Aviva 2013 Annual Report Download - page 197

Strategic report Governance IFRS Financial statements Other information
Aviva plc
Annual report and accounts 2013
195
Notes to the consolidated financial statements continued
41 – Insurance liabilities continued
(iii) Net of reinsurance
After the effect of reinsurance, the loss development table is:
Accident year
All prior
years
£m
2004
£m
2005
£m
2006
£m
2007
£m
2008
£m
2009
£m
2010
£m
2011
£m
2012
£m
2013
£m
Total
£m
Net cumulative claim payments
At end of accident year (2,870) (3,281) (3,612) (4,317) (4,808) (3,650) (3,386) (3,300) (2,925) (2,905)
One year later (4,378) (4,925) (5,442) (6,542) (7,165) (5,286) (5,242) (4,578) (4,166)
Two years later (4,712) (5,344) (5,881) (7,052) (7,638) (5,885) (5,637) (4,963)
Three years later (4,986) (5,671) (6,181) (7,356) (8,094) (6,177) (5,905)
Four years later (5,163) (5,892) (6,434) (7,664) (8,356) (6,410)
Five years later (5,327) (6,039) (6,625) (7,852) (8,515)
Six years later (5,430) (6,188) (6,724) (7,942)
Seven years later (5,491) (6,245) (6,789)
Eight years later (5,524) (6,294)
Nine years later (5,541)
Estimate of net ultimate claims
At end of accident year 6,602 6,982 7,430 8,363 9,262 7,115 6,650 6,202 5,941 5,838
One year later 6,266 6,818 7,197 8,302 9,104 7,067 6,751 6,103 5,765
Two years later 6,082 6,688 7,104 8,244 9,028 7,036 6,685 6,095
Three years later 5,882 6,544 6,996 8,249 9,007 6,978 6,644
Four years later 5,709 6,476 6,980 8,210 8,962 6,940
Five years later 5,699 6,448 6,992 8,221 8,949
Six years later 5,639 6,397 6,939 8,149
Seven years later 5,624 6,372 6,938
Eight years later 5,613 6,385
Nine years later 5,600
Estimate of net ultimate claims 5,600 6,385 6,938 8,149 8,949 6,940 6,644 6,095 5,765 5,838
Cumulative payments (5,541) (6,294) (6,789) (7,942) (8,515) (6,410) (5,905) (4,963) (4,166) (2,905)
1,720 59 91 149 207 434 530 739 1,132 1,599 2,933 9,593
Effect of discounting (394) — 13 3 3 1 1 — — — — (373)
Present value 1,326 59 104 152 210 435 531 739 1,132 1,599 2,933 9,220
Cumulative effect of foreign
exchange movements — 10 13 21 17 (28) (20) (39) (37) (32) — (95)
Effect of acquisitions 2 1 2 4 — — — — — — — 9
Present value recognised in the
statement of financial position 1,328 70 119 177 227 407 511 700 1,095 1,567 2,933 9,134
In the loss development tables shown above, the cumulative claim payments and estimates of cumulative claims for each accident
year are translated into sterling at the exchange rates that applied at the end of that accident year. The impact of using varying
exchange rates is shown at the bottom of each table. Disposals are dealt with by treating all outstanding and IBNR claims of the
disposed entity as ‘paid’ at the date of disposal.
The loss development tables above include information on asbestos and environmental pollution claims provisions from
business written before 2004. The undiscounted claim provisions for continuing operations, net of reinsurance, in respect of this
business at 31 December 2013 were £976 million (2012: £1,003 million). The movement in the year reflects strengthening of
provisions by £5 million in the UK (2012: £8 million), other decreases in undiscounted provisions of £2 million (2012: £51 million
increase), claim payments, reinsurance recoveries and foreign exchange rate movements.
(e) Provision for unearned premiums
Movements
The following changes have occurred in the provision for unearned premiums (UPR) during the year:
2013
£m
2012
£m
Carrying amount at 1 January 4,441 4,483
Premiums written during the year 9,361 9,535
Less: Premiums earned during the year (9,497) (9,514)
Change in UPR recognised as income (136) 21
Gross portfolio transfers and acquisitions — (6)
Foreign exchange rate movements (79) (57)
Carrying amount at 31 December 4,226 4,441