Our Accounts 77
Notes to the Financial Statements continued
31 December 2012
12. Other operating and administrative expenses
Accounting for other operating and administrative expenses
Other operating and administrative expenses are accounted for as incurred. Acquisition costs relate to the costs of acquiring new
business during the financial year. These include all commission and incentive payments to sales staff and third parties incurred in
writing new contracts. Where the benefit of these costs will be recognised in future accounting periods the costs are deferred.
Group Society
2012 2011 2012 2011
£m £m £m £m
Commission paid on acquisition of business 195.6 184.2 57.7 50.1
Movement in deferred acquisition costs (5.4) (14.0) – –
Write–off following termination of reinsurance contract (see Note 23) – 58.1 – –
Amortisation of intangible assets 12.0 13.0 4.6 4.7
Depreciation on property and equipment - owned 2.5 1.7 0.8 0.8
Depreciation on property and equipment - finance leases 0.9 0.9 – –
Loss on disposal of property and equipment 0.4 – 0.4 0.1
Investment management expenses and charges 12.8 3.8 16.5 23.6
Auditors’ remuneration 2.2 1.4 1.6 0.7
Employee benefits expense 216.4 209.7 216.4 209.7
Impairment of financial assets 0.4 (0.4) – 0.1
Management charge allocated to group undertakings – – (191.1) (186.8)
Rent, rate and other facilities expense 28.6 18.2 21.1 13.2
Marketing and advertising 45.9 40.4 19.2 15.8
Other staff costs 30.7 29.0 13.1 14.3
IT costs 39.4 45.8 21.6 23.7
Fees 58.3 61.1 25.0 27.9
Statements and Reviews
Other expenses 27.8 14.0 17.7 5.0
Claims handling cost recognised in Gross benefits and claims (60.0) (47.1) (6.0) (31.2)
608.5 619.8 218.6 171.7
13. Auditors’ remuneration
2012 2011
£m £m
Audit of Society 0.4 0.5
Fees payable to the Society’s auditors and its associates for other services:
Our Businesses
- Audit of subsidiaries 0.5 0.3
- Audit-related assurance services 0.2 0.2
- Tax advisory services 0.1 0.1
- Other non-audit services not covered above 1.0 0.3
2.2 1.4
14. Mutual Bonus
Risk Management
The Board declared a mutual bonus of £20.9m (2011: £18.6m) in respect of the year ended 31 December 2012.
Corporate Governance
Our Accounts