financial asset has increased significantly since initial recognition and when estimating expected credit losses, the company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both qualitative and quantitative information and analysis, based on the Company’s experience and informed credit assessment, that includes forward-looking information such as forecasts which include the impact of macro-economics. Expected credit losses on Insurance receivables are determined using a provision matrix. Receivables are categorised per individual policyholder arrangement. Impairment rates applied to various categories are set out below: Category 1 Balances older than 60 days in excess of recoverable Profit-Share Account balance Category 2 Balances in excess of recoverable Profit-Share Account balance Category 3 Total balances for members aged 51 and older. Before age 51, balances in excess of recoverable Profit-Share Account balance The Company writes off the gross carrying amount of the financial assets and insurance contract assets (net of the remaining Profit-Share Account balance) when it has no reasonable expectations of recovering the asset or portion thereof. The Company expects no significant recovery from the amount written off. There are no financial assets where the terms have been renegotiated for the current or prior year. Individually impaired assets The analysis of overall credit risk exposure indicates that the Group has receivables from contract holders that are impaired at the reporting date. The impaired assets are analysed below: 2022 2021 Group Impairment Impairment R'm Gross losses Net Gross losses Net Due from contract holders (note 8) 332 (21) 311 295 (14) 281 Loan to associate company (note 8) 559 (234) 325 433 (234) 199 Due from investment property lessees (note 8) 9 (4) 5 9 (3) 6 Liquidity risk Liquidity risk is the risk that the Group will encounter difficulty in raising funds to meet commitments to policyholders under policy contracts and in respect of financial liabilities. The Group’s approach to managing its liquidity risk is as follows: • Policyholder funds are invested in assets that in aggregate match the reasonable benefit expectation of policyholders, which includes the expectation that funds will be available to pay out benefits as required by the insurance contract. • Policyholder funds are primarily invested in assets that are listed financial instruments on various stock and bond exchanges and cash or cash equivalents that are actively traded on the various stock and bond exchanges, resulting in the ability to liquidate most of these investments at relatively short notice to be able to timeously pay out benefits as required by the policy contract. Some policyholder funds are invested in less liquid assets, such as fixed property, but not to the extent that this creates a material liquidity risk in meeting commitments to policyholders. 39. Management of risks (continued) 39.3 Financial risk management (continued) 183 Notes to the Consolidated Financial Statements
RkJQdWJsaXNoZXIy MTY2ODY3Ng==