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Business and Economics > Insurance

You are looking at 1 - 10 of 119 items for :

  • Type: Journal Issue x
  • Financial Institutions and Services: Government Policy and Regulation x
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Cover IMF Working Papers
Implementing Risk-Based Solvency for Insurers—Lessons from Kenya, Mexico, and South Africa
Peter Windsor
,
Suzette J Vogelsang
,
Christiaan Henning
,
Kerwin Martin
,
Elias Omondi
,
Gerardo Rubio
, and
Jooste Steynberg
International standards and best practice supports the implementation of a risk-based solvency regime in the regulation and supervision of insurers. Several emerging market and developing economies are transitioning to such a solvency regime or planning to do so. This paper discusses Kenya, Mexico, and South Africa’s journey to putting in place a risk-based solvency regime which had several common elements notwithstanding significantly different insurance sectors. The transition was a multi-year project requiring dedicated additional resources; restructuring of the regulator, including redesigning supervisory processes and tools and upgrading information technology systems; and significantly greater coordination between the regulator and the insurance industry.
Keywords:
Insurance; Risk-based Solvency; Risk-based supervision; solvency regime; Penetration rate; RBS project; solvency assessment; RBS implementation; supervision of insurer; Insurance companies; Solvency; Financial statements; Africa; Global
Cover Technical Assistance Reports
Principality of Andorra: Technical Assistance Report-Report on External Sector Statistics Mission (September 4–15, 2023)
International Monetary Fund. Statistics Dept.
A technical assistance (TA) mission on external sector statistics (ESS) was conducted for the Andorran Statistics Department (ASD) in the Principality of Andorra in September 2023. The mission focused on preparing plans to improve the frequency of producing balance of payments statistics and international investment position (IIP) from annual to quarterly and to enhance the coverage and quality of the balance of payments and IIP data. The mission assisted the ASD in establishing the framework of the quarterly enterprise survey, which will be used as one of the main source data for compiling balance of payments statistics and IIP quarterly.
Keywords:
Principality of Andorra; balance of payments; international investment position.; IMF's Statistics Department; enterprise survey; IIP quarterly; IMF executive directors; ad IIP; International investment position; Balance of payments statistics; Income; Insurance
Cover IMF Staff Country Reports
Ireland: Financial Sector Assessment Program-Technical Note on Insurance Regulation and Supervision
International Monetary Fund. Monetary and Capital Markets Department
This Technical Note highlights Ireland’s Insurance Regulation and Supervision. Ireland’s insurance sector is characterized by high penetration and density in both the life and the non-life sector, which, however, stems largely from outward cross-border business. Irish insurers have proved to be resilient during the coronavirus disease 2019 pandemic, although the full effects have yet to be seen. Primary drivers of solvency ratios have been financial market and interest rate movements affecting insurers’ investment portfolios and liability valuations. The Central Bank has been expanding its analysis of climate risks and corresponding risk management practices in the financial sector. There is scope for the Central Bank to leverage its expertise and experience to promote further EU convergence on insurance oversight. The Central Bank has been very active in policy discussions at the European Insurance and Occupational Pensions Authority and is well placed to take a leading role in the efforts to achieve consistent application of EU legislation, and generally supervisory convergence, on the supervision of cross-border business; the supervision of intra-group transactions and group concentrations; and the supervision of captives.
Keywords:
solvency capital requirement; risk mitigation program; solvency ASSESSMENT; probability risk; financial condition; Insurance companies; Insurance; Solvency; Global
Cover IMF Staff Country Reports
South Africa: Financial Sector Assessment Program-Technical Note on Insurance Sector - Regulation and Supervision
International Monetary Fund. Monetary and Capital Markets Department
The South African insurance sector is large, complex, internationally active, and competitive. Supported by high penetration and density of insurance products, the insurance sector has grown to account for 18 percent of the financial sector in South Africa. The industry hosts an unusually diverse range of business models, including traditional participation focused models, bank-led conglomerates, asset management focused groups, and technology driven new entrants. Even among large insurers, risk profiles vary significantly, which is unique relative to other major insurance markets. Most large insurance groups are actively expanding their business both regionally and globally.
Keywords:
IMF-World Bank Financial Sector Assessment Program; solvency assessment; FSAP's finding; B. solvency requirement; life insurer; Insurance companies; Insurance; Stress testing; Financial Sector Assessment Program; Solvency; Africa
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 Staff Country Reports
United Kingdom: Financial Sector Assessment Program-Detailed Assessment of Observance of Insurance Core Principles Issued by the International Association of Insurance Supervisors
International Monetary Fund. Monetary and Capital Markets Department
The regulatory framework for insurance supervision in the United Kingdom is sophisticated and the authorities are leaders in supervisory techniques. Observance with the Insurance Core Principles (ICPs) is very high compared to peers with 17 ICPs observed and only 6 out of 24 ICPs determined to be largely observed and 1 partly observed.
Keywords:
solvency ASSESSMENT; ASSESSMENT of observance; ASSESSMENT of insurance core principle; staff team of the International Monetary Fund; insurance solvency coverage; solvency requirement; Insurance companies; Insurance; Solvency; 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 Policy Papers
2021 Comprehensive Surveillance Review— Background Paper on The Surveillance Priority Confronting Risks and Uncertainties
International Monetary Fund. Strategy, Policy, & Review Department
The coverage of risks has become more systematic since the Global Financial Crisis (GFC): staff reports now regularly identify major risks and provide an assessment of their likelihood and economic impact, summarized in Risk Assessment Matrices (RAM). But still limited attention is paid to the range of possible outcomes. Also, risk identification is useful only so much as to inform policy design to preemptively respond to relevant risks and/or better prepare for them. In this regard, policy recommendations in surveillance could be richer in considering various risk management approaches. To this end, progress is needed on two dimensions: • Increasing emphasis on the range of potential outcomes to improve policy design. • Encouraging more proactive policy advice on how to manage risks. Efforts should continue to leverage internal and external resources to support risk analysis and advice in surveillance.
Keywords:
baseline policy advice; fund surveillance; risk analysis; risk identification; policy recommendation; Insurance; Contingency planning; Natural disasters; Global
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
Norway: Financial Sector Assessment Program-Technical Note-Insurance Sector Oversight
International Monetary Fund. Monetary and Capital Markets Department
The Norwegian insurance sector is well-capitalized. In recent years, the authorities have taken steps to recapitalize weak insurers and to boost capital for the overall industry. Risk-resilience has been strengthened by stronger retention of profits leading to accumulation of reserves, better risk management, and higher capital in the run-up to the implementation of the Solvency II regulatory regime.
Keywords:
ISCR; CR; FSA issues circular; FSA-run stress test; insurance undertaking; risk outlook; inspection program; main focus; nonlife insurance; risk assessment; balance sheet; rate of return; guarantee scheme; profitability prospects; FSA department; Insurance companies; Insurance; Financial stability assessment; Solvency; Stress testing; Europe