013 (299.0 ) Interest accreted (1 9.5 ) (1.0 ) (30.0 ) ( 19.8 ) \u2013 \u2013 (70.3 ) Effect of changes in interest rates and other financial assumptions 20.2 0.2 7.8 1.5 \u2013 \u2013 29.7 Effect of changes in fulfilment cash flows at current rates when CSM is unlocked at locked in rates 0.5 \u2013 4.8 (0.5 ) \u2013 \u2013 4.8 Total finance income from insurance contracts issued (98.6 ) (23.6 ) (23.2 ) (189.4 ) \u2013 \u2013 (334.8 ) Finance income from reinsurance contracts held Interest accreted 8.6 0.4 \u2013 (1.1 ) \u2013 \u2013 7.9 Effect of changes in interest rates and other financial assumptions (4.6 ) (0.1 ) \u2013 (0.1 ) \u2013 \u2013 (4.8 ) Effect of changes in fulfilment cash flows at current rates when CSM is unlocked at locked in rates (0.9 ) \u2013 \u2013 0.4 \u2013 \u2013 (0.5 ) Total finance expenses from reinsurance contracts held 3.1 0.3 \u2013 (0.8 ) \u2013 \u2013 2.6 Ne t in s ur an ce fina nc e exp e n s es (9 5 .5 ) ( 23.3 ) (2 3 .2 ) (190 .2 ) \u2013 \u2013 ( 3 3 2.2 ) Net gains/losses on investment contract liabilities \u2013 \u2013 \u2013 \u2013 (740.4 ) \u2013 (740.4 ) Net gains/losses on liabilities relating to policyholder funds held by the Group \u2013 \u2013 \u2013 \u2013 (160.8 ) \u2013 (160.8 ) Net investment result 25.2 2.9 4.9 11.2 (0.8 ) 9.3 52.7 D2 Investment result (continued) Year ended 31 December 2023 Investment Net Investment return Insurance contracts contracts UK Movestic Waard Scildon (without DPFs ) Chesnara plc Total \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Interest revenue from financial assets not measured at FVTPL 6.8 0.9 0.5 \u2013 \u2013 0.9 9.1 Net gains on financial investments mandatorily measured as FVTPL 63.0 18.1 21.4 129.6 527.7 6.3 766.1 Net gains on financial investments designated as FVTPL 41.9 \u2013 37.6 51.7 115.8 \u2013 247.0 Net gains from fair value adjustments to investment properties 1.2 \u2013 \u2013 \u2013 \u2013 \u2013 1.2 Total net investment return 112.9 19.0 59.5 181.3 643.5 7.2 1,023.4 Finance income/(expenses) from insurance contracts issued Change in fair value of underlying assets of contracts measured under the VFA (75.4 ) \u2013 (5.1 ) (132.6 ) \u2013 \u2013 (213.1 ) Interest accreted (18.2 ) \u2013 (30.0 ) (19.1 ) \u2013 \u2013 (67. 3 ) Effect of changes in interest rates and other financial assumptions 2.4 (16.0 ) (21.2 ) (14.2 ) \u2013 \u2013 (49.0 ) Effect of changes in fulfilment cash flows at current rates when CSM is unlocked at locked in rates 4.7 \u2013 6.9 2.9 \u2013 \u2013 14.5 Total finance income from insurance contracts issued (86.5 ) (16.0 ) (49.4 ) (163.0 ) \u2013 \u2013 (314.9 ) Finance income from reinsurance contracts held Interest accreted 8.8 \u2013 0.1 (1.1 ) \u2013 \u2013 7.8 Effect of changes in interest rates and other financial assumptions 1.5 0.7 \u2013 (1.6 ) \u2013 \u2013 0.6 Effect of changes in fulfilment cash flows at current rates when CSM is unlocked at locked in rates (1.0 ) \u2013 \u2013 (0.7 ) \u2013 \u2013 (1.7 ) Total finance expenses from reinsurance contracts held 9.3 0.7 0.1 (3.4 ) \u2013 \u2013 6.7 Ne t in s ur an ce fina nc e exp e n s es (7 7. 2 ) ( 1 5.3 ) (49 .3 ) ( 1 6 6. 4 ) \u2013 \u2013 (30 8.2 ) Net gains/(losses) on investment contract liabilities \u2013 \u2013 \u2013 \u2013 (529.6 ) \u2013 (529.6 ) Net gains/(losses) on liabilities relating to policyholder funds held by the Group \u2013 \u2013 \u2013 \u2013 (113.9 ) \u2013 (113.9 ) Net investment result 35.7 3.7 10.2 14.9 \u2013 7.2 71.7", "dimensions": { "concept": "ifrs-full:DisclosureOfAnalysisOfInsuranceRevenueExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-426": { "value": " D1 Insurance result Year ended 31 December 2024 Movestic Waard Group Scildon Insurance revenue UK (Sweden ) (Netherlands ) (Netherlands ) Total \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Contracts not measured under the PAA: Amounts relating to changes in the liability for remaining coverage: Expected incurred claims and other directly attributable expenses 65.6 0.3 22.1 133.7 221.7 Change in risk adjustment for non-financial risk for the risk expired 1.8 0.1 0.7 2.3 4.9 CSM recognised for the services provided 3.9 0.5 7.0 11.0 22.4 Insurance acquisition cash flows recovery \u2013 \u2013 \u2013 3.6 3.6 Insurance revenue for contracts not measured under the PAA 71.3 0.9 29.8 150.6 252.6 Insurance revenue for contracts measured under the PAA \u2013 9.3 \u2013 \u2013 9.3 Total insurance revenue 71.3 10.2 29.8 150.6 261.9 Insurance service expenses Incurred claims and other directly attributable expenses (60.5 ) (8.9 ) (28.6 ) (108.8 ) (206.8 ) Changes that relate to past service \u2013 changes in the FCF relating to the LIC \u2013 6.3 \u2013 \u2013 6.3 Losses on onerous contracts and reversals of those losses (4.4 ) \u2013 (2.8 ) (32.8 ) (40.0 ) Insurance acquisition cash flows amortisation \u2013 \u2013 \u2013 (3.6 ) (3.6 ) To t al i n su ra nc e s e r v i ce ex p en s e s (64.9 ) ( 2.6 ) (3 1.4 ) ( 14 5. 2 ) ( 2 44.1 ) Net income/(expenses) from reinsurance contracts held Reinsurance expenses (allocation of reinsurance premiums paid) \u2013 contracts not measured under the PAA Amounts relating to changes in the remaining coverage: Expected amount recoverable for claims and other insurance service expenses (22.9 ) \u2013 (4.3 ) (18.7 ) (45.9 ) Change in risk adjustment for non-financial risk for the risk expired (0.6 ) \u2013 (0.1 ) (0.9 ) (1.6 ) CSM recognised for the services received (0.4 ) \u2013 \u2013 (3.1 ) (3.5 ) Reinsurance expenses (allocation of reinsurance premiums paid) \u2013 contracts not measured under the PAA (23.9 ) \u2013 (4.4 ) (22.7 ) (51.0 ) Reinsurance expenses (allocation of reinsurance premiums paid) \u2013 contracts measured under the PAA \u2013 (1.3 ) \u2013 \u2013 (1.3 ) Amounts recoverable for incurred claims and other incurred insurance service expenses 23.0 2.0 2.4 19.0 46.4 Changes in amounts recoverable that relate to past service \u2013 adjustments to incurred claims \u2013 (2.5 ) \u2013 \u2013 (2.5 ) Recoveries of loss on recognition of onerous underlying contracts \u2013 \u2013 \u2013 0.5 0.5 Recoveries of losses on onerous underlying contracts and reversals of such losses \u2013 \u2013 \u2013 (1.3 ) (1.3 ) Total net expenses from reinsurance contracts held (0.9 ) (1.8 ) (2.0 ) (4.5 ) (9.2 ) Total insurance service result 5.5 5.8 (3.6 ) 0.9 8.6 D1 Insurance result (continued) Year ended 31 December 2023 Restated Movestic Waard Group Scildon Insurance revenue UK (Sweden ) (Netherlands ) (Netherlands ) Total \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Contracts not measured under the PAA: Amounts relating to changes in the liability for remaining coverage: Expected incurred claims and other directly attributable expenses 59.3 0.3 28.2 100.1 187.7 Change in risk adjustment for non-financial risk for the risk expired 1.9 0.1 0.9 2.4 5.3 CSM recognised for the services provided 4.6 0.3 7.0 9.0 20.9 Insurance acquisition cash flows recovery \u2013 \u2013 \u2013 3.5 3.5 Insurance revenue for contracts not measured under the PAA 65.8 0.7 36.1 115.0 217.6 Insurance revenue for contracts measured under the PAA \u2013 10.4 \u2013 \u2013 10.4 Total insurance revenue 65.8 11.1 36.1 115.0 228.0 Insurance service expenses Incurred claims and other directly attributable expenses (50.8 ) (11.0 ) (30.4 ) (75.1 ) (167.3 ) Changes that relate to past service \u2013 changes in the FCF relating to the LIC \u2013 3.6 \u2013 \u2013 3.6 Losses on onerous contracts and reversals of those losses (14.9 ) \u2013 (7.4 ) (35.4 ) (57.7 ) Insurance acquisition cash flows amortisation \u2013 \u2013 \u2013 (3.4 ) (3.4 ) To t al i n su ra nc e s e r v i ce ex p en s e s ( 6 5.7 ) (7.4 ) (3 7.8 ) ( 1 1 3.9 ) ( 2 2 4. 8 ) Net income/(expenses) from reinsurance contracts held Reinsurance expenses (allocation of reinsurance premiums paid) \u2013 contracts not measured under the PAA Amounts relating to changes in the remaining coverage: Expected amount recoverable for claims and other insurance service expenses (23.8 ) \u2013 (5.0 ) (17.7 ) (46.5 ) Change in risk adjustment for non-financial risk for the risk expired (0.7 ) \u2013 (0.2 ) (1.3 ) (2.2 ) CSM recognised for the services received (0.5 ) \u2013 2.2 (2.7 ) (1.0 ) Reinsurance expenses (allocation of reinsurance premiums paid) \u2013 contracts not measured under the PAA (25.0 ) \u2013 (3.0 ) (21.7 ) (49.7 ) Reinsurance expenses (allocation of reinsurance premiums paid) \u2013 contracts measured under the PAA \u2013 (2.5 ) \u2013 \u2013 (2.5 ) Amounts recoverable for incurred claims and other incurred insurance service expenses 19.5 3.2 3.4 17.3 43.4 Changes in amounts recoverable that relate to past service \u2013 adjustments to incurred claims \u2013 (1.3 ) \u2013 \u2013 (1.3 ) Recoveries of loss on recognition of onerous underlying contracts \u2013 \u2013 \u2013 0.5 0.5 Recoveries of losses on onerous underlying contracts and reversals of such losses \u2013 \u2013 \u2013 1.2 1.2 Total net expenses from reinsurance contracts held (5.5 ) (0.6 ) 0.4 (2.7 ) (8.4 ) To t al i n su ra nc e s e r v i ce r e su l t (5.4 ) 3 .1 (1.3 ) ( 1. 6 ) (5.2 ) D3 Fees, commission and other operating income Year ended 31 December 2024 2023 \u00a3m \u00a3m Policy-based fees 2.9 3.2 Fund management-based fees recognised under IFRS 15 44.1 45.5 Change in deferred income \u2013 gross 0.2 0.6 Commission income from investment contracts 22.4 20.4 Fee income from investment managers 1.3 1.3 Charges to policyholder funds for yield tax 30.8 17.9 Other types of operating income 2.5 0.5 Total fee, commission and other operating income 104.2 89.4 Fund management-based fees recognised under IFRS 15 has been disaggregated based on the geographical region as follows: Year ended 31 December 2024 2023 \u00a3m \u00a3m UK 33.9 35.0 Sweden 10.2 10.5 Total fund management-based fees recognised under IFRS 15 44.1 45.5 ", "dimensions": { "concept": "ifrs-full:DisclosureOfTradingIncomeExpenseExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-393": { "value": "
Year ended 31 December 2024 Movestic Waard Group Scildon
Insurance revenue UK (Sweden ) (Netherlands ) (Netherlands ) Total
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Contracts not measured under the PAA:
Amounts relating to changes in the liability for remaining coverage:
Expected incurred claims and other directly attributable expenses 65.6 0.3 22.1 133.7 221.7
Change in risk adjustment for non-financial risk for the risk expired 1.8 0.1 0.7 2.3 4.9
CSM recognised for the services provided 3.9 0.5 7.0 11.0 22.4
Insurance acquisition cash flows recovery \u2013 \u2013 \u2013 3.6 3.6
Insurance revenue for contracts not measured under the PAA 71.3 0.9 29.8 150.6 252.6
Insurance revenue for contracts measured under the PAA \u2013 9.3 \u2013 \u2013 9.3
Total insurance revenue 71.3 10.2 29.8 150.6 261.9
Year ended 31 December 2023 Restated Movestic Waard Group Scildon
Insurance revenue UK (Sweden ) (Netherlands ) (Netherlands ) Total
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Contracts not measured under the PAA:
Amounts relating to changes in the liability for remaining coverage:
Expected incurred claims and other directly attributable expenses 59.3 0.3 28.2 100.1 187.7
Change in risk adjustment for non-financial risk for the risk expired 1.9 0.1 0.9 2.4 5.3
CSM recognised for the services provided 4.6 0.3 7.0 9.0 20.9
Insurance acquisition cash flows recovery \u2013 \u2013 \u2013 3.5 3.5
Insurance revenue for contracts not measured under the PAA 65.8 0.7 36.1 115.0 217.6
Insurance revenue for contracts measured under the PAA \u2013 10.4 \u2013 \u2013 10.4
Total insurance revenue 65.8 11.1 36.1 115.0 228.0
", "dimensions": { "concept": "ifrs-full:DisclosureOfRevenueExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-410": { "value": "Year ended 31 December 2024 Movestic Waard Group Scildon Insurance revenue UK (Sweden ) (Netherlands ) (Netherlands ) Total \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Contracts not measured under the PAA: Amounts relating to changes in the liability for remaining coverage: Expected incurred claims and other directly attributable expenses 65.6 0.3 22.1 133.7 221.7 Change in risk adjustment for non-financial risk for the risk expired 1.8 0.1 0.7 2.3 4.9 CSM recognised for the services provided 3.9 0.5 7.0 11.0 22.4 Insurance acquisition cash flows recovery \u2013 \u2013 \u2013 3.6 3.6 Insurance revenue for contracts not measured under the PAA 71.3 0.9 29.8 150.6 252.6 Insurance revenue for contracts measured under the PAA \u2013 9.3 \u2013 \u2013 9.3 Total insurance revenue 71.3 10.2 29.8 150.6 261.9 Year ended 31 December 2023 Restated Movestic Waard Group Scildon Insurance revenue UK (Sweden ) (Netherlands ) (Netherlands ) Total \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Contracts not measured under the PAA: Amounts relating to changes in the liability for remaining coverage: Expected incurred claims and other directly attributable expenses 59.3 0.3 28.2 100.1 187.7 Change in risk adjustment for non-financial risk for the risk expired 1.9 0.1 0.9 2.4 5.3 CSM recognised for the services provided 4.6 0.3 7.0 9.0 20.9 Insurance acquisition cash flows recovery \u2013 \u2013 \u2013 3.5 3.5 Insurance revenue for contracts not measured under the PAA 65.8 0.7 36.1 115.0 217.6 Insurance revenue for contracts measured under the PAA \u2013 10.4 \u2013 \u2013 10.4 Total insurance revenue 65.8 11.1 36.1 115.0 228.0 ", "dimensions": { "concept": "ifrs-full:DisclosureOfRevenueFromContractsWithCustomersExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-418": { "value": "Year ended 31 December 2024 Movestic Waard Group Scildon Insurance revenue UK (Sweden ) (Netherlands ) (Netherlands ) Total \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Contracts not measured under the PAA: Amounts relating to changes in the liability for remaining coverage: Expected incurred claims and other directly attributable expenses 65.6 0.3 22.1 133.7 221.7 Change in risk adjustment for non-financial risk for the risk expired 1.8 0.1 0.7 2.3 4.9 CSM recognised for the services provided 3.9 0.5 7.0 11.0 22.4 Insurance acquisition cash flows recovery \u2013 \u2013 \u2013 3.6 3.6 Insurance revenue for contracts not measured under the PAA 71.3 0.9 29.8 150.6 252.6 Insurance revenue for contracts measured under the PAA \u2013 9.3 \u2013 \u2013 9.3 Total insurance revenue 71.3 10.2 29.8 150.6 261.9 Year ended 31 December 2023 Restated Movestic Waard Group Scildon Insurance revenue UK (Sweden ) (Netherlands ) (Netherlands ) Total \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Contracts not measured under the PAA: Amounts relating to changes in the liability for remaining coverage: Expected incurred claims and other directly attributable expenses 59.3 0.3 28.2 100.1 187.7 Change in risk adjustment for non-financial risk for the risk expired 1.9 0.1 0.9 2.4 5.3 CSM recognised for the services provided 4.6 0.3 7.0 9.0 20.9 Insurance acquisition cash flows recovery \u2013 \u2013 \u2013 3.5 3.5 Insurance revenue for contracts not measured under the PAA 65.8 0.7 36.1 115.0 217.6 Insurance revenue for contracts measured under the PAA \u2013 10.4 \u2013 \u2013 10.4 Total insurance revenue 65.8 11.1 36.1 115.0 228.0 ", "dimensions": { "concept": "ifrs-full:DisclosureOfInsurancePremiumRevenueExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-394": { "value": "
Finance income/(expenses) from insurance contracts issued
Change in fair value of underlying assets of contracts measured under the VFA (99.8 ) (22.8 ) (5.8 ) (170.6 ) \u2013 \u2013 (299.0 )
Interest accreted (1 9.5 ) (1.0 ) (30.0 ) ( 19.8 ) \u2013 \u2013 (70.3 )
Effect of changes in interest rates and other financial assumptions 20.2 0.2 7.8 1.5 \u2013 \u2013 29.7
Effect of changes in fulfilment cash flows at current rates when CSM is
unlocked at locked in rates 0.5 \u2013 4.8 (0.5 ) \u2013 \u2013 4.8
Total finance income from insurance contracts issued (98.6 ) (23.6 ) (23.2 ) (189.4 ) \u2013 \u2013 (334.8 )
Finance income from reinsurance contracts held
Interest accreted 8.6 0.4 \u2013 (1.1 ) \u2013 \u2013 7.9
Effect of changes in interest rates and other financial assumptions (4.6 ) (0.1 ) \u2013 (0.1 ) \u2013 \u2013 (4.8 )
Effect of changes in fulfilment cash flows at current rates when CSM is
unlocked at locked in rates (0.9 ) \u2013 \u2013 0.4 \u2013 \u2013 (0.5 )
Total finance expenses from reinsurance contracts held 3.1 0.3 \u2013 (0.8 ) \u2013 \u2013 2.6
Ne t in s ur an ce fina nc e exp e n s es (9 5 .5 ) ( 23.3 ) (2 3 .2 ) (190 .2 ) \u2013 \u2013 ( 3 3 2.2 )
Finance income/(expenses) from insurance contracts issued
Change in fair value of underlying assets of contracts measured under the VFA (75.4 ) \u2013 (5.1 ) (132.6 ) \u2013 \u2013 (213.1 )
Interest accreted (18.2 ) \u2013 (30.0 ) (19.1 ) \u2013 \u2013 (67. 3 )
Effect of changes in interest rates and other financial assumptions 2.4 (16.0 ) (21.2 ) (14.2 ) \u2013 \u2013 (49.0 )
Effect of changes in fulfilment cash flows at current rates when CSM is
unlocked at locked in rates 4.7 \u2013 6.9 2.9 \u2013 \u2013 14.5
Total finance income from insurance contracts issued (86.5 ) (16.0 ) (49.4 ) (163.0 ) \u2013 \u2013 (314.9 )
Finance income from reinsurance contracts held
Interest accreted 8.8 \u2013 0.1 (1.1 ) \u2013 \u2013 7.8
Effect of changes in interest rates and other financial assumptions 1.5 0.7 \u2013 (1.6 ) \u2013 \u2013 0.6
Effect of changes in fulfilment cash flows at current rates when CSM is
unlocked at locked in rates (1.0 ) \u2013 \u2013 (0.7 ) \u2013 \u2013 (1.7 )
Total finance expenses from reinsurance contracts held 9.3 0.7 0.1 (3.4 ) \u2013 \u2013 6.7
Ne t in s ur an ce fina nc e exp e n s es (7 7. 2 ) ( 1 5.3 ) (49 .3 ) ( 1 6 6. 4 ) \u2013 \u2013 (30 8.2 )
D5 Financing costs Year ended 31 December 2024 2023 \u00a3m \u00a3m Interest expense on bank borrowings 1.0 0.7 Interest expense on financial reinsurance 0.4 0.5 Interest expense on Tier 2 debt 9.7 9.8 Total financing costs 11.1 11.0 Interest expense on bank borrowings and Tier 2 debt is calculated using the effective interest rate method and is the total interest expense for financial liabilities that are not designated at fair value through profit or loss. ", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceIncomeExpenseExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-411": { "value": "Finance income/(expenses) from insurance contracts issued Change in fair value of underlying assets of contracts measured under the VFA (99.8 ) (22.8 ) (5.8 ) (170.6 ) \u2013 \u2013 (299.0 ) Interest accreted (1 9.5 ) (1.0 ) (30.0 ) ( 19.8 ) \u2013 \u2013 (70.3 ) Effect of changes in interest rates and other financial assumptions 20.2 0.2 7.8 1.5 \u2013 \u2013 29.7 Effect of changes in fulfilment cash flows at current rates when CSM is unlocked at locked in rates 0.5 \u2013 4.8 (0.5 ) \u2013 \u2013 4.8 Total finance income from insurance contracts issued (98.6 ) (23.6 ) (23.2 ) (189.4 ) \u2013 \u2013 (334.8 ) Finance income from reinsurance contracts held Interest accreted 8.6 0.4 \u2013 (1.1 ) \u2013 \u2013 7.9 Effect of changes in interest rates and other financial assumptions (4.6 ) (0.1 ) \u2013 (0.1 ) \u2013 \u2013 (4.8 ) Effect of changes in fulfilment cash flows at current rates when CSM is unlocked at locked in rates (0.9 ) \u2013 \u2013 0.4 \u2013 \u2013 (0.5 ) Finance income/(expenses) from insurance contracts issued Change in fair value of underlying assets of contracts measured under the VFA (75.4 ) \u2013 (5.1 ) (132.6 ) \u2013 \u2013 (213.1 ) Interest accreted (18.2 ) \u2013 (30.0 ) (19.1 ) \u2013 \u2013 (67. 3 ) Effect of changes in interest rates and other financial assumptions 2.4 (16.0 ) (21.2 ) (14.2 ) \u2013 \u2013 (49.0 ) Effect of changes in fulfilment cash flows at current rates when CSM is unlocked at locked in rates 4.7 \u2013 6.9 2.9 \u2013 \u2013 14.5 Total finance income from insurance contracts issued (86.5 ) (16.0 ) (49.4 ) (163.0 ) \u2013 \u2013 (314.9 ) Finance income from reinsurance contracts held Interest accreted 8.8 \u2013 0.1 (1.1 ) \u2013 \u2013 7.8 Effect of changes in interest rates and other financial assumptions 1.5 0.7 \u2013 (1.6 ) \u2013 \u2013 0.6 Effect of changes in fulfilment cash flows at current rates when CSM is unlocked at locked in rates (1.0 ) \u2013 \u2013 (0.7 ) \u2013 \u2013 (1.7 ) Total finance expenses from reinsurance contracts held 9.3 0.7 0.1 (3.4 ) \u2013 \u2013 6.7 ", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceIncomeExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-429": { "value": "Finance income/(expenses) from insurance contracts issued Change in fair value of underlying assets of contracts measured under the VFA (99.8 ) (22.8 ) (5.8 ) (170.6 ) \u2013 \u2013 (299.0 ) Interest accreted (1 9.5 ) (1.0 ) (30.0 ) ( 19.8 ) \u2013 \u2013 (70.3 ) Effect of changes in interest rates and other financial assumptions 20.2 0.2 7.8 1.5 \u2013 \u2013 29.7 Effect of changes in fulfilment cash flows at current rates when CSM is unlocked at locked in rates 0.5 \u2013 4.8 (0.5 ) \u2013 \u2013 4.8 Total finance income from insurance contracts issued (98.6 ) (23.6 ) (23.2 ) (189.4 ) \u2013 \u2013 (334.8 ) Finance income from reinsurance contracts held Interest accreted 8.6 0.4 \u2013 (1.1 ) \u2013 \u2013 7.9 Effect of changes in interest rates and other financial assumptions (4.6 ) (0.1 ) \u2013 (0.1 ) \u2013 \u2013 (4.8 ) Effect of changes in fulfilment cash flows at current rates when CSM is unlocked at locked in rates (0.9 ) \u2013 \u2013 0.4 \u2013 \u2013 (0.5 ) Total finance expenses from reinsurance contracts held 3.1 0.3 \u2013 (0.8 ) \u2013 \u2013 2.6 Ne t in s ur an ce fina nc e exp e n s es (9 5 .5 ) ( 23.3 ) (2 3 .2 ) (190 .2 ) \u2013 \u2013 ( 3 3 2.2 ) Finance income/(expenses) from insurance contracts issued Change in fair value of underlying assets of contracts measured under the VFA (75.4 ) \u2013 (5.1 ) (132.6 ) \u2013 \u2013 (213.1 ) Interest accreted (18.2 ) \u2013 (30.0 ) (19.1 ) \u2013 \u2013 (67. 3 ) Effect of changes in interest rates and other financial assumptions 2.4 (16.0 ) (21.2 ) (14.2 ) \u2013 \u2013 (49.0 ) Effect of changes in fulfilment cash flows at current rates when CSM is unlocked at locked in rates 4.7 \u2013 6.9 2.9 \u2013 \u2013 14.5 Total finance income from insurance contracts issued (86.5 ) (16.0 ) (49.4 ) (163.0 ) \u2013 \u2013 (314.9 ) Finance income from reinsurance contracts held Interest accreted 8.8 \u2013 0.1 (1.1 ) \u2013 \u2013 7.8 Effect of changes in interest rates and other financial assumptions 1.5 0.7 \u2013 (1.6 ) \u2013 \u2013 0.6 Effect of changes in fulfilment cash flows at current rates when CSM is unlocked at locked in rates (1.0 ) \u2013 \u2013 (0.7 ) \u2013 \u2013 (1.7 ) Total finance expenses from reinsurance contracts held 9.3 0.7 0.1 (3.4 ) \u2013 \u2013 6.7 Ne t in s ur an ce fina nc e exp e n s es (7 7. 2 ) ( 1 5.3 ) (49 .3 ) ( 1 6 6. 4 ) \u2013 \u2013 (30 8.2 ) D3 Fees, commission and other operating income Year ended 31 December 2024 2023 \u00a3m \u00a3m Policy-based fees 2.9 3.2 Fund management-based fees recognised under IFRS 15 44.1 45.5 Change in deferred income \u2013 gross 0.2 0.6 Commission income from investment contracts 22.4 20.4 Fee income from investment managers 1.3 1.3 Charges to policyholder funds for yield tax 30.8 17.9 Other types of operating income 2.5 0.5 Total fee, commission and other operating income 104.2 89.4 F1 Insurance and reinsurance contracts 31 December 2023 \u2013 restated Waard The following notes provide a quantitative analysis of the insurance and reinsurance contract Movestic Group Scildon assets and liabilities and are disaggregated by the IFRS 8 operating segments. This disaggregation (UK ) (Sweden ) (N etherlands ) (Netherlands ) Total has been chosen for the following notes because it is management\u2019s view that together with the \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m information in the underwriting risk section, it provides the most relevant information for assessing the effect that contracts within the scope of IFRS 17 have on the entity\u2019s financial performance Insurance contracts and position. Insurance contract liabilities 1,383.0 171.8 785.3 1,862.9 4,203.0 Insurance contract assets (3.9 ) \u2013 \u2013 \u2013 (3.9 ) (a) Composition of the balance sheet Net insurance The following tables show the breakdown of the insurance and reinsurance contract assets and contract liabilities 1,379.1 171.8 785.3 1,862.9 4,199.1 liabilities for each of the operating segments within Chesnara. Note A4(a)(i) provides details regarding broad product groups and measurement models. Note B2 provides details for the values Reinsurance contracts of insurance and reinsurance contracts for the broad product groups within each segment. Reinsurance contract assets 166.8 14.5 4.4 \u2013 185.7 Reinsurance contract liabilities (2. 2 ) \u2013 \u2013 (14 .9 ) (17.1 ) 31 December 2024 Waard Movestic Group Scildon Net reinsurance (UK ) (Sweden ) (N etherlands ) (Netherlands ) Total contract assets 164.6 14.5 4.4 (14.9 ) 168.6 \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Insurance contracts Current Non-current Total Insurance contract liabilities 1,308.5 174.1 720.4 1,896.1 4,099.1 \u00a3m \u00a3m \u00a3m Insurance contract assets (1.8 ) \u2013 \u2013 \u2013 (1.8 ) Insurance contract liabilities 672.1 3,530.9 4,203.0 Net insurance Insurance contract assets \u2013 (3.9 ) (3.9 ) contract liabilities 1,306.7 174.1 720.4 1,896.1 4,097.3 Reinsurance contract assets 29.1 156.6 185.7 Reinsurance contract liabilities 2.1 (19.2 ) (17.1 ) Reinsurance contracts Reinsurance contract assets 154.8 12.4 2.7 \u2013 169.9 The prior year non-current and current insurance liabilities have been restated in respect of Scildon. Reinsurance contract liabilities (2 .0 ) \u2013 \u2013 (14.6 ) (16 .6 ) (b) Fair value of underlying items Net reinsurance The following table shows the fair value of the underlying items of the Group\u2019s direct participating contract assets 152.8 12.4 2.7 (14.6 ) 153.3 contracts for each reporting segment. Current Non-current Total Waard \u00a3m \u00a3m \u00a3m Movestic Group Scildon (UK ) (Sweden ) (N etherlands ) (Netherlands ) Total Insurance contract liabilities 730.5 3,368.6 4,099.1 \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Insurance contract assets (1.8 ) \u2013 (1.8 ) Reinsurance contract assets 29.9 140.0 169.9 Fair value of underlying items Reinsurance contract liabilities 0.5 (17.1 ) (16.6 ) as at 31 December 2024 711.0 142.4 54.9 1,322.8 2,231.1 Fair value of underlying items as at 31 December 2023 816.9 132.3 65.2 1,238.7 2,253.1 Composition of underlying items The majority of the fair value of underlying items across the Group are held in collective investment schemes. A small proportion is held in equities, debt securities and in cash and deposits F2 Insurance and reinsurance contracts \u2013 quantitative analysis of recognised amounts \u2013 UK (a) Insurance contract balances \u2013 analysis by remaining coverage and incurred claims Liabilities for remaining coverage Excluding Liabilities loss Loss for incurred component component claims Total \u00a3m \u00a3m \u00a3m \u00a3m Insurance contract liabilities as at 1 January 2024 1,301.1 12.4 65.6 1,379.1 Changes in the statement of profit and loss Insurance revenue Contracts measured under the fair value approach (58.1 ) \u2013 \u2013 (58.1 ) Contracts measured under the full retrospective approach (13.2 ) \u2013 \u2013 (13.2 ) Insurance revenue total (71.3 ) \u2013 \u2013 (71.3 ) Insurance service expenses Incurred claims and other directly attributable expenses \u2013 (1.8 ) 62.3 60.5 Losses and reversals of losses on onerous contracts \u2013 4.4 \u2013 4.4 Insurance service expense total \u2013 2.6 62.3 64.9 Insurance service result (71.3 ) 2.6 62.3 (6.4 ) Net finance expenses from insurance contracts 98.5 0.1 \u2013 98.6 Total amounts recognised in comprehensive income 27.2 2.7 62.3 92.2 Investment components (135.7 ) \u2013 135.7 \u2013 Cash flows Premiums received 35.3 \u2013 \u2013 35.3 Claims and other directly attributable expenses paid \u2013 \u2013 (197.7 ) (197.7 ) Acquisitions 9.7 \u2013 (11.9 ) (2.2 ) Total cash flows 45.0 \u2013 (209.6 ) (164.6 ) Insurance contract liabilities as at 31 December 2024 1,237.6 15.1 54.0 1,306.7 Restated Liabilities for remaining coverage Excluding Liabilities loss Loss for incurred component component claims Total \u00a3m \u00a3m \u00a3m \u00a3m Insurance contract liabilities as at 1 January 2023 1,382.3 \u2013 65.3 1,447.6 Changes in the statement of profit and loss Insurance revenue Contracts measured under the fair value approach (57.5 ) \u2013 \u2013 (57.5 ) Contracts measured under the full retrospective approach (8.3 ) \u2013 \u2013 (8.3 ) Insurance revenue total (65.8 ) \u2013 \u2013 (65.8 ) Insurance service expenses Incurred claims and other directly attributable expenses 0.2 (2.5 ) 53.1 50.8 Losses and reversals of losses on onerous contracts \u2013 14.9 \u2013 14.9 Insurance service expense total 0.2 12.4 53.1 65.7 Insurance service result (65.6 ) 12.4 53.1 (0.1 ) Net finance expenses from insurance contracts 86.5 \u2013 \u2013 86.5 Total amounts recognised in comprehensive income 20.9 12.4 53.1 86.4 Investment components (131.0 ) \u2013 131.0 \u2013 Cash flows Premiums received 37.9 \u2013 \u2013 37.9 Claims and other directly attributable expenses paid \u2013 \u2013 (183.8 ) (183.8 ) Acquisitions (9.0 ) \u2013 \u2013 (9.0 ) Total cash flows 28.9 \u2013 (183.8 ) (154.9 ) Insurance contract liabilities as at 31 December 2023 1,301.1 12.4 65.6 1,379.1 There is no PAA business in the UK segment. Note A5(a) sets out the fair value methodology applied at transition that has been applied for the CA contracts in the UK. F2 Insurance and reinsurance contracts \u2013 quantitative analysis of recognised amounts \u2013 UK (continued) (b) Insurance contract balances \u2013 analysis by measurement component \u2013 contracts not measured under PAA CSM (new contracts and CSM Present value contracts (contracts of future Risk measured measured cash flows adjustment under FRA ) under FVA ) Total \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Insurance contract liabilities as at 1 January 2024 1,340.9 12.5 3.2 22.5 1,379.1 Changes that relate to current service CSM recognised for services provided \u2013 \u2013 (0.1 ) (3.8 ) (3.9 ) Change in risk adjustment for non-financial risk for risk expired \u2013 (1.8 ) \u2013 \u2013 (1.8 ) Experience adjustments (5.0 ) \u2013 \u2013 \u2013 (5.0 ) Revenue recognised for incurred policyholder tax expenses \u2013 \u2013 \u2013 \u2013 \u2013 Total changes that relate to current service (5.0 ) (1.8 ) (0.1 ) (3.8 ) (10.7 ) Changes that relate to future service Contracts initially recognised in the period (0.8 ) 0.1 0.7 \u2013 \u2013 Changes in estimates that adjust the CSM (6.2 ) (4.9 ) (2.8 ) 13.9 \u2013 Changes in estimates that result in losses or reversals of losses on onerous underlying contracts 4.3 \u2013 \u2013 \u2013 4.3 Total changes that relate to future service (2.7 ) (4.8 ) (2.1 ) 13.9 4.3 Ins u ran c e s erv i ce res ul t (7.7 ) (6 . 