Notes to the Group’s Financial Statements

Select note 1–42
27 Liabilities from insurance and investment contracts
P&C insurance
Change in insurance liabilities
2016 2015
EURm Gross Ceded Net Gross Ceded Net
Provision for unearned premiums
At 1 Jan. 2,017 46 1,971 1,999 41 1,958
Exchange differences 20 1 21 -20 1 -20
Change in provision 4 -2 2 39 5 44
At 31 Dec. 2,042 44 1,997 2,017 46 1,971
2016 2015
EURm Gross Ceded Net Gross Ceded Net
Provision for claims outstanding
At 1 Jan. 7,416 193 7,223 7,185 197 6,988
Acquired/disposed insurance holdings 28 - 28 38 - 38
Exchange differences -19 1 -20 -1 6 -8
Change in provision -87 -2 -86 195 -10 205
At 31 Dec. 7,338 192 7,146 7,416 193 7,223
Liabilities from insurance contracts
EURm 2016 2015
Provision for unearned premiums 2,042 2,017
Provision for claims outstanding 7,338 7,416
Incurred and reported losses 1,596 1,657
Incurred but not reported losses (IBNR) 3,327 3,352
Provisions for claims-adjustment costs 267 269
Provisions for annuities and sickness benefits 2,148 2,138
P&C insurance total 9,379 9,433
Reinsurers' share
Provision for unearned premiums 44 46
Provision for claims outstanding 192 193
Incurred and reported losses 114 95
Incurred but not reported losses (IBNR) 78 98
Total reinsurers' share 236 239
As the P&C insurance is exposed to various exchange rates, comparing the balance sheet data from year to year can be misleading.
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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 < 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Total
At the close of the claims year 14,689 2,570 2,696 2,699 2,810 2,893 2,932 2,831 2,814 2,845 2,886
One year later 14,631 2,566 2,653 2,650 2,849 3,007 2,919 2,859 2,807 2,864
Two years later 14,543 2,531 2,597 2,622 2,796 3,003 2,935 2,860 2,815
Three years later 14,551 2,500 2,570 2,582 2,794 2,991 2,924 2,865
Four years later 14,542 2,455 2,547 2,564 2,787 2,963 2,892
Five years later 14,449 2,431 2,533 2,541 2,785 2,948
Six years later 14,347 2,422 2,514 2,539 2,768
Seven years later 14,342 2,409 2,520 2,511
Eight years later 14,352 2,408 2,500
Nine years later 14,462 2,390
Ten years later 14,429
Current estimate of total claims costs 14,429 2,390 2,500 2,511 2,768 2,948 2,892 2,865 2,815 2,864 2,886 41,868
Total disbursed 11,640 2,177 2,278 2,280 2,506 2,649 2,562 2,477 2,332 2,255 1,640 34,797
Provision reported in the balance sheet 2,788 213 223 231 262 298 330 388 483 609 1,246 7,071
of which established vested annuities 1,523 82 71 61 77 75 71 81 64 37 8 2,148
Provision for claims-adjustment costs 267
Total provision reported in the BS 7,338
Claims costs after reinsurance
Estimated claims cost
EURm < 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Total
At the close of the claims year 13,663 2,473 2,580 2,586 2,673 2,736 2,737 2,782 2,775 2,799 2,825
One year later 13,589 2,462 2,549 2,554 2,719 2,809 2,722 2,810 2,764 2,814
Two years later 13,510 2,436 2,496 2,524 2,677 2,796 2,738 2,812 2,756
Three years later 13,480 2,406 2,470 2,498 2,671 2,791 2,738 2,819
Four years later 13,489 2,363 2,451 2,481 2,668 2,760 2,711
Five years later 13,418 2,340 2,439 2,457 2,665 2,749
Six years later 13,332 2,332 2,420 2,455 2,648
Seven years later 13,333 2,319 2,427 2,431
Eight years later 13,354 2,318 2,408
Nine years later 13,454 2,300
Ten years later 13,417
Current estimate of total claims costs 13,417 2,300 2,408 2,431 2,648 2,749 2,711 2,819 2,756 2,814 2,825 39,877
Total disbursed 10,676 2,089 2,188 2,204 2,391 2,458 2,390 2,445 2,305 2,223 1,630 32,998
Provision reported in the balance sheet 2,741 210 220 227 257 291 321 373 451 591 1,195 6,879
of which established vested annuities 1,523 82 71 61 77 75 71 81 64 37 8 2,148
Provision for claims-adjustment costs 267
Total provision reported in the BS 7,146
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Life insurance
Change in liabilities arising from other than unit-linked insurance and investment contracts
EURm Insurance contracts Investment contracts Total
At 1 Jan. 2016 4,979 36 5,014
Premiums 149 0 149
Claims paid -469 0 -470
Expense charge -37 0 -37
Guaranteed interest 138 0 138
Bonuses 5 - 5
Other 29 -8 21
Total at 31 Dec. 2016 4,794 28 4,821
Liabilities related to assets held for sale -210
Life insurance, total 4,611
Reinsurers' share -3 0 -3
Net liability at 31 Dec. 2016 4,791 28 4,608
EURm Insurance contracts Investment contracts Total
At 1 Jan. 2015 5,058 4 5,062
Premiums 148 30 178
Claims paid -445 0 -445
Expense charge -38 0 -38
Guaranteed interest 153 0 153
Bonuses 0 - 0
Portfolio transfers 17 - 17
Other 85 1 86
At 31 Dec. 2015 4,978 36 5,014
Reinsurers' share -3 - -3
Net liability at 31 Dec. 2015 4,976 36 5,012
Change in liabilities arising from unit-linked insurance and investment contracts
EURm Insurance contracts Investment contracts Total
At 1 Jan. 2016 4,042 1,817 5,858
Premiums 498 475 973
Claims paid -222 -355 -577
Expense charge -43 -20 -64
Other 153 97 250
At 31 Dec. 2016 4,427 2,013 6,440
Liabilities related to assets held for sale -2,992
Life insurance total 3,448
At 1 Jan. 2015 3,599 1,714 5,312
Premiums 575 394 969
Claims paid -198 -358 -556
Expense charge -44 -22 -66
Other 110 89 200
At 31 Dec. 2015 4,042 1,817 5,858
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 2016 2015
Insurance contracts
Liabilities for contracts with discretionary participation feature (DPF)
Provision for unearned premiums 2,425 2,516
Provision for claims outstanding 2,366 2,461
Total 4,791 4,976
Assumed reinsurance
Provision for unearned premiums 0 1
Provision for claims outstanding 1 1
Total 1 2
Insurance contracts total
Provision for unearned premiums 2,426 2,517
Provision for claims outstanding 2,368 2,462
Total 4,794 4,978
Investment contracts
Liabilities for contracts with discretionary participation feature (DPF)
Provision for unearned premiums 28 36
Liabilities for insurance and investment contracts total
Provision for unearned premiums 2,454 2,552
Provision for claims outstanding 2,368 2,462
Life insurance total 4,821 5,014
Liabilities related to assets held for sale -210 -
Liabilities for insurance and investment contracts total, life insurance 4,611 5,014
Reinsurers' share
Provision for claims outstanding -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 2016 2015
Group, total 13,990 14,447
The tables for the Financial Statements are also available in Excel format.