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Notes to the Group’s Financial Statements

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Select note 1–41
27 Liabilities from insurance and investment contracts
P&C insurance
Change in insurance liabilities
2015 2014
EURm Gross Ceded Net Gross Ceded Net
Provision for unearned premiums
At 1 Jan. 1,999 41 1,958 2,065 43 2,053
Exchange differences -20 1 -20 -69 1 -70
Change in provision 39 5 44 3 -3 6
At 31 Dec. 2,017 46 1,971 1,999 41 1,958
2015 2014
EURm Gross Ceded Net Gross Ceded Net
Provision for claims outstanding
At 1 Jan. 7,185 197 6,988 7,435 377 7,225
Disposed insurance holdings 38 - 38 45 - 45
Exchange differences -1 6 -8 -245 -2 -243
Change in provision 195 -10 205 -50 -178 128
At 31 Dec. 7,416 193 7,223 7,185 197 6,988
Liabilities from insurance contracts
EURm 2015 2014
Provision for unearned premiums 2,017 1,999
Provision for claims outstanding 7,416 7,185
Incurred and reported losses 1,657 1,609
Incurred but not reported losses (IBNR) 3,352 3,298
Provisions for claims-adjustment costs 269 269
Provisions for annuities and sickness benefits 2,138 2,009
P&C insurance total 9,433 9,183
Reinsurers' share
Provision for unearned premiums 46 41
Provision for claims outstanding 193 197
Incurred and reported losses 95 98
Incurred but not reported losses (IBNR) 98 98
Total reinsurers' share 239 237
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. 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 < 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Total
At the close of the claims year 12,216 2,494 2,558 2,681 2,681 2,789 2,877 2,924 2,818 2,803 2,831
One year later 12,182 2,473 2,554 2,638 2,632 2,831 2,988 2,911 2,848 2,796
Two years later 12,142 2,446 2,519 2,581 2,604 2,776 2,984 2,928 2,845
Three years later 12,081 2,445 2,487 2,554 2,565 2,775 2,972 2,917
Four years later 12,094 2,405 2,441 2,531 2,547 2,768 2,951
Five years later 12,127 2,357 2,417 2,518 2,524 2,770
Six years later 12,083 2,328 2,408 2,498 2,527
Seven years later 12,014 2,318 2,395 2,501
Eight years later 12,020 2,308 2,394
Nine years later 12,042 2,293
Ten years later 12,122
Current estimate of total claims costs 12,122 2,293 2,394 2,501 2,527 2,770 2,951 2,917 2,845 2,796 2,831 38,948
Total disbursed 9,370 2,043 2,153 2,249 2,254 2,470 2,602 2,508 2,378 2,188 1,585 31,800
Provision reported in the balance sheet 2,752 251 241 252 273 300 349 408 467 608 1,246 7,147
of which established vested annuities 1,490 85 82 72 62 78 72 70 74 45 8 2,138
Provision for claims-adjustment costs 269
Total provision reported in the BS 7,416
Claims costs after reinsurance
Estimated claims cost
EURm < 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Total
At the close of the claims year 11,315 2,390 2,459 2,561 2,567 2,654 2,721 2,725 2,768 2,763 2,783
One year later 11,262 2,361 2,449 2,532 2,535 2,701 2,793 2,710 2,797 2,752
Two years later 11,216 2,334 2,422 2,478 2,505 2,659 2,781 2,726 2,796
Three years later 11,163 2,338 2,390 2,452 2,479 2,653 2,775 2,727
Four years later 11,132 2,301 2,347 2,433 2,462 2,649 2,751
Five years later 11,181 2,259 2,324 2,421 2,439 2,652
Six years later 11,152 2,232 2,317 2,403 2,442
Seven years later 11,098 2,223 2,304 2,406
Eight years later 11,107 2,214 2,303
Nine years later 11,139 2,182
Ten years later 11,225
Current estimate of total claims costs 11,225 2,182 2,303 2,406 2,442 2,652 2,751 2,727 2,796 2,752 2,783 37,019
Total disbursed 8,521 1,955 2,066 2,157 2,176 2,359 2,415 2,336 2,348 2,164 1,569 30,065
Provision reported in the balance sheet 2,704 227 237 249 266 294 336 391 449 588 1,214 6,954
of which established vested annuities 1,490 85 82 72 62 78 72 70 74 45 8 2,138
Provision for claims-adjustment costs 269
Total provision reported in the BS 7,223
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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. 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
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
Change in liabilities arising from unit-linked insurance and investment contracts
EURm Insurance contracts Investment contracts Total
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
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
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 2015 2014
Insurance contracts
Liabilities for contracts with discretionary participation feature (DPF)
Provision for unearned premiums 2,516 2,625
Provision for claims outstanding 2,461 2,434
Total 4,976 5,059
Assumed reinsurance
Provision for unearned premiums 1 1
Provision for claims outstanding 1 0
Total 2 2
Insurance contracts total
Provision for unearned premiums 2,517 2,626
Provision for claims outstanding 2,462 2,434
Total 4,978 5,061
Investment contracts
Liabilities for contracts with discretionary participation feature (DPF)
Provision for unearned premiums 36 4
Liabilities for insurance and investment contracts total
Provision for unearned premiums 2,552 2,631
Provision for claims outstanding 2,462 2,434
Life insurance total 5,014 5,065
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 2015 2014
Group, total 14,447 14,248