Munich Re Group Annual Report 2006 (PDF, 1.8

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Munich Re Group Annual Report 2006 Notes_Notes to the consolidated balance sheet – Equity and liabilities (22) Other technical provisions Of the provision for premium refunds based on national regulations, €49m (42m) is apportionable to property-casualty insurance. The provision for deferred premium refunds is established solely for life and health insurance. The ceded share of “other technical provisions” amounts to €105m (43m), of which €2m (3m) is apportionable to the ceded share of the provision for premium refunds based on national regulations. 186 Reinsurance Primary insurance Total All figures in €m * 31.12.2006 Prev. year 31.12.2006 Prev. year ** 31.12.2006 Prev. year ** Provision for premium refunds based on national regulations – – 4,313 3,187 4,313 3,187 Provision for deferred premium refunds – – 5,391 6,475 5,391 6,475 – Thereof resulting from unrealised gains and losses (recognised in equity) – – 2,717 4,082 2,717 4,082 – Thereof resulting from other revaluations (recognised in profit or loss) – – 2,674 2,393 2,674 2,393 Provision for profit commission 1,038 762 – – 1,038 762 Other 13 34 80 76 93 110 Total (gross) 1,051 796 9,784 9,738 10,835 10,534 * After elimination of intra-Group transactions across segments. ** Adjusted owing to first-time application of IAS 19 (rev. 2004). Development of provision for premium refunds based on national regulations All figures in €m 2006 Prev. year Status at 31 Dec. previous year 3,187 2,717 Change in consolidated group –49 –360 Allocations/Withdrawals 1,175 830 Status at 31 Dec. financial year 4,313 3,187 The provision for premium refunds based on national regulations relates only to German primary insurance business. The allocation is based on the statutory result of the relevant part portfolios after tax, with rates of between 81.7% and 95.1% after tax mainly being applied. Development of provision for deferred premium refunds All figures in €m 2006 Prev. year * Status at 31 Dec. previous year 6,475 5,811 Change in consolidated group 9 –268 Change resulting from unrealised gains and losses on investments (recognised directly in equity) –1,382 880 Change resulting from other revaluations (recognised in profit or loss) 289 52 Status at 31 Dec. financial year 5,391 6,475 * Adjusted owing to first-time application of IAS 19 (rev. 2004).
Munich Re Group Annual Report 2006 Notes_Notes to the consolidated balance sheet – Equity and liabilities The provision for deferred premium refunds has to be established if the future participation of policyholders in realised gains is provided for in the case of valuation differences between local GAAP and IFRS basis. The above change resulting from unrealised gains and losses on investments reflects the proportional allocation to expected future policyholders’ bonuses of the change in fair values that has occurred in the past year. Changes in the provision for deferred premium refunds are only recognised in the income statement to the extent that they result from valuation differences recognised in profit or loss. To determine the portion of the valuation differences alloca- (23) Gross technical provisions for life insurance policies where the investment risk is borne by the policyholders ble to the provision for deferred premium refunds, rates of between 85.0% and 92.5% after tax were generally used. Of the carrying amount of the gross provision for deferred premium refunds totalling €5,391m at 31 December 2006, –€169m (–) concerns disposal groups held for sale; cf. (16) “Non-current assets and disposal groups held for sale”. All figures in €m 2006 Prev. year Status at 31 Dec. previous year 1,516 1,328 Change in consolidated group and other influences 17 –339 Savings premiums 423 461 Unrealised gains/losses on fund assets 100 170 Withdrawal for expenses and risk 24 27 Withdrawal for benefits 102 77 Status at 31 Dec. financial year 1,930 1,516 These provisions are valued retrospectively. The withdrawal for underwriting risks from the premiums and provision for future policy benefits is made on the basis of prudent assumptions regarding expected mortality and morbidity. Here, as with the provision for future policy benefits for non-unit-linked life insurance, the underlying calculation is based on best estimates with appropriate provisions for adverse deviation. (24) Other accrued liabilities All figures in €m 2006 Prev. year * Provisions for post-employment benefits 1,298 1,305 Tax provisions 2,044 2,032 Other provisions 1,523 1,589 Total 4,865 4,926 * Adjusted owing to first-time application of IAS 19 (rev. 2004). The provisions are directly covered by the investments for the benefit of life insurance policyholders who bear the investment risk. Small differences in relation to these investments arise as a result of including unearned revenue liability in these provisions. 187
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Munich Re Group Annual Report 2006
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The Munich Re Group Our operations
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Munich Re Group in 2006 Tireless an
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Page 140 and 141: Munich Re Group Annual Report 2006
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Page 238: © 2007 Münchener Rückversicherun
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