Aviva 2013 Annual Report Download - page 202

Aviva plc
Annual report and accounts 2013
200
Notes to the consolidated financial statements continued
44 – Reinsurance assets continued
(c) Movements
The following movements have occurred in the reinsurance asset during the year:
(i) In respect of long-term business provisions
2013
£m
2012
£m
Carrying amount at 1 January 5,972 5,373
Asset in respect of new business 268 387
Expected change in existing business asset 19 166
Variance between actual and expected experience 454 197
Impact of operating assumption changes 247 (306)
Impact of economic assumption changes (426) 143
Other movements 81 (137)
Change in asset 643 450
Effect of portfolio transfers, acquisitions and disposals1 (873) 197
Foreign exchange rate movements 42 (48)
Carrying amount at 31 December 5,784 5,972
1 Includes £631 million related to the disposal of the US business in 2013, £3 million related to the disposal of Aseval, and £230 million related to the disposal of Ark Life.
The impact of assumption changes in the above analysis shows the resulting movement in the carrying value of reinsurance
assets. The changes to the reinsurance asset from assumption changes mainly relates to business in the UK and Ireland, with
corresponding movements in gross insurance contract liabilities. For participating businesses, a movement in reinsurance assets
is generally offset by a corresponding adjustment to the unallocated divisible surplus and does not impact on profit. Where
assumption changes do impact profit, these are included in the effect of changes in assumptions and estimates during the year
shown in note 45, together with the impact of movements in related liabilities and other non-financial assets.
(ii) In respect of general insurance and health outstanding claims provisions and IBNR
2013
£m
2012
£m
Carrying amount at 1 January 1,254 1,369
Impact of changes in assumptions (45) 22
Reinsurers’ share of claim losses and expenses
Incurred in current year 312 286
Incurred in prior years (32) 13
Exceptional strengthening of general insurance latent claims provisions — —
Reinsurers’ share of incurred claim losses and expenses 280 299
Less:
Reinsurance recoveries received on claims
Incurred in current year (169) (138)
Incurred in prior years (140) (150)
Reinsurance recoveries received in the year (309) (288)
Unwind of discounting 10 13
Other movements — —
Change in reinsurance asset recognised as income (64) 46
Effect of portfolio transfers, acquisitions and disposals (9) (136)
Foreign exchange rate movements (11) (26)
Other movements (6) 1
Carrying amount at 31 December 1,164 1,254
(iii) Reinsurers’ share of the provision for UPR
2013
£m
2012
£m
Carrying amount at 1 January 248 245
Premiums ceded to reinsurers in the year 641 641
Less: Reinsurers’ share of premiums earned during the year (643) (636)
Change in reinsurance asset recognised as income (2) 5
Reinsurers’ share of portfolio transfers and acquisitions 7 3
Foreign exchange rate movements — (5)
Other movements 3 —
Carrying amount at 31 December 256 248