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Annual report 2012

The loss ratios used in the calculations are as following:

In thousands of Mongolian Tugriks 31 Dec 2012

31 Dec 2011

Accident

70%

70%

Property insurance

60%

60%

Motor insurance

55%

55%

Cargo insurance

60%

60%

Constraction insurance

60%

60%

Driver's liability

115%

70%

General liability insurance

60%

60%

Financial insurance

720%

-

Airplane insurance

60%

-

Based on the methodology used, IBNR is calculated as the difference between expected ultimate losses and reported claims. Total recognised insurance loss provisions represent discounted total unpaid claims increased by the amount of provision for adverse deviation. All liabilities were discounted to reflect the time value of money using an interest rate of 1% (2011: 3%) based on the Company’s investment portfolio at 31 December 2012 and the prevailing inflation. Claim liabilities were then discounted again at 0.5% (2.0% in 2011) to allow a margin for adverse deviations in the interest rate. Margins for claims development used for calculating provision for adverse deviation range from 10% to 15% (from 10% to 15% in 2011) depending on the line of business. If the above expected loss ratios were 5 percentage points higher/(lower) than those used by the Company, the Company’s net loss provision would increase/(decrease) by MNT 51,260 thousand (MNT 5,427 thousand in 2011). At present the Company is considering taking actions for collecting relevant historic information that would enable calculation and analysis of claims development factors and thus introduction of more sophisticated commonly used methods (e.g. chain ladder method or similar) for determining and evaluation of insurance liabilities in the following years. Liability adequacy test. The Management has performed liability adequacy test for all lines of business as at 31 December 2012 and has recognized unexpired risk reserve of MNT 355,996 thousands for driver’s liability and financial insurance (credit risk) lines where the insurance liabilities recognized were not sufficient for the settlement of estimated future claim liabilities. There was no unexpired risk reserve as of 31 December 2011.

16. Payables In thousands of Mongolian Tugriks 31 Dec 2012

31 Dec 2011

Reinsurance payable

43,717

-

Prepaid insurance premiums

6,848

6,747

Claims payable

2,493

-

53,058

6,747

83,768

112,712

16,517

35,082

100,285

147,794

Insurance payables

Total insurance payables Financial payables Payables to suppliers Accrued salary and bonus payables Total financial payables Non financial payables Social and health insurance payable Other tax payables Total non-financial payables Total payables as of year/period end

5,753

-

999

19,546

6,752

19,546

160,095

174,087

67

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Mandal Daatgal - Annual report 2012 [eng]  

Mandal Daatgal - Annual report 2012 [eng]

Mandal Daatgal - Annual report 2012 [eng]  

Mandal Daatgal - Annual report 2012 [eng]

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