OECD Asia Regional Expert Seminar · OECD Asia Regional Expert Seminar: Enhancing Transparency and...

1

OECD Asia Regional Expert Seminar:OECD Asia Regional Expert Seminar:Enhancing Transparency and Monitoring of Insurance MarketsEnhancing Transparency and Monitoring of Insurance Markets27-28 January 2012, Bangkok, Thailand

A Stocktaking and Comparative Assessment of Insurance Statistics in Selected Asian Countries: Preliminary Findings

Insurance and PensionsFinancial Market

W. Jean Kwon, Ph.D., CPCU

Faculty Chair and Professor

Disclaimer: The findings are preliminary and subject to reconfirmation by the participating institutions. All government agencies and their delegators responsible for data collection, administration and/or dissemination are welcome to offer their comments to the consultant ([email protected]).© 2012

Financial MarketOECDParis

Faculty Chair and Professor OECD External ConsultantThe School of Risk ManagementSt. John’s UniversityNew York

Importance of

Background

• Promoting efficient, open, stable and sound markets

• Maintaining high levels of transparency, confidence and integrity in the markets

The OECD Global Insurance Statistics as a unique source of comparable data since 1992.

The School of Risk Management,Insurance and Actuarial Science

• Gaps exist with non-OECD countries

2012 OECD & W. Jean Kwon – 2

2

Issues of data/statistics availability from and consistency between

Background

between

1. Public and online sources

• Often, government agencies and/or industry associations

2. Private statistical agencies



The institution responsible

A t it d l t

The Survey

• A government agency or its delegator

Data collection and management

• Collection method/frequency and data verification

• Scope of data: company vs. market level

• Dissemination of the data: collected vs. made public


Issues

• Regional/international harmonization

• Accounting standards

• Challenges


3

15 Participating Countries*

Bangladesh

Bh

Korea

M l i

* 88.3% response rate** Two participating institutions

Bhutan

Brunei

Cambodia

China, P.R.

Hong Kong, SAR

India

Malaysia

Pakistan

The Philippines

Singapore

Sri Lanka

Taiwan**


India

Indonesia

Japan**

Taiwan

Thailand**

Vietnam


Survey Findings

4

All has at least one official agency as the responsible institution

1. Institutions Responsible for Insurance Statistics

institution

The following countries (3) also have:

• Brunei Economic Planning & Development Dept.

• Japan Statistics Bureau(Statistical Research & Training Institute)


• Korea Financial Supervisory Agency


Many, if not all, also note industry associations as supporting institutions commonly:

1. Institutions Responsible for Insurance Statistics

supporting institutions, commonly:

• Life Insurance Association

• Nonlife Insurance Association

• Remarks:

• Japan Statistical Research and Training Institute

K K I D l t I tit t (KIDI)


• Korea Korea Insurance Development Institute (KIDI)

• Taiwan Taiwan Insurance Institute (TII)


Government CompaniesAssociation

5

1. Institutions Responsible for Collection and Administration of Insurance Statistics

Country Institution

Bangladesh Insurance Development and Regulatory AuthorityBangladesh Insurance Development and Regulatory Authority

Bhutan Royal Monetary Authority of Bhutan

Brunei Insurance/Takaful and Capital Market Supervision, Autoriti MonetariBrunei Darussalam

Cambodia Ministry of Economy and Finance

China, P. R. China Insurance Regulatory Commission

Hong Kong Office of the Commissioner of Insurance


India Insurance Regulatory and Development Authority

Indonesia Capital Market and Financial Institution Supervisory Agency

Japan Financial Services Agency


1. Institutions Responsible for Collection and Administration of Insurance Statistics

Country Institution

Korea Financial Supervisory ServiceKorea Financial Supervisory Service

Malaysia Bank Negara Malaysia

Pakistan Securities and Exchange Commission – Insurance Division

The Philippines Insurance Commission

Singapore Monetary Authority of Singapore

Sri Lanka Insurance Board

Taiwan Financial Supervisory Commission, Executive Yuan


p y ,

Thailand Office of Insurance Commissioner

Vietnam Insurance Supervisory Authority

Insurance Regulators Globally


6

Electronic (9)

2. Primary method(s) for collection of insurance statistics (financial statements)

• The Financial Information Exchange System (Korea)

Softcopy (11)

Hardcopy (11)



* Multiple responses permitted

3. Frequency of Collection

Monthly Quarter Yearly Yearly

Full Partial Full Partial Full Partial

Monthly (full): Bhutan, India, Korea, Taiwan

Quarter yearly (full): Indonesia, India, Japan, Korea

Full Partial Full Partial Full Partial

4 6 5 5 13 1


Yearly (partial): Cambodia


7

March 31 (4)

4. Closing Date for Financial Statements

• India, Japan, Korea, Vietnam

December 31 (11)

• Bangladesh, Bhutan, Brunei, Cambodia, Indonesia, Pakistan, the Philippines, Singapore, Taiwan, Thailand


Flexible (1)

• Malaysia (Companies are free to set their FYE.)


