Insights from NZ solvency returns for 2015 financial year NZSA - - PowerPoint PPT Presentation

NZSA Conference November 2016 Robert Cole Adrian Allott

Insights from NZ solvency returns for 2015 financial year

Insights from NZ solvency returns for 2015 financial year

• Introduction
• New Zealand solvency
• requirements
• analysis
• feedback on common issues
• strength?
• Home jurisdiction solvency
• Conclusions

Introduction

• No comment on RBNZ’s policy or

supervision responses

• No discussion of individual insurers
• Information as reported (despite some

issues)

• Mix of year end dates during 2015
• Lots more detail in the paper – please

read it!

Introduction

New Zealand solvency requirements

New Zealand solvency analysis (solvency result)

as reported adjusted for licence condition All 2,397.0 1,812.0 General 1,272.3 702.3 Life 684.2 669.2 Health 440.5 440.5 Solvency Margin ($ million) Main type

• f

insurance as reported adjusted for licence condition 177% 149% 214% 142% 136% 135% 490% 490% Solvency Ratio (%)

New Zealand solvency analysis (effective requirement)

New Zealand solvency analysis (general insurers)

New Zealand solvency analysis (life insurers)

New Zealand solvency analysis (health insurers)

New Zealand solvency analysis (solvency ratio adjusted)

New Zealand solvency analysis (general insurers 2015)

New Zealand solvency analysis (life insurers 2015)

New Zealand solvency analysis (health insurers 2015)

New Zealand solvency analysis (capital target %)

New Zealand solvency analysis (actual vs target)

New Zealand solvency feedback on common issues

• Compliance with s121 requirements
• late, pdf, no sign-off, wrong version, email
• Completing incorrectly
• e.g. large insurer selecting small insurer

exemption, lack of comments, units, figures in wrong boxes

• Applying solvency standards
• e.g. non-life cat. risk alternative method
• Solvency standard interpretation
• e.g. discretions, premium liabilities

New Zealand solvency strength?

Solvency Margin Adjusted as % of Gross Annual Premium Solvency Margin Adjusted as % of Net Assets All 23% 26% General 14% 20% Life 34% 23% Health 40% 73% Solvency Margin Adjusted Main type

• f

insurance

Home jurisdiction solvency

• Hard to directly compare (except

Australia)

• Australian solvency ratios slightly higher

than NZ?

• Some common issues
• compliance, currency, units, multiple

solvency requirements

Home jurisdiction solvency Australia

Conclusions

• Considerations for insurers & actuaries
• Considerations for RBNZ
• policy
• supervision
• thematic review
• publication
• Invite insurers to follow up with RBNZ
• Questions?
• Thank you