Nadir SA recognises a group of contracts: it receives 5,000 of premiums at issue and expects to pay 3,300 of claims in one year. Case data, from management's judgement: the discount rate is 10 % (a rate not imposed by the standard) and the risk adjustment for non-financial risk is 500. Acquisition cash flows and cash flows already occurred are nil. Calculate the net amount of the fulfilment cash flows and the premiums received at issue (a negative amount means a net inflow) and the initial contractual service margin.
- Claims to be paid in one year
- 3,300
- Premiums received at issue
- 5,000
- Discount rate (case data)
- 10 %
- Risk adjustment for non-financial risk (case data)
- 500