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Reserve Bank of Fiji Insurance Annual Report 2008

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Our ObjectivesTo administer the Insurance Act (1998) efficiently and effectively;

To ensure that the insurance legislation and supervision is proactive, relevant and effective;

To promote professional standards of management and business practice in the insurance industry;

To provide information, advice and dialogue relating to insurance and insurance supervision;

To support orderly growth of the insurance industry and its services; and

To maintain a professional supervisory body that delivers a high standard of service.

(Note: All values in this Report are in Fiji $ unless otherwise specified)


2

Governor

30 June 2009

Commodore Josaia Voreqe BainimaramaMinister for FinanceMinistry of FinanceRo Lalabalavu HouseVictoria ParadeSUVA

Dear Minister

Insurance Annual Report 2008

Pursuant to the requirements of Section 165 of the Insurance Act (1998), I am pleased to submit the Insurance Annual Report on the administration of the Insurance Act (1998) and other

matters, during the year ended 31 December 2008.

Yours sincerely

…………………........……........Sada S Reddy

Governor

Attch.

Private Mail Bag, Suva, Fiji Tel: (679) 331 3611 Fax: (679) 330 1688 Email: [email protected] Website: www.rbf.gov.fj

RESERVE BANK OF FIJI

Letter to the Minister


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Governor’s Foreword

Though 2006 and 2007 were relatively “disaster-free” years for the insurance industry worldwide, mother nature struck in 2008. A large number of tropi-cal cyclones and a major earthquake in China made 2008 one of the most dev-astating years on record.

In May, the severe floods in Myan-mar caused by tropical cyclone Nargis claimed close to 140,000 lives. This was followed by the earthquake in Sichuan, China, measuring 7.9 on the Richter scale, which killed over 87,000 people and left more than 10 million home-less.

The US Gulf took a pounding in August and September from Hurricanes Gustav and the severest was Ike, reminding us of the significant impacts of such ca-tastrophes on our daily lives and busi-nesses.

Globallly there were fatalities of more than 220,000 as a result of natural ca-tastrophes in 2008. Overall losses come to around US$200 billion and insured losses rose to US$45 billion, exceeding 2007’s figure by 50 percent. Swiss Re has estimated that 2008 was the second costliest year in insurance history, after 2005, with catastrophe losses alone ex-ceeding US$50 billion, and the fourth worst since 1970 in terms of human ca-sualties.

Not only were catastrophe losses severe, the investment losses triggered by the subprime mortgage crisis further re-sulted in the deterioration of capital of insurers and reinsurers in 2008. An AIG bankruptcy would have been the worst financial collapse in history if it had been allowed.

Despite a very challenging year on the in-ternational scene, the Fiji insurance indus-try continued to be sound and well capita-lised. The Fiji economy had its own chal-lenges to deal with in 2008 and the local insurance industry proved to be financially strong in the face of these domestic chal-lenges. The industry recorded a solvency surplus of $78.4 million, though this is a significant reduction from 2007. The li-abilities of the industry remain at compa-rable levels as they were in 2007, however the industry assets recorded a significant decline due to the life insurance sector’s investment portfolio experiencing a down-ward revaluation.

The combined growth in gross premium in 2008 of 4.6 percent, for both the life and general insurance sectors in Fiji proved the persistency of local insurers to provide in-surance coverage at affordable cost. Policy payments for life insurance declined due to the decrease in the number of termi-nated policies. This was also the case for general insurers with the decline in net claims paid.

Overall operating results for the Fiji insur-ance industry though still positive, noted a significant drop in 2008. The results have been attributed to reduced invest-ment returns and high asset depreciation recorded by the life insurance sector, and an increase in claims incurred and under-writing expenses by the general insurance sector.

The Reserve Bank of Fiji’s supervision ef-fort was boosted in 2008 with the re-acti-vating of the Insurance Taskforce. Consul-tations with the Taskforce on relevant is-sues to the industry have been successful and productive at both ends. Prudential consultations with the individual licensed

insurers also continue, both at the technical level of supervision, and at the Governor’s Annual Meetings. The Reserve Bank continues to develop and refine its risk-based supervision frame-work, and will maintain the effort to engage the industry in consultation on new and revised prudential policies and guidelines.

The outlook for the insurance industry suggests yet another challenging year. Premium rates are expected to increase as the pressure of significant losses in the international markets flow through to our local market. The impact of the international financial crisis continues to be felt in markets around the world and though Fiji has thus far, been insu-lated, the economic conditions in the domestic market will continue to chal-lenge underwriters and brokers to make appropriate underwriting decisions.

The Reserve Bank is grateful for the continued cooperation of all stakehold-ers in the insurance industry in its su-pervisory work, and reiterates that the active contributions of all stakehold-ers will continue to make the industry strong and sound.

Sada S. ReddyGOVERNOR


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International Economic Developments

According to the International Monetary Fund (IMF) world growth fell to 3.2 per-cent in 2008 compared to a 5.2 percent growth in 2007. The slowdown was fu-elled by the global financial crisis which saw major economies around the globe falling into recession. (refer to Graph 01)

The global financial crisis began in mid-2007 in the United States of America (US) and deepened through the first half of 2008 before worsening in September. The failure of important financial institutions affected interbank and credit markets around the globe and triggered a global liquidity shortage.

While the crisis emanated in the devel-oped countries it quickly spread around the globe due to financial globalisation and trade links. The World Trade Organi-sation estimates that global trade growth in volume terms slowed to 2.0 percent in 2008 compared to a 6.0 percent growth in 2007.

A wide range of policy actions have been put in place by Governments and central banks around the world to help ease the impact of the global financial meltdown. Governments introduced various measures to support credit flows such as recapital-ising banks and lifting deposit insurance

limits while central banks started easing monetary policy over the year by lowering their benchmark interest rates in an effort to ease the liquidity crisis and provide a boost to consumption. Governments, par-ticularly in advanced economies have also provided a major boost through various fiscal policy measures.

The US economy is estimated to have grown by 1.1 percent in 2008, compared to a 2.0 percent growth in 2007. The slowdown in the economy was due to the global financial crisis which froze credit markets and lowered confidence and ex-ports. The Japanese economy is estimat-ed to have contracted by 0.6 percent in 2008 after the global financial crisis re-duced demand for its exports. The Euro zone grew moderately by 0.9 percent in 2008 compared to a 2.7 percent growth in 2007. The slowdown was led by the credit crunch and reduced industrial pro-duction. The New Zealand economy grew by a marginal 0.3 percent in 2008 while the Australian economy is estimated to have grown by 2.1 percent compared to 4.0 percent in 2007. This is due to the fall in consumption and business investment.

Economic Developmentsin Fiji

The Fiji economy is estimated to have grown by a marginal 0.2 percent in 2008, following a significant contraction of

Economic Overview

GRAPH 02 Fiji’s GDP Growth

GRAPH 01 World GDP Growth Rates

Sour ce: IMF World Economic Outlook (April 2009).

%

0

1

2

3

4

5

6

20

00

2001

20

02

20

03

20

04

20

05

20

06

20

07

20

08

Yea

rs

Traders work on the floor of the New York Stock Exchange after the close September 29, 2008 in New York City. In afternoon trading The Dow Jones industrial average plunged over 700 points.

Source: Fiji Islands Bureau of Statistics and Macroeconomic Committee.

%

-1.6

1.9

3.2

0.9

5.5

0.6

3.4

-6.6-6

-4

-2

0

2

4

6

2000

2002

2004

2006

2008

8

-8

2001

2003

2005

2007

0.2


5

6.6 percent in 2007. (refer to Graph 02) Growth was supported by the wholesale & retail trade and hotels & restaurants; transport, storage & communication sec-tors. This reflected the 8.3 percent an-nual increase in tourism arrivals of around 584,796 in 2008.

The mining & quarrying sector was also estimated to have contributed to 2008 growth after an absence of mining activ-ity in 2007. Gold production was around 22,000 ounces of gold in 2008. This level is still lower than that recorded by the in-dustry prior to 2007.

Other sectors that had also supported eco-nomic growth in 2008 were the finance, insurance, real estate & business services and building & construction.

Consumption activity was weak in 2008. In 2008, net Value Added Tax (VAT) collec-tions, a partial indicator of consumption activity fell by 2.9 percent when compared with 2007.

Investment in 2007 was estimated at 15.0 percent of GDP. For 2008, a similar level is also estimated. Looking at the partial indicators in 2008, on an annual basis imports of investment goods grew by 27.2 percent and lending for investment purposes grew by 14.4 percent. The total

value of work put-in-place by the building and construction sector totalled $254.0 million in 2008, an annual increase of 10.3 percent.

The underlying fiscal deficit for 2007 stood at $96.2 million, or 1.8 percent of GDP, lower than the 3.4 percent of GDP registered for 2006. For 2008, Govern-ment’s underlying deficit is estimated at $92.0 million, or 1.5 percent of GDP, lower than the 2.0 percent of GDP announced in the 2008 National Budget.

This is attributed to the Government’s con-solidated effort in restraining spending. For 2009, the Government is targeting a net deficit of $192.8 million equivalent to 3.0 percent of GDP. The proposed deficit is expected to provide sufficient resources to boost investment levels, drive economic recovery and also safeguard against global economic shocks.

Broad money supply (M2) fell by 6.9 per-cent in December compared to a growth of 10.4 percent a year earlier. The turn-around in M2 was underpinned by a sub-stantial contraction in demand deposits. In 2008, demand deposits contracted by 25.6 percent.

Commercial banks’ credit growth picked up gradually in 2008. In December, com-

mercial banks’ credit expanded by 11.6 percent, compared to 2.1 percent in 2007. The outturn was attributed to higher lending to the wholesale, retail, hotels & restaurants; transport, communication & storage; real estate and the private indi-viduals sectors. Similarly, domestic credit rose by 4.8 percent in 2008, up from 3.2 percent a year ago. This was underpinned by a substantial expansion in private sec-tor credit. In December 2008, private sec-tor credit grew by 11.2 percent compared to 2.8 percent registered in December 2007.

Interest rates generally fell in 2008 com-pared to the previous year. The overhang of domestic liquidity in 2008 eased upward pressure on interest rates. In December 2008, the commercial banks’ weighted av-erage outstanding and new lending rates fell by 74 and 124 basis points to 7.72 and 8.45 percent respectively. Similarly, the existing time deposit rate fell by 145 basis points to 3.00 percent while the new time deposit rate rose by 75 basis points to 4.53 percent. However, the sav-ings deposit rate remained unchanged at 0.64 percent in 2008 when compared with 2007.

In 2008, the trade deficit (excluding air-craft) widened by 24.0 percent (to $2.1 billion) compared to 2007, when it nar-


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rowed by 12.1 percent. The larger deficit is driven by higher imports which more-than-offset increases in export earnings.

Imports (excluding aircraft) grew by 23.0 percent in 2008, while exports (excluding aircraft) rose by 21.6 percent. Domestic exports rose by 18.6 percent compared to a 0.7 percent decline in 2007.

Conditions in the labour market continued to weaken in 2008. This is substantiated by the falling number of taxpayer regis-trations which had been declining even before the income tax threshold was in-creased to $15,000 in June. In 2008, a total of around 7,500 new taxpayers were registered, an annual decline of around 15.5 percent. Sectors which recorded lower registrations include the mining & quarrying; electricity & water; agriculture, forestry & fishing; transport, storage & communications and the community, so-cial & personal services.

On the other hand, the Job Advertise-ments Survey, another partial indicator of employment, recorded an annual growth of 11.0 percent. However, this was likely to fill existing vacant jobs as workers are switching jobs, emigrating and also due to natural attrition and not for newly cre-ated posts.

Consumer prices were hovering between 6.0- 7.0 percent through the third quar-ter of 2008. In September 2008, inflation reached a 20-year high peak of 9.8 per-cent. However, given the plummeting in-ternational commodity prices since August, domestic prices eased ending the year at a growth of 6.6 percent, lower than the projection of 7.5 percent. While the major contributors to inflation (imported food, transport and heating & lighting charges) noted lower prices, locally produced veg-etables & rootcrops were also relatively cheaper than the corresponding period in 2007. The trimmed mean, an underlying measure of inflation was 2.8 percent.

Monetary policy formulation continued to be challenging in 2008. This was mainly driven by the widening trade deficit that consequently exerted further pressure on the balance of payments and inflation which rose significantly, owing to higher oil and food prices. In addition, the global financial crisis deteriorated further, im-pacting the major economies and forcing a number of downgrades to global growth. The concerns of a further deterioration in the balance of payments and rising infla-tion were central considerations in mon-etary policy decisions throughout the year.The credit ceiling, introduced in December 2006, remained in place in 2008 to contain

credit growth at comfortable levels without

curtailing investment. Special approvals

continued to be granted for investment-

related projects.

As foreign reserves levels improved, certain ex-

change control policies were relaxed in 2008.

To encourage private sector investment, the

Bank announced the relaxation of limits on

local borrowing by non-resident controlled

companies and individuals. Furthermore, to

mitigate inflationary pressures, importers of

some essential food items were allowed to

enter into forward foreign exchange contracts

to hedge against their risks. Moreover, con-

sistent with the Government’s policies to rec-

ognise former Fiji residents with permanent

resident visas under the exchange control

guidelines, the Bank amended the definition

of former Fiji residents. Consequently, former

Fiji residents received the right to acquire

and transfer shares and source funds locally

without prior approval of the Reserve Bank.

In addition to this, the approval limits del-

egated to foreign exchange dealers for import

prepayments was raised to $1.0 million. The

Bank also increased the delegated limits for

certain categories of transactions that previ-

ously required Reserve Bank approval. One

of the main relaxation measures was the in-

crease in travel allowances and the increase in credit and debit cards limits.


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The international insurance market remained resilient in 2008. Financial services and insurance companies will face enormous challenges in 2009 as they manage through the economic downturn and respond to shifts in market and consumer and regulator expectations.

The global reinsurance and insurance in-dustry remained resilient in 2008, despite a multitude of challenges posed by the deepening global economic crisis and sig-nificant property catastrophe losses.

The economic crisis resulting from the US subprime mortgage market collapse, trig-gered the investment losses of insurers and reinsurers in 2008. These investment losses were well above the underwriting losses which were driven by 5 years of price-cutting, higher than average catas-trophe losses, and increasing reserves for directors and officers liability (D&O) and errors and omissions liability claims1.

The investment losses coupled with catas-trophe losses, also resulted in deteriora-tion of the reinsurers and insurers capi-tal requirements. The decline in capital has been significantly worse for insurers than reinsurers. Global insurers capital declined substantially ranging from 25 to 30 percent whilst reinsurers capital ap-proximately declined by 10 percent. The impact on capital from catastrophe losses such as hurricanes Ike and Gustav was small compared to realised and unrealised investment losses2.

In the US property/casualty market, net written premium income declined by 1.4 percent compared to the decline of 0.6 percent in 2007. The reduction in premi-um growth in two years has been largely due to a weak US economy which had a large impact on commercial insurers due to rising unemployment. The income after tax for the US property/casualty industry dropped as catastrophe losses, the reces-sion and the crisis in the financial system affected underwriting and investment re-sults. Profits fell to $2.4 billion compared to $62.5 billion in 2007, a $60.1 billion decrease3.

The life insurance industry in the United Kingdom also experienced a challenging year as a result of declining equity markets combined with the write downs on bonds. The non-life industry also remained under pressure in 2008, despite some positive rates movements in certain sectors. Insur-ers in UK were not able to benefit from investment earnings due to the effect of the collapse of Lehman Brothers and sub prime asset write downs.

Asia’s insurance companies avoided ma-jor liquidity problems stemming from the global financial crisis, however, invest-

ment income decreased as a result of a fall in interest rates. The non life insurance markets of the Asia Pacific region were vi-brant and highly competitive in lines such as motor, fire and marine4.

Movements in Premium Rates

In January 2008, the average premium rate for the US property/casualty market was 15 percent down compared with a 16 percent decline in December 2007. As the year progressed, the average rate of decrease lessened and stood at 9 percent as at December 2008 indicating that the property/casualty market began to stabi-lise at year end. (refer to Graph 03)

The commercial property insurance rates generally flattened in 2008, a shift away from the soft market conditions of the prior two years. The commercial property rates were down by 10 percent in the fourth quarter of 2008 compared to a 16 percent decline in the corresponding pe-riod.

Employment Practices Liability Insur-ance (EPLI) rates continued to soften as the year progressed but at a slower pace. The increase in corporate layoffs result-

International Insurance Market

1 www.marketscout.com2 Aon Benfield – Reinsurance Market outlook3 Insurance Information Institute – 2008 Year End Results4 A. M Best research – Asia Pacific Life & Non-Life Review & Preview


8

ing from the weak economy is expected to raise the likelihood of EPLI claims thus adversely affect rates.

D&O insurance generally remained com-petitive in 2008. The continuing lawsuits stemming from the sub prime mortgage crisis has generated claims against direc-tors’ and officers’ insurance policies. As a result, insurers’ losses are expected to increase on top of several years of slow growth in premiums and downward pres-sure on rates. This could in turn lead to an increase in rates as insurers face increased payouts. In line with the US property/casualty mar-ket, the London and Lloyd’s international property market showed signs of hardening in the fourth quarter of 2008. In response to higher claims and the global economic environment, a number of insurers have raised their premiums to pass escalating costs and maintain profitability. General and product liability classes of insurance remained stable in 2008 with the excep-tion of energy.

The UK market, in 2008 has seen an in-crease in the volume of small and medium sized Australian and New Zealand business on offer as rates in the domestic market of these countries started to edge up5.

With regard to the Australian market, pre-mium rates in commercial classes contin-ued to fall with long-tail rates down by an average of 7 percent compared to a 10 percent reduction in 2007. Short-tail rates however, increased by 1 percent compared to a 7 percent fall in 2007. Premium rates in the personal lines increased in 2008 and are expected to continue to rise. Rates in personal lines increased by 3 percent on average in 2008, compared to constant rates during 20076.

Reinsurance7

Global reinsurers remained resilient amid the financial crisis generally due to two excellent operating years preceding 2008.

Significant increases in capital after Hur-ricane Katrina in 2006 and improved loss reserves have enabled the reinsurance in-dustry to withstand the large investment and catastrophe losses in 2008. Invest-ment returns for most of the reinsurers

were negative due to the effects of the credit crisis despite the majority of assets being invested in high quality, fixed-in-come securities.

Reinsurers’ capital fell by around 14 per-cent in the year 2008 compared to in-creases noted in the year 2006 and 2007. Approximately 90 percent of the decrease in reinsurer capital is due to the credit and liquidity crisis with the balance flow-ing from catastrophe losses. The impact of the credit crisis combined with catastro-phe loss has also contributed to firming of the reinsurance market. However this firm-ing of the reinsurance market was mainly caused by asset related issues rather than significant ceded losses.

Reinsurers in 2008 sustained more than $10 billion in ceded catastrophe losses and due to the industry profits in 2006 and 2007, reinsurers have maintained the capital necessary to underwrite risk.

Total Losses8

The year 2008 was one of the costliest ca-tastrophe years recording economic losses of US$269 billion, being the highest total loss since 2005. These high losses re-sulted from 137 natural catastrophes and 174 man-made disasters which claimed the lives of 240,460 people worldwide. Of the total economic losses, approximately 20 percent was covered by insurance re-sulting in total insured losses of US$52.5 billion.

Although the number of natural catastro-phes was lower than the man-made di-sasters, natural catastrophe losses made up approximately 85.1 percent (US$44.7 billion) of the total insured losses with man-made disasters accounting for the remainder of US$7.8 billion.

Storms proved to be the costliest natural catastrophe as it alone triggered losses of US$39.3 billion. The US property market was worst hit in regard to insured prop-erty losses as hurricanes Gustav and Ike resulted in damages of US$4 billion and US$20 billion respectively. Hurricane Ike is ranked as the third most expensive hur-ricane of the US history with hurricane Andrew (US$22.9 billion) ranked second and hurricane Katrina (US$43.6 billion) ranked first.

Graph 03 Average Property/Casualty Rates Increase (% change from

previous year)

Graph 04 Insured Catastrophe Losses

Source: Swiss Re Sigma.

Earthquake/tsunam Weather related Man-made disasters

1970

1975

1980

1985

1990

1995

2000

2005

140

120

110

50

40

30

20

10

0

Yea

rs

US$ bn

5 Aon – Commercial Insurance Broker – December Quarter 20086 Deloitte – J P Morgan Media Release7 Aon Benfield and A. M Best Special Report8 Sigma Natural catastrophes and man-made disasters in 2008

%

Feb Apr Jun Aug Oct

5

0

-5

-10

-15

-20

Source: Marketscouts.

2006 2007� 2008

Dec

List of Major Losses in 2008According to Loss Categories

446212

277

Other 3

4517416

156

44311

3,184141,91387,829

321,750

10124

496454

1,598166686204

2,014240,460

2,05939,288

422

5001,575

76385

7585,255

548-

476-

77552,504

Source:Swiss Re Sigma No.2/2009


9


Graph 06 Number of Events 1970 - 2008

The European market, on the other hand, recorded slightly lower losses from the pre-vious years due to lower storm and flood damages. Nonetheless, the winter storm Emma which struck central Europe and storm depression Hilal caused losses aggregating US$2.3 billion. Other natural hazards which crossed the billion dollar mark were ice and snow storms which struck China in early 2008 leading to losses of US$1.3 billion. Insured losses from man-made disasters were fuelled primarily by large scale indus-trial fires, explosions and losses in the ener-gy sectors generating losses of US$4 billion. A fire at Universal Studios in Los Angeles led to record property damages of over US$500 million and was named the single costliest man-made event of 2008.

American International Group (AIG)9

Many companies have been affected by the recent economic turmoil. The downturn has had a profound effect on American Insur-ance Corporation (AIG). AIG is the largest global insurer which nearly went bankrupt as a result of its exposure to credit default swaps written for asset-backed securities and collateralised debt obligations.

