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Business and Economics > Insurance

You are looking at 1 - 10 of 179 items for :

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Cover IMF Staff Country Reports
Belgium: Financial Sector Assessment Program-Technical Note on Insurance Regulation and Supervision
International Monetary Fund. Monetary and Capital Markets Department
The Financial Sector Assessment Program (FSAP) conducted a focused review of insurance regulation and supervision in Belgium. This technical note (TN) provides an update on the insurance sector and highlights risks and vulnerabilities. It analyzes key aspects of regulatory and supervisory oversight: supervisor; the solvency framework; supervision (micro and macro); changes in control and portfolio transfer, reinsurance; conduct of business and group supervision and supervisory co-operation and co-ordination. Belgium has adopted a twin peaks model of regulatory oversight and supervision. The National Bank of Belgium (NBB) is responsible for prudential supervision at both a micro and macro level whilst the Financial Services and Markets Authority (FSMA) is mandated with conduct of business supervision. The analysis focuses on supervision within the scope of the NBB’s and the FSMA’s mandates. The TN comments on progress in respect of the implementation of recommendations made by the previous FSAP and offers further recommendations to strengthen the regulatory and supervisory regime.
Keywords:
risk assessment framework; pre-emptive conduct supervision; conduct risk; group supervision; NBB's role; Insurance companies; Insurance; Mortgages; Financial Sector Assessment Program; Solvency; Global
Cover IMF Staff Country Reports
United Kingdom: Financial Sector Assessment Program-Systemic Stress, and Climate-Related Financial Risks: Implications for Balance Sheet Resilience
International Monetary Fund. Monetary and Capital Markets Department
The FSAP started in an important macro-financial phase right after the second Covid wave and a third lockdown. The balance sheet resilience of major institutional sectors was at the center of policy considerations. Against this backdrop, the FSAP analyzed the pandemic’s potential “scarring” of banks, insurers, corporates, and households balance sheets, focusing on the interplay of macro-financial/structural conditions and financial vulnerabilities.
Keywords:
bank solvency stress test result; fair value; resolvability Assessment framework; D. solvency stress tests result; feedback effect; Macroprudential solvency stress tests; Mortgages; Insurance companies; Stress testing; Insurance; Credit; Global
Cover IMF Working Papers
Barriers to Trade in Financial and Insurance Services: Evidence from the United Kingdom
Jiri Podpiera
Distance, as a proxy for trade barriers, is found in many studies to matter even for weightless cross-border financial investments and lending, possibly due to the presence of information asymmetries. Its importance is tested in this paper using exports of all five broad categories of the U.K.’s financial and insurance services. No trade barriers are found for the bulk of the U.K.’s exports. Trade barriers are confirmed only for interest-bearing activities – being in line with available results in the literature. The positive effect of EU membership appears to be small. Notwithstanding the uncertainties, it suggests that post-Brexit disruptions of the U.K.’s export of financial and insurance services may be minor.
Keywords:
Export; Gravity Model; Financial Services; Insurance; Censored Regression; insurance service; A. financial services; U.K.'s export; evidence from the United Kingdom; U.K.'s export value; Exports; Trade barriers; Service exports; Global; export of financial service; export destination country population; EU membership; services from the U.K.
Cover IMF Staff Country Reports
Republic of Korea: Financial Sector Assessment Program-Technical Note-Systemic Risk Analysis, Financial Sector Stress Testing, and an Assessment of Demographic Shift in Korea
International Monetary Fund. Monetary and Capital Markets Department
This note presents the systemic risk analysis conducted for the Republic of Korea in the course of the 2019 Korea FSAP. It comprises a forward-looking solvency analysis for banks, insurers, and pension funds, a liquidity stress test for banks, and an assessment of network and interconnectedness for a wide range of financial sector entities and their ties to the real economy. Various structural characteristics of Korea’s economy and its financial system informed the features and focus for its forward-looking risk analysis. They include Korea’s strong export orientation, limited diversification, and its key role as a node in regional and international supply chains. Korea’s financial system has grown by 40 percentage points of GDP since 2013, enhancing the importance of a deep financial sector analysis as conducted through the FSAP. Mortgage insurance schemes are widely used—which was reflected in the way the risk assessment for banks was conducted. Korea’s life and non-life insurance sector is large, highly concentrated and saturated. Fintech developments keep accelerating, in terms of its Open Banking system and e-money providers. Demographic developments in Korea are among the most adverse world-wide, implying a continuous drag on demand, downward pressure on interest rates, financial firms’ income, and hence their capitalization unless they will be altering their business models.
