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Notes to the Accounts

27 Liabilities from Insurance and Investment Contracts
                       
P&C insurance          
         
Change in insurance liabilities        
            2010 2009
EURm         Gross Ceded Net Gross Ceded Net
Provision for unearned premiums            
  At 1 Jan.         1,668 49 1,619 1,521 54 1,467
  Exchange differences         83 2 85 119 0 119
  Change in provision         94 2 96 28 -5 33
  At 31 Dec.         1,845 53 1,792 1,668 49 1,619
                       
                       
            2010 2009
EURm         Gross Ceded Net Gross Ceded Net
Provision for claims outstanding            
  At 1 Jan.         6,915 428 6,486 6,367 377 5,990
  Unwinding of discount         61 - 61 - - -
  Insurance holdings sold         - - - -14 - -
  Exchange differences         457 38 418 386 33 353
  Change in provision         62 -9 71 176 18 158
  At 31 Dec.         7,494 457 7,037 6,915 428 6,486
                       
Liabilities from insurance contracts        
                       
EURm                 2010 2009
  Provision for unearned premiums 1,845 1,668
  Provision for claims outstanding 7,495 6,915
  Incurred and reported losses 2,026 1,854
  Incurred but not reported losses (IBNR) 3,555 3,284
  Provisions for claims-adjustment costs 271 241
  Provisions for annuities and sickness benefits 1,643 1,535
P&C insurance total                 9,340 8,583
                       
Reinsurers' share                    
  Provision for unearned premiums 53 49
  Provision for claims outstanding 457 428
  Incurred and reported losses 303 268
  Incurred but not reported losses (IBNR) 154 160
Total reinsurers' share 510 477
                       
As the P&C Insurance is exposed to various exchange rates, comparing the balance sheet data from year to year can be misleading. The strengthening of the Swedish krone had a significant effect on the technical provisions for own account. The exchange effect on SEK-nominated technical provisions for own account amounted to net decrease of EURm 535 during the financial year.
                       
Claims cost trend of P&C Insurance        
The tables below show the cost trend for the claims for different years. The upper part of the tables shows how an estimate of the total claims costs per claims year evolves annually. The lower section shows how large a share of this is presented in the balance sheet.
                       
More information on P&C Insurance's insurance liabilities in the Risk Management section of the Annual accounts.
                       
Claims costs before reinsurance        
Estimated claims cost                    
                       
EURm < 2002 2003 2004 2005 2006 2007 2008 2009 2010 Total
  At the close of the claims year 5,027 2,572 2,515 2,677 2,691 2,756 2,908 2,916 3,036  
  One year later 5,253 2,531 2,479 2,620 2,675 2,753 2,861 2,865    
  Two years later 5,349 2,450 2,415 2,566 2,646 2,717 2,800      
  Three years later 5,429 2,441 2,409 2,538 2,643 2,684        
  Four years later 5,523 2,421 2,393 2,504 2,601          
  Five years later 5,563 2,403 2,365 2,468            
  Six years later 5,563 2,390 2,324              
  Seven years later 5,650 2,402                
  Eight years later 5,723                  
                       
Current estimate of total claims costs 5,723 2,402 2,324 2,468 2,601 2,684 2,800 2,865 3,036  
Total disbursed 3,261 2,093 1,971 2,068 2,164 2,186 2,207 2,118 1,616  
                     
Provision reported in the balance sheet 2,462 309 353 401 437 497 593 746 1,420 7,219
                     
of which established vested annuities 1,223 66 52 65 67 67 58 36 9 1,643
                     
Other provision                   5
                     
Provision for claims-adjustment costs                   271
                     
Total provision reported in the BS 7,494
                       
                       
Claims costs after reinsurance
Estimated claims cost                    
                       
EURm < 2002 2003 2004 2005 2006 2007 2008 2009 2010 Total
  At the close of the claims year 4,418 2,451 2,443 2,530 2,581 2,656 2,784 2,796 2,884  
  One year later 4,633 2,401 2,406 2,467 2,555 2,646 2,751 2,762    
  Two years later 4,735 2,326 2,344 2,412 2,525 2,619 2,694      
  Three years later 4,795 2,316 2,337 2,391 2,528 2,586        
  Four years later 4,873 2,296 2,323 2,359 2,490          
  Five years later 4,905 2,278 2,296 2,324            
  Six years later 4,903 2,266 2,254              
  Seven years later 4,939 2,279                
  Eight years later 5,030                  
                       
