Other notes to the Group’s Financial Statements 1–40

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25 Liabilities from insurance and investment contracts
P&C liabilities from insurance contracts
2017 2016
EURm Gross Reinsurance Net Gross Reinsurance Net
Provision for unearned premiums 2,399 51 2,348 2,042 44 1,997
Provision for claims outstanding 8,882 243 8,640 7,338 192 7,146
Incurred and reported losses 2,909 173 2,736 1,596 114 1,482
Incurred but not reported losses (IBNR) 3,093 70 3,023 3,327 78 3,249
Provisions for claims-adjustment costs 2,226 0 2,226 267 - 267
Provisions for annuities and sickness benefits 654 - 654 2,148 - 2,148
P&C insurance total 11,281 294 10,987 9,379 236 9,143
As Topdanmark and especially If are exposed to various exchange rates, comparing the balance sheet data from year to year can be misleading.
Change in P&C insurance liabilities
2017 2016
EURm Gross Ceded Net Gross Ceded Net
Provision for unearned premiums
At 1 January 2,042 44 1,997 2,017 46 1,971
Business acquisitions 463 24 487 -
Exchange differences -75 -2 -77 20 1 21
Change in provision -30 -15 -45 4 -2 2
At 31 December 2,399 51 2,348 2,042 44 1,997
2017 2016
EURm Gross Ceded Net Gross Ceded Net
Provision for claims outstanding
At 1 January 7,338 192 7,146 7,416 193 7,223
Business acquisitions 1,809 70 1,739 - - -
Acquired/disposed insurance holdings 33 - 33 28 - 28
Exchange differences -204 -11 -196 -19 1 -20
Change in provision -93 -8 -85 -87 -2 -86
At 31 December 8,882 243 8,640 7,338 192 7,146
The tables below show the cost trend for the claims for different years. The upper part of the tables shows how an estimate of the total claims costs per claims year evolves annually. The lower section shows how large a share of this is presented in the balance sheet. More information on insurance liabilities in the risk management note 39.
If
Claims cost trend of P&C insurance
Claims costs before reinsurance
Estimated claims cost
EURm < 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Total
At the close of the claims year 16,645 2,600 2,600 2,706 2,790 2,834 2,735 2,717 2,743 2,786 2,826
One year later 16,554 2,558 2,552 2,745 2,899 2,822 2,762 2,710 2,761 2,820
Two years later 16,529 2,504 2,526 2,692 2,895 2,837 2,763 2,718 2,749
Three years later 16,491 2,477 2,488 2,691 2,883 2,827 2,768 2,729
Four years later 16,358 2,456 2,470 2,685 2,856 2,796 2,773
Five years later 16,238 2,442 2,448 2,682 2,841 2,763
Six years later 16,227 2,424 2,446 2,667 2,819
Seven years later 16,227 2,430 2,420 2,660
Eight years later 16,339 2,412 2,408
Nine years later 16,288 2,392
Ten years later 16,267
Current estimate of total claims costs 16,267 2,392 2,408 2,660 2,819 2,763 2,773 2,729 2,749 2,820 2,826 43,207
Total disbursed 13,441 2,206 2,209 2,429 2,578 2,509 2,444 2,351 2,322 2,253 1,627 36,369
Provision reported in the balance sheet 2,826 186 199 231 241 254 329 378 427 567 1,199 6,838
of which established vested annuities 1,580 66 65 79 76 76 83 81 56 31 5 2,197
Provision for claims-adjustment costs 254
Total provision reported in the BS of If 7,092
Claims costs after reinsurance
Estimated claims cost
EURm < 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Total
At the close of the claims year 15,549 2,486 2,490 2,576 2,640 2,644 2,687 2,679 2,698 2,727 2,766
One year later 15,461 2,457 2,459 2,621 2,710 2,629 2,714 2,668 2,713 2,737
Two years later 15,407 2,405 2,431 2,580 2,698 2,645 2,717 2,660 2,697
Three years later 15,386 2,380 2,405 2,573 2,692 2,645 2,723 2,671
Four years later 15,277 2,362 2,389 2,571 2,663 2,619 2,726
Five years later 15,174 2,350 2,367 2,569 2,652 2,586
Six years later 15,169 2,332 2,365 2,553 2,629
Seven years later 15,180 2,339 2,342 2,544
Eight years later 15,280 2,322 2,331
Nine years later 15,225 2,302
Ten years later 15,210
Current estimate of total claims costs 15,210 2,302 2,331 2,544 2,629 2,586 2,726 2,671 2,697 2,737 2,766 41,199
Total disbursed 12,417 2,118 2,134 2,318 2,393 2,338 2,406 2,304 2,288 2,212 1,611 34,541
Provision reported in the balance sheet 2,793 184 196 226 235 249 320 367 410 525 1,154 6,659
of which established vested annuities 1,579 66 65 79 76 76 83 81 56 31 5 2,197
Provision for claims-adjustment costs 254
Total provision reported in the BS of If 6,912
Topdanmark
Claims cost trend of P&C insurance
Claims costs before reinsurance
Estimated claims cost
EURm <2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Total
At the close of the claims year 881 904 915 968 862 1,014 894 886 869 796
One year later 907 877 918 987 865 1,042 902 898 866
