Maintaining a Strong, Resilient Balance Sheet
Moving to a Risk-Based Capital Balance Sheet in Hong Kong
($b)
2021 Pro Forma Group EV Metrics
Reported Pro forma Impact
Free
Surplus
17.0
24.8
7.8
ā
Description
$4.4b uplift from HKRBC adoption as
liabilities reduce
$3.4b uplift from release of existing
additional resilience margins
Increases as it moves from a simple
Required
Capital
14.4
17.2
2.8
in HKRBC
formulaic approach to a risk-based basis
Increases as a result of:
AIA
EV Calculation (Hong Kong Business)
Historical HKIO
Solvency I Basis
FS
ANW
RC
Future HKRBC Basis
ANW
FS
RC
ANW(1)
33.3
43.9
10.6
Liabilities reduced from shift to best
estimate basis
Assets
Asset values unchanged at market value
VIF
39.7
32.3
(7.4)
Reduced liabilities accelerate future
distributable earnings
EV
73.0
76.3
3.3
ā
VIF plus ANW
No impact on IFRS metrics
Liabilities:
Traditional
approach
Assets
Liabilities:
Best Estimate
Basis
Notes: Due to rounding, numbers presented in the table may not add up precisely
(1)
Includes $1.9b investment in China Post Life which is not included in Free Surplus or Required Capital as it does not contribute to the eligible asset value for regulatory capital purposes under both the Group LCSM and the HKIO bases but is included as an asset within IFRS
consolidated financial statements
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