II. Reconciliation of movements in discounted outstanding claims liability
CONSOLIDATED
2015
2014
Gross
Reinsurance
and other
recoveries
Net
Gross
Reinsurance
and other
recoveries
Net
$m
$m
$m
$m
$m
$m
Balance at the beginning of the financial year
12,006
(3,248)
8,758
10,474
(2,858)
7,616
Movement in the prior year central estimate
600
(727)
(127)
440
(692)
(252)
Current year claims incurred
8,640
(1,744)
6,896
6,225
(1,087)
5,138
Claims paid/recoveries received
(8,946)
2,202
(6,744)
(7,009)
1,892
(5,117)
Movement in discounting
397
(124)
273
252
(71)
181
Movement in risk margin
79
(116)
(37)
130
(23)
107
Addition through business acquisition
9
(5)
4
1,325
(308)
1,017
Net foreign currency movements
(98)
49
(49)
169
(101)
68
Balance at the end of the financial year
12,687
(3,713)
8,974
12,006
(3,248)
8,758
III. Maturity analysis
Refer to the risk management note for details of the maturity profile of the estimated net discounted outstanding claims liability based
on the remaining term to payment at the reporting date.
IV. Development table
The following table shows the development of the net undiscounted ultimate claims for the ten most recent accident years and a
reconciliation to the net discounted outstanding claims liability.
CONSOLIDATED
Accident year
2005
and
prior 2006 2007 2008 2009 2010 2011 2012 2013 2014
2015
Total
$m $m $m $m $m $m $m $m $m $m
$m
$m
NET ULTIMATE CLAIMS PAYMENTS
Development
At end of accident
year
4,051 4,855 4,721 4,732 4,704 5,052 5,242 5,161 5,548 6,254
One year later
3,979 4,822 4,681 4,783 4,680 5,159 5,317 5,084 5,551
Two years later
3,903 4,778 4,681 4,719 4,577 5,197 5,248 5,003
Three years later
3,911 4,798 4,660 4,712 4,527 5,238 5,158
Four years later
3,898 4,727 4,640 4,626 4,475 5,387
Five years later
3,872 4,652 4,570 4,573 4,422
Six years later
3,853 4,626 4,559 4,528
Seven years later
3,860 4,616 4,544
Eight years later
3,858 4,607
Nine years later
3,836
Current estimate of
net ultimate claims
payments
3,836 4,607 4,544 4,528 4,422 5,387 5,158 5,003 5,551 6,254
Cumulative payments
made to date
(3,756) (4,557) (4,442) (4,382) (4,205) (4,320) (4,586) (4,144) (4,263) (3,671)
Net undiscounted
outstanding claims
payments
593 80 50 102 146 217 1,067 572 859 1,288 2,583 7,557
Discount to present
value
(118)
(10)
(5)
(11)
(16)
(21)
(42)
(48)
(68)
(88)
(121)
(548)
Net discounted
outstanding claims
payments
475 70 45 91 130 196 1,025 524 791 1,200 2,462 7,009
Reconciliation
Claims handling costs
406
Risk margin
1,559
Net outstanding claims liability
8,974
70 IAG ANNUAL REPORT 2015
