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TECHNICAL RESERVES FOR INSURANCE CLAIMS AND PREMIUMS
 12 Months Ended
Dec. 31, 2022
TECHNICAL RESERVES FOR INSURANCE CLAIMS AND PREMIUMS [Abstract]  
TECHNICAL RESERVES FOR INSURANCE CLAIMS AND PREMIUMS
16
TECHNICAL RESERVES FOR INSURANCE CLAIMS AND PREMIUMS


a)
This item consists of the following:

   
2022
  
   
Technical
reserves for claims
   
Technical
reserves for premiums (*)
    
Total
  
   
S/(000)

 
S/(000)

 
S/(000)

                         
Life insurance
    
1,790,666
      
8,478,060
      
10,268,726
  
General insurance
    
694,576
      
670,341
      
1,364,917
  
Health insurance
    
157,934
      
199,382
      
357,316
  
Total
    
2,643,176
      
9,347,783
      
11,990,959
  

   
2021
  
   
Technical
reserves for claims
   
Technical
reserves for premiums (*)
    
Total
  
   
S/(000)

 
S/(000)

 
S/(000)

                         
Life insurance
    
1,696,733
      
9,101,456
      
10,798,189
  
General insurance
    
714,700
      
684,950
      
1,399,650
  
Health insurance
    
144,147
      
192,525
      
336,672
  
Total
    
2,555,580
      
9,978,931
      
12,534,511
  


(*) As of December 31, 2022, the life insurance technical reserves include the mathematical reserves of annuities amounting to S/6,254.0 million (S/ 6,759.7 million as of December 31, 2021).

Insurance claims reserves represent reported claims and an estimate for incurred but non reported claims (IBNR). Reported claims are adjusted on the basis of technical reports received from independent adjusters.

As of December 31, 2022, the reserves for direct claims include reserves for IBNR for life, general and health insurance for an amount of S/933.0 million, S/29.0 million and S/111.0 million, respectively (S/825.0 million, S/38.9 million and S/109.9 million, respectively, as of December 31, 2021).

Insurance claims to be paid by reinsurers and co-insurers represent ceded claims, which are presented in “Accounts receivable from reinsurers and coinsurers” of the consolidated statement of financial position, See note 9(b).

Claims reserves have had a slight reduction, mainly due to lower reporting of COVID-19 cases. Likewise, the increase in technical reserves for premiums is mainly due to the increase in new sales in the Income line.

As of December 31, 2022, the effect due to the COVID-19 pandemic continues, IBNR reserves were calculated in two parts: a) IBNR reserve for regular claims and b) IBNR reserve for expected excess mortality (deaths above the average of cases of pre-pandemic months).

In general, the claims reserves have been estimated with prudential criteria due to the uncertainty in the claims rate caused by the pandemic that began in 2020 and continues in effect in 2021 and to a lesser extent in 2022.

Technical reserves include reserves for future benefit obligations under current life and personal accident insurance; and from unearned premium reserves in the proportion of written premiums that are allocable to the unexpired portion of the related hedging periods.


 b)
Movement of insurance claims reserves (direct and assumed) occurred during the years 2022 and 2021:

   
2022
  
   
Life
insurance
    
General
insurance
    
Health
insurance
    
Total
  
   
S/(000)

 
S/(000)

 
S/(000)

 
S/(000)

                                 
Opening balance    
1,696,733
      
714,700
      
144,147
      
2,555,580
  
Gross claims, Note 26
    
1,547,674
      
399,919
      
329,442
      
2,277,035
  
Payments
    
(1,447,753
)
    
(391,510
)
    
(315,540
)
    
(2,154,803
)
Exchange difference    
(5,988
)
    
(28,533
)
    
(115
)
    
(34,636
)
Ending balance
    
1,790,666
      
694,576
      
157,934
      
2,643,176
  

   
2021
  
   
Life
insurance
    
General
insurance
    
Health
insurance
    
Total
  
   
S/(000)

 
S/(000)

 
S/(000)

 
S/(000)

                                 
Opening balance    
1,288,056
      
629,330
      
133,088
      
2,050,474
  
Gross claims, Note 26
    
2,183,789
      
375,162
      
325,307
      
2,884,258
  
Payments
    
(1,786,376
)
    
(353,147
)
    
(314,343
)
    
