45. Technical provisions

Technical provisions31 December 201431 December 2013
Technical provisions – non-life insurance 18,410,647 16,242,254
Unearned premiums reserve 5,133,390 4,428,845
Unexpired risks reserve 19,257 8,770
Outstanding claims provisions 7,258,764 6,041,030
Provisions for the capitalized value of annuities 5,997,595 5,761,332
Provisions for bonuses and rebates for the insured 1,641 2,277
Technical provisions – life insurance 21,756,238 21,082,162
Unearned premiums reserve 97,456 102,396
Life insurance provision 16,281,625 16,048,191
Outstanding claims provisions 511,587 545,751
Provisions for bonuses and rebates for the insured 650 616
Other technical provisions 439,364 477,987
Unit-linked reserve 4,425,556 3,907,221
Total technical provisions 40,166,885 37,324,416

The table above presents also the amounts of provisions recognized for the old portfolio (as described in Note 5.17.2.2), which are as follows:

Technical provisions for old portfolio31 December 201431 December 2013
Life insurance provisions 471,174 485,757
Other technical provisions 194,623 199,699
- provisions for low interest rates 123,273 127,149
- provisions for litigations 71,350 72,550
IBNR and RBNP reserve 2,298 2,873
Total technical provisions – old portfolio 668,095 688,329

45.1 Technical provisions – non-life insurance

Gross technical provisions by classes specified in section II of the appendix to the Act on insurance activity31 December 201431 December 2013
Accident and sickness insurance (group 1 and 2) 406,557 383,967
Motor third-party liability insurance (group 10) 11,620,451 10,452,238
Other motor insurance (group 3) 1,865,335 1,664,589
Sea, aircraft and transport insurance (groups 4, 5, 6, 7) 113,307 70,633
Insurance against fire and other damage to property (groups 8, 9) 1,681,882 1,377,179
Third-party liability insurance (groups 11, 12, 13) 2,252,799 1,947,727
Credit insurance and suretyship (groups 14, 15) 162,080 135,806
Assistance (group 18) 151,905 121,669
Legal protection (group 17) 2,782 2,627
Other (group 16) 153,549 85,819
Total technical provisions 18,410,647 16,242,254

Technical provisions, net of reinsurance, by classes specified in section II of the appendix to the Act on insurance activity31 December 201431 December 2013
Accident and sickness insurance (group 1 and 2) 405,573 383,795
Motor third-party liability insurance (group 10) 11,366,417 10,246,315
Other motor insurance (group 3) 1,829,788 1,635,612
Sea, aircraft and transport insurance (groups 4, 5, 6, 7) 87,795 59,173
Insurance against fire and other damage to property (groups 8, 9) 1,501,794 1,230,550
Third-party liability insurance (groups 11, 12, 13) 2,172,237 1,896,918
Credit insurance and suretyship (groups 14, 15) 94,747 86,202
Assistance (group 18) 147,603 121,126
Legal protection (group 17) 2,781 2,627
Other (group 16) 48,852 53,417
Total technical provisions 17,657,587 15,715,735

Technical provisions – non-life insurance31 December 201431 December 2013
Short-term 4,411,180 3,245,725
Long-term 13,999,467 12,996,529
Total technical provisions 18,410,647 16,242,254

Provisions are classified as long-term if the related cash flows are expected to occur after more than 12 months from the end of the reporting period.

Change in provisions

Change in unearned premiums reserve in non-life insurance1 January - 31 December 20141 January - 31 December 2013
grossreinsurers' sharenet of reinsurancegrossreinsurers' sharenet of reinsurance
Opening balance 4,428,845 -209,940 4,218,905 4,435,516 -190,865 4,244,651
Increase (decrease) in provisions for policies concluded in the current year 4,335,362 -258,368 4,076,994 4,220,358 -160,456 4,059,902
Increase (decrease) in provisions for policies concluded in previous years -4,157,746 174,566 -3,983,180 -4,225,756 140,844 -4,084,912
Exchange differences during the period -18,556 5,948 -12,608 -1,290 537 -753
Change in group composition 642,510 -19,282 623,228 17 - 17
Transfers to assets held for sale in accordance with IFRS 5 1) -97,025 4,958 -92,067 - - -
Closing balance 5,133,390 -302,118 4,831,272 4,428,845 -209,940 4,218,905

1) Transfer of PZU Lietuva's provisions to liabilities held for sale due to the transaction described in Note 59.9.1. The decrease of reserves was translated at average rate presented in Note 5.3.

Change in unexpired risk reserve in non-life insurance1 January - 31 December 20141 January - 31 December 2013
grossreinsurers' sharenet of reinsurancegrossreinsurers' sharenet of reinsurance
Opening balance 8,770 -16 8,754 8,202 -5 8,197
Increase (decrease) in provisions for policies concluded in the current year 17,077 12 17,089 5,546 - 5,546
Increase (decrease) in provisions for policies concluded in previous years -5,316 - -5,316 -5,016 -12 -5,028
Exchange differences during the period -561 4 -557 38 1 39
Change in group composition 12,739 - 12,739 - - -
Transfers to assets held for sale in accordance with IFRS 5 -13,452 - -13,452 - - -
Closing balance 19,257 - 19,257 8,770 -16 8,754

1) Transfer of PZU Lietuva's provisions to liabilities held for sale due to the transaction described in Note 59.9.1. The decrease of reserves was translated at average rate presented in Note 5.3.

