BIMB Integrated Annual Report 2019

49 TAKAFUL RISK MANAGEMENT (a) Family Takaful Fund (continued) The key coverage for the Family Takaful contracts The key coverage for the Family Takaful contracts are death, total and permanent disability, hospital and surgical benefits, personal accident benefits, daily hospitalisation cash allowance benefits, dread disease benefits, waiver of contribution benefits and survival benefits (for annuity). Concentration of Family Takaful risk The following gives details of Takaful Malaysia Group’s concentration of risks based on outstanding actuarial reserves by main product categories: Group Note Gross Retakaful Net RM’000 RM’000 RM’000 2019 Term 1,108,400 – 1,108,400 Endowment 1,114,604 (202) 1,114,402 Mortgage 3,074,991 (315,412) 2,759,579 Annuity 295,309 – 295,309 Total Family actuarial liabilities 22(c) 5,593,304 (315,614) 5,277,690 2018 Term 979,168 – 979,168 Endowment 1,054,922 (2,646) 1,052,276 Mortgage 2,690,381 (161,073) 2,529,308 Annuity 296,415 – 296,415 Total Family actuarial liabilities 22(c) 5,020,886 (163,719) 4,857,167 Key assumptions Reserves for all plans were valued on a basis that the Appointed Actuary considers adequate and appropriate, and in-line with the valuation basis set out by BNM in respect of the Guidelines on Valuation Basis for Liabilities of Family Takaful Business (BNM/RH/GL 004-20) and Risk-Based Capital Framework for Takaful Operator. The key assumptions to which the estimation of actuarial liabilities is particularly sensitive to the followings: – Mortality and morbidity rates This is significant for contracts with significant coverage for death, total permanent disability and critical illness and the increase in the mortality or morbidity rates would have direct impact on the liability. – Discount rate As the liabilities represents the present value of future cash outflow, a reduction in discount rate would have an increasing impact on the liabilities and vice-versa. – Surrender rate This is only applicable to long-term products, where when the rate is reduced (products with PIF) or increased (products without PIF), the impact is an increase of the liability. NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 (CONTINUED) 303 BIMB HOLDINGS BERHAD 199701008362 (423858-X) Shareholders’ Information Financial Statements Additional Information Disclosure Summary