2020 INTEGRATED REPORT

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) for the year ended 31 December 2020 36. MANAGEMENT OF RISKS (continued) 36.3 Financial risk management (continued) a. Interest rate risk (continued) The cash and cash equivalents and debt securities interest rate sensitivity on profit before movement in insurance liabilities is shown below: 2020 2019 Group R'm R'm Cash and cash equivalents Interest rate decrease: 1% (31) (33) Interest rate increase: 1% 31 33 Debt Securities Interest rate decrease: 1% (202) (182) Interest rate increase: 1% 202 182 Total interest rate risk Interest rate decrease: 1% (233) (215) Interest rate increase: 1% 233 215 Fluctuations in the value of assets held to back the DPF and investment components of the policy liabilities will affect the allocations to DPF benefits and investment policyholder liabilities each year. The choice of assets to back the DPF components of the policy liabilities reflects the Group’s interpretation of the investment risk appetite of the policyholders. The assets held in this regard are as follows: DPF and Investment policies Group excluding Investment Choice Investment Choice (DPF) 2020 R'm % R'm % Local Equity 13 375 50.2 1 565 27.9 Fixed interest 4 082 15.3 2 980 53.0 Cash 1 738 6.5 300 5.3 International Equity 7 440 28.0 772 13.8 Total 26 635 100.0 5 617 100.0 196 | PPS INTEGRATED REPORT 2020