2019 Integrated Report

PPS INTEGRATED REPORT 2019 | 135 Group 2019 2018 R’000 R’000 The non-DPF liabilities developed as follows: Liabilities at beginning of the year 4 433 850 4 140 414 Unwinding of discount rate 343 390 353 967 Expected cash flows (466 836) 1 220 806 Expected risk liability at year-end 4 310 404 5 715 187 Impact of movements (101 277) (151 339) Change in valuation assumptions (926 879) (258 380) Asset value adjustments 105 735 (41 250) Risk benefit liability for new business issued 585 424 (830 368) Liabilities at end of the year 3 973 407 4 433 850 The DPF liabilities developed as follows: Liabilities at beginning of the year 26 073 342 26 614 866 Claims paid during the year (1 482 288) (1 203 249) Allocation of profits 4 246 090 634 573 Unallocated profit 50 000 – Asset value adjustments 88 297 27 152 Liabilities at end of the year 28 975 441 26 073 342 Analysis of total insurance policy liabilities, net of reinsurance: Non-DPF liabilities 3 973 407 4 433 850 DPF liabilities 28 975 441 26 073 342 Current liabilities 487 705 526 073 Liabilities at end of the year 33 436 553 31 033 265 13. SHORT-TERM INSURANCE POLICY LIABILITIES 13.1 Short-term insurance contracts – assumptions Unearned premium provision Unearned premiums represent the proportion of premiums written in the current year, which relate to risks that have not expired by the end of the financial year. The Group raises provisions for unearned premiums on a basis that reflects the underlying risk profile of its insurance contracts. An unearned premium provision is created at the commencement of each insurance contract and is released as the risk covered by the contract expires. The unearned premium provision is released evenly over the period of insurance using a time proportion basis. Deferred acquisition costs and Reinsurance commission revenue are recognised on a basis that is consistent with the related provision for unearned premiums. At each reporting date an assessment is made of whether the provisions for unearned premiums are adequate. Unexpired risk provision If the expected value of claims and expenses attributable to the unexpired periods of policies in force at the statement of financial position date exceeds the unearned premiums provision in relation to those policies, after deduction of any deferred commission expenses, management