BIMB Integrated Annual Report 2019

49 TAKAFUL RISK MANAGEMENT (CONTINUED) (b) General Takaful Fund (continued) Sensitivities (continued) The summary of changes in key assumptions and the impact to the gross and net claim liabilities, and the operating surplus, are shown below: Group Impact Impact Impact on Change in on gross on net operating assumptions liabilities liabilities surplus RM’000 RM’000 RM’000 2019 Fire loss ratio for AY 2019 +10% 26,246 15,471 (15,471) Motor Act loss ratio for AY 2019 +10% 4,465 2,950 (2,950) Average unpaid claims +10% 53,072 23,508 (23,508) Average claim frequency +10% 17,244 10,882 (10,882) Average claim settlement Increase by period 6 months 87,928 46,848 (46,848) 2018 Fire loss ratio for AY 2018 +10% 24,584 13,974 (13,974) Motor Act loss ratio for AY 2018 +10% 4,313 2,981 (2,981) Average unpaid claims +10% 40,063 18,422 (18,422) Average claim frequency +10% 13,334 8,276 (8,276) Average claim settlement period Increase by period 6 months 4,833 25,321 (25,321) Claims development table The following tables show the estimate of cumulative incurred claims, including both claims notified and IBNR for each successive accident year at the end of reporting period, together with cumulative payments to-date. In setting provisions for claims, Takaful Malaysia Group gives consideration to the probability and magnitude of future experience being more adverse than assumed and exercises a degree of caution in setting aside reserves when there is considerable uncertainty. In general, the uncertainty associated with the ultimate claims experience in an accident year is greatest when the accident year is at an early stage of development and the margin necessary to provide the necessary confidence in adequacy of provision is relatively at its highest. As claims develop and the ultimate cost of claims becomes more certain, the relative level of margin maintained should decrease. NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 (CONTINUED) 307 BIMB HOLDINGS BERHAD 199701008362 (423858-X) Shareholders’ Information Financial Statements Additional Information Disclosure Summary