Contentshousehold contents, travel, speciality personal lines, SME and trade credit and political...

ContentsCorporate Information 2

Financial Highlights 3

Board of Directors 4

Managing Director’s Report 5

People and Capital 8

Corporate Profile 10

Operations Worldwide 12

Products & Services 14

Directors’ Report 16

Statement by Directors 18

Independent Auditor’s Report 19

Income Statement 20

Balance Sheet 21

Statement of Changes in Shareholder’s Equity 22

Cash Flow Statement 23

Notes to the Financial Statements 24

Corporate Information

Annual Report 2006 I SINGAPORE2

AuditorsPricewaterhouseCoopers8 Cross Street #17-00PWC BuildingSingapore 048424

BankersCitibank, N.A.3 Temasek Avenue#16-00 Centennial TowerSingapore 039190

Fund ManagersWestern Asset Management Company Pte Ltd1 George Street#23-01Singapore 049145

Investment CustodianStates Street Bank and Trust Company168 Robinson Road#33-01 Capital TowerSingapore 068912

Company SecretaryTricor Evatthouse Corporate Services8 Cross Street #11-00PWC BuildingSingapore 048424

Financial Highlights

Net Claims Incurred (S$’000)

‘06 ‘05 ‘04 ‘03 ‘02

Net Premiums Earned (S$’000)Gross Premiums Written (S$’000)

Annual Report 2006 I SINGAPORE 3

6,0

63

‘06 ‘05 ‘04 ‘03 ‘02 ‘06 ‘05 ‘04 ‘03 ‘02

104,3

07

105,9

83

94,0

15

62,2

92

83,3

28

31,0

21

54,5

07

28,6

15

14,4

24

15,4

19

6,2

81

3,9

40

8,1

74

6,0

63

6,3

24

Board Of Directors

Clockwise from top left

Eric Sanderson

Kenneth Wesley Brown

Damien Francis Sullivan

Neil Treleaven Spettigue


The 2006 financial year was a challenging year for

our business in Singapore. The combination of a

continuing softening Property and Casualty market,

new industry participants and rising costs created

an environment that required a more targeted focus

and effort from ACE in Singapore. As expected, our

employees rose to the challenge and produced a

solid financial result with stronger operational and

business systems.

It is worth reflecting on the determinants that impact

our trading environment to properly assess our

performance and adherence to strategy. The

performance of the Global economy had a strong

influence on the Singapore economy due to

Singapore’s trade-dependent nature. The economic

growth rate of 6.00% in 2006, coupled with the

fastest quarterly rated job creation figures in over

two decades for Q406 saw increased economic

activity. The attractive business environment, focus

on the continued impact of foreign talent and an

expansion of Singapore as a financial and services

hub resulted in greater economic activity. More

regional and global business saw it’s genesis in

Singapore.

Whilst this economic activity created more commercial

opportunities vigorous competition drove insurance

rates down in most sectors. The increased number

of General Insurance Industry participants was a

core contribution to defining the market in the

short to medium term horizons. More participants

competed at both retail and reinsurance levels.

As a result of these conditions opportunities arose

for ACE in the General sector with adherence to

underwriting profitability. These included new bundled

products, personal and commercial lines.

The financial performance of the business was

positive and continued to grow in spite of the industry

conditions. Our 2005 year was exceptional due to

the alignment of the company’s policy to the Insurance

(Capital and Valuation) Regulations 2004 so a direct

comparison is not realistic. The premium revenue

for 2006 exceeded S$104.3 million. Our loss ratio

was 20.25%. Investment rose to S$4.2 million and

our paid dividend was in accordance with Board and

Parent resolutions/standards. The Company’s assets

closed at S$236.3 million and our equity is now

S$68.3 million. Return on equity exceed 10% and

in light of the market conditions it was sound result.

A continued feature of our business was to access

our Group services in areas such as reinsurance and

investment.

Managing Director’s Report

“Integrity is the heart of ourCompany. ACE is only asstrong as our reputation forhonesty, fairness and ethicalbehavior – and every one ofus owns a piece of thatreputation every time we makea business decision.”

- Evan Greenberg,President and Chief Executive Officer,

ACE Limited.



A core tenant of our operation is to recognise that

by its nature the risk business is volatile and as such

we accept and manage risk as long as we paid for

it. ACE has continued to manage its business and

customers as an underwriting entity – focused on

the need for underwriting profit.

To allow this key objective to remain clear ACE is

embarking on development in both product categories

and distribution platforms. New products areas

include but are not limited to broader offerings in

household contents, travel, speciality personal lines,

SME and trade credit and political risk. The 2006

year saw preparation in these areas which will

materialise in 2007 and yield strong results for the

5 year long term plan.

ACE is strengthening its existing distribution platforms

with further expansion of telemarketing capabilities,

customising services with broker and agency

intermediar ies and development of new

bancassurance partners. Foundations have been

laid for bundling programmes and ecommerce

initiatives that will meet and grow with customer

and producer requirements into the long term.

Our outwards focus is also coupled with the need

to maintain high levels of compliance and governance

for customers, the regulators and other stakeholders.

New initiatives included the development of a broader

Enterprise Risk Management platform and we finalised

new Disaster Recovery and Business Continuity

plans.

The Company undertook a comprehensive Avian Flu

assessment and established stand alone continuity

plans for a pandemic. As we participate in the risk

business we must demonstrate a strong capability

in managing a wide range of risks that we face as

an entity.

To ensure our relevance and guarantee our growth

we have adopted a strong discipline in managing

our business noting key assessment metrics in

revenue generation, expense management, project

planning, underwriting and statutory profit.

This assessment approach filters into every part of

our business and we apply customised models to

reflect the diverse product and distribution platforms

that demand different metrics due to the variances

from highly technical underwriting sectors to

commodity managed channels. Discipline in

operations is fundamental to our future success.

New underwriting tools, capital management systems

and continued investment in information technology

sponsor the core objective of improved operational

efficiency.

Coupled with operational discipline is the need to

operate with levels of integrity and continued

adherence to standards.

Our employees and officers embrace the following

values that reflect our Group Core Values which are

customised for our Singapore operation:

Excellence: We strive for excellence in serving our

stakeholders. We challenge industry

norms with our performance.

Innovation: We constantly search for and create

new ways to improve our service and

products.

Integrity: To reflect our Group Standard with all

parties we deal with.

Team: Different perspectives energise our

Team. We achieve better results as a

team than we can individually.

People: We create our environment that attracts

and nurtures talent. Our jobs are more

than work – they are avenues for our

growth.

In 2007 we will continue to improve our operational

efficiency, broaden our marketing/product services

and create a quality work environment. This will be

achieved through the continued hard work and focus

of the ACE employees which was outstanding in

2006.

Kenneth Wesley Brown

Managing Director


It is said that an insurance company really has only

two essential assets - people and the balance sheet.

Both are equally important in the roles they play in

the risk-taking process, and their individual quality

goes a long way in defining the overall quality of the

organization and helping to differentiate the company

from its competitors. Guided by the right strategy,

better people plus a stronger balance sheet equals

the foundation for a higher-quality insurance company.

The people of ACE are experienced, innovative,

customer-focused and committed to the principles

and values of the organization. From underwriting

to claims to actuarial, ACE people work collaboratively

with each other on behalf of their clients’ best interest.

Borders and time zones have little impact on the

ACE network, where the majority of professionals

are local citizens doing business with local customers.

Perhaps best of all, brokers and corporate risk

managers around the world consider ACE people

responsive and service-oriented – advantages that

we never take for granted.

Behind every ACE professional, and equally important

to the insurance-buying decision, is the strength of

the ACE balance sheet. The ACE balance sheet

provides peace-of-mind to clients who are entrusting

their organisations’ financial security with us. ACE’s

strong capital position and financial strength, also

offer a competitive advantage in the commercial

P&C business - from long-tail casuality lines to national

account risk management and workers’ compensation

plans.

People And Capital

We are committed to ourclients. We strive to understandtheir risks, we make promises,and we keep them.




Jean Ong, Chief Financial Officer

Kevin Leung, Financial Lines Manager, Asia

Tan Wuen Lin, Casualty, South Asia Cluster Manager

Jacquelynne Lee, Human Resources Manager

Mack Eng, Director, Accident & Health

Corporate Profile


ACE Insurance Limited (Singapore) is a member of

the ACE Group of Companies, a global leader in

insurance and reinsurance. Headed by ACE Limited,

a component of the Standard & Poor’s 500 stock

index, the A+ financial strength rating by both

Standard & Poor’s and AM Best are indicative of

ACE’s strong capital base and financial stability; key

attributes in the business of risk. With a history dating

back to 1792, the ACE Group conducts its business

on a worldwide basis with operating subsidiaries in

more than 50 countries with a strong presence in

Asia Pacific.

Operating in Singapore since 1948, ACE has carved

a niche for itself as one of the leading direct marketing

providers of Accident & Health insurance in Singapore.

ACE has the technical expertise in risk management

and engineering capabilities for all major classes of

insurance. The ‘A’ long term insurer financial strength

and counterparty credit ratings by Standard and

Poor’s are indicative of ACE Singapore’s strong

capitalisation and reflective of its parent’s rating

overlook. Over the years, the firm has built strong

client relationships by offering responsive service,

developing innovative products and providing market

leadership built on financial strength.

We believe an environmentof open communication andcollaboration produces results.We encourage full participation,d i f ferent perspect i ves,constructive criticism and asense of pride in who we areand what we do.



