GROUP ACCOUNTING POLICIES (continued) 5. Insurance, investment and reinsurance contracts (continued) 5.1 Classification of contracts (continued) Summary of measurement approaches The Group uses different measurement approaches, depending on the type of contract, as follows: Short-Term Insurance applies the premium allocation approach (PAA) to all the insurance contracts that it issues, as the coverage period of each contract in the group is one year or less, including insurance contract services arising from all premiums within the contract boundary. For a group of contracts that is not onerous at initial recognition, ShortTerm Insurance measures the liability for remaining coverage as the premiums, if any, received at initial recognition. Short-Term Insurance applies a policy of expensing all insurance acquisition cash flows as they are incurred for all insurance contracts measured using the PAA. Short–Term Insurance does not discount the liability for remaining coverage to reflect the time value of money and the effect of financial risk due to the expected time between providing each part of the services and the related premium due date being no more than a year. 5.1.2 Recognition and derecognition Groups of insurance contracts issued are initially recognised from the earliest of the following: • the beginning of the coverage period; • the date when the first payment from the policyholder is due or actually received, if there is no due date; and • when the Company determines that a group of contracts becomes onerous. Reinsurance contracts held are recognised as follows: • a group of reinsurance contracts held that provide proportionate coverage (quota share reinsurance) is recognised at the later of: (i) the beginning of the coverage period of the group; and (ii) the initial recognition of any underlying insurance contract. PPS insurance policy Portfolio IFRS17 Measurement model PPS Provider Policy - Sickness and permanent incapacity benefit - Professional Life Provider - Critical Illness Cover - Professional Disability Provider - PPS Education Cover Life Risk: Participating Variable Fee Approach (VFA) Legacy PPS Life and Disability Policy Legacy Professional Health Preserver PPS Provider Policy Business Provider Life Risk: non-participating General Measurement Model (GMM) Personal Lines Commercial Lines Value Added Services Health Professional Indemnity Non-Life insurance Premium Allocation Approach (PAA) 114 Group Accounting Policies
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