38. Error correction and change in accounting policies pursuant to IAS 8

A change in the impairment test model

A change in the impairment test model results in an impairment of goodwill allocated to CGU Bulgaria and Romania in the amount of €54,600 thousand for the 2019 financial year. In the revised impairment test the determination of the cash flow in the perpetuity and the discount rate has been adjusted.

The adjustment is implemented based on an audit by the Austrian Audit Agency for Financial Reporting (OePR). This showed that the growth assumptions used in the model and the discount rates also need to be changed.

Following review and evaluation of these findings by UNIQA Insurance Group AG, there is an impairment of goodwill of CGU Bulgaria in the amount of €19,200 thousand and of CGU Romania in the amount of €35,400 thousand.

Adjustments of deferred profit participation

In preparation for the initial application of IFRS 17 (Insurance Contracts) which is to be applied from 1 January 2023, it was discovered that deferred profit participation was not accounted for in health insurance. Due to this error correction, a provision for deferred profit participation is being recognised – with retroactive effect from 1 January 2019 – for contracts in health insurance that involve profit participation. The amount of the provision for the deferred profit participation is determined by taking into account the amounts from endowed profit participations deducted in previous years. In the course of this correction the same content is also being changed retroactively in the accounting method for life insurance, in order to achieve a uniform presentation. For this purpose – as in health insurance – a deduction of the endowed profit participations of the previous years is made. The corrections and changes in accounting policies relate exclusively to the UNIQA Austria segment.

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Equity and liabilities
In € thousand	1/1/2019 published	Change in the impairment test model	Deferred profit participation	1/1/2019 adjusted
Equity
Portion attributable to shareholders of UNIQA Insurance Group AG
Subscribed capital and capital reserves	1,789,923			1,789,923
Treasury shares	–16,614			–16,614
Accumulated results	1,198,803		24,896	1,223,699
	2,972,112		24,896	2,997,008
Non-controlling interests	14,438			14,438
	2,986,550		24,896	3,011,446
Liabilities
Technical provisions	17,336,358		–12,143	17,324,215
Deferred tax liabilities	254,999		–12,752	242,246
	25,517,251		–24,896	25,492,355
Total equity and liabilities	28,503,801	0	0	28,503,801

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Assets
In € thousand	31/12/2019 published	Change in the impairment test model	Deferred profit participation	31/12/2019 adjusted
Intangible assets	1,641,116	–54,600		1,586,516
Total assets	28,728,409	–54,600		28,673,809

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Equity and liabilities
In € thousand	31/12/2019 published	Change in the impairment test model	Deferred profit participation	31/12/2019 adjusted
Equity
Portion attributable to shareholders of UNIQA Insurance Group AG
Subscribed capital and capital reserves	1,789,923			1,789,923
Treasury shares	–16,614			–16,614
Accumulated results	1,627,714	–54,600	21,296	1,594,410
	3,401,023	–54,600	21,296	3,367,719
Non-controlling interests	19,399			19,399
	3,420,422	–54,600	21,296	3,387,118
Liabilities
Technical provisions	17,791,006		–3,106	17,787,900
Deferred tax liabilities	375,729		–18,190	357,539
	25,307,986		–21,296	25,286,690
Total equity and liabilities	28,728,409	–54,600	0	28,673,809

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Consolidated income statement
In € thousand	1–12/2019 published	Change in the impairment test model	Deferred profit participation	1–12/2019 adjusted
Insurance benefits
Gross	–3,756,264		–9,023	–3,765,286
	–3,657,078		–9,023	–3,666,100
Technical result	99,526		–9,023	90,504

Operating profit/(loss)	354,872		–9,023	345,850
Amortisation of VBI and impairment of goodwill	–4,562	–54,600		–59,162
Earnings before taxes	295,667	–54,600	–9,023	232,045
Income taxes	–59,172		2,219	–56,953
Profit/(loss) for the period	236,496	–54,600	–6,804	175,092
of which attributable to shareholders of UNIQA Insurance Group AG	232,360	–54,600	–6,804	170,956
of which attributable to non-controlling interests	4,135			4,135

Earnings per share (in €)	0.76			0.56

IFRSs

International Financial Reporting Standards. Since 2002 the term IFRSs has applied to the overall concept of standards adopted by the International Accounting Standards Board. Standards already adopted beforehand continue to be referred to as International Accounting Standards (IASs).

Profit participation

Policyholders have a reasonable right under statutory and contractual regulations to the company’s surplus profits generated in life and health insurance. The level of this profit participation is determined again each year.

Profit participation

Non-controlling interests

Shares in the profit/(loss) that are not attributable to the Group but rather to companies outside the Group that hold shares in affiliated companies.

Profit participation

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.

Non-controlling interests

Shares in the profit/(loss) that are not attributable to the Group but rather to companies outside the Group that hold shares in affiliated companies.