HSBC 2009 Annual Report Download - page 275

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intermediation of insurance, pensions and annuities
are exposed to financial risks, but not to a significant
extent.
Risk management procedures which reflect local
market conditions and regulatory requirements
may be implemented by HSBC’s insurance
manufacturing subsidiaries in addition to policies
provided for Group-wide application through the
Group Instruction Manuals. In many jurisdictions,
local regulatory requirements prescribe the type,
quality and concentration of assets that these
subsidiaries must maintain to meet insurance
liabilities. Within each subsidiary, ALCOs are
responsible for ensuring that exposures to financial
risks remain within local requirements and risk
mandates (as agreed with Group Insurance Head
Office), and ensure compliance with the control
framework established centrally through the Group
Instruction Manuals.
The following table analyses the assets held in
HSBC’s insurance manufacturing subsidiaries at
31 December 2009 by type of contract, and provides
a view of the exposure to financial risk:
Financial assets held by insurance manufacturing subsidiaries
(Audited)
Life linked Life non-linked Non-life Other
contracts57 contracts58 insurance59 assets54 Total60
US$m US$m US$m US$m US$m
At 31 December 2009
Trading assets
Debt securities ...................................... – – 10 – 10
Financial assets designated at fair value 14,409 8,607 63 2,085 25,164
Treasury bills ........................................ 46 174 – 3 223
Debt securities ...................................... 5,086 3,428 63 1,220 9,797
Equity securities ................................... 9,277 5,005 – 862 15,144
Financial investments
Held-to-maturity:
– debt securities .................................... – 13,995 186 670 14,851
Available-for-sale ..................................... – 17,211 556 3,231 20,998
– Treasury bills ..................................... – – 211 86 297
– other eligible bills .............................. – 26 127 126 279
– debt securities .................................... – 17,169 199 2,787 20,155
– equity securities ................................. – 16 19 232 267
Derivatives ................................................ 300 165 – 3 468
Other financial assets61 ............................. 861 4,473 1,475 1,263 8,072
15,570 44,451 2,290 7,252 69,563
At 31 December 2008
Trading assets
Debt securities ...................................... – – 35 4 39
Financial assets designated at fair value ... 10,263 7,990 52 1,970 20,275
Treasury bills ........................................ 31 197 – 8 236
Debt securities ...................................... 4,091 3,109 52 1,625 8,877
Equity securities ................................... 6,141 4,684 – 337 11,162
Financial investments
Held-to-maturity:
– debt securities .................................... – 10,411 170 510 11,091
Available-for-sale ..................................... – 14,617 690 2,066 17,373
– Treasury bills ..................................... – 4 130 128 262
– other eligible bills .............................. – – 272 126 398
– debt securities .................................... – 14,602 254 1,596 16,452
– equity securities ................................. – 11 34 216 261
Derivatives ................................................ 173 204 – 24 401
Other financial assets61 ............................. 843 4,752 1,106 2,110 8,811
11,279 37,974 2,053 6,684 57,990
For footnotes, see page 291.