Christopher Kee, IT Manager

Clara Koh, Executive Manager, Property & Technical Lines

Pamela Shekaran, Legal Counsel

Ling Meng Hoe, Marine, South Asia Cluster Manager

Juane Lim, Executive Manager, Claims

Operations Worldwide


• Argentina

• Australia

• Austria

• Belgium

• Bermuda

• Brazil

• Canada

• Chile

• China

• Colombia

• Denmark

• Ecuador

• Egypt

• Finland

• France

• Germany

• Gibraltar

• Guam

• Hong Kong

• India

• Indonesia

• Ireland

• Italy

• Japan

• Macao

• Malaysia

• Mexico

• Netherlands

• New Zealand

• Norway

• Pakistan

• Philippines

• Poland

• Puerto Rico

• Russia

• Saudi Arabia

• Singapore

• South Africa

• South Korea

• Spain

• Sweden

• Switzerland

• Taiwan

• Thailand

• United Kingdom

• United States

• Venezuela

• Vietnam

The ACE Group of insurance and reinsurance

companies serves a variety of clients around the

world, from large multinational corporations to smaller

clients in local markets. Guided by a strong

underwriting culture, we embrace the challenge of

helping our customers manage risk, so they can

continue in their pursuit of progress.

ACE Limited was established in 1985 to provide

hard-to-find excess liability coverage. Today, members

of the ACE Group of Companies have offices in more

than 50 countries and authority to do business in

more than 140 countries. Our diverse product mix

and extensive global presence give us a competitive

advantage with financial stability.


The ACE Group of insuranceand reinsurance companiesserves a variety of clientsaround the world.

Products & Services


Property

With global capacity and property professionals who

know and apply the industry’s best practices, ACE

can customise a broad range of property risk

management programs including tailored engineering

services to meet your needs regardless of your

company size.

Casualty & Liability

With a strong capital base and an international

network of claims centers and risk control

professionals, ACE offers risk managers and brokers

a wide variety of innovative casualty products and

services on a primary, excess or umbrella basis.

Energy & Utilities

ACE specialises in the onshore and offshore energy

markets, providing coverages in the construction or

operation of power plants, oil and gas refining

facilities, energy casualty coverage and high-rise

commercial buildings against the risk of damage to

physical assets. In addition, we also cover any other

losses incurred as a result of mechanical failures,

disruptions to telecommunications or utilities and

other corporate and industrial risks.

Marine

ACE is one of the world’s largest providers of

commercial marine protection. In the Asia Pacific,

we specialise in the cargo business by offering highly

competitive rates and terms, risk management

services, global claims service and support, recovery

exper t ise and comprehensive coverage.

Financial Lines

ACE is an internationally acknowledged provider of

professional liability, directors & officers liability, and

other financial lines. We offer a range of products

designed for over 100 classes of professionals

through our network of offices.

Commercial Lines

Utilizing cutting-edge technology, ACE Commercial

provides mono-line, multi-line and tailored insurance

solutions catering to the small-to-medium sized

enterprise (SME) segment at competitive rates and

terms through selected intermediaries and distribution

channels.

Accident & Health

Committed to help insured groups and individuals

withstand the serious impact of sudden injury or

catastrophic sickness, ACE Accident & Health’s team

tailors coverage with non-traditional benefits and

features, enabling insureds to receive the coverage

they most need.

Personal Lines

From auto and home insurance to specialty personal

insurance products, ACE’s personal and consumer

insurance offerings provide individuals with the

comfort they want and the coverage they need.

Coupled with this is the objectiveto enter into new relationshipsand customisation of ourproducts and services.

Annual Report 2006 I SINGAPORE

The directors present their report to the shareholder together with the audited financial statements of the Companyfor the financial year ended 31 December 2006.

Directors

The directors of the Company in office at the date of this report are as follows:

Damien Francis SullivanEric SandersonNeil Treleaven SpettigueKenneth Wesley Brown

Arrangements to enable directors to acquire shares and debentures

Neither at the end of nor at any time during the financial year was the Company a party to any arrangement whoseobject was to enable the directors of the Company to acquire benefits by means of the acquisition of shares in, ordebentures of, the Company or any other body corporate.

Directors’ interests in shares and debentures

According to the register of directors’ shareholdings, none of the directors holding office at the end of the financialyear had any interest in the shares in, or debentures of, the Company or any related corporation, except as follows:

16

Directors’ ReportFor the financial year ended 31 December 2006

Holdings registered Holdings in which a directorin the name of director or nominee is deemed to have an interest

At 1.1.06 or At 1.1.06 ordate of date of

appointment, appointment,At 31.12.06 if later At 31.12.06 if later

ACE Limited(Restricted ordinary shares1

of US$0.041666667 each)Damien Francis Sullivan 2,862 875 - -Neil Treleaven Spettigue 1,067 - - -

ACE Limited(Options1 to subscribe for restricted

ordinary shares ofUS$0.041666667 each)

Damien Francis Sullivan 5,442 3,560 - -Neil Treleaven Spettigue 7,265 4,870Kenneth Wesley Brown 670 - - -

1. This refers to restricted stock/stock options awarded by ACE Limited (incorporated in Cayman Islands) under the Long-Term Incentive

Plans.


For the financial year ended 31 December 2006

Directors’ Report

Directors’ contractual benefits

Since the end of the previous financial year, no director has received or become entitled to receive a benefit by reasonof a contract made by the Company or a related corporation with the director or with a firm of which he is a memberor with a company in which he has a substantial financial interest, except that certain directors have employmentrelationships with related corporations and have received remuneration in those capacities.

Share options

There were no options granted during the financial year to subscribe for unissued ordinary shares of the Company.

No shares have been issued during the financial year by virtue of the exercise of options to take up unissued ordinaryshares of the Company.

There were no unissued ordinary shares of the Company under option at the end of the financial year.

Auditors

The auditors, PricewaterhouseCoopers, have expressed their willingness to accept re-appointment.

On behalf of the directors

_________________________ _________________________NEIL TRELEAVEN SPETTIGUE KENNETH WESLEY BROWNDirector Director

30 March 2007


In the opinion of the directors,

(a) the financial statements as set out on pages 20 to 59 are drawn up so as to give a true and fair view of thestate of affairs of the Company at 31 December 2006 and of the results of the business, changes in equityand cash flows of the Company for the financial year then ended; and

(b) at the date of this statement, there are reasonable grounds to believe that the Company will be able to payits debts as and when they fall due.

On behalf of the directors

_________________________ _________________________NEIL TRELEAVEN SPETTIGUE KENNETH WESLEY BROWNDirector Director

30 March 2007

18

Statement By Directors


Independent Auditor’s Report

We have audited the accompanying financial statements of ACE Insurance Limited (the “Company”) set out on pages20 to 59, which comprise the balance sheet of the Company as at 31 December 2006, and the income statement,statement of changes in equity and cash flow statement for the year then ended, and a summary of significantaccounting policies and other explanatory notes.

Directors’ Responsibility for the Financial Statements

The Company’s directors are responsible for the preparation and fair presentation of these financial statements inaccordance with the provisions of the Singapore Companies Act and Singapore Financial Reporting Standards. Thisresponsibility includes designing, implementing and maintaining internal control relevant to the preparation and fairpresentation of financial statements that are free from material misstatement, whether due to fraud or error; selectingand applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our auditin accordance with Singapore Standards on Auditing. Those Standards require that we comply with ethical requirementsand plan and perform the audit to obtain reasonable assurance as to whether the financial statements are free frommaterial misstatement.

An audit includes performing procedures to obtain evidence about the amounts and disclosures in the financialstatements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks ofmaterial misstatement of the financial statements, whether due to fraud or error. In making those risk assessments,the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statementsin order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressingan opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriatenessof accounting policies used and the reasonableness of accounting estimates made by directors, as well as evaluatingthe overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Opinion

In our opinion,

(a) the financial statements of the Company are properly drawn up in accordance with the provisions of the SingaporeCompanies Act (the “Act”) and Singapore Financial Reporting Standards so as to give a true and fair view ofthe state of affairs of the Company as at 31 December 2006, and the results, changes in equity and cash flowsof the Company for the financial year ended on that date; and

(b) the accounting and other records required by the Act to be kept by the Company have been properly kept inaccordance with the provisions of the Act.

PricewaterhouseCoopersCertified Public Accountants

Singapore, 30 March 2007


2006 2005Note $ $

Insurance premium revenue 102,180,017 102,950,906Insurance premium ceded to reinsurers (71,159,342) (48,443,514)Net insurance premium revenue 3 31,020,675 54,507,392

Fee income from insurance contracts 20,503,410 20,296,977Investment income 4 4,162,891 3,098,505Net realised (loss)/gains on financial assets – debt securities (2,212,691) 187,242Other operating income 415,667 132,160Net income 22,869,277 23,714,884

Insurance claims and loss adjustment expenses (18,225,244) (35,006,192)Insurance claims and loss adjustment expenses recovered from reinsurers 11,943,753 31,066,526Net insurance claims 5 (6,281,491) (3,939,666)

Expenses for acquisition of insurance contracts (20,399,551) (19,136,682)Expenses for asset management services 6 (348,071) (344,681)Operating expenses: - Employee benefits 7 (10,675,955) (9,280,460) - Depreciation expense 10 (861,876) (704,022) - Other operating expenses 8 (6,915,191) (3,473,911)

(18,453,022) (13,458,393)Expenses (39,200,644) (32,939,756)

Profit before income tax 8,407,817 41,342,854

Income tax expense 9(a) (1,435,649) (8,237,185)

Profit after income tax 6,972,168 33,105,669

The accompanying notes form an integral part of these financial statements.

