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Annual Report 2016

18 Commitments and contingent liabilities

Leasing commitments

As part of its normal business operations, the Group enters into a number of lease agreements. As of 31 December, such agreements, which are operating leases, total the following obligations for the next five years and thereafter:

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USD millions

2016

2017

82

2018

69

2019

57

2020

51

2021

41

After 2021

297

Total operating lease commitments

597

Less minimum non-cancellable sublease rentals

23

Total net future minimum lease commitments

574

Minimum rentals for all operating leases (except those with terms of a month or less that were not renewed) for the years ended 31 December 2015 and 2016 were USD 63 million and USD 76 million, respectively.

Other commitments

As a participant in limited and other investment partnerships, the Group commits itself to making available certain amounts of investment funding, callable by the partnerships for periods of up to ten years. The total commitments remaining uncalled as of 31 December 2016 were USD 1 234 million.

The Group entered into a real estate construction contract. The commitments under the contract amount to USD 92 million over the next four years.

The Group enters into a number of contracts in the ordinary course of reinsurance and financial services business which, if the Group’s credit rating and/or defined statutory measures decline to certain levels, would require the Group to post collateral or obtain guarantees. The contracts typically provide alternatives for recapture of the associated business.

Legal proceedings

In the normal course of business operations, the Group is involved in various claims, lawsuits and regulatory matters. In the opinion of management, the disposition of these matters is not expected to have a material adverse effect on the Group’s business, consolidated financial position, results of operations or cash flows.