ECIC IR 2023

ANNUAL Financial Statements for the year ended 31 March 2023

E

D

H

S

I

L I

N

B

2

0

A

0

T

S

1

E

E X P O R T C R E

L T D

O C

A S

C

R I

D I

F

T

A

I

N

H

S

T

U

U

R

O

A

S

N

F

C

O

E

N

C

O

O

I

R

T

P

A

O

R

Notes to the Financial Statements

Assumptions, change in assumptions and sensitivity The methods and assumptions that have the greatest effect on the measurement of reinsurance contracts provisions are: The reinsurance unearned premium provision reflects the risk profile of the contract and is a function of the amount at risk and the probability of default. The probability of default is dependent on the country risk rating, project risk rating and the unexpired period. Claim provisions are not discounted for the time value of money. The cost of claims incurred but not yet reported is individually assessed for each contract. The probability of default is estimated by experienced underwriters using systematic processes taking into account updated information on specific country and project risk. Change in assumptions The assumptions and methodologies used in the calculation of the reinsurance technical provision are reviewed at the reporting date and the impact of any resulting changes in estimates is reflected in the statement of comprehensive income as they occur. Sensitivity analysis An analysis of sensitivity around various scenarios provides an indication of the adequacy of the Corporation’s estimates. The table presented below demonstrates the sensitivity of reinsurance contract asset estimates to particular movements in assumptions used in the estimation process.

Total value

2023

R’000 Change %

Reported value

151 566

Depreciation of USD/ZAR exchange rate by 10% Appreciation of USD/ZAR exchange rate by 10%

166 723 136 409 151 566 138 624 140 958

10,0

(10,0)

Increase in implied Probability of Default by adjusting the country rating

-

IBNR “Upwards” stress discount rate by 100bps IBNR "Downwards” stress discount rate by 100bps

(8,5) (7,0)

Total value

2022

R’000 Change %

Reported value

7 697

Depreciation of USD/ZAR exchange rate by 10% Appreciation of USD/ZAR exchange rate by 10%

8 466 6 927 7 703

10,0

(10,0)

Increase in implied Probability of Default by adjusting the country rating

0,1

YOUR EXPORT RISK PARTNER

62