Change in outstanding claims provisions in non-life insurance1 January - 31 December 20141 January - 31 December 2013
grossreinsurers' sharenet of reinsurancegrossreinsurers' sharenet of reinsurance
Opening balance, including: 6,041,030 -170,375 5,870,655 5,362,089 -304,051 5,058,038
- for claims reported 2,072,193 -121,826 1,950,367 1,970,611 -234,276 1,736,335
- for claims incurred but not reported (IBNR) 2,615,113 -29,989 2,585,124 2,413,008 -55,337 2,357,671
- for claims handling expenses 1,353,724 -18,560 1,335,164 978,470 -14,438 964,032
Paid benefits concerning claims incurred in previous years, including: -1,575,921 54,322 -1,521,599 -1,506,275 265,311 -1,240,964
- paid claims and benefits -1,313,456 50,481 -1,262,975 -1,276,357 261,990 -1,014,367
- claims handling costs -262,465 3,841 -258,624 -229,918 3,321 -226,597
Increase (decrease) in provisions, including: 2,450,810 -167,606 2,283,204 2,185,105 -130,145 2,054,960
- for losses incurred in the current year 2,041,127 -44,022 1,997,105 1,895,793 -35,684 1,860,109
- for losses incurred in previous years 409,683 -123,584 286,099 289,312 -94,461 194,851
Other changes 2 8,789 8,791 - -1,834 -1,834
Exchange differences during the period -10,665 6,304 -4,361 111 344 455
Change in group composition 454,412 -42,844 411,568 - - -
Transfers to assets held for sale in accordance with IFRS 5 -100,904 14,510 -86,394 - - -
Closing balance 7,258,764 -296,900 6,961,864 6,041,030 -170,375 5,870,655
- for claims reported 2,704,345 -228,795 2,475,550 2,072,193 -121,826 1,950,367
- for claims incurred but not reported (IBNR) 2,868,611 -46,259 2,822,352 2,615,113 -29,989 2,585,124
- for claims handling expenses 1,685,808 -21,846 1,663,962 1,353,724 -18,560 1,335,164

Change in provisions for the capitalized value of annuities– non-life insurance1 January - 31 December 20141 January - 31 December 2013
grossreinsurers' sharenet of reinsurancegrossreinsurers' sharenet of reinsurance
Opening balance 5,761,332 -146,180 5,615,152 5,660,281 -254,413 5,405,868
Paid claims concerning losses incurred in previous years -182,358 15,853 -166,505 -179,944 3,839 -176,105
Increase (decrease) in provisions for losses incurred in the previous years 76,457 -17,444 59,013 23,321 104,997 128,318
Changes in assumptions resulting from technical interest rate changes -17,284 446 -16,838 -16,981 775 -16,206
Increase in provisions for losses incurred in the current year 278,344 -587 277,757 274,655 - 274,655
Other changes - 3,916 3,916 - -1,378 -1,378
Exchange differences during the period -8 40 32 - - -
Change in group composition 81,112 -10,086 71,026 - - -
Closing balance 5,997,595 -154,042 5,843,553 5,761,332 -146,180 5,615,152

45.2 Life insurance technical provisions

Change in life insurance provision – insurance contracts1 January - 31 December 20141 January - 31 December 2013
grossreinsurers' sharenet of reinsurancegrossreinsurers' sharenet of reinsurance
Opening balance 16,526,794 - 16,526,794 16,208,275 - 16,208,275
Increase (decrease) in provisions related to current year policies 490,085 - 490,085 564,859 - 564,859
Increase (decrease) in provisions related to prior year policies -306,608 - -306,608 -260,234 - -260,234
Changes in assumptions resulting from technical interest rate changes 45,395 - 45,395 17,701 - 17,701
Exchange differences -34,027 - -34,027 -3,807 -3,807
Closing balance 16,721,639 - 16,721,639 16,526,794 - 16,526,794

Change in life unit-linked insurance provision, gross1 January - 31 December 20141 January - 31 December 2013
grossreinsurers' sharenet of reinsurancegrossreinsurers' sharenet of reinsurance
Opening balance 3,907,221 - 3,907,221 3,113,798 - 3,113,798
Increases in the fund due to premiums 1,045,805 - 1,045,805 1,082,943 - 1,082,943
Payments deducted from the fund for risk, administration and other -90,026 - -90,026 -71,333 - -71,333
Revenue from the fund’s investments 147,597 - 147,597 123,774 - 123,774
Decreases in the fund due to claims, redemptions, etc. -547,991 - -547,991 -354,088 - -354,088
Other decreases -60,274 - -60,274 -43,826 - -43,826
Other increases 23,224 - 23,224 55,953 - 55,953
Closing balance 4,425,556 - 4,425,556 3,907,221 - 3,907,221

Change in provisions for outstanding claims, gross1 January - 31 December 20141 January - 31 December 2013
grossreinsurers' sharenet of reinsurancegrossreinsurers' sharenet of reinsurance
RBNP at the beginning of the period 138,366 - 138,366 115,394 - 115,394
IBNR at the beginning of the period 407,385 - 407,385 400,962 - 400,962
Total RBNP and IBNR at the beginning of the period 545,751 - 545,751 516,356 - 516,356
Provisions for claims applied during the year -523,413 - -523,413 -516,356 - -516,356
Provisions for claims created during the year 489,249 - 489,249 545,751 - 545,751
Total RBNP and IBNR at the end of the period 511,587 - 511,587 545,751 - 545,751
RBNP at the end of the period 112,728 - 112,728 138,366 - 138,366
IBNR at the end of the period 398,859 - 398,859 407,385 - 407,385