20

Income StatementFor the financial year ended 31 December 2006


Balance Sheet

2006 2005Note $ $

Assets

Non-current assetsProperty, plant and equipment 10 2,276,734 2,332,678

Current assetsAvailable-for-sale financial assets 11 96,770,620 113,522,783Insurance receivables and other receivables 12 25,921,012 23,688,872Reinsurance assets 13 95,506,864 94,572,924Cash and cash equivalents 14 15,865,837 13,362,073

234,064,333 245,146,652

Total assets 236,341,067 247,479,330

Liabilities

Non-current liabilitiesInsurance liabilities 13 10,449,006 11,793,724Deferred income tax liabilities 16 433,000 102,000

10,882,006 11,895,274

Current liabilitiesInsurance liabilities 13 139,050,622 141,730,699Trade and other payables 15 16,147,846 16,030,987Current income tax liabilities 9(b) 1,937,409 9,888,957

157,135,877 167,650,643

Total liabilities 168,017,883 179,545,917

Net assets 68,323,184 67,933,413

Shareholder’s equity

Share capital 17 35,000,000 35,000,000Fair value reserve 215,439 (1,078,414)Retained profits 33,107,745 34,011,827

68,323,184 67,933,413


As at 31 December 2006


Share Fair value RetainedNote capital reserves profits Total

$ $ $ $

2006Beginning of financial year 35,000,000 (1,078,414) 34,011,827 67,933,413

Fair value loss on available-for-salefinancial assets 18 - 1,293,853 - 1,293,853

Net profit - - 6,972,168 6,972,168Total recognised gains 35,000,000 215,439 40,983,995 76,199,434

Dividends 19 - - (7,876,250) (7,876,250)End of financial year 35,000,000 215,439 33,107,745 68,323,184

2005Beginning of financial year- As previously reported 35,000,000 - 8,220,576 43,220,576- Effect of adoption of FRS 39

adjusted prospectively - 2,170,162 (314,418) 1,855,744- As restated 35,000,000 2,170,162 7,906,158 45,076,320

Fair value loss on available-for-salefinancial assets 18 - (3,248,576) - (3,248,576)

Net profit - - 33,105,669 33,105,669Total recognised gains/(loss) - (3,248,576) 33,105,669 29,857,093

Dividends 19 - - (7,000,000) (7,000,000)End of financial year 35,000,000 (1,078,414) 34,011,827 67,933,413


22

Statement Of Changes In Shareholder’s EquityFor the financial year ended 31 December 2006


Cash Flow Statement

2006 2005Note $ $

Cash flows from operating activitiesProfit after tax 6,972,168 33,105,669Adjustments for:

Income tax expense 1,435,649 8,237,185Depreciation expense 861,876 704,022Gain on disposal of property, plant and equipment (2,935) (26)Loss/(Gain) on sale of investments 2,212,691 (187,242)Interest income (4,028,373) (2,976,317)

Unrealised translation loss/(gain) 239,350 (465,022)Dividend income (134,518) (122,188)

Operating cash flow before working capital changes 7,555,908 38,296,081

Change in operating assets and liabilitiesInsurance receivables and other receivables (3,148,809) (10,486,008)Trade and other payables 116,859 7,594,745Net insurance liabilities (4,024,345) (17,064,083)

Cash generated from operations 499,613 18,340,735

Income tax paid (9,108,065) (2,797,806)Net cash provided by operating activities (8,608,452) 15,542,929

Cash flows from investing activitiesPurchases of property, plant and equipment (809,032) (187,955)Purchases of investments (68,437,800) (100,728,742)Proceeds from disposal of property, plant and equipment 6,035 7,997Proceeds from sale of investments 84,221,131 83,713,121Interest received 3,873,614 3,465,525Dividends received 134,518 122,188Net cash from/(used in) investing activities 18,988,466 (13,607,866)

Cash flows from financing activitiesDividends paid to shareholder of the Company (7,876,250) (9,805,895)Net cash used in financing activities (7,876,250) (9,805,895)

Net increase/(decrease) in cash and cash equivalents held 2,503,764 (7,870,832)Cash and cash equivalents at beginning of financial year 13,362,073 21,232,905Cash and cash equivalents at end of financial year 14 15,865,837 13,362,073




These notes form an integral part of and should be read in conjunction with the accompanying financial statements.

1. General

The Company is incorporated and domiciled in Singapore. The address of its registered office is 600 North BridgeRoad #17-01, Parkview Square, Singapore 188778.

The Company is licensed under the Insurance Act, Chapter 142 as a direct general insurer.

The principal activity of the Company consists of underwriting of general insurance including reinsurance of allclasses of risks.

2. Significant accounting policies

(a) Basis of preparation

The financial statements have been prepared in accordance with Singapore Financial Reporting Standards (“FRS”).The financial statements have been prepared under the historical cost convention, except as disclosed in theaccounting policies below.

The preparation of financial statements in conformity with FRS requires management to exercise its judgement inthe process of applying the Company’s accounting policies. It also requires the use of certain critical accountingestimates and assumptions. The area involving a higher degree of judgement or complexity, or area whereassumptions and estimates are significant to the financial statements is the estimation of ultimate liability arisingfrom claims made under insurance contracts, disclosed in Note 13.

Interpretations and amendments to published standards effective in 2006

On 1 January 2006, the Company adopted the new or revised FRS and Interpretations to FRS that are mandatoryfor application from that date. Changes to the Company’s accounting policies have been made as required, inaccordance with the relevant transitional provisions in the respective FRS and INT FRS.

24

Notes To the Financial StatementsFor the financial year ended 31 December 2006



2. Significant accounting policies (continued)

(a) Basis of preparation (continued)

The following are the FRS and INT FRS that are relevant to the Company:

FRS 19 (Amendments) Employee BenefitsFRS 21 (Amendments) The Effects of Changes in Foreign Exchange RatesFRS 32 (Amendments) Financial Instruments: Disclosure and PresentationFRS 39 (Amendment) Financial Guarantee ContractsINT FRS 104 Determining whether an Arrangement contains a Lease

The adoption of the above FRS did not result in substantial changes to the Company’s accounting policies.

(b) Revenue recognition

Income from insurance premiums is taken up as income at the commencement date of the risk less unearnedpremiums calculated in accordance with the provisions of the Insurance Act Chapter 142.

Dividend income from investments is recognised when the right to receive payment is established.

Interest income is recognised on a time-proportional basis using the effective interest method.

(c) Property, plant and equipment

All property, plant and equipment are initially recognised at cost and subsequently carried at cost lessaccumulated depreciation and accumulated impairment losses (Note 2(d)).

The cost of an item of property, plant and equipment includes its purchase price and any cost that is directlyattributable to bringing the asset to the location and condition necessary for it to be capable of operating inthe manner intended by management. The projected cost of dismantlement, removal or restoration is alsoincluded as part of the cost of property, plant and equipment if the obligation for the dismantlement, removalor restoration is incurred as a consequence of acquiring or using the asset.




(c) Property, plant and equipment (continued)

Depreciation is calculated on a straight line basis to allocate the depreciable amounts of all property, plantand equipment over their estimated useful lives. The estimated useful lives are as follows:

Leasehold improvements 20%Office equipment 20%Motor vehicles 33 1/3%Furniture and fittings 20%Computer equipment 20%

The residual values and useful lives of property, plant and equipment are reviewed, and adjusted as appropriate,at each balance sheet date. The effects of any revision of the residual values and useful lives are included inthe income statement for the financial year in which the changes arise.

Subsequent expenditure relating to property, plant and equipment that has already been recognised is addedto the carrying amount of the asset when it is probable that future economic benefits, in excess of the originallyassessed standard of performance of the existing asset, will flow to the Company and the cost can be reliablymeasured. Other subsequent expenditure is recognised as an expense during the financial year in which itis incurred.

On disposal of an item of property, plant and equipment, the difference between the net disposal proceedsand its carrying amount is taken to the income statement.

(d) Impairment of assets

Property, plant and equipment are reviewed for impairment whenever there is an indication that these assetsmay be impaired. If any such indication exists, the recoverable amount (i.e. the higher of the fair value lesscost to sell and value in use) of the asset is estimated to determine the amount of impairment loss.

For the purpose of impairment testing, recoverable amount is determined on an individual asset basis unlessthe asset does not generate cash flows that are largely independent of those from other assets. If this is thecase, recoverable amount is determined for the cash-generating unit (CGU) to which the asset belongs.

If the recoverable amount of the asset (or CGU) is estimated to be less than its carrying amount, the carryingamount of the asset (or CGU) is reduced to its recoverable amount. The impairment loss is recognised in theincome statement.



Notes To the Financial Statements


(d) Impairment of assets (continued)

An impairment loss of an asset is reversed if, and only if, there has been a change in the estimates used todetermine the assets’ recoverable amount since the last impairment loss was recognised. The carrying amountof an asset is increased to its revised recoverable amount, provided that this amount does not exceed thecarrying amount that would have been determined (net of depreciation) had no impairment loss been recognisedfor the asset in prior years. A reversal of impairment loss for an asset is recognised in the income statement.

(e) Investments in financial assets

(1) Classification

The Company classifies its investments in financial assets as loans and receivables and available-for-sale financial assets. The classification depends on the purpose for which the assets were acquired.Management determines the classification of its financial assets at initial recognition and re-evaluatesthis designation at every reporting date.

