Premium revenue is to be recognised upfront when the business is written. Premium revenue will need to be discounted where premium revenue under an insurance contract is to be received beyond the current year of cover. In these instances, use discount rates as are required in measuring insurance liabilities in accordance with GPS 210 Liability Valuation for General Insurers.
Premium revenue is to be reported separately for:
Direct business; and
Inward reinsurance business.
Premium revenue is not to be recognised in accordance with AASB 1023 ‘Financial Reporting of General Insurance Activities’ (that is on an earned and unearned basis).
Outwards Reinsurance Expense
Premium ceded to reinsurers is recognised as an expense fully when incurred or contracted. Where payments under a reinsurance contract extend beyond the current year of cover, reinsurance expense is to be discounted using similar discount rates as are required in measuring insurance liabilities in accordance with GPS 210 Liability Valuation for General Insurers.
Reinsurance expense is to be split into the following:
Relating to future years cover.
Disclose in this data item, the reinsurance expense that relates to cover that will be applicable for future years.
Relating to current and prior years.
Disclose in this data item, the reinsurance expense that relates to cover applicable for the current year and past years.
Reinsurance expense recognised fully upfront is to be discounted where applicable (e.g. where reinsurance contract payment extend beyond current year of cover), Use similar discount rates as are required in measuring insurance liabilities in accordance with GPS 210 Liability Valuation for General Insurers.
Reinsurance expense is not to be recognised in accordance with the pattern of reinsurance service received as required by AASB 1023 ‘Financial Reporting of General Insurance Activities’.
Net Premium Revenue
Represents the difference between Premium revenue and Outwards reinsurance expense.
Claims Expense
The claims expense for the reporting period is to be reported in relation to the following:
Direct business written and assumed by the insurer/consolidated insurance group, and
Inward reinsurance business.
For both of these items the following is to be further provided:
In relation to future years
Division Specific instructions - Financial Sector (Collection of Data) determination No. 18 of 2005 - Specific instructions | Zoe
This will reflect any movement in the value of Premium Liabilities reported in GRF 300.0 Statement of Financial Position. The value of Premium Liabilities reported in GRF 300.0 Statement of Financial Position does not have to be equal to, but must not be less than the respective amounts required by GPS 210 Liability Valuation for General Insurers.
In relation to current and prior years
This reflects the claims expense relating to claims that occur during a financial period and are paid in that same period and where a claims liability (and corresponding claims expense) has been recognised for those claims which are yet to be settled in that same period (i.e. movements in the Outstanding Claims Provision).
The OCP reported in the Statement of Financial Position does not have to be equal to, but must not be less than the amounts required by GPS 210 Liability Valuation for General Insurers.
Note:
Claims expense that relates to movements in the outstanding claims provision (OCP) and Premium Liabilities is to be based on the OCP and Premium Liabilities that are reported in GRF 300.0 Statement of Financial Position. The OCP and premium liabilities reported in the Statement of Financial Position does not have to be equal to, but must not be less than the respective amounts required by GPS 210 Liability Valuation for General Insurers and hence the amounts reported in forms titled “Outstanding Claims Provision and Insurance Risk Charge” (i.e. OCP) and Statement of Premium Liabilities and Insurance Risk Charge (i.e. Premium Liabilities).
Further, where the insurer only has insurance liabilities and claims within Australia, the claims expense reported in this form relating to current and prior years will equate to the total claims expense reported in GRF 430.0 Claims Expense by State and Territory of Australia.
Gross Claims Expense which is Attributable to Changes in Valuation Assumptions i.e. Discount Rate
Disclose in this field that component of gross claims expense which is due to changes in modeling assumptions applied to outstanding claims provision. This is a memo item of total gross claims expense and is not added into the calculation of Net Incurred Claims or Underwriting Result.
Reinsurance Recoveries Revenue
Reinsurance recoveries revenue for the reporting period is to be reported in relation to the following:
In relation to future years
This will reflect any movement in the value of Expected Reinsurance Recoveries that are associated with insurance liabilities recognised in the measurement of Premium Liabilities. This is in relation to:
direct business written and assumed by the insurer/insurance group, and
inward reinsurance business.
In relation to current and prior years.
This will reflect recoveries received or receivable associated with claims expense recognised for the following:
direct business written and assumed by the insurer/insurance group, and
inward reinsurance business.
Include amounts that the insurer has recovered or is entitled to recover from reinsurers on claim expense during the reporting period. Some estimates previously made in the context of reinsurance recoverables will have been revised in the course of the year’s business. Such adjustments are to be reflected in the next reporting period as appropriate when.
Total Reinsurance Recoveries Revenue
This represents the sum of reinsurance recoveries revenue disclosed for:
Relating to future years
Relating to current and prior years.
