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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

7.7 Deferred tax

Deferred tax assets are recognised to the extent that it is probable that future taxable profits will
be available against which the deductible temporary differences can be utilised. The Company
considers future taxable income and ongoing prudent and feasible tax planning strategies in
assessing whether to recognise deferred tax assets. The Company’s assumptions regarding the
future profitability and the anticipated timing of utilisation of deductible temporary differences and
significant changes in these assumptions from year to year may have a material impact on the
Company’s reported financial position and results of operations.

7.8 Determination of lease terms
Critical judgement in determining the lease term, the Company considers all facts and circumstances
that create an economic incentive to exercise an extension option, or not exercise a termination
option. Extension options (or periods after termination options) are only included in the lease
term if the lease is reasonably certain to be extended (or not terminated).

For leases of properties, the most relevant factors are historical lease durations, the costs and
conditions of leased assets.

Most extension options on offices and vehicles leases have not been included in the lease liability,
because the Company considers i) the underlying asset condition and/or ii) insignificant cost to
replace the leased assets.
The lease term is reassessed if an option is actually exercised (or not exercised) or the Company
becomes obliged to exercise (or not exercise) it. The assessment of reasonable certainty is only
revised if a significant event or a significant change in circumstance affecting this assessment occur,
and that it is within the control of the Company.

7.9 Determination of discount rate applied to leases

The Company determines the incremental borrowing rate as follows:

 Where possible, use recent third-party financing received by the individual lessee as a starting
point, adjusting to reflect changes in its financing conditions.
 Make adjustments specific to the lease, e.g. term, country, currency and security.
7.10 Loss reserve and outstanding claims

The Company determines the loss reserves and outstanding claims in accordance with survey
information, and also reviews the outstanding claims by monthly which are sufficient to cover
any liabilities arising out of insurance contracts to the extent that can be reasonably foreseen.
However, given the uncertainty in establishing a provision for insurance claims, it is likely that
the final outcome could prove to be significantly different from the original liability established.
Provision is made at the reporting date for the expected ultimate cost of settlement of all claims
incurred in respect of events up to that date, whether reported or not, together with related
claims handling expenses, less amounts already paid. The Company uses actuarial methods to
estimate the ultimate cost of claims. The methods mainly are as follows:

1) Chain Ladder method (CL) based on both claims paid and claims incurred.
2) Bornhuetter-Ferguson method (BF) based on both claims paid and claims incurred.
3) Frequency and Severity method (F&S)
The choice of selected results for each accident year of each class of business depends on an
assessment of the technique that has been most appropriate to observed historical developments
between Chain Ladder method and Bornhuetter-Ferguson method. For Frequency and Severity
method, it has been applied for loan protection contract which has coverage period more than
1 year and sum insured depending on reduction of loan amount.

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รายงานประจำาปี 2566 | ANNUAL REPORT 2023 | 149