On 16 September 2008, AIG’s share price fell over 95 percent. The US Government then loaned AIG $85 billion to facilitate an or-derly unwinding of its positions in exchange for a 79.9 percent equity stake. In October 2008, AIG borrowed an additional $38 bil-lion through a second secured asset credit facility created by the Federal Reserve Bank of New York. Since 16 September 2008, the US Government has bailed out AIG three times with the total sum of US$180 billion to keep the insurer in business.

The failure of AIG would have posed a “sys-temic risk” to the global financial system, as AIG companies are present in more than 140 countries and jurisdictions. Systemic risk afflicts all life insurance and investment firms around the world.

Outlook

Financial services and insurance companies face enormous challenges in 2009 as they manage through the economic downturn and

respond to shifts in market and consumer and regulator expectations.

European InsuranceMarket Outlook10

• Lifeinsurersareexpectingtohavelowerearnings in 2009 as a result of deferred policy acquisition write-offs and/or re-serve increases related to product guaran-tees;

• Forgeneralinsurers,commercialinsurancewill be impacted by depressed property prices as a result of recession and slowing of European economies;

• Profitisexpectedtoreduceduetofurtherwrite downs resulting in decrease in in-vestment income;

• Health insurance presents acceleratedgrowth opportunities in Europe for both life and non life insurance.

US Insurance MarketOutlook11

• Lifeinsurersincreasedlossesintheirin-vestment portfolio and lower income from the variable annuity business will contin-ue to affect earnings.

• Manylifeinsurershavesubstantialexpo-sure to commercial-real-estate-backed se-curities, which will result in further losses during 2009.

• Significant catastrophe losses of 2008,coupled with decline in the investment income and sizeable investment losses re-sulting from the ongoing turmoil in credit and equity markets will continue to affect earnings in 2009.

• Theonlypositivetrendisslightimprove-ment in the insurance pricing after contin-ued deterioration during the last couple of years.

Reinsurance Market Outlook12

• Globalreinsurancepricesareexpectedtobe firm for the year 2009 as a result of US hurricanes and earthquake exposures driving the capital requirements for most reinsurers; and

• Impactof credit crisiswouldalsoaffect investment portfolios of reinsurers thus having a negative impact on earnings.

Graph 07 Number of Victims 1970 - 2008

9 IFSL Research – Insurance Update 2008

10 2009 Insurance Outlook - Europe11 US Insurance Industry Outlook12 Reinsurance Market Outlook – Aon Benfield 2009

Man-made disasters

Natural catastrophes

1970

1975

1980

1985

1990

1995

2000

2005

300

250

200

150

100

50

0

Yea

rs

2008

Graph 05 Global Premium Growth 1985-2007

25

20

15

10

5

0

-5

1985

1990

1995

2000

2005

Yea

rs

2007

TotalLife General


%Real growth rates


1,000,000

100,000

10,000

1,000

Man-made disasters

Natural catastrophes

1970

1975

1980

1985

1990

1995

2000

2005

2008

Yea

rs


10

The Fiji Insurance Industry remained stable in 2008 amid the deepening of the global financial crisis. The economic slow down on the domestic front had a more visible impact on the industry as lapses and forfeitures continued to remain significant together with a noted reduction in the number of general insurance policies issued. Domestic insurers however, continued to be susceptible as Fiji is yet to face the full impact of the international financial crisis.

Licensed insurers in Fiji continued to re-main sound amid the deepening of the international financial crisis in 2008. Overall, the industry is strong and well capitalised.

The finance and insurance sectors were noted to have contributed to the marginal growth of the Fiji economy in 2008. In-surance companies’ investments, while not too diversified, contributed to the stable financial condition of the industry in 2008.

All insurance companies comfortably met the statutory solvency requirement in 2008. However, the increase in prevail-ing interest rates towards the end of 2008 significantly impacted the asset books of insurers that have invested heavily in government securities. The resulting con-solidated solvency level recorded by the life sector showed the impact of this.

Going forward with the continued outlook for a weak domestic economy in 2009, li-censed insurers will continue to be pru-

dent in their underwriting and monitor cautiously the impact of global events on reinsurance costs worldwide and in their own arrangements. With no domestic insurer involved directly in credit guar-antees or having parents making invest-ments in failed international institutions, the insurance industry in Fiji is expected to have a stable if somewhat subdued year in 2009.

Overview of IndustryPerformance

Both the life and general sectors recorded a growth in gross premium, despite the weakened economy in 2008. Total com-bined gross premium income for the life and general insurance sectors recorded growth of 4.6 percent to reach $201.6 million in 2008. This compared to a marginal decline of 1.2 percent noted in 2007. The general insurance sector domi-nated the industry trend in terms of gross premium growth, registering a growth of 4.6 percent in 2008.

Graph 08 Insurance Industry Premium and Claims

Domestic Insurance Market

120

100

80

60

40

20

0

2008

2003

2004

2005

2006

2007

Source: Insurance Companies.

General Sector Gross Premium

Life Sector Insurane Premium

General Sector Net Claims Paid

Life Sector Policy Payments

$m

Yea

rs


11

The increase in gross premium income has been attributed to a combination of increased premium rates as well as an improvement in new business in some classes.

As a percentage of GDP the life insur-ance sector’s gross premium income was equivalent to 1.4 percent and the general insurance sector at 2.0 percent. Similar levels were recorded in 2007.

Net policy payments for the life insur-ance industry reduced in 2008 to $55.6 million as a result of the decline in the number of terminated policies. For the general insurance sector, net claims paid declined to $39.8 million due to the absence of major domestic catastrophic events.

In contrast to a significant growth of 11.2 percent in 2007, consolidated as-sets of the industry noted a marginal decrease of 2.6 percent to $804.2 mil-lion. The assets of the general insurance sector continued to register an increase consistent with the trend of the last four years. The growth however, has been at a slowing rate. General insurer’s assets rose by 3.2 percent compared to 6.9 per-cent in 2007.

Life insurers’ assets were significantly impacted by the revaluation of their holdings in government securities due to the high interest rates that prevailed towards the end of 2008. As a result, the life sector’s investments declined by a significant $21.7 million.

On the other hand, a marginal growth was recorded in the general insurer assets and this was attributed to their increased hold-ings of term deposits by $24.8 million.

On the liabilities side life companies’ liabili-ties noted a marginal increase due mainly to the increase in the balance of revenue account. The liabilities of the general insur-ers showed a moderate decline in 2008 by 1.2 percent. Underwriting provisions form the bulk of the liabilities of general insur-ers and though they reduced marginally in 2008, provisioning levels were assessed to be adequate.

Owners’ funds for the life sector were im-pacted by the significant reduction in re-tained earnings and asset revaluation re-serves of life insurers in 2008, while the general insurance sector continued to enjoy another good year of returns to owners at 11.8 percent.

Overall operating results were a mirror of the movements in assets with the life sec-tor registering an after tax surplus of $15.7 million, a significant drop from the $45.8 million recorded in 2007. The increased net premiums recorded were off-set by reduced investments returns and high asset depre-ciation.

2008 saw a consistent performance from the general insurance sector which again regis-tered a positive performance of $29.7 mil-lion in underwriting surplus. This however has declined from the 2007 level of $33.7 million.

Graph 09 Insurance Industry Assets & Liabilities

Brokers General Life

49%

42%

9%

Chart 01 Insurance Industry After Tax Profit for 2008



800700600

500

400300

200100

0

$m

2008

2002

2003

2004

2005

2006

2007

Industry Assets Industry Liabilities

900


12

Prior to the Insurance Act 1998, the administrative and supervisory function of the insurance industry rested with the Commissioner of Insurance Office whose appointment was determined by the Public Service Commission as per the Insurance Act of 1976. During the period 1981 to 1998, the Commissioner’s Office came under the jurisdiction of the Reserve Bank of Fiji until the function of the Office was officially transferred to the Reserve Bank in 1999, further complementing the banking supervisory and regulatory arm of the Bank.

The Insurance Act (1998)

The insurance industry is governed by the primary legislative framework that is set out under the Insurance Act 1998 (“the Act”) and its accompanying Regulations.

As such, the Reserve Bank is empowered under the Act, to formulate and develop standards that direct the conduct of insur-ers, brokers and agents.

In support of the administrative func-tions charged to the Reserve Bank under the Insurance Act and Regulations, the Bank issues prudential policies, conducts both offsite and onsite supervision and holds prudential consultations with the insurance industry. These form the ba-sis of conducting the Reserve Bank role of maintaining a sound financial system while at the same time, protecting the in-terests of policyholders.

Insurance Market Structure

The Fiji insurance market is made up 2 life insurance companies, 8 general insurance companies, 4 insurance brokers and 378 insurance agents. The Reserve Bank ap-proved the acquisition of two insurance brokers in early 2008, reducing the total number of licensed brokers in 2008 from 5 to 4 (refer Table 01).

Life insurance companies issue life poli-cies, including business relating to the investment, administration and manage-ment of the assets of a statutory fund.

General insurance companies conduct in-surance business of any class or classes not being life insurance business.

Insurance brokers may be persons or enti-ties who buy insurance products on behalf of a person wishing to be insured and who are paid by the insured person or insur-ance company by way of commission or fee.

Supervision

Table 01: Insurance Market Participants

Company Country of

Incorpo- Ownership

ration

Life InsurersColonial Fiji Life Limited Fiji AustraliaLife InsuranceCorporation of India India IndiaGeneral InsurersColonial Health Care(Fiji) Limited Fiji AustraliaDominion InsuranceCompany Limited Fiji FijiFAI Insurances (Fiji)Limited Fiji AustraliaFiji Care InsuranceCompany Limited Fiji Australia/FijiNew India AssuranceCompany Limited India IndiaSun InsuranceCompany Limited Fiji FijiQBE Insurance(Fiji) Limited Fiji AustraliaTower Insurance(Fiji) Limited Fiji New Zealand

Aon (Fiji) Limited Fiji AustraliaMarsh Limited Fiji New Zealand/FijiUnity Insurance Brokers(Fiji) Limited Fiji FijiInsurance Holdings

d Fiji Fiji/New ZealandFiji Limite

Brokers

Source: Reserve Bank of Fiji


13

Insurance agents are persons or compa-nies who are paid a commission by insur-ers to sell their products.

The oversight of these players in the in-surance industry is carried out by way of a three pronged approach:• Licensingorde-licensing• Supervision• Regulation

All three approaches is austerely applied to the life and general insurers and brokers, while the conduct of insurance agents are the sole responsibility of the insurer that the agent represents, as stipulated under the Insurance Act. The Act specifies the insurer, whom the agent represents, as being responsible for the conduct of the agent, including all liabilities incurred by the agent.

Market Players

(a) Licensed Insurers

In 2008, 10 insurance company licenses were renewed. Out of the 10, 2 were life insurance companies while the remaining 8 were general insurers. There were no new licences approved during the year.

FijiCare Insurance Limited and Colonial Health (Fiji) Limited, as general insur-ance companies continued to be engaged, in medical and term life insurance while the remaining 6 wrote other classes in the general insurance category.

Under a special arrangement approved by the Reserve Bank, FAI Insurances (Fiji) Limited continued to be wound down. The scheme was approved in April of 2001 when QBE Insurance Fiji Limited success-

fully acquired 100 percent of the compa-ny’s shares. QBE Insurance (Fiji) Limited has since been directly involved in the winding down process.

In the beginning of the year, the Reserve Bank received an application by Insurance Holding Fiji Limited to acquire the broking businesses of Conolly Insurance Brokers Limited. This was approved after carrying out an assessment of the application.

During the year, the Reserve Bank also approved the transfer of QBE Insurance Group’s shares in QBE Insurance (Fiji) Limited to QBE Holdings (AAP) Proprietary Ltd.

(b) Company Under Official Manage-ment

The operations of the Insurance Trust of Fiji continued to be wound down. Formally known as the British American Assurance Company, the company was put under the official management of the Reserve Bank as provided for under Section 81 of the Insurance Act.

Under the Act, the Reserve Bank may, with the consent of the Minister of Finance, as-sume control of, or appoint a person to assume control of a licensed person. To date, the majority of the policies have been settled upon maturity or surrenders while only a small number of policies re-main active.

(c) Licensed Insurance Brokers

For the year in review, there were no new licences approved, however the Reserve Bank renewed the licences of the 5 insur-

ance brokers that were granted approval to operate in Fiji in 2007.

These licenses are valid for a period of 12 months only, and are subject to renewal pending satisfactory statutory compli-ance and evidence of adequate coverage in their respective Professional Indemnity and Fidelity Guarantee policies.

All brokers’ licences were, in this regard, assessed at the end of 2008 to be in com-pliance with the requirements of the In-surance Act 1998.

(d) Licensed Insurance Agents

For 2008, the Reserve Bank issued a total of 449 licences to 378 agents. This com-pares against 471 licences to 385 agents that were approved in 2007. Out of the 449 licences granted, 424 were individual agent licences while 25 were corporate li-cences.

From the 449 licences granted, 304 were for life, 92 for general and 53 for health insurance classes.

Licensing/De-licensing

Under the Insurance Act, all participants in the insurance industry are required to be licensed by the Reserve Bank.

Licensed applications are assessed against a set of comprehensive prerequisites which are guided by international bench-marks and sound practices.

An applicant is granted a licence only af-ter it has satisfactorily met all the require-ments of the Act. These licenses are valid for a period of one year and are subject to renewal based on meeting the require-ments of the Act.

The revocation of a licence usually occurs on the withdrawal or merger of an exist-ing institution, or under extreme circum-stances where an institution is not able to meet its obligations to policyholders/customers. Contravention of directives, regulations and legislations administered by the Reserve Bank are also grounds for de-licensing.


14

Supervision

The core of the Reserve Bank’s work in the administration of the Insurance Act cen-tres around supervision. This is performed at two levels; offsite monitoring and on-site examinations of all licensed insurers and brokers.

Offsite supervision involves undertaking an assessment of the licensed institution with reference to its quarterly financial statements, annual audited returns and other prudential statistics provided by the company. The Reserve Bank, may also, where appropriate, request for specific information to enable it to complete its assessment.

Onsite examination, on the other hand, involves visits to the insurance companies whereby the institution’s operations, poli-cies and procedures are examined for com-pliance with the Reserve Bank’s prudential policies and prescribed regulations.

Regulation

The development of supervisory policies for the insurance industry is complement-ed by the issuance of regulations or by-laws to the Insurance Act 1998. Together, the Insurance Act 1998 and regulations provide the legislative framework that govern the industry.

Under Section 169(i) of the Insurance Act and with the written approval of the Minister, the Reserve Bank issued the In-surance Regulations 1998, which covers a number of areas relating to license fees, prescribed deposit requirements for insur-ers and brokers, investments and other relevant areas.

Industry Consultation

The Reserve Bank engages in ongoing dia-logue with the insurance industry through the Insurance Task Force which compris-eses members of the Insurance Council of Fiji (ICOF), the Licensed Insurance Brokers Association of Fiji (LIBAF) and Reserve Bank of Fiji. During the year, the Reserve Bank met with industry stakeholders to discuss matters on policy as well as on issues affecting the industry. Arising from the above, two sub-committees of the Taskforce were formed to deal specifically on policy matters and insurance policy-holder concerns respectively.

In addition, the Reserve Bank maintains industry consultation by meeting with each insurance company, broker and their respective auditors at least twice a year to discuss issues emanating mostly from offsite monitoring. Issues arising from onsite examinations are also addressed in these meetings to ensure compliance with onsite recommendations and other direc-

tives. The meetings are formally referred to as tri-lateral meetings and are held prior to and after the annual audit of the insurance company or broker.

The Governor of the Reserve Bank of Fiji also meets with industry stakeholders, individually for insurance companies and collectively for insurance brokers, to dis-cuss issues pertaining to the insurance industry.

Policy Development

Pivotal to the role of the Reserve Bank as administrator, supervisor and regulator of the insurance industry, is the development and issuance of suitable policy statements that serve to support the administrative functions delegated to the Reserve Bank under the Insurance Act and Regulations.

These policy statements are intended to clarifiy requirements of the Insurance Act 1998, and also enable the Reserve Bank to enforce requirements which may not be included in the Act or readily understood by the industry.

The policies are available on the Reserve Bank of Fiji website and are developed specifically for the prudential supervision of the industry based on the requirements of the Insurance Act.


15

The policies aim to outline the minimum guidelines the players in the insurance in-dustry are expected to uphold or conform with, while at the same time, being ac-commodative to the domestic realities of the industry. These policies are also reflec-tive of international sound practices and core principles set by the International Association of Insurance Supervisors (IAIS), the Financial Action Taskforce and the Organisation for Economic Coopera-tion and Development.

a) Compliance with the Insurance Act

The bulk of supervision work is carried out through offsite supervision. This entails ensuring licencees comply with relevant sections of the Insurance Act that are ap-plicable to the licensed entity.

The following sections of the Insurance Act were examined as a minimum, to monitor compliance of the insurers and brokers:• Section20(1)&(2)– requirementto

maintain a deposit of prescribed na-ture whose market value is not less than the surplus of assets over liabili-ties;

• Section31–requirementtomaintainthe minimum capital and solvency margins;

• Section39(2)–submissionofreinsur-ance arrangements to the Reserve Bank by insurers;

• Section60(1) - submissionof annualreturns to the Reserve Bank by life and general insurers;

• Section 60(2) – submission of quar-terly returns to the Reserve Bank by life and general insurers;

• Section62– requirement for insurersto submit actuarial valuation of liabili-ties;

• Section66(1) - submissionof annualreturns to the Reserve Bank by insur-ance brokers;

• Section66(2)-submissionofquarterlyreturns to the Reserve Bank by insur-ance brokers.

(i) Term Deposits

Under Section 20(1) & (2) of the Insurance Act, insurance companies are required to maintain a deposit whose market value is not less than the surplus of assets over

liabilities or Net Adjustable Assets. In-surance brokers, on the other hand, are required to maintain a deposit or guaran-tee which is not less than the deductible or excess amount of their professional in-demnity and fidelity guarantee insurance policies.

For the year 2008, the Reserve Bank moni-tored the compliance of this requirement and, where necessary, followed up with the insurance companies and brokers con-cerned. All insurance companies and bro-kers held the required deposits with the deposit certificates being retained in the safe custody of the Reserve Bank.

These deposits are intended to provide, to some extent, protection to policyhold-ers by setting aside some portion of an insurer’s or broker’s assets for unforeseen circumstances.

(ii) Margin of solvency

Both life and general insurance compa-nies are required to maintain a margin of solvency at all times while conducting insurance business in Fiji. This is required under Section 31 of the Insurance Act and its determination differs between life and general insurers.

For life insurers, the companies are re-quired to maintain:• asharecapital,paidupcapitalofnot

less than $1.0 million; or• a surplus of assets over liabilities of

$1.0 million or the sum of 5.0 percent of the amount of net liabilities under life policies up to $100.0 million plus 2.5 percent of the amount of net li-abilities under life policies that exceed $100.0 million, whichever is the great-er.

General insurers are required to maintain the greater of the following:• surplus of assets over liabilities of

$1.0 million;• 20.0 percent of net premium income

derived in the last twelve months; or• 15.0percentofnetclaimsoutstanding

provision. In determining an insurer’s solvency po-sition, the Reserve Bank considers the

admissibility of assets and liabilities re-ported in the balance sheet as per the re-quirements provided under the Insurance Act and relevant policy statements.

2008 presented an interesting year for the insurance industry against the backdrop of a slowly improving interest return en-vironment domestically and a somewhat deteriorating international front which had begun to show signs of distress in the financial system towards the end of the year.

For 2008, the total industry surplus de-clined to $78.4 million from $102.9 mil-lion in 2007. (refer to Table 02)

The decline was mostly attributed to the life sector which recorded a notable de-cline in its solvency surplus over the year whilst the general sector continued to post positive and improved solvency sur-pluses.

The life sector’s solvency surplus declined due to the fall in asset values over the year which attributed to the decline in major investments as a result of market valuation required under the Insurance Act. Government securities were recorded at $231.0 million as at 31 December 2007. However, with the increase in interest and bond rates in December 2008, this de-clined to $206.1 million. Equity invest-ments and debentures collectively fell by $19.6 million whilst the decline in cash on hand by $9.5 million was attributed to a dividend payment during the year.

Table 02: SolvencySurplus ($m)

As at 31 December

2007 General 68.4 18.7 49.7Life 68.4 15.2 53.2Total 136.8 33.9 102.9





AdmissibleAssets

MRSM * SS**

* MRSM - Minimum Required Solvency Margin** SS - Solvency Surplus



16


Shareholders’ Funds

Paid-up Capital 22.7 22.2 22.2 27.1

Retainedprofit/loss 92.4 70.3 62.0 48.0

Other reserves 38.9 26.6 29.4 33.3

Total 154.0 119.1 113.6 108.4

2007 2006 2005 2004

23.9

86.5

16.3

126.7

2008

In terms of the major balance sheet items, the consolidated assets of the life sector dropped by $29.3 million while liabilities remained at 2007 comparable levels.

The general sector, on the other hand, continued to record a healthy solvency surplus, improving over the year to $56.3 million from $49.7 million. All general in-surers, save for 3, recorded an increase in solvency. On an individual basis, a ma-jority of the general insurers’ assets and liabilities increased resulting in an over-all increase in the sector’s assets to $248 million, while liabilities declined margin-ally by $1.8 million from the previous year ($159.9 million).

The improvement in solvency surplus for general insurers is attributed to an in-crease in adjusted net assets, which on a consolidated basis stood at $75.7 million compared to $68.4 million in 2007. As in the previous year, the aggregate solvency surplus was dominated by a few insurers while the remaining general insurers main-tained satisfactory buffers above their re-spective required solvency margins.

The Reserve Bank continues to vigilantly monitor the solvency status of all insur-ance companies and is alert for early warning signs that may be a cause for fi-nancial difficulty.