(i) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that arenot quoted in an active market. They arise when the Company provides money, goods or servicesdirectly to a debtor with no intention of trading the receivable. They are included in current assets,except those maturing more than 12 months after the balance sheet date. Receivables arising frominsurance contracts are classified in this category. Insurance receivables comprise of amounts duefrom insured, agents, brokers and reinsurers.

(ii) Available-for-sale financial assets

Available-for-sale financial assets are non-derivatives that are either designated in this category or notclassified in any of the other categories. They are included in non-current assets unless managementintends to dispose of the assets within 12 months after the balance sheet date.




(e) Investments in financial assets (continued)

(2) Recognition and derecognition

Purchases and sales of investments are recognised on trade-date – the date on which the Companycommits to purchase or sell the asset. Investments are derecognised when the rights to receive cashflows from the financial assets have expired or have been transferred and the Company has transferredsubstantially all risks and rewards of ownership.

On sale of a financial asset, the difference between the net sale proceeds and its carrying amount istaken to the income statement. Any amount in the fair value reserve relating to that asset is also takento the income statement.

(3) Initial measurement

Loans and receivables and available-for-sale financial assets are initially recognised at fair value plustransaction costs.

(4) Subsequent measurement

Available-for-sale financial assets are subsequently carried at fair value. Loans and receivables arecarried at amortised cost using the effective interest method.

Changes in the fair value of monetary assets denominated in a foreign currency and classified asavailable-for-sale are analysed into translation differences resulting from changes in amortised costof the asset and other changes. The translation differences are recognised in the income statement,and other changes are recognised in the fair value reserve within equity. Changes in fair values of othermonetary and non-monetary assets that are classified as available-for-sale are recognised in the fairvalue reserve within equity.

Interest on financial assets, available-for-sale, calculated using the effective interest method, is recognisedin the income statement. Dividends on available-for-sale equity securities are recognised in the incomestatement when the Company’s right to receive payment is established. When financial assets classifiedas available-for-sale are sold or impaired, the accumulated fair value adjustments recognised in thefair value reserve within equity are included in the income statement.




(e) Investments in financial assets (continued)

(5) Impairment

The Group assesses at each balance sheet date whether there is objective evidence that a financialasset or a group of financial assets is impaired.

(i) Loans and receivables

An allowance for impairment of loans and receivables, including insurance and other receivables,is recognised when there is objective evidence that the Company will not be able to collect allamounts due according to the original terms of the receivables. Significant financial difficultiesof the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, anddefault or delinquency in payments are considered indicators that the receivable is impaired. Theamount of the allowance is the difference between the asset’s carrying amount and the presentvalue of estimated future cash flows, discounted at the original effective interest rate. The amountof the allowance for impairment is recognised in the income statement.

(ii) Financial assets, available-for-sale

In the case of an equity security classified as available-for-sale, a significant or prolonged declinein the fair value of the security below its cost is considered an indicator that the security isimpaired.

When there is objective evidence that an available-for-sale financial asset is impaired, the cumulativeloss that has been recognised directly in the fair value reserve is removed from the fair valuereserve within equity and recognised in the income statement. The cumulative loss is measuredas the difference between the acquisition cost (net of any principal repayments and amortisation)and the current fair value, less any impairment loss on that financial asset previously recognisedin income statement.

Impairment losses on debt instruments classified as available-for-sale financial assets are reversedthrough the income statement. However, impairment losses recognised in the income statementon equity instruments classified as available-for-sale financial assets are not reversed through theincome statement.




(f) Fair value estimation

The carrying amounts of current financial assets and liabilities, carried at amortised cost, are assumed toapproximate their fair values.

The fair values of financial instruments traded in active markets (such as exchange-traded and over-the-countersecurities and derivatives) are based on quoted market prices at the balance sheet date. The quoted marketprices used for financial assets held by the Company are the current bid prices; the appropriate quoted marketprices for financial liabilities are the current ask price.

The fair values of financial instruments that are not traded in an active market are determined by using valuationtechniques. The Company uses a variety of methods and makes assumptions that are based on marketconditions existing at each balance sheet date. Where appropriate, quoted market prices or dealer quotesfor similar instruments are used. Valuation techniques, such as estimated discounted cash flows, are alsoused to determine the fair values of the financial instruments.

The fair values of financial liabilities carried at amortised cost are estimated by discounting the future contractualcash flows at the current market interest rates that are available to the Company for similar financial liabilities.

(g) Insurance liabilities

Insurance liabilities are initially measured at fair value and subsequently measured at amortised cost, usingthe effective interest method.

(h) Insurance contracts

The Company issues contracts that transfer insurance risk.

Insurance contracts are those contracts that transfer significant insurance risk. Such contracts may alsotransfer financial risk. As a general guideline, the Company defines as significant insurance risk the possibilityof having to pay benefits on the occurrence of an insured event that are at least 10% more than the benefitspayable if the insured event did not occur.




(h) Insurance contracts (continued)

(i) Recognition and measurement

Insurance contracts are classified into two main categories, depending on the duration of risk andwhether or not the terms and conditions are fixed.

Short-term insurance contracts

These contracts are casualty, property, professional and directors and officers liability, marine andaccident and health insurance contracts.

Casualty insurance contracts protect the Company’s customers against the risk of causing harm tothird parties as a result of their legitimate activities. Damages covered include both contractual andnon-contractual events. The typical protection offered is designed for employers who become legallyliable to pay compensation to injured employees (employers’ liability) and for individual and businesscustomers who become liable to pay compensation to a third party for bodily harm or property damage(public liability).

Property insurance contracts mainly compensate the Company’s customers for damage suffered totheir properties or for the value of property lost. Customers who undertake commercial activities ontheir premises could also receive compensation for the loss of earnings caused by the inability to usethe insured properties in their business activities (business interruption cover).

Professional and Directors and Officers insurance contracts mainly indemnify the Company’s customersagainst the legal liability as well as liability as a result of a breach of duty owed in a professional capacityin connection with the customer’s business.

Marine cargo and hull insurance contracts protect the Company’s customers from the financial lossesresulting from marine transportation and transit which can have a drastic impact to their business.

Accident and health insurance contracts protect the Company’s customers from the consequences ofevents such as hospitalisation, total permanent disability or death arising from accident or sicknessor diagnose for dreaded diseases. Guaranteed benefits paid on occurrence of the specified insuranceevent are either fixed or linked to the extent of the economic loss suffered by the policyholder. Thereare no maturity or surrender benefits.





(i) Recognition and measurement (continued)

Long-term insurance contracts

These contracts are the Return of Premiums Products Plan which the premium received will be refundedafter 7 years or 10 years if the policy criteria for refund are met. The ultimate outcome of this canonly be determined upon the expiry of the policies under the Plan and a provision on premium refundablefor this class of policies is calculated by the in-house actuary, which approximates 80% of premiumsreceived. Provision for premiums refund made is taken against gross premium written.

(ii) Reinsurance contracts held

Contracts entered into by the Company with reinsurers under which the Company is compensated forlosses on one or more contracts issued by the Company and that meet the classification requirementsfor insurance contracts are classified as reinsurance contracts held. Contracts that do not meet theseclassification requirements are classified as financial assets. Insurance contracts entered into by theCompany under which the contract holder is another insurer (inward reinsurance) are included withinsurance contracts.

The benefits to which the Company is entitled under its reinsurance contracts held are recognised asreinsurance assets. These assets consist of short-term balances due from reinsurers (insurance andother receivables), as well as longer term receivables (classified as reinsurance assets) that aredependent on the expected claims and benefits arising under the related reinsured insurance contracts.Amount recoverable from or due to reinsurers are measured consistently with the amounts associatedwith the reinsured insurance contracts and in accordance with the terms of each reinsurance contract.Reinsurance liabilities are primarily premiums payable for reinsurance contracts and are recognisedas an expense when due.

The Company assesses its reinsurance assets for impairment on a quarterly basis. If there is objectiveevidence that the reinsurance asset is impaired, the Company reduces the carrying amount of thereinsurance asset to its recoverable amount and recognises that impairment losses in the incomestatement. The Company gathers objective evidence that a reinsurance asset is impaired using thesame process adopted for financial assets held as loans and receivables. The impairment loss is alsocalculated following the same method used for these financial assets. These processes are describedin Note 2(e).





(iii) Reserves for unexpired risks

Reserves for unexpired risks are calculated using the 1/365th method, except for direct marketingbusiness which is calculated using the 1/24th method, on gross premiums written less premiums onreinsurance.

Reserve for unexpired risks also includes premium deficiency provisions which are derived using actuarialmethods on the Company’s loss statistics.

(iv) Outstanding claims reserves

Outstanding claims reserves are estimates of claims which have been incurred and reported to theCompany and estimates of losses which have occurred, but not yet been reported to the Company.Provision made for claims incurred but not reported (IBNR) is based on the amount calculated anddetermined by an Actuary approved by The Monetary Authority of Singapore as at the balance sheetdate. Any deficiency is immediately charged to the income statement.

In line with Section 37(1) (b) of the Insurance Act, an actuarial investigation is made on the claimsliabilities and a provision for adverse deviation at a minimum 75% level of confidence is included in theloss reserves.

(j) Leases

Operating leases

Leases of assets in which a significant portion of the risks and rewards of ownership are retained by the lessorare classified as operating leases. Payments made under operating leases (net of any incentives receivedfrom the lessor) are taken to the income statement on a straight-line basis over the period of the lease.

