9M FY2023 Financial Performance

Overall Business and Financial Impact from the Adoption of MFRS 17 Business Perspective • Not expected to have a notable impact on pricing and product strategies No significant impact expected to the business, financial strength, claims paying ability, or dividend paying capacity of Etiqa. Accordingly, no significant changes to the business strategies anticipated at this juncture Capital Requirements • No significant impact to capital requirements for Etiqa anticipated until such time when BNM further changes risk based capital framework Financial Statements • • The financial impact from the adoption of MFRS 17 are mainly from the following key components:- Insurance revenue recognition The measurement model will affect the revenue recognition and contract liabilities computation Deferment of expenses Amortisation of directly attributable expenses over the policy coverage period i.e. sales related expenses, commission etc. This is applicable for both life/family and general insurance/takaful businesses Insurance finance income/(expenses) Investment component is disclosed separately from insurance component in the Financial Statement. The change of the discounting factors used over the coverage period to reflect the time value of money and interest accretion on Future expected Cash flow, applicable to both life/family and general insurance/takaful business Impact to Maybank's income statement and balance sheet arising from MFRS 17 adoption can be found in Note A41 of the Maybank 9M FY2023 Financial Statements Maybank is in compliance with MFRS 17 requirements for 9M FY2023 reporting. As Etiqa has opted to use the various approaches to transition allowed under MFRS 17, the financial impact might vary depending on type of business: General Businesses Life/Family Credit Businesses Life/Family Investment Linked Businesses The discounting of insurance contract/takaful certificate liabilities will be applied. Acquisition expenses such as agency and sales commission are now amortised over the coverage period Revenue is now recognised when service is rendered over the coverage period as opposed to the previous practice of upfront recognition at inception. For example, policies/certificates such as Mortgage Reducing Term Assurance or Mortgage Reducing Term Takaful can only see revenue recognition over the duration of the credit policy/certification's coverage period, which averages about 20 to 30 years. Takaful liabilities recognition under MFRS17 now includes expected future surplus transfer that was not recognised in the past Insurance and Takaful liability recognition under MFRS 17 now includes expected future profit surplus transfer that was not allowed in the past due to local regulation 35

View entire presentation