F.11. Insurance liabilities
The following table discloses information about gross direct insurance liabilities and liabilities from accepted reinsurance:
| Direct insurance | Accepted reinsurance | Total | ||||
|---|---|---|---|---|---|---|
| (CZK million) | 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 |
| Non-life insurance liabilities | 20,285 | 23,177 | 778 | 845 | 21,063 | 24,022 |
| Provisions for unearned premium | 4,477 | 5,679 | 60 | 72 | 4,537 | 5,751 |
| Provisions for outstanding claims | 15,520 | 17,232 | 696 | 753 | 16,216 | 17,985 |
| Other insurance liabilities | 288 | 266 | 22 | 20 | 310 | 286 |
| Life insurance liabilities | 47,102 | 53,375 | – | – | 47,102 | 53,375 |
| Provisions for unearned premium | 256 | 288 | – | – | 256 | 288 |
| Provisions for outstanding claims | 1,799 | 1,810 | – | – | 1,799 | 1,810 |
| Mathematical provision | 37,121 | 43,842 | – | – | 37,121 | 43,842 |
| Unit-linked provision | 7,593 | 7,112 | – | – | 7,593 | 7,112 |
| Other insurance liabilities | 333 | 323 | – | – | 333 | 323 |
Ageing provision | 333 | 323 | – | – | 333 | 323 |
| Total | 67,387 | 76,552 | 778 | 845 | 68,165 | 77,397 |
| Current portion | – | – | – | – | 18,321 | 22,053 |
| Non-current portion | – | – | – | – | 49,844 | 55,344 |
Of which relates to the Transformed fund:
| Direct insurance | Accepted reinsurance | Total | ||||
|---|---|---|---|---|---|---|
| (CZK million) | 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 |
| Life insurance liabilities | 50 | 49 | – | – | 50 | 49 |
| Other insurance liabilities | 50 | 49 | – | – | 50 | 49 |
Ageing provisions | 50 | 49 | – | – | 50 | 49 |
| Total | 50 | 49 | – | – | 50 | 49 |
| Non-current portion | 50 | 49 | – | – | 50 | 49 |
F.11.1. Non-life insurance liabilities
F.11.1.1. Provision for unearned premiums
The table below shows the roll-forward of the non-life provision for unearned premiums:
| Gross | Reinsurance | Net | ||||
|---|---|---|---|---|---|---|
| (CZK million) | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 |
| Balance as at 1 January | 5,751 | 5,299 | (1,758) | (1,852) | 3,993 | 3,447 |
| Change of the period | 157 | 474 | (11) | (161) | 146 | 313 |
| Foreign currency translation | – | (22) | – | – | – | (22) |
| Portfolio transfer | (1,371) | – | (88) | 73 | (1,459) | 73 |
| Other changes | – | – | – | 182 | – | 182 |
| Balance as at end of reporting period | 4,537 | 5,751 | (1,857) | (1,758) | 2,680 | 3,993 |
F.11.1.2. Provisions for outstanding claims (RBNS and IBNR)
The table below discloses information about gross insurance provisions for outstanding claims:
| Direct insurance | Accepted reinsurance | Total | ||||
|---|---|---|---|---|---|---|
| (CZK million) | 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 |
| Motor | 9,971 | 11,896 | 155 | 119 | 10,126 | 12,015 |
| Non Motor | 5,549 | 5,336 | 541 | 634 | 6,090 | 5,970 |
| General liability | 2,813 | 2,314 | 241 | 190 | 3,054 | 2,504 |
| Property | 2,061 | 1,978 | 285 | 426 | 2,346 | 2,404 |
| Accident, Health and Disability | 437 | 451 | – | – | 437 | 451 |
| Marine, Aviation and Transport | 174 | 74 | 8 | 4 | 182 | 78 |
| Other | 64 | 519 | 7 | 14 | 71 | 533 |
| Total | 15,520 | 17,232 | 696 | 753 | 16,216 | 17,985 |
The following table shows the roll-forward of provisions for outstanding claims (RBNS and IBNR):
| Gross | Reinsurance | Net | ||||
|---|---|---|---|---|---|---|
| (CZK million) | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 |
| Balance as at 1 January | 17,985 | 17,587 | (7,446) | (7,667) | 10,539 | 9,920 |
| Change related to claims incurred in current year | 4,726 | 6,092 | (2,183) | (2,581) | 2,543 | 3,511 |
| Change related to claims incurred in previous years | (4,722) | (5,666) | 1,873 | 2,651 | (2,849) | (3,015) |
| Portfolio transfer | (1,876) | – | 608 | 140 | (1,268) | 140 |
| Foreign currency translation | – | (28) | – | 11 | – | (17) |
| Reclassification between segments | 103 | – | (23) | – | 80 | – |
| Balance as at end of reporting period | 16,216 | 17,985 | (7,171) | (7,446) | 9,045 | 10,539 |
F.11.1.3. Development of policyholders claims (RBNS and IBNR)
The following table shows the cumulative claim payments and the ultimate cost of claims by underwriting year and the development thereof from 2006 to 2015. The ultimate cost includes paid losses, outstanding reserves on reported losses, estimated reserves for IBNR claims and claim handling costs. The amounts refer to direct business gross of reinsurance.