When an operating lease is terminated before the lease period has expired, any payment required to be madeto the lessor by way of penalty is recognised as an expense in the period in which termination takes place.




(k) Income taxes

Current income tax liabilities (and assets) for current and prior periods are recognised at the amounts expectedto be paid to (or recovered from) the tax authorities, using the tax rates (and tax laws) that have been enactedor substantially enacted by the balance sheet date.

Deferred income tax assets/liabilities are recognised for all deductible/taxable temporary differences arisingbetween the tax bases of assets and liabilities and their carrying amounts in the financial statements exceptwhen the deferred income tax assets/liabilities arise from the initial recognition of an asset or liability in atransaction that is not a business combination and at the time of the transaction, affects neither accountingnor taxable profit or loss.

Deferred income tax asset is recognised to the extent that it is probable that future taxable profit will beavailable against which the temporary differences can be utilised.

Deferred income tax assets and liabilities are measured at:

(i) the tax rates that are expected to apply when the related deferred income tax asset is realised or thedeferred income tax liability is settled, based on tax rates (and tax laws) that have been enacted orsubstantially enacted by the balance sheet date; and

(ii) the tax consequence that would follow from the manner in which the Company expects, at the balancesheet date, to recover or settle the carrying amounts of its assets and liabilities.

Current and deferred income taxes are recognised as income or expenses in the income statement for theperiod, except to the extent that the tax arises from a business combination or a transaction which is recogniseddirectly in equity. Deferred tax on temporary differences arising from the revaluation gains and losses on fairvalue gains and losses on available-for-sale financial assets are charged or credited directly to equity in thesame period in the temporary differences arise.

(l) Provisions for other liabilities and charges

Provisions for other liabilities and charges are recognised when the Company has a legal or constructiveobligation as a result of past events, it is probable that an outflow of resources will be required to settle theobligation, and a reliable estimate of the amount can be made.




(m) Employee benefits

(1) Defined contribution plans

Defined contribution plans are post-employment benefit plans under which the Company pays fixedcontributions into separate entities such as the Central Provident Fund, and will have no legal orconstructive obligation to pay further contributions if any of the funds do not hold sufficient assets topay all employee benefits relating to employee services in the current and preceding financial years.The Company’s contribution to defined contribution plans are recognised in the financial year to whichthey relate.

(2) Employee leave entitlement

Employee entitlements to annual leave and long service leave are recognised when they accrue toemployees. A provision is made for the estimated liability for annual leave and long-service leave asa result of services rendered by employees up to the balance sheet date.

(n) Currency translation

(1) Functional and presentation currency

Items included in the financial statements of the Company are measured using the currency of theprimary economic environment in which the entity operates (‘the functional currency’). The financialstatements are presented in Singapore Dollars, which is the Company’s functional and presentationcurrency.

(2) Transactions and balances

Transactions in a currency other than the functional currency (“foreign currency”) are translated intothe functional currency using the exchange rates prevailing at the dates of the transactions. Currencytranslation gains and losses resulting from the settlement of such transactions and from the translationof monetary assets and liabilities denominated in foreign currencies at the closing rates at balancesheet date are recognised in the income statement.




(n) Currency translation

(2) Transactions and balances (continued)

Changes in the fair value of monetary securities denominated in foreign currencies classified as available-for-sale are analysed into currency translation differences on the amortised cost of the securities, andother changes. Currency translation differences on the amortised cost are recognised in the incomestatement, and other changes are recognised in fair value reserve within equity.

Non-monetary items that are measured at fair values in foreign currencies are translated using theexchange rates at the date when the fair values are determined. Currency translation differences onnon-monetary items, whereby the gain or loss are recognised in the income statement are reportedas part of the fair value gain or loss in the income statement. Currency translation differences on non-monetary items whereby the gains or losses are recognised directly in equity, such as equity investmentsclassified as available-for-sale financial assets are included in the fair value reserve.

(o) Cash and cash equivalents

Cash and cash equivalents include cash on hand, demand deposits and deposits with financial institutions.

(p) Share capital

Ordinary shares are classified as equity.

(q) Dividend

Interim dividends are recorded during the financial year in which they are declared payable. Final dividendsare recorded during the financial year in which the dividends are approved by the shareholders.




3. Net insurance premium revenue

2006 2005$ $

Short-term insurance contracts- premium receivables 104,306,800 105,982,616- change in unearned premium provision (2,126,783) (3,031,710)

Premium revenue arising from insurance contracts issued 102,180,017 102,950,906

Short-term reinsurance contracts- premium payables (71,933,111) (70,436,025)- change in unearned premium provision 773,769 21,992,511

Premium revenue ceded to reinsurers for insurancecontracts issued (71,159,342) (48,443,514)

Net insurance premium revenue 31,020,675 54,507,392

4. Investment income

2006 2005$ $

Available-for-sale:- dividend income 134,518 122,188- interest income 3,576,627 2,717,260

Cash and cash equivalents interest income from banks 451,746 259,057

4,162,891 3,098,505

5. Net insurance claims

2006 2005$ $

Insurance claims and loss adjustment expenses- gross claims paid (16,597,248) (13,919,465)- change in outstanding claims (1,627,996) (21,086,727)

(18,225,244) (35,006,192)

Insurance claims and loss adjustment expensesrecovered- paid claims recovered 11,783,582 9,952,472- change in outstanding claims 160,171 21,114,054

11,943,753 31,066,526Net insurance claims (6,281,491) (3,939,666)



6. Expenses for asset management services

2006 2005$ $

Investment management fees 348,071 344,681

7. Employee benefits

2006 2005$ $

Wages and salaries 8,524,119 7,771,594Employer’s contribution to Central Provident Fund 849,700 852,433Staff related expenses 1,302,136 656,433

10,675,955 9,280,460

8. Other operating expenses

The following items have been included in other operating expenses during the year:

2006 2005$ $

Management fees 1,441,315 1,116,982IT related expenses 1,138,335 809,189Rental on operating lease 794,253 754,177Currency exchange loss/(gain) - net 1,165,935 (522,185)Impairment of insurance receivables 47,882 72,315Gain on disposal of property, plant and equipment (2,935) (26)Other expenses 2,330,406 1,243,459

6,915,191 3,473,911



9. Income tax

(a) Income tax expense

2006 2005$ $

Tax expense attributable to profit ismade up of:

- current income tax 1,156,517 8,597,041- deferred income tax (Note 16) 279,132 (359,856)

1,435,649 8,237,185

The tax expense on profit differs from the amount that would arise using the Singapore standard rate of incometax due to the following:

2006 2005$ $

Profit before tax 8,407,817 41,342,854

Tax calculated at a tax rate of 20% (2005: 20%) 1,681,563 8,268,571Effects of:- Income taxed at concessionary rate of 10% (321,528) (382,281)- Expenses not deductible for tax purposes 86,114 361,395- Singapore statutory stepped income exemption (10,500) (10,500)Tax charge 1,435,649 8,237,185

(b) Movements in current income tax liabilities

2006 2005$ $

At beginning of financial year 9,888,957 4,089,722Income tax paid (9,108,065) (2,797,806)Current financial year’s tax expense on profit 1,156,517 8,597,041At end of financial year 1,937,409 9,888,957



10. Property, plant and equipment

Leasehold Office Furniture Computer Motorimprovements equipment and fittings equipment vehicles Total

$ $ $ $ $ $

CostAt 1 January 2006 1,458,773 578,536 976,792 861,239 36,666 3,912,006Additions 325,032 38,375 208,048 237,577 - 809,032Disposals - (313) - (112,797) - (113,110)At 31 December 2006 1,783,805 616,598 1,184,840 986,019 36,666 4,607,928

Accumulated depreciationAt 1 January 2006 407,268 196,613 370,599 584,422 20,426 1,579,328Depreciation charge 340,154 134,590 239,040 135,870 12,222 861,876Disposals - (313) - (109,697) - (110,010)At 31 December 2006 747,422 330,890 609,639 610,595 32,648 2,331,194

Net book valueAt 31 December 2006 1,036,383 285,708 575,201 375,424 4,018 2,276,734

CostAt 1 January 2005 1,435,651 535,239 920,485 865,110 36,666 3,793,151Additions 23,122 43,771 56,307 64,755 - 187,955Disposals - (474) - (68,626) - (69,100)At 31 December 2005 1,458,773 578,536 976,792 861,239 36,666 3,912,006

Accumulated depreciationAt 1 January 2005 113,279 73,456 203,182 538,313 8,204 936,434Depreciation charge 293,989 123,631 167,417 106,763 12,222 704,022Disposals - (474) - (60,654) - (61,128)At 31 December 2005 407,268 196,613 370,599 584,422 20,426 1,579,328

Net book valueAt 31 December 2005 1,051,505 381,923 606,193 276,817 16,240 2,332,678



11. Available-for-sale financial assets

2006 2005$ $

Listed securities:Government securities – SGD 15,809,597 12,762,136Government securities – USD 7,377,047 7,972,117

23,186,644 20,734,253

Equity shares in companies - SGD 2,152,000 2,168,000

Loan stocks in corporations - SGD 65,050,593 77,446,018Loan stocks in corporations - USD 6,381,383 13,107,035

71,431,976 90,553,053

Unlisted securities:Equity shares in companies - Singapore - 67,477

96,770,620 113,522,783

The loan stocks and government securities have maturity dates from February 2007 to February 2036 withthe following weighted average effective interest rates:

2006 2005

Singapore Dollar 3.72% 3.24%United States Dollar 5.10% 5.27%

The exposure of investments to interest rate risks is disclosed in Note 22(a)(iii).



