Other non-life insurance
34. The output (P.1) of other non-life insurance enterprises is calculated
according to equation (B) and shown in the production account of the insurance
enterprises and pension funds sub-sector. Non-life insurance services may be used as
intermediate consumption (P.2) by any resident sector, as final consumption by
the household sector when they are part of households' final consumption expenditure (P.3), or as exports (P.62). Non-life insurance
services used as intermediate consumption should be broken down by industry.
Equation (B) should be used to estimate the total value of non-life insurance
output. The output should then be distributed among user sectors and industries
in proportion to actual premiums payable by each sector. Whereas all resident
sectors except households use non-life insurance services for intermediate
consumption only, the household sector uses them for both final and intermediate
consumption. Households' use of non-life insurance services should be broken down into intermediate
and final consumption in proportion to actual premiums payable. Premiums clearly
associated with the productive activity of unincorporated enterprises should be
regarded as related to intermediate consumption, while the remaining premiums
paid by households should be considered as being related to final consumption.
35. In the allocation of primary income account, property income attributed to
policy holders is recorded as part of D.4, payable by the insurance sector and
receivable by the policy holder sectors. Ideally, property income attributed to
policy holders should be distributed among sectors in proportion to the reserves
attributed to each policy holder sector, but this is hardly feasible in
practice. Property income attributed to policy holders should therefore be distributed
in proportion to actual premiums paid by each policy holder sector.
36. In the secondary distribution of income account net premiums earned are shown
as payable by all policy holder sectors and receivable by the insurance sector.
Net premiums earned are calculated as actual premiums earned plus property
income attributed to policy holders less the value of services consumed. By
equation (B), net premiums earned equal claims due
Some claims arise because of damage or injuries that the policy holder causes
to the property or persons of third parties. In such cases, valid claims are
recorded as being payable directly by the insurance enterprise to the injured
parties and not indirectly via the policy holder.
37. In the financial account, net equity of policy holders on non-life insurance
reserves is shown as a change in assets of policy holder sectors and a change in
liabilities of the insurance sector. The change in net equity, classified as
F.62, is due to prepayments of premiums and reserves for outstanding claims.
F.62 also appears as a liability in the non-life insurer's balance sheet and an asset in policy holders' balance sheets.
Non-life insurance enterprises belong to NACE rev. 1 class 66.03, 'Non-life insurance'. Their institutional sector is S.125, 'Insurance corporations and pension funds'.
38. When non-resident units purchase cover from resident non-life insurers, the
service charge is shown as exports of services ((P.62). Property income
attributed to policy holders, net premiums earned and claims due are all recorded in the
external account of primary incomes and current transfers, while net equity of
policy holders on non-life insurance reserves is shown in the financial
account of the rest of the world. In this case, the calculations for the rest of the
world are no more difficult than those for any resident policy holder sector.
When resident units are insured by non-resident non-life insurers, the data
situation is far more difficult; only data on premiums payable and claims
receivable are normally available. A simplified method, ignoring non-life insurance
reserves and their subsequent property income, is therefore used: The service
charge, which is recorded as imports of services (P.72), is calculated as premiums
payable less claims receivable
An example of the flows recorded for other non-life insurance is shown in
Table A.III.5.
. The secondary distribution of income account also shows claims due as
payable by the insurance sector and receivable by all policy holder sectors. Both net
premiums earned and claims due are part of item D.7, Other current transfers.
. Net premiums payable are calculated as premiums payable less service charge,
thus equalling claims receivable. Both net premiums payable and claims
receivable are shown in the external account of primary incomes and current transfers.