Independent Auditor's Report

Key Audit Matters

Key audit matters are those matters that, in the auditor’s professional judgement, were of most significance in the audit of the financial statements of the current period. These matters, and any comments we make on the results of our procedures thereon, were addressed in the context of our audit of the financial statements, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Valuation of (Re)Insurance Contract Assets and Liabilities

Valuation of (Re)Insurance contract assets and liabilities involve significant judgments and estimates particularly with respect to the estimation of the present value of future cash flows, eligibility of premium allocation approach (PAA) and estimation of the liabilities for incurred claims.

These cash flows primarily include determination of expected premium receipts, expected ultimate cost of claims and allocation of insurance acquisition cashflows which are within the contract boundaries. The calculation for these liabilities includes significant estimation and involvement of actuarial experts in order to ensure appropriateness of methodology, assumptions and data used to determine the estimated future cash flows and the appropriateness of the discount rates used to determine the present value of these cashflows.

How our audit addressed the key audit matter

We performed the following procedures in conjunction with our actuarial specialist:

• Understanding and evaluating the process, the design and implementation of controls in place to determine valuation of contract assets and liabilities.
• Assessment of the competence, capabilities and objectivity of the management appointed actuary and our external experts.
• Tested the completeness, and on sample basis, the accuracy and relevance of data used to determine future cashflows.
• Evaluated and assessed the recoverability of Insurance receivables.
• Involved external expert to evaluate the appropriateness of the methodology, significant assumptions including risk adjustment, PAA eligibility assessment, discount rates and expenses included within the fulfilment cashflows. This included consideration of the reasonableness of assumptions against actual historical experience and the appropriateness of any judgments applied.
• Verified the source data used by experts to ensure accuracy and completeness.
• We independently reperformed the calculation to assess the mathematical accuracy of the (Re)lnsurance contract assets and liabilities on selected classes of business, particularly focusing on largest and most reserves.

Adoption of IFRS 17 Insurance Contracts

The Company adopted IFRS 17 Insurance Contracts with effect from 1 of January 2023, which resulted in changes to the measurement of insurance contracts using updated estimates and assumptions that reflect the timing of cash flows and any uncertainty relating to insurance contracts. IFRS 17 is a new and complex accounting standard that requires management to apply significant judgement in its application to the Company’s insurance contracts. The Company issues a wide range of insurance contracts and consequently a large number of judgements and estimates need to be applied and made respectively.

The Company elected to apply the modified retrospective approach for transition since it assessed historical information available and determined that all reasonable and supportable information necessary for applying the full retrospective approach was not available for groups of contracts issued prior to the transition date. The Company used this approach to determine the amounts as of the transition date of 1 January 2022 and has recorded the impact within retained earnings on transition date as disclosed in statement of changes in equity.

The adoption of this standard has had a significant impact on the reported financial position and performance of the Company.

Due to the complexity and the significant judgements applied and estimates made in determining the impact of IFRS 17, this has been considered as key audit matter.

How our audit addressed the key audit matter

We performed the following procedures in conjunction with our actuarial specialist:

• Obtained an understanding of the impact of the Company’s adoption of IFRS 17 and accounting policies adopted by the Company.
• Involved external expert to evaluate the appropriateness of the methodology, significant assumptions including risk adjustment, PAA eligibility assessment, discount rates and expenses included within the fulfilment cashflows. This included consideration of the reasonableness of assumptions against actual historical experience and the appropriateness of any judgments applied.
• Assessed the key technical accounting decisions, judgments, assumptions and accounting policy elections made in applying the requirements of IFRS 17 to determine if they were in compliance with the requirements of the standard.
• Reperformed the mathematical accuracy of the supporting calculations and adjustments used to determine the impact on the Company’s opening equity position as at 1 January 2022 and agreed the results of those calculations to the amounts reported in the financial statements.
• Tested the completeness of insurance contract data by testing the reconciliations of the Company’s reinsurance contract assets and insurance contract liabilities to insurance contracts disclosed in the 2022 financial statements.

Evaluated the reasonableness of the quantitative and qualitative disclosures included in the financial statements.

Other matter

 The financial statements for the year ended 31 December 2022 were audited by another auditor who expressed an unmodified opinion on those statements on 13 February 2023.