2.11 Opciones de la Barra de menú
2.11.1 Menú archivo
Accident year
2006 2007 2008 2009 2010 2011 2012 2013 Total
Gross of reinsurance
At end of the accident year: 1,367.9 384.5 347.3 325.8 411.3 498.0 502.1 368.1 4,205.0 One year later 1,264.7 387.8 319.7 333.0 456.3 531.2 473.4 – 3,766.1
Two years later 1,199.3 378.3 310.2 340.7 481.0 528.4 – – 3,237.9
Three years later 1,206.8 364.2 300.8 328.9 466.5 – – – 2,667.2
Four years later 1,195.9 367.4 297.2 320.2 – – – – 2,180.7
Five years later 1,185.9 366.6 294.1 – – – – – 1,846.6
Six years later 1,184.1 362.5 – – – – – – 1,546.6
Seven years later 1,195.8 – – – – – – – 1,195.8
Estimate for cumulative claims 1,195.8 362.5 294.1 320.2 466.5 528.4 473.4 368.1 4,009.0 Cumulative payments to date (1,115.5) (348.0) (288.8) (299.5) (409.8) (431.3) (328.1) (146.8) (3,367.8) Gross outstanding claims liabilities before discounting 80.3 14.5 5.3 20.7 56.7 97.1 145.3 221.3 641.2
Discounting (1.0)
Gross outstanding claims liabilities 640.2
Gross claims reported 495.3
Gross claims incurred but not reported 144.9
20. Insurance contract liabilities and reinsurance assets continued
Accident year
2006 2007 2008 2009 2010 2011 2012 2013 Total
Net of reinsurance
At end of the accident year: 1,362.9 372.6 334.6 313.0 398.4 482.2 489.8 350.9 4,104.4 One year later 1,261.4 377.6 305.5 320.6 434.1 515.8 456.3 – 3,671.3
Two years later 1,195.9 369.6 296.3 325.6 458.4 516.6 – – 3,162.4
Three years later 1,203.9 357.6 292.3 317.8 445.3 – – – 2,616.9
Four years later 1,192.8 359.6 290.2 310.0 – – – – 2,152.6
Five years later 1,181.4 359.4 287.3 – – – – – 1,828.1
Six years later 1,179.8 355.2 – – – – – – 1,535.0
Seven years later 1,188.5 – – – – – – – 1,188.5
Estimate for cumulative claims 1,188.5 355.2 287.3 310.0 445.3 516.6 456.3 350.9 3,910.1 Cumulative payments to date (1,113.2) (340.8) (282.1) (293.9) (402.4) (425.3) (323.3) (142.6) (3,323.6) Net outstanding claims liabilities before discounting 75.3 14.4 5.2 16.1 42.9 91.3 133.0 208.3 586.5
Discounting (1.0)
Net outstanding claims liabilities 585.5
Net claims reported 472.1
Net claims incurred but not reported 113.4
Net outstanding claims liabilities 585.5
It is to be expected that releases will normally be made to prior years claims as current reserves are set such that no adverse deterioration is expected. However, from time to time the random occurrence of significant large individual claims or events being worse than expected can give rise to a required strengthening, in addition to normal claims development being adverse. The 2013 result includes movement on prior year reserves of £49.1m (2012: £50.3m). This is largely due to a change in the basis of estimation for salvage and subrogation.
21. Taxation
2013 2012
Current tax
(Liability)/asset at the beginning of the financial year (4.0) 18.5
Tax charged to the income statement (6.6) (0.8)
Tax credited/(charged) directly to other comprehensive income:
Changes in fair value on available for sale assets recognised through other comprehensive income 6.3 (9.0)
Tax received during the financial year (0.6) (12.7)
Liability at the end of the financial year (4.9) (4.0)
Deferred taxes are calculated on all temporary differences under the liability method using an effective tax rate of 20% (2012: 23%).
2013 2012
Deferred tax liability
Liability at the beginning of the financial year (6.4) (6.7)
Tax credited to the income statement 0.7 0.3
Liability at the end of the financial year (5.7) (6.4)
Analysis of deferred tax liability
Claims equalisation reserve (6.0) (6.8)
Other timing differences 0.3 0.4
Liability at the end of the financial year (5.7) (6.4)
The 2013 Budget on 20 March 2013 announced that the UK corporation tax rate will reduce to 20% with effect from 1 April 2015. Reductions in the rate from 24% (effective from 1 April 2012) to 23% (effective from 1 April 2013), and to 21% (effective from 1 April 2014) were substantively enacted on 26 March 2012, 3 July 2012 and 17 July 2013 respectively. This will reduce the company’s future current tax charge accordingly. The deferred tax liability at 31 December 2013
Notes to the annual report and accounts continued
Notes to the annual report and accounts continued
All amounts are stated in £m unless otherwise indicated22. Other reinsurance liabilities
2013 2012
Arising from reinsurance operations – 2.3
All amounts are due within one year.
23. Insurance and other payables
2013 2012
Arising out of direct insurance operations 1.7 2.0
Accruals and deferred income 5.7 5.4
Insurance premium taxation payable 7.6 9.9
Amounts due to Group companies – 0.1
Other payables 2.9 4.5
17.9 21.9
All amounts are due within one year.
