Old Mutual plc (2008)
Notes to the consolidated financial statements [extract]
23 Long term and general business policyholder liabilities [extract]
(v) Assumptions [extract]
Various assumption changes have been made which have resulted in a net increase in the value of insurance contract provisions of 11 million (2007: 22 million) on the Published basis. The reserve for investment guarantees which have been calculated on a market-consistent basis was increased by 27 million (including a discretionary margin), as a result of the reduction in swap yields and increases in volatilities. Lower economic assumptions also led to an increase in underlying policyholder liabilities of 8 million. The basis for terminations and alterations was strengthened leading to an increase in liabilities of 35 million. Lower expense and mortality assumptions reduced liabilities by 39 million and 13 million respectively. Methodology changes and error corrections reduced liabilities by 6 million.