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Munich Re Group Notes on the accounts
Claims not yet paid at the balance sheet date are shown as provisions for
outstanding claims. These provisions are calculated on an individual basis.
For claims that have been incurred but not yet reported, provisions are
calculated on the basis of statistical methods
The provision for premium refunds and policyholders’ dividends contains
the amounts payable to insureds or insurers by law or by contractual
agreement insofar as they are not yet payable at the balance sheet date. In
particular, this item contains the amounts for profit-related policyholders’
dividends in life business with a savings element.
The item “Claims equalization provision and similar provisions” contains
the amounts required in accordance with commercial law to mitigate
fluctuations in claims experience, plus the provisions for major risks
(nuclear facilities and pharmaceutical products liability) and for earthquake
risks; these provisions mostly involve the Munich Reinsurance Company.
The “Other underwriting provisions” mainly comprise provisions for
anticipated losses, which are calculated on the basis of many years’
experience and current developments.
Underwriting provisions apportionable to business ceded in reinsurance
are calculated in accordance with the terms of the reinsurance
agreements.
Other provisions The provisions for employees’ pensions are calculated according to the
entry age normal method on the basis of the actuarial interest rate of 6 %
provided for under German tax law.
After revaluation of assets and liabilities in accordance with German
accounting regulations, deferred taxes are newly calculated for the
consolidated accounts. Deferred taxes on the assets side of the individual
company balance sheets are, in contrast to the practice in the parent
company’s accounts, included to the extent that there are deferred taxes
on the liabilities side of the consolidated balance sheet as a result of
consolidation measures; deferred taxes on the assets side resulting from
consolidation are shown in the consolidated balance sheet.
The other provisions are posted in accordance with the probable
requirements.
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