24. Contingent assets and liabilities
CISGIL has a contract with Parabis Ltd, for the provision of claims handling services for third party motor claims. These services are currently treated as VAT exempt within the annual report and accounts. However, this treatment has been challenged by Her Majesty’s Revenue & Customs (HMRC). If the view of HMRC is upheld, CISGIL will be liable for a VAT charge (from 2010) of up to £2.1m (2012: £1.4m). Legal Counsel has indicated that it is probable that HMRC’s view will be successfully challenged, and therefore a provision has not been made in the financial statements.
During 2012, a provision was raised by CISL, at the time a fellow subsidiary of the Co-operative Banking Group Limited, to cover the present value of lease commitments arising from the failure of a counterparty to which a number of leases had previously been assigned. As CISGIL benefited from the original assignment transaction, CISGIL made a cash contribution in 2012 of £2.6m towards the initial provision. In 2013, the provision and CISGIL’s cash contribution was transferred into CFSMS. CISGIL has an agreement with CFSMS, to contribute to any additional costs in excess of the original provision it incurs. However the timing and size of this contribution is uncertain and as such a provision has not been made in CISGIL’s year end accounts.
CISGIL is party to a Deed of Guarantee with the Trustee for the benefit of The Co-operative Group Pension Scheme (PACE) that, if CFSMS does not pay any amount due in respect of its funding obligations to PACE, CISGIL will pay to PACE its share of the amount due as if it were the principal obligor for such share. As explained in note 9, CISGIL is currently recharged by CFSMS for its share of the pension contributions, including an element of the PACE deficit funding. The directors have no reason to believe that CFSMS will not be able to continue making payments to PACE when due and therefore, at the current time, do not expect any payments to be required under the guarantee.
No other contingent assets or liabilities were identified as at 31 December 2013 (2012: £nil).
25. Commitments
No commitments were in place as at 31 December 2013 (2012: £nil).
26. Parent undertaking
CIS General Insurance Limited, a subsidiary of the Co-operative Banking Group Limited, is incorporated as an Industrial & Provident Society and is registered in England and Wales.
The Co-operative Group Limited is the ultimate parent and is incorporated as an Industrial & Provident Society and is registered in England and Wales. The results of CIS General Insurance Limited are consolidated in the group headed by the Co-operative Group Limited. The financial statements of the immediate and ultimate holding organisations are available from 1 Angel Square, Manchester, M60 0AG.
27. Related party transactions
A number of transactions have been entered into during the course of the year with related parties. These have been conducted in the normal course of business and at arm’s length. These include the provision of insurance products to members of the wider Co-operative Group and key management personnel.
Balances with parent undertaking 2013 Balances with other related parties 2013 Balances with parent undertaking 2012 Balances with other related parties 2012
Balances with related parties
At the beginning of the financial year (85.0) (55.5) (85.0) (73.9)
Movement in capital value – (0.3) – 18.4
At the end of the financial year (85.0) (55.8) (85.0) (55.5)
During the financial period, CISGIL settled claims of £9.0m (2012: £17.1m) under the terms of an indemnification agreement to reinsure the general insurance liabilities of CISL in run off. Gross technical provisions in the balance sheet include £63.5m (2012: £64.8m), being outstanding claims liabilities.
CISGIL issued subordinated debt to its intermediate parent, the Co-operative Banking Group Limited. Interest during the financial period amounted to £3.3m (2012: £3.4m).
CISGIL has bank accounts with The Co-operative Bank plc. At the end of 2013, the aggregate balance stood at £0.9m (2012: £0.3m). During the year project costs of £0.7m (2012: £0.8m), included in operating expenses, were charged to CISGIL from The Co-operative Bank plc.
Co-operative Legal Services Limited, a subsidiary of the Co-operative Group Limited, provides legal cover to CISGIL motor and home policyholders. CISGIL has paid £2.7m (2012: received £0.1m) in relation to this cover.
CISGIL has an indemnification agreement, accounted for as an intra-group guarantee under IFRS 4, with CFSMS in which CISGIL has agreed to indemnify CFSMS against all and any liability, loss, damage, costs and expense arising from the agreement.
During the year management fees of £163.4m (2012: £150.7m) included in operating expenses and claims handling costs incurred were charged to CISGIL from CFSMS. £0.1m (2012: £0.2m) was charged for capital utilisation.
During the year, investment asset management fees of £0.7m (2012: £1.1m), included in operating expenses, were charged to CISGIL from the Co-operative Asset Management Limited (TCAM). TCAM ceased to be a related party from August 2013 onwards.
During 2012, CISGIL disposed of its investment property of £11.0m and property, plant and equipment of £39.0m to the Group in exchange for a loan of £50.0m. In February 2013, the Group repaid this loan in full. Interest income of £0.2m (2012: £0.6m) is included within other operating income in respect of the loan. Key management (as defined by IAS 24) is considered to include the executive committee members of CISGIL and their close family members. Details of transactions and balances during the financial period are provided below.
All staff costs are borne by CFSMS and charged out to other companies within the Banking Group at cost.
Key management compensation
2013 2012
Salaries and short term benefits 1.1 3.0
Termination benefits – 1.4
1.1 4.4
In 2012, key management was defined as Board and executive members of the wider Banking Group.
28. Fair values of financial assets and liabilities
The following summarises the major methods and assumptions used in estimating the fair values of financial instruments reflected in the annual report and accounts: