Changes in significant accounting policies as well as new and amended standards

With the exception of the following changes, the outlined accounting policies were consistently applied to all periods presented in these consolidated financial statements.

Amendments to be applied for the first time and in the future

The Group applied the following amendments to standards with the initial application date of 1 January 2023. None of the new regulations arising from this have a significant impact on UNIQA’s assets, liabilities, financial position and profit or loss.

International Tax Reform – Pillar Two Model Rules

As UNIQA’s annual revenue exceeds the relevant threshold of € 750 million, UNIQA is affected by the current and forthcoming tax regulations implementing the Pillar Two Model Rules published by the Organisation for Economic Cooperation and Development (OECD). The aim of these regulations, which will come into force on 1 January 2024, is to ensure an effective minimum tax rate of 15 per cent for multinational groups.

UNIQA is applying the exemption from recognising and disclosing deferred tax assets and deferred tax liabilities in connection with Pillar Two income taxes.

At this time, UNIQA is carefully studying the implementation of the minimum tax rate. The current assessment is that it will not give rise to a significant additional tax burden for UNIQA.

Standards to be applied for the first time

IFRS 9 – Financial Instruments and IFRS 17 – Insurance Contracts

On 25 June 2020, the International Accounting Standards Board (IASB) published the final accounting standard for insurance contracts – IFRS 17. The date of the initial application of IFRS 17 was set for 1 January 2023. UNIQA is exercising the option for insurance companies to defer the initial application date for IFRS 9 to the initial application date for IFRS 17. IFRS 17 was transposed into EU law through the adoption of Regulation (EU) No. 2021/2036 of 19 November 2021 by the European Commission.

Due to the first application of these two accounting standards, a retrospective restatement was made of the figures for the comparative period and as at the comparative date. The impacts on the assets and liabilities in the consolidated statement of financial position as at 1 January 2022 are described and explained below.

Property, plant and equipment

The exercise of the measurement option in accordance with IAS 16.29A results in a reclassification of properties for own use at amortised cost to a fair value measurement. In the item “Property, plant and equipment”, this leads to an appreciation in the amount of € 38,714 thousand in the opening balance in accordance with IFRS 17. This only concerns those properties that are the underlying items in life and health insurance with participation features.

Deferred acquisition costs and value of business in force

Under IFRS 17, the item “Deferred acquisition costs and value of business in force” is no longer reported separately. Instead, deferred acquisition costs in connection with insurance contracts represent a portion of insurance liabilities. Non-insurance deferred acquisition cash flows as well as the value of business in force are now contained in the item “Intangible assets”.

Intangible assets

The item “Intangible assets” contains the value of business in force (VBI) amounting to € 175,028 thousand and non-insurance deferred acquisition cash flows arising in connection with contracts for the management of pension and investment funds amounting to € 3,697 thousand. These were previously contained in the item “Deferred acquisition costs and value of business in force”.

Investment property

As for the property for own use, the investment property was also reclassified for a fair value measurement in accordance with IAS 40.32B. In the item “Investment property”, this leads to an appreciation in the amount of € 1,039,042 thousand.

Unit-linked and index-linked life insurance investments

Investments under investment contracts, which were recognised in the “Other investments” item under IAS 39, are allocated to the “Unit-linked and index-linked life insurance investments” category under IFRS 9. Within the framework of the transition to IFRS 9 and IFRS 17, a re-evaluation was also performed for those insurance contracts that do not generate significant insurance risk and do not have any discretionary participation features. The reclassifications between insurance contracts and investment contracts performed in this regard are also reflected in the area of investments for coverage purposes in the items “Unit-linked and index-linked life insurance investments” and “Investments under investment contracts”. In addition, corrections of errors in accordance with IAS 8 totalling € 3,109 thousand were recognised in this regard, increasing unit-linked and index-linked life insurance investments.

Receivables and other assets

The insurance receivables previously reported under “Receivables and other assets” amounting to € 339,877 thousand include receivables from policyholders, insurance brokers and insurance companies. Under IFRS 17, these are no longer reported separately, but as part of the liabilities from insurance contracts. The reinsurance settlement receivables, which amount to € 95,762 thousand at the transition date, are no longer reported separately under IFRS 17; rather, they are reported under assets from re-insurance contracts. Furthermore, this item now contains the previously separately reported income tax receivables, which amount to € 84,900 thousand at the transition date. Other corrections of errors made in connection with financial assets in this item in accordance with IAS 8 increase receivables and other assets by € 7,557 thousand.