12. Insurance receivables and other receivables

2006 2005$ $

Receivables from insurance and reinsurance contracts:- related companies 277,839 925,586- third parties 24,379,535 21,162,233

24,657,374 22,087,819Less provision for impairment of receivables

– third parties (473,173) (441,907)24,184,201 21,645,912

Funds withheld by a related company - 5,143Other receivables:- Prepayments 80,000 105,054- Receivables from related companies 293,820 235,381- Accrued interest receivable 947,331 964,602- Rental and other deposits 361,912 357,920- Sundry receivables 53,748 374,860

1,736,811 2,037,817Total insurance receivables and other receivables 25,921,012 23,688,872

The carrying amounts of the insurance receivables and other receivables approximate their fair value.

The receivables from the related companies are unsecured, interest-free and have no fixed terms of repayment.

The insurance receivables and other receivables are denominated in the following currencies:

2006 2005$ $

Singapore Dollar 18,517,176 18,917,609United States Dollar 5,847,561 3,963,897Australian Dollar 375,191 12,002Brunei Dollar 260,952 228,132Great Britain Pound 287,745 5,368Fiji Dollar 225,688 256,200Malaysian Ringgit 112,635 34,555New Zealand Dollar - 176,423Others 294,064 94,686

25,921,012 23,688,872



13. Insurance liabilities and reinsurance assets

2006 2005$ $

GrossShort-term insurance contracts:

- claims reported and loss adjustment expenses 53,651,363 56,248,390- claims incurred but not reported 26,464,391 22,275,541- claims provision for adverse deviation 9,452,355 9,416,182- reserves for unexpired risks 42,015,498 39,888,715- no claims bonus provision 2,398,991 2,017,072- Provision for premiums refund 5,068,024 11,884,799

139,050,622 141,730,699

Long-term insurance contracts:- Provision for premiums refund 10,449,006 11,793,274

Total Insurance liabilities, gross 149,499,628 153,523,973

Recoverable from reinsurersShort-term reinsurance contracts:

- claims reported and loss adjustment expenses 43,863,319 49,342,022- claims incurred but not reported 20,600,604 14,864,503- claims provision for adverse deviation 7,527,199 7,624,426

- reserves for unexpired risks 23,515,742 22,741,973Total reinsurers share of insurance liabilities 95,506,864 94,572,924

NetShort-term insurance contracts:

- claims reported and loss adjustment expenses 9,788,044 6,906,368- claims incurred but not reported 5,863,787 7,411,038- claims provision for adverse deviation 1,925,156 1,791,756- reserves for unexpired risks 18,499,756 17,146,742- no claims bonus provision 2,398,991 2,017,072- Provision for premiums refund 5,068,024 11,884,799

43,543,758 47,157,775

Long-term insurance contracts:- Provision for premiums refund 10,449,006 11,793,274

Total insurance liabilities, net 53,992,764 58,951,049



13. Insurance liabilities and reinsurance assets (continued)

Actuarial methods, assumptions and sensitivity analysis

(a) Methods

Four standard actuarial methods (Chain ladder on incurred claims, Chain ladder on paid claims, Bornhuetter-Ferguson and Average Incurred Cost Development) have been applied to each class of business to determinethe undiscounted insurance liabilities. The selection of an appropriate method depends on the nature of theclaims development and claim volatility. The outstanding liability is equal to the case estimates in situationswhere no further loss development is expected.

The insurance liabilities also include an appropriate allowance for allocated and unallocated future claimhandling expenses. In addition, an administration expense reserve of 7.5% of gross premiums (or grossunearned premium reserve) has been included in the premium liabilities.

(b) Assumptions

The following assumptions have been made in determining the gross outstanding claim liabilities:

2006Discounted average weighted term to settlement 1.04 yearsUltimate claim number – current year 5,170Average claim size – current year $5,811Unallocated claim expense rate 4.3%Discount rate 3.0%

(c) Process used to determine assumptions

Discounted average weighted term to settlement

The discounted average weighted term to settlement is calculated separately by class of business based onhistorical payment patterns.

Ultimate claim number – current year

The ultimate claim number for the current accident year is estimated separately by class of business byprojecting the number of claims reported to date based on historical reporting patterns.




(c) Process used to determine assumptions (continued)

Average claim size – current year

The average claim size for the current accident year is estimated separately by class of business by projectingthe ultimate claims cost based on historical claim development patterns and dividing by the estimated ultimateclaim number.

Unallocated claim expense rate (or indirect claim expense rate)

The unallocated claim expense rate is calculated separately by class of business based on historical unallocatedclaim expenses as a percentage of historical payments.

Discount rate

The discount rate is derived from market yields of government securities at the balance sheet date.

Inflation rate

The inflation rate is implicit in the valuation models used so no explicit inflation rate is used in the valuation.Movement in average claim size provides a de facto estimate of the inflation rate implied in the valuation.

(d) Sensitivity analysis

The Company conducts sensitivity analysis to quantify the exposure to risk of changes in the key underlyingvariables. The valuations included in the reported results are calculated using certain assumptions about thesevariables as disclosed above. The movement in any key variable will impact the performance and equity ofthe Company. The table below shows how a change in each assumption will affect the outstanding claimsliabilities (net) and on income statement. As no explicit inflation rate is used in the valuation no sensitivityanalysis is able to be carried out for a change in the inflation rate.

(Increase)/ Impact onChange in decrease in Income

Variables variable liability Statement$ $

Discounted average weighted termto settlement +0.5 (260,010) (260,010)

-0.5 248,305 248,305Ultimate claim number - current year +10% 1,205,716 1,205,716

-10% (1,205,716) (1,205,716)Average claim size - current year +10% 1,205,716 1,205,716

-10% (1,205,716) (1,205,716)Unallocated claim expense rate +1% 862,809 862,809

-1% (862,810) (862,810)Discount rate +1% (182,029) (182,029)

-1% 170,197 170,197




(e) Process for determining risk margin

The overall risk margin was determined after allowing for uncertainty of the outstanding claim estimate.Uncertainty was analysed for each class of business taking into account potential uncertainties relating tothe actuarial models and assumptions, the quality of the underlying data used in the models and the generalinsurance environment.

The estimate of uncertainty is greater for long tailed classes when compared to short tail classes due to thelonger time until settlement of outstanding claims.

The assumptions regarding uncertainty for each class were applied to the gross and net central estimates,and the results were aggregated to arrive at an overall provision which is intended to have a 75% probabilityof sufficiency. The risk margin applied in 2006 is 12.0%.

(f) Claims development tables (for all lines)

The following tables show the development of gross and net undiscounted outstanding claims relative to theultimate expected claims for the nine most recent accident years:

Gross

Accident year 1997 to 2002 2003 2004 2005 2006 Total$ $ $ $ $ $

Estimate of ultimate

claims costs:

- at end of accident year 140,037,228 19,360,418 28,834,212 26,379,774 30,045,680

- one year later 123,398,746 19,782,078 24,578,129 18,400,679

- two years later 113,870,597 19,415,088 22,619,136

- three years later 134,314,292 18,225,969

- four years later 129,798,627

Current estimate of

cumulative claims 129,798,627 18,225,969 22,619,136 18,400,679 30,045,680 219,090,091

Cumulative payments to date (97,127,135) (10,184,432) (17,292,275) (8,769,258) (6,425,834) (139,798,934)

Outstanding claims –

undiscounted 32,671,492 8,041,537 5,326,861 9,631,421 23,619,846 79,291,157

Discount (610,150) (224,124) (181,708) (348,640) (1,095,695) (2,460,317)

Outstanding claims 32,061,342 7,817,413 5,145,153 9,282,782 22,524,150 76,830,840

Risk margin 9,452,355

Claims handling costs 3,284,914

Total gross outstanding claims 89,568,109





(f) Claims development tables (for all lines) (continued)

Net

Accident year 1997 to 2002 2003 2004 2005 2006 Total$ $ $ $ $ $

Estimate of ultimateclaims costs:

- at end of accident year 26,719,764 6,457,956 6,293,071 6,767,470 8,796,499- one year later 30,071,490 6,395,380 6,030,983 5,486,659- two years later 30,113,082 5,911,523 5,617,051- three years later 29,391,792 4,437,259- four years later 29,538,254

Current estimate ofcumulative claims 29,538,254 4,437,259 5,617,051 5,486,659 8,796,499 53,875,722

Cumulative payments to date (28,050,329) (3,571,757) (4,467,112) (3,205,496) (1,813,313) (41,108,007)Outstanding claims –

undiscounted 1,487,925 865,502 1,149,939 2,281,163 6,983,186 12,767,715Discount (24,550) (21,195) (37,085) (69,294) (248,674) (400,798)Outstanding claims 1,463,375 844,307 1,112,854 2,211,869 6,734,512 12,366,917Risk margin 1,925,156Claims handling costs 3,284,914Total net outstanding claims 17,576,987

