Notes on the consolidated balance sheet – liabilities

(20) Loss and loss adjustment expense reserve (loss reserve)

 

2010

2009 1)

 

Gross

Retro

Net

Gross

Retro

Net

Figures in EUR million

      

Balance at 31.12. of the previous year

27,256

4,734

22,522

27,161

5,480

21,681

Change in consolidated group

–2

–2

13

2

11

Portfolio entries/withdrawals

124

–11

135

–25

–1

–24

Plus incurred claims and claims expenses (net)

      

Year under review

13,746

1,391

12,355

9,671

1,180

8,491

Previous years

579

134

445

1,369

–216

1,585

Total

14,325

1,525

12,800

11,040

964

10,076

Less claims and claims expenses paid (net)

      

Year under review

6,814

518

6,296

4,984

421

4,563

Previous years

6,340

1,077

5,263

5,954

1,291

4,663

Total

13,154

1,595

11,559

10,938

1,712

9,226

Other changes

–1,210

–741

–469

–3

22

–25

Currency exchange rate differences

1,199

161

1,038

8

–21

29

Balance at 31.12. of the year under review

28,538

4,073

24,465

27,256

4,734

22,522


1) Adjusted on the basis of IAS 8

The other changes and currency exchange rate differences include the figures for the disposal group in accordance with IFRS 5 in an amount of EUR 1.3 billion (gross). In this regard please see our remarks on the disposal group.

The run-off triangles establish the correlation between the loss occurrence year and the loss run-off year. In line with previous years, we show the constituted loss reserves not by occurrence years but by the run-off of the reserve reported in the balance sheet. For the sake of improved understanding, we split the disclosure into primary insurance and reinsurance, with only the corresponding net loss reserves being shown.

The following two tables set out the net loss reserves for the years 2000 to 2010 split into our property/casualty companies in the primary insurance segments and the Group segment of Non-Life Reinsurance. The tables show the changes made over time in the loss reserve established as at each balance sheet date due to payments rendered, supplementary premiums brought to account in years after they were written and revised estimates of outstanding payments. The difference between the original loss reserve and the current reserve is reflected in the net run-off results.

These results are significantly influenced by movements in the euro relative to major foreign currencies. Despite opposing effects associated with other major foreign currencies, the depreciation of the euro against the US dollar year-on-year was a particularly significant factor in the rise in the loss reserves on a euro basis.