Insights from NZ solvency returns for 2015 financial year NZSA Conference November 2016 Robert Cole Adrian Allott
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) Main type Solvency Margin ($ million) Solvency Ratio (%) of as reported adjusted for as reported adjusted for insurance licence licence condition condition 177% 149% All 2,397.0 1,812.0 214% 142% General 1,272.3 702.3 136% 135% Life 684.2 669.2 490% 490% Health 440.5 440.5
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? Main type Solvency Margin Adjusted of Solvency Margin Solvency Margin insurance Adjusted as % of Gross Adjusted as % of Net Annual Premium Assets All 23% 26% General 14% 20% Life 34% 23% Health 40% 73%
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
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