10. Property, plant and equipment

Property, plant and equipment are accounted for using the cost model.

Gains from the disposal of property, plant and equipment are recorded under the item “Other insurance income”, while losses are recorded under “Other technical expenses”.

If the use of a property changes and an owner-occupied property becomes an investment property, the property is reclassified as investment land and buildings with the carrying amount at the date of the change.

Property, plant and equipment are depreciated on a straight line basis over a useful life for buildings of 10 to 77 years and for technical systems and operating and office equipment of 2 to 20 years. Depreciation methods, useful lives and residual values are reviewed on every reporting date and adjusted if necessary. The depreciation charges for property, plant and equipment are recognised in profit/(loss) for the period on the basis of allocated under the items , “Operating expenses” and “Net investment income” so that the expenses and earnings are distributed on the basis of their causation.

Acquisition costs

In € thousand

Land and buildings for own use

Other property, plant and equipment

Total

At 1 January 2016

332,390

229,174

561,564

Currency translation

272

376

648

Change in basis of consolidation

–2,496

–7,439

–9,935

Additions

699

24,323

25,022

Disposals

–26,609

–8,432

–35,041

Reclassifications

–1,139

–1,200

–2,339

Reclassifications held for sale

–24,663

–13,957

–38,620

At 31 December 2016

278,454

222,845

501,299

At 1 January 2017

278,454

222,845

501,299

Currency translation

1,611

16

1,627

Change in basis of consolidation

2

0

2

Additions

3,095

19,789

22,884

Disposals

–1,754

–13,043

–14,797

Reclassifications

70,545

–2,621

67,924

At 31 December 2017

351,953

226,986

578,938

Accumulated amortisation and impairment losses

In € thousand

Land and buildings for own use

Other property, plant and equipment

Total

At 1 January 2016

–110,029

–158,547

–268,575

Currency translation

–132

–328

–460

Change in basis of consolidation

1,674

64

1,738

Additions from amortisation

–10,400

–13,805

–24,206

Additions from impairment

–305

0

–305

Disposals

26,321

7,024

33,345

Reclassifications

5,483

–9

5,474

Reversal of impairment

0

33

33

Reclassifications held for sale

6,931

9,947

16,877

At 31 December 2016

–80,458

–155,621

–236,080

At 1 January 2017

–80,458

–155,621

–236,080

Currency translation

–591

112

–478

Additions from amortisation

–12,175

–15,223

–27,398

Additions from impairment

–256

0

–256

Disposals

84

10,977

11,061

Reclassifications

–15,157

–19

–15,176

At 31 December 2017

–108,553

–159,775

–268,327

Carrying amounts

In € thousand

Land and buildings for own use

Other property, plant and equipment

Total

At 1 January 2016

222,361

70,628

292,989

At 31 December 2016

197,995

67,224

265,219

At 31 December 2017

243,400

67,211

310,611

The fair values of the land and buildings for own use are derived from expert reports and are comprised as follows:

Fair values

In € thousand

Property and casualty insurance

Health insurance

Life insurance

Total

At 31 December 2016

179,153

14,843

126,858

320,854

At 31 December 2017

202,266

30,208

168,277

400,751

Other property, plant and equipment refers mainly to technical systems and operating and office equipment.

Operating expenses
This item includes acquisition expenses, portfolio management expenses and the expenses for implementing reinsurance. The operating expenses remain for the company’s own account following deduction of the commissions and profit participation received from the reinsurance business ceded.
Insurance benefits
Total of insurance benefit payments and changes in the claims provision during the financial year in connection with direct insurance and reinsurance contracts (gross). This involves net insurance benefits when reduced by the amount ceded to reinsurance companies. This does not include claims settlement expenses and changes in the provisions for claims settlement expenses.