(iii) Shareholders’ Funds

The consolidated shareholders’ funds for the insurance industry declined over the year to $126.7 million from $154.0 mil-lion in 2007. The largest contributor to the decline was the life sector where the accumulative decline seen from the sec-tor’s retained profits and other reserves fell by $15.3 million and $21.4 million respectively.

The decline in the retained profit was due to a dividend payment of $20 million dur-ing the year while the notable decline in reserves was attributed to the negative asset revaluation reserves recorded by one of the life insurance company. The general sector, contributed $89.8 mil-lion towards the consolidated insurance industry’s shareholders’ funds. As a com-

parison to the previous year, the general sector noted a positive 11.8 percent im-provement or the equivalent of $9.5 mil-lion over the year. The growth was mainly driven by retained profits, which increased by $9.4 million, therefore accounting for the improvement noted in the general sec-tor’s shareholders funds.

(iv) Reinsurance Arrangements

Reinsurance are arrangements that enable insurers to transfer or share risk with an-other insurance or reinsurance company for a fee. It is a process whereby insurers take out insurance with another insurer (reinsurer) to protect themselves against the risks they accept.

Section 39(2) of the Insurance Act requires the Reserve Bank to examine the reinsur-ance arrangements of insurance compa-nies. Under the Act, insurance companies are required to have in place adequate reinsurance arrangements to cover the risk exposure within individual insurance classes written as well as the aggregate risk for the overall portfolio. These ar-rangements are required to be provided to the Reserve Bank soon after the com-mencement of the period of cover.

In this regard, the Reserve Bank in 2008, assessed 7 reinsurance arrangements.

Table 03 Shareholders’ Funds of Fiji Licensed Insurers as at December ($m)


17

(v) Reporting Requirements for Insur-ers and Brokers The submission of returns for both insurers and brokers are stipulated under Section 60 and 66 of the Insurance Act, whereby both insurers and brokers are mandated to provide their returns on a quarterly and annual basis to the Reserve Bank.

These companies are required to provide both the prescribed annual audited and unaudited quarterly statutory returns. The annual returns are to be submitted within three months from the end of the year for both insurers and brokers while the quar-terly returns are submitted within four and six weeks at the end of each quarter for brokers and insurers respectively.

For the year 2008, most of the licensed insurers and brokers complied with these provisions while two insurance companies and three brokers applied for extensions under Section 60(3) and 66(3) of the In-surance Act 1998.

These returns provide the offsite supervi-sory tool for the Reserved Bank to prepare Financial Condition Reports on a quarterly and annual basis with the ultimate view to determine both the solvency and financial viability positions of the licensed insurers

and brokers. In addition, the statutory returns are analysed against prudential benchmarks and best practice indicators.

During the year, 14 Annual Financial Con-dition Reports and 56 Quarterly Condition Reports were prepared.

(vi) Actuarial Assessment

Section 62 of the Insurance Act requires life insurers to provide an actuarial report of its liabilities to the Reserve Bank on an annual basis. In 2008, the Reserve Bank continued to engage the services of its ac-tuarial consultant who, under the Terms of Reference prepared by the Reserve Bank, assisted in the extensive review of actu-arial assessments provided by life insurers. In addition, Financial Condition Reports prepared by the RBF examiners were also reviewed and confirmed. Where necessary, meetings were arranged between the in-surer and the Reserve Bank to discuss is-sues arising from the offsite examination of the institutions’ reports. This will be be ongoing in 2009.

For 2008, the Reserve Bank was satisfied with the overall financial condition and risk management practices of insurers and brokers licensed under the Insurance Act 1998.

Onsite Examination

The onsite examination of an institution conforms with the general powers con-ferred to the Reserve Bank under Section 3 of the Insurance Act. These onsite ex-aminations are carried out periodically to assess the level of compliance with regard to statutory obligations as well as super-visory policies issued by the Reserve Bank and set policies of the institutions. The inspection would also involve assessing the role of the audit and risk management functions and preparing a report for the insurance company concerned, with ap-propriate recommendations for improve-ment.

Overall, an onsite examination gener-ally involves assessing the inherent risks within a licensed institution, and the ef-fectiveness of the risk management over-sight functions provided by the Board and senior management in managing these risks.

Onsite Examination atInsurer’s Premises

Over the years, the Reserve Bank has ad-opted a more comprehensive onsite man-agement process with the intention of embedding a regulatory compliance and


18

risk management culture into the opera-tions of an insurer. By embracing this no-tion, insurers will have in place strategies to better manage risks enabling them to protect the interests of the policyholders and ensuring the perpetuity of their busi-ness operations.

Before conducting an onsite examination, an advice letter informing of the proposed examination is sent to the insurance com-pany concerned, at least 3 months ahead of the intended date of visit. The onsite advice letter will also request for certain information to allow the onsite team to carry out a thorough assessment to bet-ter understand the institution and its key significant processes prior to the review. Obtaining the requested previsit material well before the commencement of the visit will minimise the effect of the examina-tion on the institution’s operations as well as the possibility of prolonging the examination.

The second phase involves the examina-tion of the institution at its premises. The approach is interactive and involves a mixture of interviews, presentations and file reviews. A typical onsite examination will cover key significant activities such as underwriting, claims management, re-insurance, technical provisioning and re-serving, investment and other functions that may have been identified prior to the examination.

An onsite examination is not an audit inspection as it involves a larger scope which covers the operational, insurance and financial risk aspects of an insurer’s operations. During the interactive pro-cess, the onsite team would take the opportunity to assess the board, senior management and other key personnel for corporate governance practices, job com-patibility with a particular individual and management’s overall relationship with the supervisor.

In 2008, the Reserve Bank conducted and completed the onsite examinations of 2 general insurance companies.

(a) Revised Offshore Placement Policy

Consultation on the revised offshore policy commenced in 2008. This policy aims to outline the minimum requirements of the Reserve Bank for insurers, brokers and ap-plicants who place their business directly with offshore insurance companies. Sug-gestions from the industry have also been incorporated in this review and the policy is expected to be finalised in 2009. (b) Risk Management Policy

Insurance companies are faced with sever-al risks that can have detrimental effects on their operations. The Risk Management Policy will require insurance companies to identify, assess, monitor and control their risks so that they are financially viable to meet their liabilities when they fall due. Development work on this policy commenced in 2008. It is the intention to conduct industry consultation on this policy in 2009.

(c) Policy on the Role of Actuary

Actuaries play a vital role in the operation of insurance companies. This policy will specify the Reserve Bank’s requirements in the appointment of an actuary. It will also detail their responsibilities in accor-dance with the Insurance Act 1998 and in-ternational sound practices. Consultation on this policy is expected to commence in 2009.

Offshore Placement ofInsurance

The number of applicants seeking insur-ance cover overseas increased in 2008 due to the unavailability of cover locally and cheaper premium rates overseas.

Total applications received by the Reserve Bank in 2008 increased by 33 percent to 647 worth $24.8 million. The value of off-shore placements increased by 7.8 percent compared to the previous year. (refer to Table 05)

Applications under the “Others” category continued to dominate the offshore place-ment applications received by the Reserve Bank in 2008. The increase in this cat-

Compliance with Policy Requirements

In carrying out the Reserve Bank’s role of

formulating standards governing the con-

duct of insurance business, the Reserve

Bank has issued the following supervision

policy statements:

Policy 1� Role of External Auditors in the�� Supervision of Licensed Insurance�� Companies

Policy 2� Offshore Insurance Placement of� � Insurance Business

Policy 3A� Solvency Requirements for General �� Insurance Companies

Policy 3B� Solvency Requirements for Life �� Insurers Companies

Policy 4� Guidelines on Corporate Governance

Policy 5� Assets Investment Management �� Policy

Policy 6� Reinsurance Management Strategy

Policy 7� Fit and Proper Requirements

Table 04 Policies for Insurance Companies and Brokers Licensed to Conduct Insurance Business In Fiji

Source: Reserve Bank of Fiji

2008 saw the implementation of the fit

and proper requirements for licensed in-

surers and brokers. This policy outlines

the minimum requirements for Insurance

Companies and Insurance Brokers to en-

sure that persons holding key positions in

these institutions are fit and proper.

The policy defines responsible persons for

locally and foreign incorporated Insurers

and Brokers. For locally incorporated In-

surers and Brokers, responsible persons in-

clude the Board of Directors, Alternate Di-

rectors, Senior Management and its proxy,

whilst responsible persons in foreign in-

corporated Insurers and Brokers comprise

Senior Management. Fit and Proper status

for responsible persons, as a minimum, is

assessed against the three criteria of good

character, competence and capability and

financial soundness.

Policy Development

In 2009, there are intentions to develop or finalise the following policies:


19

egory was due to a significant increase in the number of travel policies accounting for 126 of the 247 that were approved. This is also a notable increase compared to the 55 applications approved in 2007. The remaining classes under the same category also experienced incremental changes.

Other Supervisory Activities

(a) Reserve Bank Directives

• Fronting – The Reserve Bank contin-ued to remind insurance companies on the issue of excessively ceding insur-ance risk offshore. The Reserve Bank maintains that insurers have been li-censed to underwrite risks and front-ing is prohibited.

(b) Advice on the Insurance Act Where required, the Reserve Bank provided legal interpretation of the Insurance Act and other legislations to external stake-holders.

The Reserve Bank also responded to an independent consultancy report prepared on the Fiji Insurance Industry by the Con-sumer Council of Fiji. Some of the issues raised from the report are currently being addressed by the Reserve Bank and the In-surance Task Force.

(c) Information

As per Section 164 of the Insurance Act, the Reserve Bank is required to keep re-cords of insurance companies, brokers and agents for public viewing. Such records are made available at a prescribed fee.

The Reserve Bank also prepared and sub-

mitted the 2007 Insurance Annual Report

to the Minister for Finance on 30 June

2008. Under Section 165 of the Insurance

Act, the Reserve Bank is required to pre-

pare and submit a report on the adminis-

tration of the Act and other matters aris-

ing during the preceding year.

(d) Complaints

During the year, the RBF received 3 com-

plaints from policyholders. All 3 com-

plaints related to the medical class. Two

of the 3 complaints related to premiums

paid to the insurance companies for poli-

cies. These complaints were eventually re-

solved between the parties satisfactorily.

The third complaint related to the assess-

ment of a policyholder’s claim application.

It was noted the timing of delay was due

to the insufficient provision of supporting

documents, which delayed the policyhold-

er’s medical evacuation overseas.

(e) Annual Governor’s Meeting

During the year, the Governor of the Re-

serve Bank met with industry stakehold-

ers. The objective of these meetings is to

facilitate discussions on matters affecting

the insurance industry and enable the in-

Table 05 Offshore Placement Summary ($m)

Risk

Term Life 22 0.9 21 0.6 20 0.7Medical 4 0.1 3 0.1 3 0.0Aviation 18 2.5 21 8.9 19 3.0ProfessionalIndemnity 78 1.2 65 0.8 68 1.6Comprehen-sive Liability 74 1.8 69 2.2 57 1.8MD & BI* 48 12.1 43 11.5 48 12.7Marine Hull 70 1.0 34 1.1 33 0.8Others 172 3.4 164 4.5 108 3.9Total 486 23.0 420 29.7 356 24.5

Source: Insurance Companies

.

2007 2006 2005

No. Amt. No. Amt. No. Amt.No. Amt.

21 1.03 0.08

32 3.2

89 1.5

97 1.560 12.198 1.2

247 4.2647 24.8

2008

*Material Damage and Business Interruption

Material Damage and Business Interrup-tion continued to account for the highest premium paid at $12.1 million. The other classes whose value of offshore place-ments increased included Term Life ($1.0 million), Aviation ($3.2 million), Profes-sional Indemnity ($1.5 million), Marine Hull ($1.2 million) and Others ($4.2 mil-lion). The remaining categories expe-rienced slight decreases over the same period.


20

dustry to interact directly with the Reserve Bank Governor on issues of concern.

The Governor met with insurance compa-nies on an individual basis whereas the meeting with brokers was conducted col-lectively.

Issues discussed in these meetings are followed up in the normal course of super-vision and actions taken where necessary.

Strengthening of theSupervision Role

The Reserve Bank continued to work to-wards strengthening its supervisory role by ensuring that staff received the necessary skills and knowledge to enable them to carry out their responsibilities under the Insurance Act. An area that the Bank also focused on was risk assessments, where both offsite and onsite examinations were intensified to identifying risks inherent to insurance operations including strategic, operational and financial risks.

The scope of these examinations has also widened to include corporate governance and management issues, which have led to the development of a governance policy and a detailed assessment of key oversight management functions during offsite and onsite examinations.

The intensity and thoroughness of these examinations are meant to gain an under-standing of the intrinsic nature of insur-ance operations and allow the Reserve Bank to identify areas of concern and deal with these accordingly.

Staff Development

The Reserve Bank continued to invest in staff education and training during the year with both areas becoming an integral part of the Bank’s supervision and policy development plans.

For 2008, supervisory staff attended several identified overseas supervision courses and also pursued insurance cor-

respondence courses with the Australian and New Zealand Insurance Institute and Finance (ANZIIF).

Through the Pacific Governance Support Program (PGSP), the Australian Prudential Regulatory Authority (APRA) continued to provide assistance and advice in various capacities on the supervision of insurance companies.

The Reserve Bank further benefited from the secondment of 1 of its senior staff to APRA in the area of insurance and banking supervision for a period of 3 months under an internship program.

During the latter part of the year 3 staff of the Reserve Bank participated in a work-shop on the Regulatory Management of Internal Capital Models designed for su-pervisors in the area of banking and insur-ance, sponsored by the Asia-Pacific Eco-nomic Cooperation (APEC) Study Centre.


21

Year Gross Net RetentionPremium Premium Ratio

$m % $m % %Change Change

2007 112.7 -4.1 88.7 -3.3 78.7

2006

1

117.5 7.2 91.7 9.4 78.0

2005 109.6 6.6 83.8 8.4 76.5

2004 102.8 11.3 77.3 11.5 75.2

2008 117.9 4.6 92.9 4.7 78.8


OVERALL PERFORMANCE

The general insurance sector continued to register a positive growth with gross pre-mium increasing by 4.6 percent to reach $117.9 million, despite the slow down in the economy in 2008.

This is an improvement on the negative growth of 4.1 percent recorded in 2007, but is still lower than the growth in gross premium income recorded in 2006 (7.2 percent) and 2005 (6.6 percent).

Fire continued to dominate the general insurance portfolio as the major class of general insurance business accounting for 26.4 percent of total gross premiums, above the levels recorded in the last four years. The continued growth in the fire business has been attributed to the in-creased rates for property insurance flow-ing from increased reinsurance/catastro-phe premiums. (refer to Table 07)

Motor vehicle came in as the second high-est earner of gross premiums accounting for 20.8 percent or $24.5 million of total gross premiums. This is always a competi-tive portfolio being a major class for some general insurers. The increase in 2008 was recorded at 4.3 percent compared to a 9.3 percent decline in 2007.

The medical class which accounted for 12.6 percent of the gross premium pool at $14.8 million, recorded a slight reduction from $15.1 million in 2007, due to tighter underwriting standards by insurers and the stabilization of premium rates.

During the year, the number of general insurance policies issued to individuals reduced by 2.2 percent to 132,517. A ma-jor decline was noted in the motor vehicle class and others by 21.7 percent and 29.5 percent repectively. However, group poli-cies issued, increased by 34.8 percent to 1,011, and were mainly from the motor vehicle class.

Reinsurance Cessions

Out of the total of $117.9 million re-ceived as gross premiums, 21.2 percent was ceded to reinsurers ($24.9 million) in 2008, almost identical to the proportion for 2007.

Of the amount ceded, 97.5 percent ($24.3 million) went to overseas reinsurers with approximately 71.7 percent ($17.9 mil-lion) in the overseas non-proportionate treaty.

In 2008, fire and householders were the most reinsured classes with cessions in

Operating results remained favourable for the general insurance sector in 2008, despite a re-duction in investment returns and underwriting results recorded. Overall, all general classes remained profitable, however, some recorded a decline in profitability.

General Insurance

Table 06 Premium Growth

Graph 10 Retention Ratio by General Class


100

80

60

40

20

0

20

01

20

02

20

03

20

04

20

05

20

06

20

07

Fire

%

Motor

Marine

Personal

Liability

Others

20

08

Years


22

fire totalling $15.6 million (50.2 percent of gross premiums) and householders at $2.9 million (34.5 percent of gross premi-ums). These property classes are the most susceptible to damage from natural catas-trophes and traditionally have been heav-ily reinsured. The high proportion ceded in these classes in 2008, partly reflected the nature of risks covered, in particular catastrophes and the increased rates im-posed by overseas reinsurers.

Cession ratios for all other classes were below 20 percent in 2008.

Net Premiums

Since the level of reinsurance cessions did not rise much despite the increase in gross premiums in 2008, the net premiums rose by the same percentage as gross premiums by 4.7 percent to $92.9 million.

The amount of net premiums has increased by 20.2 percent over the last five years.

The motor vehicle class continued to dominate the net premium pool due to the high retention levels of primary covers, with a portfolio of $22.8 million or 24.5 percent of total net premiums. Fire and the medical class followed at 16.7 percent and 15.8 percent respectively.

The remaining classes were below 10 per-cent of total net premiums.

Similar to 2007, the widest margin be-tween gross premium income and net pre-mium income is still skewed towards fire at $15.6 million, being reinsurance costs, while burglary maintained the narrowest margin at $0.01 million.

CLAIMS

Gross claims in 2008 was recorded at $45.6 million compared to $50.1 million in 2007. The lower amount recorded has been attributed to a notable absence of major catastrophic events during the year. This is despite the total number of report-ed cases including those outstanding from previous years increasing from 48,265 to 61,285. The situation is indicative of the small monetary value of the claims re-ceived from policyholders in 2008.

The claims received continued to be con-centrated in the medical class accounting for 88.3 percent of the claims registered or $8.3 million of the total gross claims

in the general insurance sector. Claims re-lating to fire and motor vehicle classes, however, still dominate the total sum paid out as claims at $7.0 million or (15.4 percent) and $13.4 million (29.3 percent) respectively.

Reinsurance recoveries provided some temporary relief to local general insurers during the year, but this reduced to $5.8 million from $7.5 million in 2007. The fire class accounted for the most reinsurance recoveries at $3.6 million (62.1 percent) of total reinsurance recoveries while term life accounted for $1.3 million (22.4 per-cent).

The overall net loss ratio (net claims in-curred as a percentage of net earned premiums) slightly deteriorated over the year to 49.9 percent for the general insur-ance sector. Except for motor vehicle, ma-rine hull, workers compensation, medical and others which deteriorated, all other classes of business recorded varying de-grees of improvement in their respective net loss ratios.

A notable improvement was noted in the fire class over the year, for which claims ratio improved from 45.1 percent in 2007 to 36.2 percent in 2008.

At year end 2008, the total outstand-ing claims stood at 3,581 cases of which 1,998 were related to the year under re-view, while the remaining related to previ-ous years.

OPERATING RESULTS

The general insurance sector continued to achieve strong operating results in 2008 with an underwriting surplus of $29.7 mil-lion, despite registering a 11.9 percent decline in 2007 at $33.7 million. A major contributor to the decline in underwriting surplus was the rise in claims incurred (up by 7.3 percent to $45.5 million) and un-derwriting expenses (up by 6.0 percent to $15.9 million). (refer to Graph 11)

Overall, all general classes remained prof-itable although some classes recorded negative growth.

The underwriting expense ratio (under-writing expenses to net earned pre-miums) was reported at 17.5 percent in 2008, slightly above the level recorded in 2007 at 16.5 percent.

Table 09 Distribution of Net Premiums

Table 07 Distribution of Gross Premiums

Table 08 Distribution of Net Loss Ratios (%)

2007 45.1 40.8 85.2 55.8 31.8 55.3 46.62006 17.8 62.0 40.0 54.2 43.4 24.9 46.72005 29.8 57.5 25.6 63.5 40.2 34.0 49.72004 66.8 59.1 15.5 56.3 38.8 25.1 52.5

2008 36.2 66.5 66.6 25.5 -24.5 62.2 49.9


*Personal - Householders, Medical, Term Life, Burglary, & Pers. Acc.**Liability - Motor CTP, Professional Indemnity, Public Liability & Workers

Compensation.

Year Fire Motor Marine *Personal **Liability Others Total

*Personal - Householders, Medical, Term Life, Burglary, & Pers. Acc.** Liability - Motor CTP, Professional Indemnity, Public Liability

& Workers Compensation.

Year Fire Motor Marine Pers.* Liab.** Others Total

$m

2007 14.3 21.6 2.9 28.6 17.1 4.4 88.72006 14.1 23.8 2.8 28.6 17.6 4.7 91.72005 12.2 23.2 2.9 23.3 16.9 5.4 83.92004 12.4 21.2 2.5 22.0 15.2 4.0 77.3

% change

2007 1.5 (9.2) (0.5) (0.5) (2.9) (7.4) (3.3)2006 15.8 2.4 (4.2) 23.1 4.0 (11.7) 9.32005 (1.6) 9.6 17.5 5.8 11.5 35.42004 29.8 13.6 2.3 (0.8) 9.8 49.0

% share

2007 16.1 24.3 3.2 32.1 19.3 5.0 100.02006 15.4 25.9 3.1 31.2 19.2 5.2 100.02005 14.5 27.7. 3.5 27.7 20.2 6.4 100.02004 16.0 27.4 3.2 28.5 19.7 5.1 100.0


2008 15.5 22.8 2.6 29.3 18.3 4.4 92.9

8.611.6

2008 8.4 5.6 (7.1) 2.8 7.0 - 4.7

2008 16.7 4.7 100.019.731.52.824.5

*Personal - Householders, Medical, Term Life, Burglary, & Pers. Acc.** Liability - Motor CTP, Professional Indemnity, Public Liability

& Workers Compensation.

