39. The ESA records reinsurance transactions in a simpler way than direct insurance transactions (the latter meaning transactions between insurance enterprises and ordinary policy holders). Instead of showing the flows involved (premiums earned, claims due, commissions, etc.) separately, reinsurance transactions are simply shown as a service delivered from reinsurer to direct insurer. The value of this service is measured as the balance of all flows occurring between reinsurer and direct insurer.
For resident life and non-life insurance enterprises, reinsurance services produced are shown as output (P.1), while reinsurance services received are shown as intermediate consumption (P.2). Reinsurance services delivered from resident reinsurers to non-resident insurers are shown as exports of services (P.62), while services delivered from non-resident reinsurers to resident insurers are recorded as imports of services (P.72).
40. For resident insurance enterprises data on output and intermediate consumption of reinsurance services can be obtained from insurance statistics. Calculating imports and exports of reinsurance services may be more difficult, depending mainly on the availability and quality of balance of payments statistics. However, the external balance of reinsurance services can easily be derived from insurance statistics.
Reinsurance transactions between resident insurance enterprises are often consolidated. However, in order to be in accordance with the EC insurance directives, the ESA recommends reinsurance services to be recorded without consolidation. Whether or not reinsurance services between residents are consolidated affects the level of output of insurance services, but balancing items such as value added, operating surplus and saving are not affected.