(2,453,866
)
Exchange difference    
11,264
      
63,355
      
95
      
74,714
  
Ending balance
    
1,696,733
      
714,700
      
144,147
      
2,555,580
  

The increase in technical reserves for claims corresponds mainly to excess mortality in the Life Insurance Businesses and the provision of services for Health Insurance. The impact by business for COVID-19 cases is detailed below:

2022
                  
Business line
  
IBNR Balance
COVID - 19
    
Claims reported
COVID – 19
    
Total Impact COVID-19
  
    S/MM
    S/MM
    S/MM
 
Vida Individual
    
18.7
      
3.0
      
21.7
  
Vida Grupo
    
7.0
      
2.4
      
9.4
  
Vida Ley
    
16.1
      
6.4
      
22.5
  
Vida Crédito
    
50.5
      
13.6
      
64.1
  
SISCO
    
72.1
      
102.4
      
174.5
  
Asistencia Médica
    
7.4
      
4.8
      
12.2
  
Total
    
171.8
      
132.6
      
304.4
  

2021
                  
Business line
  
IBNR Balance
COVID - 19
    
Claims reported
COVID – 19
    
Total Impact COVID-19
  
    S/MM
    S/MM
    S/MM
 
Vida Individual
    
18.0
      
39.0
      
57.0
  
Vida Grupo
    
13.9
      
18.7
      
32.6
  
Vida Ley
    
27.2
      
44.4
      
71.6
  
Vida Crédito
    
45.6
      
162.9
      
208.5
  
SISCO
    
67.8
      
286.5
      
354.3
  
Asistencia Médica
    
19.8
      
38.7
      
58.5
  
Total
    
192.3
      
590.2
      
782.5
  


c)
Movement of reserves for premiums (direct and assumed) that occurred during the years 2022 and 2021:


 
2022
  
   
Life
insurance
    
General
insurance
    
Health
insurance
    
Total
  
   
S/(000)

 
S/(000)

 
S/(000)

 
S/(000)

                                 
Opening balance    
9,101,456
      
684,950
      
192,525
      
9,978,931
  
Time course expenses and others
    
(251,627
)
    
121,667
      
–
      
(129,960
)
Unearned premium and other technical reserves variation, net
    
(1,341
)
    
(118,168
)
    
6,960
      
(112,549
)
Insurance subscriptions
    
755,290
      
7,690
      
–
      
762,980
  
Adjustment by application of market rates (i)
    
(927,838
)
    
–
      
–
      
(927,838
)
Exchange difference and others (ii)    
(197,880
)
    
(25,798
)
    
(103
)
    
(223,781
)
Ending balance
    
8,478,060
      
670,341
      
199,382
      
9,347,783
  

   
2021
  
   
Life
insurance
    
General
insurance
    
Health
insurance
    
Total
  
   
S/(000)

   
S/(000)

 
S/(000)
 
S/(000)

                                 
Opening balance
    
8,784,732
      
656,963
      
182,907
      
9,624,602
  
Time course expenses and others
    
(55,135
)
    
2,710
      
–
      
(52,425
)
Unearned premium and other technical reserves variation, net
    
(539
)
    
(21,844
)
    
9,371
      
(13,012
)
Insurance subscriptions
    
751,942
      
6,374
      
–
      
758,316
  
Adjustment by application of market rates (i)
    
(771,711
)
    
–
      
–
      
(771,711
)
Exchange difference and others (ii)    
392,167
      
40,747
      
247
      
433,161
  
Ending balance
    
9,101,456
      
684,950
      
192,525
      
9,978,931
  


(i)
As of December 31, 2022, the variation corresponds to the product of Life Annuities for S/318.5 million due to the increase in market rates and other minors for S/162.4 million.


(ii)
As of December 31, 2022, the variation corresponds mainly to a lower exchange difference adjustment of Life Annuities for S/310.1 million, Individual Life for S/279.6 million and other minors for S/67.2 million.

