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Notes to the Group’s Financial Statements

27 Liabilities from insurance and investment contracts
P&C insurance
Change in insurance liabilities
2014 2013
EURm Gross Ceded Net Gross Ceded Net
Provision for unearned premiums
At 1 Jan. 2,065 43 2,022 2,107 55 2,053
Acquired insurance holdings - - 0 38 - -
Exchange differences -69 1 -68 -127 -2 -125
Change in provision 3 -3 -0 46 -10 55
At 31 Dec. 1,999 41 1,958 2,065 43 2,022
2014 2013
EURm Gross Ceded Net Gross Ceded Net
Provision for claims outstanding
At 1 Jan. 7,435 377 7,058 7,747 522 7,225
Disposed insurance holdings 45 - 45 61 0 61
Exchange differences -245 -2 -243 -314 -20 -294
Change in provision -50 -178 128 -59 -126 66
At 31 Dec. 7,185 197 6,988 7,435 377 7,058
Liabilities from insurance contracts
EURm 2014 2013
Provision for unearned premiums 1,999 2,065
Provision for claims outstanding 7,185 7,435
Incurred and reported losses 1,609 1,770
Incurred but not reported losses (IBNR) 3,298 3,538
Provisions for claims-adjustment costs 269 271
Provisions for annuities and sickness benefits 2,009 1,856
P&C insurance total 9,183 9,500
Reinsurers' share
Provision for unearned premiums 41 43
Provision for claims outstanding 197 376
Incurred and reported losses 98 270
Incurred but not reported losses (IBNR) 98 107
Total reinsurers' share 237 420
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.
Claims costs before reinsurance
Estimated claims cost
EURm < 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Total
At the close of the claims year 9,825 2,517 2,522 2,588 2,715 2,718 2,829 2,914 2,953 2,851 2,835
One year later 9,792 2,465 2,504 2,584 2,672 2,669 2,869 3,028 2,940 2,879
Two years later 9,809 2,412 2,476 2,549 2,615 2,641 2,815 3,024 2,956
Three years later 9,823 2,385 2,475 2,518 2,588 2,601 2,814 3,012
Four years later 9,789 2,352 2,435 2,472 2,565 2,582 2,807
Five years later 9,833 2,319 2,388 2,448 2,551 2,559
Six years later 9,896 2,267 2,358 2,438 2,531
Seven years later 9,902 2,244 2,348 2,425
Eight years later 9,852 2,227 2,337
Nine years later 9,874 2,210
Ten years later 9,912
Current estimate of total claims costs 9,912 2,210 2,337 2,425 2,531 2,559 2,807 3,012 2,956 2,879 2,835 36,463
Total disbursed 7,349 2,013 2,110 2,169 2,271 2,261 2,470 2,590 2,475 2,268 1,572 29,548
Provision reported in the balance sheet 2,563 197 227 256 261 298 337 422 482 611 1,263 6,916
of which established vested annuities 1,390 73 80 77 70 59 75 65 62 47 10 2,009
Provision for claims-adjustment costs 269
Total provision reported in the BS 7,185
Claims costs after reinsurance
Estimated claims cost
EURm < 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Total
At the close of the claims year 9,070 2,375 2,418 2,490 2,598 2,604 2,691 2,756 2,756 2,801 2,795
One year later 9,022 2,318 2,390 2,480 2,567 2,572 2,738 2,829 2,741 2,829
Two years later 9,025 2,264 2,363 2,453 2,513 2,542 2,696 2,816 2,758
Three years later 9,032 2,244 2,367 2,422 2,487 2,515 2,689 2,810
Four years later 8,999 2,213 2,330 2,379 2,468 2,498 2,686
Five years later 8,998 2,181 2,289 2,355 2,455 2,474
Six years later 9,076 2,141 2,261 2,348 2,437
Seven years later 9,086 2,120 2,252 2,335
Eight years later 9,049 2,104 2,243
Nine years later 9,074 2,087
Ten years later 9,121
Current estimate of total claims costs 9,121 2,087 2,243 2,335 2,437 2,474 2,686 2,810 2,758 2,829 2,795 34,575
Total disbursed 6,617 1,897 2,022 2,083 2,180 2,184 2,361 2,409 2,304 2,241 1,559 27,856
Provision reported in the balance sheet 2,504 191 221 252 257 290 325 402 454 588 1,236 6,719
of which established vested annuities 1,390 73 80 77 70 59 75 65 62 47 10 2,009
Provision for claims-adjustment costs 269
Total provision reported in the BS 6,988
 
Life insurance
Change in liabilities arising from other than unit-linked insurance and investment contracts
EURm Insurance contracts Investment contracts Total
At 1 Jan. 2014 3,924 4 3,928
Premiums 148 1 149
Claims paid -397 -0 -397
Expense charge -36 - -36
Guaranteed interest 131 - 131
Bonuses 0 - 0
Portfolio transfers 1,337 - 1,337
Other -48 -0 -48
At 31 Dec. 2014 5,061 4 5,065
Reinsurers' share -3 - -3
Net liability at 31 Dec. 2014 5,058 4 5,062
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 - -3
Net liability at 31 Dec. 2013 3,921 4 3,925
Change in liabilities arising from unit-linked insurance and investment contracts
EURm Insurance contracts Investment contracts Total
At 1 Jan. 2014 3,095 1,522 4,617
Premiums 513 448 961
Claims paid -191 -294 -485
Expense charge -39 -21 -60
Other 220 59 279
At 31 Dec. 2014 3,599 1,714 5,312
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
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 2014 2013
Insurance contracts
Liabilities for contracts with discretionary participation feature (DPF)
Provision for unearned premiums 2,625 1,969
Provision for claims outstanding 2,434 1,948
Liabilities for contracts without discretionary participation feature (DPF)
Provision for unearned premiums - 0
Provision for claims outstanding - 1
Total 5,059 3,918
Assumed reinsurance
Provision for unearned premiums 1 4
Provision for claims outstanding 0 2
Total 2 5
Insurance contracts total
Provision for unearned premiums 2,626 1,973
Provision for claims outstanding 2,434 1,951
Total 5,061 3,924
Investment contracts
Liabilities for contracts with discretionary participation feature (DPF)
Provision for unearned premiums 4 4
Liabilities for insurance and investment contracts total
Provision for unearned premiums 2,631 1,976
Provision for claims outstanding 2,434 1,951
Life insurance total 5,065 3,927
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 2014 2013
Group, total 14,248 13,427
Note
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