HSBC 2012 Annual Report Download - page 480

HSBC HOLDINGS PLC
Notes on the Financial Statements (continued)
32 – Provisions
478
Life insurance liabilities to policyholders (continued)
Gross
Reinsurers’
share Net
US$m US$m US$m
2011
Life (non-linked)
At 1 January ................................................................................................................ 23,583 (673) 22,910
Benefits paid ............................................................................................................... (1,793) 164 (1,629)
Increase in liabilities to policyholders ........................................................................ 5,729 (254) 5,475
Exchange differences and other movements .............................................................. (593) 114 (479)
At 31 December .......................................................................................................... 26,926 (649) 26,277
Investment contracts with discretionary participation features
At 1 January ................................................................................................................ 22,074 – 22,074
Benefits paid ............................................................................................................... (2,628) – (2,628)
Increase in liabilities to policyholders ........................................................................ 3,005 – 3,005
Exchange differences and other movements1 ............................................................. (963) – (963)
At 31 December .......................................................................................................... 21,488 – 21,488
Life (linked)
At 1 January ................................................................................................................ 10,496 (760) 9,736
Benefits paid ............................................................................................................... (1,129) 56 (1,073)
Increase in liabilities to policyholders ........................................................................ 2,462 (111) 2,351
Exchange differences and other movements2 ............................................................. (619) (88) (707)
At 31 December .......................................................................................................... 11,210 (903) 10,307
Total liabilities to policyholders ................................................................................. 59,624 (1,552) 58,072
1 Includes movement in liabilities relating to discretionary profit participation benefits due to policyholders arising from net unrealised
investment gains recognised in other comprehensive income.
2 Includes amounts arising under reinsurance agreements.
The increase in liabilities to policyholders represents the aggregate of all events giving rise to additional liabilities to
policyholders in the year. The key factors contributing to the movement in liabilities to policyholders include death
claims, surrenders, lapses, liabilities to policyholders created at the initial inception of the policies, the declaration of
bonuses and other amounts attributable to policyholders.
32 Provisions
Restruc-
turing
costs
Contingent
liabilities and
contractual
commitments
Legal
proceedings
and
regulatory
matters
Customer
remediation
Other
provisions Total
US$m US$m US$m US$m US$m US$m
At 1 January 2012 .............................. 169 206 1,473 1,067 409 3,324
Additional provisions/increase
in provisions .................................. 434 73 2,779 2,473 376 6,135
Provisions utilised ............................. (320) (2) (2,510) (1,022) (153) (4,007)
Amounts reversed .............................. (89) (58) (104) (137) (63) (451)
Unwinding of discounts ..................... – – 42 1 5 48
Exchange differences and other
movements ..................................... 57 82 (13) 5 72 203
At 31 December 2012 ....................... 251 301 1,667 2,387 646 5,252
At 1 January 2011 .............................. 21 405 969 442 301 2,138
Additional provisions/increase
in provisions .................................. 221 14 896 1,078 184 2,393
Provisions utilised ............................. (58) (5) (367) (386) (71) (887)
Amounts reversed .............................. (14) (41) (28) (87) (86) (256)
Unwinding of discounts ..................... – 1 56 – 5 62
Exchange differences and other
movements ..................................... (1) (168) (53) 20 76 (126)
At 31 December 2011 ........................ 169 206 1,473 1,067 409 3,324