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14.127. In the accounting approach, output is calculated as actual premiums earned plus premium supplements less adjusted claims incurred, where adjusted claims are determined by using claims due plus the changes in equalization provisions and, if necessary, changes to own funds. In the sum of cost plus “normal profit” approach, the output is calculated as the sum of costs (including intermediate costs, labour and capital costs) plus an allowance for “normal profit”.
Include pages:
Country experience: United States: insurance services (Chapter 14)
Country example: Japan: recording insurance services on an accrual basis (Chapter 14)
Country Example: Germany: smoothing of insurance premiums paid/received
Next: B.5. Financial services
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[1] The BPM6 Compilation Guide provides recommendations on the treatment of insurance, pension and financial services, in particular, in its appendix 2, “Insurance transactions and positions and pension schemes” and appendix 3, “Financial intermediation services indirectly measured”.
[2] According to MSITS 2010, auxiliary insurance services are included in insurance and pension services. That fact should not be confused with the sectoral classification of the 2008 SNA, whereby insurance brokers andalike are classified under “financial auxiliaries.”
[3] MSITS 2010 does not recognize fees paid to administrators of pension funds as a separate category, while the 2008 SNA recommends that pension fund managers (administrators of pension funds, which only manage the activities of pension funds without taking ownership of the assets or liabilities), be classified as financial auxiliaries.
[4] The value of the output of standardized guarantee providers can be calculated in the same manner as that of non-life direct insurance. For reinsurance, commission payable should be further deducted from the premiums earned and the claims adjusted for profit sharing in excess of loss reinsurance.
Include pages:
Country experience: United States: insurance services (Chapter 14)
Country example: Japan: recording insurance services on an accrual basis (Chapter 14)
Country Example: Germany: smoothing of insurance premiums paid/received
Next: B.5. Financial services