movements on contractual obligations. The exposure to equities is managed to ensure that the Group’s internal capital requirements are met at all times, as well as those mandated by the Group’s external regulators. Benchmarks and risk parameters are set against which the Group measures the asset managers. A monthly compliance statement is provided by each asset manager stating their adherence to the investment mandate, and highlighting any deviations and the corrective action to be taken to rectify the deviations. The performance of the assets against benchmarks, and the adherence to mandates, are monitored monthly by management. The asset managers present the performance against benchmarks and adherence to mandates, to the Board, on a biannual basis. The nature of the Group’s exposures to equity risk and its objectives, policies and processes for managing equity risk have not changed significantly from the prior period. The assets have performed well compared to the benchmark. This coupled with the long-term view that PPS takes towards its investments, means that the long-term asset strategy and asset allocations have remained unchanged. The Equity price risk sensitivity on profit before movement in insurance liabilities is shown below: 2022 2021 Group R'm R'm Equity Price risk Price decrease: 1% (283) (343) Price increase: 1% 283 343 Market risk sensitivity analysis The table below shows the results of sensitivity testing on the Group’s profit or loss (before tax) and equity for reasonable possible changes in the risk variables. The sensitivity analysis indicates the effect of changes in market risk factors arising from the impact of the changes in these factors on the Group’s financial assets and liabilities and its insurance assets and liabilities. For the DPF insurance liabilities and investment contracts the assets and liabilities are matched. The market risk is thus carried by policyholders. The impact of any change in the market risk will be in the movement to/ from insurance policy liabilities on the Statement of Profit or Loss and Other Comprehensive Income. The only other impact is the change in the investment management fees, which will fluctuate as a percentage of the movement in the assets. This is also disclosed within the movement in policy liabilities on the Statement of Profit or Loss and Other Comprehensive Income. Therefore a market risk sensitivity analysis has not been included for this component of the business. The market risk sensitivity is shown below: 39. Management of risks (continued) 39.3 Financial risk management (continued) 189 Notes to the Consolidated Financial Statements
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