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38. INSURANCE RISKS (CONT’D)
Sensitivity analysis
The independent actuarial firm engaged by the Group and the Bank re-runs its valuation models on various bases. An analysis
of sensitivity around various scenarios provides an indication of the adequacy of the Group’s and the Bank’s estimation
process in respect of its insurance contracts. The table presented below demonstrates the sensitivity of the insurance
contract liabilities estimates to particular movements in assumptions used in the estimation process.
The analysis below is performed for reasonably possible movements in key assumptions with all other assumptions held
constant, showing the impact on gross and net liabilities, profit before tax and equity. The correlation of assumptions will
have a significant effect in determining the ultimate claims liabilities, but to demonstrate the impact due to changes in
assumptions, assumptions had to be changed on an individual basis.
Claim liability sensitivity analysis
2013
2012
Net
Net
RM’000
RM’000
Estimated claim liabilities
27,073
20,291
a. Change in claim costs
Assumed an average claim cost of RM400,000 net of non-reinsurance recoveries for the Comprehensive Policy Shipments
and adopted the Group’s and the Bank’s specific provisions for the other types of contracts where applicable. Changing
the average claims cost and specific provisions by 10% gives the following results:
2013
2012
Net
Net
RM’000
RM’000
RM’000
RM’000
High
Low
High
Low
+10%
–10%
+10%
–10%
Estimated claim liabilities
29,794
24,440
22,045
18,538
b. Change in average number of claims
Assumed 4.5% of Comprehensive Policy Shipments policies as IBNR claims for Comprehensive Policy Shipments.
Changing this by 10% gives the following results:
2013
2012
Net
Net
RM’000
RM’000
RM’000
RM’000
High
Low
High
Low
+10%
–10%
+10%
–10%
Estimated claim liabilities
28,073
26,161
20,769
19,813
NOTESTOTHEFINANCIALSTATEMENTS
31 DECEMBER 2013
184
EXIM Bank Annual Report 2013