Assets And Policyholder Liabilities Under Insurance And Investment Contracts

12 Months Ended

Jun. 30, 2020

Assets And Policyholder Liabilities Under Insurance And Investment Contracts [Abstract]

Assets And Policyholder Liabilities Under Insurance And Investment Contracts

12.Assets and policyholder liabilities under insurance and investment contracts

Reinsurance assets and policyholder liabilities under insurance contracts

Summarized below is the movement in reinsurance assets and policyholder liabilities under insurance contracts during the years ended June 30,2020 and 2019:

12.Assets and policyholder liabilities under insurance and investment contracts

Reinsurance assets and policyholder liabilities under insurance contracts

Summarized below is the movement in reinsurance assets and policyholder liabilities under insurance contracts during the years ended June 30,2020 and 2019:

		Reinsurance Assets(1)		Insurance contracts(2)
Balance as of July 1, 2018		$	633	$	(2 032)
	Increase in policy holder benefits under insurance contracts		775		(8 137)
	Claims and policyholders’ benefits under insurance contracts		(228)		8 237
	Foreign currency adjustment(3)		(17)		52
Balance as of June 30, 2019			1 163		(1 880)
	Increase in policy holder benefits under insurance contracts		509		(3 024)
	Claims and policyholders’ benefits under insurance contracts		(449)		3 182
	Foreign currency adjustment(3)		(217)		352
Balance as of June 30, 2020		$	1 006	$	(1 370)

(1) Included in other long-term assets (refer to Note 10);

(2) Included in other long-term liabilities;

(3) Represents the effects of the fluctuations of the ZAR against the U.S. dollar.

The Company has agreements with reinsurance companies in order to limit its losses from large insurance contracts, however, if the reinsurer is unable to meet its obligations, the Company retains the liability. The value of insurance contract liabilities is based on the best estimate assumptions of future experience plus prescribed margins, as required in the markets in which these products are offered, namely South Africa. The process of deriving the best estimates assumptions plus prescribed margins includes assumptions related to claim reporting delays (based on average industry experience).

Assets and policyholder liabilities under investment contracts

Summarized below is the movement in assets and policyholder liabilities under investment contracts during the years ended June 30,2020 and 2019:

(1) Included in other long-term assets (refer to Note 10);

(2) Included in other long-term liabilities;

(3) Represents the effects of the fluctuations of the ZAR against the U.S. dollar.

The Company has agreements with reinsurance companies in order to limit its losses from large insurance contracts, however, if the reinsurer is unable to meet its obligations, the Company retains the liability. The value of insurance contract liabilities is based on the best estimate assumptions of future experience plus prescribed margins, as required in the markets in which these products are offered, namely South Africa. The process of deriving the best estimates assumptions plus prescribed margins includes assumptions related to claim reporting delays (based on average industry experience).

Assets and policyholder liabilities under investment contracts

Summarized below is the movement in assets and policyholder liabilities under investment contracts during the years ended June 30,2020 and 2019:

			Assets(1)		Investment contracts(2)
Balance as of July 1, 2018			$	610	$	(610)
	Increase in policy holder benefits under investment contracts			24		(24)
	Foreign currency adjustment(3)			(15)		15
Balance as of June 30, 2019				619		(619)
	Increase in policy holder benefits under investment contracts			17		(17)
	Claims and policyholders’ benefits under investment contracts			(29)		29
	Foreign currency adjustment(3)			(117)		117
		Balance as of June 30, 2020	$	490	$	(490)

(1) Included in other long-term assets (refer to Note 11);

(2) Included in other long-term liabilities;

(3) Represents the effects of the fluctuations of the ZAR against the U.S. dollar.

The Company does not offer any investment products with guarantees related to capital or returns.