Supervisory Practice in Insurance Market Republic of Srpska

Transcription

1 Challenges and Practice in Supervision of Insurance Companies in Southeast Europe Supervisory Practice in Insurance Market Republic of Srpska Insurance Agency of Republic of Srpska Božana Šljivar, Director 1

2 Contents Insurance market statistics Republic of Srpska (RS) Regulatory and supervisory activities Insurance Core Principles (ICP) Self-assessment in 2014 Development trends 2

3 RS insurance market statistics No. DESCRIPTION Premium per capita, in 48,16 50,85 54,77 57,03 61,36 2. Premium / GDP % 1,70 1,64 1,78 1,8 2, Life insurance / total insurance premium % MTPL / total insurance premium % 9,04 11,10 11,82 14,61 15,79 65,32 63,48 60,73 60,64 59,58 5. Claims ratio 38,40 38,10 36,6 38,28 78,4 6. Combined ratio 89,30 87,70 81,8 80,38 120,5 7. ROA % 5,29 4,37 6,46 4,18-1,10 8. ROE % 13,27 10,93 16,52 10,57-3,50 In certain types of insurance, combined ratio above 100 Inadequate cost management and allocation by types of insurance Absence of significant changes in the structure of the premium 1-4 Data relating to the premium at the insurance market in RS, which includes branches of insurance companies from Federation of BiH 5-8 Data relating to the financial performance of insurance companies headquartered in the RS Claims ratio and combined ratio in 2010, 2011 and 2012 refer to all types of insurance, and in 2013 and 2014 refer only for nonlife insurance 3

4 RS insurance market statistics КМ , , , , ,0,0 TECHNICAL PROVISIONS - TOTAL SHARE CAPITAL CALCULATED PREMIUM Growth rate of premium Growth rate of technical reserves Growth rate of capital 32,2% 11,2% 12,5% 11,1% 7,1% 2,2% 2,2% 0,4% 6,4% 10,3% 7.1% 5,0% 8.8% 14,0% -6,6% -5,5% 4,5% 5,4% RS insurance market in 2014 realized growth in: -total insurance premium 11,1% - life insurance 16,3% - non-life insurance 10, 6% Faster growth of calculated technical provisions than total premium Capital adequacy is improved Surplus of available capital over minimum capital requirement Lack of appropriate financial instruments for coverage technical provisions (underdeveloped securities market) 4

5 Review of regulatory and supervisory activities Focus of supervisory activities in 2015 Investments, risk management, internal controls, corporate governance Market conduct Implementation of MTPL tariffs Standardization of supervisory procedures and practices Focus of regulatory activities Drafting of a New Law on MTPL Rulebook on Risk Management in Insurance Companies Rulebook on Consumers Protection and Ombudsman in Insurance Guidelines on Complaints Handling by Insurance Undertakings (EIOPA) Strategic activities MTPL insurance market - reform and liberalization of MTPL tariffs Actuarial Risk Reserving Methodology and Actuarial Risk Based Pricing Methodology 5

6 ICP Self-assessment in 2014 Significant improvement compared to ICP principles: 11 observed (powers and responsibilities of supervisor, licensing, information exchange and confidentiality requirements, supervisory review and reporting, intermediaries) 6 large observed (risk management, preventive and corrective measures) 5 partially observed (supervisory cooperation and coordination, conduct of business...) 4 non observed (countering fraud in insurance, group wide supervision, macroprudential supervision, cross-border cooperation and coordination of crisis management) 6

7 Instead of a Conclusion - Development Trends Prudential supervision should be based on risk and be prospective Solvency frame is not risk sensitive - update solvency regime by a gradual incorporation of risk based supervision Introduce the early warning system and a framework of stress tests Introduce basic group supervision Consumer protection Implement the detailed mechanisms for consumer protection Increase the Ombudsman resources Comprehensive strategy and financial literacy programs increasing efforts to educate the public on insurance matters Introduce a macroprudential supervision 7

8 Thank you for your attention! 8