v3.26.1
Insurance business (Tables)
 6 Months Ended
Jun. 30, 2026
Insurance business [Abstract]  
Schedule of insurance service result
Half-year
to 30 Jun
2026
£m
Half-year
to 30 Jun
2025
£m
Half-year
to 31 Dec
2025
£m
Insurance revenue
Amounts relating to the changes in liabilities for remaining coverage:
CSM recognised for services provided
196
392
198
Change in risk adjustments for non-financial risk for risk expired
27
24
25
Expected claims and other insurance services expenses
795
959
771
Charges to funds in respect of policyholder tax and other
104
66
134
1,122
1,441
1,128
Recovery of insurance acquisition cash flows
67
56
61
Total life
1,189
1,497
1,189
Total non-life
377
370
382
Total Insurance revenue
1,566
1,867
1,571
Insurance service expense
Incurred claims and other directly attributable expenses
(791)
(977)
(772)
Changes that relate to past service: adjustment to liabilities for incurred claims
(2)
1
(1)
Changes that relate to future service: (losses) reversal of losses on onerous contracts
(72)
(86)
2
Amortisation of insurance acquisition cash flows
(67)
(56)
(61)
Total life
(932)
(1,118)
(832)
Total non-life
(319)
(291)
(302)
Total Insurance service expense
(1,251)
(1,409)
(1,134)
Net expense from reinsurance contracts held
(17)
(28)
(111)
Insurance service result
298
430
326
Schedule of net finance income (expense) from insurance, participating investment and reinsurance contracts
Half-year to 30 June 2026
Life
£m
Non-life
£m
Total
£m
Net gains on financial assets and liabilities at fair value through profit or loss
9,670
17
9,687
Foreign exchange
201
–
201
Investment property gains
–
–
–
Net investment return on assets held to back insurance and participating
investment contracts1
9,871
17
9,888
Net investment return on assets held to back third party interests in consolidated
funds
1,165
Net investment return on assets held to back non-participating investment
contracts
5,099
Net investment return on assets held to back insurance and investment contracts
16,152
Net finance expense from insurance and participating investment contracts
(9,429)
(2)
(9,431)
Net finance expense from reinsurance contracts held
(2)
–
(2)
Net finance expense from insurance, participating investment and reinsurance
contracts
(9,431)
(2)
(9,433)
Movement in third party interests in consolidated funds
(1,124)
Change in non-participating investment contracts
(5,403)
Net finance expense in respect of insurance and investment contracts
(15,960)
Net investment return and finance result in respect of insurance and investment
contracts
192
Half-year to 30 June 2025
Life
£m
Non-life
£m
Total
£m
Net gains on financial assets and liabilities at fair value through profit or loss
3,520
17
3,537
Foreign exchange
140
–
140
Investment property gains
1
–
1
Net investment return on assets held to back insurance and participating investment
contracts1
3,661
17
3,678
Net investment return on assets held to back third party interests in consolidated
funds
703
Net investment return on assets held to back non-participating investment
contracts
935
Net investment return on assets held to back insurance and investment contracts
5,316
Net finance expense from insurance and participating investment contracts
(3,532)
(3)
(3,535)
Net finance income from reinsurance contracts held
23
–
23
Net finance expense from insurance, participating investment and reinsurance
contracts
(3,509)
(3)
(3,512)
Movement in third party interests in consolidated funds
(634)
Change in non-participating investment contracts
(1,171)
Net finance expense in respect of insurance and investment contracts
(5,317)
Net investment return and finance result in respect of insurance and investment
contracts
(1)
NOTES TO THE CONDENSED CONSOLIDATED HALF-YEAR FINANCIAL STATEMENTS (UNAUDITED) (continued)
Note 5: Insurance business (continued)
Half-year to 31 December 2025
Life
£m
Non-life
£m
Total
£m
Net gains on financial assets and liabilities at fair value through profit or loss
11,888
17
11,905
Foreign exchange
(182)
–
(182)
Investment property losses
(5)
–
(5)
Net investment return on assets held to back insurance and participating investment
contracts1
11,701
17
11,718
Net investment return on assets held to back third party interests in consolidated
funds
1,351
Net investment return on assets held to back non-participating investment
contracts
5,459
Net investment return on assets held to back insurance and investment contracts
18,528
Net finance expense from insurance and participating investment contracts
(11,805)
(11)
(11,816)
Net finance expense from reinsurance contracts held
31
–
31
Net finance expense from insurance, participating investment and reinsurance
contracts
(11,774)
(11)
(11,785)
Movement in third party interests in consolidated funds
(1,320)
Change in non-participating investment contracts
(5,622)
Net finance expense in respect of insurance and investment contracts
(18,727)
Net investment return and finance result in respect of insurance and investment
contracts
(199)
1Includes income of £9,890 million (half-year to 30 June 2025: £3,426 million; half-year to 31 December 2025: £11,583 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 2026
Present
value
of future
cash flows
£m
Risk
adjustment
£m
Contractual
service
margin
£m
Other
£m
Total
£m
Insurance contract assets
290
(66)
(83)
–
141
Liabilities arising from insurance contracts and
participating investment contracts1
(138,407)
(949)
(4,245)
–
(143,601)
Net liability
(138,117)
(1,015)
(4,328)
–
(143,460)
Insurance acquisition assets
–
–
–
35
35
Insurance and participating investment contracts net
liability
(138,117)
(1,015)
(4,328)
35
(143,425)
At 31 December 2025
Insurance contract assets
248
(59)
(76)
–
113
Liabilities arising from insurance contracts and
participating investment contracts1
(130,099)
(910)
(4,309)
–
(135,318)
Net liability
(129,851)
(969)
(4,385)
–
(135,205)
Insurance acquisition assets
–
–
–
34
34
Insurance and participating investment contracts net
liability
(129,851)
(969)
(4,385)
34
(135,171)
1Excluding insurance acquisition assets.