HSBC 2012 Annual Report Download - page 236

HSBC HOLDINGS PLC
Report of the Directors: Operating and Financial Review (continued)
Risk > Risk management of insurance operations > In 2012 / Balance sheet of manufacturing subsidiaries
234
a contract, claims and benefits may exceed the
aggregate amount of premiums received and
investment income. The cost of claims and benefits
can be influenced by many factors, including
mortality and morbidity experience, lapse and
surrender rates and, if the policy has a savings
element, the performance of the assets held to
support the liabilities.
In respect of financial risks, subsidiaries
manufacturing products with guarantees are usually
exposed to falls in market interest rates and equity
prices to the extent that the market exposure
cannot be managed by utilising any discretionary
participation (or bonus) features (‘DPF’) within
the policy contracts they issue.
The following tables analyse our insurance risk
exposures by geographical region and by type of
business. The insurance risk profile and related
exposures remained largely consistent with those
observed at 31 December 2011.
Analysis of life insurance risk – liabilities to policyholders56
(Audited)
Europe
Hong
Kong
Rest of
Asia-
Pacific
North
America57
Latin
America
Total
US$m US$m US$m US$m US$m US$m
At 31 December 2012
Life (non-linked) ................................................. 1,319 25,615 1,587 – 2,163 30,684
Insurance contracts with DPF58 ...................... 353 23,685 439 – – 24,477
Credit life ........................................................ 160 –61 – – 221
Annuities ........................................................ 586 –122 – 1,579 2,287
Term assurance and other long-term
contracts ..................................................... 220 1,930 965 – 584 3,699
Life (linked) ........................................................ 3,249 3,786 594 – 5,427 13,056
Investment contracts with DPF58,59 ..................... 24,370 – 4 – – 24,374
Insurance liabilities to policyholders .................. 28,938 29,401 2,185 – 7,590 68,114
At 31 December 2011
Life (non-linked) ................................................. 1,163 21,460 1,227 982 2,094 26,926
Insurance contracts with DPF58 ...................... 335 20,109 338 – – 20,782
Credit life ........................................................ 219 – 58 34 – 311
Annuities ........................................................ 517 – 78 741 1,546 2,882
Term assurance and other long-term
contracts ..................................................... 92 1,351 753 207 548 2,951
Life (linked) ........................................................ 2,508 3,393 476 – 4,833 11,210
Investment contracts with DPF58,59 ..................... 21,477 – 11 – – 21,488
Insurance liabilities to policyholders .................. 25,148 24,853 1,714 982 6,927 59,624
For footnotes, see page 249.
Our most significant life insurance products are
investment contracts with DPF issued in France,
insurance contracts with DPF issued in Hong Kong
and unit-linked contracts issued in Latin America,
Hong Kong and the UK. The decline in life
insurance liabilities in North America reflects the
classification of this business as held for sale at
31 December 2012.
Analysis of non-life insurance risk – net written insurance premiums60
(Audited)
Europe
Hong
Kong
Rest of
Asia-
Pacific
North
America
Latin
America
Total
US$m US$m US$m US$m US$m US$m
2012
Accident and health ............................................ 7 181 7 – 34 229
Motor .................................................................. – 14 20 – 161 195
Fire and other damage ........................................ – 20 15 24 20 79
Liability ............................................................... – 15 4 – 1 20
Credit (non-life) .................................................. – – – 36 1 37
Marine, aviation and transport ............................ – 7 4 – 13 24
Other non-life insurance contracts ..................... 5 33 1 3 30 72
Total net written insurance premiums ................ 12 270 51 63 260 656
Net insurance claims incurred and movement
in liabilities to policyholders .......................... (5) (117) (22) (24) (116) (284)