10. Property, plant and equipment

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

Gains on 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 5 to 80 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 operating expenses under the items , 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 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

–13,044

–14,798

Reclassifications

70,545

–2,621

67,924

At 31 December 2017

351,953

226,985

578,938

At 1 January 2018

351,953

226,985

578,938

Currency translation

–1,250

–150

–1,401

Additions

3,838

28,712

32,550

Disposals

–2,791

–14,585

–17,376

Reclassifications

2,811

–1,084

1,726

At 31 December 2018

354,560

239,877

594,437

Accumulated amortisation and impairment losses

In € thousand

Land and buildings for own use

Other property, plant and equipment

Total

At 1 January 2017

–80,458

–155,621

–236,080

Currency translation

–591

112

–478

Additions from depreciation

–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

At 1 January 2018

–108,553

–159,775

–268,327

Currency translation

395

20

415

Additions from depreciation

–10,723

–16,182

–26,904

Additions from impairment

–158

0

–158

Disposals

1,990

11,414

13,403

Reclassifications

–1,939

127

–1,812

Reversal of impairment

0

8

8

At 31 December 2018

–118,987

–164,388

–283,375

Carrying amounts

In € thousand

Land and buildings for own use

Other property, plant and equipment

Total

At 1 January 2017

197,995

67,224

265,219

At 31 December 2017

243,400

67,210

310,610

At 31 December 2018

235,573

75,489

311,062

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 2017

202,266

30,208

168,277

400,751

At 31 December 2018

205,776

30,386

165,722

401,884

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

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.
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.