Fennia Annual Report 2014

Calculation Methods for the Key Figures

Calculation methods for the key figures

KEY FIGURES

Turnover =

Non-life insurance turnover
+ premiums earned before reinsurers’ share
+ net investment income on the profit and loss account
+ other income

Life insurance turnover
+ premiums written before reinsurers’ share
+ net investment income on the profit and loss account
+ other income

Total result = operating profit (loss) +/- change in off-balance sheet valuation differences

Return on assets at current values (%) =
+/- operating profit or loss
+ financial expenses
+ unwinding of discount
+/- change in valuation differences on investments
+ Balance Sheet total
- technical provisions for unit-linked insurances
+/- valuation differences on investments

The divisor of the key figure is calculated as an average of values on the Balance Sheet for the current and previous financial period.

In life insurance, ‘unwinding of discount’ refers to the technical interest credited to insurances during the year plus/minus any changes in the supplementary liability of the interest.

In non-life insurance, ‘unwinding of discount’ refers to the effect of the process of unwinding the discounted claims outstanding on the claims incurred, when discounting the capital value of pension liabilities. The rate is calculated by multiplying the discounted provision for claims outstanding at the beginning of the year by the effective technical rate of interest at the end of the previous year.

Net investment income on invested capital at current values (%)
Net investment income at current values in relation to invested capital is calculated by line of investment and for the total amount of investments with reference to cash flows during the period.

Average number of employees = Average number of employees at the end of each calendar month.

NON-LIFE INSURANCE

Premiums written = premiums written before reinsurers’ share

Loss ratio % =
claims incurred
premiums earned

Loss ratio (excl. unwinding of discount) % =
claims incurred (excl. unwinding of discount)
premiums earned

Expense ratio % =
operating expenses
premiums earned

Key figures are calculated after reinsurers’ share.

Combined ratio % = loss ratio + expense ratio

Combined ratio (excl. unwinding of discount) % =
loss ratio (excl. unwinding of discount) + expense ratio

Solvency margin see calculation in the Notes

Solvency capital = solvency margin + equalisation provision + minority interest

Solvency capital, % of technical provisions =
solvency capital
+ technical provisions
- equalisation provision

Technical provisions are calculated after reinsurers’ share.

Solvency ratio % =
solvency capital
premiums earned

Premiums earned are calculated for the previous twelve months after reinsurers’ share.

LIFE INSURANCE

Premiums written = premiums written before reinsurers’ share

Expense ratio (% of expense loading) =
+ operating expenses before change in deferred acquisition costs
+ claims settlement expenses
expense loading

Solvency margin see calculation in the Notes

Solvency capital = solvency margin + equalisation provision + minority interest

Solvency ratio (%) =
solvency capital
+ technical provisions
- equalisation provision
- 75% of technical provisions for unit-linked insurances

Technical provisions are calculated after reinsurers’ share.