6 ) ( 2.2 ) 1 0 . 1 (6 .4 ) Net finance expenses from insurance contracts 96.6 1.1 0.3 0.6 98.6 Total amounts recognised in comprehensive income 88.9 (5.5 ) (1.9 ) 10.7 92.2 Cash flows Premiums received 35.3 \u2013 \u2013 \u2013 35.3 Claims and other directly attributable expenses paid (197.7 ) \u2013 \u2013 \u2013 (197.7 ) Acquisitions (2.2 ) \u2013 \u2013 \u2013 (2.2 ) Total cash flows (164.6 ) \u2013 \u2013 \u2013 (164.6 ) Insurance contract liabilities as at 31 December 2024 1,265.2 7.0 1.3 33.2 1,306.7 The contracts initially recognised in the period relate to the acquisition of the unit-linked bond and pension portfolio from Canada Life. Restated CSM (new contracts and CSM Present value contracts (contracts of future Risk measured measured cash flows adjustment under FRA ) under FVA ) Total \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Insurance contract liabilities as at 1 January 2023 1,397.1 13.2 1.1 36.2 1,447.6 Changes that relate to current service CSM recognised for services provided \u2013 \u2013 (1.5 ) (3.1 ) (4.6 ) Change in risk adjustment for non-financial risk for risk expired \u2013 (2.0 ) \u2013 \u2013 (2.0 ) Experience adjustments (8.3 ) \u2013 \u2013 \u2013 (8.3 ) Revenue recognised for incurred policyholder tax expenses (0.1 ) \u2013 \u2013 \u2013 (0.1 ) Total changes that relate to current service (8.4 ) (2.0 ) (1.5 ) (3.1 ) (15.0 ) Changes that relate to future service Contracts initially recognised in the period (1.7 ) 0.2 1.5 \u2013 \u2013 Changes in estimates that adjust the CSM 9.0 0.5 1.8 (11.3 ) \u2013 Changes in estimates that result in losses or reversals of losses on onerous underlying contracts 14.9 \u2013 \u2013 \u2013 14.9 Total changes that relate to future service 22.2 0.7 3.3 (11.3 ) 14.9 Insurance service result 13.8 (1.3 ) 1.8 (14.4 ) (0.1 ) Net finance expenses from insurance contracts 84.9 0.6 0.3 0.7 86.5 Total amounts recognised in comprehensive income 98.7 (0.7 ) 2.1 (13.7 ) 86.4 Cash flows Premiums received 37.9 \u2013 \u2013 \u2013 37.9 Claims and other directly attributable expenses paid (183.8 ) \u2013 \u2013 \u2013 (183.8 ) Acquisitions (9.0 ) \u2013 \u2013 \u2013 (9.0 ) Total cash flows (154.9 ) \u2013 \u2013 \u2013 (154.9 ) Insurance contract liabilities as at 31 December 2023 1,340.9 12.5 3.2 22.5 1,379.1 The contracts initially recognised in the period relate to the acquisition of the term assurance portfolio from Canada Life. F2 Insurance and reinsurance contracts \u2013 quantitative analysis of recognised amounts \u2013 UK (continued) (c) Reinsurance contract balances \u2013 analysis by remaining coverage and incurred claims Assets for Assets for remaining incurred coverage claims Total \u00a3m \u00a3m \u00a3m Reinsurance contract assets as at 1 January 2024 150.8 13.8 164.6 Reinsurance expenses \u2013 allocation of reinsurance premiums paid (23.9 ) \u2013 (23.9 ) Amounts recoverable from reinsurers Recoveries of incurred claims and other directly attributable expenses \u2013 23.0 23.0 Net (expenses)/income from reinsurance contracts held (23.9 ) 23.0 (0.9 ) Net finance expenses from reinsurance contracts 3.1 \u2013 3.1 Total amounts recognised in comprehensive income (20.8 ) 23.0 2.2 Investment components (2.8 ) 2.8 \u2013 Cash flows Premiums paid 11.4 \u2013 11.4 Recoveries from reinsurance contracts held \u2013 (25.4 ) (25.4 ) Total cash flows 11.4 (25.4 ) (14.0 ) Reinsurance contract assets as at 31 December 2024 138.6 14.2 152.8 Assets for Assets for remaining incurred coverage claims Total \u00a3m \u00a3m \u00a3m Reinsurance contract assets as at 1 January 2023 156.6 16.0 172.6 Reinsurance expenses \u2013 allocation of reinsurance premiums paid (25.0 ) \u2013 (25.0 ) Amounts recoverable from reinsurers Recoveries of incurred claims and other directly attributable expenses \u2013 19.5 19.5 Net (expenses)/income from reinsurance contracts held (25.0 ) 19.5 (5.5 ) Net finance expenses from reinsurance contracts 9.3 \u2013 9.3 Total amounts recognised in comprehensive income (15.7 ) 19.5 3.8 Investment components (2.6 ) 2.6 \u2013 Cash flows Premiums paid 12.5 \u2013 12.5 Recoveries from reinsurance contracts held \u2013 (24.3 ) (24.3 ) Total cash flows 12.5 (24.3 ) (11.8 ) Reinsurance contract assets as at 31 December 2023 150.8 13.8 164.6 (d) Reinsurance contract balances \u2013 analysis by measurement component \u2013 contracts not measured under PAA CSM (new contracts and CSM Present value contracts (contracts of future Risk measured measured cash flows adjustment under FRA ) under FVA ) Total \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Reinsurance contract assets as at 1 January 2024 155.6 3.0 0.4 5.6 164.6 Changes that relate to current service CSM recognised for services received \u2013 \u2013 \u2013 (0.3 ) (0.3 ) Change in risk adjustment for non-financial risk for risk expired \u2013 (0.6 ) \u2013 \u2013 (0.6 ) Experience adjustments 0.1 \u2013 \u2013 \u2013 0.1 Total changes that relate to current service 0.1 (0.6 ) \u2013 (0.3 ) (0.8 ) Changes that relate to future service Changes in estimates that adjust the CSM 0.8 \u2013 \u2013 (0.9 ) (0.1 ) Total changes that relate to future service 0.8 \u2013 \u2013 (0.9 ) (0.1 ) Net (expense)/income from reinsurance contracts held 0.9 (0.6 ) \u2013 (1.2 ) (0.9 ) Net finance income from reinsurance contracts held 3.0 \u2013 \u2013 0.1 3.1 Total amounts recognised in comprehensive income 3.9 (0.6 ) \u2013 (1.1 ) 2.2 Cash flows Premiums paid 11.3 \u2013 \u2013 \u2013 11.3 Recoveries from reinsurance contracts held (25.3 ) \u2013 \u2013 \u2013 (25.3 ) Total cash flows (14.0 ) \u2013 \u2013 \u2013 (14.0 ) Reinsurance contract assets as at 31 December 2024 145.5 2.4 0.4 4.5 152.8 F2 Insurance and reinsurance contracts \u2013 quantitative analysis of recognised amounts \u2013 UK (continued) (d) Reinsurance contract balances \u2013 analysis by measurement component \u2013 contracts not measured under PAA (continued) CSM (new contracts and CSM Present value contracts (contracts of future Risk measured measured cash flows adjustment under FRA ) under FVA ) Total \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Reinsurance contract assets as at 1 January 2023 161.1 3.1 0.5 7.9 172.6 Changes that relate to current service CSM recognised for services received \u2013 \u2013 \u2013 (0.5 ) (0.5 ) Change in risk adjustment for non-financial risk for risk expired \u2013 (0.7 ) \u2013 \u2013 (0.7 ) Experience adjustments (4.3 ) \u2013 \u2013 \u2013 (4.3 ) Total changes that relate to current service (4.3 ) (0.7 ) \u2013 (0.5 ) (5.5 ) Changes that relate to future service Changes in estimates that adjust the CSM 1.5 0.5 (0.1 ) (1.9 ) \u2013 Total changes that relate to future service 1.5 0.5 (0.1 ) (1.9 ) \u2013 Ne t (exp e ns e)/ i n co me fro m re in s ur an ce con tr act s hel d (2.8 ) ( 0 .2 ) (0 .1 ) (2. 4 ) ( 5.5 ) Net finance income from reinsurance contracts held 9.1 0.1 \u2013 0.1 9.3 Total amounts recognised in comprehensive income 6.3 (0.1 ) (0.1 ) (2.3 ) 3.8 Cash flows Premiums paid 12.5 \u2013 \u2013 \u2013 12.5 Recoveries from reinsurance contracts held (24.3 ) \u2013 \u2013 \u2013 (24.3 ) Total cash flows (11.8 ) \u2013 \u2013 \u2013 (11.8 ) Reinsurance contract assets as at 31 December 2023 155.6 3.0 0.4 5.6 164.6 (e) Insurance contracts recognised in the period (g) Expected recognition of CSM In the tables that follow the CSM accrues interest at the locked-in rate for GMM portfolios and at Restated current rates for VFA portfolios from the balance sheet date and is then amortised based on the 2024 2023 coverage units of the contract groups to give the timeline of the expected recognition. \u00a3m \u00a3m 31 December 2024 Insurance Reinsurance Estimates of the present value of future cash inflows (12.5 ) (7.3 ) contracts contracts \u00a3m \u00a3m Estimates of the present value of future cash outflows Claims and other insurance service expenses payable 11.7 5.6 Not later than one year 3.5 (0.3 ) Insurance acquisition cash flows \u2013 \u2013 Later than one year and not later than two years 2.5 (0.3 ) Later than two years and not later than three years 2.2 (0.3 ) Total estimates of the present value of net future cash inflows/(outflows) 11.7 5.6 Later than three years and not later than four years 2.0 (0.3 ) Later than four years and not later than five years 1.8 (0.3 ) Risk adjustment for non-financial risk 0.1 0.2 Later than five years and not later than ten years 6.6 (1.3 ) CSM 0.7 1.5 Later than ten years 16.0 (1.9 ) Losses recognised on initial recognition \u2013 \u2013 Total 34.6 (4.7 ) Insurance contracts recognised in the period relate to the acquisition of the unit-linked bond and pension business from Canada Life in the current year and the term assurance portfolio from 31 December 2023 \u2013 restated Insurance Reinsurance Canada Life in the prior year. None of the acquired portfolios were onerous at initial recognition. contracts contracts \u00a3m \u00a3m (f) Reinsurance contracts recognised in the period There are no material new insurance contracts recognised in the period for the UK. Not later than one year 3.4 (0.5 ) Later than one year and not later than two years 1.9 (0.5 ) Later than two years and not later than three years 1.9 (0.5 ) Later than three years and not later than four years 1.7 (0.4 ) Later than four years and not later than five years 1.5 (0.4 ) Later than five years and not later than ten years 5.0 (1.6 ) Later than ten years 10.3 (2.1 ) Total 25.7 (6.0 ) F3 Insurance and reinsurance contracts \u2013 quantitative analysis of recognised amounts \u2013 Movestic (a) Insurance contract balances \u2013 analysis by remaining coverage and incurred claims Liabilities for incurred claims Contracts under PAA Liabilities for For contracts PV of remaining not under future Risk coverage PAA cash flows adjustment Total \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Insurance contract liabilities as at 1 January 2024 133.5 \u2013 37.1 1.2 171.8 Changes in the statement of profit and loss Insurance revenue Contracts measured under the fair value approach (0.9 ) \u2013 \u2013 \u2013 (0.9 ) Contracts measured under the full retrospective approach (9.3 ) \u2013 \u2013 \u2013 (9.3 ) Insurance revenue total (10.2 ) \u2013 \u2013 \u2013 (10.2 ) Insurance service expenses Incurred claims and other directly attributable expenses \u2013 0.6 8.2 0.1 8.9 Adjustments to liabilities for incurred claims \u2013 \u2013 (6.0 ) (0.3 ) (6.3 ) Insurance service expense total \u2013 0.6 2.2 (0.2 ) 2.6 Insurance service result (10.2) 0.6 2.2 (0.2 ) (7.6 ) Net finance expenses from insurance contracts 22.8 \u2013 \u2013 0.8 23.6 Effect of movements in exchange rates (10.1 ) \u2013 (2.5 ) (0.1 ) (12.7 ) Total amounts recognised in comprehensive income 2.5 0.6 (0.3 ) 0.5 3.3 Investment components (9.4 ) 9.4 \u2013 \u2013 \u2013 Cash flows Premiums received 17.4 \u2013 \u2013 \u2013 17.4 Claims and other directly attributable expenses paid \u2013 (10.1 ) (8.3 ) \u2013 (18.4 ) Total cash flows 17.4 (10.1 ) (8.3 ) \u2013 (1.0 ) Insurance contract liabilities as at 31 December 2024 144.0 (0.1 ) 28.5 1.7 174.1 Liabilities for incurred claims Contracts under PAA Liabilities for For contracts PV of remaining not under future Risk coverage PAA cash flows adjustment Total \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Insurance contract liabilities as at 1 January 2023 119.1 \u2013 38.2 1.6 158.9 Changes in the statement of profit and loss Insurance revenue Contracts measured under the fair value approach (0.7 ) \u2013 \u2013 \u2013 (0.7 ) Contracts measured under the full retrospective approach (10.4 ) \u2013 \u2013 \u2013 (10.4 ) Insurance revenue total (11.1 ) \u2013 \u2013 \u2013 (11.1 ) Insurance service expenses Incurred claims and other directly attributable expenses \u2013 0.6 10.3 0.1 11.0 Adjustments to liabilities for incurred claims \u2013 \u2013 (3.4 ) (0.2 ) (3.6 ) Insurance service expense total \u2013 0.6 6.9 (0.1 ) 7.4 Insurance service result (11.1 ) 0.6 6.9 (0.1 ) (3.7 ) Net finance expenses from insurance contracts 14.2 \u2013 2.0 (0.2 ) 16.0 Effect of movements in exchange rates (2.8 ) \u2013 (1.1 ) (0.1 ) (4.0 ) Total amounts recognised in comprehensive income 0.3 0.6 7.8 (0.4 ) 8.3 Investment components (6.1 ) 6.1 \u2013 \u2013 \u2013 Cash flows Premiums received 20.2 \u2013 \u2013 \u2013 20.2 Claims and other directly attributable expenses paid \u2013 (6.7 ) (8.9 ) \u2013 (15.6 ) Total cash flows 20.2 (6.7 ) (8.9 ) \u2013 4.6 Insurance contract liabilities as at 31 December 2023 133.5 \u2013 37.1 1.2 171.8 The fair value approach was applied to all insurance contracts not measured under PAA in Movestic at transition. Note A5(a) provides further details relating to fair value methodology applied for contracts in Movestic. F3 Insurance and reinsurance contracts \u2013 quantitative analysis of recognised amounts \u2013 Movestic (continued) (b) Insurance contract balances \u2013 analysis by measurement component \u2013 contracts not measured under PAA Present value of future Risk cash flows adjustment CSM Total \u00a3m \u00a3m \u00a3m \u00a3m Insurance contract liabilities as at 1 January 2024 125.4 1.1 5.0 131.5 Changes that relate to current service CSM recognised for services provided \u2013 \u2013 (0.5 ) (0.5 ) Change in risk adjustment for non-financial risk for risk expired \u2013 (0.1 ) \u2013 (0.1 ) Experience adjustments 0.3 \u2013 \u2013 0.3 Total changes that relate to current service 0.3 (0.1 ) (0.5 ) (0.3 ) Changes that relate to future service Changes in estimates that adjust the CSM (3.4 ) 0.2 3.3 0.1 Total changes that relate to future service (3.4 ) 0.2 3.3 0.1 Insurance service result (3.1 ) 0.1 2.8 (0.2 ) Net finance expenses from insurance contracts 22.6 \u2013 0.2 22.8 Effect of movements in exchange rates (9.5 ) (0.1 ) (0.4 ) (10.0 ) Total amounts recognised in comprehensive income 10.0 \u2013 2.6 12.6 Cash flows Premiums received 8.1 \u2013 \u2013 8.1 Claims and other directly attributable expenses paid (10.1 ) \u2013 \u2013 (10.1 ) Total cash flows (2.0 ) \u2013 \u2013 (2.0 ) Insurance contract liabilities as at 31 December 2024 133.4 1.1 7.6 142.1 Present value of future Risk cash flows adjustment CSM Total \u00a3m \u00a3m \u00a3m \u00a3m Insurance contract liabilities as at 1 January 2023 111.4 1.1 4.5 117.0 Changes that relate to current service CSM recognised for services provided \u2013 \u2013 (0.3 ) (0.3 ) Change in risk adjustment for non-financial risk for risk expired \u2013 (0.1 ) \u2013 (0.1 ) Experience adjustments 0.3 \u2013 \u2013 0.3 Total changes that relate to current service 0.3 (0.1 ) (0.3 ) (0.1 ) Changes that relate to future service Changes in estimates that adjust the CSM (0.8 ) 0.1 0.7 \u2013 Total changes that relate to future service (0.8 ) 0.1 0.7 \u2013 Insurance service result (0.5 ) \u2013 0.4 (0.1 ) Net finance expenses from insurance contracts 14.0 \u2013 0.2 14.2 Effect of movements in exchange rates (2.6 ) \u2013 (0.1 ) (2.7 ) Total amounts recognised in comprehensive income 10.9 \u2013 0.5 11.4 Cash flows Premiums received 9.8 \u2013 \u2013 9.8 Claims and other directly attributable expenses paid (6.7 ) \u2013 \u2013 (6.7 ) Total cash flows 3.1 \u2013 \u2013 3.1 Insurance contract liabilities as at 31 December 2023 125.4 1.1 5.0 131.5 F3 Insurance and reinsurance contracts \u2013 quantitative analysis of recognised amounts \u2013 Movestic (continued) (c) Reinsurance contract balances \u2013 analysis by remaining coverage and incurred claims Contracts under PAA Assets for incurred claims Assets for PV of remaining future Risk coverage cash flows adjustment Total \u00a3m \u00a3m \u00a3m \u00a3m Reinsurance contract assets as at 1 January 2024 (0.6 ) 14.9 0.2 14.5 Reinsurance expenses \u2013 allocation of reinsurance (1.3 ) \u2013 \u2013 (1.3 ) Amounts recoverable from reinsurers Recoveries of incurred claims and other directly attributable expenses \u2013 1.9 \u2013 1.9 Changes in the expected recoveries for past claims \u2013 (2.3 ) (0.1 ) (2.4 ) Net (expenses)/income from reinsurance contracts held (1.3 ) (0.4 ) (0.1 ) (1.8 ) Net finance expenses from reinsurance contracts \u2013 0.3 \u2013 0.3 Effect of movements in exchange rates \u2013 (1.0 ) \u2013 (1.0 ) Total amounts recognised in comprehensive income (1.3 ) (1.1 ) (0.1 ) (2.5 ) Cash flows Premiums paid net of ceding commission 2.6 \u2013 \u2013 2.6 Recoveries from reinsurance contacts held \u2013 (2.2 ) \u2013 (2.2 ) Total cash flows 2.6 (2.2 ) \u2013 0.4 Reinsurance contract assets as at 31 December 2024 0.7 11.6 0.1 12.4 Contracts under PAA Assets for incurred claims Assets for PV of remaining future Risk coverage cash flows adjustment Total \u00a3m \u00a3m \u00a3m \u00a3m Reinsurance contract assets as at 1 January 2023 0.3 15.2 0.3 15.8 Reinsurance expenses \u2013 allocation of reinsurance (2.5 ) \u2013 \u2013 (2.5 ) Amounts recoverable from reinsurers Recoveries of incurred claims and other directly attributable expenses \u2013 3.1 0.1 3.2 Changes in the expected recoveries for past claims \u2013 (1.2 ) (0.1 ) (1.3 ) Net (expenses)/income from reinsurance contracts held (2.5 ) 1.9 \u2013 (0.6 ) Net finance expenses from reinsurance contracts \u2013 0.8 (0.1 ) 0.7 Effect of movements in exchange rates \u2013 (0.4 ) \u2013 (0.4 ) Total amounts recognised in comprehensive income (2.5 ) 2.3 (0.1 ) (0.3 ) Cash flows Premiums paid net of ceding commission 1.6 \u2013 \u2013 1.6 Recoveries from reinsurance contacts held \u2013 (2.6 ) \u2013 (2.6 ) Total cash flows 1.6 (2.6 ) \u2013 (1.0 ) Reinsurance contract assets as at 31 December 2023 (0.6 ) 14.9 0.2 14.5 (d) Reinsurance contract balances \u2013 analysis by measurement component \u2013 31 December 2024 Insurance Reinsurance contracts not measured under PAA contracts contracts All Movestic reinsurance is measured as PAA, therefore no table is presented for analysis \u00a3m \u00a3m of reinsurance contracts by measurement component. Not later than one year 0.3 \u2013 (e) Insurance contracts recognised in the period Later than one year and not later than two years 0.3 \u2013 There are no material new insurance contracts recognised in the period for Movestic. Later than two years and not later than three years 0.3 \u2013 Later than three years and not later than four years 0.3 \u2013 Later than four years and not later than five years 0.3 (f) Reinsurance contracts recognised in the period Later than five years and not later than ten years 1.4 \u2013 There are no material new reinsurance contracts recognised in the period for Movestic. Later than ten years 4.6 \u2013 (g) Expected recognition of CSM Total 7.5 \u2013 In the tables that follow the CSM accrues interest at the locked-in rate for GMM portfolios and at current rates for VFA portfolios from the balance sheet date and is then amortised based on the coverage units of the contract groups to give the timeline of the expected recognition. 31 December 2023 Insurance Reinsurance contracts contracts \u00a3m \u00a3m Not later than one year 0.1 \u2013 Later than one year and not later than two years 0.2 \u2013 Later than two years and not later than three years 0.2 \u2013 Later than three years and not later than four years 0.2 \u2013 Later than four years and not later than five years 0.2 \u2013 Later than five years and not later than ten years 0.9 \u2013 Later than ten years 3.2 \u2013 Total 5.0 \u2013 F4 Insurance and reinsurance contracts \u2013 quantitative analysis of recognised amounts \u2013 Waard Group (a) Insurance contract balances \u2013 analysis by remaining coverage and incurred claims Liabilities for remaining coverage Excluding Liabilities loss Loss for incurred component component claims Total \u00a3m \u00a3m \u00a3m \u00a3m Insurance contract liabilities as at 1 January 2024 761.8 12.4 11.1 785.3 Changes in the statement of profit and loss Insurance revenue total (29.8 ) \u2013 \u2013 (29.8) Insurance service expenses Incurred claims and other directly attributable expenses \u2013 (1.3 ) 29.9 28.6 Losses and reversals of losses on onerous contracts \u2013 2.8 \u2013 2.8 Insurance service expense total \u2013 1.5 29.9 31.4 Insurance service result (29.8 ) 1.5 29.9 1.6 Net finance expenses from insurance contracts 23.1 0.1 \u2013 23.2 Effect of movements in exchange rates (34.6 ) (0.6 ) (0.5 ) (35.7 ) Total amounts recognised in comprehensive income (41.3 ) 1.0 29.4 (10.9 ) Investment components (54.5 ) \u2013 54.5 \u2013 Cash flows Premiums received 31.0 \u2013 \u2013 31.0 Claims and other directly attributable expenses paid \u2013 \u2013 (85.0 ) (85.0 ) Total cash flows 31.0 \u2013 (85.0 ) (54.0 ) Insurance contract liabilities as at 31 December 2024 697.0 13.4 10.0 720.4 Liabilities for remaining coverage Excluding Liabilities loss Loss for incurred component component claims Total \u00a3m \u00a3m \u00a3m \u00a3m Insurance contract liabilities as at 1 January 2023 447.7 7.3 8.7 463.7 Changes in the statement of profit and loss Insurance revenue total (36.1 ) \u2013 \u2013 (36.1 ) Insurance service expenses Incurred claims and other directly attributable expenses \u2013 (2.1 ) 32.5 30.4 Losses and reversals of losses on onerous contracts \u2013 7.4 \u2013 7.4 Insurance service expense total \u2013 5.3 32.5 37.8 Insurance service result (36.1 ) 5.3 32.5 1.7 Net finance expenses from insurance contracts 49.4 \u2013 \u2013 49.4 Effect of movements in exchange rates (11.3 ) (0.2 ) (0.2 ) (11.7 ) Total amounts recognised in comprehensive income 2.0 5.1 32.3 39.4 Investment components (62.1 ) \u2013 62.1 \u2013 Acquisitions \u2013 estimate of the present value of future cash inflows 346.6 \u2013 \u2013 346.6 Cash flows Premiums received 27.6 \u2013 \u2013 27.6 Claims and other directly attributable expenses paid \u2013 \u2013 (92.0 ) (92.0 ) Total cash flows 27.6 \u2013 (92.0 ) (64.4 ) Insurance contract liabilities as at 31 December 2023 761.8 12.4 11.1 785.3 For the Waard Group, the full retrospective approach at transition has been applied to all insurance contracts. F4 Insurance and reinsurance contracts \u2013 quantitative analysis of recognised amounts \u2013 Waard Group (continued) (b) Insurance contract balances \u2013 analysis by measurement component \u2013 contracts not measured under PAA Present value of future Risk cash flows adjustment CSM Total \u00a3m \u00a3m \u00a3m \u00a3m Insurance contract liabilities as at 1 January 2024 699.2 7.9 78.2 785.3 Changes that relate to current service CSM recognised for services provided \u2013 \u2013 (7.0 ) (7.0 ) Change in risk adjustment for non-financial risk for risk expired \u2013 (0.7 ) \u2013 (0.7 ) Experience adjustments 6.5 \u2013 \u2013 6.5 Total changes that relate to current service 6.5 (0.7 ) (7.0 ) (1.2 ) Changes that relate to future service Contracts initially recognised in the period \u2013 \u2013 \u2013 \u2013 Changes in estimates that adjust the CSM (0.8 ) (3.3 ) 4.1 \u2013 Changes in estimates that result in losses or reversals of losses on onerous underlying contracts 2.7 0.1 \u2013 2.8 Total changes that relate to future service 1.9 (3.2 ) 4.1 2.8 Insurance service result 8.4 (3.9 ) (2.9 ) 1.6 Net finance expenses from insurance contracts 20.5 0.1 2.6 23.2 Effect of movements in exchange rates (31.8 ) (0.3 ) (3.6 ) (35.7 ) Total amounts recognised in comprehensive income (2.9 ) (4.1 ) (3.9 ) (10.9 ) Cash flows Premiums received 31.0 \u2013 \u2013 31.0 Claims and other directly attributable expenses paid (85.0 ) \u2013 \u2013 (85.0 ) Total cash flows (54.0 ) \u2013 \u2013 (54.0 ) Insurance contract liabilities as at 31 December 2024 642.3 3.8 74.3 720.4 Present value of future Risk cash flows adjustment CSM Total \u00a3m \u00a3m \u00a3m \u00a3m Insurance contract liabilities as at 1 January 2023 439.3 3.2 21.2 463.7 Changes that relate to current service CSM recognised for services provided \u2013 \u2013 (7.0 ) (7.0 ) Change in risk adjustment for non-financial risk for risk expired \u2013 (0.9 ) \u2013 (0.9 ) Experience adjustments 2.3 \u2013 \u2013 2.3 Total changes that relate to current service 2.3 (0.9 ) (7.0 ) (5.6 ) Changes that relate to future service Contracts initially recognised in the period (52.6 ) 6.4 46.2 \u2013 Changes in estimates that adjust the CSM (15.4 ) (2.2 ) 17.6 \u2013 Changes in estimates that result in losses or reversals of losses on onerous underlying contracts 6.7 0.6 \u2013 7.3 Total changes that relate to future service (61.3 ) 4.8 63.8 7.3 Insurance service result (59.0 ) 3.9 56.8 1.7 Net finance expenses from insurance contracts 46.6 1.0 1.8 49.4 Effect of movements in exchange rates (9.9 ) (0.2 ) (1.6 ) (11.7 ) Total amounts recognised in comprehensive income (22.3 ) 4.7 57.0 39.4 Acquisitions \u2013 estimate of the present value of future cash inflows 346.6 \u2013 \u2013 346.6 Cash flows Premiums received 27.6 \u2013 \u2013 27.6 Claims and other directly attributable expenses paid (92.0 ) \u2013 \u2013 (92.0 ) Total cash flows (64.4 ) \u2013 \u2013 (64.4 ) Insurance contract liabilities as at 31 December 2023 699.2 7.9 78.2 785.3 The contracts initially recognised in the prior year relate to the acquisition of Conservatrix
F4 Insurance and reinsurance contracts \u2013 quantitative analysis of recognised amounts \u2013 Waard Group (continued)
(c) Reinsurance contract balances \u2013 analysis by remaining coverage and incurred claims
Assets for Assets for
remaining incurred
coverage claims Total
\u00a3m \u00a3m \u00a3m
Reinsurance contract assets as at 1 January 2024 2.8 1.6 4.4
Reinsurance expenses \u2013 allocation of reinsurance premiums paid (4.4 ) \u2013 (4.4 )
Amounts recoverable from reinsurers
Recoveries of incurred claims and other directly attributable expenses \u2013 2.4 2.4
Net (expenses)/income from reinsurance contracts held (4.4 ) 2.4 (2.0 )
Net finance expenses from reinsurance contracts \u2013 \u2013 \u2013
Effect of movements in exchange rates (0.1 ) (0.1 ) (0.2 )
Total amounts recognised in comprehensive income (4.5 ) 2.3 (2.2 )
Cash flows
Premiums paid 3.5 \u2013 3.5
Recoveries from reinsurance contracts held \u2013 (3.0 ) (3.0 )
Total cash flows 3.5 (3.0 ) 0.5
Reinsurance contract assets as at 31 December 2024 1.8 0.9 2.7
Assets for Assets for
remaining incurred
coverage claims Total
\u00a3m \u00a3m \u00a3m
Reinsurance contract assets as at 1 January 2023 1.6 1.9 3.5
Reinsurance expenses \u2013 allocation of reinsurance premiums paid (3.0 ) \u2013 (3.0 )
Amounts recoverable from reinsurers
Recoveries of incurred claims and other directly attributable expenses \u2013 3.4 3.4
Net (expenses)/income from reinsurance contracts held (3.0 ) 3.4 0.4
Net finance expenses from reinsurance contracts 0.1 \u2013 0.1
Total amounts recognised in comprehensive income (2.9 ) 3.4 0.5
Cash flows
Premiums paid 4.1 \u2013 4.1
Recoveries from reinsurance contracts held \u2013 (3.7 ) (3.7 )
Total cash flows 4.1 (3.7 ) 0.4
Reinsurance contract assets as at 31 December 2023 2.8 1.6 4.4
For the Waard Group, the full retrospective approach at transition has been applied to all reinsurance contracts.
