Page 147 - Suncorp_Review

Suncorp Group Limited Annual Report 2010/11 145

GENERAL INSURANCE

2011 2010

Exposure Change in Proft (loss) Equity Exposure Change in Proft (loss) Equity at 30 June interest rate after tax reserves at 30 June interest rate after tax reserves $m % $m $m $m % $m $m

Interest-bearing investment securities (including derivative

fnancial instruments) 10,696 +1.5 (272) – 11,071 +2.0 (352) – –0.6 108 – –2.0 352 – Other fnancial liabilities (596) +1.5 (6) – (170) +2.0 (3) – –0.6 3 – –2.0 3 –

(c) Equity risk

The General Insurance business has exposure to equity risk through investments in international unit trusts where the unit trusts have investments in equity. The table below presents a sensitivity analysis showing the impact on proft or loss and equity reserves for price movements for exposures as at the balance date with all other variables remaining constant. The price movements for international unit trusts used in the sensitivity analysis for 2011 have been revised to refect updated assessment of the reasonable possible movements over the next 12 months given renewed observations and experience in the investment markets during the fnancial year.

GENERAL INSURANCE

2011 2010

Exposure Change in Proft (loss) Equity Exposure Change in Proft (loss) Equity at 30 June prices after tax reserves at 30 June prices after tax reserves $m % $m $m $m % $m $m

International unit trusts 86 +20 12 – 80 +25 13 – –20 (12) – –25 (13) –

(d) Credit spread risk

General Insurance is exposed to credit spread risk through its investments in interest-bearing securities. This risk is mitigated by incorporating a diversifed investment portfolio, establishing maximum exposure limits for counterparties and minimum limits on credit ratings. The table below presents a sensitivity analysis on how movements credit spread movements could affect General Insurance’s proft or loss for its exposure as at the year end. The movements in credit spread used in the sensitivity analysis for 2011 have been revised to refect updated assessment of the reasonable possible changes in credit spread over the next 12 months given renewed observations and experience in the investment markets during the fnancial year.

GENERAL INSURANCE

2011 2010

Exposure Change in Proft (loss) Exposure Change in Proft (loss) at 30 June credit spread after tax at 30 June credit spread after tax $m % $m $m % $m

Credit exposure

(excluding semi-government) 6,337 +0.6 (60) 7,807 +2.0 (214) –0.3 30 –2.0 214 Credit exposure

(semi-government) 1,277 +0.2 (9) 1,631 +0.6 (14) –0.1 4 –0.6 14