Year Fire Motor Marine Pers.* Liab.** Others Total

$m

2007 28.3 23.5 3.3

33.0 19.6 5.0

112.72006 27.5 25.9 3.4

34.4 20.6 5.7

117.5

2005 25.4 25.4 4.1

29.0 19.3 6.4

109.62004 24.7 23.1 4.0

28.8 17.1 5.0

102.8

2008 31.1

24.5 2.9

34.2 20.2 5.0

117.9

% Change

2007 2.9

(9.3) (3.3) (4.1) (4.9) (12.3) (4.1)2006 8.4 1.9 (17.4) 18.6 6.8

(10.2) 7.32005 2.8 10.0 3.3 0.6 1 2.6

27.0 6.62004 11.3 14.9 2.6

4.3 11.8 60.8 11.4% Share

2007 25.1 20.9 2.9 29.3 17.4 4.4 100

2006 23.4 22.0 2.9 29.3 17.5 4.9 100

2005 23.2 23.2 3.8 26.5 17.6 5.8 100

2004 24.0 22.5 3.9 28.0 16.7 4.9 100


2008 9.9 4.3 (12.1) 3.6 3.1 0.0 4.6

2008 26.4 20.8 2.5 29.0 17.1 4.2 100


23

Consequently, the resulting combined ra-tio (the net loss ratio plus the expenses ratio) for the general insurance sector stood at 67.4 percent (2007: 63.1 per-cent). Based on the ratio, the general in-surance industry is best said to be earn-ing $0.33 as pre-tax profit from every dollar of premium earned.

Total non-underwriting income recorded a 38.9 percent decline to $6.9 million over the year. Interest received although down over the year, continued to account for the bulk of non-underwriting income at 78.3 percent ($5.4 million).

The decline in interest income is gener-ally reflective of the changes in interest rates during the year. The average rate of return on total assets of $247.9 mil-lion stood at 2.8 percent compared to 4.7 percent in 2007.

The consolidated pre-tax profit for the general insurance sector at the end of the year stood at $25.7 million compared to $34.4 million, recording a 25.5 per-cent reduction, over the year. Taxation expense also declined over the year to $7.6 million from $10.6 million in 2007. This resulted in the net profit after tax of $18.1 million, a 23.9 percent reduction from $23.8 million in 2007.

BALANCE SHEET

Assets

In 2008, the asset distribution pattern for the general insurance sector remained largely unchanged with bank deposits and cash on hand being the major asset categories accounting for 62.3 percent of total assets.

Total assets grew at a marginal rate of 3.2 percent to reach $247.9 million, in line with the growth of the general pre-mium base. In comparison to 2007, to-tal assets grew by 6.9 percent to $240.3 million.

The growth in the balance sheet was mainly driven by the increase in bank de-posits by 24.1 percent to $127.8 million. The bulk of the assets continued to be in investments, accounting for 65.1 percent of the general insurance industry assets and bank deposits continued to be the largest holding at 51.6 percent.

Based on the industry’s consolidated cash and deposit holdings of $154.4 million (2007: $140.7 million), there is more than sufficient cash to cover the total industry’s consolidated outstanding claims of $72.7 million. Liabilities

A moderate decline was noted in total liabilities over the year to $158.1 million (2007: $159.9 million).

The major liability, outstanding claims provisions (including claims incurred but not reported) was recorded at $72.7 mil-lion and accounted for 46.0 percent of total liabilities. This was $65.2 million in 2007 and accounted for 40.8 percent of total liabilities.

Unearned premium provision (UPP) comprised the bulk of the balance of li-abilities at $51.4 million (32.5 percent of total liabilities). UPP as a percentage of net premium income stood at 55.3 percent which was above the prudential benchmark of 40.0 percent. Such a level of provisions was indicative of adequate unearned premium provisioning for the general insurance industry.

Other provisions and other liabilities re-corded decreases over the year to $13.5 million (2007: $23.9 million) and $18.6 million (2007: $19.0 million) respective-ly. Bulk of the decline in other provisions was attributed to dividends, which de-creased by $7.1 million to $5.3 million in 2008.

Other liabilities were spread among a di-versity of creditors, the major categories being amounts due to reinsurers at $7.5 million, to related persons at $5.6 million and sundry creditors of $3.1 million.

Owners’ Funds

Consolidated shareholders funds record-ed another double digit growth of 11.8 percent ($9.5 million) to $89.8 million in 2008 from $80.3 million.

The growth has been attributed to the increase in retained earnings, which in-creased by 18.2 percent to $61.0 million from $51.6 million in 2007.

Graph 11 Operating and Underwriting Results

Graph 12 Distribution of Assets for General Insurance Companies

Graph 13 Distribution of Liabilities for General Insurance Companies


240

$m

200

160

120

80

40

0

2001

2002

Term Deposits Amt Due from Reinsurers

Outstanding Premiums Shares

Govt Securities Fixed Assets

Other Assets

2003

2004

2005

2006

2007

2008

280

Yea

rs


$m

Outstanding Claims Provision Unearned Premium Provision

Other Liabilities Other Provision

160

140

120

100

80

60

40

20

0

2001

2002

2003

2004

2005

2006

2007

2008

Yea

rs

2001

2002

2003

2004

2005

2006

2007

2008

35

30

2520

1510

5

0

40

Net Profit

Operating and U

nder

writing Result

s

Investment and Others

$m

Yea

rs



24

Graph14: Fire

Graph15: Motor CTP

Graph16: Marine

Graph17: Motor Vehicle

Graph 18: Medical

Graph19: Total

%

908070605040302010

0

2001

2002

2003

2004

2005

2006

2007

2008

Yea

rs

%

908070605040302010

0

2001

2002

2003

2004

2005

2006

2007

2008

Yea

rs

%

140

120

100

80

60

40

20

0

20

01

20

02

20

03

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04

20

05

20

06

20

07

20

08

Yea

rs

%

908070605040302010

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2001

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2006

2007

2008

Yea

rs

%

908070605040302010

0

2001

2002

2003

2004

2005

2006

2007

2008

Yea

rs

Net Loss Ratios13: Fiji General Insurance Busines Classes


%

80

70

60

50

40

30

20

10

0

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

Yea

rs

13Net Loss Ratio is claims incurred as a percentage of net earned premiums


25

PREMIUMS

Gross premiums recorded during 2008 rose by 4.5 percent to $83.7 million compared to an increase of 4.4 percent recorded in 2007. After reinsurance of $1.2 million, net premium income was $82.5 million, a growth of 4.8 percent over the year. (2007: $78.7 million)

Premium growth occurred mainly in endowment policies and other life products evident by the high premiums received for these products. Savings type life insurance products (i.e endowment) are the largest source of premiums and recorded a slight growth in gross premiums over the year to $68.2 million. There was also significant premium growth in ‘other class’14 which increased by 73.9 percent to $8.3 million (2007: $4.8 million). These accounted for 81.5 percent and 10.0 percent respectively of total gross premiums received by the industry in 2008.

Whole of life and term life products accounted for the remaining 8.5 percent

Growth in the life sector moderated amidst persistent challenging investment conditions. Demand for life insurance particularly in investment linked products continued to draw strong interest from consumers. Operating results remained favorable for the life insurers despite a relatively weak economic environment.

Life Insurance

of gross premiums received during the year.

PERFORMANCE OF LIFE BUSINESS

New Business

In 2008, new life policies issued continued the downward trend from 2004. The number of new life policies issued fell by 7.1 percent to 12,017 due to the decline in participating policies.( refer to Table 10)

Non participating policies, however, recorded a significant increase with 407 issued in 2008 compared to 25 in 2007. This has been attributed to the increase in term life policies, while the reduction in endowment and whole of life policies on the other hand contributed to the decline in participating policies. Participating policies entitle policy owners to a share in surpluses that may be distributed by the insurer, whereas non participating policies do not entitle the owners to such benefits.

Chart 2 Composition of Gross Premiums (2008 - $83.7 million)

14 “Other Class” majority includes single premium policy.

Term

Other (individual) Whole of Life

Endowment

81%

3%

10%

6%


Whole of Life - Policy is taken out for the whole of a person’s life with the sum insured payable on death.

Endowment - a savings or investment product with the death cover attached to give it the flavour of ‘life’ insurance. The sum insured is payable at the expiry of a given term (typically 10, 15, 20 or 25 years) or on death of the life insured, should it occur before the policy term expires.

Term - provides life cover for a particular period. (usually more than one year for life insurers). If no claim is made during the period of the policy, i.e. the insured does not die, there is no value.


26

Sums insured for new life policies also recorded a slight decline of 2.5 percent to $355.6 million from $364.9 million in 2007. All ordinary life insurance policies sums insured, except for whole of life, contributed to the decline. (refer to Table 11)

Total premiums written for new policies issued also continued a downward trend. Premiums written on new life business marginally fell by 3.1 percent to $15.7 million while premiums relating to endowment policies declined by 3.9 percent in 2008 to $14.7 million (2007: $15.3 million). On the other hand, premiums written for whole of life and term life policies rose by 50.0 percent and 16.7 percent respectively. (refer to Table 12)

Endowment policies continued to comprise the bulk of new policies issued and new business premiums at 95.9 percent and 93.6 percent respectively. Sums insured for new life business also slightly declined over the year to 52.3 percent (2007: 53.1 percent). Term life and whole life policies accounted for 46.4 percent and 1.3 percent of new business total sums insured respectively.

Endowment life policies cover the risk for a specified period at the end of which the sum assured is paid back to the policyholder along with the entire bonus accumulated during the term of the policy. The policy also pays out in the event of death during the policy duration. It is this feature that accounts for the dominance of endowment policies.

Terminations

A total of 15,386 policies were terminated in 2008 with participating policies accounting for the majority at 98.9 percent. This has declined from the 18,222 policies terminated in 2007. Accordingly, the sum insured terminated for the year also fell by 11.9 percent to $459.5 million. (2007: $521.8 million). (refer to Table 13)

The value of annual premiums relating to the terminated policies declined to $16.2 million from $18.5 million in 2007. The value of premiums terminated through

forfeitures accounted for 62.9 percent of the total premiums terminated in the year. Overall, majority of the policies terminated in 2008 were through surrenders and forfeitures which accounted for 83.3 percent of the total termination and transfers.

Surrenders and Forfeitures

Total policies terminated through surrenders and forfeitures declined to 12,814 from 15,709 in 2007. This, however, was still high in comparison to normal exits of policies through death and maturity. This was mostly due to the economic conditions prevailing in 2008, resulting in policyholders being unable to continue paying premiums.

Policies surrendered in 2008 declined by 14.0 percent to 4,625. (2007: 5,376). The overall surrender rate (surrendered policies/ policies in force at commencement of year) was 5.3 percent compared to 5.9 percent in 2007.

Total number of policies forfeited also declined to 8,189 from 10,333 in 2007. The forfeiture rate (policies forfeited/average of new policies written in the current year and the preceding year) accordingly declined to 65.7 percent. (2007: 76.8 percent) Business in Force

The trend over the last five years has shown the dominance of participating policies, albeit declining gradually over the years, as opposed to non participating policies.

Total life insurers’ policies in force at the end of 2008 dropped to 86,193 from 87,822 in 2007. The total sum insured and the related annual premiums, however, increased over the year by 0.5 percent and 3.7 percent to $1,568.9 million and $79.4 million respectively. (refer to Table 15)

The growth in annual premiums for business in force was due to the increase in the endowment category by 4.3 percent to $72.6 million in 2008. Whole of life insurance, however, slightly reduced to

Table 11 Distribution of New Sums Insured of Life Insurers

Table 10 New Business of Life Insurers

Table 12 Distribution of New Business Premiums of Life Insurers

Year Ordinary Life Insurances Total

Whole of Endow- TermLife ment Life

$m

2007 0.2 15.3 0.6 16.22006 0.4 14.9 1.3 16.62005 0.6 14.6 1.5 16.72004 0.7 14.3 1.7 16.6

2008 0.3 14.7 0.7 15.7

% Change

2007 -50.0 2.7 -53.8 -2.42006 -33.3 2.1 -13.3 -0.62005 -14.3 2.1 -11.8 0.62004 -43.5 22.2 60.4 21.6

2008 50.0 -3.9 16.7 -3.1

% Share

2007 1.2 94.4 3.7 100.02006 2.4 89.8 7.8 100.02005 3.6 87.4 9.0 100.02004 3.9 85.7 10.3 100.0

2008 1.9 93.6 4.5 100.0




$m

2007 3.5 193.8 167.6 364.92006 7.6 194.7 176.6 378.92005 10.8 200.3 213.5 424.62004 12.8 189.8 226.3 428.9

2008 4.5 186.0 165.1 355.6

2007 -53.9 -0.5 -5.1 -3.72006 -29.6 -2.8 -17.3 -10.82005 -15.6 5.5 -5.7 -1.02004 -48.5 19.0 40.1 24.0

2008 -28.6 -4.0 -1.5 -2.5

2007 1.0 53.1 45.9 1002006 2.0 51.4 46.6 1002005 -2.5 47.2 50.3 1002004 3.0 44.3 52.8 100

2008 1.3 52.3 46.4 100


% Change

% Share

Year No. ofPolicies

SumInsured

($m)

Premium

Partic. NonPartic.

Partic. NonPartic.

$million

2007 12,905 25 197.3 167.6 16.22006 13,845 130 202.3 176.6 16.62005 14,833 261 211.5 213.1 16.72004 14,955 471 202.9 226.0 16.6

2008 11,620 407 190.5 165.1 15.7

% Change

2007 -6.8 -80.8 -4.9 -5.1 -2.42006 -6.7 -50.2 -4.3 -17.1 -0.62005 -0.8 -44.6 4.2 -5.7 0.62004 6.5 108.4 9.4 40.7 21.6

2008 -10.0 1528.0 1-3.4 .5 -3.1



27

Table 14 Terminations of AnnualPremiums of Life Insurers

$4.6 million over the year whilst term life remained stable at $2.2 million. The dominance of endowment insurance is noted with the increasing trend in the past five years of the value of the annual premiums.

Policy Payments

Gross policy payments declined over the year to $55.8 million. (2007: $59.8 million). (refer to Table 18)

Payment for matured policies continued to be the largest benefit payment at $30.6 million (2007: $28.0 million) and accounted for 54.8 percent of the total gross policy payments. The Bulk (93.5 percent) of the benefit payments were for endowment policies.

With the decline in the number of policies surrendered in 2008, the benefit payment through surrenders also declined over the year by 20.6 percent to $18.9 million. Benefits payments for death and others also recorded a slight reduction over the year.

INCOME AND OUTGOING

Income

Total income for the life insurance sector registered a decline in growth over the year to $96.6 million. (2007: $131.9 million) This resulted from the large

decline in investment income and the high asset depreciation recorded in 2008. Asset depreciation reduced total income by $18.5 million in 2008.

Investment income also recorded a large fall over the year by $7.4 million to $31.6 million. (2007: $39.0 million) The lower returns from investment were due to the decline in interest income, dividends and other income which fell by $5.9 million, $0.6 million and $1.6 million respectively over the year. Interest income accounted for the majority of investment income at 80.4 percent or $25.4 million.

Net insurance premiums continued to increase, from $78.7 million in 2007 to $82.5 million, although new life insurance business recorded a decline over the year.

Outgoing

Total outgoing for the life sector improved by 7.0 percent over the year to $79.9 million. (2007: $85.9 million). All outgoings categories (net policy payments, net commission incurred, operating expenses) recorded declines over the year and contributed to the reduction in total expenditure. Net policy payments recorded the highest decline of $5.1 million. This was expected given the decline in terminated policies during the year. Net policy payments continued to be the major expenditure item at $55.6 million and accounted for 69.6 percent of total outgoings.

Table 15 Life Business In Force

$m

2007 10.9 27.1 161.9 303.0 19.0 521.82006 11.7 23.4 124.8 281.4 23.0 464.32005 11.1 24.5 130.2 369.9 28.6 564.32004 13.2 20.5 138.6 317.2 23.0 512.6

2008 8.6 28.6 126.1 272.7 23.5 459.6

2007 -6.8 15.8 29.6 7.7 -17.4 12.42006 5.4 -4.5 -4.1 -23.9 -19.6 -17.72005 -15.9 19.5 -6.1 14.2 24.3 10.12004 6.1 8.9 7.2 -7.2 31.1 -1.4

2008 21.1 5.5 -22.1 -10.0 23.7 -11.9

2007 2.1 5.2 31.0 58.1 3.6 100.02006 2.5 5.0 26.9 60.6 5.0 100.02005 2.0 4.3 23.1 65.6 5.0 100.02004 2.6 4.0 27.0 61.9 4.5 100.0

2008 1.9 6.2 27.4 59.3 5.1 100.0


Year Death Maturity Surrender Forteiture Other Total

% Change

% Share

Table 13 Terminations of SumInsured of Life Insurers

YearNumber of

PoliciesSum

Insured($m)

Premium

Partic. NonPartic.

Partic. NonPartic.

($m)

2007 86,610 1,212 1,200.4 360.2 76.6

2006 89,555 1,278 1,200.0 388.8 74.7

2005 89,617 1,362 1,179.0 412.9 79.0

2004 91,666 1,307 1,163.5 431.0 77.3

2008 84,717 1,476 1,215.6 353.3 79.4

% Change

2007 -3.3 -5.2 0.0 -7.4 2.5

2006 -0.1 -6.2 1.8 -5.8 -5.4

2005 8.6 7.1 1.3 -4.2 2.2

2004 4.2 13.3 5.7 -24.3 15.5

2008 -2.2 21.8 1.3 -1.9 3.7


$m

2007 0.4 1.4 5.0 11.4 0.3 18.52006 0.4 1.6 3.7 11.2 7.5 24.42005 0.4 1.1 3.4 11.6 2.4 18.92004 0.4 0.9 3.3 9.5 0.9 15

2008 0.3 1.3 4.1 10.2 0.3 16.2

% Change

2007 0.0 -12.5 35.1 1.8 -96.0 -24.22006 0.0 45.5 8.8 -3.4 212.5 29.12005 0.0 22.2 3.0 22.1 167.0 26.02004 1.5 29.7 11.1 -10.4 17.4 -2.8

2008 -25.0 -7.1 -18.0 -10.5 0.0 -12.4

% Share

2007 2.2 7.6 27.0 61.6 1.6 1002006 1.6 6.6 15.2 45.9 30.6 1002005 2.1 5.8 18.0 61.4 12.7 1002004 2.8 5.8 22.0 63.5 5.9 100

2008 1.9 8.0 25.3 62.9 1.9 100


Year Death Maturity Surrender Forteiture Other Total


28

Net commission incurred continued to decline since 2006 to a total of $7.0 million. This indicated that insurers are opting to sell insurance policies directly as opposed to employing agents.

OVERALL RESULTS

The life sector registered an after tax surplus of $15.7 million, plummeting from the $45.8 million recorded in 2007. This has been attributed to the lower investment returns and high asset depreciation recorded, which more than off-set the growth in net insurance premiums and the improvement in total outgoings.

Bonuses paid in 2008 totalled $2.6 million from $2.1 million in 2007. There was also a $20 million dividend payout during the year.

BALANCE SHEET

Assets

2008 saw a contraction in the balance sheet of life insurers, particularly its combined assets. Total assets declined by $29.3 million over the year to $556.3 million.

Both major categories (investments

and loans) declined over the year and

contributed to the fall in total assets.

Current assets also declined over the

year. The reduction in total investments

Table 16 Distribution of SumsInsured for Life Business in Force

was due mainly to government securities

and equity investments which declined

by $24.9 million and $15.6 million

respectively. The reduction in cash on

hand by $9.6 million contributed to the

decline in current assets.

The asset distribution pattern remained

largely unchanged from 2007. Investments

in government securities accounted for

37.0 percent of total assets at $206.1

million, followed by loans which at

$94.1 million (16.9 percent), equity

investments with related and non related

persons at $60.2 million (10.8 percent).

Total investments amounted to $417.5

million and accounted for 75.1 percent of

total assets.

Liabilities

Life insurer’s liabilities are required under

the Insurance Act 1998 to be valued

annually by an actuary to determine the

net statutory liability which represents

the estimated total liabilities of insurers

to the insureds. Total liabilities increased

marginally over the year to $519.4 million.

(2007: $511.9 million). The balance of

revenue account continued to dominate

the liabilities of life insurers at $490.3

million. Of this, the net statutory liability

valued as at 31 December 2008 was

$466.7 million.

Owner’s Funds

Shareholder’s accounts were impacted

by the movement in asset and liabilities

during the year. A dividend payment and

the depreciation of asset values resulted

in a large decline in retained profits from

$40.8 million in 2007 to $25.5 million.

Asset revaluation reserve also contributed

to the decline with a negative balance of

$9.2 million.



$m

2007 119.7 1,080.7 360.1 1,560.42006 128.1 1,071.6 388.7 1,588.42005 137.3 1,039.1 415.5 1,591.92004 147.2 1,013.6 433.7 1,594.4

2008 113.9 1,101.7 353.3 1,568.9

% Change

2007 -6.6 0.8 -7.4 -1.82006 -6.7 3.1 -6.5 -0.22005 -6.7 2.5 -4.2 -0.22004 -0.6 2.2 -6.4 -1.1

2008 -4.8 1.9 -1.9 0.5

% Share

2007 7.7 69.3 23.1 100.02006 8.1 67.5 24.5 100.02005 8.6 65.3 26.1 100.02004 9.2 63.6 27.2 100.0

2008 7.3 70.2 22.5 100.0




$m

2007 4.8 69.6 2.2 76.62006 5.3 67.2 2.2 74.72005 5.8 67.6 5.6 79.02004 6.5 65.5 5.3 77.3

2008 4.6 72.6 2.2 79.4

% Change

2007 -9.4 3.6 0.1 2.52006 -8.6 -0.6 -60.7 -5.42005 -10.8 3.2 5.7 2.22004 -2.4 17.4 19.8 15.5

2008 -4.2 4.3 0.0 3.7

% Share

2007 6.3 90.9 2.8 100.02006 7.1 90.0 2.9 100.02005 7.3 85.6 7.1 100.02004 8.4 84.8 6.8 100.0

2008 5.8 91.4 2.8 100.0


Table 17 Distribution Annual Premiums for Life Business in Force

Year Maturity Death Surrender Others Total

2007 28.0 7.7 23.8 0.3 59.82006 23.7 8.3 17.6 0.2 49.82005 23.5 8.1 16.6 0.2 48.42004 21.1 8.7 15.4 0.3 45.5

2008 30.6 6.0 18.9 0.2 55.8


Table 18 Gross Policy Payments ($m)

Graph 20 Distribution of Assets for Life Insurance Companies


$m

700

600

500400300200

100-

Loans

Government Securities

2008

2004

2005

2006

2007

Outstanding Premiums Other Investments

Fixed Assets Other Assets

Yea

rs


29

PREMIUMS

In 2008, total premiums transacted by the insurance broking industry declined slightly to $90.0 million (2007: $90.3 mil-lion). The decline in premiums was largely due to the miscellaneous class which reg-istered a decline of 7.2 percent to $10.3 million (2007: $11.1 million).