Keywords:
ISCR; CR; financial system; sensitivity analysis; balance sheet; banking system; central bank; credit risk; housing market; return on assets; sovereign bond; bond yield; real GDP; market structure; solvency analysis; Insurance; Loans; Stress testing; Commercial banks; Insurance companies; Global
Cover IMF Staff Country Reports
Republic of Korea: Financial System Stability Assessment and Press Release for the Republic of Korea
International Monetary Fund. Monetary and Capital Markets Department
This paper presents Financial System Stability Assessment (FSSA) with the Republic of Korea. The Korean authorities have continued their efforts at upgrading the prudential, legal, and supervisory framework for the financial sector, and keeping up with international standards and practices in other G20 jurisdictions. The authorities have been strengthening the system with micro and macroprudential measures against vulnerabilities, strengthening the crisis management framework, and upgrading the prudential and legal framework. The FSSA suggests moving toward a more forward-looking monitoring and systemic risk identification mechanism. The reliability of various stress tests could be augmented with advanced methods, system-wide monitoring, and testing the overall leverage related to residential properties, households’ resilience to adverse shocks, and sovereign contingent liabilities. Stronger focus is required on systemic risks emanating from securities market activities that can amplify contagion, including sudden redemption and liquidity pressures in the funds and asset management industry.
Keywords:
ISCR; CR; Korea's financial system; bank; holding company; onshore financial markets; exchange rate; central bank; Commercial banks; Financial sector stability; Insurance; Loans; Liquidity; Global; Asia and Pacific
Cover IMF Staff Country Reports
France: Financial Sector Assessment Program-Technical Note-Risk Analysis of Banking and Insurance Sector
International Monetary Fund. Monetary and Capital Markets Department
This technical note presents risk analysis of banking and insurance sector in France. The assessment is based on stress tests, which simulate the health of banks, insurers under severe yet plausible (counterfactual) adverse scenarios. The stress tests reveal that banks and insurers would be resilient against simulated shocks, although some challenges remain. French banks have improved their capitalization and asset quality; however, profitability remains challenged. The report also highlights that profitability is pressured on both the income and expense sides. Banks’ ability to generate higher interest income is constrained by persistently low interest rates, and market businesses including trading activities have contracted in recent years. Growth-at-risk (GaR) analysis shows that the biggest contributing factors to the risk of growth are cost of funding and stock market prices. Financial conditions continue to tighten gradually since mid-2017; though the overall conditions remain accommodative. Risks stemming from loans to households seem to be contained over the short- to medium-term horizon, given relatively strong households’ balance sheets, no evidence of significant misalignment in house prices, social safety nets, and fixed interest rates.
Keywords:
ISCR; CR; BNP Paribas; Crédit Agricole; risk tolerance; cash flow; central bank; balance sheet; interest rate; Stress testing; Insurance companies; Liquidity risk; Insurance; Liquidity; Global
Cover IMF Staff Country Reports
France: Financial System Stability Assessment
International Monetary Fund. Monetary and Capital Markets Department
This Financial System Stability Assessment paper on France provides summary of an assessment of the financial system. Dominated by internationally active financial conglomerates, the French financial system has made important progress since the last financial stability assessment program (FSAP). In order to address a build-up of systemic risks, the authorities have proactively used macroprudential measures and public communication. The government is pursuing a strategy to prepare Paris as a key financial hub, including by promoting crypto-assets, fintech, green finance, and market entry. Banking and insurance business lines, and the corporate sector, carry important financial vulnerabilities that need close attention. The FSAP thus has recommended augmenting policy tools to contain vulnerabilities and continue to act pre-emptively if systemic risks intensify. In order to mitigate intensification of corporate—and potentially household—vulnerabilities, the FSAP proposed: active engagement with the European Central Bank on the possible use of bank-specific measures; considering fiscal measures to incentivize corporates to finance through equity rather than debt; and a sectoral systemic risk buffer.