How flexible are you to move the closing date to, for example December 31?

Question!

example, December 31?

• India

• Japan

• Korea

• Malaysia

• Vietnam



8

Has a formal procedure (11)

5. Data Validation

Conducts a random validation (2)

• India, Pakistan

Treats the submission as “final and complete” (2)

• Bangladesh, Japan

Remarks:


Remarks:

• Built-in check & manual trend analysis (Malaysia)

• Built-in check of business data only, not including financials of nonlife companies (Taiwan)


1 month (Korea, Taiwan-life, Pakistan)

6. From Receipt to Making Public, It Takes

Up to 2 months (Singapore, Thailand, Taiwan-nonlife)

3 months (Malaysia)

6 months (India, the Philippines)

10 months (Indonesia)


No reply (5)


9

Yes (11)

7. Revision Plan for Data Collection Method

• Brunei (new system in September 2011 )

• India (examines an electronic filing system)

• Indonesia (develops an electronic filing system)

• Malaysia (develops an Integrated Statistical System)

• Singapore (examines further streamline of the process)

• Thailand (plans IT improvement)


No (4)

• Cambodia, Japan, Korea, Pakistan


8. Webpage for Insurance Statistics

Not Making Public Online (5)Yes (10)

Bangladesh

Bhutan

Brunei

Japan (via LIA & GIA)

Vietnam

Cambodia

India

Indonesia

Korea

Malaysia

Pakistan


Pakistan

The Philippines

Singapore

Taiwan

Thailand


10

9. Making Public of Data/Statistics

Partial DataAll Collected Data

At the company/market level (9)

• Cambodia, India, Indonesia, Malaysia, Pakistan, the Philippines, Singapore, Taiwan, Thailand

At the company level (1)

• Vietnam


At the market level (3)

• Korea, Taiwan, ThailandPremiumLoss (Claims)

ExpensesReinsurance


9bc. Data Collected vs. Made Available

Country Has Collected Data Since Currently Makes Available Since

Cambodia* 2003 2007 [2008]

* Limited data collected** Not available online (softcopy)All publishing years to be verified

Cambodia 2003 2007 [2008]

India 2005 2005

Indonesia 1998 1998

Korea 1979 1998

Malaysia 1990 2005

Pakistan 2006 2006

The Philippines 1980 2004


pp

Singapore 1980s 1999

Taiwan 1990 (L); 1985 (N) 1990 (L); 1985 (N)

Thailand 2003 2003

Vietnam** 2002 2004


11

When available (10), it is commonly free of fee

11. Online Data Available Free of Fee?

Remarks

• May also be available in hard copy (with a fee)

• Korea (membership/registration required for online access to the KIDI-administrated statistics)



All countries (12) collect such data except:

13. Collection of Data Separately for New Business

• Cambodia, Malaysia

Remarks

• Brunei (premium data only)

• Japan (selected as stipulated in the law)

• Singapore (premium and distribution for life and life


g p (preinsurance)


12

No countries are known to use other sources directly.

14. Use of Statistical Sources

Some materials for reference only, for example:

• Sigma (4)

• ASEAN Insurance Statistics (1)



15. Strengths and Weaknesses

WeaknessesStrengths

Data quality & reliability

Small insurance market

Timeliness

Comparison between markets as well as among different types of insurers

Well-designed submission forms

System infrastructure

Centralized database management system

Continuous investigation for


ypgsystem improvement


13

Generally Accepted Accounting Principle (10)*

16. Accounting Principle

• Bhutan, Brunei, India, Indonesia, Japan, Malaysia, Pakistan, the Philippines, Taiwan, Vietnam

Statutory Accounting Principle (8)

• Bangladesh, Cambodia, Indonesia, Japan**, Korea, Malaysia, the Philippines, Thailand


Other (1)

• Singapore (Singapore Financial Reporting Standard)

* Bhutan, Brunei, and the Philippines in line with the International Accounting Standard or the IFRS.** GAAP is reflected in SAP (Japan)


Information technology and expertise

17. Difficulty in Implementing Local Accounting Standard/Principle

Availability of data to support accounting/disclosure requirements



14

Data Collection Scope:Collected vs. Making Public(Company Level Only)

Life Nonlife Composite

Written Premium Amount (15)

12. Data – Premium

(Number of Responses) (Published/Collected)