| (CZK million) | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | Total |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Cumulative claim payments | |||||||||||
| at the end of underwriting year | 9,575 | 7,945 | 7,507 | 8,278 | 9,004 | 6,519 | 6,728 | 6,943 | 5,704 | 5,358 | 73,561 |
| one year later | 12,152 | 10,608 | 9,957 | 10,658 | 12,363 | 8,595 | 8,974 | 9,199 | 7,961 | – | – |
| two years later | 12,581 | 11,051 | 10,470 | 11,094 | 12,816 | 8,957 | 9,375 | 9,733 | – | – | – |
| three years later | 12,797 | 11,286 | 10,715 | 11,313 | 13,047 | 9,084 | 9,512 | – | – | – | – |
| four years later | 12,900 | 11,443 | 10,838 | 11,406 | 13,166 | 9,174 | – | – | – | – | – |
| five years later | 12,998 | 11,543 | 10,917 | 11,474 | 13,193 | – | – | – | – | – | – |
| six years later | 13,048 | 11,624 | 10,985 | 11,543 | – | – | – | – | – | – | – |
| seven years later | 13,155 | 11,648 | 11,015 | – | – | – | – | – | – | – | – |
| eight years later | 13,190 | 11,686 | – | – | – | – | – | – | – | – | – |
| nine years later | 13,212 | – | – | – | – | – | – | – | – | – | – |
| Estimate of ultimate cumulative claims costs | |||||||||||
| at the end of underwriting year | 15,411 | 13,497 | 12,847 | 13,113 | 15,228 | 11,531 | 11,570 | 12,107 | 10,555 | 10,153 | 126,012 |
| one year later | 14,778 | 13,512 | 12,716 | 12,978 | 15,079 | 10,899 | 11,462 | 11,688 | 10,741 | – | – |
| two years later | 14,687 | 13,184 | 12,257 | 12,835 | 14,927 | 10,756 | 11,193 | 11,343 | – | – | – |
| three years later | 14,476 | 12,939 | 12,104 | 12,654 | 14,605 | 10,465 | 10,914 | – | – | – | – |
| four years later | 14,124 | 12,637 | 11,867 | 12,420 | 14,073 | 10,143 | – | – | – | – | – |
| five years later | 13,943 | 12,400 | 11,666 | 12,195 | 13,966 | – | – | – | – | – | – |
| six years later | 13,861 | 12,248 | 11,531 | 12,100 | – | – | – | – | – | – | – |
| seven years later | 13,683 | 12,142 | 11,446 | – | – | – | – | – | – | – | – |
| eight years later | 13,637 | 12,032 | – | – | – | – | – | – | – | – | – |
| nine years later | 13,554 | – | – | – | – | – | – | – | – | – | – |
| Estimate of cumulative claims | 13,554 | 12,032 | 11,446 | 12,100 | 13,966 | 10,143 | 10,914 | 11,343 | 10,741 | 10,153 | 116,392 |
| Cumulative payments | (13,212) | (11,686) | (11,015) | (11,543) | (13,193) | (9,174) | (9,512) | (9,733) | (7,961) | (5,358) | (102,387) |
| Provisions for outstanding claims not included in underwriting years | – | – | – | – | – | – | – | – | – | – | 1,428 |
| Provision not included in the claims development table | – | – | – | – | – | – | – | – | – | – | 87 |
| Accepted reinsurance | – | – | – | – | – | – | – | – | – | – | 696 |
| Amount recognised in the Statement of Financial Position | – | – | – | – | – | – | – | – | – | – | 16,216 |
Provisions for outstanding claims which were not included in the analysis by accident year include provision for claims which occurred before 2006 of CZK 1,428 million and provisions related to minor non-life insurance products of CZK 87 million.
Claim payments related to Polish branch were excluded from claims development triangle presented above. The Group disposed of Proama portfolio as at year end 2015 and all Polish operations were classified as discontinued operations for the years ended 31 December 2015 and 31 December 2014. For details please refer to F.8.