The life and medical class also recorded a premium decline of 4.4 percent to $12.9

million while the liability class fell by 4.0 percent to $9.6 million.

Total premiums placed for the fire and property class registered a growth of 2.9 percent to $43.2 million while transport and marine grew by 2.2 percent to $14.0 million. The growth in these two classes has, however, slowed compared to growths experienced in 2006 and 2007.

The composition of premiums placed re-mained unchanged over the years. Fire and property continued to dominate the market share in terms of total premiums placed in 2008 accounting for 48.0 per-cent (2007: 46.5 percent), followed by transport and marine (15.6 percent), life and medical (14.3 percent), miscella-neous (11.4 percent) and liability (10.7 percent).

INSURANCE BROKING ACCOUNT

The total amount outstanding in the insur-ance broking account at year end 2008 was $2.4 million, an increase of 4.3 percent from $2.3 million in 2007. The increase

The insurance broking industry continued its downward trend in terms of premiums transacted in 2008 and this has been attributed to some extent to the general slow down in the economy during the year. A lower reported net profit coupled with dividend payouts resulted in lower retained earnings reported in 2008.

Insurance Brokers

Table 19 Total Premiums Transacted

Chart 03 Distribution of Premiums Transacted by Brokers

in the balance of the broking account was largely due to the increase in total monies received during the year.

Total premium monies received increased by 4.6 percent to $95.1 million (2007: $90.9 million). The increase in premiums handled was a result of increases in pre-miums placed with both licensed insurers and unlicensed insurers.

Fire and Property Liability

Transport and Marine Life and Medical

Miscellaneous

48%

16%

11%

11%

14%


$m

2007 42.0 13.7 10.0 13.5 11.1 90.32006 39.1 13.3 11.7 14.7 17.9 96.72005 35.8 11.5 10.6 15.5 15.5 88.92004 39.4 11.6 10.0 13.2 16.1 90.3

2008 43.2 14.0 9.6 12.9 10.3 90.0

2007 7.4 3.0 -14.5 -8.2 -38.0 -6.62006 9.2 15.7 10.4 -5.2 15.5 8.82005 -9.1 -0.9 6.0 17.4 -3.7 -1.62004 -0.5 -0.9 30.8 2.9 13.7 5.1

2008 2.9 2.2 -4.0 -4.4 -7.2 -0.3

2007 46.5 15.2 11.1 15.0 12.3 100.02006 40.4 13.8 12.1 15.2 18.5 100.02005 40.3 12.9 11.9 17.4 17.4 100.02004 43.7 12.9 11 14.7 17.8 100.0

2008 48.0 15.6 10.7 14.3 11.4 100.0

*Liability - Motor-CTP, Professional Indemnity, Public Liability &Workers Compensation

**Miscellaneous - Others, CIT & Burglary, Personal Accident

Source: Insurance Brokers.

YearFire

& Pro-perty

Trans-port &Marine

*Liability Life &Medical aneous

Total

% Change

% Share


30

Of the total monies received, premiums placed with licensed insurers accounted for 80.0 percent (2007: 81.0 percent) while 19.7 percent were placed with un-licensed insurers. The general insurance business accounted for 99.3 percent of total monies received by the brokers while life insurance business accounted for 0.7 percent.

Table 20 Insurance Broking Account of Brokers ($m)

Graph 21 Insurance Broking Account for Insurance Brokers

Payments made to brokers for commission and charges amounted to $12.8 million (2007: $11.9 million), an increase of 7.6 percent over the year. As a percentage of total monies withdrawn, payments to self were recorded at the same level as in 2007 of 13.5 percent.

Table 21 Operating Results of Brokers ($m)

Graph 23 Distribution of Assets for Insurance Brokers

Brokerage earned by the broking industry remained at $12.3 million over the year. Other income which consists of interest income and commissions recorded a de-cline of $0.3 million.

Brokerage earned as commission contin-ued to dominate total revenue and ac-counted for 96.9 percent of the total rev-enue earned in 2008.

A slight improvement in total expenses for the broking industry which improved to $8.0 million in 2008 (2007: $8.2 mil-

Table 22 Payment to Brokers as a Per-centage of Total Monies Withdrawn

Total premium monies withdrawn by the broking industry in 2008, increased by 6.0 percent to $94.9 million (2007: $89.5 mil-lion). The increase in monies withdrawn has been attributed to a rise in payments made to licensed insurers and to brokers for commission and charges.

Of the total monies withdrawn, payments to licensed insurers accounted for 67.3 percent (2007: 64.8 percent) while pay-ments to unlicensed insurers accounted for 18.5 percent.

OPERATING RESULTS

Total revenue for the insurance broking industry declined by 3.1 percent to $12.8 million (2007: $13.1 million)

lion). Total expenses were dominated by other expenses and salaries & wages categories which accounted for 58.1 per-cent and 29.8 percent of total expenses respectively.

The industry after tax profit was recorded at $3.2 million, a reduction of 5.9 percent over the year (2007: $3.4 million).

The efficiency ratio (total expenses to total revenue) for the broking industry amounted to 63.0 percent in 2008 (2007: 63.1 percent). The efficiency ratio sug-gested that for every dollar of revenue generated, $0.63 was for payment of ex-penses.

BALANCE SHEET

Assets

Total assets of the broking insurance in-dustry increased by 8.0 percent to $32.3 million in 2008 (2007: $29.9). The in-crease in assets was due to the increase noted in investments in bank deposits while minimal changes were noted in all other categories.

Outstanding premiums continued to domi-nate the total assets of the broking indus-try accounting for 60.6 percent of total assets in 2008. Bank deposits accounted for 13.2 percent while cash on hand and insurance broking account both accounted for 7.5 percent of total assets.


$m

Outstanding Premium Fixed Assets

Insurance Broking Acc Other Investments

40

30

20

10

0

2002

2003

2004

2005

2006

2007

2008

Other Assets

Yea

rs

Year B/f Total Total BalanceLast Year Monies Monies Year End

Received Withdrawn

2007 0.9 90.9 89.5 2.32006 1.9 97.6 98.5 0.92005 3.5 94.5 94.2 3.82004 4.2 90.5 91.2 3.5

2008 2.1 95.1 94.9 2.4

% Change

2007 -52.6 -6.9 -9.1 155.62006 -45.7 3.3 4.6 -76.32005 -16.7 4.4 3.3 8.62004 -14.3 -1.3 -1.3 -16.7

2008 133.3 4.6 6.0 4.3



$m

100

80

60

40

20

0

2008

2002

2003

2004

2005

2006

2007

Premium Monies Received

Premium Monies Paid

Yea

rs


$m %

15

10

5

0

2008

2002

2003

2004

2005

2006

2007

15

10

5

0

Payments to Self% of Total Monies Withdrawn

Yea

rs


Year Brokerage Other Total OperatingEarned Income Expenses Profit/

Losses

2007 12.3 0.8 8.2 3.42006 12.8 0.6 7.2 4.12005 12.6 0.3 6.9 4.12004 12.3 0.3 6.5 4.1

2008 12.3 0.5 8.0 3.2

2007 -3.9 33.3 13.9 -17.12006 1.6 100.0 4.3 0.02005 2.4 0.0 6.1 0.02004 10.8 -40.0 8.1 9.9

2008 0.0 -37.5 -2.4 -5.9% Change


31

Graph 24 Distribution of Liabilities for Insurance Brokers

Liabilities

Total liabilities also increased by 21.5 percent to $26.6 million in 2008 (2007: $21.9 million). The increase was mainly due to an increase in provisions for divi-dends by $3.0 million and amounts due to insurers by $0.8 million.

Amounts due to insurers amounted to $19.3 million and continued to dominate the total liabilities of insurance broking industry at 72.6 percent. This was fol-lowed by provisions for dividends at 11.3 percent.

Owner’s Funds

The insurance broking sector recorded a 27.8 percent reduction in total owners funds to $5.7 million, compared to $7.9 million in 2007. The fall was due to a reduction in retained earnings, falling by 30.6 percent to $5.0 million in 2008.

Retained profits of insurance brokers de-creased due to dividend payments by some brokers. In 2008, $2.1 million was paid out as dividend by the insurance brokers.


$m

Amount Due to Insurers Other Liabilities

Amount Due to Related Persons Provisions CurrentLiabilities

40

30

20

10

0

2002

2003

2004

2005

2006

2007

2008

Yea

rs


32

MONTHS EVENT

January 1 staff attended the IAIS Solvency and Actuarial Issues Sub-Committee meeting and Regional Information session, Bank Negara, Malaysia.February 1 RBF staff attached with the Australian Prudential Regulatory Authority (APRA) for three months.June 2 RBF staff attended the New Supervisor’s Workshop on Examination Reports and Data Analysis (organised and funded by Pacific Financial Technical Assistance Centre (PFTAC)) in Rarotonga, Cook Islands.October 3 staff attended training on Managing Regulatory Change for Internal Capital Models funded by the APEC Centre, Melbourne, Australia.Ongoing 10 Staff continued/completed correspondence studies with Australian and New Zealand Institute of Insurance and Finance (ANZIIF) in 2008.

STAFF TRAINING EVENTS

15 Dead and missing 16 Property and business interruption, excluding liability and life insurance losses 17 Not available Source: Swiss Re. Sigma No 2/2009

LOCAL EVENTS

Months Event

January Tropical Cyclone Gene hit Fiji. February Merging of two licensed insurance brokers.March One major fire in Suva.May RBF Trilateral Post Audit and Actuarial Meetings with insurance companies June Insurance Annual Report 2007 submitted to Minister of Finance and National Planning.July Onsite examination of one general insurance company.August One major bus fire in Sigatoka claiming 12 lives.September Onsite examination of one general insurance company. RBF received technical assistance from APRA as part of their Pacific Governance Support Program for 2008. One major bus fire in Sigatoka. There were no major fatalities. October Annual Governor’s meeting with Insurance Companies and Licensed Insurance Brokers Association of Fiji (LIBAF). One major personal accident in Suva. November Continuation of Annual Governors meeting with Insurance Companies and Licensed Insurance Brokers Association of Fiji (LIBAF).December The 2007 Insurance Annual Report was tabled in Cabinet. Renewal of insurance agents, brokers and insurers licenses for 2009. RBF Trilateral pre-audit meetings with insurance companies.

Months Country Event Victim15 Insured Losses (US$m)16

January China Snow storms, freezing rain across the country 130 1,300 US Winter storms, heavy rain, snow; floods, mudslides 12 745 Australia Floods caused by heavy rain - 550 US Gas explosion at steel plant - na17

February Germany, Austria, Winter storm Emma, winds up to 15 1,321 Czech Rep et al 150 km/h; floods US Tornadoes, winter storms, floods 56 95March US Thunderstorms, tornadoes, hail 2 560April US Storms, hail, heavy rain, floods - 800 US Thunderstorms, hail - 470 May US Tornadoes, storms, winds up to 320 km/h, heavy rain, hail 7 1,325 US Thunderstorms, winds up to 137 km/h, hail - 1,100 Germany, Belgium, Storm Hilal, thunderstorms, 4 973 UK, France et al hail; floods, landslides US Tornadoes, winds up to 280 km/h, hail 22 585June US Storms over Midwest, hail, rain; floods 16 725 US Fire at Universal Studios - na Australia Explosion and fire at gas processing plant - na July US, Mexico, Gulf of Hurricane Dolly, winds up to 160 km/h, 5 525 Mexico heavy rain; floodsAugust US, Caribbean, Gulf Hurricane Gustav, winds up to 240 km/h; 135 4,000 of Mexico, Haiti et al offshore damages, floodsSeptember US, Caribbean, Gulf Hurricane Ike, winds up to 195 km/h; of Mexico, Haiti et al offshore damages, floods 136 20,000November US Three urban forest fires, Santa Ana winds up to 130 km/h - 500

CALENDAR OF EVENTS

INTERNATIONAL EVENTS


33

Appendices

Statistical Tables

- General Insurance

- Life Insurance

- Insurance Brokers

Lists of Agents Licensed as at 31 December 2008

Fiji: Key Economic and Financial Indicators

Fiji: Key Insurance Indicators


34

Table One (i)-(xiv) – Underwriting Account

Table Two – Profit and Loss Account

Table Three – Balance Sheet

Table Four – Statement of Premiums

Table Five – Statement of Claims and Commissions

Table Six – Statement of Reinsurance Arrangements

Table Seven – Statement of Claims Run-off by Accident Year

Table Eight – Statement of Gross Aggregate Exposures

General Insurance


35

Table 1: UNDERWRITING OPERATIONS FOR THE GENERAL INSURANCE INDUSTRY

($’000)

CONSOLIDATED 2008 2007 2006 2005 2004

PART A - PREMIUMS

Gross premium income 117,890.3 112,700.2 117,538.0 109,639.0 102,806.7

less

Reinsurance outwards 24,961.3 23,978.5 25,842.8 25,792.4 25,506.3

NET PREMIUM INCOME 92,929.0 88,721.8 91,695.3 83,846.6 77,300.4

add

Retained unearned premiums - opening 45,324.8 47,710.9 43,172.7* 39,591.2 35,305.2

less

Retained unearned premiums - closing 47,139.5 45,324.8 47,710.9 43,171.1* 39,591.2

NET EARNED PREMIUMS 91,114.3 91,107.9 87,157.0 80,266.6 73,014.5

PART B - CLAIMS

Net claims paid 39,848.8 42,555.8 39,948.2 34,419.0 34,126.4

add

Net claims outstanding - closing 60,638.5 55,023.8 55,131.5 54,334.7 48,813.5*

less

Net claims outstanding - opening 55,023.8 55,131.5 54,334.7 48,889.2* 44,593.8

NET CLAIMS INCURRED 45,463.5 42,448.0 40,745.1 39,864.5 38,346.2

PART C - UNDERWRITING EXPENSES

Commission expense 10,844.8 9,483.8 10,374.5 10,937.8 9,160.2

Acquisition expense 5,082.8 5,520.2 5,609.6 4,857.9 4,876.4

TOTAL EXPENSES 15,927.7 15,004.0 15,984.1 15,795.8 14,036.6

UNDERWRITING SURPLUS / (DEFICIT) 29,723.2 33,655.9 30,427.9 24,606.3 20,631.8

NET LOSS RATIO (%) 49.9 46.6 46.7 49.7 52.5

EXPENSE RATIO (%) 17.5 16.5 18.3 19.7 19.2

*Does not correspond due to adjustments by few insurance companies. Source: Insurance Companies


36

Table 1(i) UNDERWRITING OPERATIONS FOR THE GENERAL INSURANCE INDUSTRY

($’000)

FIRE 2008 2007 2006 2005 2004

PART A - PREMIUMS


less



add

Retained unearned premiums - opening 11,515.6 11,170.5 10,049.7 8,881.8 7,750.1

less

Retained unearned premiums - closing 12,327.9 11,515.6 11,170.5 10,049.7 8,881.8


PART B - CLAIMS

Net claims paid 3,452.5 5,551.6 5,738.4 2,692.8 5,028.0

add

Net claims outstanding - closing 9,107.8 7,232.4• 6,509.6 9,939.9 9,281.1*

less





Acquisition expense 1,024.6 1,065.8 976.5 743.3 1,017.6

TOTAL EXPENSES 4,207.2 3,135.5 3,012.8 2,697.8 2,505.1


NET LOSS RATIO (%) 36.2 45.1 17.8 29.8 66.8

EXPENSE RATIO (%) 28.6 22.5 23.2 24.5 22.1

*Does not correspond due to an adjustment by one insurance company •Revised 2007 figure due to an adjustment by an insurance company



37


Table 1(ii) UNDERWRITING OPERATIONS FOR THE GENERAL INSURANCE INDUSTRY

($’000)

HOUSEHOLDERS 2008 2007 2006 2005 2004

PART A - PREMIUMS


less



add


less



PART B - CLAIMS

Net claims paid 1,427.4 2,667.1 986.3 1,308.6 1,070.2

add

Net claims outstanding - closing 1,424.3 839.6* 1,251.6 906.2 1,066.3

less

Net claims outstanding - opening 841.1* 1,251.6 906.2 1,066.3 1,176.6

NET CLAIMS INCURRED 2,010.6 2,255.2 1,331.7 1,148.4 959.9


Commission expense 895.8 847.1 746.6 662.4 579.9

Acquisition expense 144.6 142.2 67.9 148.4 175.1

TOTAL EXPENSES 1,040.4 989.3 814.4 810.8 754.9


NET LOSS RATIO (%) 41.7 47.8 33.8 28.8 30.8

EXPENSE RATIO (%) 21.6 20.9 20.7 20.3 24.2 *Does not correspond due to an adjustment by an insurance company


38

Table 1 (iii) UNDERWRITING OPERATIONS FOR THE GENERAL INSURANCE INDUSTRY

($’000)

MOTOR VEHICLE 2008 2007 2006 2005 2004

PART A - PREMIUMS


less



add


less



PART B - CLAIMS

Net claims paid 13,337.8 12,026.7 13,638.4 11,936.7 10,889.4

add

Net claims outstanding - closing 7,698.2 6,200.1• 8,693.1 8,124.7 7,436.5

less

Net claims outstanding - opening 6,200.1 8,693.1 8,124.7 7,436.5 6,601.4





TOTAL EXPENSES 3,061.2 2,976.9 3,342.8 3,435.1 3,012.3


NET LOSS RATIO (%) 66.5 40.9 62.0 57.5 59.1

EXPENSE RATIO (%) 13.7 12.8 14.6 15.7 15.2 • Revised 2007 figure due to an adjustment by an insurance company Source: Insurance Companies


39

Table 1(iv) UNDERWRITING OPERATIONS FOR THE GENERAL INSURANCE INDUSTRY

($’000)

MARINE HULL 2008 2007 2006 2005 2004

PART A - PREMIUMS


less

Reinsurance outwards 184.4 292.2 314.1 627.6 879.9


add

Retained unearned premiums - opening 624.9 669.2 780.4 748.6 679.3

less

Retained unearned premiums - closing 442.9 624.9 669.2 780.4 748.6


PART B - CLAIMS

Net claims paid 1,095.4 467.8 693.1 207.0 625.5

add

Net claims outstanding - closing 1,620.9 1,267.1 1,046.1 1,036.1 758.0

less

Net claims outstanding - opening 1,267.1 1,046.1 1,036.1 758.0 1,179.9

NET CLAIMS INCURRED 1,449.3 688.7 703.1 485.1 203.6




TOTAL EXPENSES 170.8 74.3 159.8 176.9 119.8

UNDERWRITING SURPLUS / (DEFICIT) (417.2) 352.6 452.4 703.6 736.1

NET LOSS RATIO (%) 120.5 61.7 53.5 35.5 19.2

EXPENSE RATIO (%) 14.2 6.7 12.2 13.0 11.3



40

Table 1(v) UNDERWRITING OPERATIONS FOR THE GENERAL INSURANCE INDUSTRY

($’000)

MARINE CARGO 2008 2007 2006 2005 2004

PART A - PREMIUMS


less



add


less



PART B - CLAIMS

Net claims paid 682.9 1,029.0 467.1 220.6 318.9

add

Net claims outstanding - closing 953.2 1,196.2 461.6 481.4 461.0

less

Net claims outstanding - opening 1,196.2 461.6 481.4 461.0 613.2

NET CLAIMS INCURRED 439.9 1,763.6 447.4 241.0 166.7


Commission expense 104.9 (8.4) 96.3 44.3 5.8


TOTAL EXPENSES 197.6 83.9 177.3 116.3 105.6

UNDERWRITING SURPLUS / (DEFICIT) 828.8 (85.4) 938.0 1,115.4 1,053.1

NET LOSS RATIO (%) 30.0 100.1 28.6 16.4 12.6

EXPENSE RATIO (%) 13.5 4.8 11.3 7.9 8.0



41

Table 1(vi) UNDERWRITING OPERATIONS FOR THE GENERAL INSURANCE INDUSTRY

($’000)

BURGLARY 2008 2007 2006 2005 2004

PART A - PREMIUMS


less



add


less



PART B - CLAIMS

Net claims paid 1,213.7 985.3 1,275.5 872.4 804.4

add

Net claims outstanding - closing 850.6 966.5 625.8 1,021.0 605.2

less

Net claims outstanding - opening 966.5 625.8 1,021.0 605.2 616.9

NET CLAIMS INCURRED 1,097.8 1,326.0 880.3 1,288.2 792.7




TOTAL EXPENSES 195.6 202.8 211.1 211.3 230.9

UNDERWRITING SURPLUS / (DEFICIT) 116.1 (24.5) 357.9 (108.3) 303.8

NET LOSS RATIO (%) 77.9 88.1 60.7 92.6 59.7

EXPENSE RATIO (%) 13.9 13.5 14.6 15.2 17.4



42

Table 1(vii) UNDERWRITING OPERATIONS FOR THE GENERAL INSURANCE INDUSTRY

($’000)