(d) Reinsurance contract balances \u2013 analysis by measurement component \u2013 contracts not measured under PAA Present value of future Risk cash flows adjustment CSM Total \u00a3m \u00a3m \u00a3m \u00a3m Reinsurance contract assets as at 1 January 2024 3.1 0.2 1.1 4.4 Changes that relate to current service CSM recognised for services received \u2013 \u2013 \u2013 \u2013 Change in risk adjustment for non-financial risk for risk expired \u2013 (0.1 ) \u2013 (0.1 ) Experience adjustments (1.4 ) \u2013 \u2013 (1.4 ) Total changes that relate to current service (1.4 ) (0.1 ) \u2013 (1.5 ) Changes that relate to future service Changes in estimates that adjust the CSM (0.2 ) 0.1 (0.3 ) \u2013 CSM adjustment for income on initial recognition of onerous underlying contracts \u2013 \u2013 (0.5 ) (0.5 ) Total changes that relate to future service 0.2 0.1 (0.8 ) (0.5 ) Net (expense)/income from reinsurance contracts held (1.2 ) \u2013 (0.8 ) (2.0 ) Net finance income from reinsurance contracts held \u2013 \u2013 \u2013 \u2013 Effect of movements in exchange rates (0.2 ) \u2013 \u2013 (0.2 ) Total amounts recognised in comprehensive income (1.4 ) \u2013 (0.8 ) (2.2 ) Cash flows Premiums paid 3.5 \u2013 \u2013 3.5 Recoveries from reinsurance contracts held (3.0 ) \u2013 \u2013 (3.0 ) Total cash flows 0.5 \u2013 \u2013 0.5 Reinsurance contract assets as at 31 December 2024 2.2 0.2 0.3 2.7 F4 Insurance and reinsurance contracts \u2013 quantitative analysis of recognised amounts \u2013 Waard Group (continued) (d) Reinsurance contract balances \u2013 analysis by measurement component \u2013 contracts not measured under PAA (continued) Present value of future Risk cash flows adjustment CSM Total \u00a3m \u00a3m \u00a3m \u00a3m Reinsurance contract assets as at 1 January 2023 3.6 0.5 (0.6 ) 3.5 Changes that relate to current service CSM recognised for services received \u2013 \u2013 2.2 2.2 Change in risk adjustment for non-financial risk for risk expired \u2013 (0.2 ) \u2013 (0.2 ) Experience adjustments (0.8 ) \u2013 \u2013 (0.8 ) Total changes that relate to current service (0.8 ) (0.2 ) 2.2 1.2 Changes that relate to future service Changes in estimates that adjust the CSM (0.2 ) (0.1 ) 0.3 \u2013 CSM adjustment for income on initial recognition of onerous underlying contracts \u2013 \u2013 (0.8 ) (0.8 ) Total changes that relate to future service (0.2 ) (0.1 ) (0.5 ) (0.8 ) Net (expense)/income from reinsurance contracts held (1.0 ) (0.3 ) 1.7 0.4 Net finance income from reinsurance contracts held 0.1 \u2013 \u2013 0.1 Total amounts recognised in comprehensive income (0.9 ) (0.3 ) 1.7 0.5 Cash flows Premiums paid 4.1 \u2013 \u2013 4.1 Recoveries from reinsurance contracts held (3.7 ) \u2013 \u2013 (3.7 ) Total cash flows 0.4 \u2013 \u2013 0.4 Reinsurance contract assets as at 31 December 2023 3.1 0.2 1.1 4.4 (e) Insurance contracts recognised in the period (g) Expected recognition of CSM All insurance and reinsurance contracts recognised in 2023 are in respect of the Conservatrix In the tables that follow the CSM accrues interest at the locked-in rate for GMM portfolios and acquisition. There were no new contracts recognised in 2024. at current rates for VFA portfolios from the balance sheet date and is then amortised based on the coverage units of the contract groups to give the timeline of the expected recognition. Year Ended 31 December 2023 Non-onerous Onerous contracts contracts Total 31 December 2024 Insurance Reinsurance \u00a3m \u00a3m \u00a3m contracts contracts \u00a3m \u00a3m Estimates of the present value of future cash inflows (346.6 ) \u2013 (346.6 ) Not later than one year 4.1 (0.4 ) Estimates of the present value of future cash outflows Later than one year and not later than two years 3.7 0.4 Claims and other insurance service expenses payable 294.1 \u2013 294.1 Later than two years and not later than three years 3.5 (0.1 ) Later than three years and not later than four years 3.2 (0.1 ) Total estimates of the present value of future net outflows (52.5 ) \u2013 (52.5 ) Later than four years and not later than five years 3.0 (0.1 ) Later than five years and not later than ten years 12.2 (0.2 ) Risk adjustment for non-financial risk 6.3 \u2013 6.3 Later than ten years 44.6 \u2013 CSM 46.2 \u2013 46.2 Total 74.3 (0.5 ) Losses recognised on initial recognition \u2013 \u2013 \u2013 (f) Reinsurance contracts recognised in the period 31 December 2023 Insurance Reinsurance contracts contracts There are no new reinsurance contracts recognised in the period for Waard. \u00a3m \u00a3m Not later than one year 4.9 (1.0 ) Later than one year and not later than two years 4.4 0.6 Later than two years and not later than three years 4.0 (0.2 ) Later than three years and not later than four years 3.7 (0.1 ) Later than four years and not later than five years 3.4 (0.1 ) Later than five years and not later than ten years 13.0 (0.3 ) Later than ten years 44.8 \u2013 Total 78.2 (1.1 ) F5 Insurance and reinsurance contracts \u2013 quantitative analysis of recognised amounts \u2013 Scildon (a) Insurance contract balances \u2013 analysis by remaining coverage and incurred claims Liabilities for remaining coverage Excluding Liabilities loss Loss for incurred component component claims Total \u00a3m \u00a3m \u00a3m \u00a3m Insurance contract liabilities as at 1 January 2023 1,761.7 64.6 36.6 1,862.9 Changes in the statement of profit and loss Insurance revenue total (150.6 ) \u2013 \u2013 (150.6) Insurance service expenses Incurred claims and other directly attributable expenses \u2013 (20.9 ) 129.6 108.7 Losses and reversals of losses on onerous contracts \u2013 32.8 \u2013 32.8 Amortisation of insurance acquisition cash flows 3.7 \u2013 \u2013 3.7 Insurance service expense total 3.7 11.9 129.6 145.2 Insurance service result (146.9 ) 11.9 129.6 (5.4) Net finance expenses from insurance contracts 188.9 0.5 \u2013 189.4 Effect of movements in exchange rates (84.1 ) (3.3 ) (1.7 ) (89.1 ) Total amounts recognised in comprehensive income (42.1 ) 9.1 127.9 94.9 Investment components (133.2 ) \u2013 133.2 \u2013 Cash flows Premiums received 208.2 \u2013 \u2013 208.2 Claims and other directly attributable expenses paid - \u2013 (263.1 ) (263.1 ) Insurance acquisition cash flows (6.8 ) \u2013 \u2013 (6.8 ) Total cash flows 201.4 \u2013 (263.1 ) (61.7 ) Insurance contract liabilities as at 31 December 2024 1,787.8 73.7 34.6 1,896.1 Liabilities for remaining coverage Excluding Liabilities loss Loss for incurred component component claims Total \u00a3m \u00a3m \u00a3m \u00a3m Insurance contract liabilities as at 1 January 2023 1,633.1 76.3 42.0 1,751.4 Changes in the statement of profit and loss Insurance revenue total (115.0 ) \u2013 \u2013 (115.0 ) Insurance service expenses Incurred claims and other directly attributable expenses \u2013 (45.8 ) 120.9 75.1 Losses and reversals of losses on onerous contracts \u2013 35.4 \u2013 35.4 Amortisation of insurance acquisition cash flows 3.4 \u2013 \u2013 3.4 Insurance service expense total 3.4 (10.4 ) 120.9 113.9 Insurance service result (111.6 ) (10.4 ) 120.9 (1.1 ) Net finance expenses from insurance contracts 162.6 0.4 \u2013 163.0 Effect of movements in exchange rates (37.5 ) (1.7 ) (0.9 ) (40.1 ) Total amounts recognised in comprehensive income 13.5 (11.7 ) 120.0 121.8 Investment components (110.6 ) \u2013 110.6 \u2013 Cash flows Premiums received 231.3 \u2013 \u2013 231.3 Claims and other directly attributable expenses paid \u2013 \u2013 (236.0 ) (236.0 ) Insurance acquisition cash flows (5.6 ) \u2013 \u2013 (5.6 ) Total cash flows 225.7 \u2013 (236.0 ) (10.3 ) Insurance contract liabilities as at 31 December 2023 1,761.7 64.6 36.6 1,862.9 For Scildon, the full retrospective approach at transition has been applied to all insurance contracts. b) Insurance contract balances \u2013 analysis by measurement component \u2013 contracts not measured under PAA Present value of future Risk cash flows adjustment CSM Total \u00a3m \u00a3m \u00a3m \u00a3m Insurance contract liabilities as at 1 January 2024 1,753.1 30.2 79.6 1,862.9 Changes that relate to current service CSM recognised for services provided \u2013 \u2013 (11.0 ) (11.0) Change in risk adjustment for non-financial risk for risk expired \u2013 (2.3 ) \u2013 (2.3) Experience adjustments (24.8 ) \u2013 \u2013 (24.8) Total changes that relate to current service (24.8 ) (2.3 ) (11.0 ) (38.1 ) Changes that relate to future service Contracts initially recognised in the period (7.7 ) 1.6 8.8 2.7 Changes in estimates that adjust the CSM (7.2 ) (10.7 ) 17.9 \u2013 Changes in estimates that result in losses or reversals of losses on onerous underlying contracts 31.1 (1.1 ) \u2013 30.0 Total changes that relate to future service 16.2 (10.2 ) 26.7 32.7 Insurance service result (8.6 ) (12.5 ) 15.7 (5.4 ) Net finance expenses from insurance contracts 186.7 1.6 1.1 189.4 Effect of movements in exchange rates (83.9 ) (1.1 ) (4.1 ) (89.1 ) Total amounts recognised in comprehensive income 94.2 (12.0 ) 12.7 94.9 Cash flows Premiums received 208.2 \u2013 \u2013 208.2 Claims and other directly attributable expenses paid (263.1 ) \u2013 \u2013 (263.1 ) Insurance acquisition cash flows (6.8 ) \u2013 \u2013 (6.8 ) Total cash flows (61.7 ) \u2013 \u2013 (61.7 ) Insurance contract liabilities as at 31 December 2024 1,785.6 18.2 92.3 1,896.1 Present value of future Risk cash flows adjustment CSM Total \u00a3m \u00a3m \u00a3m \u00a3m Insurance contract liabilities as at 1 January 2023 1,639.5 28.5 83.4 1,751.4 Changes that relate to current service CSM recognised for services provided \u2013 \u2013 (9.0 ) (9.0 ) Change in risk adjustment for non-financial risk for risk expired \u2013 (3.5 ) \u2013 (3.5 ) Experience adjustments (24.0 ) \u2013 \u2013 (24.0 ) Total changes that relate to current service (24.0 ) (3.5 ) (9.0 ) (36.5 ) Changes that relate to future service Contracts initially recognised in the period (11.2 ) 2.6 11.5 2.9 Changes in estimates that adjust the CSM 3.6 1.7 (5.3 ) \u2013 Changes in estimates that result in losses or reversals of losses on onerous underlying contracts 33.1 (0.6 ) \u2013 32.5 Total changes that relate to future service 25.5 3.7 6.2 35.4 Insurance service result 1.5 0.2 (2.8 ) (1.1 ) Net finance expenses from insurance contracts 159.9 2.2 0.9 163.0 Effect of movements in exchange rates (37.5 ) (0.7 ) (1.9 ) (40.1 ) Total amounts recognised in comprehensive income 123.9 1.7 (3.8 ) 121.8 Cash flows Premiums received 231.3 \u2013 \u2013 231.3 Claims and other directly attributable expenses paid (236.0 ) \u2013 \u2013 (236.0 ) Insurance acquisition cash flows (5.6 ) \u2013 \u2013 (5.6 ) Total cash flows (10.3 ) \u2013 \u2013 (10.3 ) Insurance contract liabilities as at 31 December 2023 1,753.1 30.2 79.6 1,862.9 F5 Insurance and reinsurance contracts \u2013 quantitative analysis of recognised amounts \u2013 Scildon (continued) (c) Reinsurance contract balances \u2013 analysis by remaining coverage and incurred claims Assets for remaining coverage Excluding Loss- Assets for loss-recovery recovery incurred component component claims Total \u00a3m \u00a3m \u00a3m \u00a3m Reinsurance contract assets as at 1 January 2024 (29.0 ) 6.2 7.9 (14.9 ) Reinsurance expenses \u2013 allocation of reinsurance premiums paid (22.7 ) \u2013 \u2013 (22.7 ) Amounts recoverable from reinsurers Recoveries of incurred claims and other directly attributable expenses \u2013 \u2013 19.0 19.0 Changes in the loss-recovery component \u2013 (0.8 ) \u2013 (0.8 ) Net (expenses)/income from reinsurance contracts held (22.7 ) (0.8 ) 19.0 (4.5 ) Net finance expenses from reinsurance contracts (0.8 ) \u2013 \u2013 (0.8 ) Effect of movements in exchange rates 1.2 (0.3 ) (0.2 ) 0.7 Total amounts recognised in comprehensive income (22.3 ) (1.1 ) 18.8 (4.6 ) Cash flows Premiums paid 30.8 \u2013 \u2013 30.8 Recoveries from reinsurance contracts held \u2013 \u2013 (25.9 ) (25.9 ) Total cash flows 30.8 \u2013 (25.9 ) 4.7 Reinsurance contract assets as at 31 December 2024 (20.5 ) 5.1 0.8 (14.6 ) Assets for remaining coverage Excluding Loss- Assets for loss-recovery recovery incurred component component claims Total \u00a3m \u00a3m \u00a3m \u00a3m Reinsurance contract assets as at 1 January 2023 (28.4 ) 4.5 8.7 (15.2 ) Reinsurance expenses \u2013 allocation of reinsurance premiums paid (21.8 ) \u2013 \u2013 (21.8 ) Amounts recoverable from reinsurers Recoveries of incurred claims and other directly attributable expenses \u2013 \u2013 17.3 17.3 Changes in the loss-recovery component \u2013 1.8 \u2013 1.8 Net (expenses)/income from reinsurance contracts held (21.8 ) 1.8 17.3 (2.7 ) Net finance expenses from reinsurance contracts (3.4 ) \u2013 \u2013 (3.4 ) Effect of movements in exchange rates 0.6 (0.1 ) (0.2 ) 0.3 Total amounts recognised in comprehensive income (24.6 ) 1.7 17.1 (5.8 ) Cash flows Premiums paid 24.0 \u2013 \u2013 24.0 Recoveries from reinsurance contracts held \u2013 \u2013 (17.9 ) (17.9 ) Total cash flows 24.0 \u2013 (17.9 ) 6.1 Reinsurance contract assets as at 31 December 2023 (29.0 ) 6.2 7.9 (14.9 ) For Scildon, the full retrospective approach at transition has been applied to all reinsurance contracts. (d) Reinsurance contract balances \u2013 analysis by measurement component \u2013 contracts not measured under PAA Present value of future Risk cash flows adjustment CSM Total \u00a3m \u00a3m \u00a3m \u00a3m Reinsurance contract assets as at 1 January 2024 (51.8 ) 12.0 24.9 (14.9 ) Changes that relate to current service CSM recognised for services received \u2013 \u2013 (3.1 ) (3.1 ) Change in risk adjustment for non-financial risk for risk expired \u2013 (0.9 ) \u2013 (0.9 ) Experience adjustments (0.1 ) \u2013 \u2013 (0.1 ) Total changes that relate to current service (0.1 ) (0.9 ) (3.1 ) (4.1 ) Changes that relate to future service Contracts initially recognised in the period (2.3 ) 0.5 1.9 0.1 Changes in estimates that adjust the CSM (1.4 ) (4.1 ) 4.0 (1.5 ) CSM adjustment for income on initial recognition of onerous underlying contracts \u2013 \u2013 0.5 0.5 Changes in recoveries of losses on onerous underlying contracts that adjust the CSM \u2013 \u2013 0.5 0.5 Total changes that relate to future service (3.7 ) (3.6 ) 6.9 (0.4 ) Net (expense)/income from reinsurance contracts held (3.8 ) (4.5 ) 3.8 (4.5 ) Net finance income from reinsurance contracts held (1.8 ) 0.6 0.4 (0.8 ) Effect of movements in exchange rates 2.4 (0.5 ) (1.2 ) 0.7 Total amounts recognised in comprehensive income (3.2 ) (4.4 ) 3.0 (4.6 ) Cash flows Premiums paid 30.8 \u2013 \u2013 30.8 Recoveries from reinsurance contracts held (25.9 ) \u2013 \u2013 (25.9 ) Total cash flows 4.9 \u2013 \u2013 4.9 Reinsurance contract assets as at 31 December 2024 (50.1 ) 7.6 27.9 (14.6 F5 Insurance and reinsurance contracts \u2013 quantitative analysis of recognised amounts \u2013 Scildon (continued) (d) Reinsurance contract balances \u2013 analysis by measurement component \u2013 contracts not measured under PAA (continued) Present value of future Risk cash flows adjustment CSM Total \u00a3m \u00a3m \u00a3m \u00a3m Reinsurance contract assets as at 1 January 2023 (52.1 ) 10.7 26.2 (15.2 ) Changes that relate to current service CSM recognised for services received \u2013 \u2013 (2.7 ) (2.7 ) Change in risk adjustment for non-financial risk for risk expired \u2013 (1.3 ) \u2013 (1.3 ) Experience adjustments (1.0 ) \u2013 \u2013 (1.0 ) Total changes that relate to current service (1.0 ) (1.3 ) (2.7 ) (5.0 ) Changes that relate to future service Contracts initially recognised in the period (3.1 ) 0.9 2.2 \u2013 Changes in estimates that adjust the CSM 1.5 1.3 (2.8 ) \u2013 CSM adjustment for income on initial recognition of onerous underlying contracts \u2013 \u2013 0.5 0.5 Changes in recoveries of losses on onerous underlying contracts that adjust the CSM \u2013 \u2013 1.8 1.8 Total changes that relate to future service (1.6 ) 2.2 1.7 2.3 Net (expense)/income from reinsurance contracts held (2.6 ) 0.9 (1.0 ) (2.7 ) Net finance income from reinsurance contracts held (4.3 ) 0.6 0.3 (3.4 ) Effect of movements in exchange rates 1.1 (0.2 ) (0.6 ) 0.3 Total amounts recognised in comprehensive income (5.8 ) 1.3 (1.3 ) (5.8 ) Cash flows Premiums paid 24.0 \u2013 \u2013 24.0 Recoveries from reinsurance contracts held (17.9 ) \u2013 \u2013 (17.9 ) Total cash flows 6.1 \u2013 \u2013 6.1 Reinsurance contract assets as at 31 December 2023 (51.8 ) 12.0 24.9 (14.9 ) (e) Insurance contracts recognised in the period (f) Reinsurance contracts recognised in the period Year Ended 31 December 2024 Non-onerous Onerous 2024 2023 contracts contracts Total \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Estimates of the present value of future cash inflows 11.2 12.5 Estimates of the present value of future cash inflows (92.5 ) (40.1 ) (132.6 ) Estimates of the present value of future cash outflows (13.6 ) (15.6 ) Risk adjustment for non-financial risk 0.5 0.9 Estimates of the present value of future cash outflows CSM 1.9 2.2 Claims and other insurance service expenses payable 1.2 1.0 2.2 Insurance acquisition cash flows 81.6 41.2 122.8 Total value of reinsurance contracts recognised in the period \u2013 \u2013 Total estimates of the present value of future cash outflows 82.8 42.2 125.0 All reinsurance contracts above are in respect of new business written and all contract groups were originally in a net cost position. Risk adjustment for non-financial risk 1.0 0.6 1.6 CSM 8.7 \u2013 8.7 (g) Expected recognition of CSM In the tables that follow the CSM accrues interest at the locked-in rate for GMM portfolios and at Losses recognised on initial recognition \u2013 2.7 2.7 current rates for VFA portfolios from the balance sheet date and is then amortised based on the coverage units of the contract groups to give the timeline of the expected recognition. Year Ended 31 December 2023 Non-onerous Onerous 31 December 2024 Insurance Reinsurance contracts contracts Total contracts contracts \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Estimates of the present value of future cash inflows (113.1 ) (46.2 ) (159.3 ) Not later than one year 9.4 (2.6 ) Later than one year and not later than two years 8.6 (2.4 ) Estimates of the present value of future cash outflows Later than two years and not later than three years 7.9 (2.2 ) Claims and other insurance service expenses payable 98.3 47.3 145.6 Later than three years and not later than four years 7.2 (2.1 ) Insurance acquisition cash flows 1.4 1.0 2.4 Later than four years and not later than five years 6.6 (1.9 ) Later than five years and not later than ten years 24.5 (7.7 ) Total estimates of the present value of future cash outflows 99.7 48.3 148.0 Later than ten years 28.1 (9.0 ) Risk adjustment for non-financial risk 1.9 0.8 2.7 Total 92.4 (27.9 ) CSM 11.5 \u2013 11.5 Losses recognised on initial recognition \u2013 2.9 2.9 31 December 2023 Insurance Reinsurance All insurance contracts above are in respect of new business written. contracts contracts \u00a3m \u00a3m Not later than one year 8.1 (2.3 ) Later than one year and not later than two years 7.5 (2.1 ) Later than two years and not later than three years 6.9 (2.0 ) Later than three years and not later than four years 6.3 (1.9 ) Later than four years and not later than five years 5.7 (1.7 ) Later than five years and not later than ten years 21.1 (6.9 ) Later than ten years 24.0 (8.0 ) Total 79.6 (24.9 ) ", "dimensions": { "concept": "ifrs-full:DisclosureOfInsuranceContractsExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-419": { "value": "Finance income/(expenses) from insurance contracts issued Change in fair value of underlying assets of contracts measured under the VFA (99.8 ) (22.8 ) (5.8 ) (170.6 ) \u2013 \u2013 (299.0 ) Interest accreted (1 9.5 ) (1.0 ) (30.0 ) ( 19.8 ) \u2013 \u2013 (70.3 ) Effect of changes in interest rates and other financial assumptions 20.2 0.2 7.8 1.5 \u2013 \u2013 29.7 Effect of changes in fulfilment cash flows at current rates when CSM is unlocked at locked in rates 0.5 \u2013 4.8 (0.5 ) \u2013 \u2013 4.8 Total finance income from insurance contracts issued (98.6 ) (23.6 ) (23.2 ) (189.4 ) \u2013 \u2013 (334.8 ) Finance income from reinsurance contracts held Interest accreted 8.6 0.4 \u2013 (1.1 ) \u2013 \u2013 7.9 Effect of changes in interest rates and other financial assumptions (4.6 ) (0.1 ) \u2013 (0.1 ) \u2013 \u2013 (4.8 ) Effect of changes in fulfilment cash flows at current rates when CSM is unlocked at locked in rates (0.9 ) \u2013 \u2013 0.4 \u2013 \u2013 (0.5 ) Total finance expenses from reinsurance contracts held 3.1 0.3 \u2013 (0.8 ) \u2013 \u2013 2.6 Finance income/(expenses) from insurance contracts issued Change in fair value of underlying assets of contracts measured under the VFA (75.4 ) \u2013 (5.1 ) (132.6 ) \u2013 \u2013 (213.1 ) Interest accreted (18.2 ) \u2013 (30.0 ) (19.1 ) \u2013 \u2013 (67. 3 ) Effect of changes in interest rates and other financial assumptions 2.4 (16.0 ) (21.2 ) (14.2 ) \u2013 \u2013 (49.0 ) Effect of changes in fulfilment cash flows at current rates when CSM is unlocked at locked in rates 4.7 \u2013 6.9 2.9 \u2013 \u2013 14.5 Total finance income from insurance contracts issued (86.5 ) (16.0 ) (49.4 ) (163.0 ) \u2013 \u2013 (314.9 ) Finance income from reinsurance contracts held Interest accreted 8.8 \u2013 0.1 (1.1 ) \u2013 \u2013 7.8 Effect of changes in interest rates and other financial assumptions 1.5 0.7 \u2013 (1.6 ) \u2013 \u2013 0.6 Effect of changes in fulfilment cash flows at current rates when CSM is unlocked at locked in rates (1.0 ) \u2013 \u2013 (0.7 ) \u2013 \u2013 (1.7 ) Total finance expenses from reinsurance contracts held 9.3 0.7 0.1 (3.4 ) \u2013 \u2013 6.7 Ne t in s ur an ce fina nc e exp e n s es (7 7. 2 ) ( 1 5.3 ) (49 .3 ) ( 1 6 6. 4 ) \u2013 \u2013 (30 8.2 ) D5 Financing costs Year ended 31 December 2024 2023 \u00a3m \u00a3m Interest expense on bank borrowings 1.0 0.7 Interest expense on financial reinsurance 0.4 0.5 Interest expense on Tier 2 debt 9.7 9.8 Total financing costs 11.1 11.0 Interest expense on bank borrowings and Tier 2 debt is calculated using the effective interest rate method and is the total interest expense for financial liabilities that are not designated at fair value through profit or loss. ", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestIncomeExpenseExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-427": { "value": "Finance income/(expenses) from insurance contracts issued Change in fair value of underlying assets of contracts measured under the VFA (99.8 ) (22.8 ) (5.8 ) (170.6 ) \u2013 \u2013 (299.0 ) Interest accreted (1 9.5 ) (1.0 ) (30.0 ) ( 19.8 ) \u2013 \u2013 (70.3 ) Effect of changes in interest rates and other financial assumptions 20.2 0.2 7.8 1.5 \u2013 \u2013 29.7 Effect of changes in fulfilment cash flows at current rates when CSM is unlocked at locked in rates 0.5 \u2013 4.8 (0.5 ) \u2013 \u2013 4.8 Total finance income from insurance contracts issued (98.6 ) (23.6 ) (23.2 ) (189.4 ) \u2013 \u2013 (334.8 ) Finance income from reinsurance contracts held Interest accreted 8.6 0.4 \u2013 (1.1 ) \u2013 \u2013 7.9 Effect of changes in interest rates and other financial assumptions (4.6 ) (0.1 ) \u2013 (0.1 ) \u2013 \u2013 (4.8 ) Effect of changes in fulfilment cash flows at current rates when CSM is unlocked at locked in rates (0.9 ) \u2013 \u2013 0.4 \u2013 \u2013 (0.5 ) Finance income/(expenses) from insurance contracts issued Change in fair value of underlying assets of contracts measured under the VFA (75.4 ) \u2013 (5.1 ) (132.6 ) \u2013 \u2013 (213.1 ) Interest accreted (18.2 ) \u2013 (30.0 ) (19.1 ) \u2013 \u2013 (67. 3 ) Effect of changes in interest rates and other financial assumptions 2.4 (16.0 ) (21.2 ) (14.2 ) \u2013 \u2013 (49.0 ) Effect of changes in fulfilment cash flows at current rates when CSM is unlocked at locked in rates 4.7 \u2013 6.9 2.9 \u2013 \u2013 14.5 Total finance income from insurance contracts issued (86.5 ) (16.0 ) (49.4 ) (163.0 ) \u2013 \u2013 (314.9 ) Finance income from reinsurance contracts held Interest accreted 8.8 \u2013 0.1 (1.1 ) \u2013 \u2013 7.8 Effect of changes in interest rates and other financial assumptions 1.5 0.7 \u2013 (1.6 ) \u2013 \u2013 0.6 Effect of changes in fulfilment cash flows at current rates when CSM is unlocked at locked in rates (1.0 ) \u2013 \u2013 (0.7 ) \u2013 \u2013 (1.7 ) ", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestIncomeExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-50": { "value": " D3 Fees, commission and other operating income Year ended 31 December 2024 2023 \u00a3m \u00a3m Policy-based fees 2.9 3.2 Fund management-based fees recognised under IFRS 15 44.1 45.5 Change in deferred income \u2013 gross 0.2 0.6 Commission income from investment contracts 22.4 20.4 Fee income from investment managers 1.3 1.3 Charges to policyholder funds for yield tax 30.8 17.9 Other types of operating income 2.5 0.5 Total fee, commission and other operating income 104.2 89.4 Fund management-based fees recognised under IFRS 15 has been disaggregated based on the geographical region as follows: Year ended 31 December 2024 2023 \u00a3m \u00a3m UK 33.9 35.0 Sweden 10.2 10.5 Total fund management-based fees recognised under IFRS 15 44.1 45.5 ", "dimensions": { "concept": "ifrs-full:DisclosureOfFeeAndCommissionIncomeExpenseExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-420": { "value": " D3 Fees, commission and other operating income Year ended 31 December 2024 2023 \u00a3m \u00a3m Policy-based fees 2.9 3.2 Fund management-based fees recognised under IFRS 15 44.1 45.5 Change in deferred income \u2013 gross 0.2 0.6 Commission income from investment contracts 22.4 20.4 Fee income from investment managers 1.3 1.3 Charges to policyholder funds for yield tax 30.8 17.9 Other types of operating income 2.5 0.5 Total fee, commission and other operating income 104.2 89.4 Fund management-based fees recognised under IFRS 15 has been disaggregated based on the geographical region as follows: Year ended 31 December 2024 2023 \u00a3m \u00a3m UK 33.9 35.0 Sweden 10.2 10.5 Total fund management-based fees recognised under IFRS 15 44.1 45.5 ", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherOperatingIncomeExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-412": { "value": " D4 Expenses by nature Year ended 31 December 2024 Insurance Other Other acquisition attributable operating cash flows expenses expenses Total Note \u00a3m \u00a3m \u00a3m \u00a3m Administrative expenses Personnel-related costs I1 2.7 13.6 26.8 43.1 Investment management fees \u2013 2.4 1.3 3.7 Costs paid to third-party administrators \u2013 10.6 2.4 13.0 Other goods and services 4.0 14.0 23.4 41.4 Depreciation charge on property and equipment 0.1 0.5 0.3 0.9 Depreciation of right-of-use assets \u2013 \u2013 0.8 0.8 Amortisation charge on software assets \u2013 \u2013 2.7 2.7 Sub-total 6.8 41.1 57.7 105.6 Commission, new business and renewal costs Insurance contracts \u2013 3.8 \u2013 3.8 Investment contracts \u2013 \u2013 32.6 32.6 Sub-total \u2013 3.8 32.6 36.4 Amortisation and Impairment of intangible assets Acquired value of in-force business \u2013 \u2013 4.8 4.8 Deferred acquisition costs \u2013 \u2013 7.7 7.7 Sub-total \u2013 \u2013 12.5 12.5 Other expenses Payment of yield tax relating to policyholders funds \u2013 \u2013 30.8 30.8 Other \u2013 2.2 \u2013 2.2 Sub-total \u2013 2.2 30.8 33.0 Total 6.8 47.1 133.6 187.5 Expenses classed as \u2018insurance acquisition cash flows\u2019 in the table above are offset against the CSM on initial recognition. The \u2018other attributable expenses\u2019 are reported in the \u2018Insurance service expense\u2019 line in the income statement. D4 Expenses by nature (continued) Year ended 31 December 2023 \u2013 restated Insurance Other Other acquisition attributable operating cash flows expenses expenses Total Note \u00a3m \u00a3m \u00a3m \u00a3m Administrative expenses Personnel-related costs I1 2.2 13.6 25.4 41.2 Investment management fees \u2013 2.3 1.3 3.6 Costs paid to third-party administrators \u2013 9.5 3.9 13.4 Other goods and services 3.3 13.0 28.9 45.2 Depreciation charge on property and equipment 0.1 0.5 0.2 0.8 Depreciation of right-of-use assets \u2013 \u2013 0.4 0.4 Amortisation charge on software assets \u2013 \u2013 2.0 2.0 Sub-total 5.6 38.9 62.1 106.6 Commission, new business and renewal costs Insurance contracts \u2013 3.8 \u2013 3.8 Investment contracts \u2013 \u2013 29.4 29.4 Sub-total \u2013 3.8 29.4 33.2 Amortisation and Impairment of intangible assets Acquired value of in-force business \u2013 \u2013 28.6 28.6 Deferred acquisition costs \u2013 \u2013 7.6 7.6 Sub-total \u2013 \u2013 36.2 36.2 Other expenses Payment of yield tax relating to policyholders funds \u2013 \u2013 17.9 17.9 Other \u2013 2.9 4.3 7.2 Sub-total \u2013 2.9 22.2 25.1 Total 5.6 45.5 149.9 201.1 Included in other goods and services above are the following amounts payable to the auditor and its associates, exclusive of VAT. Year ended 31 December 2024 2023 \u00a3m \u00a3m Fees payable to the Company\u2019s auditor for the audit of the Company\u2019s financial statements 0.7 0.6 Fees payable to the Company\u2019s auditor and its associates for other services to the Group: The audit of the Company\u2019s subsidiaries pursuant to legislation* 2.4 1.9 Audit-related assurance services** 0.2 2.0 Non-audit services \u2013 0.1 Total 3.3 4.6 *Includes \u00a31.0m (2023: \u00a31.6m) audit fees in respect of the Movestic, Waard and Scildon audit in the year performed by EY. **Includes \u00a30.1m (2023: \u00a30.1m) fees related to assurance services in respect of Waard and Scildon in the year performed by EY, \u00a30.2m (2023: \u00a30.2m) fees related to assurance services in respect of CASFS performed by Deloitte and \u00a30.1m (2023: \u00a30.1m) fees related to assurance services in respect of Chesnara parent company performed by Deloitte. ", "dimensions": { "concept": "ifrs-full:DisclosureOfExpensesExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-51": { "value": "D4 Expenses by nature Year ended 31 December 2024 Insurance Other Other acquisition attributable operating cash flows expenses expenses Total Note \u00a3m \u00a3m \u00a3m \u00a3m Administrative expenses Personnel-related costs I1 2.7 13.6 26.8 43.1 Investment management fees \u2013 2.4 1.3 3.7 Costs paid to third-party administrators \u2013 10.6 2.4 13.0 Other goods and services 4.0 14.0 23.4 41.4 Depreciation charge on property and equipment 0.1 0.5 0.3 0.9 Depreciation of right-of-use assets \u2013 \u2013 0.8 0.8 Amortisation charge on software assets \u2013 \u2013 2.7 2.7 Sub-total 6.8 41.1 57.7 105.6 Commission, new business and renewal costs Insurance contracts \u2013 3.8 \u2013 3.8 Investment contracts \u2013 \u2013 32.6 32.6 Sub-total \u2013 3.8 32.6 36.4 Amortisation and Impairment of intangible assets Acquired value of in-force business \u2013 \u2013 4.8 4.8 Deferred acquisition costs \u2013 \u2013 7.7 7.7 Sub-total \u2013 \u2013 12.5 12.5 Other expenses Payment of yield tax relating to policyholders funds \u2013 \u2013 30.8 30.8 Other \u2013 2.2 \u2013 2.2 Sub-total \u2013 2.2 30.8 33.0 Total 6.8 47.1 133.6 187.5 Expenses classed as \u2018insurance acquisition cash flows\u2019 in the table above are offset against the CSM on initial recognition. The \u2018other attributable expenses\u2019 are reported in the \u2018Insurance service expense\u2019 line in the income statement. D4 Expenses by nature (continued) Year ended 31 December 2023 \u2013 restated Insurance Other Other acquisition attributable operating cash flows expenses expenses Total Note \u00a3m \u00a3m \u00a3m \u00a3m Administrative expenses Personnel-related costs I1 2.2 13.6 25.4 41.2 Investment management fees \u2013 2.3 1.3 3.6 Costs paid to third-party administrators \u2013 9.5 3.9 13.4 Other goods and services 3.3 13.0 28.9 45.2 Depreciation charge on property and equipment 0.1 0.5 0.2 0.8 Depreciation of right-of-use assets \u2013 \u2013 0.4 0.4 Amortisation charge on software assets \u2013 \u2013 2.0 2.0 Sub-total 5.6 38.9 62.1 106.6 Commission, new business and renewal costs Insurance contracts \u2013 3.8 \u2013 3.8 Investment contracts \u2013 \u2013 29.4 29.4 Sub-total \u2013 3.8 29.4 33.2 Amortisation and Impairment of intangible assets Acquired value of in-force business \u2013 \u2013 28.6 28.6 Deferred acquisition costs \u2013 \u2013 7.6 7.6 Sub-total \u2013 \u2013 36.2 36.2 Other expenses Payment of yield tax relating to policyholders funds \u2013 \u2013 17.9 17.9 Other \u2013 2.9 4.3 7.2 Sub-total \u2013 2.9 22.2 25.1 Total 5.6 45.5 149.9 201.1 Included in other goods and services above are the following amounts payable to the auditor and its associates, exclusive of VAT. Year ended 31 December 2024 2023 \u00a3m \u00a3m Fees payable to the Company\u2019s auditor for the audit of the Company\u2019s financial statements 0.7 0.6 Fees payable to the Company\u2019s auditor and its associates for other services to the Group: The audit of the Company\u2019s subsidiaries pursuant to legislation* 2.4 1.9 Audit-related assurance services** 0.2 2.0 Non-audit services \u2013 0.1 Total 3.3 4.6 *Includes \u00a31.0m (2023: \u00a31.6m) audit fees in respect of the Movestic, Waard and Scildon audit in the year performed by EY. **Includes \u00a30.1m (2023: \u00a30.1m) fees related to assurance services in respect of Waard and Scildon in the year performed by EY, \u00a30.2m (2023: \u00a30.2m) fees related to assurance services in respect of CASFS performed by Deloitte and \u00a30.1m (2023: \u00a30.1m) fees related to assurance services in respect of Chesnara parent company performed by Deloitte. ", "dimensions": { "concept": "ifrs-full:DisclosureOfExpensesByNatureExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-421": { "value": "D4 Expenses by nature Year ended 31 December 2024 Insurance Other Other acquisition attributable operating cash flows expenses expenses Total Note \u00a3m \u00a3m \u00a3m \u00a3m Administrative expenses Personnel-related costs I1 2.7 13.6 26.8 43.1 Investment management fees \u2013 2.4 1.3 3.7 Costs paid to third-party administrators \u2013 10.6 2.4 13.0 Other goods and services 4.0 14.0 23.4 41.4 Depreciation charge on property and equipment 0.1 0.5 0.3 0.9 Depreciation of right-of-use assets \u2013 \u2013 0.8 0.8 Amortisation charge on software assets \u2013 \u2013 2.7 2.7 Sub-total 6.8 41.1 57.7 105.6 Commission, new business and renewal costs Insurance contracts \u2013 3.8 \u2013 3.8 Investment contracts \u2013 \u2013 32.6 32.6 Sub-total \u2013 3.8 32.6 36.4 Amortisation and Impairment of intangible assets Acquired value of in-force business \u2013 \u2013 4.8 4.8 Deferred acquisition costs \u2013 \u2013 7.7 7.7 Sub-total \u2013 \u2013 12.5 12.5 Other expenses Payment of yield tax relating to policyholders funds \u2013 \u2013 30.8 30.8 Other \u2013 2.2 \u2013 2.2 Sub-total \u2013 2.2 30.8 33.0 Total 6.8 47.1 133.6 187.5 Expenses classed as \u2018insurance acquisition cash flows\u2019 in the table above are offset against the CSM on initial recognition. The \u2018other attributable expenses\u2019 are reported in the \u2018Insurance service expense\u2019 line in the income statement. D4 Expenses by nature (continued) Year ended 31 December 2023 \u2013 restated Insurance Other Other acquisition attributable operating cash flows expenses expenses Total Note \u00a3m \u00a3m \u00a3m \u00a3m Administrative expenses Personnel-related costs I1 2.2 13.6 25.4 41.2 Investment management fees \u2013 2.3 1.3 3.6 Costs paid to third-party administrators \u2013 9.5 3.9 13.4 Other goods and services 3.3 13.0 28.9 45.2 Depreciation charge on property and equipment 0.1 0.5 0.2 0.8 Depreciation of right-of-use assets \u2013 \u2013 0.4 0.4 Amortisation charge on software assets \u2013 \u2013 2.0 2.0 Sub-total 5.6 38.9 62.1 106.6 Commission, new business and renewal costs Insurance contracts \u2013 3.8 \u2013 3.8 Investment contracts \u2013 \u2013 29.4 29.4 Sub-total \u2013 3.8 29.4 33.2 Amortisation and Impairment of intangible assets Acquired value of in-force business \u2013 \u2013 28.6 28.6 Deferred acquisition costs \u2013 \u2013 7.6 7.6 Sub-total \u2013 \u2013 36.2 36.2 Other expenses Payment of yield tax relating to policyholders funds \u2013 \u2013 17.9 17.9 Other \u2013 2.9 4.3 7.2 Sub-total \u2013 2.9 22.2 25.1 Total 5.6 45.5 149.9 201.1 Included in other goods and services above are the following amounts payable to the auditor and its associates, exclusive of VAT. Year ended 31 December 2024 2023 \u00a3m \u00a3m Fees payable to the Company\u2019s auditor for the audit of the Company\u2019s financial statements 0.7 0.6 Fees payable to the Company\u2019s auditor and its associates for other services to the Group: The audit of the Company\u2019s subsidiaries pursuant to legislation* 2.4 1.9 Audit-related assurance services** 0.2 2.0 Non-audit services \u2013 0.1 Total 3.3 4.6 *Includes \u00a31.0m (2023: \u00a31.6m) audit fees in respect of the Movestic, Waard and Scildon audit in the year performed by EY. **Includes \u00a30.1m (2023: \u00a30.1m) fees related to assurance services in respect of Waard and Scildon in the year performed by EY, \u00a30.2m (2023: \u00a30.2m) fees related to assurance services in respect of CASFS performed by Deloitte and \u00a30.1m (2023: \u00a30.1m) fees related to assurance services in respect of Chesnara parent company performed by Deloitte. ", "dimensions": { "concept": "ifrs-full:DisclosureOfGeneralAndAdministrativeExpenseExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-395": { "value": "
Depreciation charge on property and equipment 0.1 0.5 0.3 0.9
Depreciation of right-of-use assets \u2013 \u2013 0.8 0.8
Amortisation charge on software assets \u2013 \u2013 2.7 2.7
Depreciation charge on property and equipment 0.1 0.5 0.2 0.8
Depreciation of right-of-use assets \u2013 \u2013 0.4 0.4
Amortisation charge on software assets \u2013 \u2013 2.0 2.0
