22. Insurance and reinsurance contracts

The Group has insurance subsidiaries mainly in Spain and Latin America (mostly in Mexico). The main product offered by the insurance subsidiaries is life insurance to cover the risk of death (risk insurance) and life-savings insurance. Within life and accident insurance, a distinction is made between freely sold products and those offered to customers who have taken mortgage or consumer loans, which cover the principal of those loans in the event of the customer’s death.

There are two types of life-saving insurance products: individual insurance, which seeks to provide the customer with savings for retirement or other events, and group insurance, which is taken out by employers to cover their commitments to their employees.

The most significant provisions recognized by consolidated insurance subsidiaries with respect to insurance policies issued by them are under the heading “Liabilities under insurance contracts” in the accompanying consolidated balance sheets.

The breakdown of the balance under this heading is as follows:

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Liabilities under Insurance Contracts Technical Reserve and Provisions	Millions of euros
	2015	2014	2013
Mathematical reserves	8,101	9,352	8,816
Provision for unpaid claims reported	697	578	496
Provisions for unexpired risks and other provisions	609	530	522
Total	9,407	10,460	9,834

The cash flows of those liabilities under insurance contracts are shown below:

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Maturity	Millions of euros
	Up to 1 Year	1 to 3 Years	3 to 5 Years	Over 5 Years	Total
Liabilities under insurance contracts	1,652	1,397	1,495	4,863	9,407

The modeling methods and techniques used to calculate the mathematical reserves for the insurance products are actuarial and financial methods and modeling techniques approved by the respective country’s insurance regulator or supervisor. The most important insurance entities are located in Spain and Mexico (which together account for approximately 95% of the insurance revenues), where the modeling methods and techniques are reviewed by the insurance regulator in Spain (General Directorate of Insurance) and Mexico (National Insurance and Bonding Commission), respectively. The modeling methods and techniques used to calculate the mathematical reserves for the insurance products are based on IFRS and primarily involve the valuation of the estimated future cash flows, discounted at the technical interest rate for each policy. To ensure this technical interest rate, asset-liability management is carried out, acquiring a portfolio of securities that generate the cash flows needed to cover the payment commitments assumed with the customers.

The table below shows the key assumptions used in the calculation of the mathematical reserves for insurance products in Spain and Mexico, respectively:

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MATHEMATICAL RESERVES	Mortality table		Average technical interest type
	Spain	Mexico	Spain	Mexico
Individual life insurance (1)	GKM80/GKM95/ Own tables	Tables of the Comision Nacional De Seguros y Fianzas 2000-individual	1.35 - 4.8%	2.5%
Group insurance (2)	PERM/F2000NP	Tables of the Comision Nacional De Seguros y Fianzas 2000-group	1.68 - 4.82%	5.5%

(1) Provides coverage in the case of one or more of the following events: death and disability (2) Insurance policies purchased by companies (other than Group BBVA entities) on behalf of their employees

The table below shows the mathematical reserves by type of product as of December 31, 2015, 2014 and 2013:

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Technical Reserves by type of insurance product	Millions of euros
	2015	2014	2013
Mathematical reserves	8,101	9,352	8,816
Individual life insurance (1)	4,294	5,683	5,695
Savings	3,756	5,073	4,907
Risk	526	610	788
Others	12	-	-
Group insurance §	3,807	3,669	3,121
Savings	3,345	3,207	3,000
Risk	462	462	121
Others	-		496
Provision for unpaid claims reported	697	578	522
Provisions for unexpired risks and other provisions	609	529
Total	9,407	10,460	9,834

(1) Provides coverage in the event of death or disability (2) The insurance policies purchased by employers (other than BBVA Group) on behalf of its employees

The table below shows the contribution of each insurance product to the Group’s income (see Note 42) in the years ended December 31, 2015, 2014 and 2013:

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Revenues by type of insurance product	Millions of euros
	2015	2014	2013
Life insurance	670	599	549
Individual	329	272	303
Savings	80	67	52
Risk	249	205	251
Group insurance	342	327	247
Savings	22	90	62
Risk	320	237	185
Non-Life insurance	409	309	381
Home insurance	127	117	120
Other non-life insurance products	283	192	261
Total	1,080	908	930

The heading “Reinsurance assets” in the accompanying consolidated balance sheets includes the amounts that the consolidated insurance entities are entitled to receive under the reinsurance contracts entered into by them with third parties and, more specifically, the share of the reinsurer in the technical provisions recognized by the consolidated insurance subsidiaries. As of December 31, 2015, 2014 and 2013 the balance is €511 million, €559 million, and €619 million, respectively.