MOTOR CTP 2008 2007 2006 2005 2004

PART A - PREMIUMS


less

Reinsurance outwards 1,212.2 1,770.9 1,906.2 1,382.0 992.1


add


less



PART B - CLAIMS

Net claims paid 3,240.4 3,444.9 3,161.6 2,115.6 2,157.9

add


less




Commission expense 492.8 411.7 553.2 1,035.1 696.2


TOTAL EXPENSES 592.6 496.7 646.2 1,103.6 769.5


NET LOSS RATIO (%) 38.5 41.4 71.8 57.3 42.3

EXPENSE RATIO (%) 6.0 5.7 9.5 15.4 11.0 •Revised 2007 figure due to an adjustment by an insurance company Source: Insurance Companies


43

Table 1(viii) UNDERWRITING OPERATIONS FOR THE GENERAL INSURANCE INDUSTRY

($’000)

PERSONAL ACCIDENT 2008 2007 2006 2005 2004

PART A - PREMIUMS

Gross premium income 862.2 816.9 817.8 1,322.4 1,299.3

less


NET PREMIUM INCOME 834.2 765.5 725.2 1,213.7 1,231.1

add


less


NET EARNED PREMIUMS 834.2 813.5 761.2 1,164.9 1,262.0

PART B - CLAIMS

Net claims paid 24.9 1,002.0 111.7 405.7 515.4

add

Net claims outstanding - closing 347.7 159.5• 688.3 353.1 220.5

less

Net claims outstanding - opening 159.5 688.3 353.1 220.5 309.4

NET CLAIMS INCURRED 213.0 473.2 446.9 538.4 426.5




TOTAL EXPENSES 192.5 160.2 148.4 227.6 234.9

UNDERWRITING SURPLUS / (DEFICIT) 428.7 180.1 165.9 399.0 600.6

NET LOSS RATIO (%) 25.5 58.2 58.7 46.2 33.8

EXPENSE RATIO (%) 23.1 19.7 19.5 19.5 18.6

•Revised 2007 figure due to an adjustment by an insurance company Source: Insurance Companies


44


Table 1(ix) UNDERWRITING OPERATIONS FOR THE GENERAL INSURANCE INDUSTRY

($’000)

PROFESSIONAL INDEMNITY 2008 2007 2006 2005 2004

PART A - PREMIUMS

Gross premium income 488.9 636.7 908.9 815.6 785.7

less


NET PREMIUM INCOME 431.4 546.8 651.4 666.9 625.3

add


less


NET EARNED PREMIUMS 540.5 670.3 665.8 634.9 517.1

PART B - CLAIMS

Net claims paid 1.6 69.6 9.0 132.5 1.2

add

Net claims outstanding - closing 44.3 34.4* 84.6 104.4 164.8

less

Net claims outstanding - opening 32.9* 84.6 104.4 164.8 457.0

NET CLAIMS INCURRED 13.0 19.5 (10.8) 72.1 (291.0)




TOTAL EXPENSES 94.4 111.9 148.8 137.6 137.8

UNDERWRITING SURPLUS / (DEFICIT) 433.1 538.9 527.9 425.2 670.3

NET LOSS RATIO (%) 2.4 2.9 (1.6) 11.4 (56.3)

EXPENSE RATIO (%) 17.5 16.7 22.3 21.7 26.7

*Does not correspond due to an adjustment by an insurance company


45

Table 1(x) UNDERWRITING OPERATIONS FOR THE GENERAL INSURANCE INDUSTRY

($’000)

PUBLIC LIABILITY 2008 2007 2006 2005 2004

PART A - PREMIUMS


less



add

Retained unearned premiums - opening 989.3 1,012.1 1,096.2 940.0 796.0

less

Retained unearned premiums - closing 931.5 989.3 1,012.1 1,096.2 940.0


PART B - CLAIMS

Net claims paid 214.5 252.6 239.9 197.2 487.1

add

Net claims outstanding - closing 2,333.7 2,974.0 2,836.9 2,235.6 2,758.1*

less


NET CLAIMS INCURRED (425.7) 389.7 841.3 (313.3) 628.5




TOTAL EXPENSES 302.0 313.2 297.5 349.9 332.4

UNDERWRITING SURPLUS / (DEFICIT) 1,865.0 1,106.1 630.8 1,696.4 660.5

NET LOSS RATIO (%) (24.4) 21.5 47.5 (18.1) 38.8

EXPENSE RATIO (%) 17.3 17.3 16.8 20.2 20.5

*Does not correspond due to an adjustment by one insurance company Source: Insurance Companies


46

Table 1(xi) UNDERWRITING OPERATIONS FOR THE GENERAL INSURANCE INDUSTRY

($’000)

WORKERS COMPENSATION 2008 2007 2006 2005 2004

PART A - PREMIUMS


less



add


less



PART B - CLAIMS

Net claims paid 1,582.8 1,721.6 1,857.7 2,075.0 1,665.8

add

Net claims outstanding - closing 8,469.2 8,479.9 8,665.0 9,338.0 8,914.9

less






TOTAL EXPENSES 836.3 832.2 939.2 936.5 797.1


NET LOSS RATIO (%) 25.6 24.1 17.8 39.8 43.7

EXPENSE RATIO (%) 13.6 13.1 14.1 14.9 15.4



47

Table 1(xii) UNDERWRITING OPERATIONS FOR THE GENERAL INSURANCE INDUSTRY

($’000)

MEDICAL 2008 2007 2006 2005 2004

PART A - PREMIUMS


less



add


less



PART B - CLAIMS

Net claims paid 8,279.8 7,683.7 6,934.0 8,251.7 8,195.6

add


less






TOTAL EXPENSES 2,762.7 3,271.7 3,500.6 2,803.2 2,835.3

UNDERWRITING SURPLUS / (DEFICIT) 3,519.2 4,459.5 3,445.1 (815.5) 740.8

NET LOSS RATIO (%) 58.5 48.5 55.1 81.9 70.8

EXPENSE RATIO (%) 18.3 21.8 22.6 25.5 23.1 •Revised 2007 figure due to an adjustment by an insurance company



48

Table 1(xiii) UNDERWRITING OPERATIONS FOR THE GENERAL INSURANCE INDUSTRY

($’000)

TERM LIFE 2008 2007 2006 2005 2004

PART A - PREMIUMS


less



add

Retained unearned premiums - opening 1,336.1 1,473.9 1,558.6* 2,330.5 1,357.6

less

Retained unearned premiums - closing 1,817.5 1,336.1 1,473.9 1,557.1* 2,330.5


PART B - CLAIMS

Net claims paid 3,373.3 3,977.9 3,614.2 2,824.0 1,523.5

add

Net claims outstanding - closing 2,504.1 2,336.7 1,723.8 1,549.2 990.2

less

Net claims outstanding - opening 2,336.7 1,723.8 1,549.2 990.2 1,064.8



Commission expense 935.9 935.8 995.8 1,102.3 884.0


TOTAL EXPENSES 1,434.5 1,525.7 1,632.5 1,736.1 1,344.1

UNDERWRITING SURPLUS / (DEFICIT) 1,532.3 396.5 549.4 1,539.4 1,117.5

NET LOSS RATIO (%) 54.4 70.5 63.5 50.8 37.1

EXPENSE RATIO (%) 22.0 23.4 27.3 26.1 34.4

*Does not correspond due to adjustments by one insurance company. Source: Insurance Companies


49

Table 1(xiv) UNDERWRITING OPERATIONS FOR THE GENERAL INSURANCE INDUSTRY

($’000)

OTHER 2008 2007 2006 2005 2004

PART A - PREMIUMS


less

Reinsurance outwards 608.7 615.9 986.8 1,048.3 1,048.9


add


less



PART B - CLAIMS

Net claims paid 1,921.7 1,675.8 1,221.3 1,179.4 843.7

add

Net claims outstanding - closing 3,467.6 2,671.2• 1,662.2 1,653.0 1,294.4*

less


NET CLAIMS INCURRED 2,718.1 2,684.8 1,230.5 1,525.9 828.3




TOTAL EXPENSES 839.9 829.7 952.6 1,052.8 856.6

UNDERWRITING SURPLUS / (DEFICIT) 810.0 1,322.8 2,761.4 1,910.1 1,620.3

NET LOSS RATIO (%) 62.2 55.5 24.9 34.0 25.1

EXPENSE RATIO (%) 19.2 17.2 19.3 23.5 25.9 *Does not correspond due an adjustment by one insurance company

•Revised 2007 figure due to an adjustment by an insurance company



50

Table 2 PROFIT & LOSS STATEMENT FOR FIJI GENERAL INSURANCE INDUSTRY

($’000)

2008 2007 2006 2005 2004

PART A - PROFIT AND LOSS ACCOUNT

Non-underwriting income 6,290.0 10,705.7 6,877.5 5,432.5 3,888.4

Other non-underwriting income 570.0 639.9 760.0 1,022.5 1,552.5

Total non-underwriting income 6,860.0 11,345.5 7,637.5 6,454.9 5,440.8

Underwriting surplus / (deficit) 29,723.2 33,655.9 30,427.9 24,606.3 20,631.8

Expenses not included in Return 6A 10,933.4 10,347.3 10,157.6 9,507.9 7,840.1

Abnormal / extraordinary items 13.4 (226.5) (207.1) (219.0) (771.1)

PRE-TAX PROFIT (LOSS) 25,663.2 34,427.8 27,700.8 21,334.4 17,461.4

Taxation expense 7,591.6 10,590.9 9,096.0 6,464.4 4,834.7

PROFIT (LOSS) AFTER TAXATION 18,071.6 23,836.8 18,604.7 14,870.0 12,626.8

PART B - APPROPRIATION ACCOUNT

Unappropriated profit (loss) brought

forward from last period 51,623.6 40,885.9• 37,188.7

• 32,511.9* 19,782.7

add

Profit (loss) after taxation for the current period 18,071.6 23,836.8 18,604.7 14,870.0 12,626.8

Other transfers in (attach details) 8,691.5 13,099.2 15,424.2 11,821.2 715.4

UNAPPROPRIATED PROFIT/(LOSS)

CARRIED FORWARD 61,003.7 51,623.6 40,369.2• 35,560.7

• 31,694.1*

•Does not correspond due to IFRS impact on insurance companies

*Does not correspond due to an adjustment by one insurance company Source: Insurance Companies


51

Table 3 CONSOLIDATED BALANCE SHEET OF FIJI GENERAL INSURANCE INDUSTRY

($’000)

CURRENT ASSETS 2008 2007 2006 2005 2004

Cash on hand 26,641.1 37,690.4 11,855.3 11,076.9 11,100.2

Outstanding premiums 21,150.7 19,312.2 18,072.9 15,548.2 14,832.4

Amounts due from reinsurers 13,978.3 12,345.3 15,713.9 29,539.7 26,224.1

Deferred reinsurance expense 2,699.2 4,505.8 2,093.8 3,393.5 4,457.6

Deferred acquisition expense 4,431.2 3,538.1 3,959.1 4,093.8 3,832.0

Prepayments 1,016.5 608.4 44.9 98.4 69.8

Sundry debtors 2,257.5 2,066.5 10,161.7 1,493.7 957.5

Other current assets 1,535.0 1,800.8 1,225.3 1,534.9 1,409.1

Total 73,709.4 81,867.5 63,126.9 66,779.2 62,882.6

LOANS

Loans to directors and persons prescribed

in section 32(1)(a): 0.0 0.0 0.0 1.1 15.4

Loans to related persons 4,131.9 2,837.0 1,790.0 2,368.8 6,752.8

Unsecured employee loans 71.9 49.3 74.1 85.4 94.1

Other loans 5,134.9 7,073.9 5,848.8 6,799.9 3,715.2

Total 9,338.7 9,960.2 7,712.9 9,255.2 10,577.6

INVESTMENTS

Land and buildings 5,045.7 5,363.1 4,737.3 4,281.1 2,763.9

Government securities 9,971.2 8,241.0 12,093.2 14,627.3 12,246.0

Bank deposits 127,824.6 103,002.8 109,707.5 95,476.4 77,898.3

Debentures 0.0 0.0 169.9 220.9 200.0

Shares 12,761.3 13,056.8 12,681.1 13,191.4 12,468.0

Other Investments 5,883.6 15,267.4 10,306.5 7,991.1 5,149.9

Total 161,486.4 144,931.1 149,695.5 135,788.4 110,726.1

FIXED ASSETS

Motor vehicles 657.9 637.2 769.9 696.5 704.6

Furniture and fittings 439.7 505.1 263.8 296.4 379.3

Computer hardware 442.2 431.2 401.5 484.7 284.5

Computer software 4.0 148.6 270.7 178.3 80.7

Other Fixed Assets 647.1 639.9 618.2 538.9 505.5

Total 2,190.8 2,362.0 2,324.1 2,194.8 1,954.5

INTANGIBLE ASSETS

Future income tax benefit 1,071.0 1,087.8 1,829.7 916.6 683.4

Goodwill 0.0 0.0 0.0 0.0 0.0

Establishment costs 0.0 0.0 0.0 0.0 0.0

Other intangible assets 0.0 0.0 0.0 0.0 0.0

Total 1,071.0 1,087.8 1,829.7 916.6 683.4

OTHER ASSETS

Other amounts due from related persons 13.6 0.0 0.0 0.0 17.8

Other 75.3 74.7 93.3 82.4 78.4

Total 89.0 74.7 93.3 82.4 96.2

TOTAL ASSETS 247,885.4 240,283.5 224,782.3 215,016.6 186,920.3



52

Table 3 (cont’d) CONSOLIDATED BALANCE SHEET OF FIJI GENERAL INSURANCE INDUSTRY

($’000) LIABILITIES 2008 2007 2006 2005 2004

UNDERWRITING PROVISIONS

Unearned premium provision 51,419.4 50,039.5 49,875.2 46,951.2 44,173.9

Outstanding claims provision 72,738.4 65,246.6 68,245.3 75,211.3 62,036.1

CAE provision 1,787.3 1,700.8 1,398.6 1,403.2 1,255.2

Other 0.0 0.0 0.0 0.0 0.0

Total 125,945.1 116,986.9 119,519.1 123,565.7 107,465.2

OTHER PROVISIONS

Taxation 4,064.4 6,918.1 7,614.9 4,914.8 3,373.0

Dividends 5,307.3 12,444.3 8,500.0 8,000.0 500.0

Stamp duty 815.1 687.9 334.7 329.8 441.6

Fire service levy 457.4 221.6 249.5 217.4 286.7

Employee entitlements 444.8 380.3 426.1 572.1 363.6

Doubtful debts 1,446.8 2,160.4 1,836.2 808.0 808.0

Other 985.9 1,178.6 718.1 558.2 387.3

Total 13,521.6 23,991.3 19,679.5 15,400.2 6,160.0

BORROWINGS

Borrowings from related persons 0.0 0.0 0.0 269.6 3,767.8

Other borrowings 0.0 0.0 52.4 0.0 0.0

Total 0.0 0.0 52.4 269.6 3,767.8

OTHER LIABILITIES

Amounts due:

- to insurers 0.0 0.0 (270.1) 100.7 38.2

- to reinsurers 7,450.4 4,777.5 5,668.8 10,880.4 9,699.5

- to related persons 5,555.4 7,363.7 6,522.7 3,555.3 3,519.4

- to agents and brokers 1,199.6 724.8 1,200.0 939.4 1,574.9

Sundry creditors 3,085.5 4,190.8 2,791.7 2,089.0 1,075.9

Other 1,323.4 1,910.5 986.0 466.5 981.6

Total 18,614.4 18,967.2 16,899.2 18,031.3 16,889.5

TOTAL LIABILITIES 158,081.1 159,945.4 156,150.1 157,266.8 134,282.6

NET ASSETS 89,804.2 80,338.0 68,632.1 57,749.8 52,637.7

OWNERS’ FUNDS

Paid-up capital 14,807.8 13,580.4 13,080.4 13,080.4 13,055.4

Retained profits 61,003.7 51,623.6 40,369.2 35,560.7 31,694.1

Balance of head office account 8,140.4 7,775.0 7,438.4 1,112.4 877.6

Asset revaluation reserve 4,675.7 6,244.4 6,629.5 6,881.6 6,583.8

General reserve 0.0 243.3 243.3 243.3 201.6

Other 1,176.7 871.4 871.4 871.4 225.2

TOTAL OWNERS’ FUNDS 89,804.2 80,338.0 68,632.1 57,749.8 52,637.7



53

Tabl

e 4

CON

SOLI

DATE

D ST

ATEM

ENT

OF P

REM

IUM

S FO

R GE

NER

AL C

0MPA

NIE

S AS

AT

31 D

ECEM

BER

2008

(IN

SIDE

FIJ

I)

($’0

00)

PART

ICU

LARS

FI

RE

HOU

SE-

MOT

OR

MAR

INE

MAR

INE

BURG

LARY

M

OTOR

-

PERS

ONAL

PR

OF.

PUBL

IC

WOR

KERS

M

EDIC

AL

TERM

OT

HER

TO

TAL

HOL

DERS

VE

HIC

LE

HU

LL

CARG

O

CTP

ACCI

DEN

T IN

DEM

NIT

Y LI

ABIL

ITY

COM

P.

LI

FE

Tota

l pre

miu

ms

(incl

udin

g un

clos

ed

busi

ness

and

third

par

ty c

olle

ctio

ns)

less

ret

urne

d pr

emiu

ms:

- D

irect

bus

ines

s 35

,589

.0

10,4

44.2

24

,689

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1,26

9.5

1,

731.

5

1,39

9.1

11

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.0

862.

2

488.

4

1,99

1.4

6,

294.

1

14,7

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8,

738.

4

5,25

3.5

12

5,19

4.7

- In

war

ds r

eins

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ce b

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ess

0.0

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0

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0

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8

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(0.4

) 0.

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2.5

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86

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4.1

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4,

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4

117,

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3

Trea

ty r

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:

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al

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(c)

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6

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5

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0.

0

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2.8

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333.

6

TOTA

L RE

INSU

RAN

CE

15,6

26.3

2,

917.

5

1,67

1.6

18

4.4

12

2.3

1.

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2.2

28

.0

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30

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6

608.

7

24,9

61.3

NET

PRE

MIU

M IN

COM

E

15,5

15.3

5,

484.

7

22,7

79.9

1,

020.

9

1,59

0.2

1,

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1

10,2

41.3

83

4.2

43

1.4

1,

683.

5

5,94

7.4

14

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6,98

8.8

4,

389.

7

92,9

29.0

Ret

aine

d U

near

ned

Pre

miu

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sion

:

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t beg

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ng o

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624.

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4

5,58

3.5

33

0.3

27

5.2

98

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2,

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8

4,05

5.9

1,

336.

1

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4.1

45

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.8

-

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P a

t end

of y

ear

12,3

27.9

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1

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86.8

44

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67

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7

330.

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6.2

3,

568.

0

1,81

7.5

2,

255.

7

47,1

39.5

NET

EAR

NED

PRE

MIU

MS

14

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.0

4,82

1.8

22

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1,20

2.9

1,

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3

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9.5

9,

939.

1

834.

2

540.

5

1,74

1.3

6,

140.

0

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24.5

6,

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5

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8.1

91

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No.

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189

939

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2 84

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2 2,

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2,84

9 1

32,5

17

No.

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0

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7 0

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0 45

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1 1

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0 0

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7,19

2

Sour

ce: I

nsur

ance

Com

pani

es


54

Tabl

e 5

CON

SOLI

DATE

D ST

ATEM

ENT

OF C

LAIM

S AN

D CO

MM

ISSI

ONS

FOR

GEN

ERAL

COM

PAN

IES

AS A

T 31

DEC

EMBE

R 20

08 (

INSI

DE F

IJI)

($’0

00)

PART

ICU

LARS

FI

RE

HOU

SE-

MOT

OR

MAR

INE

MAR

INE

BURG

LARY

M

OTOR

-

PERS

ONAL

PR

OF.

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IC

WOR

KERS

M

EDIC

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TERM

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TO

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HOL

DERS

VE

HIC

LE

HU

LL

CARG

O

CTP

ACCI

DEN

T IN

DEM

NIT

Y LI

ABIL

ITY

COM

P.

LI

FE

PART

A -

CLA

IMS

GROS

S CL

AIM

S PA

ID

-

Dire

ct b

usin

ess

7,04

3.8

1,

527.

6

13,3

72.5

1,

851.

3

683.

0

1,21

3.7

3,

240.

4

24.9

1.

6

217.

7

1,58

2.8

8,

279.

8

4,67

8.3

1,

921.

7

45,6

39.1

-

Inw

ards

rei

nsur

ance

bus

ines

s 0.

0

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0

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0

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0

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0

0.0

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0

Sub-

tota

l 7,

043.

8

1,52

7.6

13

,372

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1,85

1.3

68

3.0

1,

213.

7

3,24

0.4

24

.9

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21

7.7

1,

582.

8

8,27

9.8

4,

678.

3

1,92

1.7

45

,639

.1

REI

NSU

RAN

CE R

ECOV

ERIE

S

-

Loca

l rei

nsur

ers

13

9.8

0.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0

1,01

1.7

0.

0

1,15

1.5

-

Ove

rsea

s pr

opor

tiona

l

1,11

3.4

10

0.2

34

.8

47.6

0.

0

0.0

0.

0

0.0

0.

0

3.1

0.

0

0.0

29

3.3

0.

0

1,59

2.4

-

Ove

rsea

s no

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tiona

l 2,

338.

1

0.0

0.

0

708.

4

0.0

0.

0

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0

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0.

0

0.0

0.

0

0.0

0.

0

3,04

6.4

Sub-

tota

l

3,

591.

2

100.

2

34.8

75

5.9

0.

0

0.0

0.

0

0.0

0.

0

3.1

0.

0

0.0

1,

305.

