AVBOB Financial Statements 2018

89 NOTES TO THE REPORT OF THE INDEPENDENT ACTUARY FOR THE YEAR ENDED 30 JUNE 2018 2018 2017 R 000 R 000 1. RECONCILIATION OF STATUTORY BASIS TO PUBLISHED REPORTING BASIS Excess of assets over liabilities - Published Reporting Basis 6 183 372 6 180 916 Excess of assets over liabilities - Statutory Basis 6 053 257 6 022 918 Difference 130 115 157 998 2. ANALYSIS OF CHANGE IN EXCESS ASSETS (PUBLISHED REPORTING BASIS) Excess assets as at the end of the year 6 183 372 6 180 916 Excess assets as at the beginning of the year 6 180 916 5 778 852 Change in excess assets during the year 2 456 402 064 This change in the excess assets is due to the following: Investment return on excess assets 508 600 151 325 Investment income 215 199 175 165 Capital appreciation/(depreciation) 293 401 ( 23 840) Tax on surplus investment return ( 73 736) ( 25 491) Change in valuation assumptions 486 825 151 229 New business strain ( 366 698) ( 151 408) Balance of (losses)/profit ( 552 535) 276 409 Total change in excess assets 2 456 402 064 The main valuation assumptions were amended as follows: • • • • • • 3. PUBLISHED REPORTING ASSET VALUATION METHODS AND ASSUMPTIONS A change in the lapse rate basis increased the policyholder liabilities by R10,0 million. The assets are valued at statement of financial position values, ie at market or directors’ values as described in the accounting policies. The differences are due to assets deemed to be inadmissible for statutory reporting purposes. The excess of assets over liabilities on the published reporting basis has changed as follows over the year: Changes in the future economic assumptions decreased the policyholder liabilities by R25,3 million. The inflation gap remained unchanged at 2.75%. A reduction in expenses reduced the policyholder liabilities by R230,2 million. Changes in the assumed mortality rates decreased the policyholder liabilities by R202,2 million. A reduction in funeral costs reduced the policyholder liabilities by R1,6 million. A decrease in the elimination of negative reserves reduced the policyholder liabilities by R37,5 million. 89