INSURANCE AND UNDERWRITING RESULT

12 Months Ended

Dec. 31, 2023

INSURANCE AND UNDERWRITING RESULT [Abstract]

INSURANCE AND UNDERWRITING RESULT

22 INSURANCE AND UNDERWRITING RESULT

a) The insurance and reinsurance result consists of the following:

	2023			2022
		S/(000)			S/(000)
Contracts measured under BBA and VFA (b)		226,125			211,323
Contracts measured under PAA		3,629,283			3,321,947
Income from the Insurance Service		3,855,408			3,533,270
Claims incurred and adjustments related to past claims incurred and other insurance service expenses		(2,232,672	)		(2,122,652	)
Losses in onerous contracts and reversal of losses		(17,181	)		(92,530	)
Others		(3,134	)		(15,741	)
Insurance Service Expenses		(2,252,987	)		(2,230,923	)
Insurance Service Result		1,602,421			1,302,347

	2023			2022
		S/(000)			S/(000)
Variation in incurred claim provision - pending Claims - Reinsurance		448,500			317,110
Adjustment changes of incurred claim provision - RA - Reinsurance		(9	)		–
Income from reinsurance recoveries		448,491			317,110
Premiums assigned to the reinsurance period		(839,812	)		(778,009	)
Expenses for assigning the premiums paid to the reinsurer		(839,812	)		(778,009	)
Reinsurance result		(391,321	)		(460,899	)

b) The result of the contracts measured under BBA and VFA of the insurance service is detailed below:

	2023		2022
		S/(000)		S/(000)
Amounts related to changes in liabilities for the remaining coverage:
CSM recognized for services provided		128,639		131,588
Change in risk adjustment for non-financial risk		12,357		15,982
Expenses for insurance services and expected claims occurred		81,995		65,329
Cash recovery for the purchase of insurance		3,134		(1,576	)
Contracts measured under BBA and VFA		226,125		211,323

c) The impact of new business for onerous and non-onerous contracts is detailed below:

	2023
	Onerous contracts			Non-onerous contracts			Total
		S/(000)			S/(000)			S/(000)
Estimates of the present value of future outflows:
Insurance Acquisition Cash Flows		21,123			85,120			106,243
Claims and other directly attributable expenses		135,905			658,515			794,420
Estimates of the present value of future inflows		(138,467	)		(856,323	)		(994,790	)
Risk adjustment for non-financial risk		1,913			6,225			8,138
CSM		–			106,463			106,463
Impact on provisions for contracts recognized in the period		20,474			–			20,474

	2022
	Onerous contracts			Non-onerous contracts			Total
		S/(000)			S/(000)			S/(000)
Estimates of the present value of future outflows:
Insurance Acquisition Cash Flows		14,022			72,277			86,299
Claims and other directly attributable expenses		165,170			468,718			633,888
Estimates of the present value of future inflows		(167,263	)		(668,931	)		(836,194	)
Risk adjustment for non-financial risk		2,562			7,569			10,131
CSM		–			120,367			120,367
Impact on provisions for contracts recognized in the period		14,491			–			14,491

d) Below, we present the estimate of the release of CSM considering the reversals of the loss component:

	2023		2022
		S/(000)		S/(000)
One year		113,378		115,614
Two years		115,736		148,085
Three years		116,736		164,542
Four years		117,284		165,924
Five years		114,531		152,654
from 6 to 10 years		494,953		413,518
Older than 10 years		1,011,435		217,278
Total		2,084,053		1,377,615

e) The fair value of the underlying assets is as follows:

	2023		2022
		S/(000)		S/(000)
IL Controlled		91,502		84,570
IL Controlled Soles		186,879		187,088
IL Balanced		79,671		72,059
IL Balanced II		382,326		370,484
IL Global Balanced		87,527		75,301
IL Capitalized		1,433		328
IL Capitalized II		259		190
IL Global Growth		1,073		198
IL Sustainable Capitalization		804		–

f) The impact in the current period of the transition approaches adopted to establish CSM for insurance contract portfolios is revealed in the following table:

	2023			2022
		S/(000)			S/(000)
CSM at the beginning of the period		992,527			1,251,473
Changes related to future service		(11,385	)		(181,050	)
Changes related to the current service		(74,030	)		(77,896	)
CSM at the end of the period		907,112			992,527

g) Below is the composition of the net premiums earned as of December 31, 2021 under IFRS 4:

	Gross written premiums		Technical reserve adjustment			Total gross written premiums (*)		Premiums ceded to reinsurers and co-insurers, net (**)			Results of financial assets designated at fair value through profit and loss,		Total Net premiums earned
		S/(000)		S/(000)			S/(000)		S/(000)			S/(000)		S/(000)
2021
Life insurance		2,508,154		(890,216	)		1,617,938		(214,636	)		54,663		1,457,965
Health insurance		630,790		(30,457	)		600,333		(15,078	)		–		585,255
General insurance		1,140,478		(3,176	)		1,137,302		(508,992	)		–		628,310
Total		4,279,422		(923,849	)		3,355,573		(738,706	)		54,663		2,671,530

(*) Gross written premiums by insurance type are described below:

	2021
		S/(000)	%
Life insurance (i)		1,617,938		48.22
Health insurance (ii)		600,333		17.89
General insurance (iii)		1,137,302		33.89
Total		3,355,573		100.00

(i) The breakdown of life insurance gross written premiums is as follows:

	2021
		S/(000)	%
Disability and survival (*)		645,194		39.88
Credit life		593,370		36.67
Individual life (**)		119,220		7.37
Group life		150,777		9.32
Annuities		109,377		6.76
Total		1,617,938		100.00

(*) This item includes Complementary Work Risk Insurance (“SCTR” from its Spanish acronym).

(**) Individual life insurance premiums include Investment Link insurance contracts.

(ii) Gross health insurance premiums include medical assistance that amounts to S/519.8 million and represents 86.59 percent in this line of business as of December 31, 2021

(iii) General insurance gross written premiums consist of the following:

	2021
		S/(000)	%
Automobile		334,939		29.45
Fire and allied lines		311,048		27.35
Theft and robbery		110,815		9.74
Third party liability		109,907		9.66
Transport		58,300		5.13
Technical lines (*)		63,792		5.61
Marine Hull		29,414		2.59
SOAT (Mandatory automobile line)		25,662		2.26
Aviation		38,275		3.37
Others		55,150		4.84
Total		1,137,302		100.00

(*) Technical lines include Contractor’s All Risk (CAR), Machinery breakdown, All Risk (EAR), Electronic equipment (EE), All Risk Contractor’s Equipment (ARCE).

(**) ”Premiums ceded to reinsurers and coinsurers, net” include:

	2021
		S/(000)
Premiums ceded for automatic contracts (mainly excess of loss)		(355,356	)
Premiums ceded for facultative contracts,		(392,346	)
Annual variation of reserve risk in progress of premiums ceded		8,996
		(738,706	)

h) Below are the claims incurred by life, general and health insurance contracts as of December 31, 2021 under IFRS 4:

	2021
	Life insurance			General insurance			Health insurance			Total
		S/(000)			S/(000)			S/(000)			S/(000)
Gross claims		2,183,789			375,162			325,307			2,884,258
Ceded claims		(406,494	)		(120,546	)		(15,301	)		(542,341	)
Net insurance claims		1,777,295			254,616			310,006			2,341,917