Insurance business (Tables)

6 Months Ended

Jun. 30, 2024

Insurance business [Abstract]

Schedule of insurance service result

	Half-year to 30 Jun 2024 £m	Half-year to 30 Jun 2023 £m	Half-year to 31 Dec 2023 £m
Life
Amounts relating to the changes in liabilities for remaining coverage:
Contractual service margin recognised for services provided	216	160	169
Change in risk adjustments for non-financial risk for risk expired	27	30	54
Expected incurred claims and other insurance services expenses	977	955	952
Charges to funds in respect of policyholder tax and other	68	20	67
	1,288	1,165	1,242
Recovery of insurance acquisition cash flows	56	40	47
Total life	1,344	1,205	1,289
Non-life
Total non-life	306	245	269
Total insurance revenue	1,650	1,450	1,558
Life
Incurred claims and other directly attributable expenses	(961)	(966)	(931)
Changes that relate to past service: adjustment to liabilities for incurred claims	3	(1)	1
Changes that relate to future service: losses and reversal of losses on onerous contracts	(46)	(26)	84
Amortisation of insurance acquisition cash flows	(56)	(40)	(48)
Net impairment loss on insurance acquisition assets	(8)	–	(7)
Total life	(1,068)	(1,033)	(901)
Non-life
Total non-life	(271)	(205)	(275)
Total insurance service expense	(1,339)	(1,238)	(1,176)
Net (expense) income from reinsurance contracts held	(23)	11	(9)
Insurance service result	288	223	373

Schedule of net finance income (expense) from insurance, participating investment and reinsurance contracts

	Half-year to 30 June 2024
	Life £m	Non-life £m	Total £m
Net investment return on assets held to back insurance and participating investment contracts (memorandum item)1	6,482	20	6,502
Net finance expense from insurance and participating investment contracts	(6,555)	(3)	(6,558)
Net finance income from reinsurance contracts held	81	–	81
Net finance expense from insurance, participating investment and reinsurance contracts	(6,474)	(3)	(6,477)
	Half-year to 30 June 2023
	Life £m	Non-life £m	Total £m
Net investment return on assets held to back insurance and participating investment contracts (memorandum item)1	3,542	28	3,570
Net finance expense from insurance and participating investment contracts	(3,732)	(39)	(3,771)
Net finance income from reinsurance contracts held	2	–	2
Net finance expense from insurance, participating investment and reinsurance contracts	(3,730)	(39)	(3,769)
	Half-year to 31 December 2023
	Life £m	Non-life £m	Total £m
Net investment return on assets held to back insurance and participating investment contracts (memorandum item)1	8,214	7	8,221
Net finance (expense) income from insurance and participating investment contracts	(7,997)	33	(7,964)
Net finance income from reinsurance contracts held	49	–	49
Net finance (expense) income from insurance, participating investment and reinsurance contracts	(7,948)	33	(7,915)

1Net investment return on assets held to back insurance contracts and participating investment contracts is reported within net trading

income on the face of the Group’s income statement; includes income of £6,951 million (half-year to 30 June 2023: £3,781 million;

half-year to 31 December 2023: £6,419 million) in respect of unit-linked and with-profit contracts measured applying the variable fee

approach. The assets generating the investment return held to back insurance contracts and participating investment contracts are

carried at fair value on the Group’s balance sheet.

Reconciliation of insurance balances for liability for remaining coverage and liability for incurred claims

At 30 June 2024	Present value of future cash flows £m		Risk adjustment1 £m		Contractual service margin2 £m		Other £m		Total £m
Insurance contract assets		2		1		(2)		–	1
Liabilities arising from insurance contracts and participating investment contracts3,4		(119,421)		(1,139)		(4,467)		–	(125,027)
Insurance acquisition assets		–		–		–		20	20
Net liabilities		(119,419)		(1,138)		(4,469)		20	(125,006)
At 31 December 2023
Insurance contract assets		–		1		–		–	1
Liabilities arising from insurance contracts and participating investment contracts3,4		(114,555)		(1,178)		(4,415)		–	(120,148)
Insurance acquisition assets		–		–		–		24	24
Net liabilities		(114,555)		(1,177)		(4,415)		24	(120,123)

1The movement in the risk adjustment during the half-year to 30 June 2024 included £34 million, net of reinsurance, arising on the

initial recognition of contracts issued in the period (half-year to 30 June 2023: £42 million; half-year to 31 December 2023:

£44 million).

2The movement in the contractual service margin during the half-year to 30 June 2024 included £27 million, net of reinsurance, arising

on the initial recognition of contracts issued in the period (half-year to 30 June 2023: £56 million; half-year to 31 December 2023:

£31 million).

3Liabilities arising from insurance and participating investment contracts substantially all relates to liability for remaining coverage.

4Excluding insurance acquisition assets.