38.4 Technical provisions in non-life insurance
Reference Areas:
Health
Investments
Banking
Best Pratices in PZU
| Provisions (by accounting classes prescribed by section II of the attachment to the Insurance Activity Act) | 31 December 2017 | 31 December 2016 | ||||
| gross | reinsurers’ share | net | gross | reinsurers’ share | net | |
| Accident and sickness insurance (group 1 and 2) | 392 | (10) | 382 | 386 | - | 386 |
| Motor third party liability insurance (group 10) | 13,544 | (361) | 13,183 | 12,551 | (306) | 12,245 |
| Other motor insurance (group 3) | 2,769 | (21) | 2,748 | 2,446 | (41) | 2,405 |
| Marine, aviation and transport insurance (groups 4, 5, 6, 7) | 88 | (20) | 68 | 94 | (20) | 74 |
| Insurance against fire and other property damage (groups 8 and 9) | 2,221 | (547) | 1,674 | 1,810 | (271) | 1,539 |
| TPL insurance (groups 11, 12, 13) | 2,157 | (106) | 2,051 | 2,150 | (92) | 2,058 |
| Credit and suretyship (groups 14, 15) | 196 | (77) | 119 | 183 | (72) | 111 |
| Assistance (group 18) | 280 | (1) | 279 | 239 | (4) | 235 |
| Legal protection (group 17) | 10 | - | 10 | 7 | - | 7 |
| Other (group 16) | 343 | (107) | 236 | 522 | (184) | 338 |
| Total technical provisions | 22,000 | (1,250) | 20,750 | 20,388 | (990) | 19,398 |
| Technical provisions in non-life insurance | 31 December 2017 | 31 December 2016 | ||||
| gross | reinsurers’ share | net | gross | reinsurers’ share | net | |
| Short-term | 5,162 | (312) | 4,850 | 4,972 | (265) | 4,707 |
| Long-term | 16,838 | (938) | 15,900 | 15,416 | (725) | 14,691 |
| Total technical provisions | 22,000 | (1,250) | 20,750 | 20,388 | (990) | 19,398 |
Long-term provisions are those under which projected cash flows will occur more than 12 months after the end of the reporting period, or after 31 December 2017.
Movement in provisions
| Movement in the provision for unearned premiums in non-life insurance | 1 January – 31 December 2017 | 1 January – 31 December 2016 | ||||
| gross | reinsurers’ share | net | gross | reinsurers’ share | net | |
| Beginning of the period | 6,957 | (377) | 6,580 | 5,643 | (339) | 5,304 |
| Increase (reduction) of provisions relating to policies concluded in the current year | 7,334 | (429) | 6,905 | 6,552 | (194) | 6,358 |
| Increase (reduction) of provisions relating to policies concluded in previous years | (6,366) | 336 | (6,030) | (5,255) | 156 | (5,099) |
| Foreign exchange differences in the period | (48) | 4 | (44) | 17 | - | 17 |
| Total technical provisions | 7,877 | (466) | 7,411 | 6,957 | (377) | 6,580 |
| Movement in provision for unexpired risk | 1 January – 31 December 2017 | 1 January – 31 December 2016 | ||||
| gross | reinsurers’ share | net | gross | reinsurers’ share | net | |
| Beginning of the period | 26 | - | 26 | 119 | - | 119 |
| Increase (reduction) of provisions relating to policies concluded in the current year | 33 | (3) | 30 | 23 | - | 23 |
| Increase (reduction) of provisions relating to policies concluded in previous years | (21) | - | (21) | (116) | - | (116) |
| Foreign exchange differences in the period | (1) | - | (1) | - | - | - |
| End of the period | 37 | (3) | 34 | 26 | - | 26 |
| Movement in the provision for outstanding claims and benefits in non-life insurance | 1 January – 31 December 2017 | 1 January – 31 December 2016 | ||||
| gross | reinsurers’ share | net | gross | reinsurers’ share | net | |
| Balance at the beginning of the period, including: | 7,730 | (421) | 7,309 | 7,706 | (580) | 7,126 |
| Benefits paid related to losses incurred in previous years, including: | (2,713) | 177 | (2,536) | (2,502) | 247 | (2,255) |
| - claims paid | (2,308) | 170 | (2,138) | (2,133) | 241 | (1,892) |
| - claims handling expenses | (405) | 7 | (398) | (369) | 6 | (363) |
| Increase (reduction) of provisions, including: | 3,305 | (348) | 2,957 | 2,539 | (87) | 2,452 |
| - relating to losses incurred in the current year | 3,212 | (223) | 2,989 | 2,751 | (66) | 2,685 |
| - relating to losses incurred in previous years | 93 | (125) | (32) | (212) | (21) | (233) |
| Other changes | 6 | 4 | 10 | (24) | (1) | (25) |
| Foreign exchange differences in the period | (27) | 3 | (24) | 11 | - | 11 |
| End of the period | 8,301 | (585) | 7,716 | 7,730 | (421) | 7,309 |
| Movement in the provision for the capitalized value of annuities in non-life insurance | 1 January – 31 December 2017 | 1 January – 31 December 2016 | ||||
| gross | reinsurers’ share | net | gross | reinsurers’ share | net | |
| Beginning of the period | 5,673 | (192) | 5,481 | 5,808 | (178) | 5,630 |
| Claims paid related to losses incurred in previous years | (355) | 11 | (344) | (325) | 9 | (316) |
| Increase (reduction) of provisions relating to losses incurred in previous years | 212 | (4) | 208 | 13 | (22) | (9) |
| Changes in assumptions resulting from movements in technical rates | (16) | 1 | (15) | (15) | - | (15) |
| Increase in provisions relating to losses incurred in the current year | 203 | (4) | 199 | 168 | - | 168 |
| Other changes | 59 | (2) | 57 | 24 | (1) | 23 |
| End of the period | 5,776 | (190) | 5,586 | 5,673 | (192) | 5,481 |
