My first Publication ocbc_ar17_fullreport_english | Page 237

39. RISK MANAGEMENT (continued)
39.5 INSURANCE-RELATED RISK MANAGEMENT
This note sets out the risk management information of GEH Group.
Governance framework
Managing risk is an integral part of GEH Group’s core business. As stated in the Enterprise Risk Management (“ERM”) Framework,
GEH Group shall operate within parameters and limits that have been set based on the risk appetite approved by the GEH Board, and
pursue appropriate risk-adjusted returns.
GEH Group Risk Management department spearheads the development and implementation of the ERM Framework for GEH Group.
GEH Board is responsible to provide oversight on the risk management initiatives. The GEH Board may delegate this responsibility to
the Risk Management Committee (“RMC”). At GEH Group level, detailed risk management and oversight activities are undertaken by
the following group management committees chaired by the Group Chief Executive Officer and comprising key Senior Management
Executives, namely: Group Management Committee (“GMC”), Group Asset-Liability Committee (“Group ALC”) and Group Information
Technology Steering Committee (“Group ITSC”).
GMC is responsible for providing leadership, direction and functional oversight with regards to all matters of GEH Group. The GMC is
also responsible for ensuring compliance and alignment with Group Governance and Oversight Framework, i.e. Group standards and
guidelines. The GMC is supported by the local Senior Management Team (“SMT”) and Product Development Committee (“PDC”).
Group ALC is responsible for balance sheet management. Specifically, Group ALC reviews and formulates technical frameworks, policies
and methodologies relating to balance sheet management. Group ALC is also responsible for ensuring compliance and alignment with
Group Governance and Oversight Framework, i.e. Group standards and guidelines. Group ALC is supported by the local Asset-Liability
Committee (“ALC”).
Regulatory framework
Insurers are required to comply with the Insurance Act and Regulations, as applicable, including guidelines on investment limits.
The responsibility for the formulation, establishment and approval of the investment policy rests with the respective Board of Directors
(“Board”) of the insurance subsidiaries. The Board exercises oversight on investments to safeguard the interests of policyholders
and shareholders.
Capital management
GEH’s capital management policy is to create shareholder value, deliver sustainable returns to shareholders, maintain a strong capital
position with sufficient buffer to meet policyholders’ obligations and regulatory requirements and make strategic investments for
business growth.
GEH Group has had no significant changes in the policies and processes relating to its capital structure during the year.
Regulatory capital
The insurance subsidiaries of GEH Group are required to comply with capital ratios prescribed by the insurance regulations of the
jurisdiction in which the subsidiaries operate. The Capital Adequacy Ratios of GEH Group’s insurance subsidiaries in both Singapore and
Malaysia remained well above the minimum regulatory ratios under the Risk based Capital Frameworks regulated by the Monetary
Authority of Singapore (“MAS”) and Bank Negara, Malaysia (“BNM”) respectively.
GEH Group’s approach to capital management requires adequate capital to meet industry requirements, including any additional
amounts required by the respective regulators. This involves managing assets, liabilities and risks in a coordinated way by assessing and
monitoring available and required capital (by each regulated entity) on a regular basis and, where appropriate, taking suitable actions to
influence the capital position of GEH Group in light of changes in economic conditions and risk characteristics.
The primary sources of capital of GEH Group are shareholders’ funds and issued subordinated debt. Available capital of the consolidated
Singapore insurance subsidiaries as at 31 December 2017 amounted to $11.8 billion (2016: $10.3 billion) while available capital of the
consolidated Malaysia insurance subsidiaries as at 31 December 2017 amounted to $8.2 billion (2016: $7.2 billion).
Dividend
GEH’s dividend policy aims to provide shareholders with a predictable and sustainable dividend return, payable on a half-yearly basis.
BUILDING ON OUR CORPORATE STRATEGY FOR SUSTAINABLE GROWTH
235