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Notes to the Group’s Financial Statements

Select note 1-41
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27 Liabilities from insurance and investment contracts
P&C insurance
Change in insurance liabilities
2013 2012
EURm Gross Ceded Net Gross Ceded Net
Provision for unearned premiums
At 1 Jan. 2,107 55 2,053 1,972 53 1,919
Acquired insurance holdings 38 - 38 - - -
Exchange differences -127 -2 -128 56 1 56
Change in provision 46 -10 36 79 1 78
At 31 Dec. 2,065 43 2,022 2,107 55 2,053
2013 2012
EURm Gross Ceded Net Gross Ceded Net
Provision for claims outstanding
At 1 Jan. 7,747 522 7,225 7,576 476 7,100
Disposed insurance holdings 61 0 61 -1 -0 -1
Exchange differences -314 -20 -294 199 12 187
Change in provision -59 -126 66 -27 35 -62
At 31 Dec. 7,435 377 7,058 7,747 522 7,225
Liabilities from insurance contracts
EURm 2013 2012
Provision for unearned premiums 2,065 2,107
Provision for claims outstanding 7,435 7,747
Incurred and reported losses 1,770 2,050
Incurred but not reported losses (IBNR) 3,538 3,573
Provisions for claims-adjustment costs 271 275
Provisions for annuities and sickness benefits 1,856 1,849
P&C insurance total 9,500 9,854
Reinsurers' share
Provision for unearned premiums 43 55
Provision for claims outstanding 376 522
Incurred and reported losses 270 401
Incurred but not reported losses (IBNR) 107 121
Total reinsurers' share 420 577
As the P&C insurance is exposed to various exchange rates, comparing the balance sheet data from year to year can be misleading.
 
Claims cost trend of P&C insurance
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 P&C insurance's insurance liabilities in the Risk Management section of the Annual accounts.
Claims costs before reinsurance
Estimated claims cost
EURm < 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Total
At the close of the claims year 7,715 2,468 2,629 2,639 2,703 2,847 2,853 2,968 3,051 3,085 2,979
One year later 7,770 2,434 2,575 2,621 2,700 2,801 2,801 3,009 3,170 3,071
Two years later 7,768 2,371 2,521 2,592 2,664 2,741 2,771 2,953 3,168
Three years later 7,851 2,365 2,492 2,589 2,630 2,712 2,728 2,952
Four years later 7,871 2,349 2,458 2,548 2,583 2,688 2,709
Five years later 7,853 2,322 2,423 2,498 2,557 2,674
Six years later 7,928 2,281 2,369 2,467 2,547
Seven years later 8,037 2,247 2,345 2,456
Eight years later 8,077 2,209 2,327
Nine years later 8,061 2,194
Ten years later 8,096
Current estimate of total claims costs 8,096 2,194 2,327 2,456 2,547 2,674 2,709 2,952 3,168 3,071 2,979 35,174
Total disbursed 5,586 1,975 2,095 2,196 2,250 2,357 2,336 2,513 2,639 2,407 1,654 28,011
  
Provision reported in the balance sheet 2,510 219 232 259 297 316 373 440 529 664 1,325 7,164
of which established vested annuities 1,316 53 70 74 70 66 55 63 48 34 7 1,856
Provision for claims-adjustment costs 271
Total provision reported in the BS 7,435
Claims cost after reinsurance
  
Estimated claims cost
EURm < 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Total
At the close of the claims year 6,994 2,398 2,482 2,530 2,602 2,723 2,733 2,821 2,884 2,880 2,927
One year later 5,918 2,363 2,422 2,502 2,592 2,691 2,699 2,869 2,960 2,865
Two years later 7,030 2,300 2,366 2,473 2,565 2,634 2,668 2,826 2,948
Three years later 7,097 2,294 2,345 2,477 2,532 2,607 2,639 2,819
Four years later 7,110 2,281 2,313 2,438 2,487 2,586 2,621
Five years later 7,091 2,254 2,279 2,394 2,462 2,573
Six years later 7,116 2,212 2,238 2,364 2,454
Seven years later 7,242 2,180 2,215 2,355
Eight years later 7,283 2,143 2,199
Nine years later 7,282 2,130
Ten years later 7,318
Current estimate of total claims costs 7,318 2,130 2,199 2,355 2,454 2,573 2,621 2,819 2,948 2,865 2,911 33,194
Total disbursed 4,875 1,921 1,974 2,103 2,164 2,263 2,256 2,455 2,492 2,287 1,617 26,407
Provision reported in the balance sheet 2,442 210 225 252 291 311 365 365 455 4,915 7,388 6,787
of which established vested annuities 1,315 53 70 74 70 66 55 63 48 34 7 1,856
Provision for claims-adjustment costs 271
Total provision reported in the BS 7,058
 
Life insurance
Change in liabilities arising from other than unit-linked insurance and investment contracts
EURm Insurance contracts Investment contracts Total
At 1 Jan. 2013 4,065 6 4,071
Premiums 159 0 159
Claims paid -396 -1 -396
Expense charge -37 -0 -37
Guaranteed interest 139 0 139
Bonuses 3 0 3
Other -11 -1 -12
At 31 Dec. 2013 3,924 4 3,927
Reinsurers' share -3 0 -3
Net liability at 31 Dec. 2013 3,921 4 3,925
EURm Insurance contracts Investment contracts Total
At 1 Jan. 2012 4,242 7 4,249
Premiums 172 0 172
Claims paid -425 -1 -426
Expense charge -38 -0 -38
Guaranteed interest 148 0 148
Bonuses 3 0 3
Other -37 -1 -38
At 31 Dec. 2012 4,065 6 4,071
Reinsurers' share -3 0 -3
Net liability at 31 Dec. 2012 4,062 6 4,067
Change in liabilities arising from unit-linked insurance and investment contracts
EURm Insurance contracts Investment contracts Total
At 1 Jan. 2013 2,665 1,168 3,833
Premiums 469 440 909
Claims paid -173 -172 -345
Expense charge -36 -18 -54
Other 169 104 274
At 31 Dec. 2013 3,095 1,522 4,617
At 1 Jan. 2012 2,216 838 3,054
Premiums 421 389 810
Claims paid -165 -123 -289
Expense charge -32 -14 -46
Other 225 79 303
At 31 Dec. 2012 2,665 1,168 3,833
The liabilities at 1 Jan. and at 31 Dec. 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. A more detailed specification of changes in insurance liabilities is presented in Group's Risk Management.
EURm 2013 2012
Insurance contracts
Liabilities for contracts with discretionary participation feature (DPF)
Provision for unearned premiums 1,969 2,090
Provision for claims outstanding 1,948 1,972
Liabilities for contracts without discretionary participation feature (DPF)
Provision for unearned premiums 0 0
Provision for claims outstanding 1 1
Total 3,918 4,063
Assumed reinsurance
Provision for unearned premiums 4 1
Provision for claims outstanding 2 1
Total 5 2
Insurance contracts total
Provision for unearned premiums 1,973 2,091
Provision for claims outstanding 1,951 1,975
Total 3,924 4,065
Investment contracts
Liabilities for contracts with discretionary participation feature (DPF)
Provision for unearned premiums 4 6
Liabilities for insurance and investment contracts total
Provision for unearned premiums 1,976 2,096
Provision for claims outstanding 1,951 1,975
Life insurance total 3,927 4,071
Reinsurers' share
Provision for unearned premiums 0 0
Provision for claims outstanding -3 -3
Total -3 -3
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.
EURm 2013 2012
Group, total 3,927 4,071
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