", "dimensions": { "concept": "ifrs-full:DisclosureOfDepreciationAndAmortisationExpenseExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-396": { "value": "Year ended 31 December 2024 2023 \u00a3m \u00a3m Fees payable to the Company\u2019s auditor for the audit of the Company\u2019s financial statements 0.7 0.6 Fees payable to the Company\u2019s auditor and its associates for other services to the Group: The audit of the Company\u2019s subsidiaries pursuant to legislation* 2.4 1.9 Audit-related assurance services** 0.2 2.0 Non-audit services \u2013 0.1 Total 3.3 4.6 *Includes \u00a31.0m (2023: \u00a31.6m) audit fees in respect of the Movestic, Waard and Scildon audit in the year performed by EY. **Includes \u00a30.1m (2023: \u00a30.1m) fees related to assurance services in respect of Waard and Scildon in the year performed by EY, \u00a30.2m (2023: \u00a30.2m) fees related to assurance services in respect of CASFS performed by Deloitte and \u00a30.1m (2023: \u00a30.1m) fees related to assurance services in respect of Chesnara parent company performed by Deloitte. ", "dimensions": { "concept": "ifrs-full:DisclosureOfAuditorsRemunerationExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-52": { "value": " D5 Financing costs Year ended 31 December 2024 2023 \u00a3m \u00a3m Interest expense on bank borrowings 1.0 0.7 Interest expense on financial reinsurance 0.4 0.5 Interest expense on Tier 2 debt 9.7 9.8 Total financing costs 11.1 11.0 Interest expense on bank borrowings and Tier 2 debt is calculated using the effective interest rate method and is the total interest expense for financial liabilities that are not designated at fair value through profit or loss. ", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceCostExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-428": { "value": " D5 Financing costs Year ended 31 December 2024 2023 \u00a3m \u00a3m Interest expense on bank borrowings 1.0 0.7 Interest expense on financial reinsurance 0.4 0.5 Interest expense on Tier 2 debt 9.7 9.8 Total financing costs 11.1 11.0 Interest expense on bank borrowings and Tier 2 debt is calculated using the effective interest rate method and is the total interest expense for financial liabilities that are not designated at fair value through profit or loss. ", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestExpenseExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-53": { "value": " D6 Income tax Total income tax comprises 2024 2023 Year ended 31 December \u00a3m \u00a3m CA and other Group activities \u2013 net credit (15.2 ) 20.4 Movestic (0.5 ) \u2013 Waard Group \u2013 net expense/credit 0.8 (1.6 ) Scildon \u2013 net (expense)/credit (2.0 ) (1.9 ) Total net credit (16.9 ) 16.9 UK business CA and other Group activities 2024 2023 Year ended 31 December \u00a3m \u00a3m Current tax Current year expense 0.1 \u2013 Overseas tax \u2013 (0.3 ) Net expense 0.1 (0.3 ) Deferred tax Origination and reversal of temporary differences (17.4 ) 20.7 Adjustment to prior years 2.1 \u2013 Total income tax credit (expense)/credit (15.2 ) 20.4 Reconciliation of effective tax rate on profit before tax 2024 2023 Year ended 31 December \u00a3m \u00a3m Profit/(loss) before tax 2.1 (26.3 ) Income tax using the domestic corporation tax rate of 25.0% (2023: 23.5%) (0.5 ) 6.2 Non-taxable profit on acquisition of subsidiary (0.2 ) \u2013 Impact of small companies rate \u2013 (1.5 ) Other permanent differences \u2013 (0.6 ) Effect of UK tax bases on insurance profits (15.8 ) (7.5 ) Offset of franked investment income 2.6 1.2 Variation in rate of tax on amortisation of acquired in-force value 1.5 13.3 Foreign tax \u2013 (0.3 ) Effect of deferred tax not recognised (4.8 ) 10.1 Effect of change in tax rate \u2013 (0.2 ) Other 2.0 (0.3 ) Total income tax credit (expense)/credit (15.2 ) 20.4 The Finance Act 2021 increased the rate of corporation tax from 19% to 25% from 1 April 2023. D6 Income tax (continued) Movestic Movestic 2024 2023 Year ended 31 December \u00a3m \u00a3m Current tax Current year expense (0.5 ) \u2013 Net expenses (0.5 ) \u2013 Deferred tax Origination and reversal of temporary differences \u2013 \u2013 Total income tax expense (0.5 ) \u2013 Reconciliation of effective tax rate on profit before tax 2024 2023 Year ended 31 December \u00a3m \u00a3m Profit before tax 10.4 5.4 Income tax using the domestic corporation tax rate of 20.6% (20.6%) (2.1 ) (1.1 ) Non-taxable income in relation to unit-linked business 1.2 1.2 Unrecognised tax recoverable 0.8 (0.3 ) Non-deductible expenses 0.1 0.2 Under/(over) provided in prior years (0.5 ) \u2013 Total income tax credit/(expense) (0.5 ) \u2013 Waard Group Waard Group 2024 2023 Year ended 31 December \u00a3m \u00a3m Current tax Current year expense (0.9 ) (1.7 ) Adjustment to prior years 0.6 4.7 Net expenses (0.3 ) 3.0 Deferred tax Origination and reversal of temporary differences 1.1 (4.6 ) Total income tax credit/(expense) 0.8 (1.6 ) Reconciliation of effective tax rate on profit before tax 2024 2023 Year ended 31 December \u00a3m \u00a3m (Loss)/profit before tax (2.5 ) 14.7 Income tax using the domestic corporation tax rate of 25.8% (2023: 25%) 0.7 (3.8 ) Non-taxable fair value adjustment \u2013 1.7 Temporary differences 0.1 1.0 Reversal of temporary difference \u2013 (0.5 ) Total income tax credit/(expense) 0.8 (1.6 ) Scildon Scildon 2024 2023 Year ended 31 December \u00a3m \u00a3m Current tax \u2013 4.8 Adjustments for prior year \u2013 \u2013 Net expense \u2013 4.8 Deferred tax Origination and reversal of temporary differences (2.0 ) (6.7 ) Total income tax credit/(expense) (2.0 ) (1.9 ) Reconciliation of effective tax rate on profit before tax 2024 2023 Year ended 31 December \u00a3m \u00a3m Loss before tax 7.5 7.5 Income tax using the domestic corporation tax rate 25.8% (2023: 25%) (1.9 ) (1.9 ) Permanent differences 0.1 0.1 Temporary differences (0.1 ) (0.1 ) Total income tax credit/(expense) (1.9 ) (1.9 ) ", "dimensions": { "concept": "ifrs-full:DisclosureOfIncomeTaxExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-54": { "value": " E1 Intangible assets Year ended 31 December 2024 Software AVIF AVCR assets Total \u00a3m \u00a3m \u00a3m \u00a3m Cost: Balance at 1 January 112.3 2.3 31.1 145.6 Additions \u2013 \u2013 2.1 2.1 Foreign exchange translation difference \u2013 \u2013 (2.4 ) (2.3 ) Balance at 31 December 112.3 2.3 30.8 145.4 Amortisation and impairment losses: Balance at 1 January 76.1 2.1 21.7 99.9 Amortisation for the year 4.7 \u2013 2.7 7.4 Impairment for the year \u2013 \u2013 \u2013 \u2013 Foreign exchange translation difference 1.0 \u2013 (1.7 ) (0.7 ) Balance at 31 December 81.8 2.1 22.7 106.6 Carrying amounts: At 1 January 36.3 0.2 9.3 45.8 At 31 December 30.5 0.2 8.1 38.8 Year ended 31 December 2023 Software AVIF AVCR assets Total \u00a3m \u00a3m \u00a3m \u00a3m Cost: Balance at 1 January 113.9 2.3 29.5 145.7 Additions \u2013 \u2013 2.3 2.3 Foreign exchange translation difference (1.6 ) \u2013 (0.7 ) (2.3 ) Balance at 31 December 112.3 2.3 31.1 145.7 Amortisation and impairment losses: Balance at 1 January 48.5 2.1 20.2 70.8 Amortisation for the year 7.5 \u2013 2.0 9.5 Impairment for the year 21.0 \u2013 \u2013 21.0 Foreign exchange translation difference (0.9 ) \u2013 (0.5 ) (1.4 ) Balance at 31 December 76.1 2.1 21.7 99.9 Carrying amounts: At 1 January 65.4 0.2 9.3 74.9 At 31 December 36.3 0.2 9.3 45.8 Section A5 (i) provides further details of the significant judgements applied and the sensitivities to those judgements in respect of the AVIF assets held in regard to CASLP within the UK segment of \u00a319.8m (31 December 2023: \u00a322.9m) and also in Movestic of \u00a310.7m (31 December 2023: \u00a313.4m). The AVCR asset and the software assets are held in respect of Movestic. The amortisation charged to the Consolidated Statement of Comprehensive Income is recognised Deferred acquisition costs Year ended 31 December 2024 2023 \u00a3m \u00a3m Balance at 1 January 50.6 51.2 Additions 9.2 8.3 Amortisation charged to income (7.7 ) (7.6 ) Foreign exchange translation difference (3.6 ) (1.3 ) Balance at 31 December 48.4 50.6 Current 6.3 11.1 Non-current 42.1 39.5 Total 48.4 50.6 The amortisation charged to income is recognised in other operating expenses (see Note D4). ", "dimensions": { "concept": "ifrs-full:DisclosureOfIntangibleAssetsExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-413": { "value": " E1 Intangible assets Year ended 31 December 2024 Software AVIF AVCR assets Total \u00a3m \u00a3m \u00a3m \u00a3m Cost: Balance at 1 January 112.3 2.3 31.1 145.6 Additions \u2013 \u2013 2.1 2.1 Foreign exchange translation difference \u2013 \u2013 (2.4 ) (2.3 ) Balance at 31 December 112.3 2.3 30.8 145.4 Amortisation and impairment losses: Balance at 1 January 76.1 2.1 21.7 99.9 Amortisation for the year 4.7 \u2013 2.7 7.4 Impairment for the year \u2013 \u2013 \u2013 \u2013 Foreign exchange translation difference 1.0 \u2013 (1.7 ) (0.7 ) Balance at 31 December 81.8 2.1 22.7 106.6 Carrying amounts: At 1 January 36.3 0.2 9.3 45.8 At 31 December 30.5 0.2 8.1 38.8 Year ended 31 December 2023 Software AVIF AVCR assets Total \u00a3m \u00a3m \u00a3m \u00a3m Cost: Balance at 1 January 113.9 2.3 29.5 145.7 Additions \u2013 \u2013 2.3 2.3 Foreign exchange translation difference (1.6 ) \u2013 (0.7 ) (2.3 ) Balance at 31 December 112.3 2.3 31.1 145.7 Amortisation and impairment losses: Balance at 1 January 48.5 2.1 20.2 70.8 Amortisation for the year 7.5 \u2013 2.0 9.5 Impairment for the year 21.0 \u2013 \u2013 21.0 Foreign exchange translation difference (0.9 ) \u2013 (0.5 ) (1.4 ) Balance at 31 December 76.1 2.1 21.7 99.9 Carrying amounts: At 1 January 65.4 0.2 9.3 74.9 At 31 December 36.3 0.2 9.3 45.8 Section A5 (i) provides further details of the significant judgements applied and the sensitivities to those judgements in respect of the AVIF assets held in regard to CASLP within the UK segment of \u00a319.8m (31 December 2023: \u00a322.9m) and also in Movestic of \u00a310.7m (31 December 2023: \u00a313.4m). The AVCR asset and the software assets are held in respect of Movestic. The amortisation charged to the Consolidated Statement of Comprehensive Income is recognised in other operating expenses (see Note D4). Deferred acquisition costs Year ended 31 December 2024 2023 \u00a3m \u00a3m Balance at 1 January 50.6 51.2 Additions 9.2 8.3 Amortisation charged to income (7.7 ) (7.6 ) Foreign exchange translation difference (3.6 ) (1.3 ) Balance at 31 December 48.4 50.6 Current 6.3 11.1 Non-current 42.1 39.5 Total 48.4 50.6 The amortisation charged to income is recognised in other operating expenses (see Note D4). ", "dimensions": { "concept": "ifrs-full:DisclosureOfIntangibleAssetsAndGoodwillExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-397": { "value": "Deferred acquisition costs Year ended 31 December 2024 2023 \u00a3m \u00a3m Balance at 1 January 50.6 51.2 Additions 9.2 8.3 Amortisation charged to income (7.7 ) (7.6 ) Foreign exchange translation difference (3.6 ) (1.3 ) Balance at 31 December 48.4 50.6 Current 6.3 11.1 Non-current 42.1 39.5 Total 48.4 50.6 The amortisation charged to income is recognised in other operating expenses (see Note D4). ", "dimensions": { "concept": "ifrs-full:DisclosureOfDeferredAcquisitionCostsArisingFromInsuranceContractsExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-55": { "value": " E2 Property and equipment 31 December 2024 2023 \u00a3m \u00a3m Cost: Balance at 1 January 20.6 19.0 Additions 0.8 1.9 Disposals (1.7 ) (0.3 ) Revaluation 0.7 0.3 Foreign exchange translation difference (0.8 ) (0.3 ) Balance at 31 December 19.6 20.6 Amortisation and impairment losses: Balance at 1 January 12.2 11.1 Depreciation charge for the year 1.7 0.8 Disposals (1.7 ) \u2013 Foreign exchange translation difference (0.4 ) 0.3 Balance at 31 December 11.7 12.2 Carrying amounts at 31 December 7.9 8.4 The Group leases several assets including office buildings, office equipment, IT equipment and motor vehicles. The average lease term is 3 years. E2 Property and equipment (continued) Right-of-use assets Non-investment 2024 property Other Total \u00a3m \u00a3m \u00a3m Carrying amounts at 1 January 1.1 0.2 1.3 Additions 0.1 \u2013 0.1 Depreciation charge (0.6 ) (0.2 ) (0.8 ) Carrying amounts at 31 December 0.6 \u2013 0.6 Amounts recognised in profit or loss are not considered to be material. Right-of-use assets Non-investment 2023 property Other Total \u00a3m \u00a3m \u00a3m Carrying amounts at 1 January 1.2 0.1 1.3 Additions \u2013 0.8 0.8 Depreciation charge (0.4 ) (0.4 ) (0.8 ) Foreign exchange translation difference 0.3 (0.3 ) \u2013 Carrying amounts at 31 December 1.1 0.2 1.3 Amounts recognised in profit or loss are not considered to be material. ", "dimensions": { "concept": "ifrs-full:DisclosureOfPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-57": { "value": " E4 Financial investments (a) Financial investments by classification The carrying amounts of the financial investments and other financial assets and liabilities held by the Group at the balance sheet date are as follows: 31 December 2024 Amortised FVTPL \u2013 FVTPL \u2013 cost designated mandatory Total \u00a3m \u00a3m \u00a3m \u00a3m Financial investments Equity securities \u2013 \u2013 191.5 191.5 Holdings in collective investment schemes \u2013 \u2013 8,661.6 8,661.6 Debt securities \u2013 government bonds \u2013 446.1 \u2013 446.1 Debt securities \u2013 other \u2013 634.7 10.1 644.8 Policyholder funds help by the Group \u2013 1,825.8 \u2013 1,825.8 Mortgage loan portfolio \u2013 346.9 \u2013 346.9 Total \u2013 3,253.5 8,863.2 12,116.7 Derivatives and other financial assets Amounts deposited with reinsurer \u2013 34.3 \u2013 34.3 Derivative financial instruments \u2013 \u2013 0.1 0.1 Other assets 68.7 \u2013 \u2013 68.7 Cash and cash equivalents \u2013 138.0 \u2013 138.0 Total financial investments and financial assets 68.7 3,425.8 8,863.3 12,357.8 Financial liabilities Investment contracts at fair value through profit or loss \u2013 6,116.7 \u2013 6,116.7 Liabilities relating to policyholder funds help by the Group \u2013 1,825.5 \u2013 1,825.5 Derivative financial instruments \u2013 \u2013 0.6 0.6 Borrowings 204.8 \u2013 \u2013 204.8 Other current liabilities 129.7 \u2013 \u2013 129.7 Total financial liabilities 334.5 7,942.2 0.6 8,277.3 31 December 2023 Amortised FVTPL \u2013 FVTPL \u2013 cost designated mandatory Total \u00a3m \u00a3m \u00a3m \u00a3m Financial investments Equity securities \u2013 \u2013 194.2 194.2 Holdings in collective investment schemes \u2013 \u2013 8,376.2 8,376.2 Debt securities \u2013 government bonds \u2013 716.5 \u2013 716.5 Debt securities \u2013 other \u2013 520.6 \u2013 520.6 Policyholder funds help by the Group \u2013 1,281.8 \u2013 1,281.8 Mortgage loan portfolio \u2013 366.8 \u2013 366.8 Total \u2013 2,885.7 8,570.4 11,456.1 Derivatives and other financial assets Amounts deposited with reinsurers \u2013 32.5 \u2013 32.5 Derivative financial instruments \u2013 \u2013 0.3 0.3 Other assets 57.7 \u2013 \u2013 57.7 Cash and cash equivalents \u2013 146.0 \u2013 146.0 Total financial investments and financial assets 57.7 3,064.2 8,570.7 11,692.6 Financial liabilities Investment contracts at fair value through profit or loss \u2013 5,872.3 \u2013 5,872.3 Liabilities relating to policyholder funds help by the Group \u2013 1,281.8 \u2013 1,281.8 Derivative financial instruments \u2013 \u2013 4.4 4.4 Borrowings 207.9 \u2013 \u2013 207.9 Other current liabilities 131.7 \u2013 \u2013 131.7 Total financial liabilities 339.6 7,154.1 4.4 7,498.1 inancial investment fair values air value is the amount for which an asset or liability could be exchanged between willing parties an arm\u2019s length transaction. The tables below show the determination of fair value according o a three-level valuation hierarchy. Fair values are generally determined at prices quoted in active arkets (Level 1). However, where such information is not available, the Group applies valuation echniques to measure such instruments. These valuation techniques make use of market-observable ata for all significant inputs where possible (Level 2), but in some cases it may be necessary to stimate other than market-observable data within a valuation model for significant inputs (Level 3). Fair value measurement at Level 1 Level 2 Level 3 Total 31 December 2024 \u00a3m \u00a3m \u00a3m \u00a3m Investment properties \u2013 \u2013 91.7 91.7 Financial assets Equities \u2013 Listed 191.5 \u2013 \u2013 191.5 Holdings in collective investment schemes 8,454.1 38.9 168.6 8,661.6 Debt securities \u2013 government bonds 446.1 \u2013 \u2013 446.1 Debt securities \u2013 other debt securities 644.8 \u2013 \u2013 644.8 Policyholders\u2019 funds held by the Group 1,781.6 \u2013 44.2 1,825.8 Mortgage loan portfolio \u2013 346.9 \u2013 346.9 Amounts deposited with reinsurers \u2013 34.3 \u2013 34.3 Derivative financial instruments \u2013 0.1 \u2013 0.1 Total 11,518.1 420.2 304.5 12,242.8 Financial liabilities Investment contracts at fair value through profit or loss \u2013 6,116.7 \u2013 6,116.7 Liabilities related to policyholders\u2019 funds held by the Group \u2013 1,825.5 \u2013 1,825.5 Derivative financial instruments \u2013 0.6 \u2013 0.6 Total \u2013 7,942.8 \u2013 7,942.8 Fair value measurement at Level 1 Level 2 Level 3 Total 31 December 2023 \u00a3m \u00a3m \u00a3m \u00a3m Investment properties \u2013 \u2013 88.1 88.1 Financial assets Equities \u2013 Listed 194.2 \u2013 \u2013 194.2 Holdings in collective investment schemes 8,189.2 44.5 142.5 8,376.2 Debt securities \u2013 government bonds 716.5 \u2013 \u2013 716.5 Debt securities \u2013 other debt securities 520.6 \u2013 \u2013 520.6 Policyholders\u2019 funds held by the Group 1,239.4 \u2013 42.4 1,281.8 Mortgage loan portfolio \u2013 366.8 \u2013 366.8 Amounts deposited with reinsurers \u2013 32.5 \u2013 \u2013 Derivative financial instruments \u2013 0.3 \u2013 0.3 Total 10,859.9 444.1 273.0 11,577.0 Financial liabilities Investment contracts at fair value through profit or loss \u2013 5,872.3 \u2013 5,872.3 Liabilities related to policyholders\u2019 funds held by the Group 1,281.8 \u2013 \u2013 1,281.8 Derivative financial instruments \u2013 4.4 \u2013 4.4 Total 1,281.8 5,876.7 \u2013 7,158.5 E4 Financial investments (continued) (b) Financial investment fair values (continued) Investment properties The investment properties are valued by external chartered surveyors using industry standard techniques based on guidance from the Royal Institute of Chartered Surveyors. The valuation methodology includes an assessment of general market conditions and sector level transactions and takes account of expectations of occupancy rates, rental income and growth. Properties undergo individual scrutiny using cash flow analysis to factor in the timing of rental reviews, capital expenditure, lease incentives, dilapidation and operating expenses; these reviews utilise both observable and unobservable inputs. Holdings in collective investment schemes The holdings classified as Level 3 \u00a3168.6m (Dec 2023: \u00a3142.5m) also relate to Scildon, and represent investments held in a mortgage fund. These are classified as Level 3 as the fair value is derived from valuation techniques that include inputs that are not based on observable market data. Policyholder funds held by the Group There is also a small holding of assets classified as Level 3 \u00a344.2m (Dec 2023: \u00a342.4m) from our Movestic operation which are unlisted. The valuation of the vast majority of these assets is based on unobservable prices from trading on the over-the-counter market. Debt securities The debt securities classified as Level 2 at 2023 and 2024 are traded in active markets with less depth or wider bid-ask spreads. This does not meet the classification as Level 1 inputs. The fair values of debt securities not traded in active markets are determined using broker quotes or valuation techniques with observable market inputs. Financial instruments valued using broker quotes are classified at Level 2, only where there is a sufficient range of available quotes. These assets were valued using counterparty or broker quotes and were periodically validated against third-party models. Derivative financial instruments The derivatives financial instruments include a foreign currency hedge related to the Group. This was obtained to manage the exposure to foreign exchange movements between sterling and both the euro and Swedish krona. It includes an uncapped collar which consists of two hedges: \u2013 one hedge to protect against the downside (sterling strengthening) (starting at strike A), and one to remove the upside (weakening) (strike B); with the strikes of these coordinated to result in no upfront premium. \u2013 the second hedge (strike B) creates an uncapped liquidity requirement when it bites. The capped collar comes with an additional leg which creates value and liquidity when exchange rates move beyond a certain point (strike C). Within derivative financial instruments is a financial reinsurance embedded derivative related to our Movestic operation. The Group has entered into a reinsurance contract with a third party that has a section that is deemed to transfer significant insurance risk and a section that is deemed not to transfer significant insurance risk. The element of the contract that does not transfer significant insurance risk has two components and has been accounted for as a financial liability at amortised cost and an embedded derivative asset at fair value. The embedded derivative represents an option to repay the amounts due under the contract early at a discount to the amortised cost, with its fair value being determined by reference to market interest rate at the balance sheet date. It is, accordingly, determined at Level 2 in the three-level fair value determination hierarchy set out above. Further detail can be found in Note E5. Investment contract liabilities The investment contract liabilities in Level 2 of the valuation hierarchy represent the fair value of linked and non-linked liabilities valued using established actuarial techniques utilising mark et observable data for all significant inputs, such as investment yields. Significant unobservable inputs in Level 3 instruments valuations The Level 3 instruments held in the Group are in relation to investments held in an Aegon manag ed Dutch Mortgage Fund that contains mortgage-backed assets in the Netherlands. The fair value of the mortgage fund is determined by the fund manager on a monthly basis using an in-hou se valuation model. The valuation model relies on a number of unobservable inputs, the most significant being the assumed conditional prepayment rate, the discount rate and the impairme nt rate, all of which are applied to the anticipated modelled cash flows to derive the fair value of the underlying asset. The assumed Conditional Prepayment Rate (CPR) is used to calculate the projected prepayme nt cash flow per individual loan and reflects the anticipated early repayment of mortgage balances . The CPR is based on four variables: Contract age \u2013 The CPR for newly originated mortgage loans will initially be low, after which it increases for a couple of years to its maximum expected value, and subsequently diminishes over time. Interest rate differential \u2013 The difference between the contractual rates and current interest rate s are positively correlated with prepayments. When contractual rates are higher than interest rat es of newly originated mortgages, we observe more prepayments and the vice versa. Previous partial repayments \u2013 Borrowers who made a partial prepayment in the past, are more lik ely to do so in the future. Burnout effect \u2013 Borrowers who have not made a prepayment in the past, while their option to prep ay was in the money, are less likely to prepay in the future. The projected prepayment cash flows per loan are then combined to derive an average expected lifetime CPR, which is then applied to the outstanding balance of the fund. The CPR used in t he valuation of the fund as at 31 December 2024 was 3.7% (31 December 2023: 3.2%). The expected projected cash flows for each mortgage within the loan portfolio are discounted usi ng rates that are derived using a matrix involving the following three parameters: The remaining fixed rate term of the mortgage Indexed Loan to Value (LTV) of each mortgage Current (Aegon) mortgage rates At 31 December 2024 this resulted in discounting the cash flows in each mortgage using a ran ge from 4.06% to 4.26% (31 December 2023: 4.67% to 4.68%). An impairment percentage is applied to those loan cash flows which are in arrears, to reflect the chance of the loan actually going into default. For those loans which are 1, 2 or 3 months in arrea rs, an impairment percentage is applied to reflect the chance of default. This percentage ranges from 0.60% for 1 month in arrears to 13.70% for loans which are 3 months in arrears (31 December 20 23: 0.60% for 1 month in arrears to 13.70% for loans which are 3 months in arrears). Loans which are in default receive a 100% reduction in value. The value of the fund has the potential to decrease or increase over time. This can be as a consequence of a periodic reassessment of the conditional prepayment rate and/or the discount rate used in the valuation model. A 1 percent increase in the CPR would increase the value of the asset by \u00a32.0m (31 December 2023: \u00a31.9m). A 1 percent decrease in the CPR would reduce the value of the asset by \u00a32.2m (31 December 2023: \u00a32.1m). A 1 percent increase in the discount rate would reduce the value of the asset by \u00a315.3m (31 December 2023: \u00a311.4m). A 1 percent decrease in the discount rate would increase the value of the asset by \u00a317.5m (31 December 2023: \u00a313.3m). Reconciliation of Level 3 fair value measurements of financial instruments Level 3 movement 31 December 2024 Holdings in collective Policyholder Investment investment funds held properties schemes by Group Total \u00a3m \u00a3m \u00a3m \u00a3m At start of period 88.1 142.5 42.4 273.0 Additions \u2013 acquisition of subsidiary \u2013 \u2013 \u2013 \u2013 Total gains and losses recognised in the income statement 8.1 33.5 1.9 43.5 Purchases 3.4 \u2013 17.0 20.4 Settlements (7.9 ) \u2013 (13.9 ) (21.8 ) Exchange rate adjustment \u2013 (7.4 ) (3.2 ) (10.6 ) At the end of period 91.7 168.6 44.2 304.5 31 December 2023 Holdings in collective Policyholder Investment investment funds held properties schemes by Group Total \u00a3m \u00a3m \u00a3m \u00a3m At start of period 93.3 145.4 35.1 273.8 Additions \u2013 acquisition of subsidiary \u2013 \u2013 \u2013 \u2013 Total gains and losses recognised in the income statement (2.7 ) 0.5 (6.4 ) (8.6 ) Purchases 2.3 \u2013 20.5 22.8 Settlements (4.8 ) \u2013 (6.0 ) (10.8 ) Exchange rate adjustment \u2013 (3.4 ) (0.8 ) (4.2 ) At the end of period 88.1 142.5 42.4 273.0 31 December Carrying amount Fair value 2024 2023 2024 2023 \u00a3m \u00a3m \u00a3m \u00a3m Financial liabilities Borrowings 200.8 200.6 166.1 148.4 Amounts due in relation to financial reinsurance 2.4 5.3 2.3 5.1 Term finance 1.6 2.0 1.6 1.9 Total 204.8 207.9 170.0 155.4 The fair value of the Tier 2 debt is calculated using quoted prices in active markets and they are classified as Level 1 in the fair value hierarchy. The amount due in relation to financial reinsurance is fair valued with reference to market interest rates at the balance sheet date and is classed as Level 2 in the fair value hierarchy. There were no transfers between Levels 1, 2 and 3 during the year. The Group holds no Level 3 liabilities as at the balance sheet date. ", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-56": { "value": "E3 Investment properties 31 December 2024 2023 \u00a3m \u00a3m Balance at 1 January 88.1 94.5 Additions 3.4 2.3 Disposals (7.9 ) (6.0 ) Revaluation 8.1 (2.7 ) Balance at 31 December 91.7 88.1 Investment properties were bought for investment purposes in line with the investment strategy of the Group. Detail on the property types and the frequency of valuations is provide in Note A4(k). There is no observable input and therefore they are classed as Level 3 in the fair value hierarchy, see Note E4(b). The revaluation is disclosed within net investment return (see Note D2). Expenses incurred in the operation and maintenance of investment properties are disclosed within other operating expenses (see Note D4). Rental income from investment properties was \u00a36.9m for the year (2023: \u00a36.8m). Operating expenses incurred on investment properties was \u00a30.6m for the year (2023: \u00a31.0m). ", "dimensions": { "concept": "ifrs-full:DisclosureOfInvestmentPropertyExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-398": { "value": " (b) Financial investment fair values Fair value is the amount for which an asset or liability could be exchanged between willing parties in an arm\u2019s length transaction. The tables below show the determination of fair value according to a three-level valuation hierarchy. Fair values are generally determined at prices quoted in active markets (Level 1). However, where such information is not available, the Group applies valuation techniques to measure such instruments. These valuation techniques make use of market-observable data for all significant inputs where possible (Level 2), but in some cases it may be necessary to estimate other than market-observable data within a valuation model for significant inputs (Level 3). Fair value measurement at Level 1 Level 2 Level 3 Total 31 December 2024 \u00a3m \u00a3m \u00a3m \u00a3m Investment properties \u2013 \u2013 91.7 91.7 Financial assets Equities \u2013 Listed 191.5 \u2013 \u2013 191.5 Holdings in collective investment schemes 8,454.1 38.9 168.6 8,661.6 Debt securities \u2013 government bonds 446.1 \u2013 \u2013 446.1 Debt securities \u2013 other debt securities 644.8 \u2013 \u2013 644.8 Policyholders\u2019 funds held by the Group 1,781.6 \u2013 44.2 1,825.8 Mortgage loan portfolio \u2013 346.9 \u2013 346.9 Amounts deposited with reinsurers \u2013 34.3 \u2013 34.3 Derivative financial instruments \u2013 0.1 \u2013 0.1 Total 11,518.1 420.2 304.5 12,242.8 Financial liabilities Investment contracts at fair value through profit or loss \u2013 6,116.7 \u2013 6,116.7 Liabilities related to policyholders\u2019 funds held by the Group \u2013 1,825.5 \u2013 1,825.5 Derivative financial instruments \u2013 0.6 \u2013 0.6 Total \u2013 7,942.8 \u2013 7,942.8 Fair value measurement at Level 1 Level 2 Level 3 Total 31 December 2023 \u00a3m \u00a3m \u00a3m \u00a3m Investment properties \u2013 \u2013 88.1 88.1 Financial assets Equities \u2013 Listed 194.2 \u2013 \u2013 194.2 Holdings in collective investment schemes 8,189.2 44.5 142.5 8,376.2 Debt securities \u2013 government bonds 716.5 \u2013 \u2013 716.5 Debt securities \u2013 other debt securities 520.6 \u2013 \u2013 520.6 Policyholders\u2019 funds held by the Group 1,239.4 \u2013 42.4 1,281.8 Mortgage loan portfolio \u2013 366.8 \u2013 366.8 Amounts deposited with reinsurers \u2013 32.5 \u2013 \u2013 Derivative financial instruments \u2013 0.3 \u2013 0.3 Total 10,859.9 444.1 273.0 11,577.0 Financial liabilities Investment contracts at fair value through profit or loss \u2013 5,872.3 \u2013 5,872.3 Liabilities related to policyholders\u2019 funds held by the Group 1,281.8 \u2013 \u2013 1,281.8 Derivative financial instruments \u2013 4.4 \u2013 4.4 Total 1,281.8 5,876.7 \u2013 7,158.5 Investment contract liabilities The investment contract liabilities in Level 2 of the valuation hierarchy represent the fair value of linked and non-linked liabilities valued using established actuarial techniques utilising mark et observable data for all significant inputs, such as investment yields. Significant unobservable inputs in Level 3 instruments valuations The Level 3 instruments held in the Group are in relation to investments held in an Aegon manag ed Dutch Mortgage Fund that contains mortgage-backed assets in the Netherlands. The fair value of the mortgage fund is determined by the fund manager on a monthly basis using an in-hou se valuation model. The valuation model relies on a number of unobservable inputs, the most significant being the assumed conditional prepayment rate, the discount rate and the impairme nt rate, all of which are applied to the anticipated modelled cash flows to derive the fair value of the underlying asset. The assumed Conditional Prepayment Rate (CPR) is used to calculate the projected prepayme nt cash flow per individual loan and reflects the anticipated early repayment of mortgage balances . The CPR is based on four variables: Contract age \u2013 The CPR for newly originated mortgage loans will initially be low, after which it increases for a couple of years to its maximum expected value, and subsequently diminishes over time. Interest rate differential \u2013 The difference between the contractual rates and current interest rate s are positively correlated with prepayments. When contractual rates are higher than interest rat es of newly originated mortgages, we observe more prepayments and the vice versa. Previous partial repayments \u2013 Borrowers who made a partial prepayment in the past, are more lik ely to do so in the future. Burnout effect \u2013 Borrowers who have not made a prepayment in the past, while their option to prep ay was in the money, are less likely to prepay in the future. The projected prepayment cash flows per loan are then combined to derive an average expected lifetime CPR, which is then applied to the outstanding balance of the fund. The CPR used in t he valuation of the fund as at 31 December 2024 was 3.7% (31 December 2023: 3.2%). The expected projected cash flows for each mortgage within the loan portfolio are discounted usi ng rates that are derived using a matrix involving the following three parameters: The remaining fixed rate term of the mortgage Indexed Loan to Value (LTV) of each mortgage Current (Aegon) mortgage rates At 31 December 2024 this resulted in discounting the cash flows in each mortgage using a ran ge from 4.06% to 4.26% (31 December 2023: 4.67% to 4.68%). An impairment percentage is applied to those loan cash flows which are in arrears, to reflect the chance of the loan actually going into default. For those loans which are 1, 2 or 3 months in arrea rs, an impairment percentage is applied to reflect the chance of default. This percentage ranges from 0.60% for 1 month in arrears to 13.70% for loans which are 3 months in arrears (31 December 20 23: 0.60% for 1 month in arrears to 13.70% for loans which are 3 months in arrears). Loans which are in default receive a 100% reduction in value. The value of the fund has the potential to decrease or increase over time. This can be as a consequence of a periodic reassessment of the conditional prepayment rate and/or the discount rate used in the valuation model. A 1 percent increase in the CPR would increase the value of the asset by \u00a32.0m (31 December 2023: \u00a31.9m). A 1 percent decrease in the CPR would reduce the value of the asset by \u00a32.2m (31 December 2023: \u00a32.1m). (b) Financial investment fair values (continued) Investment properties The investment properties are valued by external chartered surveyors using industry standard techniques based on guidance from the Royal Institute of Chartered Surveyors. The valuation methodology includes an assessment of general market conditions and sector level transactions and takes account of expectations of occupancy rates, rental income and growth. Properties undergo individual scrutiny using cash flow analysis to factor in the timing of rental reviews, capital expenditure, lease incentives, dilapidation and operating expenses; these reviews utilise both observable and unobservable inputs. Holdings in collective investment schemes The holdings classified as Level 3 \u00a3168.6m (Dec 2023: \u00a3142.5m) also relate to Scildon, and represent investments held in a mortgage fund. These are classified as Level 3 as the fair value is derived from valuation techniques that include inputs that are not based on observable market data. Policyholder funds held by the Group There is also a small holding of assets classified as Level 3 \u00a344.2m (Dec 2023: \u00a342.4m) from our Movestic operation which are unlisted. The valuation of the vast majority of these assets is based on unobservable prices from trading on the over-the-counter market. Debt securities The debt securities classified as Level 2 at 2023 and 2024 are traded in active markets with less depth or wider bid-ask spreads. This does not meet the classification as Level 1 inputs. The fair values of debt securities not traded in active markets are determined using broker quotes or valuation techniques with observable market inputs. Financial instruments valued using broker quotes are classified at Level 2, only where there is a sufficient range of available quotes. These assets were valued using counterparty or broker quotes and were periodically validated against third-party models. Derivative financial instruments The derivatives financial instruments include a foreign currency hedge related to the Group. This was obtained to manage the exposure to foreign exchange movements between sterling and both the euro and Swedish krona. It includes an uncapped collar which consists of two hedges: \u2013 one hedge to protect against the downside (sterling strengthening) (starting at strike A), and one to remove the upside (weakening) (strike B); with the strikes of these coordinated to result in no upfront premium. \u2013 the second hedge (strike B) creates an uncapped liquidity requirement when it bites. The capped collar comes with an additional leg which creates value and liquidity when exchange rates move beyond a certain point (strike C). Within derivative financial instruments is a financial reinsurance embedded derivative related to our Movestic operation. The Group has entered into a reinsurance contract with a third party that has a section that is deemed to transfer significant insurance risk and a section that is deemed not to transfer significant insurance risk. The element of the contract that does not transfer significant insurance risk has two components and has been accounted for as a financial liability at amortised cost and an embedded derivative asset at fair value. The embedded derivative represents an option to repay the amounts due