Keywords:
ISCR; CR; asset; return on equity; bank; financial system; U.S. dollar; debt service; real GDP; monetary policy; banking sector; asset quality; Insurance companies; Insurance; Stress testing; Financial statements; Liquidity requirements; Global
Cover IMF Staff Country Reports
Canada: Financial System Stability Assessment
International Monetary Fund. Monetary and Capital Markets Department
This Financial System Stability Assessment paper discusses that Canada has enjoyed favorable macroeconomic outcomes over the past decades, and its vibrant financial system continues to grow robustly. However, macrofinancial vulnerabilities—notably, elevated household debt and housing market imbalances—remain substantial, posing financial stability concerns. Various parts of the financial system are directly exposed to the housing market and/or linked through housing finance. The financial system would be able to manage severe macrofinancial shocks. Major deposit-taking institutions would remain resilient, but mortgage insurers would need additional capital in a severe adverse scenario. Housing finance is broadly resilient, notwithstanding some weaknesses in the small non-prime mortgage lending segment. Although banks’ overall capital buffers are adequate, additional required capital for mortgage exposures, along with measures to increase risk-based differentiation in mortgage pricing, would be desirable. This would help ensure adequate through-the cycle buffers, improve mortgage risk-pricing, and limit procyclical effects induced by housing market corrections.
Keywords:
ISCR; CR; housing market; financial system; credit risk; government bond; capital ratio; IMF staff estimate; real GDP; foreign currency; mortgage lending; Mortgages; Housing prices; Insurance; Insurance companies; Systemic risk; Global
Cover IMF Staff Country Reports
Eastern Caribbean Currency Union: 2018 Discussion on Common Policies of Member Countries-Press Release; Staff Report; and Statement by the Executive Director for the Eastern Caribbean Currency Union
International Monetary Fund. Western Hemisphere Dept.
This 2018 discussion on common policies of the Eastern Caribbean Currency Union (ECCU) highlights that the member countries are gradually recovering following the catastrophic impact of Hurricanes Irma and Maria in 2017. Conditions remain favorable to growth, however, risks are increasing. The fiscal balance for the region as a whole worsened in 2017, reflecting lower inflows from citizenship-by-investment programs and higher reconstruction and current spending. The IMF team made several policy recommendations including shifting focus from the current emphasis on recovery from natural disasters to building ex-ante resilience. The report also recommends intensifying decisive and timely actions to resolve weaknesses in the financial sector, including longstanding problems in the banking sector and emerging risks in the non-banking sector. The authorities expressed commitment to the acceleration of key reforms to upgrade and strengthen the financial sector regional oversight framework. In addition to fiscal consolidation, injecting new vigor into the structural policy agenda will help enhance competitiveness and make growth more inclusive.
Keywords:
ISCR; CR; ECCU country; ECCU price aggregate; Cartac; ECCU debt target; ECCU authority; ECCU region; ECCU work program; ECCU aggregate; Natural disasters; Insurance; Nonperforming loans; Credit bureaus; Caribbean; Global; staff advice; IMF's transparency policy; IMF's article
Cover IMF Staff Country Reports
Jamaica: Financial System Stability Assessment
International Monetary Fund. Monetary and Capital Markets Department
The macroeconomic environment has improved, reflecting the authorities’ efforts, supported by an IMF arrangement. Previously, years of high fiscal deficits, public enterprise borrowing, and financial sector bailouts led to rapid government debt accumulation, crowded out private credit, increased financial dollarization, and stifled economic growth. Fiscal discipline has been essential to reduce public debt (to about 100 percent of GDP). With government debt accounting for a sizable share of financial institutions’ assets, falling interest rates on government debt are leading to a search for yield. Also, entrenched structural obstacles, including high crime, bureaucratic processes, insufficient labor force skills, and poor access to finance still constrain economic growth. The authorities have made good progress in implementing the 2006 FSAP recommendations. Work on the regulatory framework has significantly advanced in several areas such as securities dealers’ activities, powers to the Bank of Jamaica (BoJ), payment systems, and the introduction of the centralized securities depository. However, the crisis management framework and risk-based supervision work has been lagging.
Keywords:
ISCR; CR; securities dealer; return on equity; Sagicor investments Jamaica Sagicor life Jamaica; BoJ power; intermediation activity; liquid asset ratio; liquid asset ratio requirement; liquidity facilities; unit trust; insurance fund; credit risk; resolution regime; Securities; Insurance companies; Insurance; Pension spending; Global; Caribbean