RBS 2006 Annual Report Download - page 167
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RBS Group • Annual Report and Accounts 2006
166
Notes on the accounts continued
Financial statements
27 Insurance liabilities (continued)
Group
2006 2005(1)
Gross performance of life business (life contracts) £m £m
Profit from existing business:
Expected return 26 30
Experience variances (3) (2)
23 28
New business contribution (2) 12 (4)
Operating assumption changes 5 1
Investment return variances 17
Economic assumption changes (1) 1
Other 17 19
Total movement in the year 57 52
Notes:
(1) Prior year comparatives have been reanalysed to be consistent with 2006 presentation.
(2) New business contribution represents the present value of future profits on new insurance contract business written during the year.
Group
Life Investment
contracts contracts
Movement in provision for liabilities under life contracts and under linked and other investment contracts £m £m
At 1 January 2005 2,041 2,102
Implementation of IAS 32, IAS 39 and IFRS 4 on 1 January 2005 47 —
Premiums received 429 86
Fees and expenses (11) (21)
Investment return 252 333
Actuarial adjustments (91) —
Account balances paid on surrender and other terminations in the year (368) (204)
At 1 January 2006 2,299 2,296
Premiums received 588 83
Fees and expenses (30) (19)
Investment return 235 182
Actuarial adjustments (454) —
Account balances paid on surrender and other terminations in the year (429) (296)
At 31 December 2006 2,209 2,246
Changes in assumptions during the year were not material to the profit recognised.
2006 2005
Assets backing linked liabilities £m £m
Debt securities 1,540 1,514
Equity securities 2,243 2,255
Other investments 3 8
Cash and cash equivalents 73 52
The associated liabilities are:
Linked contracts classified as insurance contracts 1,713 1,640
Linked contracts classified as investment contracts (within customer deposits) 2,146 2,189
There are no options and guarantees relating to life assurance contracts that could in aggregate have a material effect on the
amount, timing and uncertainty of the Group’s future cash flows.