Risk Appetite Overview

1. OVERVIEW
SIC adopts a decentralised risk management approach, where all departments own and manage their risks, while the Risk Management Department provides oversight under a Board-approved framework. Risk management is mandatory for all staff and must be embedded in day-to-day decision-making.

2. OUR RISK PHILOSOPHY
The Company maintains a guarded approach to risk, aimed at:

1. Protecting earnings and capital
2. Preventing avoidable losses and inefficiencies
3. Safeguarding reputation and stakeholder confidence

We will:

1. Only engage in businesses and products we fully understand
2. Anticipate and manage uncertainty proactively
3. Promote accountability and consultation in all decisions

3. KEY RISK APPETITE POSITIONS
A. Insurance, Product Design, Pricing & Underwriting Risk (CORE BUSINESS RISK)
The Company maintains a moderate but controlled appetite for insurance-related risks in pursuit of profitable growth.

1. Insurance Risk:
   Acceptable within approved classes and reinsurance protections. High-risk exposures must be adequately mitigated through treaties and underwriting controls.
2. Product Design Risk:
   Low appetite for poorly designed products. All products must be well-structured, tested, compliant and aligned to market needs before launch.
3. Pricing Risk:
   Low appetite for underpricing. Premiums must accurately reflect risk exposure, claims experience, and market conditions.
4. Underwriting Risk:
   Low appetite for weak underwriting practices. All risks must be assessed using approved guidelines, limits and professional judgement.
5. Claims Risk:
   Fair claims settlement in line with regulations and approved limits, while preventing fraud and leakages.
6. Underwriting Capacity:
   Risks must be written within approved retention limits and reinsurance capacity.

B. Credit Risk
Low appetite

1. Strict enforcement of “No Premium, No Cover”
2. Timely settlement of obligations to co-insurers and partners
3. Zero tolerance for breaches that attract regulatory penalties

C. Market, Investment & Liquidity Risk
Moderate appetite within policy limits

1. Investments guided strictly by the Company’s investment policy
2. Maintain sufficient liquidity to meet claims and obligations
3. Preference for secure and regulatory-compliant investment instruments

D. Regulatory & Legal Risk
Zero tolerance

1. Full compliance with all regulatory and statutory requirements
2. No tolerance for fines, sanctions, or adverse publicity
3. Legal exposures must be proactively managed

E. Contagion & Related Party Risk
Low appetite

1. Avoid conflicts of interest
2. Ensure strong governance and oversight of subsidiaries and related entities

F. Strategic Risk
Low to moderate appetite

1. Strategic initiatives must be well assessed, understood and aligned to capability
2. Entry into unfamiliar or untested markets is approached with caution

G. Business Continuity Risk
Zero tolerance for major disruptions

1. Low appetite for business disruption; robust and tested Business Continuity Plans must ensure continuity during and after crises.

H. Technology & Cybersecurity Risk
Low appetite

1. Strong controls to protect systems, data, and infrastructure
2. Immediate escalation of any significant cyber threats or breaches

I. Financial & Financial Reporting Risk
Low appetite

1. Strict adherence to financial controls and budgets
2. Zero tolerance for inaccurate or delayed financial reporting

J. Anti-Money Laundering (AML) Risk
low appetite

1. Full compliance with AML/CFT requirements
2. No tolerance for facilitating financial crime

K. Safeguarding Risk (People & Assets)
Low appetite

1. No tolerance for preventable workplace injuries, unsafe conditions, or negligence affecting staff, customers or third parties
2. Exposure to loss or damage of physical assets must be minimised through appropriate controls and monitoring
3. Low tolerance for breaches affecting intellectual property and confidential information
4. All incidents impacting safety or asset integrity must be promptly reported, investigated and addressed

L. People & Culture Risk
Low appetite with positive appetite for development

1. Recruitment strictly through approved processes; zero tolerance for fraud
2. Low tolerance for skills gaps, discrimination and poor performance management
3. Strong support for training, development, and succession planning
4. Zero tolerance for fraud, unethical conduct, harassment and unsafe practices
5. Low tolerance for industrial unrest and productivity-impacting behaviours

M. Information Management
Low appetite

1. Information must be accurate, complete, and timely
2. Low tolerance for poor data governance or weak controls
3. Information must be secure, accessible, and properly managed

N. Leadership Risk
Low Appetite

1. Leadership must promote accountability, strong risk culture, and effective oversight
2. Low tolerance for weak decision-making or control failures
3. Strong support for leadership development and succession planning

4. WHAT THIS MEANS FOR STAFF
Every staff member is expected to:

1. Understand the risks within their role
2. Follow approved policies and procedures
3. Escalate issues promptly
4. Make decisions that align with the Company’s risk appetite

CONCLUSION
SIC’s risk appetite is designed to ensure sustainable growth, operational discipline and long-term value creation.

All staff play a critical role in protecting the Company by taking informed risks and not uncontrolled ones.