Two years later 909 884 934 978 867 1,044 899 885
Three years later 925 884 930 977 860 1,040 893
Four years later 920 875 922 968 849 1,027
Five years later 905 876 915 962 847
Six years later 908 873 909 956
Seven years later 883 867 908
Eight years later 875 868
Nine years later 875
Current estimate of total claims costs 875 868 908 956 847 1,027 893 885 866 796 8,921
Total disbursed 812 808 830 870 745 899 739 704 630 411 7,449
Discounting 0 0 0 0 0 0 0 0 -1 -1 -3
Provision reported in the balance sheet 62 60 78 86 101 128 153 182 236 385 1,470
Discounting of previous years 278
Total provision reported in the BS of Topdanmark 1,748
Claims costs after reinsurance
Estimated claims cost
EURm <2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Total
At the close of the claims year 836 858 858 828 810 858 841 830 807 771
One year later 864 832 864 842 819 868 846 842 810
Two years later 869 844 882 835 821 870 845 831
Three years later 886 846 880 833 815 866 838
Four years later 881 836 874 826 805 854
Five years later 866 838 866 820 802
Six years later 870 836 861 815
Seven years later 845 830 860
Eight years later 837 831
Nine years later 836
Current estimate of total claims costs 836 831 860 815 802 854 838 831 810 771 8,248
Total disbursed 775 772 782 729 703 730 690 664 589 403 6,838
Discounting 0 0 0 0 0 0 0 0 -1 -1 -3
Provision reported in the balance sheet 61 59 78 86 99 123 148 168 221 368 1,407
Discounting of previous years 278
Total provision reported in the BS of Topdanmark 1,685
Life insurance liabilities from insurance and investment contracts
2017 2016
EURm Gross Reinsurance Net Gross Reinsurance Net
Provision for unearned premiums
Insurance contracts 5,467 0 5,467 2,426 3 2,423
Investment contracts 2,324 - 2,324 28 - 28
Provision for claims outstanding 26 - 26 2,368 - 2,368
Total 7,817 0 7,817 4,821 3 4,818
Mandatum's liabilities related to assets held for sale -198 -210 -210
Group liabilities from insurance and investment contracts, total 7,618 0 7,618 4,611 3 4,608
Change in liabilities from insurance contracts
Gross Reinsurance
EURm Contracts with discretionary participation features Contracts with discretionary participation features Net
At 1 January 2017 4,794 - 4,794
Business acquisitions 3,258 - 3,258
Premiums 159 - 159
Claims paid -515 - -515
Expense charge -39 - -39
Guaranteed interest 153 - 153
Bonuses 1 - 1
Other -19 - -19
Total at 31 December 2017 7,791 - 7,791
Mandatum's liabilities related to assets held for sale -198
Life insurance liabilities from insurance contracts, total 7,592
Gross Reinsurance
EURm Contracts with discretionary participation features Contracts with discretionary participation features Net
At 1 January 2016 4,979 0 4,979
Premiums 149 - 149
Claims paid -470 - -470
Expense charge -37 - -37
Guaranteed interest 138 - 138
Bonuses 5 - 5
Other 29 -3 26
Total at 31 December 2016 4,794 -3 4,791
Mandatum's liabilities related to assets held for sale -210
Life insurance liabilities from insurance contracts, total 4,581
Life insurance liabilities from investment contracts
EURm 2017 2016
Investment contracts with discretionary participation feature 26 28
The change between financial years is mainly due to the claims paid.
Change in liabilities from life insurance investment contracts
EURm Contracts with discretionary participation features
At 1 January 2017 28
Claims paid -2
Other 1
Life insurance liabilities from investment contracts at 31 December 2017, total 26
EURm Contracts with discretionary participation features
At 1 January 2016 36
Other (includes i.e. conversions between different insurance classes) -8
Life insurance liabilities from investment contracts at 31 December 2016, total 28
The liabilities at 1 January and at 31 December include the future bonus reserves and the effect of the reserve for the decreased discount rate. The calculation is based on items before reinsurers' share. More details on the insurance liabilities are presented in the risk management note 39.
Investment contracts do not include a provision for claims outstanding.
Liability adequacy test does not give rise to supplementary claims.
Exemption allowed in IFRS 4 Insurance contracts has been applied to investment contracts with DPF or contracts with a right to trade-off for an investment contract with DPF. These investment contracts have been valued like insurance contracts.
Reconciliation to the consolidated insurance and investment contracts
EURm 2017
P&C insurance 11,281
Life insurance 7,618
Consolidated insurance and investment contracts, total 18,900