Årsrapport 2022 godkendt 7. marts 2023 (eng) - Flipbook - Side 24
INDUSTRIENS PENSIONSFORSIKRING A/S ANNUAL REPORT 2022
INDEPENDENT AUDITOR'S REPORT
Key audit matter
How our audit addressed the key audit matter
Measurement of unlisted investment assets
We performed risk assessment procedures with the purpose of achieving an understanding of IT
systems, procedures and relevant controls relating to measurement of unlisted investments.
Unlisted investment assets comprise investments in equity funds and unlisted shares and are included
in the financial line items “other financial investment assets” and “investment assets related to marketrate products” totalling DKK 67,217 million, which constitutes 30% of total investment assets.
Unlisted investment assets further comprise investments in property and infrastructure (offshore wind
turbines and solar installations) and are included in the financial line items “Equity investments in
associated undertakings” and “investment assets related to market-rate products” totalling DKK 8,396
million, which constitutes 4% of total investment assets.
Unlisted investment assets are measured at estimated fair value. The accounting estimate of fair value
is based on valuation models, data and significant assumptions, which are not directly observable by a
third party. Changes in significant assumptions, which are included in the accounting estimate, may
have a material effect on the Financial Statements.
We focused on the measurement of unlisted investments, as the accounting estimate is by nature
complex and influenced by subjectivity and thus to a large extent associated with estimation
uncertainty.
In respect of controls, we assessed whether these were designed and implemented effectively to
address the risk of material misstatement. For selected controls, on which we planned to rely, we tested
whether these controls had been performed on a consistent basis.
We assessed and tested the valuation models applied by Management.
We tested on a sample basis the consistency between the assumptions applied, data and the
calculation of fair values.
We tested on a sample basis the applied fair values against relevant reporting from external fund
managers.
We challenged the significant assumptions forming the basis of the accounting estimate incorporated
in the calculation of the fair values based on our knowledge of the portfolio and the market
development.
We assessed whether the disclosures on the unlisted investments were adequate.
Reference is made to the description in the Financial Statements of “Accounting estimates” in Note 1
and “Equity investments in group undertakings”, “Equity investments in associated undertakings” and
“Investment assets related to market-rate products” in Notes 10, 11, 12 and 22.
Measurement of provisions for insurance and investment contracts
The Company has provisions for insurance and investment contracts totalling DKK 209,716 million,
which constitutes 90% of the balance sheet total.
The provisions primarily comprise life insurance provisions for market-rate contracts of DKK 194,651
million and average-rate contracts of DKK 6,826 million as well as provisions for claims relating to
health and accident insurance DKK 8,238 million.
The provisions for market-rate contracts are based on the fair value of the assets allocated and for the
remainder of provisions actuarial principles are applied, which involve significant accounting estimates
associated with the actuarial assumptions concerning the timing and extent of future payments to the
members.
The significant actuarial assumptions comprise yield curve used for discounting, longevity, mortality,
disability, probability of buy-backs and lapses as well as costs.
We focused on the measurement of provisions for insurance and investment contracts, as the
accounting estimate is by nature complex and influenced by subjectivity and thus to a large extent
associated with estimation uncertainty.
We performed risk assessment procedures with the purpose of achieving an understanding of IT
systems, procedures and relevant controls relating to providing for insurance and investment contracts.
In respect of controls, we assessed whether these were designed and implemented effectively to
address the risk of material misstatement. For selected controls, on which we planned to rely, we tested
whether these controls had been performed on a consistent basis.
We assessed the actuarial methods and models applied by the Company as well as assumptions
applied, and calculations made.
We assessed and challenged the methods and models and significant assumptions applied comprising
yield curve used for discounting, longevity, mortality, disability, probability of buy-backs and lapses as
well as costs based on our experience and knowledge of the sector with a view to assess, whether
these assumptions are in accordance with regulatory and accounting requirements. This comprised an
assessment of the continuity of the basis for the calculation of provisions.
We tested the calculation of provisions for insurance and investment contracts on a sample basis.
We assessed whether the disclosures on the provisions were adequate.
Reference is made to the description in the Financial Statements of “Accounting estimates” in Note 1
and “Provisions for insurance and investment contracts” in Notes 14 and 15.
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