Other Recoveries Revenue
This is the revenue from claims recoveries other than reinsurance recoveries, in respect of claims. Where appropriate it is to be reported after deducting the reinsurer’s share of the ‘other recoveries revenue’.
Total Recoveries
Represents the sum of the values reported for “Total reinsurance recoveries revenue” and “Other recoveries revenue”.
Net Incurred Claims
This represents the difference between “Gross claims expense” and “Total recoveries”.
Acquisition Costs
This item will include the fully expensed component of the DAC (as recognised under AASB 1023).
Total Underwriting Expenses
Underwriting expenses are derived from:
Acquisition costs
Plus:
Other underwriting expenses (including commission expenses)
Levies and charges (collected on behalf of and payable to other agencies i.e. government)
Less:
Commission revenue (this should be recognised fully up front). The commission revenue should only relate to insurance business. Do not include ‘premium rebates’ received from reinsurers in this line item.
Underwriting Result
The underwriting result is derived from:
Net Premium Revenue
Less:
Net Incurred Claims
Less:
Total underwriting expenses
Investment Income
The total will agree to the totals disclosed in GRF 310.3 Investment & Operating Income and Expense.
Other Operating Income
Include income earned, which does not ordinarily come within the specific terms used above.
The total will agree to the totals disclosed in GRF 310.3 Investment & Operating Income and Expense.
Other Operating Expenses
Report the operating expenses of the business in accordance with AASB 1023 and other applicable accounting standards. The total will agree to the totals disclosed in GRF 310.3 Investment & Operating Income and Expense.
Profit or Loss from Ordinary Activities before Goodwill Amortisation and Income Tax
The profit (loss) from general insurance business is derived from:
Underwriting result
Plus:
Investment income
Other operating income
Less:
Other operating expenses
Plus:
Share of net profits (or losses) of associates and joint ventures accounted for using the equity method.
Goodwill Amortisation
The total will agree to the value disclosed in GRF 310.3 Investment & Operating Income and Expense.
Goodwill must be recorded and amortised in accordance with AASB 1013 Accounting for Goodwill. Goodwill is to be amortised over its estimated useful life but not exceeding 20 years. The total will reconcile to the value disclosed as “Goodwill Amortisation” in GRF 300.0 Statement of Financial Performance.
Profit or Loss from Ordinary Activities before Income Tax Expense (Benefit)
Derived from:
Profit or loss from ordinary activities before goodwill amortisation and income tax
Less:
Goodwill amortisation.
Income Tax Expense (or Benefit)
Represents the income tax expense or benefit attributable to the operating profit or loss.
This item must be completed in accordance with the requirements of AASB 1020 ‘Accounting for Income Tax’.
Profit or Loss from Ordinary Activities after Income Tax
Derived from:
Profit or loss from ordinary activities before income tax expense (benefit)
Less:
Income tax expense (or benefit)
Profit or Loss on Extraordinary Items after Income Tax
Extraordinary items are to be classified in accordance with the Australian accounting standards.
Items are extraordinary in that they have their origin outside the ordinary operations and are not of a recurring nature. An event or transaction that would be outside the ordinary operations of one company or group of companies may well be part of the ordinary operations of another. For an item to be classified as extraordinary it is necessary for it to be both outside the ordinary operations of the company and for the underlying event or transaction to be of a type that is not of a recurring nature.
It is expected that only on rare occasions will items fall within the definition of extraordinary items. The fact that an item relates to one or more prior financial periods in no way contributes to its classification as an extraordinary item.
Net Profit or Loss after Income Tax
Derived from:
Profit or loss from ordinary activities after income tax
Plus:
Profit or loss on extraordinary items after income tax
Retained Profits or Accumulated Losses at Beginning of Financial Year
Report here the relevant net assets amount as at the start of the financial year concerned.
Amounts Transferred from/to Parent Entity
Disclose the amount of dividends or funds transferred from/to the parent entity during the reporting period.
Retained Profits or Accumulated Losses at end of Reporting Period
This is derived from:
Net Profit or Loss after income tax
Adjusted for the following:
Retained profits or losses at beginning of financial year;
Adjustment (positive or negative) to retained profits due to change in accounting policies/standards;
Aggregate of amounts transferred from/to reserves;
Aggregate of amounts transferred from the parent entity;
Aggregate of amounts transferred to the parent entity; and
Aggregate of other amounts (positive or negative).
Note: If capital is provided by the parent entity, which is not required to be repaid by the branch, this contribution of capital is to be disclosed in this form as funds transferred from the parent entity.
If the capital provided by the parent is in the form of debt and must be repaid, the amount should be disclosed in the liability section of GRF 300.0 Statement of Financial Position under “Loan Capital”.