WA - The discounting simply converts the expected future claims...

W
A - The discounting simply converts the expected future claims into a present value. For example, if future claims are expected to be $x million next year, the discounting rate applied to it will mean its PV is a bit less than $x mil. It is discounted because there is an expectation that assets will earn income before the claim is paid.
B - The interest income is an actual event that goes through the accounts and forms part of the total assets of the company from time to time.
C - The difference between the total assets and the PV is a surplus item of profit. The profit (or loss) attributable to any given year will only be the change in the surplus amount.

This is all very simplistic but I hope it gives the general principle.