NTUC Income AR 2018

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 $685 million while insurance contract provisions increased by $719 million. Insurance Funds * Net Assets ($million) Insurance Contract Provisions ($million) 31-Dec-17 31-Dec-18 % change 31-Dec-17 31-Dec-18 % change Life Insurance Participating Fund 25,990 26,486 1.9% 25,540 26,025^ 1.9% Non-Participating Fund 3,962 4,199 6.0% 2,333 2,570 10.2% Investment-Linked Fund 2,120 2,127 0.3% 2,118 2,123 0.2% General Insurance Fund 1,322 1,267 -4.2% 633 625 -1.3% Total Insurance Funds 33,394 34,079 2.1% 30,624 31,343 2.3% * Net Assets is the assets net of other liabilities. ^ Includes Investment contract liabilities of $7.2 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, to trim the annual bonus rates for selected annuity policies and to increase the terminal (or special) bonus rates for selected endowment policies maturing between 1st April 2019 and 31st March 2020. The bonus rates will be published on the Co-operative’s website in April 2019. 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, 28 March 2019 Appointed Actuary’s Report For the Financial Year Ended 31 December 2018 29 2018 ANNUAL REPORT