0

0.0

5,

790.

3

NET

CLA

IMS

PAID

3,45

2.5

1,

427.

4

13,3

37.8

1,

095.

4

682.

9

1,21

3.7

3,

240.

4

24.9

1.

6

214.

5

1,58

2.8

8,

279.

8

3,37

3.3

1,

921.

7

39,8

48.8

Net

cla

ims

outs

tand

ing

- cl

osin

g 9,

107.

8

1,42

4.3

7,

698.

2

1,62

0.9

95

3.2

85

0.6

17

,257

.4

347.

7

44.3

2,

333.

7

8,46

9.2

4,

559.

7

2,50

4.1

3,

467.

6

60,6

38.5

Net

cla

ims

outs

tand

ing

- op

enin

g 7,

232.

4

841.

1

6,20

0.1

1,

267.

1

1,19

6.2

96

6.5

16

,669

.3

159.

5

32.9

2,

974.

0

8,47

9.9

3,

996.

8

2,33

6.7

2,

671.

2

55,0

23.8

NET

CLA

IMS

INCU

RRED

5,32

7.9

2,

010.

6

14,8

35.9

1,

449.

3

439.

9

1,09

7.8

3,

828.

4

213.

0

13.0

(4

25.7

) 1,

572.

1

8,84

2.6

3,

540.

7

2,71

8.1

45

,463

.5

PART

B -

UN

DERW

RITI

NG

EXPE

NSE

S

Com

mis

sion

exp

ense

;

brok

er

2,92

5.5

33

3.7

92

9.5

10

0.6

86

.6

83.6

36

.4

63.1

54

.9

163.

9

386.

8

1,11

7.6

29

3.9

42

5.8

7,

001.

8

agen

ts

257.

1

562.

1

1,06

3.3

18

.2

18.2

43

.9

456.

4

48.8

4.

2

50.6

12

2.4

37

2.1

64

2.0

18

3.6

3,

843.

0

Acq

uisi

tion

expe

nse

1,02

4.6

14

4.6

1,

068.

3

52.1

92

.7

68.1

99

.8

80.6

35

.3

87.4

32

7.2

1,

272.

9

498.

6

230.

5

5,08

2.8

UN

DERW

RITI

NG

EXPE

NSE

4,

207.

2

1,04

0.3

3,

061.

2

170.

8

197.

6

195.

6

592.

6

192.

5

94.4

30

2.0

83

6.2

2,

762.

7

1,43

4.5

83

9.9

15

,927

.7

PART

C -

UN

DERW

RITI

NG

5,16

7.9

1,

770.

9

4,41

8.7

(4

17.2

) 82

8.8

11

6.1

5,

518.

1

428.

7

433.

1

1,86

5.0

3,

731.

6

3,51

9.2

1,

532.

3

810.

0

29,7

23.1

RESU

LT

PART

D -

UN

DERW

RITI

NG

%

%

%

%

%

%

%

%

%

%

%

%

%

%

%

RATI

OS

Loss

rat

io

36.2

41

.7

66.5

12

0.5

30

.0

77.9

38

.5

25.5

2.

4

(24.

4)

25.6

58

.5

54.4

62

.2

49.9

Expe

nse

ratio

28

.6

21.6

13

.7

14.2

13

.5

13.9

6.

0

23.1

17

.5

17.3

13

.6

18.3

22

.0

19.2

17

.5

Com

bine

d ra

tio

64.8

63

.3

80.2

13

4.7

43

.6

91.8

44

.5

48.6

19

.9

(7.2

) 39

.2

76.7

76

.5

81.5

67

.4

Sour

ce: I

nsur

ance

Com

pani

es


55

Tabl

e 6

CON

SOLI

DATE

D ST

ATEM

ENT

OF R

EIN

SURA

NCE

ARR

ANGE

MEN

TS F

OR G

ENER

AL C

OMPA

NIE

S AS

AT

31 D

ECEM

BER

2008

($’0

00)

PART

ICU

LARS

FIRE

H

OUSE

- M

OTOR

M

ARIN

E M

ARIN

E BU

RGLA

RY

MOT

OR -

PE

RSON

AL

PROF

. PU

BLIC

W

ORKE

RS

MED

ICAL

TE

RM

OTH

ER

TOTA

L

H

OLDE

RS

VEH

ICLE

H

ULL

CA

RGO

CT

P AC

CIDE

NT

INDE

MN

ITY

LIAB

ILIT

Y CO

MP.

LIFE

PART

A -

RETE

NTIO

NS

HIGH

EST

RISK

RET

ENTI

ON (N

ET)

- B

ase

rete

ntio

n

2,07

3.1

2,

073.

1

1,99

5.9

89

7.6

89

7.6

96

5.9

2,

095.

9

715.

9

400.

0

1,29

5.9

2,

045.

9

250.

0

350.

0

800.

0

16,8

56.8

- A

dditi

onal

co-

insu

ranc

e (if

any

)

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

Sub-

tota

l (HR

R)

[su

m 1

:2]

2,

073.

1

2,07

3.1

1,

995.

9

897.

6

897.

6

965.

9

2,09

5.9

71

5.9

40

0.0

1,

295.

9

2,04

5.9

25

0.0

35

0.0

80

0.0

16

,856

.8

MAX

IMUM

EVE

NT R

ETEN

TION

(NET

)

- B

ase

rete

ntio

n

3,65

6.8

3,

656.

8

2,14

5.9

1,

397.

6

1,39

7.6

96

5.9

2,

095.

9

715.

9

400.

0

1,29

5.9

2,

045.

9

250.

0

350.

0

1,20

0.0

21

,574

.1

- A

dditi

onal

co-

insu

ranc

e (if

any

)

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

Sub-

tota

l (M

ER)

[s

um 4

:5]

3,

656.

8

3,65

6.8

2,

145.

9

1,39

7.6

1,

397.

6

965.

9

2,09

5.9

71

5.9

40

0.0

1,

295.

9

2,04

5.9

25

0.0

35

0.0

1,

200.

0

21,5

74.1

PART

B -

LIM

ITS

Max

imum

acc

epta

nce

/

unde

rwrit

ing

limit

99

,282

.1

58,7

82.1

5,

583.

7

2,49

5.1

9,

441.

8

3,49

5.1

50

,000

.0

4,51

6.8

27

,000

.0

89,4

18.4

37

9,18

3.6

75

0.0

1,

100.

0

135,

350.

0

866,

398.

6

Max

imum

aut

omat

ic p

er

risk

capa

city

99,2

82.1

58

,782

.1

5,58

3.7

2,

495.

1

9,44

1.8

3,

495.

1

50,0

00.0

4,

516.

8

27,0

00.0

89

,418

.4

379,

183.

6

250.

0

750.

0

135,

350.

0

865,

548.

6

PART

C -

COV

ER

Max

imum

cat

astr

ophe

cove

r ar

rang

ed

1,

814,

410.

7

1,81

4,41

0.7

10

0,41

8.4

6,

718.

4

22,9

18.4

54

,183

.6

50,0

00.0

12

1,68

3.6

0.

0

21,8

36.7

37

4,18

3.6

0.

0

2,00

0.0

1,

017,

500.

0

5,40

0,26

3.9

MP

L us

ed (

if an

y)

1.

0

1.0

1.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

3.

0

Num

ber

of r

eins

tatm

ents

3.0

3.

0

3.0

0.

0

3.0

0.

0

0.0

1.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0

13.0

Acc

umul

ated

loss

(st

op lo

ss)

0.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0

Sour

ce: I

nsur

ance

Com

pani

es


56

Tabl

e 7

CON

SOLI

DATE

D ST

ATEM

ENT

OF C

LAIM

S RU

N-O

FF B

Y AC

CIDE

NT

YEAR

FOR

GEN

ERAL

COM

PAN

IES

AS A

T 31

DEC

EMBE

R 20

08

($’0

00)

PART

ICU

LARS

FI

RE

HOU

SE-

MOT

OR

MAR

INE

MAR

INE

BURG

LARY

M

OTOR

-

PERS

ONAL

PR

OF.

PUBL

IC

WOR

KERS

M

EDIC

AL

TERM

OT

HER

TO

TAL

($ o

r N

o. v

alue

as

appr

opri

ate)

HOL

DERS

VE

HIC

LE

HU

LL

CARG

O

CTP

ACCI

DEN

T IN

DEM

NIT

Y LI

ABIL

ITY

COM

P.

LI

FE

No

of c

laim

s re

port

ed th

is fi

nanc

ial y

ear

whe

re th

e ev

ent g

ivin

g ris

e to

the

clai

m o

ccur

red:

(a)

this

yea

r

257

26

7

4,25

6

25

108

24

5

48

15

6

69

286

47

,630

16

9

530

53

,911

(b)

in th

e ye

ar p

rior

to (

a)

31

18

278

3

24

15

27

1

5

25

72

6,

470

52

12

3

7,14

4

(c)

in th

e ye

ar tw

o ye

ars

prio

r to

(a)

4

2

11

1

0

2

31

0

1

1

35

16

7

19

13

0

(d)

in a

ny y

ear

earli

er th

an (

c)

0

0

8

0

0

2

40

0

0

3

25

13

7

2

100

TOTA

L N

O OF

CLA

IMS

REPO

RTED

29

2

287

4,

553

29

13

2

264

14

6

16

12

98

418

54

,129

23

5

674

61

,285

Gro

ss c

laim

pay

men

ts th

is fi

nanc

ial y

ear

whe

re th

e ev

ent g

ivin

g ris

e to

the

clai

m

occu

rred

($)

:

(a)

this

yea

r 4,

040.

8

1,27

1.4

10

,146

.3

1,41

0.9

47

1.1

90

2.5

14

4.5

13

.8

0.0

69

.1

272.

8

6,47

3.4

2,

531.

6

1,00

6.6

28

,754

.8

(

b) in

the

year

prio

r to

(a)

1,

856.

8

234.

0

2,72

2.3

33

2.6

15

2.9

28

8.1

38

2.7

11

.1

0.0

67

.0

404.

5

1,71

3.5

1,

673.

0

662.

6

10,5

00.9

(c)

in th

e ye

ar tw

o ye

ars

prio

r to

(a)

94

5.5

2.

3

166.

2

7.6

55

.7

0.5

74

1.0

0.

0

0.0

33

.4

316.

7

90.7

28

2.2

17

2.0

2,

813.

8

(d)

in a

ny y

ear

earli

er th

an (

c)

200.

6

20.0

33

7.7

10

0.3

3.

4

22.6

1,

972.

2

0.0

1.

6

48.2

59

3.0

(2

.1)

191.

5

80.5

3,

569.

6

TOTA

L GR

OSS

CLAI

MS

PAYM

ENTS

7,

043.

8

1,52

7.6

13

,372

.5

1,85

1.3

68

3.0

1,

213.

7

3,24

0.4

24

.9

1.6

21

7.7

1,

587.

1

8,27

5.5

4,

678.

3

1,92

1.7

45

,639

.1

No

of c

laim

s ou

tsta

ndin

g at

end

of

finan

cial

yea

r w

here

the

even

t giv

ing

rise

to th

e cl

aim

occ

urre

d:

(

a) th

is y

ear

84

60

771

11

49

68

43

5 2

32

195

398

27

253

1,99

8

(b)

in th

e ye

ar p

rior

to (

a)

29

4 12

5 5

20

18

58

2 0

24

193

85

12

123

698

(

c) in

the

year

two

year

s pr

ior

to (

a)

29

1 48

6

4 1

57

0 1

22

135

16

5 13

33

8

(d)

in a

ny y

ear

earli

er th

an (

c)

23

9 97

7

4 7

146

0 2

31

195

3 4

19

547

TOTA

L N

O OF

OU

TSTA

NDI

NG

CLAI

MS

165

74

1,04

1 29

77

94

30

4 7

5 10

9 71

8 50

2 48

40

8 3,

581

Gro

ss e

xpec

ted

futu

re p

aym

ents

on

outs

tand

ing

repo

rted

cla

ims

whe

re

the

even

t giv

ing

rise

to th

e cl

aim

oc

curr

ed (

$):

(

a) th

is y

ear

8,48

5.0

94

3.9

4,

303.

5

537.

8

227.

0

469.

5

1,30

7.3

44

.6

5.1

28

9.5

88

9.6

1,

950.

2

779.

5

1,39

2.6

21

,625

.2

(

b) in

the

year

prio

r to

(a)

43

6.1

22

.2

580.

5

114.

1

223.

4

117.

6

2,34

9.2

12

.1

0.0

30

9.5

1,

272.

2

545.

3

218.

8

940.

3

7,14

1.2

(

c) in

the

year

two

year

s pr

ior

to (

a)

782.

3

10.0

48

5.9

2,

698.

9

96.3

1.

5

2,66

1.6

0.

0

10.0

36

3.7

93

8.2

96

.2

115.

5

338.

0

8,59

8.1

(

d) in

any

yea

r ea

rlier

than

(c)

8,

482.

6

90.8

1,

200.

3

432.

7

46.1

12

5.1

6,

220.

7

0.0

27

.2

812.

4

3,33

0.2

31

.0

229.

1

367.

3

21,3

95.7

G

ross

pro

visi

on fo

r IB

NR

cla

ims

(all

acci

dent

yea

rs)

799.

0

316.

8

1,12

5.7

13

8.4

40

9.6

11

8.5

5,

525.

5

111.

0

10.0

58

1.6

1,

986.

5

1,89

6.2

1,

493.

0

629.

2

15,1

41.0

TOTA

L GR

OSS

O/S

PROV

ISIO

N

18,9

85.1

1,

383.

7

7,69

5.9

3,

922.

1

1,00

2.3

83

2.1

18

,064

.3

167.

7

52.3

2,

356.

8

8,41

6.6

4,

519.

0

2,83

5.8

3,

667.

5

73,9

01.2

Rei

nsur

ance

rec

over

ies

expe

cted

on

repo

rted

out

stan

ding

cla

ims

whe

re th

e ev

ent g

ivin

g ris

e to

the

cla

im o

ccur

red

($):

(a)

this

yea

r 4,

755.

4

1.6

11

2.0

10

4.8

0.

0

0.0

0.

0

0.0

0.

0

6.7

0.

0

0.0

17

9.2

54

.3

5,21

4.1

(

b) in

the

year

prio

r to

(a)

36

.5

0.8

0.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

37

.3

(

c) in

the

year

two

year

s pr

ior

to (

a)

58.3

3.

5

0.0

2,

141.

6

1.6

0.

0

34.5

0.

0

8.0

0.

0

0.0

0.

0

0.0

0.

0

2,24

7.4

(

d) in

any

yea

r ea

rlier

than

(c)

5,

354.

9

0.7

0.

0

111.

4

6.0

0.

0

905.

4

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.6

6,

379.

0 Es

timat

ed r

eins

uran

ce r

ecov

erie

s on

IB

NR

cla

ims

1.1

3.

1

8.3

0.

0

4.0

0.

0

14.4

1.

0

0.0

77

.9

17.9

0.

0

235.

3

6.8

36

9.7

TOTA

L RE

INSU

RAN

CE R

ECOV

ERIE

S ON

O/S

10

,206

.3

9.6

12

0.3

2,

357.

7

11.6

0.

0

954.

3

1.0

8.

0

84.6

17

.9

0.0

41

4.6

61

.7

14,2

47.6

Sour

ce: I

nsur

ance

Com

pani

es


57

Tabl

e 8

CON

SOLI

DATE

D ST

ATEM

ENT

OF G

ROSS

AGG

REGA

TE E

XPOS

URE

S FO

R GE

NER

AL C

OMPA

NIE

S AS

AT

31 D

ECEM

BER

2008

($’0

00)

PART

ICU

LARS

FI

RE

HOU

SE-

MOT

OR

MAR

INE

MAR

INE

BURG

LARY

M

OTOR

- PE

RSON

AL

PROF

. PU

BLIC

W

ORKE

RS

MED

ICAL

TE

RM

OTH

ER

TOTA

L

HOL

DERS

VE

HIC

LE

HU

LL

CARG

O

CTP

ACCI

DEN

T IN

DEM

NIT

Y LI

ABIL

ITY

COM

P.

LI

FE

GROS

S AG

GREG

ATE

EXPO

SURE

S

INSI

DE F

IJI

-

Wes

tern

Div

isio

n 3,

486,

172.

2 63

7,93

9.7

190,

650.

6 63

,071

.1

39,1

16.4

7,

375.

1 0.

0 40

,806

.0

0.0

185,

495.

0 50

,275

.4

0.0

0.0

302,

546.

2 5,

003,

447.

7

- C

entr

al D

ivis

ion

3,96

1,36

7.6

1,27

9,69

2.1

356,

769.

7 49

,779

.6

171,

565.

0 9,

926.

9 0.

0 11

,987

.6

1,00

0.0

182,

251.

3 10

9,76

6.2

10.0

0.

0 13

8,23

2.9

6,27

2,34

9.0

- N

othe

rn D

ivis

ion

489,

009.

4 39

,132

.1

18,1

46.6

4,

345.

8 1,

501.

8 66

0.0

0.0

3,55

5.0

0.0

1,59

0.0

104,

276.

1 0.

0 0.

0 80

8.0

663,

024.

8

- Ea

ster

n D

ivis

ion

228,

186.

1 66

,609

.8

94,9

13.9

3,

047.

2 7,

734.

3 0.

0 0.

0 0.

0 0.

0 7,

350.

0 1,

153.

9 0.

0 99

9,88

3.7

286,

885.

0 1,

695,

763.

8

Sub-

tota

l - In

side

Fiji

8,

164,

735.

2 2,

023,

373.

8 66

0,48

0.8

120,

243.

7 21

9,91

7.6

17,9

62.1

0.

0 56

,348

.6

1,00

0.0

376,

686.

3 26

5,47

1.5

10.0

99

9,88

3.7

728,

472.

1 13

,634

,585

.2

OU

TSID

E FI

JI

23,6

42.3

44

.0

0.0

0.0

226.

8 0.

0 0.

0 0.

0 0.

0 0.

0 0.

0 0.

0 26

,760

.1

27,2

43.0

77

,916

.2

TOTA

L 8,

188,

377.

4 2,

023,

417.

8 66

0,48

0.8

120,

243.

7 22

0,14

4.4

17,9

62.1

0.

0 56

,348

.6

1,00

0.0

376,

686.

3 26

5,47

1.5

10.0

1,

026,

643.

7 75

5,71

5.1

13,7

12,5

01.4

Sour

ce: I

nsur

ance

Com

pani

es


58

Table Nine – Statement of Revenue and Distribution

Table Ten – Statement of Revenue and Distribution for Statutory Funds

Table Eleven – Balance Sheet

Table Twelve – Statement of Premiums and Commissions

Table Thirteen – Statement of Policy Payments

Table Fourteen – Statement of Business Profile

Table Fifteen – Summary and Valuation of Policies

Table Sixteen – Valuation of Balance Sheet

Life Insurance


59

Tabl

e 9

CON

SOLI

DATE

D ST

ATEM

ENT

OF R

EVEN

UE

& D

ISTR

IBU

TION

FOR

LIF

E CO

MPA

NIE

S

($’0

00)

PART

ICUL

ARS

ALL

STAT

UTO

RY F

UN

DS

OWN

ERS’

FU

NDS

TO

TAL

2008

20

07

2006

20

05

2004

20

08

2007

20

06

2005

20

04

2008

20

07

2006

20

05

2004

PAR

T A

- RE

VENU

E

Net

Insu

ranc

e P

rem

ium

s 82

,465

.1

78,6

51.6

75

,170

.4

73,0

23.9

69

,063

.7

0.0

0.

0

0.0

0.

0

0.0

82

,465

.1

78,6

51.6

75

,170

.4

73,0

23.9

69

,063

.7

Net

Con

side

ratio

n fo

r A

nnui

ties

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

Inve

stm

ent I

ncom

e:

-

Inte

rest

23

,709

.2

28,6

56.3

26

,312

.2

30,8

41.7

24

,954

.9

1,71

1.0

2,

676.

7

2,17

4.7

2,

459.

8

1,32

1.7

25

,420

.2

31,3

33.0

28

,486

.9

33,3

01.5

26

,276

.6

- R

ent

3,67

5.2

3,

158.

5

3,70

1.0

3,

841.

9

3,33

7.7

61

9.2

48

2.4

49

2.7

44

2.2

25

8.7

4,

294.

4

3,64

0.9

4,

193.

7

4,28

4.1

3,

596.

4

-

Div

iden

ds

1,68

4.7

2,

210.

7

1,41

2.1

81

1.6

72

0.3

24

5.8

25

7.7

13

1.6

58

.1

51.0

1,

930.

5

2,46

8.4

1,

543.

7

869.

7

771.

3

-

Oth

er

0.0

1,

365.

2

0.0

0.

0

1,37

0.9

0.

0

234.

8

0.0

0.

0

120.

2

0.0

1,

600.

0

0.0

0.

0

1,49

1.0

Gai

n (lo

ss)

on D

ispo

sal o

f Ass

ets

84.3

88

.9

(6.8

) 1,

637.

7

3.5

0.

0

0.0

0.

0

774.

0

0.0

84

.3

88.9

(6

.8)

2,41

1.7

3.

5 A

sset

Val

ue A

ppre

ciat

ion

(Dep

reci

atio

n)

(16,

816.

0)

10,4

31.9

(1

6,04

5.2)

(4

,912

.4)

(13.

9)

(1,6

64.3

) 3,

052.

6

(3,0

98.6

) (5

88.4

) 1,

219.

5

(18,

480.

3)

13,4

84.5

(1

9,14

3.8)

(5

,500

.8)

1,20

5.6

Oth

er In

com

e

731.

6

530.

4

228.

7

346.

0

(13.

9)

123.

1

78.7

29

.7

40.1

78

4.2

85

4.7

60

9.1

25

8.4

38

6.1

77

0.3

Tota

l Inc

ome

95,5

34.0

12

5,09

3.5

90

,772

.2

105,

590.

