Brief explanations to the main income and expense items
 | Insurance premiums - Income (premiums) is generated by selling insurance policies to clients (policyholders).
- A small part of the insurance risk is transferred to reinsurers for a fee. This fee is deducted from insurance premiums written.
|
 | Investment income - Majority of the funds collected as insurance premiums is invested in financial markets.
- Investments are made in financial instruments (debt securities and equities) and real estate properties. Return on these investments is a major component affecting the profitability of the life insurance operations.
- Investment activities generate income but also costs (e.g. interest expenses, asset management costs).
|
 | Claims - When an insured event (e.g. death, pension or disability) occurs, claims are paid to the policyholder or other beneficiary according to the nature of the event and the scope of the insurance cover.
|
 | Change in liabilities for insurance and investment contracts - Change in liabilities for insurance and investment 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.
- The provision for unearned premiums generally increases when premiums are written and decreases when claims are paid. The provision may also change when changes are made in actuarial assumptions.
|
 | Costs for running the business - Operating and other expenses mostly consist of staff costs, expenses related to the sales and management of insurance policies, investment management and other administration.
- Taxes are paid according to local tax legislations and consolidated at the Group level.
|
