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Note 3. Insurance underwriting activities

Defence Service Homes Insurance Scheme
Notes to and forming part of the Financial Statements

for the period ended 30 June 2018

This section describes DSHIS's insurance underwriting activities.

Note 3.1. Insurance underwriting activities

  2018 2017
  $'000 $'000
Note 3.1A: Reinsurance and other recoveries    
Reinsurance recoveries 483 1,416
Other recoveries 240 351
Total reinsurance and other recoveries 723 1,767

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  2018 2017
  $'000 $'000
The Scheme has incurred claims during 2017–18 for which recoveries have and will be made in accordance with reinsurance treaties, which were in force at the date of loss.
In determining the gross claims outstanding, the actuary has applied a prudential margin of 12% (2017: 11%), to a central estimate of the expected present value of future payments for claims incurred of $14,710,080 (2017: $18,896,640), resulting in a risk margin component of $1,576,080 (2017: $1,872,640).
Note 3.1B: Claims outstanding    
Gross claims outstanding 14,710 18,897
Less: reinsurers liability (871) (2,050)
Net claims outstanding 13,839 16,847

No unexpired risk liability is necessary for 2018 as there is no deficiency.

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  2018 2017
  $'000 $'000
Note 3.1C: Unearned revenue    
Unearned premiums 22,970 21,770
Insurance agency revenue received in advance 66 69
Total unearned revenue 23,036 21,839

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Note 3.1D: Net claims incurred
  2018 2017
  Current year Prior
years
Total Current year Prior
years
Total
  $'000 $'000 $'000 $'000 $'000 $'000
1  Claims are not subject to discount.
Building insurance claims are typically resolved within one year. No claims development table is required under AASB 1023 17.7.1 (b) (iii) for lines of business typically resolved within one year.
Gross incurred1 21,608 4,985 26,593 30,080 3,919 33,999
Less: Reinsurance and other recoveries (215) (508) (723) (1,630) (137) (1,767)
Net claims incurred 21,393 4,477 25,870 28,450 3,782 32,232
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