under the contract early at a discount to the amortised cost, with its fair value being determined by reference to market interest rate at the balance sheet date. It is, accordingly, determined at Level 2 in the three-level fair value determination hierarchy set out above. Further detail can be found in Note E5. A 1 percent increase in the discount rate would reduce the value of the asset by \u00a315.3m (31 December 2023: \u00a311.4m). A 1 percent decrease in the discount rate would increase the value of the asset by \u00a317.5m (31 December 2023: \u00a313.3m). Reconciliation of Level 3 fair value measurements of financial instruments Level 3 movement 31 December 2024 Holdings in collective Policyholder Investment investment funds held properties schemes by Group Total \u00a3m \u00a3m \u00a3m \u00a3m At start of period 88.1 142.5 42.4 273.0 Additions \u2013 acquisition of subsidiary \u2013 \u2013 \u2013 \u2013 Total gains and losses recognised in the income statement 8.1 33.5 1.9 43.5 Purchases 3.4 \u2013 17.0 20.4 Settlements (7.9 ) \u2013 (13.9 ) (21.8 ) Exchange rate adjustment \u2013 (7.4 ) (3.2 ) (10.6 ) At the end of period 91.7 168.6 44.2 304.5 31 December 2023 Holdings in collective Policyholder Investment investment funds held properties schemes by Group Total \u00a3m \u00a3m \u00a3m \u00a3m At start of period 93.3 145.4 35.1 273.8 Additions \u2013 acquisition of subsidiary \u2013 \u2013 \u2013 \u2013 Total gains and losses recognised in the income statement (2.7 ) 0.5 (6.4 ) (8.6 ) Purchases 2.3 \u2013 20.5 22.8 Settlements (4.8 ) \u2013 (6.0 ) (10.8 ) Exchange rate adjustment \u2013 (3.4 ) (0.8 ) (4.2 ) At the end of period 88.1 142.5 42.4 273.0 31 December Carrying amount Fair value 2024 2023 2024 2023 \u00a3m \u00a3m \u00a3m \u00a3m Financial liabilities Borrowings 200.8 200.6 166.1 148.4 Amounts due in relation to financial reinsurance 2.4 5.3 2.3 5.1 Term finance 1.6 2.0 1.6 1.9 Total 204.8 207.9 170.0 155.4 The fair value of the Tier 2 debt is calculated using quoted prices in active markets and they are classified as Level 1 in the fair value hierarchy. The amount due in relation to financial reinsurance is fair valued with reference to market interest rates at the balance sheet date and is classed as Level 2 in the fair value hierarchy. There were no transfers between Levels 1, 2 and 3 during the year. The Group holds no Level 3 liabilities as at the balance sheet date. ", "dimensions": { "concept": "ifrs-full:DisclosureOfFairValueOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-414": { "value": " (b) Financial investment fair values Fair value is the amount for which an asset or liability could be exchanged between willing parties in an arm\u2019s length transaction. The tables below show the determination of fair value according to a three-level valuation hierarchy. Fair values are generally determined at prices quoted in active markets (Level 1). However, where such information is not available, the Group applies valuation techniques to measure such instruments. These valuation techniques make use of market-observable data for all significant inputs where possible (Level 2), but in some cases it may be necessary to estimate other than market-observable data within a valuation model for significant inputs (Level 3). Fair value measurement at Level 1 Level 2 Level 3 Total 31 December 2024 \u00a3m \u00a3m \u00a3m \u00a3m Investment properties \u2013 \u2013 91.7 91.7 Financial assets Equities \u2013 Listed 191.5 \u2013 \u2013 191.5 Holdings in collective investment schemes 8,454.1 38.9 168.6 8,661.6 Debt securities \u2013 government bonds 446.1 \u2013 \u2013 446.1 Debt securities \u2013 other debt securities 644.8 \u2013 \u2013 644.8 Policyholders\u2019 funds held by the Group 1,781.6 \u2013 44.2 1,825.8 Mortgage loan portfolio \u2013 346.9 \u2013 346.9 Amounts deposited with reinsurers \u2013 34.3 \u2013 34.3 Derivative financial instruments \u2013 0.1 \u2013 0.1 Total 11,518.1 420.2 304.5 12,242.8 Financial liabilities Investment contracts at fair value through profit or loss \u2013 6,116.7 \u2013 6,116.7 Liabilities related to policyholders\u2019 funds held by the Group \u2013 1,825.5 \u2013 1,825.5 Derivative financial instruments \u2013 0.6 \u2013 0.6 Total \u2013 7,942.8 \u2013 7,942.8 Fair value measurement at Level 1 Level 2 Level 3 Total 31 December 2023 \u00a3m \u00a3m \u00a3m \u00a3m Investment properties \u2013 \u2013 88.1 88.1 Financial assets Equities \u2013 Listed 194.2 \u2013 \u2013 194.2 Holdings in collective investment schemes 8,189.2 44.5 142.5 8,376.2 Debt securities \u2013 government bonds 716.5 \u2013 \u2013 716.5 Debt securities \u2013 other debt securities 520.6 \u2013 \u2013 520.6 Policyholders\u2019 funds held by the Group 1,239.4 \u2013 42.4 1,281.8 Mortgage loan portfolio \u2013 366.8 \u2013 366.8 Amounts deposited with reinsurers \u2013 32.5 \u2013 \u2013 Derivative financial instruments \u2013 0.3 \u2013 0.3 Total 10,859.9 444.1 273.0 11,577.0 Financial liabilities Investment contracts at fair value through profit or loss \u2013 5,872.3 \u2013 5,872.3 Liabilities related to policyholders\u2019 funds held by the Group 1,281.8 \u2013 \u2013 1,281.8 Derivative financial instruments \u2013 4.4 \u2013 4.4 Total 1,281.8 5,876.7 \u2013 7,158.5 Investment contract liabilities The investment contract liabilities in Level 2 of the valuation hierarchy represent the fair value of linked and non-linked liabilities valued using established actuarial techniques utilising mark observable data for all significant inputs, such as investment yields. Significant unobservable inputs in Level 3 instruments valuations The Level 3 instruments held in the Group are in relation to investments held in an Aegon manag Dutch Mortgage Fund that contains mortgage-backed assets in the Netherlands. The fair value of the mortgage fund is determined by the fund manager on a monthly basis using an in-hou valuation model. The valuation model relies on a number of unobservable inputs, the most significant being the assumed conditional prepayment rate, the discount rate and the impairme rate, all of which are applied to the anticipated modelled cash flows to derive the fair value of the underlying asset. The assumed Conditional Prepayment Rate (CPR) is used to calculate the projected prepayme cash flow per individual loan and reflects the anticipated early repayment of mortgage balances The CPR is based on four variables: Contract age \u2013 The CPR for newly originated mortgage loans will initially be low, after which it increases for a couple of years to its maximum expected value, and subsequently diminishes over time. \u2013 Interest rate differential \u2013 The difference between the contractual rates and current interest rate are positively correlated with prepayments. When contractual rates are higher than interest rat of newly originated mortgages, we observe more prepayments and the vice versa. \u2013 Previous partial repayments \u2013 Borrowers who made a partial prepayment in the past, are more lik to do so in the future. Burnout effect \u2013 Borrowers who have not made a prepayment in the past, while their option to prep was in the money, are less likely to prepay in the future. The projected prepayment cash flows per loan are then combined to derive an average expected lifetime CPR, which is then applied to the outstanding balance of the fund. The CPR used in t valuation of the fund as at 31 December 2024 was 3.7% (31 December 2023: 3.2%). The expected projected cash flows for each mortgage within the loan portfolio are discounted usi rates that are derived using a matrix involving the following three parameters: \u2013 The remaining fixed rate term of the mortgage \u2013 Indexed Loan to Value (LTV) of each mortgage \u2013 Current (Aegon) mortgage rates At 31 December 2024 this resulted in discounting the cash flows in each mortgage using a ran from 4.06% to 4.26% (31 December 2023: 4.67% to 4.68%). An impairment percentage is applied to those loan cash flows which are in arrears, to reflect the chance of the loan actually going into default. For those loans which are 1, 2 or 3 months in arrea an impairment percentage is applied to reflect the chance of default. This percentage ranges from 0.60% for 1 month in arrears to 13.70% for loans which are 3 months in arrears (31 December 20 0.60% for 1 month in arrears to 13.70% for loans which are 3 months in arrears). Loans which are in default receive a 100% reduction in value. The value of the fund has the potential to decrease or increase over time. This can be as a consequence of a periodic reassessment of the conditional prepayment rate and/or the discount rate used in the valuation model. A 1 percent increase in the CPR would increase the value of the asset by \u00a32.0m (31 December 2023: \u00a31.9m). A 1 percent decrease in the CPR would reduce the value of the asset by \u00a32.2m (31 December 2023: \u00a32.1m). (b) Financial investment fair values (continued) Investment properties The investment properties are valued by external chartered surveyors using industry standard techniques based on guidance from the Royal Institute of Chartered Surveyors. The valuation methodology includes an assessment of general market conditions and sector level transactions and takes account of expectations of occupancy rates, rental income and growth. Properties undergo individual scrutiny using cash flow analysis to factor in the timing of rental reviews, capital expenditure, lease incentives, dilapidation and operating expenses; these reviews utilise both observable and unobservable inputs. Holdings in collective investment schemes The holdings classified as Level 3 \u00a3168.6m (Dec 2023: \u00a3142.5m) also relate to Scildon, and represent investments held in a mortgage fund. These are classified as Level 3 as the fair value is derived from valuation techniques that include inputs that are not based on observable market data. Policyholder funds held by the Group There is also a small holding of assets classified as Level 3 \u00a344.2m (Dec 2023: \u00a342.4m) from our Movestic operation which are unlisted. The valuation of the vast majority of these assets is based on unobservable prices from trading on the over-the-counter market. Debt securities The debt securities classified as Level 2 at 2023 and 2024 are traded in active markets with less depth or wider bid-ask spreads. This does not meet the classification as Level 1 inputs. The fair values of debt securities not traded in active markets are determined using broker quotes or valuation techniques with observable market inputs. Financial instruments valued using broker quotes are classified at Level 2, only where there is a sufficient range of available quotes. These assets were valued using counterparty or broker quotes and were periodically validated against third-party models. Derivative financial instruments The derivatives financial instruments include a foreign currency hedge related to the Group. This was obtained to manage the exposure to foreign exchange movements between sterling and both the euro and Swedish krona. It includes an uncapped collar which consists of two hedges: \u2013 one hedge to protect against the downside (sterling strengthening) (starting at strike A), and one to remove the upside (weakening) (strike B); with the strikes of these coordinated to result in no upfront premium. \u2013 the second hedge (strike B) creates an uncapped liquidity requirement when it bites. The capped collar comes with an additional leg which creates value and liquidity when exchange rates move beyond a certain point (strike C). Within derivative financial instruments is a financial reinsurance embedded derivative related to our Movestic operation. The Group has entered into a reinsurance contract with a third party that has a section that is deemed to transfer significant insurance risk and a section that is deemed not to transfer significant insurance risk. The element of the contract that does not transfer significant insurance risk has two components and has been accounted for as a financial liability at amortised cost and an embedded derivative asset at fair value. The embedded derivative represents an option to repay the amounts due under the contract early at a discount to the amortised cost, with its fair value being determined by reference to market interest rate at the balance sheet date. It is, accordingly, determined at Level 2 in the three-level fair value determination hierarchy set out above. Further detail can be found in Note E5. A 1 percent increase in the discount rate would reduce the value of the asset by \u00a315.3m (31 December 2023: \u00a311.4m). A 1 percent decrease in the discount rate would increase the value of the asset by \u00a317.5m (31 December 2023: \u00a313.3m). Reconciliation of Level 3 fair value measurements of financial instruments Level 3 movement 31 December 2024 Holdings in collective Policyholder Investment investment funds held properties schemes by Group Total \u00a3m \u00a3m \u00a3m \u00a3m At start of period 88.1 142.5 42.4 273.0 Additions \u2013 acquisition of subsidiary \u2013 \u2013 \u2013 \u2013 Total gains and losses recognised in the income statement 8.1 33.5 1.9 43.5 Purchases 3.4 \u2013 17.0 20.4 Settlements (7.9 ) \u2013 (13.9 ) (21.8 ) Exchange rate adjustment \u2013 (7.4 ) (3.2 ) (10.6 ) At the end of period 91.7 168.6 44.2 304.5 31 December 2023 Holdings in collective Policyholder Investment investment funds held properties schemes by Group Total \u00a3m \u00a3m \u00a3m \u00a3m At start of period 93.3 145.4 35.1 273.8 Additions \u2013 acquisition of subsidiary \u2013 \u2013 \u2013 \u2013 Total gains and losses recognised in the income statement (2.7 ) 0.5 (6.4 ) (8.6 ) Purchases 2.3 \u2013 20.5 22.8 Settlements (4.8 ) \u2013 (6.0 ) (10.8 ) Exchange rate adjustment \u2013 (3.4 ) (0.8 ) (4.2 ) At the end of period 88.1 142.5 42.4 273.0 31 December Carrying amount Fair value 2024 2023 2024 2023 \u00a3m \u00a3m \u00a3m \u00a3m Financial liabilities Borrowings 200.8 200.6 166.1 148.4 Amounts due in relation to financial reinsurance 2.4 5.3 2.3 5.1 Term finance 1.6 2.0 1.6 1.9 Total 204.8 207.9 170.0 155.4 The fair value of the Tier 2 debt is calculated using quoted prices in active markets and they are classified as Level 1 in the fair value hierarchy. The amount due in relation to financial reinsurance is fair valued with reference to market interest rates at the balance sheet date and is classed as Level 2 in the fair value hierarchy. There were no transfers between Levels 1, 2 and 3 during the year. The Group holds no Level 3 liabilities as at the balance sheet date. ", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-58": { "value": "E5 Derivative financial instruments A currency hedge is held in the Parent Company in order to manage the exposure to foreign exchange movements between sterling and both the euro and Swedish krona. The currency hedge is classed as Level 2 (2023: Level 2) in the three-level fair value determination hierarchy set out in Note E4(b). There are also derivatives held within the unit-linked and with-profits funds, except for an option to repay a financial reinsurance contract early, which comprises an embedded derivative. 31 December 2024 2023 Asset Liability Asset Liability \u00a3m \u00a3m \u00a3m \u00a3m Exchange-traded futures \u2013 (0.3 ) 0.2 \u2013 Foreign currency hedge \u2013 (0.3 ) \u2013 (4.4 ) Financial reinsurance embedded derivative 0.1 \u2013 0.1 \u2013 Total 0.1 (0.6 ) 0.3 (4.4 ) Current 0.1 (0.6 ) 0.3 (4.4 ) Non-current \u2013 \u2013 \u2013 \u2013 Total 0.1 (0.6 ) 0.3 (4.4 ) Derivatives within unit-linked funds As part of its investment management strategy, the Group purchases derivative financial instruments as part of its investment portfolio for unit-linked investment funds, which match the liabilities arising on its unit-linked insurance and investment business. A variety of equity futures are part of the portfolio matching the unit-linked investment and insurance liabilities. Derivatives are used to facilitate more efficient portfolio management allowing changes in investment strategy to be reflected by futures transactions rather than a high volume of transactions in the underlying assets. All the contracts in the unit-linked funds are exchange-traded futures, with their fair value being the bid price at the balance sheet date. They are, accordingly, determined at Level 1 in the three-level fair value determination hierarchy set out in Note E4(b). Exchange-traded futures 2024 2023 (by geographical investment market) Asset Liability Asset Liability 31 December \u00a3m \u00a3m \u00a3m \u00a3m Japan \u2013 \u2013 0.2 \u2013 USA \u2013 (0.2 ) \u2013 \u2013 Total \u2013 (0.2 ) 0.2 \u2013 E5 Derivative financial instruments (continued) Financial reinsurance embedded derivative In respect of Movestic, the Group has a reinsurance contract with a third party that has an element that is deemed to transfer significant insurance risk and an element that is deemed not to transfer significant insurance risk. This assessment has been determined by management based on the contractual terms of the reinsurance agreement. The element of the contract that does not transfer significant insurance risk has two components and has been accounted for as a financial liability at amortised cost and an embedded derivative at fair value. The embedded derivative represents an option to repay the amounts due under the contract early at a discount to the amortised cost, with its fair value being determined by reference to market interest rates at the balance sheet date. It is, accordingly, determined at Level 2 in the three-level fair value determination hierarchy set out in Note E4(b). Derivatives within CA (S&P with-profits funds) As part of its investment management strategy, CA enters into a limited range of derivative instruments to manage its exposure to various risks. CA uses equity index futures in order to economically hedge equity market risk in the with-profit funds\u2019 investments. The change in fair value of the futures contracts is intended to offset the change in fair value of the underlying equities being hedged. CA settles the market value of the futures contracts on a daily basis by paying or receiving a variation margin. The futures contracts are not discounted as this daily settlement is equal to the change in fair value of the futures. As a result, there is no additional fair value to recognise in relation to these derivatives on the balance sheet at the year end. CA also purchases exchange rate futures to mitigate exchange rate risk within its with-profits funds. These contracts are exchange-traded contracts in active markets with their fair value being the bid price at the balance sheet date. They are, accordingly, determined at Level 1 in the three-level fair value determination hierarchy set out in Note E4(b). ", "dimensions": { "concept": "ifrs-full:DisclosureOfDerivativeFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-60": { "value": "7 Cash and cash equivalents 31 December 2024 2023 \u00a3m \u00a3m Bank and cash balances 127.4 135.7 Call deposits due after 1 month 10.6 10.3 Total cash and cash equivalents 138.0 146.0 Bank overdrafts (0.8 ) (0.2 ) Cash and cash equivalents in the statement of cash flows 137.2 145.8 Deposits are subject to a combination of fixed and variable interest rates, with an average maturity of 95 days (2023: 95 days). Included in cash and cash equivalents held by the Group are balances totalling \u00a369.7m (2023: \u00a352.6m) held in unit-linked policyholders\u2019 funds. The following tables show the changes in liabilities arising from financing activities in the year. These liabilities are measured at amortised cost. 31 December Foreign Financing exchange Other 1 Jan cash translation changes 31 Dec 2024 flows (i) differences (ii) 2024 \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Tier 2 debt 200.6 (9.5 ) \u2013 9.7 200.8 Financial reinsurance 5.3 (2.6 ) (0.7 ) 0.4 2.4 Lease liabilities 1.2 (0.3 ) (0.3 ) \u2013 0.6 Total 207.1 (12.4 ) (1.0 ) 10.1 203.8 31 December Foreign Financing exchange Other 1 Jan cash translation changes 31 Dec 2023 flows (i) differences (ii) 2023 \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Tier 2 debt 200.4 \u2013 \u2013 0.2 200.6 Financial reinsurance 9.6 (3.9 ) (0.4 ) \u2013 5.3 Lease liabilities 1.2 (0.6 ) (0.1 ) 0.7 1.2 Total 211.2 (4.5 ) (0.5 ) 0.9 207.1 (i) The cash flows from bank loans and other borrowings make up the net amount of proceeds from borrowings and repayments of borrowings in the cash flow statement. (ii) Other changes include interest accruals. ", "dimensions": { "concept": "ifrs-full:DisclosureOfCashAndCashEquivalentsExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-399": { "value": " E6 Other assets 31 December 2024 2023 \u00a3m \u00a3m Receivables arising from investment contracts Reinsurers share of accrued policyholder claims 1.9 1.9 Receivables from policyholders 6.3 3.5 Commission receivables 0.1 0.1 Sub-total 8.3 5.5 Other receivables Accrued interest income 10.2 10.2 Receivables from fund management companies 3.4 3.3 Prepayments 12.5 13.7 Income tax balances 21.1 16.4 Other 13.1 8.6 Sub-total 60.3 52.2 Total 68.6 57.7 Current 66.5 54.9 Non-current 2.1 2.8 Total 68.6 57.7 ", "dimensions": { "concept": "ifrs-full:DisclosureOfPrepaymentsAndOtherAssetsExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-422": { "value": " E6 Other assets 31 December 2024 2023 \u00a3m \u00a3m Receivables arising from investment contracts Reinsurers share of accrued policyholder claims 1.9 1.9 Receivables from policyholders 6.3 3.5 Commission receivables 0.1 0.1 Sub-total 8.3 5.5 Other receivables Accrued interest income 10.2 10.2 Receivables from fund management companies 3.4 3.3 Prepayments 12.5 13.7 Income tax balances 21.1 16.4 Other 13.1 8.6 Sub-total 60.3 52.2 Total 68.6 57.7 Current 66.5 54.9 Non-current 2.1 2.8 Total 68.6 57.7 ", "dimensions": { "concept": "ifrs-full:DisclosureOfTradeAndOtherReceivablesExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-59": { "value": " E6 Other assets 31 December 2024 2023 \u00a3m \u00a3m Receivables arising from investment contracts Reinsurers share of accrued policyholder claims 1.9 1.9 Receivables from policyholders 6.3 3.5 Commission receivables 0.1 0.1 Sub-total 8.3 5.5 Other receivables Accrued interest income 10.2 10.2 Receivables from fund management companies 3.4 3.3 Prepayments 12.5 13.7 Income tax balances 21.1 16.4 Other 13.1 8.6 Sub-total 60.3 52.2 Total 68.6 57.7 Current 66.5 54.9 Non-current 2.1 2.8 Total 68.6 57.7 ", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherAssetsExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-415": { "value": "
Income tax balances 21.1 16.4
VAT 0.3 0.2
Employee tax 2.3 2.1
", "dimensions": { "concept": "ifrs-full:DisclosureOfTaxReceivablesAndPayablesExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-61": { "value": "SECTION F INSURANCE AND REINSURANCE CONTRACTS F1 Insurance and reinsurance contracts 31 December 2023 \u2013 restated Waard The following notes provide a quantitative analysis of the insurance and reinsurance contract Movestic Group Scildon assets and liabilities and are disaggregated by the IFRS 8 operating segments. This disaggregation (UK ) (Sweden ) (N etherlands ) (Netherlands ) Total has been chosen for the following notes because it is management\u2019s view that together with the \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m information in the underwriting risk section, it provides the most relevant information for assessing the effect that contracts within the scope of IFRS 17 have on the entity\u2019s financial performance Insurance contracts and position. Insurance contract liabilities 1,383.0 171.8 785.3 1,862.9 4,203.0 Insurance contract assets (3.9 ) \u2013 \u2013 \u2013 (3.9 ) (a) Composition of the balance sheet Net insurance The following tables show the breakdown of the insurance and reinsurance contract assets and contract liabilities 1,379.1 171.8 785.3 1,862.9 4,199.1 liabilities for each of the operating segments within Chesnara. Note A4(a)(i) provides details regarding broad product groups and measurement models. Note B2 provides details for the values Reinsurance contracts of insurance and reinsurance contracts for the broad product groups within each segment. Reinsurance contract assets 166.8 14.5 4.4 \u2013 185.7 Reinsurance contract liabilities (2. 2 ) \u2013 \u2013 (14 .9 ) (17.1 ) 31 December 2024 Waard Movestic Group Scildon Net reinsurance (UK ) (Sweden ) (N etherlands ) (Netherlands ) Total contract assets 164.6 14.5 4.4 (14.9 ) 168.6 \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Insurance contracts Current Non-current Total Insurance contract liabilities 1,308.5 174.1 720.4 1,896.1 4,099.1 \u00a3m \u00a3m \u00a3m Insurance contract assets (1.8 ) \u2013 \u2013 \u2013 (1.8 ) Insurance contract liabilities 672.1 3,530.9 4,203.0 Net insurance Insurance contract assets \u2013 (3.9 ) (3.9 ) contract liabilities 1,306.7 174.1 720.4 1,896.1 4,097.3 Reinsurance contract assets 29.1 156.6 185.7 Reinsurance contract liabilities 2.1 (19.2 ) (17.1 ) Reinsurance contracts Reinsurance contract assets 154.8 12.4 2.7 \u2013 169.9 The prior year non-current and current insurance liabilities have been restated in respect of Scildon. Reinsurance contract liabilities (2 .0 ) \u2013 \u2013 (14.6 ) (16 .6 ) (b) Fair value of underlying items Net reinsurance The following table shows the fair value of the underlying items of the Group\u2019s direct participating contract assets 152.8 12.4 2.7 (14.6 ) 153.3 contracts for each reporting segment. Current Non-current Total Waard \u00a3m \u00a3m \u00a3m Movestic Group Scildon (UK ) (Sweden ) (N etherlands ) (Netherlands ) Total Insurance contract liabilities 730.5 3,368.6 4,099.1 \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Insurance contract assets (1.8 ) \u2013 (1.8 ) Reinsurance contract assets 29.9 140.0 169.9 Fair value of underlying items Reinsurance contract liabilities 0.5 (17.1 ) (16.6 ) as at 31 December 2024 711.0 142.4 54.9 1,322.8 2,231.1 Fair value of underlying items as at 31 December 2023 816.9 132.3 65.2 1,238.7 2,253.1 Composition of underlying items The majority of the fair value of underlying items across the Group are held in collective investment schemes. A small proportion is held in equities, debt securities and in cash and deposits . IFRS FINANCIAL STATEMENTS SECTION F INSURANCE AND REINSURANCE CONTRACTS F2 Insurance and reinsurance contracts \u2013 quantitative analysis of recognised amounts \u2013 UK (a) Insurance contract balances \u2013 analysis by remaining coverage and incurred claims Liabilities for remaining coverage Excluding Liabilities loss Loss for incurred component component claims Total \u00a3m \u00a3m \u00a3m \u00a3m Insurance contract liabilities as at 1 January 2024 1,301.1 12.4 65.6 1,379.1 Changes in the statement of profit and loss Insurance revenue Contracts measured under the fair value approach (58.1 ) \u2013 \u2013 (58.1 ) Contracts measured under the full retrospective approach (13.2 ) \u2013 \u2013 (13.2 ) Insurance revenue total (71.3 ) \u2013 \u2013 (71.3 ) Insurance service expenses Incurred claims and other directly attributable expenses \u2013 (1.8 ) 62.3 60.5 Losses and reversals of losses on onerous contracts \u2013 4.4 \u2013 4.4 Insurance service expense total \u2013 2.6 62.3 64.9 Insurance service result (71.3 ) 2.6 62.3 (6.4 ) Net finance expenses from insurance contracts 98.5 0.1 \u2013 98.6 Total amounts recognised in comprehensive income 27.2 2.7 62.3 92.2 Investment components (135.7 ) \u2013 135.7 \u2013 Cash flows Premiums received 35.3 \u2013 \u2013 35.3 Claims and other directly attributable expenses paid \u2013 \u2013 (197.7 ) (197.7 ) Acquisitions 9.7 \u2013 (11.9 ) (2.2 ) Total cash flows 45.0 \u2013 (209.6 ) (164.6 ) Insurance contract liabilities as at 31 December 2024 1,237.6 15.1 54.0 1,306.7 200 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Restated Liabilities for remaining coverage Excluding Liabilities loss Loss for incurred component component claims Total \u00a3m \u00a3m \u00a3m \u00a3m Insurance contract liabilities as at 1 January 2023 1,382.3 \u2013 65.3 1,447.6 Changes in the statement of profit and loss Insurance revenue Contracts measured under the fair value approach (57.5 ) \u2013 \u2013 (57.5 ) Contracts measured under the full retrospective approach (8.3 ) \u2013 \u2013 (8.3 ) Insurance revenue total (65.8 ) \u2013 \u2013 (65.8 ) Insurance service expenses Incurred claims and other directly attributable expenses 0.2 (2.5 ) 53.1 50.8 Losses and reversals of losses on onerous contracts \u2013 14.9 \u2013 14.9 Insurance service expense total 0.2 12.4 53.1 65.7 Insurance service result (65.6 ) 12.4 53.1 (0.1 ) Net finance expenses from insurance contracts 86.5 \u2013 \u2013 86.5 Total amounts recognised in comprehensive income 20.9 12.4 53.1 86.4 Investment components (131.0 ) \u2013 131.0 \u2013 Cash flows Premiums received 37.9 \u2013 \u2013 37.9 Claims and other directly attributable expenses paid \u2013 \u2013 (183.8 ) (183.8 ) Acquisitions (9.0 ) \u2013 \u2013 (9.0 ) Total cash flows 28.9 \u2013 (183.8 ) (154.9 ) Insurance contract liabilities as at 31 December 2023 1,301.1 12.4 65.6 1,379.1 There is no PAA business in the UK segment. Note A5(a) sets out the fair value methodology applied at transition that has been applied for the CA contracts in the UK. CHESNARAANNUALREPORTANDACCOUNTS2024201 IFRS FINANCIAL STATEMENTS SEC SECTION TIONF F INSUR INSURANCE ANCEAND ANDREINSU REINSUR RANCE ANCECONT CONTR RA AC CTS TS F2 Insurance and reinsurance contracts \u2013 quantitative analysis of recognised amounts \u2013 UK (continued) (b) Insurance contract balances \u2013 analysis by measurement component \u2013 contracts not measured under PAA CSM (new contracts and CSM Present value contracts (contracts of future Risk measured measured cash flows adjustment under FRA ) under FVA ) Total \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Insurance contract liabilities as at 1 January 2024 1,340.9 12.5 3.2 22.5 1,379.1 Changes that relate to current service CSM recognised for services provided \u2013 \u2013 (0.1 ) (3.8 ) (3.9 ) Change in risk adjustment for non-financial risk for risk expired \u2013 (1.8 ) \u2013 \u2013 (1.8 ) Experience adjustments (5.0 ) \u2013 \u2013 \u2013 (5.0 ) Revenue recognised for incurred policyholder tax expenses \u2013 \u2013 \u2013 \u2013 \u2013 Total changes that relate to current service (5.0 ) (1.8 ) (0.1 ) (3.8 ) (10.7 ) Changes that relate to future service Contracts initially recognised in the period (0.8 ) 0.1 0.7 \u2013 \u2013 Changes in estimates that adjust the CSM (6.2 ) (4.9 ) (2.8 ) 13.9 \u2013 Changes in estimates that result in losses or reversals of losses on onerous underlying contracts 4.3 \u2013 \u2013 \u2013 4.3 Total changes that relate to future service (2.7 ) (4.8 ) (2.1 ) 13.9 4.3 Ins u ran c e s erv i ce res ul t (7.7 ) (6 . 6 ) ( 2.2 ) 1 0 . 1 (6 .4 ) Net finance expenses from insurance contracts 96.6 1.1 0.3 0.6 98.6 Total amounts recognised in comprehensive income 88.9 (5.5 ) (1.9 ) 10.7 92.2 Cash flows Premiums received 35.3 \u2013 \u2013 \u2013 35.3 Claims and other directly attributable expenses paid (197.7 ) \u2013 \u2013 \u2013 (197.7 ) Acquisitions (2.2 ) \u2013 \u2013 \u2013 (2.2 ) Total cash flows (164.6 ) \u2013 \u2013 \u2013 (164.6 ) Insurance contract liabilities as at 31 December 2024 1,265.2 7.0 1.3 33.2 1,306.7 The contracts initially recognised in the period relate to the acquisition of the unit-linked bond and pension portfolio from Canada Life. 202 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Restated CSM (new contracts and CSM Present value contracts (contracts of future Risk measured measured cash flows adjustment under FRA ) under FVA ) Total \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Insurance contract liabilities as at 1 January 2023 1,397.1 13.2 1.1 36.2 1,447.6 Changes that relate to current service CSM recognised for services provided \u2013 \u2013 (1.5 ) (3.1 ) (4.6 ) Change in risk adjustment for non-financial risk for risk expired \u2013 (2.0 ) \u2013 \u2013 (2.0 ) Experience adjustments (8.3 ) \u2013 \u2013 \u2013 (8.3 ) Revenue recognised for incurred policyholder tax expenses (0.1 ) \u2013 \u2013 \u2013 (0.1 ) Total changes that relate to current service (8.4 ) (2.0 ) (1.5 ) (3.1 ) (15.0 ) Changes that relate to future service Contracts initially recognised in the period (1.7 ) 0.2 1.5 \u2013 \u2013 Changes in estimates that adjust the CSM 9.0 0.5 1.8 (11.3 ) \u2013 Changes in estimates that result in losses or reversals of losses on onerous underlying contracts 14.9 \u2013 \u2013 \u2013 14.9 Total changes that relate to future service 22.2 0.7 3.3 (11.3 ) 14.9 Insurance service result 13.8 (1.3 ) 1.8 (14.4 ) (0.1 ) Net finance expenses from insurance contracts 84.9 0.6 0.3 0.7 86.5 Total amounts recognised in comprehensive income 98.7 (0.7 ) 2.1 (13.7 ) 86.4 Cash flows Premiums received 37.9 \u2013 \u2013 \u2013 37.9 Claims and other directly attributable expenses paid (183.8 ) \u2013 \u2013 \u2013 (183.8 ) Acquisitions (9.0 ) \u2013 \u2013 \u2013 (9.0 ) Total cash flows (154.9 ) \u2013 \u2013 \u2013 (154.9 ) Insurance contract liabilities as at 31 December 2023 1,340.9 12.5 3.2 22.5 1,379.1 The contracts initially recognised in the period relate to the acquisition of the term assurance portfolio from Canada Life. CHESNARAANNUALREPORTANDACCOUNTS2024203 IFRS FINANCIAL STATEMENTS SECTION F INSURANCE AND REINSURANCE CONTRACTS F2 Insurance and reinsurance contracts \u2013 quantitative analysis of recognised amounts \u2013 UK (continued) (c) Reinsurance contract balances \u2013 analysis by remaining coverage and incurred claims Assets for Assets for remaining incurred coverage claims Total \u00a3m \u00a3m \u00a3m Reinsurance contract assets as at 1 January 2024 150.8 13.8 164.6 Reinsurance expenses \u2013 allocation of reinsurance premiums paid (23.9 ) \u2013 (23.9 ) Amounts recoverable from reinsurers Recoveries of incurred claims and other directly attributable expenses \u2013 23.0 23.0 Net (expenses)/income from reinsurance contracts held (23.9 ) 23.0 (0.9 ) Net finance expenses from reinsurance contracts 3.1 \u2013 3.1 Total amounts recognised in comprehensive income (20.8 ) 23.0 2.2 Investment components (2.8 ) 2.8 \u2013 Cash flows Premiums paid 11.4 \u2013 11.4 Recoveries from reinsurance contracts held \u2013 (25.4 ) (25.4 ) Total cash flows 11.4 (25.4 ) (14.0 ) Reinsurance contract assets as at 31 December 2024 138.6 14.2 152.8 Assets for Assets for remaining incurred coverage claims Total \u00a3m \u00a3m \u00a3m Reinsurance contract assets as at 1 January 2023 156.6 16.0 172.6 Reinsurance expenses \u2013 allocation of reinsurance premiums paid (25.0 ) \u2013 (25.0 ) Amounts recoverable from reinsurers Recoveries of incurred claims and other directly attributable expenses \u2013 19.5 19.5 Net (expenses)/income from reinsurance contracts held (25.0 ) 19.5 (5.5 ) Net finance expenses from reinsurance contracts 9.3 \u2013 9.3 Total amounts recognised in comprehensive income (15.7 ) 19.5 3.8 Investment components (2.6 ) 2.6 \u2013 Cash flows Premiums paid 12.5 \u2013 12.5 Recoveries from reinsurance contracts held \u2013 (24.3 ) (24.3 ) Total cash flows 12.5 (24.3 ) (11.8 ) Reinsurance contract assets as at 31 December 2023 150.8 13.8 164.6 204 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (d) Reinsurance contract balances \u2013 analysis by measurement component \u2013 contracts not measured under PAA CSM (new contracts and CSM Present value contracts (contracts of future Risk measured measured cash flows adjustment under FRA ) under FVA ) Total \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Reinsurance contract assets as at 1 January 2024 155.6 3.0 0.4 5.6 164.6 Changes that relate to current service CSM recognised for services received \u2013 \u2013 \u2013 (0.3 ) (0.3 ) Change in risk adjustment for non-financial risk for risk expired \u2013 (0.6 ) \u2013 \u2013 (0.6 ) Experience adjustments 0.1 \u2013 \u2013 \u2013 0.1 Total changes that relate to current service 0.1 (0.6 ) \u2013 (0.3 ) (0.8 ) Changes that relate to future service Changes in estimates that adjust the CSM 0.8 \u2013 \u2013 (0.9 ) (0.1 ) Total changes that relate to future service 0.8 \u2013 \u2013 (0.9 ) (0.1 ) Net (expense)/income from reinsurance contracts held 0.9 (0.6 ) \u2013 (1.2 ) (0.9 ) Net finance income from reinsurance contracts held 3.0 \u2013 \u2013 0.1 3.1 Total amounts recognised in comprehensive income 3.9 (0.6 ) \u2013 (1.1 ) 2.2 Cash flows Premiums paid 11.3 \u2013 \u2013 \u2013 11.3 Recoveries from reinsurance contracts held (25.3 ) \u2013 \u2013 \u2013 (25.3 ) Total cash flows (14.0 ) \u2013 \u2013 \u2013 (14.0 ) Reinsurance contract assets as at 31 December 2024 145.5 2.4 0.4 4.5 152.8 CHESNARAANNUALREPORTANDACCOUNTS2024205 IFRS FINANCIAL STATEMENTS SECTION F INSURANCE AND REINSURANCE CONTRACTS F2 Insurance and reinsurance contracts \u2013 quantitative analysis of recognised amounts \u2013 UK (continued) (d) Reinsurance contract balances \u2013 analysis by measurement component \u2013 contracts not measured under PAA (continued) CSM (new contracts and CSM Present value contracts (contracts of future Risk measured measured cash flows adjustment under FRA ) under FVA ) Total \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Reinsurance contract assets as at 1 January 2023 161.1 3.1 0.5 7.9 172.6 Changes that relate to current service CSM recognised for services received \u2013 \u2013 \u2013 (0.5 ) (0.5 ) Change in risk adjustment for non-financial risk for risk expired \u2013 (0.7 ) \u2013 \u2013 (0.7 ) Experience adjustments (4.3 ) \u2013 \u2013 \u2013 (4.3 ) Total changes that relate to current service (4.3 ) (0.7 ) \u2013 (0.5 ) (5.5 ) Changes that relate to future service Changes in estimates that adjust the CSM 1.5 0.5 (0.1 ) (1.9 ) \u2013 Total changes that relate to future service 1.5 0.5 (0.1 ) (1.9 ) \u2013 Ne t (exp e ns e)/ i n co me fro m re in s ur an ce con tr act s hel d (2.8 ) ( 0 .2 ) (0 .1 ) (2. 