The following table shows the cumulative claim payments by underwriting year related to Polish branch from 2012 to 2015:
| (CZK million) | 2012 | 2013 | 2014 | 2015 | Total |
|---|---|---|---|---|---|
| Cumulative claim payments | |||||
| at the end of underwriting year | 119 | 535 | 782 | 1,337 | 2,773 |
| one year later | 196 | 744 | 1,237 | – | – |
| two years later | 208 | 816 | – | – | – |
| three years later | 219 | – | – | – | – |
| Cumulative payments | (219) | (816) | (1,237) | (1,337) | (3,609) |
F.11.1.4. Other insurance liabilities
| Gross | Reinsurance | Net | ||||
|---|---|---|---|---|---|---|
| (CZK million) | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 |
| Balance as at 1 January | 286 | 271 | (42) | (34) | 244 | 237 |
| Utilisation of provisions | (424) | (326) | 55 | 26 | (369) | (300) |
| Creation of provisions | 615 | 341 | (71) | (34) | 544 | 307 |
| Other changes | (163) | – | – | – | (163) | – |
| Foreign currency translation | (4) | – | – | – | (4) | – |
| Balance as at end of reporting period | 310 | 286 | (58) | (42) | 252 | 244 |
Creation and utilisation of provisions relates mainly to provision for non-discretionary bonuses.
F.11.2. Life insurance liabilities
The tables below present changes in life insurance liabilities net of reinsurance:
| 2015 | |||
|---|---|---|---|
| (CZK million) | Gross | Reinsurance | Net |
| Balance as at 1 January | 53,375 | (731) | 52,644 |
| Premium allocation | 9,262 | – | 9,262 |
| Release of liabilities due to benefits paid, surrenders and other terminations | (14,397) | – | (14,397) |
| Fees deducted from account balances | (2,313) | – | (2,313) |
| Unwinding of discount / accretion of interest | 1,120 | – | 1,120 |
| Changes in unit-prices | 76 | – | 76 |
| Change in IBNR and RBNS | 19 | (9) | 10 |
| Change in UPR | (40) | 6 | (34) |
| Balance as at end of reporting period | 47,102 | (734) | 46,368 |
| 2014 | |||
|---|---|---|---|
| (CZK million) | Gross | Reinsurance | Net |
| Balance as at 1 January | 60,391 | (738) | 59,653 |
| Premium allocation | 13,948 | (2) | 13,946 |
| Release of liabilities due to benefits paid, surrenders and other terminations | (19,615) | – | (19,615) |
| Fees deducted from account balances | (2,597) | – | (2,597) |
| Unwinding of discount / accretion of interest | 1,278 | – | 1,278 |
| Changes in unit-prices | 16 | – | 16 |
| Change in IBNR and RBNS | (25) | 6 | (19) |
| Change in UPR | (21) | 3 | (18) |
| Balance as at end of reporting period | 53,375 | (731) | 52,644 |
Of which relates to the Transformed fund:
| 2015 | |||
|---|---|---|---|
| (CZK million) | Gross | Reinsurance | Net |
| Balance as at 1 January | 49 | – | 49 |
| Premium allocation | 1 | – | 1 |
| Balance as at end of reporting period | 50 | – | 50 |
| 2014 | |||
|---|---|---|---|
| (CZK million) | Gross | Reinsurance | Net |
| Balance as at 1 January | 32 | – | 32 |
| Premium allocation | 17 | – | 17 |
| Balance as at end of reporting period | 49 | – | 49 |
Unit-linked provisions
| Gross direct insurance | ||
|---|---|---|
| (CZK million) | 31.12.2015 | 31.12.2014 |
| Balance as at 1 January | 7,112 | 10,652 |
| Premiums and payments | 405 | (3,559) |
| Interests and bonuses credited to policyholders | 76 | 19 |
| Balance as at 31 December | 7,593 | 7,112 |
Insurance liabilities and financial liabilities related to policies of the life segment
| (CZK million) | Net position | |
|---|---|---|
| 31.12.2015 | 31.12.2014 | |
| Insurance contracts | 43,247 | 49,396 |
Insurance contracts without discretionary participation feature | 11,297 | 9,887 |
Insurance contracts with discretionary participation feature | 31,950 | 39,509 |
| Investment contracts with discretionary participation feature | 1,995 | 2,101 |
| Total insurance provisions | 45,242 | 51,497 |
| Investment contracts fair valued | – | – |
| Investment contracts at amortised cost | 87,661 | 80,685 |
| Total investment contracts | 87,661 | 80,685 |
Of which relates to the Transformed fund
| (CZK million) | Net position | |
|---|---|---|
| 31.12.2015 | 31.12.2014 | |
| Investment contracts at amortised cost | 87,648 | 80,672 |
| Total investment contracts | 87,648 | 80,672 |
Total insurance provisions presented in the table above include the following items – all net of reinsurance:
| Net position | ||
|---|---|---|
| (CZK million) | 31.12.2015 | 31.12.2014 |
| Provisions for unearned premium | 256 | 288 |
| Mathematical provision | 37,060 | 43,774 |
| Unit-linked provision | 7,593 | 7,112 |
| Other insurance liabilities | 333 | 323 |
| Total insurance provisions | 45,242 | 51,497 |