(g) Movements in insurance liabilities and reinsurance assets

(i) Claims and loss adjustment expenses

Year ended 31December 2006 2005

Gross Reinsurance Net Gross Reinsurance Net$ $ $ $ $ $

At beginning of year 87,940,113 (71,830,951) 16,109,162 66,853,386 (50,716,897) 16,136,489Cash paid for claims settled in the year (16,597,248) 11,783,582 (4,813,666) (13,919,465) 9,952,472 (3,966,993)Changes in the year 18,225,244 (11,943,753) 6,281,491 35,006,192 (31,066,526) 3,939,666At end of year 89,568,109 (71,991,122) 17,576,987 87,940,113 (71,830,951) 16,109,162Notified claims 53,651,363 (43,863,319) 9,788,044 56,248,390 (49,342,022) 6,906,368Incurred but not reported & PAD 35,916,746 (28,127,803) 7,788,943 31,691,723 (22,488,929) 9,202,794At end of year 89,568,109 (71,991,122) 17,576,987 87,940,113 (71,830,951) 16,109,162

(ii) Reserves for unexpired risks

2006 2005Gross Reinsurance Net Gross Reinsurance Net

$ $ $ $ $ $

At beginning of year 39,888,715 (22,741,973) 17,146,742 36,857,005 (749,462) 36,107,543Changes in the year 2,126,783 (773,769) 1,353,014 3,031,710 (21,992,511) (18,960,801)At end of year 42,015,498 (23,515,742) 18,499,756 39,888,715 (22,741,973) 17,146,742




(g) Movements in insurance liabilities and reinsurance assets (continued)

(iii) Refundable bonus provision

2006 2005$ $

At beginning of year 2,017,072 1,524,127Movement for the year 381,919 492,945At end of year 2,398,991 2,017,072

(iv) Provision for premiums refund

2006 2005$ $

At beginning of year 23,678,073 22,246,973Provision for the year 3,723,756 2,157,529Refunds during the year (11,884,799) (726,429)At end of year 15,517,030 23,678,073

14. Cash and cash equivalents

2006 2005$ $

Cash on hand 800 3,000Demand deposits 5,843,011 5,222,637Fixed deposits with financial institutions 10,022,026 8,136,436

15,865,837 13,362,073

The carrying amounts of cash and cash equivalents approximate their fair value.

Cash and cash equivalents are denominated in the following currencies:

2006 2005$ $

Singapore Dollar 11,749,714 8,467,995United States Dollar 4,116,123 4,894,078

15,865,837 13,362,073



14. Cash and cash equivalents (continued)

The Company has fixed deposits with a financial institution with an average maturity of 1 month (2005: 1 month)from the end of financial year with the following weighted average effective interest rates:

2006 2005$ $

Singapore Dollar 3.11% 2.31%United States Dollar 5.10% 4.12%

The exposure of cash and cash equivalents to interest rate risks is disclosed in Note 22(a)(iii).

15. Trade and other payables

2006 2005$ $

Amount due to insureds, agents, brokers and reinsurers:- related companies 4,493,402 4,710,887- third parties 7,736,760 8,070,467

12,230,162 12,781,354Other payables:- payables to related companies 142,584 2,609- sundry creditors 1,822,036 1,345,413- GST payable 681,635 603,578- accrued operating expenses 1,271,429 1,298,033

3,917,684 3,249,633Total trade and other payables 16,147,846 16,030,987

The carrying amounts of trade and other payables approximate their fair value.

Trade and other payables are denominated in the following currencies:

2006 2005$ $

Singapore Dollar 13,277,303 14,170,704United States Dollar 2,523,734 1,663,078Others 346,809 197,205

16,147,846 16,030,987



16. Deferred income taxes

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to set off currentincome tax assets against current income tax liabilities and when the deferred income taxes relate to thesame fiscal authority. The amounts, determined after appropriate offsetting, are shown on the balance sheet.

The movement in the deferred income tax account is as follows:

2006 2005$ $

At beginning of financial year 102,000 461,856Tax charge/(credit) to:- Income statement (Note 9) 279,132 (359,856)- Fair value reserve (Note 18) 51,868 -At end of financial year 433,000 102,000

The movement in the deferred income tax assets and liabilities (prior to offsetting of balances within the sametax jurisdiction) during the year is as follows:

Deferred income tax liabilities/(assets):

Acceleratedtax

depreciation Others Total$ $ $

At 1 January 2006 116,899 (14,899) 102,000Charged/(credited) to income statement 79,275 199,857 279,132Charged to equity (Note 18) - 51,868 51,868At 31 December 2006 196,174 236,826 433,000

At 1 January 2005 111,501 350,355 461,856Charged/(credited) to income statement 5,398 (365,254) (359,856)At 31 December 2005 116,899 (14,899) 102,000

The Company’s deferred tax liabilities have been computed based on the corporate tax rate and tax lawsprevailing at balance sheet date. On 15 February 2007, the Singapore Second Minister of Finance announceda reduction in corporate tax rate from 20% to 18% with effect from the year of assessment 2008. TheCompany's deferred tax expense for the current financial year have not taken into consideration the effectof the reduction in the corporate tax rate, which will be accounted for in the Company's deferred tax expensein the year ending 31 December 2007. The Company’s deferred tax liabilities as of 31 December 2006 willbe reduced by approximately $35,236 when the new corporate tax rate of 18% is applied.



17. Share capital

No. of shares AmountAuthorised Issued Authorised Issued

share capital share capital share capital share capital$ $

2006Beginning of financial year 50,000,000 35,000,000 50,000,000 35,000,000Effect of Companies (Amendment)

Act 2005 (50,000,000) - (50,000,000) -End of financial year - 35,000,000 - 35,000,000

2005Beginning and end of financial year 50,000,000 35,000,000 50,000,000 35,000,000

Under the Companies (Amendment) Act 2005 that came into effect on 30 January 2006, the concepts of parvalue and authorised share capital were abolished.

All issued ordinary shares are fully paid.

(a) Share based remuneration

ACE Limited has a restricted share grant plan, a restricted share option plan and an employee share participationplan.

Restricted share grant plan

Under ACE Limited's long term incentive plan, 1,810 restricted ordinary shares were awarded during the yearended 31 December 2006 and 1,700 ordinary shares during the year ended 31 December 2005 to eligibleemployees of the Company. These shares vest at various dates over a 4-year period from the grant datesand any unvested shares are cancelled on termination of the employment of the eligible employees. This planis a group scheme with expenses incurred under the scheme charged out by ACE Limited to the Companyon an annual basis. The annual expense is based on an amortised calculation that is reflective of the currentyear’s expense portion of all restricted share grants issued in the current and prior years, and is consistentwith the treatment required by FRS 102. There is no liability to the Company for the unamortised portion ofthe restrictive stock grants issued. The amortised calculation incorporates the fair market value of ACELimited’s common stock in determining the expense amount. Expected future dividend payments in relationto the restrictive stock grants issued are made directly by ACE Limited to the eligible employees. The totalexpense charged to the income statement of the Company for the year ended 31 December 2006 wasS$144,082 (2005: S$41,901).



17. Share capital (continued)

(a) Share based remuneration (continued)

Restricted share option plan

Under ACE Limited’s long term incentive plan, restrictive share options were granted to eligible employeesof the Company. The exercisable price of these options is the fair market value at issue date. These optionsvest at various dates over a 3 year period from the grant date and any unvested options are cancelled ontermination of employment. This plan is a group scheme with expenses incurred under the scheme chargedout by ACE Limited to the Company on an annual basis. Any option not exercised or cancelled pursuant tothe terms of plan will be forfeited by the tenth anniversary from the date of grant. The total value of theoptions granted during the year was S$39,604 (2005: S$24,970).

Movements in the number of share options outstanding and their related weighted average exercise pricesare as follows:

2006 2005Average Average

exercise price in Options exercise price in OptionsUS dollar US dollarper share per share

At 1 January 3,380 1,600Granted 56.29 1,525 44.43 1,870Forfeited - - 39.95 (90)Exercised 42.11 (150) - -Lapsed - - - -At 31 December 4,755 3,380

Out of the 4,755 outstanding options (2005: 3,380 options), 1,637 options (2005: 828) were exercisable.Options exercised in 2006 resulted in 150 shares (2005: zero shares) being issued at US$ 56.29, equivalentto S$ 87.87 each (2005: US$ 44.43, equivalent to S$69.30 each). The related weighted average share priceat the time of exercise was US$ 42.11, equivalent to S$ 64.87 per share.

Share options outstanding at the end of the year have the following expiry date and exercise prices:

Expiry Year Exercise price Share optionsUS dollar 2006 2005per share

2014 43.40 1,480 1,6002015 44.43 1,750 1,7802016 56.29 1,525 -

4,755 3,380



17. Share capital (continued)

(a) Share based remuneration (continued)

The weighted average fair value of options granted during the period determined using the Black-Scholesvaluation model was US$ 16.86, equivalent to S$ 26.26 per option (2005: US$ 8.76, equivalent to S$13.50).The significant inputs into the model were share price of US$ 56.29, equivalent to S$ 87.87 (2005: US$44.43, equivalent to S$ 69.30), at the grant date, the exercise price shown above, volatility of 31% (2005:22.36%), dividend yield of 1.63% (2005: 1.89%), an expected option life of 5 years and an annual risk-freeinterest rate of 4.58% (2005: 3.88%). The volatility measured at the standard deviation of continuouslycompounded share returns is based on statistical analysis of daily share prices over the last three years.

Employee share purchase plan

The Company collects monies from local eligible employees and acquires ordinary shares in ACE Limited onbehalf of the employees on a bi-annual basis. The price paid by the eligible employees is set at a discountof 15% to the fair value of the ordinary shares at the date of acquisition; this discount is incurred at the grouplevel by ACE Limited and not charged to the company. The total amount of discount applied to the employeeshare plan purchases in the current year was $15,215 (2005: $14,703).

