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Chapter
36 /
Insurance Contracts (IFRS 4)
425
8. EXTRACTS FROM PUBLISHED FINANCIAL STATEMENTS
BARLOWORLD
Notes to the Consolidated Annual Financial Statements for the Year Ended September 30
32. Insurance Contracts
Ce rta in transactions are en tered into by the group as insurer which fa lls wi thin the definition of
insurance co ntrac ts per IRFS 4 ,
Insurance Contracts.
Significant items inc lude d are the fo llowi ng :
3
I
2
(2)
(2)
(4)
6
8
12
4
6
8
373
582
(520)
(I)
-il
±31
219
214
---.l
±31
135
38
( II )
0
--il
lQ2
I
0
-il
---.l
Income
Expenses
Cash intlow/(outtlow)
Losses recognised on buying reinsurance
Deferral of gains and losses on reinsurance
The amortisation for the period
Unamortised amount at the beginning of the period
Unamortised amount at the end of the period
• Cre dit life and warranty products sold wi th vehicles in the motor segment
• Specific portion s of mai ntenance co ntracts on equipment and vehicles so ld in the equipment,
industrial distribution, and motor segments
• Guaranteed res idual values on equipment and vehicles in the equipme nt and mo tor segments
2006
2005
2004
----'1JJ.L
.se:
~
1,1 56
1,007
935
970
866
788
19
3
(92)
Liabilities
At the beginning of the period
Amounts added
Amounts used
Amounts reversed unused
Translation difference
At the end of the period
Maturity profile:
Within one year
Two to five years
More than five years
Assets
At the beginning of the period
Amounts added
Amounts used
Amounts reversed unused
Translation difference
At the end of the period
Age analysis of items overdue but not impaired
Overdue 30 to 60 days
Overdue 60 to 90 days
Overdue 90+ days
Significant Assumptions and Risks Arising from Insurance Contracts: Credit Life and
Warranty Products
Th e sa le of credit life and ex tended warr anty products in the motor segme nt is co nducted through
ce ll captive arr angements. The principle risk that the group faces und er the se insurance contracts is
that the actu al claims and benefit paym ents exceed the carrying amounts of the insurance liabilities.
Thi s could occur because the frequency or se verity of claims and ben efits are grea ter than estimated.
Insuranc e events are rand om and the actual number and amounts of claims and benefits will vary from
yea r to yea r from the est imate determined using statistica l techn iques.
Th e key financ ial risk is that the proceed s from financial assets are not suffic ient to fund the obli–
ga tions ar ising from insurance co ntrac ts and incl udes cre dit risk, interes t rate risk , currency risk, and
liquidity risk . All risks are managed on behalf of the gro up by an outside insu ranc e company .
Th e risks are spre ad over a large variety of clients in the South African mark et.
The terms and conditions that have a materi al effect on the amount, timing, and uncertainty of
future cas h flows arisi ng from these co ntracts are set out be low .