C. REGULATORY CAPITAL COMPLIANCE
The PCA calculation is based on applying the APRA Level 2 Insurance Group requirements.
CONSOLIDATED
2015
2014
$m
$m
I. Common Equity Tier 1 capital
Ordinary shares
7,275
6,775
Reserves
(38)
38
Retained earnings
(337)
(151)
Excess technical provisions (net of tax)
748
914
Minority interests
201
226
Less: Deductions
(4,637)
(4,514)
Common Equity Tier 1 capital (CET1 capital)
3,212
3,288
II. Additional Tier 1 capital
Hybrid equities
762
817
Total Tier 1 capital
3,974
4,105
III. Tier 2 capital
Subordinated term notes
811
876
Total Tier 2 capital
811
876
Total regulatory capital
4,785
4,981
IV. Prescribed Capital Amount (PCA)
Insurance risk charge
1,500
1,624
Insurance concentration risk charge
200
225
Diversified asset risk charge
1,489
1,441
Aggregation benefit
(715)
(729)
Operating risk charge
343
335
Total PCA
2,817
2,896
PCA multiple
1.70
1.72
CET1 multiple
1.14
1.14
D. CREDIT RATING
Ratings published by Standard & Poor's (S&P) for key wholly owned insurers within the Group as at the current reporting date.
ENTITY
ISSUER CREDIT RATING
FINANCIAL STRENGTH
RATING
I. Parent
Insurance Australia Group Limited
A/Stable
n/a
II. Licensed insurers
Insurance Australia Limited
AA-/Stable
AA-/Stable
IAG New Zealand Limited
AA-/Stable
AA-/Stable
CGU Insurance Limited
AA-/Stable
AA-/Stable
Swann Insurance (Aust) Pty Ltd
AA-/Stable
AA-/Stable
IAG Re Labuan (L) Berhad
n/a
AA-/Stable
IAG Re Australia Limited
AA-/Stable
AA-/Stable
IAG Re Singapore Pte Ltd
AA-/Stable
AA-/Stable
Lumley General Insurance (NZ) Limited
A+/Stable
A+/Stable
WFI Insurance Limited
A+/Stable
A+/Stable
AMI Insurance Ltd
n/a
AA-/Stable
NOTE 34. NET TANGIBLE ASSETS
CONSOLIDATED
2015
2014
$
$
Net tangible assets per ordinary share
1.34
1.27
Net tangible assets per ordinary share has been determined using the net assets on the balance sheet adjusted for non-controlling
interests, intangible assets and goodwill.
96 IAG ANNUAL REPORT 2015