The main assumptions used to estimate of retirement, disability and survival annuities and individual life reserves ​are as follows:

 
2022
2021
Mortality
Mortality table
Technical rates
Mortality table
Technical rates
 
Annuities
 SPP-S-2017 and SPP-I- 2017 (at market rates)
 Investment rates: between 5.18% - 9.73% Reinvestment rates: between 5.12% - 8.26% SPP-S-2017 and SPP-I- 2017 (at market rates)
 Investment rates: between 2.30% - 8.89% Reinvestment rates: between 3.51% - 6.99%
SPP-S-2017 and SPP-I- 2017 (at cost)
Investment rates: between 3.64% - 8.03% Reinvestment rates: between 2.5% - 5.25%
SPP-S-2017 and SPP-I- 2017 (at cost)
Investment rates: between 3.75% - 8.02% Reinvestment rates: between 2.5% - 5.25%
Pension insurance - Definitive Regime (Claims with an accrual date up to May)
B-85 and MI-85
Soles VAC 0.64% / Nominal U.S. dollar 3.74%
B-85 and MI-85
Soles VAC 1.37% / Nominal US dollar 3.61%
Pension Insurance - Definitive Regime (Claims with accrual date at June 2011)
B-85 adjusted and MI-85
Soles VAC 0.64% / Nominal U.S. dollar 3.74% / Adjusted Soles 4.97%  / Adjusted dollar 3.74%
B-85 adjusted and MI-85
Soles VAC 1.37% / Nominal US dollar 3.61% / Adjusted Soles 5.12% / Adjusted dollar 3.61%
Pension Insurance - Temporary Regime (IFRS reserve)
SPP-S-2017- and SPP-I-2017
Soles VAC 3.7083%
SPP-S-2017- and SPP-I-2017
Soles VAC 3.614%
SCTR (IFRS reserve) Claims settled up to December 2019
SPP-S-2017 and SPP-I-2017
Soles VAC 3.743%
SPP-S-2017 and SPP-I-2017
Soles VAC 3.663%
 SCTR (IFRS reserve) Claims settled from January 2020 onwards
 SPP-S-2017 and SPP-I-2017 Soles VAC 3.081% SPP-S-2017 and SPP-I-2017 Soles VAC 2.748%
Individual life
CSO 80 adjusted
 US Dollars 2.0% - 4.0% / Soles 4.0% - 7.0%
CSO 80 adjusted
US Dollars 4.0% - 5.0% / Soles 4.0% - 5.0%

The sensitivity of the estimates used by the Group to measure its insurance risks is represented primarily by the life insurance risks; the main variables as of December 31, 2022 and 2021, are the interest rates and the mortality tables used. The Group has evaluated the changes in its most significant reserves related to life insurance contracts included in retirement, disability and survival annuities reserves of +/- 100 bps of the interest rates and of +/- 5 bps of the mortality factors, with the following results:

   
2022
    
2021
  
         
Variation of the reserve
          
Variation of the reserve
  
Variables
  
Reserve
    
Amount
    
Percentage
    
Reserve
    
Amount
    
Percentage
  
               
%
                
%
  
                                     
Portfolio in S/ - Base amount
    
3,932,792
      
–
      
–
      
3,951,240
      
–
      
–
  
Changes in interest rates: + 100 bps
    
3,558,149
      
(374,643
)
    
(9.53
)
    
3,581,606
      
(369,633
)
    
(9.35
)
Changes in interest rates: - 100 bps
    
4,386,248
      
453,456
      
11.53
      
4,398,670
      
447,430
      
11.32
  
Changes in Mortality tables to 105%
    
3,903,888
      
(28,904
)
    
(0.73
)
    
3,923,102
      
(28,138
)
    
(0.71
)
Changes in Mortality tables to 95%
    
3,963,030
      
30,238
      
0.77
      
3,980,673
      
29,433
      
0.74
  
                                                 
                                                 
Portfolio in US$ - Base amount
    
2,563,504
      
–
      
–
      
672,130
      
–
      
-
  
Changes in interest rates: + 100 bps
    
2,378,659
      
(184,845
)
    
(7.21
)
    
623,665
      
(48,465
)
    
(7.21
)
Changes in interest rates: - 100 bps
    
2,783,239
      
219,735
      
8.57
      
729,743
      
57,613
      
8.57
  
Changes in Mortality tables to 105%
    
2,541,988
      
(21,516
)
    
(0.84
)
    
666,489
      
(5,641
)
    
(0.84
)
Changes in Mortality tables to 95%
    
2,585,823
      
22,319
      
0.87
      
677,982
      
5,852
      
0.87