85 Principles and main assumptions used in the estimating life reserve for long-term contracts Life reserve for long-term contracts incorporate a number of relevant elements, use a number of uncertain assumption and actual results may differ from expectations due to fluctuations. However, the estimates were made using an actuarial method, which is a generally accepted method, and efforts have been made to set assumptions and reduce uncertainty as far as possible. Details of assumptions used in calculating the life reserve for long-term contracts are (i) Mortality rate which determined based on actual historical claims data, the industry mortality rate and TMO 2017. Assumptions are differentiated by the type of product, sex and age of the insured, the credibility of data, and the underwriting process; (ii) Related expenses rates which are both fixed expenses and variable expenses that relate to policy maintenance and adjusted appropriately for inflation; (iii) Lapse and surrender rates which determines based on actual historical lapse and surrender rates, taking into account the product type, distribution channel and the credibility of data; and (iv) Discount rate which using the risk free rate as at the valuation date, which is the higher of the rate of the return on non-interest bearing Thai governments bonds at the valuation date and average rate of return on non-interest bearing Thai governments bonds at the end of each of the eight quarters in the past before the valuation date. The sensitivity analysis that affect to insurance contract liabilities for long-term contracts The result of sensitivity analysis for significant assumptions that affect the present value of the insurance contract liabilities as at 31 December 2021 and 2020 are summarised below: (Unit: Million Baht) Consolidated financial statements 2021 Insurance contract liabilities for long - term contracts Change Gross reinsurance increase (decrease) Net reinsurance increase (decrease) Profit before tax increase (decrease) Equity increase (decrease) Mortality rate Increase 10% 15 15 (15) (15) Expenses rate Increase 10% 9 9 (9) (9) Lapse and surrender rates Increase 10% (18) (18) 18 18 Discount rate Increase 0.10% (30) (30) 30 30 Mortality rate Decrease 10% (15) (15) 15 15 Expenses rate Decrease 10% (9) (9) 9 9 Lapse and surrender rates Decrease 10% 19 19 (19) (19) Discount rate Decrease 0.10% 30 30 (30) (30) 301 แบบ 56-1 One Report / รายงานประจ� ำปี 2564 บริษัท ทุนธนชาต จ� ำกัด (มหาชน)
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