Current estimate of total claims costs 5,030 2,279 2,254 2,324 2,490 2,586 2,694 2,762 2,884  
Total disbursed 2,670 1,994 1,920 1,960 2,075 2,114 2,138 2,072 1,597  
                     
Provision reported in the balance sheet 2,360 284 334 364 415 472 555 690 1,287 6,761
                     
of which established vested annuities 1,223 66 52 65 67 67 58 36 9 420
                     
Other provision                   5
                     
Provision for claims-adjustment costs 271
                     
Total provision reported in the BS 7,037
                     
                     
Life insurance                    
                       
Change in liabilities arising from other than unit-linked insurance and investment contracts
                       
EURm               Insurance contracts Investment contracts Total
At 1 Jan. 2010               4,374 57 4,431
Premiums               273 1 274
Claims paid               -401 -37 -438
Expense charge               -37 0 -37
Guaranteed interest               158 1 159
Bonuses               1 0 1
Other               20 0 20
At 31 Dec. 2010               4,388 22 4,410
Reinsurers' share               -4   -4
Net liability at 31 Dec. 2010               4,385 22 4,406
                     
EURm               Insurance contracts Investment contracts Total
At 1 Jan. 2009               4,423 63 4,487
Premiums               238 20 258
Claims paid               -385 -27 -411
Expense charge               -39 0 -39
Guaranteed interest               157 2 159
Bonuses               18 0 18
Other               -38 -1 -40
At 31 Dec. 2009               4,374 57 4,431
Reinsurers' share               -4 0 -4
Net liability at 31 Dec. 2009               4,370 57 4,427
                       
                       
Change in liabilities arising from unit-linked insurance and investment contracts
                       
EURm               Insurance contracts Investment contracts Total
At 1 Jan. 2010               1,961 398 2,359
Premiums               376 467 843
Claims paid               -163 -181 -344
Expense charge               -30 -9 -38
Other               236 68 304
At 31 Dec. 2010               2,381 743 3,124
                     
At 1 Jan. 2009               1,538 99 1,637
Premiums               273 279 551
Claims paid               -126 -27 -153
Expense charge               -25 -2 -26
Other               302 49 351
At 31 Dec. 2009               1,961 398 2,359
                       
The liabilities at 1 Jan. and at 31 Dec. include the future bonus reserves and the effect of the reserve for the decreased discount rate. The calculation is based on items before reinsurers' share. A more detailed specification of changes in insurance liabilities is presented in Group's Risk Management.
                       
EURm                 2010 2009
Insurance contracts                    
Liabilities for contracts with discretionary participation feature (DPF)    
  Provision for unearned premiums 2,465 2,513
  Provision for claims outstanding 1,907 1,844
Liabilities for contracts without discretionary participation feature (DPF)    
  Provision for unearned premiums 14 13
  Provision for claims outstanding 0 0
  Total                 4,386 4,371
                       
Assumed reinsurance                    
  Provision for unearned premiums 1 1
  Provision for claims outstanding 2 2
  Total                 3 3
                       
Insurance contracts total                    
  Provision for unearned premiums 2,479 2,528
  Provision for claims outstanding 1,909 1,846
  Total                 4,388 4,374
                       
Investment contracts                    
Liabilities for contracts with discretionary participation feature (DPF)    
  Provision for unearned premiums 22 57
                       
Liabilities for insurance and investment contracts total    
  Provision for unearned premiums 2,501 2,585
  Provision for claims outstanding 1,909 1,846
Life insurance total                 4,410 4,431
                       
Reinsurers' share                    
  Provision for unearned premiums 0 0
  Provision for claims outstanding -4 -4
Total                 -4 -4
                       
Investment contracts do not include a provision for claims outstanding.
         
Liability adequacy test does not give rise to supplementary claims.
         
Exemption allowed in IFRS 4 Insurance contracts has been applied to investment contracts with DPF or contracts with a right to trade-off for an investment contract with DPF. These investment contracts have been valued like insurance contracts.
                       
                       
Group, total                 13,750 13,014
                       
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