Tesco 2009 Annual Report Download - page 108

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106 FINANCIAL STATEMENTS
Tesco PLC Annual Report and Financial Statements 2009
Note 23 Financial risk factors continued
Insurance risk
TPF is exposed to insurance risk indirectly through its profit sharing commission arrangement with The Royal Bank of Scotland Group PLC. Insurance
risk is the risk of fluctuations in the timing, frequency or severity of insured events, relative to the expectations at the time of underwriting.
The frequency and severity of claims and the sources of uncertainty for the key classes that TPF is exposed to are as follows:
Motor insurance
Claims experience is quite variable, due to a wide range of factors, but the principal ones are age, sex and driving experience, type and nature of vehicle,
use of vehicle and area. There are many sources of uncertainty that will affect TPF’s experience under motor insurance including operational risk,
reserving risk, premium rates not matching claims inflation rates, the weather, the social, economic and legislative environment and reinsurance failure risk.
Property insurance
The major causes of claims for property insurance are theft, flood, escape of water, fire, storm, subsidence and various types of accidental damage.
The major source of uncertainty is the volatility of weather.
Note 24 Customer deposits
2009 2008
£m £m
Customer deposits 4,538 –
Customer deposits are recorded at amortised cost and are repayable on demand.
Note 25 Deposits by banks
The Group has deposits by banks with the following maturity:
2009 2008
£m £m
Within three months 24 –
24 –
Deposits by banks are recorded at amortised cost.
Note 26 Provisions
Property
provisions
£m
At 23 February 2008 27
Foreign currency translation 3
Acquisitions through business combinations 59
Amount utilised in the year (12)
At 28 February 2009 77
Property provisions comprise future rents payable net of rents receivable on onerous and vacant property leases, provisions for terminal dilapidations
and provisions for future rents above market value on unprofitable stores. The majority of the provision is expected to be utilised over the period to 2020.
The balances are analysed as follows:
2009 2008
£m £m
Current 10 4
Non-current 67 23
77 27
Notes to the Group financial statements continued