4 ) ( 5.5 ) Net finance income from reinsurance contracts held 9.1 0.1 \u2013 0.1 9.3 Total amounts recognised in comprehensive income 6.3 (0.1 ) (0.1 ) (2.3 ) 3.8 Cash flows Premiums paid 12.5 \u2013 \u2013 \u2013 12.5 Recoveries from reinsurance contracts held (24.3 ) \u2013 \u2013 \u2013 (24.3 ) Total cash flows (11.8 ) \u2013 \u2013 \u2013 (11.8 ) Reinsurance contract assets as at 31 December 2023 155.6 3.0 0.4 5.6 164.6 206 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (e) Insurance contracts recognised in the period (g) Expected recognition of CSM In the tables that follow the CSM accrues interest at the locked-in rate for GMM portfolios and at Restated current rates for VFA portfolios from the balance sheet date and is then amortised based on the 2024 2023 coverage units of the contract groups to give the timeline of the expected recognition. \u00a3m \u00a3m 31 December 2024 Insurance Reinsurance Estimates of the present value of future cash inflows (12.5 ) (7.3 ) contracts contracts \u00a3m \u00a3m Estimates of the present value of future cash outflows Claims and other insurance service expenses payable 11.7 5.6 Not later than one year 3.5 (0.3 ) Insurance acquisition cash flows \u2013 \u2013 Later than one year and not later than two years 2.5 (0.3 ) Later than two years and not later than three years 2.2 (0.3 ) Total estimates of the present value of net future cash inflows/(outflows) 11.7 5.6 Later than three years and not later than four years 2.0 (0.3 ) Later than four years and not later than five years 1.8 (0.3 ) Risk adjustment for non-financial risk 0.1 0.2 Later than five years and not later than ten years 6.6 (1.3 ) CSM 0.7 1.5 Later than ten years 16.0 (1.9 ) Losses recognised on initial recognition \u2013 \u2013 Total 34.6 (4.7 ) Insurance contracts recognised in the period relate to the acquisition of the unit-linked bond and pension business from Canada Life in the current year and the term assurance portfolio from 31 December 2023 \u2013 restated Insurance Reinsurance Canada Life in the prior year. None of the acquired portfolios were onerous at initial recognition. contracts contracts \u00a3m \u00a3m (f) Reinsurance contracts recognised in the period There are no material new insurance contracts recognised in the period for the UK. Not later than one year 3.4 (0.5 ) Later than one year and not later than two years 1.9 (0.5 ) Later than two years and not later than three years 1.9 (0.5 ) Later than three years and not later than four years 1.7 (0.4 ) Later than four years and not later than five years 1.5 (0.4 ) Later than five years and not later than ten years 5.0 (1.6 ) Later than ten years 10.3 (2.1 ) Total 25.7 (6.0 ) CHESNARAANNUALREPORTANDACCOUNTS2024207 IFRS FINANCIAL STATEMENTS SECTION F INSURANCE AND REINSURANCE CONTRACTS F3 Insurance and reinsurance contracts \u2013 quantitative analysis of recognised amounts \u2013 Movestic (a) Insurance contract balances \u2013 analysis by remaining coverage and incurred claims Liabilities for incurred claims Contracts under PAA Liabilities for For contracts PV of remaining not under future Risk coverage PAA cash flows adjustment Total \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Insurance contract liabilities as at 1 January 2024 133.5 \u2013 37.1 1.2 171.8 Changes in the statement of profit and loss Insurance revenue Contracts measured under the fair value approach (0.9 ) \u2013 \u2013 \u2013 (0.9 ) Contracts measured under the full retrospective approach (9.3 ) \u2013 \u2013 \u2013 (9.3 ) Insurance revenue total (10.2 ) \u2013 \u2013 \u2013 (10.2 ) Insurance service expenses Incurred claims and other directly attributable expenses \u2013 0.6 8.2 0.1 8.9 Adjustments to liabilities for incurred claims \u2013 \u2013 (6.0 ) (0.3 ) (6.3 ) Insurance service expense total \u2013 0.6 2.2 (0.2 ) 2.6 Insurance service result (10.2) 0.6 2.2 (0.2 ) (7.6 ) Net finance expenses from insurance contracts 22.8 \u2013 \u2013 0.8 23.6 Effect of movements in exchange rates (10.1 ) \u2013 (2.5 ) (0.1 ) (12.7 ) Total amounts recognised in comprehensive income 2.5 0.6 (0.3 ) 0.5 3.3 Investment components (9.4 ) 9.4 \u2013 \u2013 \u2013 Cash flows Premiums received 17.4 \u2013 \u2013 \u2013 17.4 Claims and other directly attributable expenses paid \u2013 (10.1 ) (8.3 ) \u2013 (18.4 ) Total cash flows 17.4 (10.1 ) (8.3 ) \u2013 (1.0 ) Insurance contract liabilities as at 31 December 2024 144.0 (0.1 ) 28.5 1.7 174.1 208 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Liabilities for incurred claims Contracts under PAA Liabilities for For contracts PV of remaining not under future Risk coverage PAA cash flows adjustment Total \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Insurance contract liabilities as at 1 January 2023 119.1 \u2013 38.2 1.6 158.9 Changes in the statement of profit and loss Insurance revenue Contracts measured under the fair value approach (0.7 ) \u2013 \u2013 \u2013 (0.7 ) Contracts measured under the full retrospective approach (10.4 ) \u2013 \u2013 \u2013 (10.4 ) Insurance revenue total (11.1 ) \u2013 \u2013 \u2013 (11.1 ) Insurance service expenses Incurred claims and other directly attributable expenses \u2013 0.6 10.3 0.1 11.0 Adjustments to liabilities for incurred claims \u2013 \u2013 (3.4 ) (0.2 ) (3.6 ) Insurance service expense total \u2013 0.6 6.9 (0.1 ) 7.4 Insurance service result (11.1 ) 0.6 6.9 (0.1 ) (3.7 ) Net finance expenses from insurance contracts 14.2 \u2013 2.0 (0.2 ) 16.0 Effect of movements in exchange rates (2.8 ) \u2013 (1.1 ) (0.1 ) (4.0 ) Total amounts recognised in comprehensive income 0.3 0.6 7.8 (0.4 ) 8.3 Investment components (6.1 ) 6.1 \u2013 \u2013 \u2013 Cash flows Premiums received 20.2 \u2013 \u2013 \u2013 20.2 Claims and other directly attributable expenses paid \u2013 (6.7 ) (8.9 ) \u2013 (15.6 ) Total cash flows 20.2 (6.7 ) (8.9 ) \u2013 4.6 Insurance contract liabilities as at 31 December 2023 133.5 \u2013 37.1 1.2 171.8 The fair value approach was applied to all insurance contracts not measured under PAA in Movestic at transition. Note A5(a) provides further details relating to fair value methodology applied for contracts in Movestic. CHESNARAANNUALREPORTANDACCOUNTS2024209 IFRS FINANCIAL STATEMENTS SECTION F INSURANCE AND REINSURANCE CONTRACTS F3 Insurance and reinsurance contracts \u2013 quantitative analysis of recognised amounts \u2013 Movestic (continued) (b) Insurance contract balances \u2013 analysis by measurement component \u2013 contracts not measured under PAA Present value of future Risk cash flows adjustment CSM Total \u00a3m \u00a3m \u00a3m \u00a3m Insurance contract liabilities as at 1 January 2024 125.4 1.1 5.0 131.5 Changes that relate to current service CSM recognised for services provided \u2013 \u2013 (0.5 ) (0.5 ) Change in risk adjustment for non-financial risk for risk expired \u2013 (0.1 ) \u2013 (0.1 ) Experience adjustments 0.3 \u2013 \u2013 0.3 Total changes that relate to current service 0.3 (0.1 ) (0.5 ) (0.3 ) Changes that relate to future service Changes in estimates that adjust the CSM (3.4 ) 0.2 3.3 0.1 Total changes that relate to future service (3.4 ) 0.2 3.3 0.1 Insurance service result (3.1 ) 0.1 2.8 (0.2 ) Net finance expenses from insurance contracts 22.6 \u2013 0.2 22.8 Effect of movements in exchange rates (9.5 ) (0.1 ) (0.4 ) (10.0 ) Total amounts recognised in comprehensive income 10.0 \u2013 2.6 12.6 Cash flows Premiums received 8.1 \u2013 \u2013 8.1 Claims and other directly attributable expenses paid (10.1 ) \u2013 \u2013 (10.1 ) Total cash flows (2.0 ) \u2013 \u2013 (2.0 ) Insurance contract liabilities as at 31 December 2024 133.4 1.1 7.6 142.1 210 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Present value of future Risk cash flows adjustment CSM Total \u00a3m \u00a3m \u00a3m \u00a3m Insurance contract liabilities as at 1 January 2023 111.4 1.1 4.5 117.0 Changes that relate to current service CSM recognised for services provided \u2013 \u2013 (0.3 ) (0.3 ) Change in risk adjustment for non-financial risk for risk expired \u2013 (0.1 ) \u2013 (0.1 ) Experience adjustments 0.3 \u2013 \u2013 0.3 Total changes that relate to current service 0.3 (0.1 ) (0.3 ) (0.1 ) Changes that relate to future service Changes in estimates that adjust the CSM (0.8 ) 0.1 0.7 \u2013 Total changes that relate to future service (0.8 ) 0.1 0.7 \u2013 Insurance service result (0.5 ) \u2013 0.4 (0.1 ) Net finance expenses from insurance contracts 14.0 \u2013 0.2 14.2 Effect of movements in exchange rates (2.6 ) \u2013 (0.1 ) (2.7 ) Total amounts recognised in comprehensive income 10.9 \u2013 0.5 11.4 Cash flows Premiums received 9.8 \u2013 \u2013 9.8 Claims and other directly attributable expenses paid (6.7 ) \u2013 \u2013 (6.7 ) Total cash flows 3.1 \u2013 \u2013 3.1 Insurance contract liabilities as at 31 December 2023 125.4 1.1 5.0 131.5 CHESNARAANNUALREPORTANDACCOUNTS2024 211 IFRS FINANCIAL STATEMENTS SECTION F INSURANCE AND REINSURANCE CONTRACTS F3 Insurance and reinsurance contracts \u2013 quantitative analysis of recognised amounts \u2013 Movestic (continued) (c) Reinsurance contract balances \u2013 analysis by remaining coverage and incurred claims Contracts under PAA Assets for incurred claims Assets for PV of remaining future Risk coverage cash flows adjustment Total \u00a3m \u00a3m \u00a3m \u00a3m Reinsurance contract assets as at 1 January 2024 (0.6 ) 14.9 0.2 14.5 Reinsurance expenses \u2013 allocation of reinsurance (1.3 ) \u2013 \u2013 (1.3 ) Amounts recoverable from reinsurers Recoveries of incurred claims and other directly attributable expenses \u2013 1.9 \u2013 1.9 Changes in the expected recoveries for past claims \u2013 (2.3 ) (0.1 ) (2.4 ) Net (expenses)/income from reinsurance contracts held (1.3 ) (0.4 ) (0.1 ) (1.8 ) Net finance expenses from reinsurance contracts \u2013 0.3 \u2013 0.3 Effect of movements in exchange rates \u2013 (1.0 ) \u2013 (1.0 ) Total amounts recognised in comprehensive income (1.3 ) (1.1 ) (0.1 ) (2.5 ) Cash flows Premiums paid net of ceding commission 2.6 \u2013 \u2013 2.6 Recoveries from reinsurance contacts held \u2013 (2.2 ) \u2013 (2.2 ) Total cash flows 2.6 (2.2 ) \u2013 0.4 Reinsurance contract assets as at 31 December 2024 0.7 11.6 0.1 12.4 212 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Contracts under PAA Assets for incurred claims Assets for PV of remaining future Risk coverage cash flows adjustment Total \u00a3m \u00a3m \u00a3m \u00a3m Reinsurance contract assets as at 1 January 2023 0.3 15.2 0.3 15.8 Reinsurance expenses \u2013 allocation of reinsurance (2.5 ) \u2013 \u2013 (2.5 ) Amounts recoverable from reinsurers Recoveries of incurred claims and other directly attributable expenses \u2013 3.1 0.1 3.2 Changes in the expected recoveries for past claims \u2013 (1.2 ) (0.1 ) (1.3 ) Net (expenses)/income from reinsurance contracts held (2.5 ) 1.9 \u2013 (0.6 ) Net finance expenses from reinsurance contracts \u2013 0.8 (0.1 ) 0.7 Effect of movements in exchange rates \u2013 (0.4 ) \u2013 (0.4 ) Total amounts recognised in comprehensive income (2.5 ) 2.3 (0.1 ) (0.3 ) Cash flows Premiums paid net of ceding commission 1.6 \u2013 \u2013 1.6 Recoveries from reinsurance contacts held \u2013 (2.6 ) \u2013 (2.6 ) Total cash flows 1.6 (2.6 ) \u2013 (1.0 ) Reinsurance contract assets as at 31 December 2023 (0.6 ) 14.9 0.2 14.5 (d) Reinsurance contract balances \u2013 analysis by measurement component \u2013 31 December 2024 Insurance Reinsurance contracts not measured under PAA contracts contracts All Movestic reinsurance is measured as PAA, therefore no table is presented for analysis \u00a3m \u00a3m of reinsurance contracts by measurement component. Not later than one year 0.3 \u2013 (e) Insurance contracts recognised in the period Later than one year and not later than two years 0.3 \u2013 There are no material new insurance contracts recognised in the period for Movestic. Later than two years and not later than three years 0.3 \u2013 Later than three years and not later than four years 0.3 \u2013 Later than four years and not later than five years 0.3 (f) Reinsurance contracts recognised in the period Later than five years and not later than ten years 1.4 \u2013 There are no material new reinsurance contracts recognised in the period for Movestic. Later than ten years 4.6 \u2013 (g) Expected recognition of CSM Total 7.5 \u2013 In the tables that follow the CSM accrues interest at the locked-in rate for GMM portfolios and at current rates for VFA portfolios from the balance sheet date and is then amortised based on the coverage units of the contract groups to give the timeline of the expected recognition. 31 December 2023 Insurance Reinsurance contracts contracts \u00a3m \u00a3m Not later than one year 0.1 \u2013 Later than one year and not later than two years 0.2 \u2013 Later than two years and not later than three years 0.2 \u2013 Later than three years and not later than four years 0.2 \u2013 Later than four years and not later than five years 0.2 \u2013 Later than five years and not later than ten years 0.9 \u2013 Later than ten years 3.2 \u2013 Total 5.0 \u2013 CHESNARAANNUALREPORTANDACCOUNTS2024213 IFRS FINANCIAL STATEMENTS SECTION F INSURANCE AND REINSURANCE CONTRACTS F4 Insurance and reinsurance contracts \u2013 quantitative analysis of recognised amounts \u2013 Waard Group (a) Insurance contract balances \u2013 analysis by remaining coverage and incurred claims Liabilities for remaining coverage Excluding Liabilities loss Loss for incurred component component claims Total \u00a3m \u00a3m \u00a3m \u00a3m Insurance contract liabilities as at 1 January 2024 761.8 12.4 11.1 785.3 Changes in the statement of profit and loss Insurance revenue total (29.8 ) \u2013 \u2013 (29.8) Insurance service expenses Incurred claims and other directly attributable expenses \u2013 (1.3 ) 29.9 28.6 Losses and reversals of losses on onerous contracts \u2013 2.8 \u2013 2.8 Insurance service expense total \u2013 1.5 29.9 31.4 Insurance service result (29.8 ) 1.5 29.9 1.6 Net finance expenses from insurance contracts 23.1 0.1 \u2013 23.2 Effect of movements in exchange rates (34.6 ) (0.6 ) (0.5 ) (35.7 ) Total amounts recognised in comprehensive income (41.3 ) 1.0 29.4 (10.9 ) Investment components (54.5 ) \u2013 54.5 \u2013 Cash flows Premiums received 31.0 \u2013 \u2013 31.0 Claims and other directly attributable expenses paid \u2013 \u2013 (85.0 ) (85.0 ) Total cash flows 31.0 \u2013 (85.0 ) (54.0 ) Insurance contract liabilities as at 31 December 2024 697.0 13.4 10.0 720.4 214 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Liabilities for remaining coverage Excluding Liabilities loss Loss for incurred component component claims Total \u00a3m \u00a3m \u00a3m \u00a3m Insurance contract liabilities as at 1 January 2023 447.7 7.3 8.7 463.7 Changes in the statement of profit and loss Insurance revenue total (36.1 ) \u2013 \u2013 (36.1 ) Insurance service expenses Incurred claims and other directly attributable expenses \u2013 (2.1 ) 32.5 30.4 Losses and reversals of losses on onerous contracts \u2013 7.4 \u2013 7.4 Insurance service expense total \u2013 5.3 32.5 37.8 Insurance service result (36.1 ) 5.3 32.5 1.7 Net finance expenses from insurance contracts 49.4 \u2013 \u2013 49.4 Effect of movements in exchange rates (11.3 ) (0.2 ) (0.2 ) (11.7 ) Total amounts recognised in comprehensive income 2.0 5.1 32.3 39.4 Investment components (62.1 ) \u2013 62.1 \u2013 Acquisitions \u2013 estimate of the present value of future cash inflows 346.6 \u2013 \u2013 346.6 Cash flows Premiums received 27.6 \u2013 \u2013 27.6 Claims and other directly attributable expenses paid \u2013 \u2013 (92.0 ) (92.0 ) Total cash flows 27.6 \u2013 (92.0 ) (64.4 ) Insurance contract liabilities as at 31 December 2023 761.8 12.4 11.1 785.3 For the Waard Group, the full retrospective approach at transition has been applied to all insurance contracts. CHESNARAANNUALREPORTANDACCOUNTS2024215 IFRS FINANCIAL STATEMENTS SECTION F INSURANCE AND REINSURANCE CONTRACTS F4 Insurance and reinsurance contracts \u2013 quantitative analysis of recognised amounts \u2013 Waard Group (continued) (b) Insurance contract balances \u2013 analysis by measurement component \u2013 contracts not measured under PAA Present value of future Risk cash flows adjustment CSM Total \u00a3m \u00a3m \u00a3m \u00a3m Insurance contract liabilities as at 1 January 2024 699.2 7.9 78.2 785.3 Changes that relate to current service CSM recognised for services provided \u2013 \u2013 (7.0 ) (7.0 ) Change in risk adjustment for non-financial risk for risk expired \u2013 (0.7 ) \u2013 (0.7 ) Experience adjustments 6.5 \u2013 \u2013 6.5 Total changes that relate to current service 6.5 (0.7 ) (7.0 ) (1.2 ) Changes that relate to future service Contracts initially recognised in the period \u2013 \u2013 \u2013 \u2013 Changes in estimates that adjust the CSM (0.8 ) (3.3 ) 4.1 \u2013 Changes in estimates that result in losses or reversals of losses on onerous underlying contracts 2.7 0.1 \u2013 2.8 Total changes that relate to future service 1.9 (3.2 ) 4.1 2.8 Insurance service result 8.4 (3.9 ) (2.9 ) 1.6 Net finance expenses from insurance contracts 20.5 0.1 2.6 23.2 Effect of movements in exchange rates (31.8 ) (0.3 ) (3.6 ) (35.7 ) Total amounts recognised in comprehensive income (2.9 ) (4.1 ) (3.9 ) (10.9 ) Cash flows Premiums received 31.0 \u2013 \u2013 31.0 Claims and other directly attributable expenses paid (85.0 ) \u2013 \u2013 (85.0 ) Total cash flows (54.0 ) \u2013 \u2013 (54.0 ) Insurance contract liabilities as at 31 December 2024 642.3 3.8 74.3 720.4 216 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Present value of future Risk cash flows adjustment CSM Total \u00a3m \u00a3m \u00a3m \u00a3m Insurance contract liabilities as at 1 January 2023 439.3 3.2 21.2 463.7 Changes that relate to current service CSM recognised for services provided \u2013 \u2013 (7.0 ) (7.0 ) Change in risk adjustment for non-financial risk for risk expired \u2013 (0.9 ) \u2013 (0.9 ) Experience adjustments 2.3 \u2013 \u2013 2.3 Total changes that relate to current service 2.3 (0.9 ) (7.0 ) (5.6 ) Changes that relate to future service Contracts initially recognised in the period (52.6 ) 6.4 46.2 \u2013 Changes in estimates that adjust the CSM (15.4 ) (2.2 ) 17.6 \u2013 Changes in estimates that result in losses or reversals of losses on onerous underlying contracts 6.7 0.6 \u2013 7.3 Total changes that relate to future service (61.3 ) 4.8 63.8 7.3 Insurance service result (59.0 ) 3.9 56.8 1.7 Net finance expenses from insurance contracts 46.6 1.0 1.8 49.4 Effect of movements in exchange rates (9.9 ) (0.2 ) (1.6 ) (11.7 ) Total amounts recognised in comprehensive income (22.3 ) 4.7 57.0 39.4 Acquisitions \u2013 estimate of the present value of future cash inflows 346.6 \u2013 \u2013 346.6 Cash flows Premiums received 27.6 \u2013 \u2013 27.6 Claims and other directly attributable expenses paid (92.0 ) \u2013 \u2013 (92.0 ) Total cash flows (64.4 ) \u2013 \u2013 (64.4 ) Insurance contract liabilities as at 31 December 2023 699.2 7.9 78.2 785.3 The contracts initially recognised in the prior year relate to the acquisition of Conservatrix . CHESNARAANNUALREPORTANDACCOUNTS2024217 IFRS FINANCIAL STATEMENTS SECTION F INSURANCE AND REINSURANCE CONTRACTS F4 Insurance and reinsurance contracts \u2013 quantitative analysis of recognised amounts \u2013 Waard Group (continued) (c) Reinsurance contract balances \u2013 analysis by remaining coverage and incurred claims Assets for Assets for remaining incurred coverage claims Total \u00a3m \u00a3m \u00a3m Reinsurance contract assets as at 1 January 2024 2.8 1.6 4.4 Reinsurance expenses \u2013 allocation of reinsurance premiums paid (4.4 ) \u2013 (4.4 ) Amounts recoverable from reinsurers Recoveries of incurred claims and other directly attributable expenses \u2013 2.4 2.4 Net (expenses)/income from reinsurance contracts held (4.4 ) 2.4 (2.0 ) Net finance expenses from reinsurance contracts \u2013 \u2013 \u2013 Effect of movements in exchange rates (0.1 ) (0.1 ) (0.2 ) Total amounts recognised in comprehensive income (4.5 ) 2.3 (2.2 ) Cash flows Premiums paid 3.5 \u2013 3.5 Recoveries from reinsurance contracts held \u2013 (3.0 ) (3.0 ) Total cash flows 3.5 (3.0 ) 0.5 Reinsurance contract assets as at 31 December 2024 1.8 0.9 2.7 Assets for Assets for remaining incurred coverage claims Total \u00a3m \u00a3m \u00a3m Reinsurance contract assets as at 1 January 2023 1.6 1.9 3.5 Reinsurance expenses \u2013 allocation of reinsurance premiums paid (3.0 ) \u2013 (3.0 ) Amounts recoverable from reinsurers Recoveries of incurred claims and other directly attributable expenses \u2013 3.4 3.4 Net (expenses)/income from reinsurance contracts held (3.0 ) 3.4 0.4 Net finance expenses from reinsurance contracts 0.1 \u2013 0.1 Total amounts recognised in comprehensive income (2.9 ) 3.4 0.5 Cash flows Premiums paid 4.1 \u2013 4.1 Recoveries from reinsurance contracts held \u2013 (3.7 ) (3.7 ) Total cash flows 4.1 (3.7 ) 0.4 Reinsurance contract assets as at 31 December 2023 2.8 1.6 4.4 For the Waard Group, the full retrospective approach at transition has been applied to all reinsurance contracts. 218 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (d) Reinsurance contract balances \u2013 analysis by measurement component \u2013 contracts not measured under PAA Present value of future Risk cash flows adjustment CSM Total \u00a3m \u00a3m \u00a3m \u00a3m Reinsurance contract assets as at 1 January 2024 3.1 0.2 1.1 4.4 Changes that relate to current service CSM recognised for services received \u2013 \u2013 \u2013 \u2013 Change in risk adjustment for non-financial risk for risk expired \u2013 (0.1 ) \u2013 (0.1 ) Experience adjustments (1.4 ) \u2013 \u2013 (1.4 ) Total changes that relate to current service (1.4 ) (0.1 ) \u2013 (1.5 ) Changes that relate to future service Changes in estimates that adjust the CSM (0.2 ) 0.1 (0.3 ) \u2013 CSM adjustment for income on initial recognition of onerous underlying contracts \u2013 \u2013 (0.5 ) (0.5 ) Total changes that relate to future service 0.2 0.1 (0.8 ) (0.5 ) Net (expense)/income from reinsurance contracts held (1.2 ) \u2013 (0.8 ) (2.0 ) Net finance income from reinsurance contracts held \u2013 \u2013 \u2013 \u2013 Effect of movements in exchange rates (0.2 ) \u2013 \u2013 (0.2 ) Total amounts recognised in comprehensive income (1.4 ) \u2013 (0.8 ) (2.2 ) Cash flows Premiums paid 3.5 \u2013 \u2013 3.5 Recoveries from reinsurance contracts held (3.0 ) \u2013 \u2013 (3.0 ) Total cash flows 0.5 \u2013 \u2013 0.5 Reinsurance contract assets as at 31 December 2024 2.2 0.2 0.3 2.7 CHESNARAANNUALREPORTANDACCOUNTS2024219 IFRS FINANCIAL STATEMENTS SECTION F INSURANCE AND REINSURANCE CONTRACTS F4 Insurance and reinsurance contracts \u2013 quantitative analysis of recognised amounts \u2013 Waard Group (continued) (d) Reinsurance contract balances \u2013 analysis by measurement component \u2013 contracts not measured under PAA (continued) Present value of future Risk cash flows adjustment CSM Total \u00a3m \u00a3m \u00a3m \u00a3m Reinsurance contract assets as at 1 January 2023 3.6 0.5 (0.6 ) 3.5 Changes that relate to current service CSM recognised for services received \u2013 \u2013 2.2 2.2 Change in risk adjustment for non-financial risk for risk expired \u2013 (0.2 ) \u2013 (0.2 ) Experience adjustments (0.8 ) \u2013 \u2013 (0.8 ) Total changes that relate to current service (0.8 ) (0.2 ) 2.2 1.2 Changes that relate to future service Changes in estimates that adjust the CSM (0.2 ) (0.1 ) 0.3 \u2013 CSM adjustment for income on initial recognition of onerous underlying contracts \u2013 \u2013 (0.8 ) (0.8 ) Total changes that relate to future service (0.2 ) (0.1 ) (0.5 ) (0.8 ) Net (expense)/income from reinsurance contracts held (1.0 ) (0.3 ) 1.7 0.4 Net finance income from reinsurance contracts held 0.1 \u2013 \u2013 0.1 Total amounts recognised in comprehensive income (0.9 ) (0.3 ) 1.7 0.5 Cash flows Premiums paid 4.1 \u2013 \u2013 4.1 Recoveries from reinsurance contracts held (3.7 ) \u2013 \u2013 (3.7 ) Total cash flows 0.4 \u2013 \u2013 0.4 Reinsurance contract assets as at 31 December 2023 3.1 0.2 1.1 4.4 220 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (e) Insurance contracts recognised in the period (g) Expected recognition of CSM All insurance and reinsurance contracts recognised in 2023 are in respect of the Conservatrix In the tables that follow the CSM accrues interest at the locked-in rate for GMM portfolios and acquisition. There were no new contracts recognised in 2024. at current rates for VFA portfolios from the balance sheet date and is then amortised based on the coverage units of the contract groups to give the timeline of the expected recognition. Year Ended 31 December 2023 Non-onerous Onerous contracts contracts Total 31 December 2024 Insurance Reinsurance \u00a3m \u00a3m \u00a3m contracts contracts \u00a3m \u00a3m Estimates of the present value of future cash inflows (346.6 ) \u2013 (346.6 ) Not later than one year 4.1 (0.4 ) Estimates of the present value of future cash outflows Later than one year and not later than two years 3.7 0.4 Claims and other insurance service expenses payable 294.1 \u2013 294.1 Later than two years and not later than three years 3.5 (0.1 ) Later than three years and not later than four years 3.2 (0.1 ) Total estimates of the present value of future net outflows (52.5 ) \u2013 (52.5 ) Later than four years and not later than five years 3.0 (0.1 ) Later than five years and not later than ten years 12.2 (0.2 ) Risk adjustment for non-financial risk 6.3 \u2013 6.3 Later than ten years 44.6 \u2013 CSM 46.2 \u2013 46.2 Total 74.3 (0.5 ) Losses recognised on initial recognition \u2013 \u2013 \u2013 (f) Reinsurance contracts recognised in the period 31 December 2023 Insurance Reinsurance contracts contracts There are no new reinsurance contracts recognised in the period for Waard. \u00a3m \u00a3m Not later than one year 4.9 (1.0 ) Later than one year and not later than two years 4.4 0.6 Later than two years and not later than three years 4.0 (0.2 ) Later than three years and not later than four years 3.7 (0.1 ) Later than four years and not later than five years 3.4 (0.1 ) Later than five years and not later than ten years 13.0 (0.3 ) Later than ten years 44.8 \u2013 Total 78.2 (1.1 ) CHESNARAANNUALREPORTANDACCOUNTS2024221 IFRS FINANCIAL STATEMENTS SECTION F INSURANCE AND REINSURANCE CONTRACTS F5 Insurance and reinsurance contracts \u2013 quantitative analysis of recognised amounts \u2013 Scildon (a) Insurance contract balances \u2013 analysis by remaining coverage and incurred claims Liabilities for remaining coverage Excluding Liabilities loss Loss for incurred component component claims Total \u00a3m \u00a3m \u00a3m \u00a3m Insurance contract liabilities as at 1 January 2023 1,761.7 64.6 36.6 1,862.9 Changes in the statement of profit and loss Insurance revenue total (150.6 ) \u2013 \u2013 (150.6) Insurance service expenses Incurred claims and other directly attributable expenses \u2013 (20.9 ) 129.6 108.7 Losses and reversals of losses on onerous contracts \u2013 32.8 \u2013 32.8 Amortisation of insurance acquisition cash flows 3.7 \u2013 \u2013 3.7 Insurance service expense total 3.7 11.9 129.6 145.2 Insurance service result (146.9 ) 11.9 129.6 (5.4) Net finance expenses from insurance contracts 188.9 0.5 \u2013 189.4 Effect of movements in exchange rates (84.1 ) (3.3 ) (1.7 ) (89.1 ) Total amounts recognised in comprehensive income (42.1 ) 9.1 127.9 94.9 Investment components (133.2 ) \u2013 133.2 \u2013 Cash flows Premiums received 208.2 \u2013 \u2013 208.2 Claims and other directly attributable expenses paid - \u2013 (263.1 ) (263.1 ) Insurance acquisition cash flows (6.8 ) \u2013 \u2013 (6.8 ) Total cash flows 201.4 \u2013 (263.1 ) (61.7 ) Insurance contract liabilities as at 31 December 2024 1,787.8 73.7 34.6 1,896.1 222 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Liabilities for remaining coverage Excluding Liabilities loss Loss for incurred component component claims Total \u00a3m \u00a3m \u00a3m \u00a3m Insurance contract liabilities as at 1 January 2023 1,633.1 76.3 42.0 1,751.4 Changes in the statement of profit and loss Insurance revenue total (115.0 ) \u2013 \u2013 (115.0 ) Insurance service expenses Incurred claims and other directly attributable expenses \u2013 (45.8 ) 120.9 75.1 Losses and reversals of losses on onerous contracts \u2013 35.4 \u2013 35.4 Amortisation of insurance acquisition cash flows 3.4 \u2013 \u2013 3.4 Insurance service expense total 3.4 (10.4 ) 120.9 113.9 Insurance service result (111.6 ) (10.4 ) 120.9 (1.1 ) Net finance expenses from insurance contracts 162.6 0.4 \u2013 163.0 Effect of movements in exchange rates (37.5 ) (1.7 ) (0.9 ) (40.1 ) Total amounts recognised in comprehensive income 13.5 (11.7 ) 120.0 121.8 Investment components (110.6 ) \u2013 110.6 \u2013 Cash flows Premiums received 231.3 \u2013 \u2013 231.3 Claims and other directly attributable expenses paid \u2013 \u2013 (236.0 ) (236.0 ) Insurance acquisition cash flows (5.6 ) \u2013 \u2013 (5.6 ) Total cash flows 225.7 \u2013 (236.0 ) (10.3 ) Insurance contract liabilities as at 31 December 2023 1,761.7 64.6 36.6 1,862.9 For Scildon, the full retrospective approach at transition has been applied to all insurance contracts. CHESNARAANNUALREPORTANDACCOUNTS2024223 IFRS FINANCIAL STATEMENTS SECTION F INSURANCE AND REINSURANCE CONTRACTS F5 Insurance and reinsurance contracts \u2013 quantitative analysis of recognised amounts \u2013 Scildon (continued) ( b) Insurance contract balances \u2013 analysis by measurement component \u2013 contracts not measured under PAA Present value of future Risk cash flows adjustment CSM Total \u00a3m \u00a3m \u00a3m \u00a3m Insurance contract liabilities as at 1 January 2024 1,753.1 30.2 79.6 1,862.9 Changes that relate to current service CSM recognised for services provided \u2013 \u2013 (11.0 ) (11.0) Change in risk adjustment for non-financial risk for risk expired \u2013 (2.3 ) \u2013 (2.3) Experience adjustments (24.8 ) \u2013 \u2013 (24.8) Total changes that relate to current service (24.8 ) (2.3 ) (11.0 ) (38.1 ) Changes that relate to future service Contracts initially recognised in the period (7.7 ) 1.6 8.8 2.7 Changes in estimates that adjust the CSM (7.2 ) (10.7 ) 17.9 \u2013 Changes in estimates that result in losses or reversals of losses on onerous underlying contracts 31.1 (1.1 ) \u2013 30.0 Total changes that relate to future service 16.2 (10.2 ) 26.7 32.7 Insurance service result (8.6 ) (12.5 ) 15.7 (5.4 ) Net finance expenses from insurance contracts 186.7 1.6 1.1 189.4 Effect of movements in exchange rates (83.9 ) (1.1 ) (4.1 ) (89.1 ) Total amounts recognised in comprehensive income 94.2 (12.0 ) 12.7 94.9 Cash flows Premiums received 208.2 \u2013 \u2013 208.2 Claims and other directly attributable expenses paid (263.1 ) \u2013 \u2013 (263.1 ) Insurance acquisition cash flows (6.8 ) \u2013 \u2013 (6.8 ) Total cash flows (61.7 ) \u2013 \u2013 (61.7 ) Insurance contract liabilities as at 31 December 2024 1,785.6 18.2 92.3 1,896.1 224 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Present value of future Risk cash flows adjustment CSM Total \u00a3m \u00a3m \u00a3m \u00a3m Insurance contract liabilities as at 1 January 2023 1,639.5 28.5 83.4 1,751.4 Changes that relate to current service CSM recognised for services provided \u2013 \u2013 (9.0 ) (9.0 ) Change in risk adjustment for non-financial risk for risk expired \u2013 (3.5 ) \u2013 (3.5 ) Experience adjustments (24.0 ) \u2013 \u2013 (24.0 ) Total changes that relate to current service (24.0 ) (3.5 ) (9.0 ) (36.5 ) Changes that relate to future service Contracts initially recognised in the period (11.2 ) 2.6 11.5 2.9 Changes in estimates that adjust the CSM 3.6 1.7 (5.3 ) \u2013 Changes in estimates that result in losses or reversals of losses on onerous underlying contracts 33.1 (0.6 ) \u2013 32.5 Total changes that relate to future service 25.5 3.7 6.2 35.4 Insurance service result 1.5 0.2 (2.8 ) (1.1 ) Net finance expenses from insurance contracts 159.9 2.2 0.9 163.0 Effect of movements in exchange rates (37.5 ) (0.7 ) (1.9 ) (40.1 ) Total amounts recognised in comprehensive income 123.9 1.7 (3.8 ) 121.8 Cash flows Premiums received 231.3 \u2013 \u2013 231.3 Claims and other directly attributable expenses paid (236.0 ) \u2013 \u2013 (236.0 ) Insurance acquisition cash flows (5.6 ) \u2013 \u2013 (5.6 ) Total cash flows (10.3 ) \u2013 \u2013 (10.3 ) Insurance contract liabilities as at 31 December 2023 1,753.1 30.2 79.6 1,862.9 CHESNARAANNUALREPORTANDACCOUNTS2024225 IFRS FINANCIAL STATEMENTS SECTION F INSURANCE AND REINSURANCE CONTRACTS F5 Insurance and reinsurance contracts \u2013 quantitative analysis of recognised amounts \u2013 Scildon (continued) (c) Reinsurance contract balances \u2013 analysis by remaining coverage and incurred claims Assets for remaining coverage Excluding Loss- Assets for loss-recovery recovery incurred component component claims Total \u00a3m \u00a3m \u00a3m \u00a3m Reinsurance contract assets as at 1 January 2024 (29.0 ) 6.2 7.9 (14.9 ) Reinsurance expenses \u2013 allocation of reinsurance premiums paid (22.7 ) \u2013 \u2013 (22.7 ) Amounts recoverable from reinsurers Recoveries of incurred claims and other directly attributable expenses \u2013 \u2013 19.0 19.0 Changes in the loss-recovery component \u2013 (0.8 ) \u2013 (0.8 ) Net (expenses)/income from reinsurance contracts held (22.7 ) (0.8 ) 19.0 (4.5 ) Net finance expenses from reinsurance contracts (0.8 ) \u2013 \u2013 (0.8 ) Effect of movements in exchange rates 1.2 (0.3 ) (0.2 ) 0.7 Total amounts recognised in comprehensive income (22.3 ) (1.1 ) 18.8 (4.6 ) Cash flows Premiums paid 30.8 \u2013 \u2013 30.8 Recoveries from reinsurance contracts held \u2013 \u2013 (25.9 ) (25.9 ) Total cash flows 30.8 \u2013 (25.9 ) 4.7 Reinsurance contract assets as at 31 December 2024 (20.5 ) 5.1 0.8 (14.6 ) Assets for remaining coverage Excluding Loss- Assets for loss-recovery recovery incurred component component claims Total \u00a3m \u00a3m \u00a3m \u00a3m Reinsurance contract assets as at 1 January 2023 (28.4 ) 4.5 8.7 (15.2 ) Reinsurance expenses \u2013 allocation of reinsurance premiums paid (21.8 ) \u2013 \u2013 (21.8 ) Amounts recoverable from reinsurers Recoveries of incurred claims and other directly attributable expenses \u2013 \u2013 17.3 17.3 Changes in the loss-recovery component \u2013 1.8 \u2013 1.8 Net (expenses)/income from reinsurance contracts held (21.8 ) 1.8 17.3 (2.7 ) Net finance expenses from reinsurance contracts (3.4 ) \u2013 \u2013 (3.4 ) Effect of movements in exchange rates 0.6 (0.1 ) (0.2 ) 0.3 Total amounts recognised in comprehensive income (24.6 ) 1.7 17.1 (5.8 ) Cash flows Premiums paid 24.0 \u2013 \u2013 24.0 Recoveries from reinsurance contracts held \u2013 \u2013 (17.9 ) (17.9 ) Total cash flows 24.0 \u2013 (17.9 ) 6.1 Reinsurance contract assets as at 31 December 2023 (29.0 ) 6.2 7.9 (14.9 ) For Scildon, the full retrospective approach at transition has been applied to all reinsurance contracts. 