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TECHNICAL RESERVES, INSURANCE CLAIMS RESERVES AND UNEARNED PREMIUMS
 12 Months Ended
Dec. 31, 2017
Disclosure of insurance claim reserves and technical reserves [Abstract]  
Disclosure of insurance claim reserves and technical reserves [Text Block]
15
TECHNICAL RESERVES, INSURANCE CLAIMS RESERVES AND UNEARNED PREMIUMS
 
a)
This item consists of the following:
 
 
 
2017
 
 
 
Claims reserves
direct
 
Technical
reserves (*)
 
Total
 
 
 
S/(000)
 
S/(000)
 
S/(000)
 
 
 
 
 
 
 
 
 
 
 
 
Life insurance
 
 
626,871
 
 
5,599,777
 
 
6,226,648
 
General insurance
 
 
484,608
 
 
513,826
 
 
998,434
 
Health insurance
 
 
69,373
 
 
149,305
 
 
218,678
 
Total
 
 
1,180,852
 
 
6,262,908
 
 
7,443,760
 
 
 
 
2016
 
 
 
Claims reserves
direct
 
Technical
reserves (*)
 
Total
 
 
 
S/(000)
 
S/(000)
 
S/(000)
 
 
 
 
 
 
 
 
 
 
 
 
Life insurance
 
 
551,516
 
 
5,128,974
 
 
5,680,490
 
General insurance
 
 
325,748
 
 
574,435
 
 
900,183
 
Health insurance
 
 
60,733
 
 
144,783
 
 
205,516
 
Total
 
 
937,997
 
 
5,848,192
 
 
6,786,189
 
 
(*)
At December 31, 2017, the life insurance technical reserves include the mathematical reserves of life annuities amounting to S/3,514.4 million (S/3,241.2 million at December 31, 2016).
 
Insurance claims reserves represent reported claims and an estimation for incurred but non reported claims (IBNR). Reported claims are adjusted on the basis of technical reports received from independent adjusters.
 
Insurance claims and technical reserves corresponding to the reinsurers and coinsurers are shown as ceded claims, which are presented in “Accounts receivable from reinsurers and coinsurers” of the consolidated statement of financial position, See Note 9(b).
 
At December 31, 2017, the reserves for direct claims include reserves for IBNR for life, general and health insurance for an amount of S/282.4 million, S/11.3 million and S/47.6 million, respectively (S/231.4 million, S/9.1 million and S/41.4 million, respectively, at December 31, 2016).
 
At December 31, 2017 and in previous years, the differences between the estimations for the incurred and non-reported claims and the settled and pending liquidation claims have not been significant. In the case of general risks and health, retrospective analysis indicates that the amounts accrued are adequate and the Management believes that the estimated IBNR reserve is sufficient to cover any liability as of December 31, 2017 and 2016.
 
Technical reserves comprise reserves for future benefit obligation under its in-force life, annuities and accident insurance policies and the unearned premium reserves in respect of the portion of premiums written that is allocable to the unexpired portion of the related policy periods for general and health insurance products.
 
b)
Movement of insurance claims reserves (direct and assumed), occurred during the years 2017 and 2016:
 
 
 
2017
 
 
 
Life
insurance
 
General
insurance
 
Health
insurance
 
Total
 
 
 
S/(000)
 
S/(000)
 
S/(000)
 
S/(000)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
 
 
551,516
 
 
325,748
 
 
60,733
 
 
937,997
 
Claims, Note 24
 
 
646,026
 
 
661,108
 
 
294,557
 
 
1,601,691
 
Payments
 
 
(569,108)
 
 
(491,108)
 
 
(285,899)
 
 
(1,346,115)
 
Exchange difference
 
 
(1,563)
 
 
(11,140)
 
 
(18)
 
 
(12,721)
 
Ending balance
 
 
626,871
 
 
484,608
 
 
69,373
 
 
1,180,852
 
 
 
 
2016
 
 
 
Life
insurance
 
General
insurance
 
Health
insurance
 
Total
 
 
 
S/(000)
 
S/(000)
 
S/(000)
 
S/(000)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
 
 
478,960
 
 
335,818
 
 
64,896
 
 
879,674
 
Claims, Note 24
 
 
618,274
 
 
351,227
 
 
274,902
 
 
1,244,403
 
Payments
 
 
(544,934)
 
 
(385,621)
 
 
(243,847)
 
 
(1,174,402)
 
Exchange difference
 
 
(784)
 
 
24,324
 
 
(35,218)
 
 
(11,678)
 
Ending balance
 
 
551,516
 
 
325,748
 
 
60,733
 
 
937,997
 
 
c)
Technical reserves occurred during the years 2017 and 2016:
 
 
 
2017
 
 
 
Life
insurance
 
General
insurance
 
Health
insurance
 
Total
 
 
 
S/(000)
 
S/(000)
 
S/(000)
 
S/(000)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
 
 
5,128,974
 
 
574,435
 
 
144,783
 
 
5,848,192
 
Time course expenses and others
 
 
77,855
 
 
–
 
 
–
 
 
77,855
 
Unearned premium and other technical reserves variation, net
 
 
127
 
 
(28,992)
 
 
4,621
 
 
(24,244)
 
Insurance subscriptions
 
 
491,519
 
 
–
 
 
–
 
 
491,519
 
Exchange difference and others
 
 
(98,698)
 
 
(31,617)
 
 
(99)
 
