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Tokio Marine Safety Insurance (Thailand) Public Company Limited
Notes to the Financial Statements

Tokio Marine Safety Insurance (Thailand) Public Company Limited
For the year ended 31 December 2023
Notes to the Financial Statements
For the year ended 31 December 2023

4.13 Insurance liabilities

a) Loss reserve and outstanding claims

The loss reserve and outstanding claims include the claims incurred and reported, claims
incurred but not reported (IBNR) as well as claim handling costs. Outstanding claims are
recorded at the amount to be actually paid. Loss reserve is provided upon receipt of claim
advices from the insured based on the claims notified by the insured and estimates made
by the independent appraiser or a valuer of the company depending on the case. The maximum
value of claims estimate is not however, to exceed the sum-insured under the relevant policy.

IBNR is calculated using actuarial technique chain ladder or Bornhuetter-Ferguson (BF)
or Frequency & Severity (F&S) bases on a best estimate of claims which are expected to
be paid in respect of losses occurring before or as at the reporting the year. The IBNR is
calculated for both reported and not reported losses, and net of recorded claims.

b) Unearned premium reserve
Unearned premium reserve (UPR) represents the prorated portion of written premiums for
insurance that relates to period of unexpired risks from the statement of financial position
date to the subsequent dates of expiry of the policies, and are computed as follows:

Type of insurance Reserve calculation method
- Fire, marine and transportation - Daily prorate basis (the one-three
(Hull), motor and miscellaneous hundred sixty five)
- Marine and transportation (Individual) - Net premium written for the last ninety days
- Traveling accident - Daily prorate basis (the one-three
hundred sixty five)

Unexpired risks reserve is the reserve for the claims that may be incurred in respect of
in-force policies. Unexpired risks reserve is set aside using an actuarial method, at the best
estimate of the claims that are expected be incurred during the remaining year of coverage,
based on historical claims data.
The Company compares the amounts of unexpired risks reserve with unearned premium
reserve, and if unexpired risks reserve is higher than unearned premium reserve, the difference
is recognised as unexpired risks reserve in the financial statements.

4.14 Employee Benefits
Defined contribution plans

The Company has established a provident fund which is a defined contribution plan, and the assets
of the provident fund are held separately from those of the Company in funds independently
administered by a fund manager who is authorised by the Securities and Exchange Commission.
The provident fund is funded by payments from employees and by the Company. Contributions to
the provident fund are charged to the statements of comprehensive income in the year to which
they relate.

Defined retirement benefit plans
The Company has obligations in respect of the severance payments it must make to employees
upon retirement under Thai Labor Law. The Company treats these severance payment obligations
as a defined retirement benefit plan. The amounts payable for this benefit in the future depends on
base salary and the years of service of respective employees on retirement date.

132 | รายงานประจำาปี 2566 | ANNUAL REPORT 2023 15