226 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (d) Reinsurance contract balances \u2013 analysis by measurement component \u2013 contracts not measured under PAA Present value of future Risk cash flows adjustment CSM Total \u00a3m \u00a3m \u00a3m \u00a3m Reinsurance contract assets as at 1 January 2024 (51.8 ) 12.0 24.9 (14.9 ) Changes that relate to current service CSM recognised for services received \u2013 \u2013 (3.1 ) (3.1 ) Change in risk adjustment for non-financial risk for risk expired \u2013 (0.9 ) \u2013 (0.9 ) Experience adjustments (0.1 ) \u2013 \u2013 (0.1 ) Total changes that relate to current service (0.1 ) (0.9 ) (3.1 ) (4.1 ) Changes that relate to future service Contracts initially recognised in the period (2.3 ) 0.5 1.9 0.1 Changes in estimates that adjust the CSM (1.4 ) (4.1 ) 4.0 (1.5 ) CSM adjustment for income on initial recognition of onerous underlying contracts \u2013 \u2013 0.5 0.5 Changes in recoveries of losses on onerous underlying contracts that adjust the CSM \u2013 \u2013 0.5 0.5 Total changes that relate to future service (3.7 ) (3.6 ) 6.9 (0.4 ) Net (expense)/income from reinsurance contracts held (3.8 ) (4.5 ) 3.8 (4.5 ) Net finance income from reinsurance contracts held (1.8 ) 0.6 0.4 (0.8 ) Effect of movements in exchange rates 2.4 (0.5 ) (1.2 ) 0.7 Total amounts recognised in comprehensive income (3.2 ) (4.4 ) 3.0 (4.6 ) Cash flows Premiums paid 30.8 \u2013 \u2013 30.8 Recoveries from reinsurance contracts held (25.9 ) \u2013 \u2013 (25.9 ) Total cash flows 4.9 \u2013 \u2013 4.9 Reinsurance contract assets as at 31 December 2024 (50.1 ) 7.6 27.9 (14.6 ) CHESNARAANNUALREPORTANDACCOUNTS2024227 IFRS FINANCIAL STATEMENTS SECTION F INSURANCE AND REINSURANCE CONTRACTS F5 Insurance and reinsurance contracts \u2013 quantitative analysis of recognised amounts \u2013 Scildon (continued) (d) Reinsurance contract balances \u2013 analysis by measurement component \u2013 contracts not measured under PAA (continued) Present value of future Risk cash flows adjustment CSM Total \u00a3m \u00a3m \u00a3m \u00a3m Reinsurance contract assets as at 1 January 2023 (52.1 ) 10.7 26.2 (15.2 ) Changes that relate to current service CSM recognised for services received \u2013 \u2013 (2.7 ) (2.7 ) Change in risk adjustment for non-financial risk for risk expired \u2013 (1.3 ) \u2013 (1.3 ) Experience adjustments (1.0 ) \u2013 \u2013 (1.0 ) Total changes that relate to current service (1.0 ) (1.3 ) (2.7 ) (5.0 ) Changes that relate to future service Contracts initially recognised in the period (3.1 ) 0.9 2.2 \u2013 Changes in estimates that adjust the CSM 1.5 1.3 (2.8 ) \u2013 CSM adjustment for income on initial recognition of onerous underlying contracts \u2013 \u2013 0.5 0.5 Changes in recoveries of losses on onerous underlying contracts that adjust the CSM \u2013 \u2013 1.8 1.8 Total changes that relate to future service (1.6 ) 2.2 1.7 2.3 Net (expense)/income from reinsurance contracts held (2.6 ) 0.9 (1.0 ) (2.7 ) Net finance income from reinsurance contracts held (4.3 ) 0.6 0.3 (3.4 ) Effect of movements in exchange rates 1.1 (0.2 ) (0.6 ) 0.3 Total amounts recognised in comprehensive income (5.8 ) 1.3 (1.3 ) (5.8 ) Cash flows Premiums paid 24.0 \u2013 \u2013 24.0 Recoveries from reinsurance contracts held (17.9 ) \u2013 \u2013 (17.9 ) Total cash flows 6.1 \u2013 \u2013 6.1 Reinsurance contract assets as at 31 December 2023 (51.8 ) 12.0 24.9 (14.9 ) 228 CHESNARA ANNUAL REPORT AND ACCOUNTS 2024 (e) Insurance contracts recognised in the period (f) Reinsurance contracts recognised in the period Year Ended 31 December 2024 Non-onerous Onerous 2024 2023 contracts contracts Total \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Estimates of the present value of future cash inflows 11.2 12.5 Estimates of the present value of future cash inflows (92.5 ) (40.1 ) (132.6 ) Estimates of the present value of future cash outflows (13.6 ) (15.6 ) Risk adjustment for non-financial risk 0.5 0.9 Estimates of the present value of future cash outflows CSM 1.9 2.2 Claims and other insurance service expenses payable 1.2 1.0 2.2 Insurance acquisition cash flows 81.6 41.2 122.8 Total value of reinsurance contracts recognised in the period \u2013 \u2013 Total estimates of the present value of future cash outflows 82.8 42.2 125.0 All reinsurance contracts above are in respect of new business written and all contract groups were originally in a net cost position. Risk adjustment for non-financial risk 1.0 0.6 1.6 CSM 8.7 \u2013 8.7 (g) Expected recognition of CSM In the tables that follow the CSM accrues interest at the locked-in rate for GMM portfolios and at Losses recognised on initial recognition \u2013 2.7 2.7 current rates for VFA portfolios from the balance sheet date and is then amortised based on the coverage units of the contract groups to give the timeline of the expected recognition. Year Ended 31 December 2023 Non-onerous Onerous 31 December 2024 Insurance Reinsurance contracts contracts Total contracts contracts \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Estimates of the present value of future cash inflows (113.1 ) (46.2 ) (159.3 ) Not later than one year 9.4 (2.6 ) Later than one year and not later than two years 8.6 (2.4 ) Estimates of the present value of future cash outflows Later than two years and not later than three years 7.9 (2.2 ) Claims and other insurance service expenses payable 98.3 47.3 145.6 Later than three years and not later than four years 7.2 (2.1 ) Insurance acquisition cash flows 1.4 1.0 2.4 Later than four years and not later than five years 6.6 (1.9 ) Later than five years and not later than ten years 24.5 (7.7 ) Total estimates of the present value of future cash outflows 99.7 48.3 148.0 Later than ten years 28.1 (9.0 ) Risk adjustment for non-financial risk 1.9 0.8 2.7 Total 92.4 (27.9 ) CSM 11.5 \u2013 11.5 Losses recognised on initial recognition \u2013 2.9 2.9 31 December 2023 Insurance Reinsurance All insurance contracts above are in respect of new business written. contracts contracts \u00a3m \u00a3m Not later than one year 8.1 (2.3 ) Later than one year and not later than two years 7.5 (2.1 ) Later than two years and not later than three years 6.9 (2.0 ) Later than three years and not later than four years 6.3 (1.9 ) Later than four years and not later than five years 5.7 (1.7 ) Later than five years and not later than ten years 21.1 (6.9 ) Later than ten years 24.0 (8.0 ) Total 79.6 (24.9 ) ", "dimensions": { "concept": "ifrs-full:DisclosureOfReinsuranceExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-62": { "value": " G1 Other provisions 2024 2023 \u00a3m \u00a3m Balance at I January 23.2 8.7 Additions \u2013 Arising on acquisition \u2013 12.3 Charge in the year 0.7 7.1 Amounts utilised during the year (3.0 ) (4.8 ) Foreign exchange translation difference (0.6 ) (0.1 ) Balance at 3I December 20.3 23.2 The other provisions balance includes the following significant items: (i) Liabilities acquired as part of the Conservatrix acquisition The contracts acquired in the acquisition of Conservatrix by Waard Leven in the prior year include \u00a312.5m as at 31 December 2024 (31 December 2023: \u00a312.6m) of liabilities relating to obligations to former employees of Conservatrix under a now closed defined benefit pension scheme. The liabilities are valued under IAS 19. The pension scheme is closed to new entrants with no further benefits accruing and as such the exposure for Waard Leven is limited to the longevity risk of the contracts. Waard Leven is regulated by De Nederlandsche Bank (DNB) and the Netherlands Authority for financial markets. As such, there is no requirement to hold plan assets against these liabilities, instead the liabilities are assessed as part of the SII requirements and as a result of this assessment there are considered to be sufficient general account assets to meet the obligation related to these pension policies. (ii) Provision established for the costs associated with outsourced UK administration services During 2023, Chesnara initiated a Transition and Transformation (T&T) programme in respect of its UK business. This programme includes activities and costs related to both (i) the integration of the acquired CASLP and Canada Life businesses into the standard UK model and (ii) the restructure of the administration outsourcing arrangements for the rest of the legacy UK business, including the migration of the policies onto a new platform architecture with SS&C. An ongoing assessment of the proposed project costs at 31 December 2024 has been conducted in accordance with the requirements of IAS 37 and as a result of this assessment a provision of \u00a32.9m is held in the balance sheet (31 December 2023: \u00a34.6m). The timing of the outflow of economic benefits is subject to the phased delivery of the programme, however as the majority of the costs provided for are in respect of contractual obligations with third parties, then the amount is not expected to material change due to any required rephasing. There are also provisions at the year end relating to the mis-selling of contracts in the UK \u00a31.9m (31 December 2023: \u00a32.7m). ", "dimensions": { "concept": "ifrs-full:DisclosureOfProvisionsExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-400": { "value": "G1 Other provisions 2024 2023 \u00a3m \u00a3m Balance at I January 23.2 8.7 Additions \u2013 Arising on acquisition \u2013 12.3 Charge in the year 0.7 7.1 Amounts utilised during the year (3.0 ) (4.8 ) Foreign exchange translation difference (0.6 ) (0.1 ) Balance at 3I December 20.3 23.2 The other provisions balance includes the following significant items: (i) Liabilities acquired as part of the Conservatrix acquisition The contracts acquired in the acquisition of Conservatrix by Waard Leven in the prior year include \u00a312.5m as at 31 December 2024 (31 December 2023: \u00a312.6m) of liabilities relating to obligations to former employees of Conservatrix under a now closed defined benefit pension scheme. The liabilities are valued under IAS 19. The pension scheme is closed to new entrants with no further benefits accruing and as such the exposure for Waard Leven is limited to the longevity risk of the contracts. Waard Leven is regulated by De Nederlandsche Bank (DNB) and the Netherlands Authority for financial markets. As such, there is no requirement to hold plan assets against these liabilities, instead the liabilities are assessed as part of the SII requirements and as a result of this assessment there are considered to be sufficient general account assets to meet the obligation related to these pension policies. (ii) Provision established for the costs associated with outsourced UK administration services During 2023, Chesnara initiated a Transition and Transformation (T&T) programme in respect of its UK business. This programme includes activities and costs related to both (i) the integration of the acquired CASLP and Canada Life businesses into the standard UK model and (ii) the restructure of the administration outsourcing arrangements for the rest of the legacy UK business, including the migration of the policies onto a new platform architecture with SS&C. An ongoing assessment of the proposed project costs at 31 December 2024 has been conducted in accordance with the requirements of IAS 37 and as a result of this assessment a provision of \u00a32.9m is held in the balance sheet (31 December 2023: \u00a34.6m). The timing of the outflow of economic benefits is subject to the phased delivery of the programme, however as the majority of the costs provided for are in respect of contractual obligations with third parties, then the amount is not expected to material change due to any required rephasing. There are also provisions at the year end relating to the mis-selling of contracts in the UK \u00a31.9m (31 December 2023: \u00a32.7m). ", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherProvisionsContingentLiabilitiesAndContingentAssetsExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-63": { "value": "2 Lease liabilities The Group leases several assets including office buildings and an immaterial amount of office and IT equipment and motor vehicles. Maturity analysis Carrying 31 December 2024 value 0-1 year 1-2 years 2-5 years Total \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Non-investment property 0.6 0.3 0.1 0.2 0.6 Total 0.6 0.3 0.1 0.2 0.6 Current 0.3 Non-current 0.3 Total 0.6 Maturity analysis Carrying 31 December 2023 value 0-1 year 1-2 years 2-5 years Total \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Non-investment property 1.2 0.6 0.3 0.3 1.2 Total 1.2 0.6 0.3 0.3 1.2 Current 0.6 Non-current 0.6 Total 1.2 ", "dimensions": { "concept": "ifrs-full:DisclosureOfLeasesExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-64": { "value": "G3 Borrowings Group 2024 2023 31 December \u00a3m \u00a3m Tier 2 debt 200.8 200.6 Amount due in relation to financial reinsurance 2.4 5.3 Term finance 1.6 2.0 Total 204.8 207.9 Current 1.4 2.8 Non-current 203.4 205.1 Total 204.8 207.9 The fair value of amounts due in relation to Tier 2 debt at 31 December 2024 was \u00a3166.1m (31 December 2023: \u00a3148.0m). The fair value of amounts due in relation to financial reinsurance at 31 December 2024 was \u00a32.3m (31 December 2023: \u00a35.1m). Term finance comprises capital amounts outstanding on mortgage bonds taken out over properties held in the unit-linked policyholder funds in the UK. The mortgage over each such property is negotiated separately, varies in term from 5 to 20 years, and bears interest at fixed or floating rates that are agreed at the time of inception of the mortgage. The fair value of the term finance is not materially different to the carrying value shown above. ", "dimensions": { "concept": "ifrs-full:DisclosureOfBorrowingsExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-65": { "value": " G4 Deferred tax assets and liabilities Deferred tax assets and liabilities comprise: 31 December 2024 2023 Asset Liability Asset Liability \u00a3m \u00a3m \u00a3m \u00a3m Net deferred tax liabilities: UK and other Group activities 1.6 (24.7 ) 16.0 (24.3 ) Movestic \u2013 \u2013 \u2013 \u2013 Waard Group 34.5 \u2013 35.0 \u2013 Scildon 2.8 \u2013 3.6 \u2013 Total 38.9 (24.7 ) 54.6 (24.3 ) Current \u2013 \u2013 \u2013 \u2013 Non-current 38.9 (24.7 ) 54.6 (24.3 ) Total 38.9 (24.7 ) 54.6 (24.3 ) (a) CA and other Group activities: Recognised deferred tax assets and liabilities 31 December 2023 Credit/ Recognised 2024 Assets / (charge ) through Assets / (liabilities ) in year equity (liabilities ) \u00a3m \u00a3m \u00a3m \u00a3m Deferred acquisition costs 1.0 (0.3 ) \u2013 0.7 Deferred income 0.4 (0.1 ) \u2013 0.3 Acquired value in-force (14.0 ) 2.3 \u2013 (11.7 ) Property, plant and equipment 0.1 \u2013 \u2013 0.1 Tax losses on pensions business 1.1 0.4 \u2013 1.5 Unrealised and deferred investment gains (23.2 ) (10.3 ) \u2013 (33.5 ) Excess expenses of management and recognised trade losses 26.9 (6.5 ) \u2013 20.4 Share-based payments 1.0 \u2013 0.5 1.5 Tax losses 0.2 (0.2 ) \u2013 \u2013 IFRS 17 transitional adjustment (1.8 ) (0.6 ) \u2013 (2.4 ) Total (8.3 ) (15.3 ) 0.5 (23.1) Comprising: Net deferred tax liabilities (8.3 ) (15.3 ) 0.5 (23.1) Total (8.3 ) (15.3 ) 0.5 (23.1) 31 December 2022 Credit/ Recognised 2023 Assets / (charge ) through Assets / (liabilities ) in year equity (liabilities ) \u00a3m \u00a3m \u00a3m \u00a3m Deferred acquisition costs 1.5 (0.5 ) \u2013 1.0 Deferred income 0.5 (0.1 ) \u2013 0.4 Acquired value in-force (33.6 ) 19.6 \u2013 (14.0 ) Property, plant and equipment 0.1 \u2013 \u2013 0.1 Tax losses on pensions business 1.2 (0.1 ) \u2013 1.1 Unrealised and deferred investment gains (13.7 ) (9.5 ) \u2013 (23.2 ) Excess expenses of management 12.5 14.4 \u2013 26.9 Share-based payments 0.9 0.1 \u2013 1.0 Right-of-use assets/lease liabilities 0.1 (0.1 ) \u2013 \u2013 Tax losses 4.7 (4.5 ) \u2013 0.2 Difference in IFRS 4 and IFRS 17 reserves (3.1 ) 1.3 \u2013 (1.8 ) Total (28.9 ) 20.6 \u2013 (8.3 ) Comprising: Net deferred tax liabilities (28.9 ) 20.6 \u2013 (8.3 ) Total (28.9 ) 20.6 \u2013 (8.3 ) On 31 December 2023, the long-term business of CASLP, along with the majority of the assets of the Company were transferred into CA via a Business Transfer Scheme under Part VII of the Financial Services and Markets Act 2000. Consequently, previously unrecognised losses (excess expenses of management) of CA have been recognised as deferred tax assets at 31 December 2023. This has resulted in a \u00a311.9m additional deferred tax asset being recognised at the balance sheet date. The 2024 IFRS 17 transitional adjustment liability is inclusive of a prior year adjustment of \u00a30.4m following refinement of this calculation on submission of the 2023 tax computation. The Finance Act 2021 increased the rate of corporation tax from 19% to 25% from 1 April 2023. The enacted tax rate of 25% has been used in the calculation of UK deferred tax assets and liabilities where relevant, being the rate of corporation tax that is expected to apply when the majority of those deferred tax balances reverse. Deferred tax balances have been updated to reflect changes to equity on transition to IFRS 17. The tax rate applied is that which is expected at the time of realisation. The deferred tax (charge)/credit to the Consolidated Statement of Comprehensive Income for the year is classified as follows: Year ended 31 December 2024 2023 \u00a3m \u00a3m Income tax (charge)/credit (15.3 ) 20.7 (b) CA and other Group activities: Items for which no deferred tax asset is recognised 31 December 2024 2023 \u00a3m \u00a3m Tax losses on pensions business 12.8 20.7 Trade losses 53.5 28.7 Total 66.3 49.4 G4 Deferred tax assets and liabilities (continued) (b) CA and other group activities: Items for which no deferred tax asset is recognised (continued) A deferred tax asset has not been recognised in respect of trading losses due to the uncertainty of future trading profits against which the losses could be offset. There are no aggregate temporary differences arising on the acquisition of subsidiaries or associated undertakings, for which deferred tax has not been recognised. (c) Movestic: Recognised deferred tax assets and liabilities As at the balance sheet date, Movestic had a recognised deferred tax liability of \u00a3Nil (31 December 2023: \u00a3Nil), in respect of fair value adjustments arising upon acquisition. Unrecognised deferred tax assets were \u00a3Nil at the balance sheet date in respect of corporation tax recoverable (31 December 2023: \u00a3Nil). (d) Waard Group: Recognised deferred tax assets and liabilities 31 December Foreign 2023 Credit / exchange 2024 Assets / Arising on (charge ) translation Assets / (liabilities ) acquisition in year difference (liabilities ) \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Fair value adjustments on acquisition 27.1 \u2013 (26.5 ) (0.6 ) \u2013 Defined benefit scheme obligations 1.2 \u2013 (0.1 ) (0.1 ) 1.0 Valuation differences 1.0 \u2013 10.2 (0.2 ) 11.0 Valuation differences on investments 5.7 \u2013 17.5 (0.7 ) 22.5 Total 35.0 \u2013 1.1 (1.6 ) 34.5 Comprising: Net deferred tax asset 40.0 \u2013 (3.8 ) (1.7 ) 34.5 Net deferred tax liabilities (5.0 ) \u2013 4.9 0.1 \u2013 Total 35.0 \u2013 1.1 (1.6 ) 34.5 31 December Foreign 2022 Credit / exchange 2023 Assets / Arising on (charge ) translation Assets / (liabilities ) acquisition in year difference (liabilities ) \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Fair value adjustments on acquisition 2.1 28.9 (3.8 ) (0.1 ) 27.1 Defined benefit scheme obligations \u2013 1.1 0.1 \u2013 1.2 Valuation differences 2.0 \u2013 (0.9 ) (0.1 ) 1.0 Valuation differences on investments \u2013 5.8 (0.1 ) \u2013 5.7 Total 4.1 35.8 (4.7 ) (0.2 ) 35.0 Comprising: Net deferred tax asset 4.1 35.8 0.1 \u2013 40.0 Net deferred tax liabilities \u2013 \u2013 (4.8 ) (0.2 ) (5.0 ) Total 4.1 35.8 (4.7 ) (0.2 ) 35.0 (e) Scildon: Recognised deferred tax assets and liabilities 31 December Foreign 2023 (Charge) / Recognised exchange 2024 Assets / credit through translation Assets / (liabilities ) in year equity difference (liabilities ) \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Deferred acquisition costs 6.1 \u2013 \u2013 (0.3 ) 5.8 Revaluation of buildings and investment properties (0.7 ) (0.1 ) \u2013 \u2013 (0.8 ) Valuation differences on technical provisions (30.4 ) (0.3 ) \u2013 1.4 (29.3 ) Valuation differences on investments at fair value through profit and loss 23.0 (5.9 ) \u2013 (0.9 ) 16.2 Non-compensable losses within fiscal unity 5.6 4.3 1.3 (0.4 ) 10.8 Total 3.6 (2.0 ) 1.3 (0.2 ) 2.7 Comprising: Net deferred tax assets 10.5 5.5 1.3 (0.6 ) 16.7 Net deferred tax liabilities (6.9 ) (7.5 ) \u2013 0.5 13.9 Total 3.6 (2.0 ) 1.3 (0.2 ) 2.7 31 December Foreign 2022 (Charge) / Recognised exchange 20243 Assets / credit through translation Assets / (liabilities ) in year equity difference (liabilities ) \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Deferred acquisition costs 6.1 0.1 \u2013 (0.1 ) 6.1 LAT reserve (1.8 ) 1.8 \u2013 \u2013 \u2013 Revaluation of buildings and investment properties (0.8 ) (0.1 ) \u2013 0.2 (0.7 ) Valuation differences on technical provisions (35.5 ) 4.3 \u2013 0.8 (30.4 ) Valuation differences on investments at fair value through profit and loss 36.9 (13.0 ) \u2013 (0.9 ) 23.0 Non-compensable losses within fiscal unity \u2013 \u2013 \u2013 5.6 5.6 Total 4.9 (6.9 ) \u2013 5.6 3.6 Comprising: Net deferred tax assets 4.9 \u2013 \u2013 5.6 10.5 Net deferred tax liabilities \u2013 (6.9 ) \u2013 \u2013 (6.9 ) Total 4.9 (6.9 ) \u2013 5.6 3.6 ", "dimensions": { "concept": "ifrs-full:DisclosureOfDeferredTaxesExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-66": { "value": " G5 Deferred income 31 December 2024 2023 \u00a3m \u00a3m Balance at 1 January 2.8 3.5 Release to income (0.2 ) (0.6 ) Settlements (1.3 ) \u2013 Foreign exchange translation difference \u2013 (0.1 ) Balance at 31 December 1.3 2.8 Current 0.2 0.2 Non-current 1.1 2.6 Total 1.3 2.8 The release to income is included in fees and commission income (see Note D3). These are initial fees that relate to future provision of services that are deferred and amortised over the anticipated period. ", "dimensions": { "concept": "ifrs-full:DisclosureOfDeferredIncomeExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-423": { "value": " G6 Other current liabilities 31 December Restated 2024 2023 \u00a3m \u00a3m Reinsurance payables Payables in respect of investment contracts 0.6 0.9 Liabilities for assets withheld 40.0 45.5 Reinsurers share of deferred acquisition costs and claims deposits 0.1 0.1 Sub-total 40.7 46.5 Payables related to investment contracts Accrued claims 21.0 19.9 Policyholder liabilities 3.7 2.6 Sub-total 24.7 22.5 Other payables Accrued expenses 13.4 13.9 VAT 0.3 0.2 Employee tax 2.3 2.1 Other 21.8 27.7 Sub-total 37.8 43.9 Income taxes 26.5 18.8 Total 129.7 131.7 Current 74.5 131.7 Non-current 55.2 \u2013 Total 129.7 131.7 The carrying value of other payables is a reasonable approximation of fair value. ", "dimensions": { "concept": "ifrs-full:DisclosureOfTradeAndOtherPayablesExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-401": { "value": " G6 Other current liabilities 31 December Restated 2024 2023 \u00a3m \u00a3m Reinsurance payables Payables in respect of investment contracts 0.6 0.9 Liabilities for assets withheld 40.0 45.5 Reinsurers share of deferred acquisition costs and claims deposits 0.1 0.1 Sub-total 40.7 46.5 Payables related to investment contracts Accrued claims 21.0 19.9 Policyholder liabilities 3.7 2.6 Sub-total 24.7 22.5 Other payables Accrued expenses 13.4 13.9 VAT 0.3 0.2 Employee tax 2.3 2.1 Other 21.8 27.7 Sub-total 37.8 43.9 Income taxes 26.5 18.8 Total 129.7 131.7 Current 74.5 131.7 Non-current 55.2 \u2013 Total 129.7 131.7 The carrying value of other payables is a reasonable approximation of fair value. ", "dimensions": { "concept": "ifrs-full:DisclosureOfAccruedExpensesAndOtherLiabilitiesExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-67": { "value": "G6 Other current liabilities 31 December Restated 2024 2023 \u00a3m \u00a3m Reinsurance payables Payables in respect of investment contracts 0.6 0.9 Liabilities for assets withheld 40.0 45.5 Reinsurers share of deferred acquisition costs and claims deposits 0.1 0.1 Sub-total 40.7 46.5 Payables related to investment contracts Accrued claims 21.0 19.9 Policyholder liabilities 3.7 2.6 Sub-total 24.7 22.5 Other payables Accrued expenses 13.4 13.9 VAT 0.3 0.2 Employee tax 2.3 2.1 Other 21.8 27.7 Sub-total 37.8 43.9 Income taxes 26.5 18.8 Total 129.7 131.7 Current 74.5 131.7 Non-current 55.2 \u2013 Total 129.7 131.7 The carrying value of other payables is a reasonable approximation of fair value. ", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherCurrentLiabilitiesExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-402": { "value": " H1 Share capital and share premium Group 2024 2023 31 December Number Share Number Share of shares capital of shares capital issued \u00a3m issued \u00a3m Share capital 150,991,019 7.5 150,849,587 7.5 Share Share premium premium \u00a3m \u00a3m 142.5 142.5 Merger Merger reserve reserve \u00a3m \u00a3m 36.3 36.3 The number of shares in issue at the balance sheet date included Nil shares held in treasury (31 December 2023: Nil). The merger reserve is for presentation purposes only in order to show the correct share capital of Chesnara plc following the reverse acquisition in 2004. ", "dimensions": { "concept": "ifrs-full:DisclosureOfIssuedCapitalExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-416": { "value": " H1 Share capital and share premium Group 2024 2023 31 December Number Share Number Share of shares capital of shares capital issued \u00a3m issued \u00a3m Share capital 150,991,019 7.5 150,849,587 7.5 Share Share premium premium \u00a3m \u00a3m 142.5 142.5 Merger Merger reserve reserve \u00a3m \u00a3m 36.3 36.3 The number of shares in issue at the balance sheet date included Nil shares held in treasury (31 December 2023: Nil). The merger reserve is for presentation purposes only in order to show the correct share capital of Chesnara plc following the reverse acquisition in 2004. H2 Other reserves Group 2024 2023 31 December \u00a3m \u00a3m Capital redemption reserve 0.1 0.1 Foreign exchange translation differences (9.4 ) 5.9 Other items of comprehensive income 0.9 0.5 Balance at 31 December (8.4 ) 6.5 The foreign exchange translation reserve represents the cumulative impact of exchange differences arising on translation of the financial results of Movestic, Scildon and Waard to sterling, with these exchange differences reported as other comprehensive income within each reporting period. The movement in the year is due to the strengthening of sterling against the euro and Swedish krona. H3 Retained earnings Group 2023 2023 Year ended 31 December \u00a3m \u00a3m Retained earnings attributable to equity holders of the Parent Company comprise: Balance at 1 January 167.0 183.1 Profit/(loss) for the year 3.9 18.6 Share-based payment 2.1 0.7 Dividends Final approved and paid for 2022 \u2013 (22.8 ) Interim approved and paid for 2023 \u2013 (12.6 ) Final approved and paid for 2023 (23.5 ) \u2013 Interim approved and paid for 2024 (13.0 ) \u2013 Balance at 31 December 136.5 167.0 The interim dividend in respect of 2023, approved and paid in 2023, was paid at the rate of 8.36p per share. The final dividend in respect of 2023, approved and paid in 2024, was paid at the rate of 15.61p per share so that the total dividend paid to the equity shareholders of the Parent Company in respect of the year ended 31 December 2023 was made at the rate of 23.97p per share. The interim dividend in respect of 2024, approved and paid in 2024, was paid at the rate of 8.61p per share to equity shareholders of the Parent Company registered at the close of business on 20 September 2024, the dividend record date. A final dividend of 16.08p per share in respect of the year ended 31 December 2024 payable on 20 May 2025 to equity shareholders of the Parent Company registered at the close of business on 4 April 2025, the dividend record date, was approved by the directors after the balance sheet date. The resulting total final dividend of \u00a323.5m has not been provided for in these financial statements and there are no income tax consequences. The following summarises dividends per share in respect of the year ended 31 December 2023 and 31 December 2024: Year ended 31 December 2024 2023 P P Interim \u2013 approved and paid 8.61 8.36 Final \u2013 proposed/paid 16.08 15.61 Total 24 .6 9 2 3 . 97 ", "dimensions": { "concept": "ifrs-full:DisclosureOfReservesAndOtherEquityInterestExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-68": { "value": " H1 Share capital and share premium Group 2024 2023 31 December Number Share Number Share of shares capital of shares capital issued \u00a3m issued \u00a3m Share capital 150,991,019 7.5 150,849,587 7.5 Share Share premium premium \u00a3m \u00a3m 142.5 142.5 Merger Merger reserve reserve \u00a3m \u00a3m 36.3 36.3 The number of shares in issue at the balance sheet date included Nil shares held in treasury (31 December 2023: Nil). The merger reserve is for presentation purposes only in order to show the correct share capital H3 Retained earnings Group 2023 2023 Year ended 31 December \u00a3m \u00a3m Retained earnings attributable to equity holders of the Parent Company comprise: Balance at 1 January 167.0 183.1 Profit/(loss) for the year 3.9 18.6 Share-based payment 2.1 0.7 Dividends Final approved and paid for 2022 \u2013 (22.8 ) Interim approved and paid for 2023 \u2013 (12.6 ) Final approved and paid for 2023 (23.5 ) \u2013 Interim approved and paid for 2024 (13.0 ) \u2013 Balance at 31 December 136.5 167.0 The interim dividend in respect of 2023, approved and paid in 2023, was paid at the rate of 8.36p per share. The final dividend in respect of 2023, approved and paid in 2024, was paid at the rate of 15.61p per share so that the total dividend paid to the equity shareholders of the Parent Company in respect of the year ended 31 December 2023 was made at the rate of 23.97p per share. The interim dividend in respect of 2024, approved and paid in 2024, was paid at the rate of 8.61p per share to equity shareholders of the Parent Company registered at the close of business on 20 September 2024, the dividend record date. A final dividend of 16.08p per share in respect of the year ended 31 December 2024 payable on 20 May 2025 to equity shareholders of the Parent Company registered at the close of business on 4 April 2025, the dividend record date, was approved by the directors after the balance sheet date. The resulting total final dividend of \u00a323.5m has not been provided for in these financial statements and there are no income tax consequences. The following summarises dividends per share in respect of the year ended 31 December 2023 and 31 December 2024: Year ended 31 December 2024 2023 P P Interim \u2013 approved and paid 8.61 8.36 Final \u2013 proposed/paid 16.08 15.61 Total 24 .6 9 2 3 . 97 H2 Other reserves Group 2024 2023 31 December \u00a3m \u00a3m Capital redemption reserve 0.1 0.1 Foreign exchange translation differences (9.4 ) 5.9 Other items of comprehensive income 0.9 0.5 Balance at 31 December (8.4 ) 6.5 The foreign exchange translation reserve represents the cumulative impact of exchange differences arising on translation of the financial results of Movestic, Scildon and Waard to sterling, with these exchange differences reported as other comprehensive income within each reporting period. The movement in the year is due to the strengthening of sterling against the euro and Swedish krona. ", "dimensions": { "concept": "ifrs-full:DisclosureOfShareCapitalReservesAndOtherEquityInterestExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-403": { "value": " H3 Retained earnings Group 2023 2023 Year ended 31 December \u00a3m \u00a3m Retained earnings attributable to equity holders of the Parent Company comprise: Balance at 1 January 167.0 183.1 Profit/(loss) for the year 3.9 18.6 Share-based payment 2.1 0.7 Dividends Final approved and paid for 2022 \u2013 (22.8 ) Interim approved and paid for 2023 \u2013 (12.6 ) Final approved and paid for 2023 (23.5 ) \u2013 Interim approved and paid for 2024 (13.0 ) \u2013 Balance at 31 December 136.5 167.0 The interim dividend in respect of 2023, approved and paid in 2023, was paid at the rate of 8.36p per share. The final dividend in respect of 2023, approved and paid in 2024, was paid at the rate of 15.61p per share so that the total dividend paid to the equity shareholders of the Parent Company in respect of the year ended 31 December 2023 was made at the rate of 23.97p per share. The interim dividend in respect of 2024, approved and paid in 2024, was paid at the rate of 8.61p per share to equity shareholders of the Parent Company registered at the close of business on 20 September 2024, the dividend record date. A final dividend of 16.08p per share in respect of the year ended 31 December 2024 payable on 20 May 2025 to equity shareholders of the Parent Company registered at the close of business on 4 April 2025, the dividend record date, was approved by the directors after the balance sheet date. The resulting total final dividend of \u00a323.5m has not been provided for in these financial statements and there are no income tax consequences. The following summarises dividends per share in respect of the year ended 31 December 2023 and 31 December 2024: Year ended 31 December 2024 2023 P P Interim \u2013 approved and paid 8.61 8.36 Final \u2013 proposed/paid 16.08 15.61 Total 24 .6 9 2 3 . 97 ", "dimensions": { "concept": "ifrs-full:DisclosureOfDividendsExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-424": { "value": "24.69", "decimals": 2, "dimensions": { "concept": "ifrs-full:DividendsRecognisedAsDistributionsToOwnersPerShare", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:GBP/xbrli:shares" } }, "fact-425": { "value": "23.97", "decimals": 2, "dimensions": { "concept": "ifrs-full:DividendsRecognisedAsDistributionsToOwnersPerShare", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:GBP/xbrli:shares" } }, "fact-404": { "value": "
I1 Employee benefit expense, including directors
Year ended 31 December Waard Other Group
UK Movestic Group Scildon activities 2024 2023
\u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m
Wages and salaries 3.6 7.8 4.0 8.2 8.5 32.1 31.0
Social security costs 0.6 2.9 0.4 1.1 1.2 6.2 5.8
Pension costs-defined contribution plans 0.4 1.7 0.5 1.2 1.0 4.8 4.4
Total 4.6 12.4 4.9 10.5 10.7 43.1 41.2
Monthly average number of employees
Company 82 62
Subsidiaries 273 325
Total 355 387
Directors The Directors\u2019 Remuneration Report and Note I2 provides detail of compensation to directors of the Company. UK UK-based employees are all employed by Chesnara plc. At the end of May 2005, the Group allowed eligible employees to enter a pension scheme known as the Chesnara plc Stakeholder Scheme, on a basis where employer contributions are made to the Scheme at the same rate as would be payable had their membership of their predecessor scheme continued, provided that employee contributions also continued to be made at the same rate. The employee may opt to request the Company to pay employer contributions into a personal pension plan, in which instance, employer contributions will be made on the same terms as for the Chesnara plc Stakeholder Scheme. The Group has, for the period covered by these financial statements, only made contributions to defined contribution plans to provide pension benefits for employees upon retirement and, otherwise, has no residual obligation or commitments in respect of any defined benefit scheme. The Group has established frameworks for approved and unapproved discretionary share option plans which may, at the discretion of the Remuneration Committee, be utilised for granting options to executive directors and to other Group employees. Options have been granted to executive directors in the period, in relation to the share-based payment components of the new executive incentive schemes that was introduced under the 2014 terms. Further details can be found in the Directors\u2019 Remuneration Report section and in Note I2. Waard The Waard business participates in a defined contribution scheme. As a result of the Conservatrix acquisition, Waard Leven assumed the obligations under a defined benefit pension scheme for a small number of former Conservatrix employees. This scheme is closed to new entrants with no further benefits accruing and as such the exposure for Waard Leven is limited to the longevity risk of the contracts. The liability is valued under IAS 19 and reported under \u2018Other provisions\u2019 in the balance sheet. Scildon Scildon operated a defined benefit pension scheme for the benefit of its present and past employees. This scheme was closed during 2019 and transferred into a defined contribution scheme. From 1 October 2019, Scildon no longer bears any risks relating to the funding of the plan and all pension assets were transferred to another administrator in 2020. Until that point, Scildon continued to bear only the fund administration costs. Under the Company\u2019s new defined contribution scheme, Scildon pays a contribution to the scheme and subsequently has no further financial obligations with respect to this part of the scheme. This contribution is recognised as an expense when paid. Movestic The Swedish business participates in a combined defined benefit and defined contribution scheme operated by F\u00f6rs\u00e4kringsbranschens Pensionskassa, \u2018FPK\u2019. (the Scheme). The Scheme is a multi-employer scheme with participants including other Swedish insurance companies not related to the Group. The Scheme provides, for those born in 1971 or earlier, benefits to employees which are linked to their final salary and to the amount of time working for companies which are members of the Scheme. For those employees born in 1972 or later, the Scheme operates on a defined contribution basis. Assets and liabilities are held on a pooled basis and are not allocated by the Trustee to any individual company. Consequently, reliable information is not available to account for the Scheme as a defined benefit scheme and therefore, in accordance with IAS 19 Employee Benefits, the Scheme is accounted for as a defined contribution scheme. Contributions to the Scheme are based on the funding recommendations of the independent qualified actuary: the contributions paid to the Scheme subsequent to the acquisition of the Swedish business on 23 July 2009 and up to 31 December 2023, totalled \u00a35.4m (SEK 74.2m). During 2024 further contributions of \u00a30.4m were made. The employers within the Scheme are collectively responsible for the funding of the Scheme as a whole and therefore in the event that other employers exit from the Scheme, remaining employers would be responsible for the ongoing funding. The collective nature of the Scheme results in all participating entities sharing the actuarial risk associated with the Scheme. F\u00f6rs\u00e4kringsbranschens Pensionskassa, \u2018FPK\u2019, issues an audited Annual Report (under Swedish law-limited IFRS) each year. The last available published report was as at 31 December 2022. The Annual Report states that the Scheme\u2019s surplus is \u00a3260.1m (\u00a3339.3m as at 31 December 2023). As at 31 December 2023, the fund had assets under management of \u00a31.3bn (31 December 2022: \u00a31.3bn). During 2023 there were 97 (2022: 97) employer insurance companies participating in the Scheme and 22,000 (31 December 2022: 22,000) insured individuals. From the available information, it cannot be determined with certainty as to whether there would be a change in the required employer funding rate, although there is currently no deficit in the Scheme. ", "dimensions": { "concept": "ifrs-full:DisclosureOfInformationAboutEmployeesExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-69": { "value": "1 Employee benefit expense, including directors Year ended 31 December Waard Other Group UK Movestic Group Scildon activities 2024 2023 \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m \u00a3m Wages and salaries 3.6 7.8 4.0 8.2 8.5 32.1 31.0 Social security costs 0.6 2.9 0.4 1.1 1.2 6.2 5.8 Pension costs-defined contribution plans 0.4 1.7 0.5 1.2 1.0 4.8 4.4 Total 4.6 12.4 4.9 10.5 10.7 43.1 41.2 Monthly average number of employees Company 82 62 Subsidiaries 273 325 Total 355 387 Directors The Directors\u2019 Remuneration Report and Note I2 provides detail of compensation to directors of the Company. UK UK-based employees are all employed by Chesnara plc. At the end of May 2005, the Group allowed eligible employees to enter a pension scheme known as the Chesnara plc Stakeholder Scheme, on a basis where employer contributions are made to the Scheme at the same rate as would be payable had their membership of their predecessor scheme continued, provided that employee contributions also continued to be made at the same rate. The employee may opt to request the Company to pay employer contributions into a personal pension plan, in which instance, employer