Výročná správa 2009 - Komunálna Poisťovňa

(All amount are in thousands of Euros, unless stated otherwise)(i)The ultimate liability arising from claims made under insurance contracts innon-life insuranceThe estimation of the ultimate liability arising from claims made under insurance contracts is theCompany’s most critical accounting estimate. There are several sources of uncertainty that needto be considered in the estimate of the liability that the Company will ultimately pay for such claims.The main source of uncertainty in regard to non-life insurance is legislation that allows thepolicyholder to announce the claim until the period for claim announcement expires. This periodnormally takes a few years and the Company considers this risk in calculating IBNR. On a regularbasis, the Company monitors and reassesses historical data and assumptions in calculationsand, based on this data, states the final estimate of liabilities. Insurance of the Company’s carsincludes both MTPL and car accident insurance, which also includes an entitlement to compensationfor damages to health. Claims settlement in regard to damages to health takes a longtime, and an estimate of the ultimate claim is therefore much more complicated. The Companyconsiders this risk when calculating IBNR. IBNR is the sum of the present values of expected payments,and the calculation takes into account things such as mortality (by using mortality tables),the discount rate, the expected salary and pension benefit increases, an estimate of the insurancecompany’s expenses, and other parameters affecting the amount of the annuity paid. The totalamount of these provisions is currently not material for the Company. However, a gradual increasein the importance and the amount of this provision is expected.Calculation methods use historical experience of the development of insurance claims, as itis expected that this experience will repeat in the future. However, reasons for a different developmentmay exist. If such reasons are known and can be identified, then the methods may bemodified. The reasons may be as follows:- economic, legal, political and social trends;- a change in the liquidation procedures for insurance accidents;- a change in the non-life insurance portfolio; and- accidental deviations, including significant lossesAnother material estimate used by the Company is a reserve for the deficit in Motor Third PartyLiability, as described in Note 2.12 a) (i).(ii)Estimate of future insurance benefits arising from long-term insurance contractsThe amount of liabilities arising from long-term insurance contracts depends on estimates thatthe Company makes regarding the expected number of deaths in every year, in which the Companyis exposed to insurance risk. These estimates are based on standard mortality tables that reflectthe latest historical mortality experience, adjusted, if necessary, by the Company’s own experience.The main sources of uncertainty include epidemics (such as AIDS or SARS), extensive lifestylechanges (such as dietary changes or smoking), and other events which could result infuture mortality being significantly worse than in the past for age groups for which the Companyis exposed to significant risk that a client will die. On the other hand, ongoing improvements inmedical care and social conditions may result in prolonging the lives of the Company’s clientscompared to expected lifespan, which the Company takes into consideration when making its estimatesof liabilities and future insurance benefits from insurance contracts for reaching a certainage. For insurance contracts for reaching a certain age, the expected mortality improvements areappropriately factored in, estimating the amount of liabilities from long-term insurance contracts.If the numbers of deaths in future years were 10% higher or lower than the management’sestimate, the ultimate liability would be EUR 41thousand (2008: EUR 0 thousand) higher or lower.Investment income from the related financial assets is another factor estimated within long­-term insurance contracts with guaranteed contractual terms. This estimate is made based on thebest current estimate of the market income, taking into account the future economic development.The Company estimates its actual value at 4.12% (2008: 0%).Ročná účtovná závierka a komentár I Company AccountsIf the average investment income were 0.1% higher or lower than the management’s estimate,the ultimate liability would be EUR 243 thousand (2008: EUR 0 thousand) higher or lower.135