Balance as of 1 January –28 –13 –41 Change during the period –6 8 2 Amounts reclassified out of accumulated other comprehensive income 59 59 Tax –13 –1 –14 Balance as of period end 12 –6 6 1 Reclassification adjustment included in net income is presented in ’’Net realised investment gains/losses’’.
Foreign currency translation, net of tax Balance as of 1 January 55 –13 Changes during the period –68 7 Balance as of period end –13 –6
Cash flows from operating activities Net income attributable to common shareholder 409 172 Add net income attributable to non-controlling interests 2 –2
Adjustments to reconcile net income to net cash provided/used by operating activities: Depreciation, amortisation and other non-cash items 70 71 Net realised investment gains/losses –141 –49 Income from equity-accounted investees, net of dividends received1 –19 Change in: Technical provisions and other reinsurance assets and liabilities, net –906 –484 Funds held by ceding companies and under reinsurance treaties –148 –141 Reinsurance recoverable on unpaid claims and policy benefits 1 127 753 Other assets and liabilities, net –22 123 Income taxes payable/recoverable –16 –112 Trading positions, net 99 –48
Cash flows from investing activities Fixed income securities: Net purchase/sale/maturities of short-term investments 1 052 –20
Cash flows from financing activities Dividends paid to parent –200 –250 Net cash provided/used by financing activities –200 250
Business combinations The Group applies the acquisition method of accounting for business combinations. This method allocates the cost of the acquired entity to the assets and liabilities assumed based on their estimated fair values at the date of acquisition. The underlying assets and liabilities acquired are subsequently accounted for according to the relevant GAAP guidance. This includes specific requirements applicable to subsequent accounting for assets and liabilities recognised as part of applying the acquisition method of accounting, including goodwill and other intangible assets.
Insurance receivables Insurance receivables as of 31 December were as follows: USD millions 2015 2016
Cedents report their case reserves and their estimated IBNR to the Group. The Group develops and recognises its own estimate of IBNR claims, which includes circumstances in which the cedent has not reported any claims to the Group or where the Group’s estimate of reserves needed to cover reported claims differs from the amounts reported by cedents.
In most cases, these standard actuarial techniques encompass a number of loss development factor techniques applied to claim tables of paid and reported losses. Other actuarial techniques may be applicable to specific categories. For instance, the analysis of frequency and severity could be applied in all disaggregation categories. In some cases, techniques specific to the projection of future payments for specific risks such as asbestos or pollution claims are applied to both proportional and non-proportional liability claims (see also separate section ‘Asbestos and environmental claims exposure’ on page 21).
Unrealised losses on securities available-for-sale The following table shows the fair value and unrealised losses of the Group’s fixed income securities, aggregated by investment category and length of time that individual securities were in a continuous unrealised loss position as of 31 December 2015 and 2016. As of 31 December 2015 and 2016, USD 42 million and USD 5 million, respectively, of the gross unrealised loss on equity securities available-for-sale relates to declines in value for less than 12 months and USD 12 million and USD 1 million, respectively, to declines in value for more than 12 months.
Liabilities Derivative financial instruments –6 –74 –80 Total liabilities at fair value 0 –6 –74 –80
During the year certain tax positions and audits in Switzerland and Canada were effectively settled.
Change in unearned premiums gross –91 –56 Change in unearned premiums retroceded –1 0 Change in unearned premiums net –92 –56
Investments 2 Investment income 112 183 Investment expenses –56 –20 Allocated investment return –36 –44 Investment result 20 119
Investments Investments in subsidiaries and affiliated companies 1 435 1 438 Fixed income securities 724 730
Non-technical provisions Tax provisions 27 6 Provision for currency fluctuation 39 39 Other provisions –4 52 Total non-technical provisions 62 97
As of 31 December 2016, the following public placed debentures were outstanding: 10 Deposit arrangements
In 2016, management expenses of CHF 72 million were recharged to affiliated companies of the Company and invoiced to third parties. These recharges were reported net under “Operating costs”, “Investment expenses” and “Other expenses”.
Effective 1 January 2016, the Company directly employed its staff in Switzerland. In prior years, the staff were employed by Swiss Reinsurance Company Ltd.
Financial Statements I Swiss Re Corporate Solutions Ltd 16 Personnel information and administrative expenses