NTUC Income AR 2017

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 4. MANAGEMENT OF INSURANCE AND FINANCIAL RISKS (CONTINUED) (a) Life Insurance Contracts Risk Management (continued) Sensitivity Analysis (continued) (ii) Life Insurance Non-Par Fund To understand the risks undertaken by the Group in the Life Insurance Non-Par Fund, the following sensitivity analysis is done to measure the impact on the Group’s liabilities. 2017 2016 Assumption Change Impact on liabilities $’000 Impact on liabilities % Impact on liabilities $’000 Impact on liabilities % Interest rates +100 bps (378,441) -16.2% (361,371) -17.7% -100 bps 586,305 25.1% 556,748 27.3% Mortality / morbidity ElderShield: +11.1% Morbidity DPS: +5% Mortality Non-Par Life: +20% Mortality G&H: +20% Morbidity 146,359 6.3% 131,219 6.4% ElderShield: -11.1% Morbidity DPS: -5% Mortality Non-Par Life: -20% Mortality G&H: -20% Morbidity (90,617) -3.9% (99,438) -4.9% Lapses Eldershield: +50bps DPS: +50bps Non-Par Life:+20% (14,754) -0.6% (15,045) -0.7% Eldershield: -50bps DPS: -50bps Non-Par Life: -20% 16,195 0.7% 16,153 0.8% For the Life Insurance Non-Par Fund, the analysis is done with respect to the liabilities of the fund, a corresponding amount will be recognised as surplus/deficit to the Life Insurance Non-Par Fund. (iii) Investment-Linked Fund To understand the risks undertaken by the Group in the Investment-Linked Fund, the following sensitivity analysis is done to measure the impact on the Group’s liabilities. 2017 2016 Assumption Change Impact on liabilities $’000 Impact on liabilities % Impact on liabilities $’000 Impact on liabilities % Interest rates +100 bps (38) -14.7% (19) -6.9% -100 bps 51 19.7% 24 8.7% Mortality +20% (2) -0.8% 8 2.8% -20% 3 1.0% (3) -1.2% Lapses +20% (29) -11.0% (28) -9.8% -20% 35 13.4% 37 13.3% For the Investment-Linked Fund, the analysis is done with respect to the liabilities of the fund, a corresponding amount will be recognised as surplus/deficit to the Investment-Linked Non Unit Fund. ANNUAL REPORT 2017 EVERY DAY MADE DIFFERENT 69