18. Fair value reserve

2006 2005$ $

Beginning of financial year (1,078,414) 2,170,162Fair value gains/(loss) (866,970) (3,061,334)Deferred tax on fair loss (51,868) -Transfer to income statement on disposal 2,212,691 (187,242)End of financial year 215,439 (1,078,414)

The fair value reserve is non-distributable.

19. Dividends

2006 2005$ $

Ordinary dividends paid

Interim exempt (one-tier) dividend for 2006 of 22.50 cents (2005: 20.00 cents) per share paid 7,876,250 7,000,000



20. Commitments

Operating lease commitments where company is a lessee

The Company leases various office spaces under non-cancellable operating lease agreements. The leaseshave varying terms, escalation clauses and renewal rights.

The future aggregate minimum lease payments under non-cancellable operating leases contracted for at thereporting date but not recognised as liabilities, are as follows:

2006 2005$ $

Not later than one year 895,120 1,036,220Later than one year but not later than five years 1,350,200 2,690,160

2,245,320 3,726,380

21. Immediate and ultimate holding corporations

The Company is a wholly-owned subsidiary of ACE-INA Overseas Insurance Company Limited, incorporatedin Bermuda.

The ultimate holding corporation is ACE Limited, incorporated in Cayman Islands.

22. Management of financial and insurance risk

(a) Financial risk

The Company’s activities expose it to a variety of financial risks, including the effects of market, currencyand interest rate risks, along with credit, liquidity and cash flow risk. The Company’s overall risk managementfocuses on the mitigation of these risks in a cost-effective manner. The risk management is carried out byan external investment manager, under instructions from the investment committee.

(i) Foreign currency risk

The Company's foreign exchange risk is mainly with respect to transactions denominated in UnitedStates Dollar arising from its insurance business and investment activities. However, United StateDollar liabilities are backed by assets in the underlying currency.



22. Management of financial and insurance risk (continued)

(a) Financial risk (continued)

(ii) Market risk

The Company is exposed to securities market risk from its investments. These positions are not hedged.

(iii) Cash flow and fair value interest rate risks

Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuatebecause of changes in market interest rates. Fair value interest rate risk is the risk that the value ofa financial instrument will fluctuate due to changes in market interest rates.

The income and operating cash flows are substantially independent of the changes in market interestrates as the Company's investment policy is to only invest in fixed income securities.

The table below sets out the Company’s exposure to interest rate risks. Included in the table are theassets at carrying amounts, categorised by the earlier of contractual repricing or maturity dates. TheCompany does not have any interest bearing liabilities.

Variablerates Fixed rates

Less than 6 Less than 6 6 to 12 1 to 5 Over 5 Non-interest Totalmonths months months years years bearing

$ $ $ $ $ $ $

At 31 December 2006

Assets

Cash and cash

equivalents - 10,022,026 - - - 5,843,811 15,865,837

Available-for-sale

financial assets 4,145,609 9,939,255 7,443,784 49,791,627 25,450,345 - 96,770,620

4,145,609 19,961,281 7,443,784 49,791,627 25,450,345 5,843,811 112,636,457

Variablerates Fixed rates

Less than 6 Less than 6 6 to 12 1 to 5 Over 5 Non-interest Totalmonths months months years years bearing

$ $ $ $ $ $ $

At 31 December 2005

Assets

Cash and cash

equivalents - 8,136,436 - - - 5,225,637 13,362,073

Available-for-sale

financial assets 8,232,017 14,168,168 14,826,473 51,061,876 25,166,772 67,477 113,522,783

8,232,017 22,304,604 14,826,473 51,061,876 25,166,772 5,293,114 126,884,856




(a) Financial risk (continued)

(iv) Credit risk

The Company has proper policies in place to ensure that businesses are made through brokers andreinsurers that have good credit history. The Head Office approves such reinsurers based on a creditworthiness rating. The Company has no significant concentrations of credit risk.

(v) Liquidity risk

The Company maintains its investment in fixed and variable income instruments which are easilyconvertible to cash whenever needed.

(b) Insurance risk

The risk under any one insurance contract is the possibility that insured event occurs and the uncertainty ofthe amount of the resulting claims. By the very nature of an insurance contract, this risk is random andtherefore unpredictable.

The Company’s operations are diversified by line of business and the geographic spread of risk. A globalapproach to risk management allows the Company to underwrite and accept large insurance accounts.

Clearly defined underwriting authorities, standards and guidelines are in place in the Company. Experiencedunderwriting teams maintain underwriting discipline through the use of pricing models, sophisticated catastropheand risk management methodologies, and strict risk selection criteria. Qualified actuaries from the regionwork closely with the underwriting teams to provide additional expertise in the underwriting process. Centrally-coordinated reinsurance management facilitates appropriate risk transfer and efficient cost-effective use ofexternal reinsurance markets. Reinsurers utilised by the Company must meet certain financial experiencerequirements and are put through a stringent financial review process in order to be pre-approved by the HeadOffice’s Reinsurance Security Committee, comprising senior management personnel. As a result of thesecontrols, reinsurance is placed with a select group of only the most financially secured and experiencedcompanies in the reinsurance industry. Consistent approach to reserving practices and the settlement ofclaims are also ensured. In addition to these internal controls, the Company’s operating units and functionalareas are subject to review by the corporate audit team that regularly carries out operational audits.





(b) Insurance risk (continued)

The concentration of insurance risk before and after reinsurance by territory in relation to the major line ofbusiness is summarised below, with reference to the carrying amount of the insurance liabilities (gross andnet of reinsurance):

2006Territory Financial General Accident

lines liabilities and health Fire Others Total$ $ $ $ $ $

Singapore Gross 36,782,555 18,234,679 7,163,315 8,598,220 6,965,855 77,744,624

Net 3,795,963 4,128,204 1,959,943 1,299,303 3,381,162 14,564,575

Middle East Gross 45,221 37,352 - 48,734 16,374 147,681

Net 15,577 16,802 - 42,293 4,274 78,946

Other Asian Gross 1,152,837 1,232,130 94,511 1,459,155 6,395,136 10,333.769

Countries Net 376,707 575,739 28,710 305,362 1,204,596 2,491,114

Europe & Gross 7,039 972,428 102 176,874 185,592 1,342,035

USA Net 2,134 212,865 36 119,874 107,443 442,352

Total Gross 37,987,652 20,476,589 7,257,928 10,282,983 13,562,957 89,568,109Net 4,190,381 4,933,610 1,988,689 1,766,832 4,697,475 17,576,987

2005Territory Financial General Accident

lines liabilities and health Fire Others Total$ $ $ $ $ $

Singapore Gross 38,088,267 14,445,205 10,242,745 9,455,926 13,971,978 86,204,121

Net 3,974,515 3,107,333 2,578,374 3,159,792 1,891,042 14,711,056

Middle East Gross - - - 57,723 31,621 89,344

Net - - - 57,048 30,273 87,321

Other Asian Gross 1,525 401,719 58,272 123,040 934,865 1,519,421

Countries Net 2,197 416,024 71,197 121,363 573,835 1,184,616

Europe & Gross - 31,262 210 41,368 54,387 127,227

USA Net - 32,664 345 40,884 52,276 126,169

Total Gross 38,089,792 14,878,186 10,301,227 9,678,057 14,992,851 87,940,113Net 3,976,712 3,556,021 2,649,916 3,379,087 2,547,426 16,109,162



23. Related party transactions

The following transactions took place between the Company and related parties during the financial year:

(a) Sales and purchases of services2006 2005

$ $Business from related companiesPremium income 6,463,602 3,151,633Commission expense (627,660) (212,446)Claims paid (2,510,055) (239,552)

Business to related companiesPremiums ceded (61,855,395) (73,803,154)Commissions received 18,524,072 25,808,071Claims recovered 9,907,347 9,831,932

General expenses billed to regional office 147,737 439,615

General expenses allocated by regional office (937,607) (590,514)

Information processing expenses billed by arelated company (766,565) (693,744)

Service fees billed by related companies (570,610) (526,468)Service fees billed to a related company 40,724 -

Outstanding balances at 31 December 2006, arising from sales/purchases of services, are set out in Notes12 and 15, respectively.

(b) Key management personnel compensation

The key management personnel compensation includes salary, bonus and other emoluments (including benefits-in-kind) computed based on the cost incurred by the Company and when the Company did not incur any costs,the value of the benefit.

Key management personnel compensation is analysed as follows:2006 2005

$ $

Salaries and other short-term employee benefits 1,841,908 1,404,520Restricted stock grants and share options expenses 144,082 41,901

1,985,990 1,446,421

The compensation to directors of the Company included in the above amounted to $555,828(2005: $597,334).



24. Comparatives

The following prior year (2005) comparatives have been reclassified to conform to current year’s presentation:

Balance sheet itemsPreviously

Reclassified reported$ $

Non-current liabilitiesInsurance liabilities 11,793,274 23,678,073

Current liabilitiesInsurance liabilities 141,730,699 129,845,900

25. New accounting standards and FRS interpretations

Certain new accounting standards and interpretations have been published that are mandatory for accountingperiods beginning on or after 1 January 2007. The Company does not expect that adoption of these accountingstandards or interpretations will have a material impact on the Company’s financial statements.

26. Authorisation of financial statements

These financial statements were authorised for issue in accordance with a resolution of the directors on30 March 2007.

Contentshousehold contents, travel, speciality personal lines, SME and trade credit and political...

Documents

Transcript of Contentshousehold contents, travel, speciality personal lines, SME and trade credit and political...