LIABILITIES ARISING FROM INSURANCE CONTRACTS AND PARTICIPATING INVESTMENT CONTRACTS (Tables)

12 Months Ended

Dec. 31, 2019

LIABILITIES ARISING FROM INSURANCE CONTRACTS AND PARTICIPATING INVESTMENT CONTRACTS (Tables) [Line Items]

Disclosure of types of insurance contracts [text block]

Insurance contract and participating investment contract liabilities are comprised as follows:

	2019							2018
	Gross		Reinsurance1			Net		Gross		Reinsurance1			Net
	£m		£m			£m		£m		£m			£m
Life insurance (see (1) below):
Insurance contracts		96,812		(715	)		96,097		84,366		(716	)		83,650
Participating investment contracts		14,063		–			14,063		13,912		–			13,912
		110,875		(715	)		110,160		98,278		(716	)		97,562
Non-life insurance contracts (see (2) below):
Unearned premiums		333		(14	)		319		342		(13	)		329
Claims outstanding		241		–			241		254		–			254
		574		(14	)		560		596		(13	)		583
Total		111,449		(729	)		110,720		98,874		(729	)		98,145

1 Reinsurance balances are reported within assets.

Disclosure of provisions for unearned premiums [text block]

The movements in non-life insurance contract liabilities and reinsurance assets over the year have been as follows:

	2019			2018
	£m			£m
Provisions for unearned premiums
Gross provision at 1 January		342			358
Increase in the year		663			681
Release in the year		(672	)		(697	)
Change in provision for unearned premiums charged to income statement		(9	)		(16	)
Gross provision at 31 December		333			342
Reinsurers’ share		(14	)		(13	)
Net provision at 31 December		319			329

Participating Life Insurance Contract [Member]

LIABILITIES ARISING FROM INSURANCE CONTRACTS AND PARTICIPATING INVESTMENT CONTRACTS (Tables) [Line Items]

Disclosure of Life Insurance and Participating Contract Liabilities [text block]

The movement in life insurance contract and participating investment contract liabilities over the year can be analysed as follows:

	Insurance contracts			Participating investment contracts			Gross			Reinsurance			Net
	£m			£m			£m			£m			£m
At 1 January 2018		86,949			15,881			102,830			(563	)		102,267
New business		5,476			31			5,507			(42	)		5,465
Changes in existing business		(8,072	)		(2,000	)		(10,072	)		(111	)		(10,183	)
Change in liabilities charged to the income statement		(2,596	)		(1,969	)		(4,565	)		(153	)		(4,718	)
Exchange and other adjustments		13			–			13			–			13
At 31 December 2018		84,366			13,912			98,278			(716	)		97,562
New business		5,684			37			5,721			(45	)		5,676
Changes in existing business		6,798			114			6,912			46			6,958
Change in liabilities charged to the income statement (note 10)		12,482			151			12,633			1			12,634
Exchange and other adjustments		(36	)		–			(36	)		–			(36	)
At 31 December 2019		96,812			14,063			110,875			(715	)		110,160

Nonparticipating Life Insurance Contract [Member]

LIABILITIES ARISING FROM INSURANCE CONTRACTS AND PARTICIPATING INVESTMENT CONTRACTS (Tables) [Line Items]

Disclosure of Liabilities for Insurance Contracts and Participating Investment Contracts [text block]

Liabilities for insurance contracts and participating investment contracts can be split into with-profit fund liabilities, accounted for using the PRA’s realistic capital regime (realistic liabilities) and non-profit fund liabilities, accounted for using a prospective actuarial discounted cash flow methodology, as follows:

	2019						2018
	With-profit fund		Non-profit fund		Total		With-profit fund		Non-profit fund		Total
	£m		£m		£m		£m		£m		£m
Insurance contracts		8,018		88,794		96,812		7,851		76,515		84,366
Participating investment contracts		7,222		6,841		14,063		7,438		6,474		13,912
Total		15,240		95,635		110,875		15,289		82,989		98,278

Claims outstanding [Member]

LIABILITIES ARISING FROM INSURANCE CONTRACTS AND PARTICIPATING INVESTMENT CONTRACTS (Tables) [Line Items]

Disclosure of Insurance Claims Outstanding [text block]

These provisions represent the liability for short-term insurance contracts for which the Group’s obligations are not expired at the year end.

	2019			2018
	£m			£m
Claims outstanding
Gross claims outstanding at 1 January		254			225
Cash paid for claims settled in the year		(300	)		(306	)
Increase/(decrease) in liabilities charged to the income statement 1		287			335
		(13	)		29
Gross claims outstanding at 31 December		241			254
Reinsurers’ share		–			–
Net claims outstanding at 31 December		241			254
Notified claims		128			170
Incurred but not reported		113			84
Net claims outstanding at 31 December		241			254

1 Of which an increase of £335 million (2018: £367 million) was in respect of current year claims and a decrease of £48 million (2018: a decrease of £32 million) was in respect of prior year claims.