NTUC Income AR 2017

I am pleased to submit my report on the financial health of the Co-operative. The Co-operative remains financially sound and the insurance contract provisions are sufficient to meet future obligations. Our net assets increased by $3,450 million while insurance contract provisions increased by $2,850 million. Insurance Funds * Net Assets ($million) Insurance Contract Provisions ($million) 31-Dec-16 31-Dec-17 % change 31-Dec-16 31-Dec-17 % change Life Insurance Participating Fund 23,785 25,990 9.3% 23,385 25,540^ 9.2% Non-Participating Fund 3,160 3,962 25.4% 2,042 2,333 14.3% Investment-Linked Fund 1,725 2,120 22.9% 1,719 2,118 23.2% General Insurance Fund 1,274 1,322 3.8% 628 633 0.8% Total Insurance Funds 29,944 33,394 11.5% 27,774 30,624 10.3% * Net Assets is the assets net of other liabilities. ^ Includes Investment contract liabilities of $10.5 million. The insurance contract provisions are valued in accordance to Insurance (Valuation and Capital) Regulations 2004, taking into account all contractual liabilities. For the Participating Fund, total insurance contract provisions include an allowance for future bonuses. The reserving assumptions are reviewed on an annual basis to reflect the Co-operative’s latest experience. One of my duties as the Appointed Actuary is to recommend to the Board of Directors (“the Board”) the bonus rates to be allocated to the Co-operative’s participating policyholders. After weighing in the financial analysis, policyholders’ reasonable expectations and senior management’s view, my recommendation is to maintain the bonus rates for majority of the participating products, and to increase the terminal (or special) bonus rates for selected endowment policies maturing between 1st April 2018 and 31st March 2019. The bonus rates will be published on the Co-operative’s website in April 2018. In addition, I recommend to the Board the amount to transfer from the surplus arising in the Participating Fund to the Surplus Account on an annual basis. This recommendation complies with the maximum amount that can be transferred as stipulated in section 17 of the Insurance Act. I also recommend to the Board the amount to transfer from Surplus Account and other Insurance Funds to the Shareholders’ Fund. The detailed financials can be found in the “Consolidated Statement of Changes in Equity” section of this report. The above recommendations have been agreed and approved by the Board. Lau Sok Hoon Appointed Actuary Singapore, 27 March 2018 APPOINTED ACTUARY’S REPORT FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 ANNUAL REPORT 2017 NTUC INCOME INSURANCE CO-OPERATIVE LIMITED 28