Written Premium Amount (15)

Direct Business 8/14 8/15 2/5

Reinsurance Accepted 4/12 5/14 2/5

Reinsurance Ceded 5/13 6/14 2/5

Number of Policies (14)




p 3/6 2/6 2/4



15


Loss/Claims Amount (13)

12. Data – Loss/Claims


Loss/Claims Amount (13)




Number of Claims (12)




p 1/6 2/7 2/4




Operating Expenses (13)

12. Data – Operating Expense


Operating Expenses (13)






16


Cash & Equivalent (15) 8/14 8/15 3/5

12. Data – Balance Sheet (Assets)


Cash & Equivalent (15) 8/14 8/15 3/5

Bond (13) 7/12 6/12 2/4

Public (12) 5/11 5/12 2/4

Private (11) 5/11 5/11 2/4

Mortgage Loans (12) 5/11 5/12 1/3

Other Loans (15) 6/14 6/15 2/5

Stock (13) 7/13 7/13 2/5


Stock (13) 7/13 7/13 2/5

Public (9) 4/9 4/9 2/3

Real Estate (15) 8/13 6/14 3/5

Other Investments (15) 8/13 8/14 3/5



Unearned Premium Reserve (14) 7/13 8/14 3/5

12. Data – Balance Sheet (Liabilities)


Unearned Premium Reserve (14) 7/13 8/14 3/5

Loss Reserve (Tech Provision) (14) 8/13 8/14 3/4

Reinsurance Payables (13) 5/13 5/13 2/5

Borrowed Money (13) 3/12 3/12 1/4

Special Reserves (10) 4/10 4/10 1/3



17


Initial Capital (15) 7/14 7/15 3/5

12. Data – Balance Sheet (Capital)


Initial Capital (15) 7/14 7/15 3/5

Additional Contributions (11) 5/11 5/11 2/4

Retained Earnings (15) 6/14 6/15 3/5

Earmarked Surplus (Any) (12) 5/12 5/11 2/3

Solvency Target Ratio* (7) 2/7 2/7 0/2

* Equivalent ratios as well




Earned Premium (14) 6/13 7/14 3/5

12. Data – Income Statement


Earned Premium (14) 6/13 7/14 3/5

Losses Incurred (15) 8/14 8/15 3/5

Loss Adjustment Exp Incurred (10) 4/9 4/10 3/4

Underwriting Exp Incurred (10) 4/9 4/10 3/4

Net Investment Income Earned (13) 7/13 7/13 3/4

Net Realized Capital Gain (13) 7/13 7/14 3/4

Other Income (13) 7/13 7/14 3/4


Other Income (13) 7/13 7/14 3/4

Interest Paid/Incurred (11) 5/11 5/11 2/4

Taxes Paid (14) 6/14 6/14 3/6


18

Cambodia

Insurance DivisionFinancial Industry DepartmentMinistry of Economy and Finance

20

Japan

Insurance Business DivisionSupervisory BureauFinancial Services Agency (金融庁)

Ministry of Finance (Minister for Financial Services, 財務大臣)

22

New business premiums by lineSimplified income statementSimplified balance sheet

New business premiums by lineIncome statementBalance sheet

Full statistics

23

Identical data in English pages

Thailand

Office of Insurance Commission

24

Insurance Statistics

Monthly Data (Life)

Monthly Data (Nonlife)

25

Quarter yearly & End of year

Year-to-year comparison

Annual data only

26

From 1997

Data Scope Comparison:

Government vs Other SourcesGovernment vs. Other Sources

Thailand Nonlife Insurance

27

Public source Office of Insurance Commission

Data Availability Comparison

Private sources ISIS Database andCompany’s websites:1. Bangkok Insurance (public)*2. Viriyah Insurance (private)*

Findings (selected)


• Much longer period of data in the public source than in private sources

• Much fuller information in private sources than in the public source

* Largest in terms of gross premiums written in 2010 and 2009, respectively.


Bangkok Insurance Company(ISIS Database)

28

*

* The database shows results from 2004 through 2010.

29

Remarks

Coordination of data/statistics collection processes

• Account closing date• Account closing date• Codification exercise in line with international development –

Financial statement entries• IT in selected countries• Efficiency in data verification in selected countries

Systemic approach for data dissemination

• In the public domain


p• At the regulated company’s domain• To private statistical agencies

No harm from publishing all collected data


30

We Welcome Your Comments

Thank You!

OECD Asia Regional Expert Seminar · OECD Asia Regional Expert Seminar: Enhancing Transparency and...

Documents

Transcript of OECD Asia Regional Expert Seminar · OECD Asia Regional Expert Seminar: Enhancing Transparency and...