My first Publication ocbc_ar17_fullreport_english | Page 245
39. RISK MANAGEMENT (continued)
39.5 INSURANCE-RELATED RISK MANAGEMENT (continued)
Market and credit risk (continued)
(b) Foreign currency risk
Hedging through currency forwards and swaps is typically used for the fixed income portfolio. Internal limits on foreign exchange
exposures ranging from 15% to 35% are applied to investments in fixed income portfolios at a fund level. Currency risk derived from
investments in foreign equities is generally not hedged.
GEH Group is also exposed to foreign exchange risk on the net investment in its foreign subsidiaries. Such risk mainly arises from
GEH Group’s subsidiaries in Malaysia. The Insurance and Shareholders’ Funds in Malaysia are predominantly held in Malaysian Ringgit,
as prescribed by BNM.
The following table shows the foreign exchange position of GEH Group’s financial and insurance-related assets and liabilities by
major currencies.
$ million
2017
Available-for-sale securities
Equity securities
Debt securities
Other investments
Securities at fair value through profit or loss
Equity securities
Debt securities
Other investments
Financial instruments held-for-trading
Equity securities
Debt securities
Derivative financial assets
Loans
Insurance receivables
Other debtors and interfund balances
Cash and cash equivalents
Financial and insurance-related assets
Other creditors and interfund balances
Insurance payables
Derivative financial payables
Provision for agents’ retirement benefits
Debt issued
General insurance fund contract liabilities
Life assurance fund contract liabilities
Financial and insurance-related liabilities
(1)
Not subject
to foreign
Others currency risk
SGD MYR USD
Total
2,785
14,378
3,128 5,582
11,752
199 659
10,445
2,399 5,294
3,294
1,203 –
–
– 14,320
39,869
6,929
100
21
1,799 1,677
692
40 252
159
294 507
308
298 –
–
– 2,536
1,180
2,431
#
541
231
432
1,052
960
3,882
29,309 12
1,101
–
927
1,620
289
858
24,749 –
#
6
–
6
139
325
14,684 –
–
2
–
23
129
300
11,358 –
–
–
–
–
2,214
–
2,214 12
1,642
239
1,359
2,701
3,731
5,365
82,314
1,344
1,105
4
–
400
109
41,421
44,383 291
3,001
14
276
–
122
18,936
22,640 160
4
115
–
–
–
1,390
1,669 295
14
247
–
–
–
483
1,039 2,214
–
–
–
–
–
–
2,214 4,304
4,124
380
276
400
231
62,230
71,945
# represents amounts less than $0.5 million.
BUILDING ON OUR CORPORATE STRATEGY FOR SUSTAINABLE GROWTH
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