Life Insurance
Main items of the Life Insurance segment balance sheet
In the Life Insurance business, payments are received from customers in exchange for a commitment to pay insurance claims in the future. The company invests the funds it receives from customers and these funds are therefore the main asset in the company's balance sheet. The estimated amount of future insurance claims is shown on the balance sheet as liabilities for insurance and investment contracts.
Life Insurance segment balance sheet items in more detail
Investment assets include financial assets (such as shares and bonds), investments in real estate properties as well as cash and cash equivalents. Investment assets in Life insurance consist mainly of debt and equity securities. There are also smaller amounts of real estate property investments and other investments such as hedge funds and investments into commodity markets. The breakdown of the investment portfolio in Life insurance is shown below:
Money market refers to debt securities with a maturity of less than one year and bonds to debt securities with a maturity of over one year.
Listed equities are shares of companies that are traded on regulated exchanges whereas private equity refers to shares of companies that are not publicly traded in regulated exchanges.
Other investments include hedge funds and commodities.
Investments related to unit-linked insurance represent the funds that cover the company's liabilities for unit-linked insurance contracts. Unit-linked insurance relates to the Life Insurance business and is described in more detail in the respective section.
Intangible assets are assets that cannot be physically measured and which are mainly created through time and/or effort. The main intangible asset in Sampo's balance sheet is goodwill that has been created as a result of mergers.
Other assets include such items as property, plant and equipment, tax assets, reinsurers' share of insurance liabilities and other items that are small in relation to total assets.
Liabilities for insurance and investment contracts consist of provisions for unearned premiums and outstanding claims. The provision for unearned premiums is intended to cover anticipated claims costs and operating expenses during the remaining term of insurance contracts in force. The provision for claims outstanding is intended to cover the anticipated future payments of all claims incurred, including claims not yet reported to the company. The composition of the liabilities for insurance and investment contracts in Mandatum Life is shown below:
Liabilities for unit-linked insurance and investment contracts represent the amount of savings that have been generated by the policyholders of unit-linked insurances. For unit-linked contracts, all the liabilities and the assets covering the unit-linked insurance are matched and the corresponding asset is recognised on the asset side of the balance sheet.
Financial and other liabilities include any financial liabilities (e.g. debt) the company has issued as well as a number of other liabilities that are small in relation to the entire balance sheet. These include such items as tax liabilities, provisions, liabilities for employee benefits and other miscellaneous liabilities.