Interim Results -5-
September 23 2011 - 2:00AM
UK Regulatory
Other Assets 0.1 - 0.1 0.1
Liabilities
Creditors
arising out
of insurance
operations (3.7) - (3.7) (3.7)
Technical
provisions (11.8) (4.3) (16.1) (15.4)
Financial
liabilities -
borrowings (10.0) - (10.0) (10.0)
Other
liabilities (3.4) - (3.4) (3.4)
--------------- ----------- --------------- --------------- --------------
25.6 (4.3) 21.3 22.0
--------------- ----------- --------------- --------------- --------------
Tawa Share
94.3% 20.1 20.7
--------------- --------------
Consideration
paid in cash 7.4 7.4
Deferred
consideration
payable 8.2 8.4
---------------
Consideration
paid net of
cash and cash
equivalents
received (23.0) (23.0)
--------------- ----------- --------------- --------------- --------------
Goodwill on
acquisition
(negative) (4.5) (4.9)
--------------- ----------- --------------- --------------- --------------
The revised deferred consideration of $8.2 million (2010: $8.4
million) has been taken into account in the calculation of the
goodwill and is included in other liabilities in the statement of
financial position. The adjustment to negative goodwill of $0.4
million has been recognised in the consolidated income statement
for the period.
4 Acquisition of subsidiaries continued
Oslo Re (UK)
On 10 March 2011, the Group acquired 100% of the issued ordinary
share capital of Oslo Re (UK). This transaction has been accounted
for by the acquisition method of accounting. The net assets
acquired in the transaction, and the negative goodwill arising, are
as follows:
Fair value Fair value on
Book value adjustments acquisition
$m $m $m
--------------------- ----------- -------------------- --------------------
Assets
Cash and cash
equivalents 8.9 - 8.9
Reinsurers' share of
technical
provisions 4.2 - 4.2
Liabilities
Technical provisions (4.4) - (4.4)
Other liabilities (0.2) - (0.2)
--------------------- ----------- -------------------- --------------------
8.5 - 8.5
Consideration paid
in cash 6.5
--------------------- ----------- -------------------- --------------------
Consideration paid
net of cash and
cash equivalents
received (2.4)
--------------------- ----------- -------------------- --------------------
Goodwill on
acquisition
(negative) (2.0)
--------------------- ----------- -------------------- --------------------
The initial accounting for the business combination is still
considered incomplete and the amounts recognised in these condensed
consolidated financial statements are provisional.
The negative goodwill of $2.0 million has been recognised in the
consolidated income statement for the period.
5 Segmental information
The Group's reportable segments under IFRS 8 are identified as
follows:
-- Underwriting run-off and insurance;
-- Run-off management;
-- Insurance services (Pro); and
-- Other corporate activities.
The other corporate activities segment includes corporate
expenses and other activities not related to the core business
segments and which are not reportable segments due to their
immateriality. Certain expenses and taxes are not allocated across
the segments.
The accounting policies of the reportable segments are the same
as the Group's accounting policies. Segment profit represents the
profit earned by each segment without allocation of central
corporate expenses and tax expense. This is the measure reported to
the Group Chief Executive for the purposes of resource allocation
and assessment of segment performance.
5 Segmental information continued
Segment income and results
The following is an analysis of the Group's revenue and result
by reportable segment.
Under -
writing
run-off Insurance Other
and Run-off services corporate
insurance manage-ment (Pro) activities Intra-group Total
For the period
ended 30 June
2011 $m $m $m $m $m $m
---------------- ---------- ------------ ---------- ----------- ------------ -------
Continuing
operations
Income
Insurance
premium
expense 57.8 - - - - 57.8
Insurance
premium ceded
to reinsurers 2.0 - - - - 2.0
---------------- ---------- ------------ ---------- ----------- ------------ -------
Net earned
premium
expense 59.8 - - - - 59.8
Revenue from
consultancy
and run-off
services - 14.7 23.4 2.3 (22.5) 17.9
Investment
return 2.5 0.1 - - - 2.6
Interest income 2.9 - - - - 2.9
Other income (2.4) - 1.3 0.1 - (1.0)
----------------
Segment income 3.0 14.8 24.7 2.4 (22.5) 22.4
---------------- ---------- ------------ ---------- ----------- ------------ -------
Insurance
claims and
loss
adjustment
expenses (45.3) - - 1.5 - (43.8)
Insurance
claims and
loss
adjustment
expenses
recovered from
reinsurers 3.2 - - (0.2) - 3.0
---------------- ---------- ------------ ---------- ----------- ------------ -------
Net insurance
claims (42.1) - - 1.3 - (40.8)
---------------- ---------- ------------ ---------- ----------- ------------ -------
Cost of run-off
services (0.5) - (21.4) (4.9) 21.3 (5.5)
Administrative
expenses (2.8) (12.7) (0.1) (3.6) 1.2 (18.0)
---------------- ------------
Segment
expenses (3.3) (12.7) (21.5) (8.5) 22.5 (23.5)
---------------- ---------- ------------ ---------- ----------- ------------ -------
Segment results
of operating
activities
before
recognising
negative
goodwill 17.4 2.1 3.2 (4.8) - 17.9
---------------- ---------- ------------ ---------- ----------- ------------ -------
Negative
goodwill
recognised - - - 1.5 - 1.5
Segment results
of operating
activities 17.4 2.1 3.2 (3.3) - 19.4
---------------- ---------- ------------ ---------- ----------- ------------ -------
Share of
results of
associate - - - (0.8) - (0.8)
Finance costs (0.2) - - (1.9) - (2.1)
Taxation (0.1) - (0.9) 0.8 - (0.2)
Loss for the
period from
discontinued
operations - - - (5.3) - (5.3)
----------------
Segment
profit/(loss)
for the
period 17.1 2.1 2.3 (10.5) - 11.0
---------------- ---------- ------------ ---------- ----------- ------------ -------
5 Segmental information continued
Segment income and results continued
Under -
writing
run-off Insurance Other
and Run-off services corporate
insurance manage-ment (Pro) activities Intra-group Total
For the period
ended 30 June
2010 $m $m $m $m $m $m
---------------- ---------- ------------ ---------- ----------- ------------ -------
Continuing
operations
Income
Insurance
premium
expense (0.8) - - - - (0.8)
Insurance
premium ceded
to reinsurers 0.5 - - - - 0.5
---------------- ---------- ------------ ---------- ----------- ------------ -------
Net earned
premium
expense (0.3) - - - - (0.3)
Revenue from
consultancy
and run-off
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