b. LIQUIDITY RISK EXPOSURE
i. Outstanding claims liability and investments
The breakdown of the fixed term investments are provided by expected maturity. Actual maturities may differ from expected maturities
because certain counterparties have the right to call or prepay certain obligations with or without call or prepayment penalties.
A maturity analysis of the estimated net discounted outstanding claims liability based on the remaining term to payment at the
reporting date and the investments that have a fixed term is provided in the table below.
This maturity profile is a tool used in the investment of assets backing insurance liabilities in accordance with the policy of broadly
matching the overall interest rate sensitivity of the assets with the overall interest rate sensitivity created by the maturity profile of the
estimated pattern of claims payments.
CONSOLIDATED
MATURITY ANALYSIS
NET DISCOUNTED
OUTSTANDING CLAIMS
LIABILITY
INVESTMENTS
2015
2014
2015
2014
$m
$m
$m
$m
Floating interest rate (at call)
-
-
1,002
948
Within 1 year or less
3,836
3,400
3,058
4,042
Within 1 to 2 years
1,549
1,611
1,192
581
Within 2 to 3 years
946
1,039
2,804
1,340
Within 3 to 4 years
641
678
1,542
3,509
Within 4 to 5 years
433
441
1,674
1,424
Over 5 years
1,569
1,589
2,853
1,940
Total
8,974
8,758
14,125
13,784
Timing of future claim payments is inherently uncertain. The table above presents estimated timing.
ii. Interest bearing liabilities
The following table provides information about the residual maturity periods of the interest bearing liabilities of a capital nature based
on the contractual maturity dates of undiscounted cash flows. All of the liabilities have call, reset or conversion dates which occur prior
to any contractual maturity.
CONSOLIDATED
CARRYING
VALUE
MATURITY DATES OF CONTRACTUAL UNDISCOUNTED CASH
FLOWS
Within 1
year 1 - 2 years 2 - 5 years
Over 5
years Perpetual
Total
$m
$m
$m
$m
$m
$m
$m
2015
Tier 1 regulatory capital
(a)
927
-
-
-
-
927
927
Tier 2 regulatory capital
(a)
841
-
-
-
841
-
841
Contractual undiscounted interest
payments
(b)
90
86
227
-
-
403
Total contractual undiscounted payments
90
86
227
841
927 2,171
2014
Tier 1 regulatory capital
(a)
927
-
-
-
-
927
927
Tier 2 regulatory capital
(a)
834
-
-
-
834
-
834
Contractual undiscounted interest
payments
(b)
96
96
287
-
-
479
Total contractual undiscounted payments
96
96
287
834
927 2,240
(a)
These liabilities have call, reset or conversion dates upon which certain terms, including the interest or distribution rate, can be changed or the security may be
redeemed or converted. The detailed descriptions of the instruments are provided in the interest bearing liabilities note. The classification of Tier 1 and Tier 2 is subject
to Life and General Insurance Capital transitional arrangements.
(b)
Contractual undiscounted interest payments are calculated based on underlying fixed interest rates or prevailing market floating rates as applicable at the reporting
date. Interest payments have not been included beyond five years. Reporting date exchange rates have been used for interest projections for liabilities in foreign
currencies.
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