Other provisions

The decline in the item “Other provisions” in the amount of € 19,220 thousand can be largely attributed to the fact that other provisions in connection with the insurance business are no longer recognised separately.

Liabilities and other items classified as equity or liabilities

The re-evaluation of those insurance contracts that do not transfer significant insurance risk and do not have discretionary participation features as part of the transition to IFRS 9 and IFRS 17 led to a reclassification between insurance and investment contracts, which is reflected in an increase of € 292,405 thousand in the “Liabilities and other items classified as liabilities” item. Further effects resulted from the reinsurance settlement liabilities now contained in the technical provisions in accordance with IFRS 17 as well as from the liabilities to policyholders, insurance brokers and insurance companies in the amount of € 326,943 thousand. Furthermore, income tax liabilities in the amount of € 115,393 thousand were reclassified to this item at the transition date. Miscellaneous corrections of errors made in connection with other liabilities in accordance with IAS 8 increased liabilities by € 3,972 thousand.

Deferred tax assets and liabilities

The restatements of items from the statement of financial position impacted deferred tax assets in the amount of € 24,438 thousand and deferred tax liabilities in the amount of € 268,004 thousand.

IFRS 9 Financial Instruments – transitional provisions

Since UNIQA’s business is predominantly insurance-related and UNIQA has not yet adopted IFRS 9 in any other version, it was permissible to defer initial application of IFRS 9 to 1 January 2023.

For the presentation of restated comparative information for the period prior to the initial application of IFRS 9, UNIQA has applied IFRS 9 using classification overlay. Accordingly, IFRS 9 was also applied to the financial assets disposed of in the course of 2022. Impairments for financial assets were determined on the basis of the IFRS 9 impairment model for expected credit losses.

In principle, IFRS 9 was applied retrospectively. The following evaluations took place based on the facts and circumstances that existed at the date of the initial application:

• the definition of the business model in which a financial asset is held;
• the revocation of previous designations of specific financial assets that were measured at fair value through profit or loss (FVTPL); and
• the designation of specific strategic equity investments not held for trading purposes as financial assets at fair value through other comprehensive income (FVOCI).

Application of the expected credit loss model for financial assets measured at fair value through other comprehensive income and for financial assets measured at amortised cost led to the recognition of an impairment loss of € 196,630 thousand under IFRS 9 on 1 January 2023.

The following tables show the effects with respect to the classification and measurement in accordance with IAS 39 as at 31 December 2022 and IFRS 9 as at 1 January 2023.

The reclassification in the amount of € 3,045,105 thousand from available-for-sale financial assets to financial assets at fair value through profit or loss concerns assets with contractual cash flows that are not solely payments of principal and interest on the outstanding principal amount (“SPPI criterion” is not met).

An amount of € 3,743 thousand was reclassified from the category “Financial assets at amortised cost” and subsequently recognised at fair value in the category “Financial assets measured at fair value through profit or loss in accordance with IFRS 9”. This concerns assets with contractual cash flows that are not solely payments of principal and interest on the outstanding principal amount (“SPPI criterion” is not met), which led to a remeasurement in the amount of € 1,163 thousand.

The reclassification of € 50,901 thousand out of the category “Financial assets measured at amortised cost” to “Financial assets measured at fair value through other comprehensive income” relates to assets with contractual cash flows that represent solely payments of principal and interest on the outstanding principal amount (“SPPI criterion” is met). These assets were recognised at fair value in the category “Financial assets at fair value through other comprehensive income” in accordance with IFRS 9. This led to a remeasurement in the amount of €–1,692 thousand).

Financial assets at amortised cost were subjected for the first time to an impairment for expected credit losses within the framework of the transitional provisions of IFRS 9. This remeasurement led to a reduction in the carrying amount of these assets amounting to € 47 thousand.

Corrections of errors of € 8,536 thousand were recognised in the “Loans and receivables” category in accordance with IAS 8.

Corrections of errors

In the initial application of IFRS 9 and IFRS 17, errors were identified in the “Receivables and other assets”, “Liabilities and other items classified as equity or liabilities” and “Other investments” items and corrections in accordance with IAS 8 were made. The errors were identified during work on the inclusion of companies not previously included in the integrated financial statement preparation process. This resulted in restatements of the opening balances for the 2022 financial year, which are described in the section “Standards to be applied for the first time”.