 
(130,414)
 
Ending balance
 
 
5,599,777
 
 
513,826
 
 
149,305
 
 
6,262,908
 
 
 
 
2016
 
 
 
Life 
insurance
 
General insurance
 
Health 
insurance
 
Total
 
 
 
S/(000)
 
S/(000)
 
S/(000)
 
S/(000)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
 
 
4,755,154
 
 
582,453
 
 
144,346
 
 
5,481,953
 
Time course expenses and others
 
 
58,778
 
 
-
 
 
-
 
 
58,778
 
Unearned premium and other technical
reserves variation, net
 
 
365
 
 
(11,578)
 
 
9,881
 
 
(1,332)
 
Insurance subscriptions
 
 
361,966
 
 
-
 
 
-
 
 
361,966
 
Exchange difference and others
 
 
(47,289)
 
 
3,560
 
 
(9,444)
 
 
(53,173)
 
Ending balance
 
 
5,128,974
 
 
574,435
 
 
144,783
 
 
5,848,192
 
 
At December 31, 2017 and 2016 no additional reserves were needed as a result of the liability adequacy test. The main assumptions used in estimation of retirement, disability and survival annuities and individual life (including Investment link insurance contracts) reserves as, of those dates, are the following:
 
 
 
At December 31, 2017
 
At December 31, 2016
Mortality
 
Mortality table
 
Technical rates
 
Mortality table
 
Technical rates
Annuities
 
SPP-S-2017 and SPP-I- 2017
 
Between 2.90% - 7.93% / Between 2.50% - 5.25%
 
TAP 2012 and MI 2006
 
Between 4.21% - 7.69% / Between 2.50% - 5.25%
Pension insurance –Temporary Regime / SCTR (*)
 
B-85 and MI-85
 
3.00% soles VAC
 
B-85 and MI-85
 
3.00% soles VAC
Pension insurance –Definitive Regime
 
B-85 and MI-85
 
3.31% soles VAC / 4.66% Nominal dollars
 
B-85 and MI-85
 
3.43% soles VAC / 4.65% Nominal dollars
Pension insurance –Definitive Regime / SCTR
 
B-85 adjusted and MI-85
 
Between 3.00%, 3.38% soles VAC / 4.66% Nominal dollars / 6.35% soles adjusted / 4.66% dollars adjusted
 
B-85 adjusted and MI-85
 
Between 3.00%, 3.43% soles VAC / 4.65% Nominal dollars / 6.49% soles adjusted / 4.65% dollars adjusted
Pension insurance –Temporary Regime /SCTR (Longevity)
 
SPP-S-2017- and SPP-I-2017
 
Between 3.81%, 3.88% soles VAC
 
SPP-S-2017- and SPP-I-2017
 
Between 3.74%, 3.88% soles VAC
Individual life
 
CSO 80 adjusted
 
Between 4.00% - 5.00%
 
CSO 80 adjusted
 
Between 4.00% - 5.00%
 
(*)
Complementary Work Risk Insurance (SCTR the Spanish acronym).
 
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, 2017 and 2016, are the interest rates and the mortality tables used. The Group has evaluated the changes of the reserves related to its most significant life insurance contracts included in retirement, disability and survival annuities contracts of +/- 100 bps of the interest rates and of +/- 5 bps of the mortality factors, with the following results:
 
 
 
At December 31, 2017
 
At December 31, 2016
 
 
 
 
 
 
Variation of the reserve
 
 
 
 
Variation of the reserve
 
Variables
 
Amount of 
the reserve
 
Amount
 
Percentage
 
Amount of 
the reserve
 
Amount
 
Percentage
 
 
 
S/(000)
 
S/(000)
 
%
 
S/(000)
 
S/(000)
 
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Portfolio in S/- Base amount
 
 
519,317
 
 
-
 
 
-
 
 
508,498
 
 
-
 
 
-
 
Changes in interest rates: + 100 bps
 
 
473,067
 
 
(46,250)
 
 
(8.91)
 
 
462,992
 
 
(45,506)
 
 
(8.95)
 
Changes in interest rates: - 100 bps
 
 
574,664
 
 
55,347
 
 
10.66
 
 
563,057
 
 
54,559
 
 
10.73
 
Changes in Mortality tables to 105%
 
 
514,091
 
 
(5,226)
 
 
(1.01)
 
 
503,253
 
 
(5,245)
 
 
(1.03)
 
Changes in Mortality tables to 95%
 
 
524,801
 
 
5,484
 
 
1.06
 
 
514,003
 
 
5,505
 
 
1.08
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Portfolio in US$- Base amount
 
 
2,682,536
 
 
-
 
 
-
 
 
2,317,565
 
 
-
 
 
-
 
Changes in interest rates: + 100 bps
 
 
2,428,338
 
 
(254,198)
 
 
(9.48)
 
 
2,089,212
 
 
(228,352)
 
 
(9.85)
 
Changes in interest rates: - 100 bps
 
 
2,993,483
 
 
310,948
 
 
11.59
 
 
2,591,011
 
 
273,447
 
 
11.80
 
Changes in Mortality tables to 105%
 
 
2,660,474
 
 
(22,062)
 
 
(0.82)
 
 
2,293,403
 
 
(24,161)
 
 
(1.04)
 
Changes in Mortality tables to 95%
 
 
2,705,711
 
 
23,176
 
 
0.86
 
 
2,336,095
 
 
18,530
 
 
0.80