NTUC Income AR 2017

CORPORATE GOVERNANCE COMMUNICATION WITH MEMBERS Members of the Co-operative can access relevant information on the Co-operative at its website at www.income.com.sg . Members are also given the opportunity to participate actively at the Co-operative’s AGMs where they can ask questions and communicate their views. The directors, senior management and external auditors are present at these meetings to address queries and concerns raised by members. ENTERPRISE RISK MANAGEMENT The Risk Management Strategy, as formulated by the Risk Management Committee (RMC) and approved by the Board, serves to ensure that the risk management framework is in place to identify, measure, manage, monitor and report material risks consistently across all business activities. Enterprise Risk Management Framework Enterprise Risk Management (ERM) Framework at the Co-operative level involves the overall assessment of risks which the Co-operative can be exposed to at present, as well as, in the reasonably foreseeable future, and its integration with capital management. The Co-operative’s enterprise-wide Risk Appetite Statement articulates quantitatively and qualitatively, the level of risk that the Co-operative is ready to accept and tolerate, and provides the basis for oversight and governance for the Co- operative. The foremost principle underlying the Co-operative’s ERM Framework is that all risk management activities are aimed at facilitating the achievement of its stated corporate objectives and social priorities, in a manner that is consistent with the Co-operative’s stated aim of financial stability and serving the community whilst protecting and enhancing the reputation and standing of the Co-operative. Risk Management Principles Risk is a key part of our business and is defined as events which have a range of probabilistic outcomes, some of which have a negative impact on the organisation. Under the risk management framework, risks are classified under five broad categories which are considered to be most central to our business: 1. Market Risk Market Risk is the risk to the Co-operative’s financial condition arising from adverse movements in the level or volatility of market prices and long-term investment performance. This risk is managed through the confluence of investment and liability management strategies (including bonus strategy for participating business). 2. Insurance Risk Insurance risk refers to the payment of claim upon a contingent, uncontrollable event, in return for a premium. The assumption of insurance risk to earn an economic profit is our core business. This risk is managed through the combination of underwriting and pricing. The Insurance Risk Policy sets out the types of risks that are acceptable to us, the limits of our retention and how new risks are to be evaluated and approved. ANNUAL REPORT 2017 EVERY DAY MADE DIFFERENT 25