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

	2018							2017
	Gross £m		Reinsurance¹ £m			Net £m		Gross¹ £m		Reinsurance² £m			Net £m
Life insurance (see (1) below):
Insurance contracts		84,366		(716	)		83,650		86,949		(563	)		86,386
Participating investment contracts		13,912		–			13,912		15,881		–			15,881
		98,278		(716	)		97,562		102,830		(563	)		102,267
Non-life insurance contracts (see (2) below):
Unearned premiums		342		(13	)		329		358		(13	)		345
Claims outstanding		254		–			254		225		–			225
		596		(13	)		583		583		(13	)		570
Total		98,874		(729	)		98,145		103,413		(576	)		102,837

1	During the year the Group has reviewed the classification of pre-2007 unitised pension savings products and as a result these products have been reclassified from insurance contracts to participating investment contracts; comparatives have been restated accordingly.

2	Reinsurance balances are reported within other assets (note 27).

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

	Insurance contracts £m			Participating investment contracts £m			Gross £m			Reinsurance £m			Net £m
At 1 January 2017		77,881			15,896			93,777			(671	)		93,106
New business		4,154			43			4,197			(21	)		4,176
Changes in existing business		4,928			(58	)		4,870			129			4,999
Change in liabilities charged to the income statement (note 10)		9,082			(15	)		9,067			108			9,175
Exchange and other adjustments		(14	)		–			(14	)		–			(14	)
At 31 December 2017		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 (note 10)		(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

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

	2018 £m			2017 £m
Claims outstanding
Gross claims outstanding at 1 January		225			209
Cash paid for claims settled in the year		(306	)		(321	)
Increase/(decrease) in liabilities charged to the income statement ¹		335			337
		29			16
Gross claims outstanding at 31 December		254			225
Reinsurers’ share		–			–
Net claims outstanding at 31 December		254			225
Notified claims		170			174
Incurred but not reported		84			51
Net claims outstanding at 31 December		254			225

1	Of which an increase of £367 million (2017: £350 million) was in respect of current year claims and a decrease of £32 million (2017: a decrease of £13 million) was in respect of prior year claims.