Access America 2003 Annual Report Download - page 28

Information on liabilities
Technical provisions
Technical provisions include unearned premium reserves, claim reserves and other technical
provisions.
Premiums written attributable to income of future periods are accrued under unearned
premium reserves. These premiums are distributed to the current fiscal year and subsequent
years over the period of the contract for every day that the premium has to cover.
Claim reserves are assessed according to local supervisory instances’ requirements, are
computed on a case by case basis and are supplemented by IBNR reserves (reserves for
claims Incurred But Not yet Reported) based on management and statistical estimates.
Non-technical provisions
These include personnel provisions and similar liabilities, provision for income taxes and
other non-technical provisions.
Pension and similar reserves are calculated taking local circumstances into account as well
as expected future trends in salaries and wages, retirement rates and pension increases.
Provision for income taxes are calculated in accordance with the relevant local tax
regulations.
Other liabilities
Other liabilities include deposits received from reinsurers, loans, liabilities direct /indirect
business, liabilities with associated companies (current accounts), deferred income, deferred
service income and other liabilities. These are reported at fair value.
Deferred tax liabilities
The calculation of deferred tax is based on temporary differences between the carrying
amounts of assets or liabilities in the published balance sheet and their tax basis, and on
differences arising from the application of uniform valuation policies for consolidation
purposes. The tax rates used for the calculation of deferred taxes are the local rates applicable
in the countries concerned. Anticipated changes are already taken into account as at balance
sheet date.
Information on income statement
Turnover
Turnover includes insurance premiums and service revenue.
Premiums earned
Premiums written for travel insurance are reported proportionately as income over the term
of the insurance contract for every day that the premium has to cover. Unearned premiums
are calculated separately for each policy in order to determine the portion of premium
income that has not been earned.
Claims and service administration expenses (ICHC / ISHC)
Claims and service handling costs are assessed according to business management criteria
and transferred from the general expenses to the claims and service administration expenses,
respectively.
Ordinary result
Interest income and interest expenses are recognised on an accrual basis.
Dividends are recognised as income when received.
Interest on finance leases is recognised as interest expenses over the term of the respective
lease.
26