NTUC Income AR 2018

Notes to the Financial Statements For the Financial Year Ended 31 December 2018 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. 2018 2017 Assumption Change Impact on liabilities $’000 Impact on liabilities % Impact on liabilities $’000 Impact on liabilities % Interest rates +100 bps (395,953) -15.4% (378,441) -16.2% -100 bps 609,789 23.7% 586,305 25.1% Mortality / morbidity ElderShield: +11.1% Morbidity DPS: +5% Mortality Non-Par Life: +20% Mortality Group & Health: +20% Morbidity 156,714 6.1% 146,359 6.3% ElderShield: -11.1% Morbidity DPS: -5% Mortality Non-Par Life: -20% Mortality Group & Health: -20% Morbidity (93,030) -3.6% (90,617) -3.9% Lapses ElderShield: +50bps DPS: +50bps Non-Par Life:+20% (14,672) -0.6% (14,754) -0.6% ElderShield: -50bps DPS: -50bps Non-Par Life: -20% 16,529 0.6% 16,195 0.7% 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. 2018 2017 Assumption Change Impact on liabilities $’000 Impact on liabilities % Impact on liabilities $’000 Impact on liabilities % Interest rates +100 bps (101) -19.4% (38) -14.7% -100 bps 156 30.0% 51 19.7% Mortality +20% 29 5.6% (2) -0.8% -20% (26) -5.1% 3 1.0% Lapses +20% (55) -10.5% (29) -11.0% -20% 66 12.7% 35 13.4% 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. 71 2018 ANNUAL REPORT