HSBC 2009 Annual Report Download - page 284

HSBC HOLDINGS PLC
Report of the Directors: Risk (continued)
Insurance operations > Financial risks > Liquidity risk // PVIF
282
for collation and review by the Group Insurance
Market and Liquidity Risk Meeting. Liquidity risk
is assessed in these reports by measuring changes
in expected cumulative net cash flows under a
series of stress scenarios designed to determine the
effect of reducing expected available liquidity and
accelerating cash outflows. This is achieved by, for
example, assuming new business or renewals are
lower, and surrenders or lapses are greater, than
expected.
The following tables show the expected
undiscounted cash flows for insurance contract
liabilities and the remaining contractual maturity of
investment contract liabilities at 31 December 2009.
As indicated in the analyses of life and non-life
insurance risks on pages 268 to 269, a significant
proportion of the Group’s non-life insurance
business is viewed as short-term, with the settlement
of liabilities expected to occur within one year of the
period of risk. There is a greater spread of expected
maturities for the life business where, in a large
proportion of cases, the liquidity risk is borne in
conjunction with policyholders (wholly in the case
of unit-linked business).
The profile of the expected maturity of the
insurance contracts as at 31 December 2009
remained comparable with 2008.
Expected maturity of insurance contract liabilities
(Audited)
Expected cash flows (undiscounted)68
Within 1 year 1-5 years 5-15 years Over 15 years Total
US$m US$m US$m US$m US$m
At 31 December 2009
Non-life insurance .................................... 1,318 1,277 123 10 2,728
Life insurance (non-linked) ...................... 2,393 10,098 17,253 18,231 47,975
Life insurance (linked) .............................. 522 2,290 4,483 6,899 14,194
4,233 13,665 21,859 25,140 64,897
At 31 December 2008
Non-life insurance .................................... 1,178 1,186 115 1 2,480
Life insurance (non-linked) ...................... 2,527 7,789 16,695 14,432 41,443
Life insurance (linked) .............................. 1,295 1,251 3,269 5,390 11,205
5,000 10,226 20,079 19,823 55,128
For footnote, see page 291.
Remaining contractual maturity of investment contract liabilities
(Audited)
Liabilities under investment contracts by
insurance manufacturing subsidiaries69
Linked
investment
contracts
Other
investment
contracts
Investment
contracts
with DPF
Total
US$m US$m US$m US$m
At 31 December 2009
Remaining contractual maturity:
– due within 1 year ............................................................... 477 443 14 934
– due between 1 and 5 years ................................................ 904 – 20 924
– due between 5 and 10 years .............................................. 693 – – 693
– due after 10 years .............................................................. 2,093 – – 2,093
– undated70 ............................................................................ 3,180 3,492 20,980 27,652
7,347 3,935 21,014 32,296
At 31 December 2008
Remaining contractual maturity:
– due within 1 year ............................................................... 178 314 – 492
– due between 1 and 5 years ................................................ 610 21 34 665
– due between 5 and 10 years .............................................. 482 31 – 513
– due after 10 years .............................................................. 1,649 42 – 1,691
– undated70 ............................................................................ 3,093 3,147 17,732 23,972
6,012 3,555 17,766 27,333
For footnotes, see page 291.