contributions will be made on the same terms as for the Chesnara plc Stakeholder Scheme. The Group has, for the period covered by these financial statements, only made contributions to defined contribution plans to provide pension benefits for employees upon retirement and, otherwise, has no residual obligation or commitments in respect of any defined benefit scheme. The Group has established frameworks for approved and unapproved discretionary share option plans which may, at the discretion of the Remuneration Committee, be utilised for granting options to executive directors and to other Group employees. Options have been granted to executive directors in the period, in relation to the share-based payment components of the new executive incentive schemes that was introduced under the 2014 terms. Further details can be found in the Directors\u2019 Remuneration Report section and in Note I2. Waard The Waard business participates in a defined contribution scheme. As a result of the Conservatrix acquisition, Waard Leven assumed the obligations under a defined benefit pension scheme for a small number of former Conservatrix employees. This scheme is closed to new entrants with no further benefits accruing and as such the exposure for Waard Leven is limited to the longevity risk of the contracts. The liability is valued under IAS 19 and reported under \u2018Other provisions\u2019 in the balance sheet. Scildon Scildon operated a defined benefit pension scheme for the benefit of its present and past employees. This scheme was closed during 2019 and transferred into a defined contribution scheme. From 1 October 2019, Scildon no longer bears any risks relating to the funding of the plan and all pension assets were transferred to another administrator in 2020. Until that point, Scildon continued to bear only the fund administration costs. Under the Company\u2019s new defined contribution scheme, Scildon pays a contribution to the scheme and subsequently has no further financial obligations with respect to this part of the scheme. This contribution is recognised as an expense when paid. Movestic The Swedish business participates in a combined defined benefit and defined contribution scheme operated by F\u00f6rs\u00e4kringsbranschens Pensionskassa, \u2018FPK\u2019. (the Scheme). The Scheme is a multi-employer scheme with participants including other Swedish insurance companies not related to the Group. The Scheme provides, for those born in 1971 or earlier, benefits to employees which are linked to their final salary and to the amount of time working for companies which are members of the Scheme. For those employees born in 1972 or later, the Scheme operates on a defined contribution basis. Assets and liabilities are held on a pooled basis and are not allocated by the Trustee to any individual company. Consequently, reliable information is not available to account for the Scheme as a defined benefit scheme and therefore, in accordance with IAS 19 Employee Benefits, the Scheme is accounted for as a defined contribution scheme. Contributions to the Scheme are based on the funding recommendations of the independent qualified actuary: the contributions paid to the Scheme subsequent to the acquisition of the Swedish business on 23 July 2009 and up to 31 December 2023, totalled \u00a35.4m (SEK 74.2m). During 2024 further contributions of \u00a30.4m were made. The employers within the Scheme are collectively responsible for the funding of the Scheme as a whole and therefore in the event that other employers exit from the Scheme, remaining employers would be responsible for the ongoing funding. The collective nature of the Scheme results in all participating entities sharing the actuarial risk associated with the Scheme. F\u00f6rs\u00e4kringsbranschens Pensionskassa, \u2018FPK\u2019, issues an audited Annual Report (under Swedish law-limited IFRS) each year. The last available published report was as at 31 December 2022. The Annual Report states that the Scheme\u2019s surplus is \u00a3260.1m (\u00a3339.3m as at 31 December 2023). As at 31 December 2023, the fund had assets under management of \u00a31.3bn (31 December 2022: \u00a31.3bn). During 2023 there were 97 (2022: 97) employer insurance companies participating in the Scheme and 22,000 (31 December 2022: 22,000) insured individuals. From the available information, it cannot be determined with certainty as to whether there would be a change in the required employer funding rate, although there is currently no deficit in the Scheme. ", "dimensions": { "concept": "ifrs-full:DisclosureOfEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-70": { "value": " I2 Share-based payments The Group issues equity-settled share-based payments to the executive directors and members of the senior management team based on the 2014 terms. Equity settled share-based payments are measured at fair value at the date of the grant, and expensed on a straight-line over the vesting period, based on the Group\u2019s estimate of shares that will eventually vest. The bonus scheme consists of two components: (a) Short-Term Incentive Scheme (STIS) (b) Long-Term Incentive Plan (LTIP) The STIS is based upon a 1 year performance period measured against cash generation, EcV Earnings and strategic Group objectives. In relation to 2024, upon meeting the necessary performance targets, the Company granted an award in the form of a right to receive a cash amount of up to 100% of the gross salary. In the event that the gross cash payment due is greater than \u00a320,000, a mandatory 35% of the cash award was deferred into shares, which had a vesting period of 3 years. Therefore the award was 65% settled in cash and 35% settled by a share option award, which cannot be exercised for 3 years. Under the LTIP, options are granted with a vesting period of 3 years. These awards are subject to performance conditions tied to the Company\u2019s financial performance in respect of growth in EcV, Commercial Cash Generation and Total Shareholder Return (TSR). For schemes with market performance criteria, the number of options expected to invest is adjusted only for expectations of leavers prior to vesting. Fair value of the options is measured by use of the Monte Carlo model at the issuing date. The LTIP also contains a target of EcV growth and Commercial Cash Generation. As these are non-market performance conditions, the number of options expected to vest is recalculated at each balance sheet date based on expectations of performance against target. The movement in cumulative expense since the previous balance sheet date is recognised in the income statement, with a corresponding entry in reserves. If the options remain unexercised after a period of 10 years from the date of grant, the options expire. Furthermore, options are forfeited if the employee leaves the Group before options vest and is deemed to be a \u2018Bad Leaver\u2019. (a) 2024 award made under the Short-Term Incentive Scheme (STIS) Details of the short-term incentive awards made in the year are as follows: 2024 Short-Term Incentive Scheme (STIS) 2024 2023 Awards made in year \u00a3m \u00a3m Amount paid as cash bonus through the income statement (65%) 0.6 0.5 Amount deferred into shares for 3 years and subject to forfeiture (35%) 0.3 0.3 Total bonus award for the year 0.9 0.8 Amount of deferred expense recorded in the current year 0.1 0.1 The deferred share award will be made following the end of the performance period by the Remuneration Committee. The deferred amount will be divided by the share price on the award date and the number of share awards will be awarded. The share awards will be accounted for per IFRS 2, under Equity Settled share-based payments. (b) 2024 award made under the Long-Term Incentive Plan (LTIP) In 2024, the Group granted 708,094 Nil priced share options with a vesting period of 3 years. These awards were subject to performance conditions tied to the Company\u2019s financial performance in respect of growth in Economic Value, Commercial Cash Generation and Total Shareholder Return (TSR). The fair value of the non-market base condition was determined to be 150.26p, which was the average weighted share price as at the grant date of the options. Details of the share options outstanding during the year are as follows: 2024 Long-Term Incentive Plan (LTIP) 2024 Weighted average Options exercise number price 000 \u00a3 Outstanding at the beginning of the year \u2013 \u2013 Granted during the year 708,094 \u2013 Lapsed during the year \u2013 \u2013 Outstanding at the end of the year 708,094 \u2013 The weighted average contractual life is 10 years. The inputs into the Monte Carlo model are as follows: Valuation method Monte Carlo Weighted average share price (pence) 266.50 Weighted average exercise price (pence) Nil Weighted average fair value of options granted (pence) 152.46 Expected volatility 28.19 Expected life 3 years Risk-free rate 4.57% Expected dividend yield 0% Expected volatility was determined by calculating the historical volatility of the Company\u2019s share price over the previous 10 years. The Group recognised total expense of \u00a3334,219 related to equity-settled share-based payments transactions in 2024. (c) 2023 award made under the Short-Term Incentive Scheme (STIS) The Group has recorded an expense of \u00a360,825 (2023: \u00a360,825) with regards to the 35% element that has been deferred over the vesting period. (d) 2023 award made under the Long-Term Incentive Plan (LTIP) In 2023, the Group granted 571,645 Nil priced share options with a vesting period of 3 years. These awards were subject to performance conditions tied to the Company\u2019s financial performanc in respect of growth in Economic Value, Commercial Cash Generation and Total Shareholder Return (TSR). The fair value of the non-market base condition was determined to be 154.53p, which was the average weighted share price as at the grant date of the options. Details of the share options outstanding during the year are as follows: 2023 Long-Term Incentive Plan (LTIP) 2024 2023 Weighted Weighted average average Options exercise Options exercise number price number price 000 \u00a3 000 \u00a3 Outstanding at the beginning of the year 572 \u2013 \u2013 \u2013 Granted during the year \u2013 \u2013 572 \u2013 Lapsed during the year (42 ) \u2013 \u2013 \u2013 Outstanding at the end of the year 530 \u2013 572 \u2013 The weighted average contractual life is 10 years. The inputs into the Monte Carlo model are as follows: Valuation method Monte Carlo Weighted average share price (pence) 268.00 Weighted average exercise price (pence) Nil Weighted average fair value of options granted (pence) 154.53 Expected volatility 29.39 Expected life 3 years Risk-free rate 5.70% Expected dividend yield 0% Expected volatility was determined by calculating the historical volatility of the Company\u2019s share price over the previous 10 years. The Group recognised total expense of \u00a3335,807 (2023: \u00a388,222) related to equity-settled share-based payments transactions in 2024. (e) 2022 award made under the Short-Term Incentive Scheme (STIS) The Group has recorded an expense of \u00a359,319 (2023: \u00a359,319) with regards to the 35% elemen that has been deferred over the vesting period. (f) 2022 award made under the Long-Term Incentive Plan (LTIP) In April 2022, the Group granted 253,000 Nil priced share options with a vesting period of 3 years. These awards were subject to performance conditions tied to the Company\u2019s financial performanc in respect of growth in Economic Value and Total Shareholder Return (TSR). The fair value of the non-market base condition was determined to be 284.00p, which was the share price as at 28 April 2022, the grant date of the options. Details of the share options outstanding during the year are as follows: 2022 Long-Term Incentive Plan (LTIP) 2024 2023 Weighted Weighted average average Options exercise Options exercise number price number price 000 \u00a3 000 \u00a3 Outstanding at the beginning of the year 253 \u2013 253 \u2013 Granted during the year \u2013 \u2013 \u2013 \u2013 Lapsed during the year (3 ) \u2013 \u2013 \u2013 Outstanding at the end of the year 250 \u2013 253 \u2013 The weighted average contractual life is 10 years. The inputs into the Monte Carlo model are as follows: Valuation method Monte Carlo Weighted average share price (pence) 284.00 Weighted average exercise price (pence) Nil Weighted average fair value of options granted (pence) 162.50 Expected volatility 29.04 Expected life 3 years Risk-free rate 2.24% Expected dividend yield 0% Expected volatility was determined by calculating the historical volatility of the Company\u2019s share price over the previous 10 years. The Group recognised total expense of \u00a3115,033 (2023: \u00a355,714) related to equity-settled share-based payments transactions in 2023. g) 2021 award made under the Short-Term Incentive Scheme (STIS) The Group has recorded an expense of \u00a376,913 (2023: \u00a376,913) with regards to the 35% element that has been deferred over the vesting period. h) 2021 award made under the Long-Term Incentive Plan (LTIP) In April 2021, the Group granted 260,000 Nil priced share options with a vesting period of 3 years. These awards were subject to performance conditions tied to the Company\u2019s financial performance in respect of growth in Economic Value and Total Shareholder Return (TSR). The fair value of the non-market base condition was determined to be 278.50p, which was the share price as at 28 April 2021, the grant date of the options. Details of the share options outstanding during the year are as follows: 2021 Long-Term Incentive Plan (LTIP) 2024 2023 Weighted Weighted average average Options exercise Options exercise number price number price 000 \u00a3 000 \u00a3 Outstanding at the beginning of the year 342 \u2013 532 \u2013 Exercised during the year (113 ) 2.54 (123 ) 2.78 Lapsed during the year (203 ) \u2013 (67 ) \u2013 Outstanding at the end of the year 26 \u2013 342 \u2013 The weighted average contractual life is 10 years. The inputs into the Monte Carlo model are as follows: Valuation method Monte Carlo Weighted average share price (pence) 278.50 Weighted average exercise price (pence) Nil Weighted average fair value of options granted (pence) 160.56 Expected volatility 30.01 Expected life 3 years Risk-free rate 0.48% Expected dividend yield 0% Expected volatility was determined by calculating the historical volatility of the Company\u2019s share price over the previous 10 years. The Group recognised total expense of \u00a348,603 (2023: \u00a345,085) related to equity-settled share-based payments transactions in 2024. (i) 2020 award made under the Short-Term Incentive Scheme (STIS) The Group has recorded an expense of \u00a314,775 (2023: \u00a359,099) with regards to the 35% element that has been deferred over the vesting period. (j) 2020 award made under the Long-Term Incentive Plan (LTIP) In April 2020, the Group granted 224,000 Nil priced share options with a vesting period of 3 years. These awards were subject to performance conditions tied to the Company\u2019s financial performance in respect of growth in Economic Value and Total Shareholder Return (TSR). The fair value of the non-market base condition was determined to be 323.50p, which was the share price as at 28 April 2020, the grant date of the options. Details of the share options outstanding during the year are as follows: 2020 Long-Term Incentive Plan (LTIP) 2024 2023 Weighted Weighted average average Options exercise Options exercise number price number price 000 \u00a3 000 \u00a3 Outstanding at the beginning of the year 38 \u2013 192 \u2013 Exercised during the year \u2013 \u2013 (28 ) 2.82 Lapsed during the year \u2013 \u2013 (126 ) \u2013 Outstanding at the end of the year 38 \u2013 38 \u2013 The weighted average contractual life is 10 years. The inputs into the Monte Carlo model are as follows: Valuation method Monte Carlo Weighted average share price (pence) 323.50 Weighted average exercise price (pence) Nil Weighted average fair value of options granted (pence) 184.04 Expected volatility 28.51 Expected life 3 years Risk-free rate 0.42% Expected dividend yield 0% Expected volatility was determined by calculating the historical volatility of the Company\u2019s share price over the previous 10 years. The Group recognised total expense of \u00a3nil (2023: \u00a318,750) related to equity-settled share-based payments transactions in 2023. (k) 2019 award made under the Short-Term Incentive Scheme (STIS) The Group has recorded an expense of \u00a3nil (2023: \u00a314,289) with regards to the 35% element that has been deferred over the vesting period. (l) 2019 award made under the Long-Term Incentive Plan (LTIP) In April 2019, the Group granted 196,000 Nil priced share options with a vesting period of 3 years. These awards were subject to performance conditions tied to the Company\u2019s financial performance in respect of growth in Economic Value and Total Shareholder Return (TSR). The fair value of the non-market base condition was determined to be 358.50p, which was the share price as at 28 April 2019, the grant date of the options. Details of the share options outstanding during the year are as follows: 2019 Long-Term Incentive Plan (LTIP) 2024 2023 Weighted Weighted average average Options exercise Options exercise number price number price 000 \u00a3 000 \u00a3 Outstanding at the beginning of the year \u2013 \u2013 \u2013 \u2013 Lapsed during the year \u2013 \u2013 \u2013 \u2013 Outstanding at the end of the year \u2013 \u2013 \u2013 \u2013 The weighted average contractual life is 10 years. The inputs into the Monte Carlo model are as follows: Valuation method Monte Carlo Weighted average share price (pence) 358.50 Weighted average exercise price (pence) Nil Weighted average fair value of options granted (pence) 202.74 Expected volatility 25.35 Expected life 3 years Risk-free rate 1.110% Expected dividend yield 0% Expected volatility was determined by calculating the historical volatility of the Company\u2019s share price over the previous 10 years. The Group recognised no expense related to equity-settled share-based payments transactions in 2024. (m) 2018 award made under the Short-Term Incentive Scheme (STIS) The Group has recorded no expense with regards to the 35% element that has been deferred over the vesting period. (n) 2018 award made under the Long-Term Incentive Plan (LTIP) In April 2018, the Group granted 168,000 Nil priced share options with a vesting period of 3 years. These awards were subject to performance conditions tied to the Company\u2019s financial performance in respect of growth in Economic Value and Total Shareholder Return (TSR). The fair value of the non-market base condition was determined to be 410.00p, which was the share price as at 28 April 2018, the grant date of the options. I2 Share-based payments (continued) (n) 2018 award made under the Long-Term Incentive Plan (LTIP) (continued) Details of the share options outstanding during the year are as follows: 2019 Long-Term Incentive Plan (LTIP) 2024 2023 Weighted Weighted average average Options exercise Options exercise number price number price 000 \u00a3 000 \u00a3 Outstanding at the beginning of the year \u2013 \u2013 \u2013 \u2013 Lapsed during the year \u2013 \u2013 \u2013 \u2013 Outstanding at the end of the year \u2013 \u2013 \u2013 \u2013 The weighted average contractual life is 10 years. The inputs into the Monte Carlo model are as follows: Valuation method Monte Carlo Weighted average share price (pence) 410.00 Weighted average exercise price (pence) Nil Weighted average fair value of options granted (pence) 229.78 Expected volatility 25.77 Expected life 3 years Risk-free rate 1.190% Expected dividend yield 0% Expected volatility was determined by calculating the historical volatility of the Company\u2019s share price over the previous 10 years. The Group recognised no expense related to equity-settled share-based payments transactions in 2024. (o) 2017 award made under the Long-Term Incentive Plan (LTIP) In April 2017, the Group granted 174,000 Nil priced share options with a vesting period of 3 years. These awards were subject to performance conditions tied to the Company\u2019s financial performance in respect of growth in Economic Value and Total Shareholder Return (TSR). The fair value of the non-market base condition was determined to be 382.75p, which was the share price as at 28 April 2017, the grant date of the options. Details of the share options outstanding during the year are as follows: 2017 Long-Term Incentive Plan (LTIP) 2024 2023 Weighted Weighted average average Options exercise Options exercise number price number price 000 \u00a3 000 \u00a3 Outstanding at the beginning of the year \u2013 \u2013 26 \u2013 Exercised during the year \u2013 \u2013 (26 ) 2.63 Outstanding at the end of the year \u2013 \u2013 \u2013 \u2013 The weighted average contractual life is 10 years. The inputs into the Monte Carlo model are as follows: Valuation method Monte Carlo Weighted average share price (pence) 382.75 Weighted average exercise price (pence) Nil Weighted average fair value of options granted (pence) 211.73 Expected volatility 26.97 Expected life 3 years Risk-free rate 0.70% Expected dividend yield 0% Expected volatility was determined by calculating the historical volatility of the Company\u2019s share price over the previous 10 years. The Group recognised no expense related to equity-settled share-based payments transactions in 2024 and 2023. p) 2016 award made under the Long-Term Incentive Plan (LTIP) In April 2016, the Group granted 255,000 Nil priced share options with a vesting period of 3 years. These awards were subject to performance conditions tied to the Company\u2019s financial performance in respect of growth in Economic Value and Total Shareholder Return (TSR). The fair value of the non-market base condition was determined to be 312.00p, which was the share price as at 28 April 2016, the grant date of the options. Details of the share options outstanding during the year are as follows: 2016 Long-Term Incentive Plan (LTIP) 2024 2023 Weighted Weighted average average Options exercise Options exercise number price number price 000 \u00a3 000 \u00a3 Outstanding at the beginning of the year \u2013 \u2013 90 \u2013 Exercised during the year \u2013 \u2013 (90 ) 2.63 Outstanding at the end of the year \u2013 \u2013 \u2013 \u2013 The weighted average contractual life is 10 years. The inputs into the Monte Carlo model are as follows: Valuation method Monte Carlo Weighted average share price (pence) 312.00 Weighted average exercise price (pence) Nil Weighted average fair value of options granted (pence) 179.72 Expected volatility 28.07 Expected life 3 years Risk-free rate 0.86% Expected dividend yield 0% Expected volatility was determined by calculating the historical volatility of the Company\u2019s share price over the previous 10 years. The Group recognised no expense related to equity-settled share-based payments transactions in 2024 and 2023. ", "dimensions": { "concept": "ifrs-full:DisclosureOfSharebasedPaymentArrangementsExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-71": { "value": " I3 Earnings per share Earnings per share are based on the following: Year ended 31 December Restated 2024 2023 (Loss)/profit for the year attributable to shareholders (\u00a3m) 3.9 18.7 Weighted average number of ordinary shares 150,938,024 150,528,597 Basic earnings per share 2.56 p 12.41 p Diluted earnings per share 2.52 p 12.29 p The weighted average number of ordinary shares in respect of the year ended 31 December 2024 is based upon 150,991,019 shares. No shares were held in treasury. There were 2,330,118 share options outstanding at 31 December 2024 (2023: 1,537,582). Accordingly, there is dilution of the average number of ordinary shares in issue in respect of 2024 and 2023. ", "dimensions": { "concept": "ifrs-full:DisclosureOfEarningsPerShareExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-405": { "value": " I4 Capital commitments There were no capital commitments as at 31 December 2024 or as at 31 December 2023. ", "dimensions": { "concept": "ifrs-full:DisclosureOfCommitmentsAndContingentLiabilitiesExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-72": { "value": " I4 Capital commitments There were no capital commitments as at 31 December 2024 or as at 31 December 2023. ", "dimensions": { "concept": "ifrs-full:DisclosureOfCommitmentsExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-73": { "value": "I5 Related parties (a) Identity of related parties The shares of the Company were widely held and no single shareholder exercised significant influence or control over the Company. The Company has related party relationships with: (i) key management personnel who comprise the directors (including non-executive directors) of the Company; (ii) its subsidiary companies; (iii) other companies over which the directors have significant influence; and (iv) transactions with persons related to key management personnel. (b) Related party transactions (i) Transactions with key management personnel. Key management personnel comprise of the directors of the Company. This is on the basis that the Group\u2019s governance map requires all strategically significant decisions to be approved by the Group Board. As such, they have the authority and responsibility for planning, directing and controlling the activities of the Group. Key management compensation is as follows: 2024 2023 \u00a3m \u00a3m Short-term employee benefits 3.1 2.1 Post-employment benefits 0.1 0.1 Share-based payments 1.5 0.6 Total 4.7 2.8 The share-based payments charge comprises \u00a30.3m (2023: \u00a30.3m) of Short-Term Incentive Scheme (STIS), and \u00a31.3m (2023: \u00a30.2m) related to Long-Term Incentive Plan (LTIP), which is determined in accordance with IFRS 2 \u2018Share-based Payment\u2019. Further details on the share-based payment are In addition to their salaries, the Company also provides non-cash benefits to directors and contributes to a post-employment defined contribution pension plan on their behalf, or where regulatory contribution limits are reached, pay an equivalent amount as an addition to base salary. The following amounts were payable to directors in respect of bonuses and incentives: 2024 2023 \u00a3m \u00a3m Annual bonus scheme (included in the short-term employee benefits above) 0.9 0.7 These amounts have been included in accrued expenses as disclosed in Note G6. The amounts payable under the annual bonus scheme were payable within 1 year. The terms and conditions attached to the annual bonus scheme can be found in the Remuneration section of the Corporate Governance section of the Annual Report and Accounts. (ii) Transactions with subsidiaries The Company undertakes centralised administration functions, the costs of which it charges back to its operating subsidiaries. The following amounts which effectively comprised a recovery of expenses at no mark-up were credited to the Statement of Comprehensive Income of the Company for the respective periods: Year ended 31 December 2024 2023 \u00a3m \u00a3m Recovery of expenses 7.2 5.4 (iii) Transactions between subsidiaries In the Netherlands, Scildon owns a commercial property that has been occupied by its fellow Dutch subsidiary Waard since October 2022. The following amounts of rental income were received from Waard by Scildon during the respective periods: Year ended 31 December 2024 2023 \u00a3m \u00a3m Rental income 0.1 0.1 (iv) Transactions with persons related to key management personnel During the year, there were no transactions with persons related to key management personnel (31 December 2023: \u00a3Nil). ", "dimensions": { "concept": "ifrs-full:DisclosureOfRelatedPartyExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-406": { "value": "(i) Transactions with key management personnel. Key management personnel comprise of the directors of the Company. This is on the basis that the Group\u2019s governance map requires all strategically significant decisions to be approved by the Group Board. As such, they have the authority and responsibility for planning, directing and controlling the activities of the Group. Key management compensation is as follows: 2024 2023 \u00a3m \u00a3m Short-term employee benefits 3.1 2.1 Post-employment benefits 0.1 0.1 Share-based payments 1.5 0.6 Total 4.7 2.8 The share-based payments charge comprises \u00a30.3m (2023: \u00a30.3m) of Short-Term Incentive Scheme (STIS), and \u00a31.3m (2023: \u00a30.2m) related to Long-Term Incentive Plan (LTIP), which is determined in accordance with IFRS 2 \u2018Share-based Payment\u2019. Further details on the share-based payment are disclosed in Note I2. In addition to their salaries, the Company also provides non-cash benefits to directors and contributes to a post-employment defined contribution pension plan on their behalf, or where regulatory contribution limits are reached, pay an equivalent amount as an addition to base salary. The following amounts were payable to directors in respect of bonuses and incentives: 2024 2023 \u00a3m \u00a3m Annual bonus scheme (included in the short-term employee benefits above) 0.9 0.7 These amounts have been included in accrued expenses as disclosed in Note G6. The amounts payable under the annual bonus scheme were payable within 1 year. The terms and conditions attached to the annual bonus scheme can be found in the Remuneration section of the Corporate Governance section of the Annual Report and Accounts. (ii) Transactions with subsidiaries The Company undertakes centralised administration functions, the costs of which it charges back to its operating subsidiaries. The following amounts which effectively comprised a recovery of expenses at no mark-up were credited to the Statement of Comprehensive Income of the Company for the respective periods: Year ended 31 December 2024 2023 \u00a3m \u00a3m Recovery of expenses 7.2 5.4 (iii) Transactions between subsidiaries In the Netherlands, Scildon owns a commercial property that has been occupied by its fellow Dutch subsidiary Waard since October 2022. The following amounts of rental income were received from Waard by Scildon during the respective periods: Year ended 31 December 2024 2023 \u00a3m \u00a3m Rental income 0.1 0.1 (iv) Transactions with persons related to key management personnel During the year, there were no transactions with persons related to key management personnel (31 December 2023: \u00a3Nil). ", "dimensions": { "concept": "ifrs-full:DisclosureOfInformationAboutKeyManagementPersonnelExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-417": { "value": "
I6 Group entities
Control of the Group
The issued share capital of Chesnara plc, the Group Parent Company, is widely held, with no single party able to control 20% or more of such capital or of the rights which such ownership confers.
Group subsidiary companies
Country of Ownership interest Ownership interest Functional
Name incorporation 31 December 2024 31 December 2023 Currency
Countrywide Assured plc United Kingdom 100% of all share capital (1) 100% of all share capital (1) Sterling
Countrywide Assured Life Holdings Limited United Kingdom 100% of all share capital 100% of all share capital Sterling
Countrywide Assured Services Limited United Kingdom 100% of all share capital (1) 100% of all share capital (1) Sterling
Countrywide Assured Trustee Company Limited United Kingdom 100% of all share capital (1) 100% of all share capital (1) Sterling
CASLP Limited United Kingdom 100% of all share capital 100% of all share capital Sterling
CASFS Limited United Kingdom 100% of all share capital (2) 100% of all share capital (2) Sterling
CASLPTS Limited United Kingdom 100% of all share capital (2) 100% of all share capital (2) Sterling
Registered address
2nd Floor, Building 4, West Strand Business Park,
West Strand Road, Preston, Lancashire PR1 8UY
Movestic Livf\u00f6rs\u00e4kring AB Sweden 100% of all share capital 100% of all share capital Swedish krona
Movestic Fonder AB Sweden 100% of all share capital (3) 100% of all share capital (3) Swedish krona
Registered address
Box 7853, S-103 99 Stockholm, Sweden
Waard Leven N.V. Netherlands 100% of all share capital 100% of all share capital Euro
Waard Schade N.V. Netherlands 100% of all share capital 100% of all share capital Euro
Waard Verzekeringen B.V. Netherlands 100% of all share capital (4) 100% of all share capital (4) Euro
Robein Leven N.V. Netherlands 100% of all share capital (4) 100% of all share capital (4) Euro
Robein Effectendienstveriening N.V. Netherlands 100% of all share capital (4) 100% of all share capital (4) Euro
Registered address
Geert Scholtenslaan II 1687 CL Wognum, Netherlands
Scildon N.V Netherlands 100% of all share capital 100% of all share capital Euro
Registered address
Laapersveld 68 Hilversum, Netherlands
(1) Held indirectly through Countrywide Assured Life Holdings Limited.
(2) Held indirectly through Countrywide Assured plc.
(3) Held indirectly through Movestic Livf\u00f6rs\u00e4kring AB.
(4) Held indirectly through Waard Leven N.V.
CASLP Limited was dissolved on 14 January 2025.
CASFS Limited (registered number: 02354894) and CASLPTS Limited (registered number: 01489455) are exempt from the requirements of the Companies Act 2006 relating to the audit of individual financial
statements by virtue of s.479A of the Companies Act 2006.
", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestsInOtherEntitiesExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-407": { "value": "Chesnara plc", "dimensions": { "concept": "ifrs-full:NameOfParentEntity", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-74": { "value": "Group subsidiary companies Country of Ownership interest Ownership interest Functional Name incorporation 31 December 2024 31 December 2023 Currency Countrywide Assured plc United Kingdom 100% of all share capital (1) 100% of all share capital (1) Sterling Countrywide Assured Life Holdings Limited United Kingdom 100% of all share capital 100% of all share capital Sterling Countrywide Assured Services Limited United Kingdom 100% of all share capital (1) 100% of all share capital (1) Sterling Countrywide Assured Trustee Company Limited United Kingdom 100% of all share capital (1) 100% of all share capital (1) Sterling CASLP Limited United Kingdom 100% of all share capital 100% of all share capital Sterling CASFS Limited United Kingdom 100% of all share capital (2) 100% of all share capital (2) Sterling CASLPTS Limited United Kingdom 100% of all share capital (2) 100% of all share capital (2) Sterling Registered address 2nd Floor, Building 4, West Strand Business Park, West Strand Road, Preston, Lancashire PR1 8UY Movestic Livf\u00f6rs\u00e4kring AB Sweden 100% of all share capital 100% of all share capital Swedish krona Movestic Fonder AB Sweden 100% of all share capital (3) 100% of all share capital (3) Swedish krona Registered address Box 7853, S-103 99 Stockholm, Sweden Waard Leven N.V. Netherlands 100% of all share capital 100% of all share capital Euro Waard Schade N.V. Netherlands 100% of all share capital 100% of all share capital Euro Waard Verzekeringen B.V. Netherlands 100% of all share capital (4) 100% of all share capital (4) Euro Robein Leven N.V. Netherlands 100% of all share capital (4) 100% of all share capital (4) Euro Robein Effectendienstveriening N.V. Netherlands 100% of all share capital (4) 100% of all share capital (4) Euro Registered address Geert Scholtenslaan II 1687 CL Wognum, Netherlands Scildon N.V Netherlands 100% of all share capital 100% of all share capital Euro Registered address Laapersveld 68 Hilversum, Netherlands (1) Held indirectly through Countrywide Assured Life Holdings Limited. (2) Held indirectly through Countrywide Assured plc. (3) Held indirectly through Movestic Livf\u00f6rs\u00e4kring AB. (4) Held indirectly through Waard Leven N.V. CASLP Limited was dissolved on 14 January 2025. CASFS Limited (registered number: 02354894) and CASLPTS Limited (registered number: 01489455) are exempt from the requirements of the Companies Act 2006 relating to the audit of individual financial statements by virtue of s.479A of the Companies Act 2006. ", "dimensions": { "concept": "ifrs-full:DisclosureOfSignificantInvestmentsInSubsidiariesExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-76": { "value": " I7 Portfolio acquisition On 23 December 2024, Chesnara announced it had reached an agreement to acquire the UK unit-linked bond and pension business of Canada Life Limited, representing approximately 17,000 policies. The transaction is initially in the form of a reinsurance agreement with the non-unit cash flows of the unit-linked policies ceded by Canada Life Limited and accepted by CA. The date of recognition of the reinsurance contract under IFRS 17 is 23 December 2024, however under the terms of the contract the economic impacts are backdated to 1 January 2024 and the cash flows from this date are accordingly recognised as a receivable in the December 2024 balance sheet. The initial commission paid by CA to Canada Life Limited for this reinsurance inwards transaction was \u00a32.2m and was funded from internal group resources. As no inputs and processes have been transferred as part of the transaction it is not accounted for as a business combination, instead it is recognised at cost. The CSM on initial recognition has been calculated as \u00a30.7m as at 31 December 2024. Customers\u2019 policies are expected to transfer to CA in the future via a Part VII transfer, following Court approval.", "dimensions": { "concept": "ifrs-full:DisclosureOfBusinessCombinationsExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "fact-75": { "value": " I8 Post balance sheet event The directors are not aware of any significant post balance sheet events that require disclosure in the financial statements.", "dimensions": { "concept": "ifrs-full:DisclosureOfEventsAfterReportingPeriodExplanatory", "language": "en", "entity": "scheme:213800VFRMBRTSZ3SJ06", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } } } }