P&C Insurance
P&C Insurance income statement
The main income and expense items are reported in the income statement. The income statement of the P&C Insurance segment is illustrated roughly below.
The changes in the fair value of investments are not directly recognized in the income statement. The gains or losses on e.g. investments in the stock markets are recorded in the income statement when the investments are sold.
P&C Insurance income statement items explained
Insurance premiums written represent the total volume of insurance payments during the accounting period.
In P&C insurance premiums are recognised in premiums written when the premium is charged.
The breakdown of insurance premiums written into different types of insurance is shown below:
Net income from investments shows the result made through investment activities. It mainly consists of interest earned on debt securities, dividends received, rental income and expenses on real estate investment properties and realised gains and losses on investments.
The investment operations in the P&C business aim at achieving the highest possible returns at acceptable levels of risk, to ensure that in all circumstances, the required solvency ratio will be exceeded and technical provisions will be covered with sufficient and structurally suitable investment assets.
Claims incurred include claims or benefits payments made during the accounting period. It may relate to insured events that have incurred during the period or earlier periods. It also includes the change in the provision for outstanding claims (i.e. liabilities related to claims already incurred). The provision is intended to cover the anticipated future claims payments and costs of claim settlements.
Change in liabilities for insurance contracts shows the change in the provision for unearned premiums. The provision for unearned premiums is intended to cover anticipated claims costs and operating expenses in the future, often after several years. In P&C Insurance, this is normally calculated on a strictly proportional basis over time.
Staff costs include wages and salaries to employees as well as pension and other social security costs.
Other operating income, expense and finance costs include administrative expenses (e.g. IT costs) and depreciation on tangible and intangible assets as well as the interest expenses on financial liabilities. Other income includes any items of income that are not included in insurance premiums. This item is typically relatively small.
Profit before taxes shows the profitability of the segment. Profit before taxes is sometimes also referred to as operating result, which can further be broken down to technical result indicating the profitability of insurance underwriting operations and investment result indicating the profitability of the investment operations.
The operating result is analyzed further below:
Changes in the fair value of the company's investments are recognised in the comprehensive income statement.
Total comprehensive income includes “profit/loss” and other comprehensive income. Other comprehensive income comprise income and expense not required/allowed, according to IFRS standards, to recognize through p/l and do not result from transactions with owners in their capacity as owners.
Profit at market values shows what the profit had been if all investments would be marked-to-market in the financial statements.