4

99,4

23.2

1,

035.

0

6,78

2.8

(2

69.8

) 3,

185.

8

3,75

5.3

96

,568

.9

131,

876.

3

90,5

02.5

10

8,77

6.2

10

3,17

8.5

N

et P

olic

y P

aym

ents

55

,581

.4

60,6

37.2

49

,987

.5

48,4

26.9

45

,590

.3

0.0

0.

0

0.0

0.

0

0.0

55

,581

.4

60,6

37.2

49

,987

.5

48,4

26.9

45

,590

.3N

et C

omm

issi

ons

Incu

rred

6,

950.

7

7,20

9.2

7,

590.

5

7,44

9.3

6,

768.

6

0.0

0.

0

0.0

0.

0

0.0

6,

950.

7

7,20

9.2

7,

590.

5

7,44

9.3

6,

768.

6O

pera

ting

Expe

nses

16

,890

.2

17,6

67.5

16

,506

.4

17,0

85.3

15

,291

.9

440.

4

433.

7

429.

5

458.

2

569.

6

17,3

30.6

18

,101

.1

16,9

35.9

17

,543

.5

15,8

61.6

In

crea

se (

Dec

reas

e) in

Pol

icy

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

L

iabi

litie

s 0.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0

To

tal O

utgo

ing

79,4

22.4

85

,513

.9

74,0

84.4

72

,961

.5

67,6

50.8

44

0.4

43

3.7

42

9.5

45

8.2

56

9.6

79

,862

.7

85,9

47.5

74

,513

.7

73,4

19.6

68

,220

.4

PRE-

TAX

REVE

NU

E SU

RPLU

S / (

DEFI

CIT)

16

,111

.6

39,5

79.6

16

,687

.9

32,6

28.9

31

,772

.4

594.

6

6,34

9.1

(6

99.3

) 2,

727.

6

3,18

5.7

16

,706

.2

45,9

28.9

15

,988

.7

35,3

56.6

34

,958

.1

Taxa

tion

expe

nse

249.

3

(567

.8)

(1,6

47.4

) 1,

122.

9

1,29

6.5

79

4.2

73

2.5

27

2.2

74

9.0

37

7.7

1,

043.

6

164.

7

(1,3

75.2

) 1,

871.

9

1,67

4.2

AFTE

R-TA

X RE

VEN

UE

SURP

LUS

/ (DE

FICI

T)

15,8

62.3

40

,147

.4

18,3

35.3

31

,506

.0

30,4

75.9

(1

99.6

) 5,

616.

6

(971

.5)

1,97

8.6

2,

808.

0

15,6

62.7

45

,764

.1

17,3

64.0

33

,484

.7

33,2

83.9

PA

RT B

- D

ISTR

IBU

TION

Bal

ance

of R

even

ue A

ccou

nt a

t the

begi

nnin

g of

the

year

48

2,22

1.4

44

9,65

5.1

43

7,38

8.7

40

7,09

0.7

38

1,63

0.8

60

,996

.0

50,1

31.3

46

,604

.0

41,4

37.1

34

,570

.1

543,

217.

4

499,

786.

4

483,

992.

7

448,

527.

9

416,

200.

9 R

even

ue S

urpl

us /

(Defi

cit)

for

this

per

iod

15,8

62.3

40

,147

.4

18,3

35.3

31

,506

.0

30,4

75.9

(1

99.6

) 5,

616.

6

(971

.5)

1,97

8.6

2,

808.

0

15,6

62.7

45

,764

.0

17,3

63.9

33

,484

.6

33,2

83.8

Oth

er T

rans

fers

in

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

BALA

NCE

OF

REVE

NU

E AC

COU

NT

49

8,08

3.7

48

9,80

2.5

45

5,72

4.0

43

8,59

6.7

41

2,10

6.6

60

,796

.4

55,7

47.9

45

,632

.5

43,4

15.8

37

,378

.1

558,

880.

1

545,

550.

4

501,

356.

6

482,

012.

5

449,

484.

7 BE

FORE

DIS

TRIB

UTI

ONS

B

onus

es P

rovi

ded

For

or P

aid

2,63

0.6

2,

082.

0

1,28

2.1

1,

223.

1

718.

1

0.0

0.

0

0.0

0.

0

0.0

2,

630.

6

2,08

2.0

1,

282.

1

1,22

3.1

71

8.1

Tran

sfer

to O

wne

rs’ F

und

4,87

4.0

5,

248.

1

4,49

8.7

8,

648.

8

4,05

9.0

(4

,874

.0)

(5,2

48.1

) (4

,498

.7)

(8,6

48.8

) (4

,059

.0)

0.0

0.

0

0.0

0.

0

0.0

Tran

sfer

s to

Res

erve

s 0.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0 D

ivid

ends

Pro

vide

d Fo

r or

Pai

d 0.

0

0.0

0.

0

0.0

0.

0

20,0

00.0

0.

0

0.0

5,

000.

0

0.0

20

,000

.0

0.0

0.

0

5,00

0.0

0.

0 O

ther

Tra

nsfe

rs O

ut (

atta

ch d

etai

ls)

315.

0

251.

0

288.

1

(8,6

63.9

) 23

8.8

0.

0

0.0

0.

0

460.

6

0.0

31

5.0

25

1.0

28

8.1

(8

,203

.3)

238.

8

BA

LAN

CE O

F RE

VEN

UE

ACCO

UN

T AT

TH

E EN

D OF

TH

E YE

AR

490,

264.

1

482,

221.

4

449,

655.

1

437,

388.

7

407,

090.

7

45,6

70.4

60

,996

.0

50,1

31.3

46

,604

.0

41,4

37.1

53

5,93

4.6

54

3,21

7.4

49

9,78

6.5

48

3,99

2.8

44

8,52

8.0

Sour

ce: I

nsur

ance

Com

pani

es


60

Tabl

e 10

CO

NSO

LIDA

TED

STAT

EMEN

T OF

REV

ENU

E AN

D DI

STRI

BUTI

ON F

OR S

TATU

TORY

FU

NDS

OF

LIFE

COM

PAN

IES

($

’000

)

PA

RTIC

ULA

RS

PART

ICIP

ATIN

G N

ON-P

ARTI

CIPA

TIN

G TO

TAL

20

08

2007

20

06

2005

20

04

2008

20

07

2006

20

05

2004

20

08

2007

20

06

2005

20

04

A.

REV

ENU

E

Net

Insu

ranc

e P

rem

ium

s 77

,950

.5

73,2

65.1

68

,594

.4

66,2

88.4

62

,501

.7

4,51

4.6

5,

386.

6

6,57

6.0

6,

735.

4

6,56

1.9

82

,465

.1

78,6

51.6

75

,170

.4

73,0

23.9

69

,063

.7

Net

Con

side

ratio

n fo

r A

nnui

ties

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

Inve

stm

ent I

ncom

e

- In

tere

st

23,4

56.2

28

,126

.4

25,7

85.4

29

,995

.9

24,0

69.9

25

3.0

52

9.9

52

6.8

84

5.9

88

5.0

23

,709

.2

28,6

56.3

26

,312

.2

30,8

41.7

24

,954

.9

- R

ent

3,60

4.3

3,

069.

4

3,59

1.7

3,

702.

4

3,16

2.1

70

.8

89.1

10

9.3

13

9.5

17

5.6

3,

675.

2

3,15

8.5

3,

701.

0

3,84

1.9

3,

337.

7

-

Div

iden

ds

1,59

0.1

1,

934.

7

1,13

4.0

40

3.7

49

4.2

94

.6

276.

0

278.

1

407.

9

226.

1

1,68

4.7

2,

210.

7

1,41

2.1

81

1.6

72

0.3

- O

ther

0.

0

1,32

5.4

0.

0

0.0

1,

041.

0

0.0

39

.8

0.0

0.

0

329.

9

0.0

1,

365.

2

0.0

0.

0

1,37

0.9

Gai

n (lo

ss)

on D

ispo

sal o

f Ass

ets

84.3

88

.9

(6.8

) 1,

161.

3

3.5

0.

0

0.0

0.

0

476.

5

0.0

84

.3

88.9

(6

.8)

1,63

7.7

3.

5 A

sset

Val

ue A

ppre

ciat

ion

/ (D

epre

ciat

ion)

(1

5,93

6.0)

10

,162

.4

(15,

546.

5)

(4,7

50.4

) 0.

0

(880

.0)

269.

5

(498

.7)

(162

.0)

(13.

9)

(16,

816.

0)

10,4

31.9

(1

6,04

5.2)

(4

,912

.4)

(13.

9)O

ther

Inco

me

714.

8

511.

4

229.

2

360.

6

(3.9

) 16

.8

19.0

(0

.5)

(14.

6)

(10.

0)

731.

6

530.

4

228.

7

346.

0

(13.

9)

To

tal I

ncom

e 91

,464

.1

118,

483.

7

83,7

81.3

97

,161

.9

91,2

68.5

4,

069.

8

6,60

9.8

6,

990.

9

8,42

8.5

8,

154.

6

95,5

34.0

12

5,09

3.5

90

,772

.2

105,

590.

4

99,4

23.2

N

et P

olic

y P

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ents

54

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57,7

94.1

47

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46,0

99.0

42

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1,54

8.5

2,

843.

1

2,51

2.0

2,

327.

9

2,92

3.1

55

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.4

60,6

37.2

49

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48,4

26.9

45

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Net

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mis

sion

s In

curr

ed

6,70

7.7

6,

944.

8

7,23

9.3

7,

087.

4

6,46

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24

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4.4

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36

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7

7,20

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5

7,44

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pera

ting

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14

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12

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7.5

1,

982.

6

2,40

1.3

2,

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4

2,30

5.2

16

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17,6

67.5

16

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17,0

85.3

15

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B. D

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Bal

ance

of R

even

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the

year

47

1,95

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43

8,38

7.2

42

5,97

8.3

39

1,88

9.8

36

7,19

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10

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11,2

67.9

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48

2,22

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44

9,65

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43

7,38

8.7

40

7,09

0.7

END

OF T

HE

YEAR

Sour

ce: I

nsur

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Com

pani

es


61

Table 11 ASSETS AND LIABILITIES OF THE FIJI LIFE INSURANCE INDUSTRY ($’000)

ASSETS 2008 2007 2006 2005 2004

Current Assets Cash on hand 5,856.5 15,475.7 4,038.8 36,495.1 2,370.3 Outstanding Premiums 15,634.2 14,635.8 15,968.0 14,947.9 14,080.8 Amounts due from reinsurers 59.8 90.2 398.7 76.0 415.1 Deferred reinsurance expense 0.0 275.3 348.8 406.0 373.1Deferred acquisition expense 0.0 0.0 0.0 0.0 0.0 Prepayments 730.2 418.7 380.7 343.3 349.6 Sundry debtors 5,628.1 5,964.7 5,254.7 5,259.6 4,838.8 Other Current Assets 134.3 91.7 1,321.5 (17.9) 28.2

Total 28,043.1 36,952.2 27,711.4 57,510.0 22,455.9 Loans Loans to directors and other persons 0.0 0.0 0.0 0.0 0.0 Loans to related persons 0.0 0.0 0.0 0.0 0.0 Unsecured employee loan 0.0 12.1 17.9 125.9 208.4 Other Loans 94,149.6 97,077.2 101,276.3 96,699.8 91,190.4 Total 94,149.6 97,089.3 101,294.2 96,825.7 91,398.8 Investments Land & Buildings 58,445.8 57,743.5 62,164.9 61,563.3 58,255.5 Government securities 206,055.6 230,919.7 185,845.1 206,467.5 222,219.5 Bank deposits 46,589.0 40,186.1 48,684.9 3,336.2 4,275.3 Debentures 30,540.1 34,535.9 22,832.3 18,736.6 22,706.7 Shares 60,180.2 75,775.6 59,690.7 60,542.4 50,221.5 Other Investments 15,682.9 0.0 0.0 0.0 0.0

Total 417,493.7 439,160.7 379,217.7 350,645.9 357,678.4 Fixed Assets Furniture & Fittings 4,709.7 2,522.1 1,763.5 2,277.2 2,485.3Motor vehicles 1,342.5 804.1 962.8 966.9 1,010.5 Computer Hardware & Software 817.6 649.6 496.6 620.3 567.6 Other Fixed Assets 58.3 69.4 74.5 0.0 0.0

Total 6,928.1 4,045.3 3,297.5 3,864.5 4,063.4

Intangible Assets Intangible Assets 0.0 0.0 0.0 0.0 0.0 Total 0.0 0.0 0.0 0.0 0.0 Other Assets Other 9,667.1 8,341.2 6,165.2 4,488.6 5,740.8 Total 9,667.1 8,341.2 6,165.2 4,488.6 5,740.8 TOTAL ASSETS 556,281.7 585,588.8 517,686.0 513,334.7 481,337.3



62

Table 11 (cont’d) ASSETS AND LIABILITIES OF THE FIJI LIFE INSURANCE INDUSTRY ($’000)

LIABILITIES 2008 2007 2006 2005 2004

Balance of revenue account at year end 490,264.1 482,221.4 449,655.1 437,388.7 407,090.7 Claims admitted but not paid 5,878.4 5,912.8 5,350.6 6,634.7 6,508.7 Unearned premium provision 0.0 0.0 0.0 0.0 0.0 Other 0.0 0.0 0.0 0.0 0.0

Total 496,142.5 488,134.2 455,005.7 444,023.4 413,599.4

Other Provisions Taxation 1,003.7 957.9 865.0 3,260.6 2,309.6 Dividends 0.0 0.0 0.0 0.0 0.0 Stamp duty 0.0 0.0 0.0 0.0 0.0 Fire service levy 0.0 0.0 0.0 0.0 0.0 Employee entitlements 2,143.6 1,316.9 1,080.2 951.9 868.5 Doubtful debts 3,866.4 3,040.2 2,834.7 3,563.3 4,102.1 Other 0.0 0.0 0.0 0.0 0.0 Total 7,013.7 5,315.0 4,779.9 7,775.8 7,280.2 Borrowings Borrowings from related persons 0.0 0.0 0.0 0.0 0.0 Other borrowings 9,422.8 11,106.1 0.0 0.0 0.0 Total 9,422.8 11,106.1 0.0 0.0 0.0 Other Liabilities Amounts due: - to insurers 0.0 0.0 0.0 0.0 0.0 - to reinsurers 95.9 147.1 332.5 130.0 50.8 - to related persons (32.0) 192.1 65.3 36.4 49.4 - to agents and brokers 0.0 0.3 (0.1) (1.8) (1.1)Sundry creditors 6,767.9 6,643.2 7,029.5 5,535.6 4,558.5 Other 26.1 409.1 0.0 0.0 0.0 Total 6,857.9 7,391.7 7,427.3 5,700.2 4,657.6 TOTAL LIABILITIES 519,437.0 511,947.0 467,212.9 457,499.4 425,537.3 NET ASSETS 36,844.6 73,641.7 50,473.1 55,835.2 55,800.0 OWNERS’ FUNDS Paid-up capital 9,091.1 9,091.1 9,091.1 9,091.1 14,091.1 Retained profits 25,485.7 40,811.3 29,946.5 26,419.2 16,252.4 Balance of head office account 371.5 362.3 341.9 332.3 311.5 Asset revaluation reserve (9,197.4) 12,283.3 0.0 8,899.0 14,051.4 General reserve 0.0 0.0 0.0 0.0 0.0 Other 11,093.6 11,093.6 11,093.6 11,093.6 11,093.6 TOTAL OWNERS’ FUNDS 36,844.6 73,641.7 50,473.1 55,835.2 55,800.0



63

Table 12 CONSOLIDATED STATEMENTS OF PREMIUMS AND COMMISSIONS FOR LIFE COMPANIES AS AT 31 DECEMBER 2008 ($’000)

PARTICULARS ORDINARY LIFE (INDIVIDUAL) INDUSTRIAL LIFE GROUP LIFE OTHER OTHER TOTAL

WHOLE OF LIFE ENDOWMENT TERM (TERM) (INDIVIDUAL) (GROUP)

PART A - PREMIUMS

Direct Insurance Premiums:

- new 339.2 7,374.3 537.8 0.0 5.2 6,561.8 0.0 14,818.3

- renewal 4,239.3 60,794.7 1,567.0 0.0 31.2 1,705.2 0.0 68,337.4

Sub total - Direct 4,578.5 68,169.0 2,104.8 0.0 36.4 8,267.1 0.0 83,155.7

Reinsurance Premiums Inwards 0.0 0.0 480.8 0.0 0.0 70.6 0.0 551.4

GROSS INSURANCE PREMIUMS 4,578.5 68,169.0 2,585.6 0.0 36.4 8,337.7 0.0 83,707.2

Reinsurance Premiums Ceded:

- treaty local 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

- treaty overseas 570.2 512.4 53.4 0.0 0.0 106.1 0.0 1,242.1

- facultative local 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

- facultative overseas 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Sub total - Cessions 570.2 512.4 53.4 0.0 0.0 106.1 0.0 1,242.1

NET INSURANCE PREMIUMS 4,008.3 67,656.6 2,532.2 0.0 36.4 8,231.6 0.0 82,465.1

Gross Consideration for Annuities 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Reinsurance Outwards 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

NET CONSIDERATION FOR ANNUITIES 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

PART B - COMMISSIONS

Paid or Payable:

(i) Direct business

- new 154.3 1,640.8 62.2 0.0 0.0 186.2 0.0 2,043.4

- renewal 162.0 4,625.7 58.7 0.0 0.0 60.9 0.0 4,907.3

(ii) Reinsurance business 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Sub total - Paid or Payable 316.3 6,266.4 120.9 0.0 0.0 247.1 0.0 6,950.7

Received or Receivable 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

NET COMMISSIONS INCURRED 316.3 6,266.4 120.9 0.0 0.0 247.1 0.0 6,950.7



64

Table 13 CONSOLIDATED STATEMENT OF POLICY PAYMENTS FOR LIFE COMPANIES AS AT 31 DECEMBER 2008

($’000)

PARTICULARS ORDINARY LIFE (INDIVIDUAL) INDUSTRIAL LIFE GROUP LIFE OTHER OTHER TOTAL

WHOLE OF LIFE ENDOWMENT TERM (TERM) (INDIVIDUAL) (GROUP)

POLICY PAYMENTS

Gross Policy Payments

- maturities 0.0 30,626.4 (0.1) 0.0 0.0 0.0 0.0 30,626.4

- death 1,390.0 3,794.5 699.4 0.0 100.0 59.4 0.0 6,043.3

- annuities 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

- surrenders 1,143.2 17,639.2 86.7 0.0 0.0 0.0 0.0 18,869.1

- accident & health 0.0 45.0 0.0 0.0 0.0 147.7 0.0 192.7

- other 0.0 56.8 0.0 0.0 0.0 0.0 0.0 56.8

Total 2,533.2 52,162.0 786.0 0.0 100.0 207.1 0.0 55,788.3

Reinsurance Claims Payments 0.0 0.0 929.6 0.0 0.0 0.0 0.0 929.6

Total Policy Payments 2,533.2 52,162.0 1,715.6 0.0 100.0 207.1 0.0 56,717.9

Reinsurance Recoveries 57.3 705.0 251.8 0.0 0.0 122.5 0.0 1,136.5

NET POLICY PAYMENTS 2,476.0 51,457.0 1,463.9 0.0 100.0 84.6 0.0 55,581.4



65

Table 14 CONSOLIDATED STATEMENT OF BUSINESS PROFILE FOR LIFE COMPANIES AS AT 31 DECEMBER 2008 INDIVIDUAL BUSINESS NO. OF POLICIES AMOUNT INSURED ($’000) PREMIUMS

PARTIC. NON-PARTIC. PARTIC. NON-PARTIC. ($’000) NEW LIFE BUSINESS Ordinary Life Insurances - Whole of Life insurances 74 0 4,492.1 0.0 287.1 - Endowment insurances 11,536 0 186,007.3 0.0 14,714.1 - Term insurances 0 407 0.0 165,076.0 674.0 Sub total - ordinary life 11,610 407 190,499.4 165,076.0 15,675.1 Industrial Life Insurances 0 0 0.0 0.0 0.0 Annuities 0 0 0.0 0.0 0.0 Total 11,610 407 190,499.4 165,076.0 15,675.1 TERMINATIONS AND TRANSFERS Policies other than annuities - Death 319 6 3,881.1 4,714.6 289.0 - Maturity 1,896 0 14,658.9 13,965.6 1,319.4 - Expiry of term 0 16 0.0 5,566.4 31.6 - Surrender 4,607 18 49,911.9 76,219.9 4,085.3 - Forfeiture 8,067 122 132,514.9 140,175.6 10,172.9 - Net transfers 0 0 0.0 0.0 0.0 - Others 332 3 9,370.9 8,590.5 349.0 Sub total - policies other than annuities 15,221 165 210,337.6 249,232.7 16,247.1 Annuities 0 0 0.0 0.0 0.0 Total 15,221 165 210,337.6 249,232.7 16,247.1 BUSINESS IN FORCE AT END OF YEAR 1. LIFE BUSINESS IN FORCE Ordinary Life Insurances - Whole of Life insurances 3,367 3 113,949.1 1.1 4,595.1 - Endowment insurances 81,350 18 1,101,642.4 14.5 72,568.5 - Term insurances 0 1,455 0.0 353,254.3 2,188.6 Sub total - ordinary life 84,717 1,476 1,215,591.5 353,269.9 79,352.2 Industrial Life Insurances 0 0 0.0 0.0 0.0 Annuities 0 0 0.0 0.0 0.0 Total 84,717 1,476 1,215,591.5 353,269.9 79,352.2 2. OTHER BUSINESS IN FORCE Accident 0 0 0.0 880,418.6 2,066.2 Other 0 0 0.0 0.0 0.0 Sub total - other business 0 0 0.0 880,418.6 2,066.2 Total 84,717 1,476 1,215,591.5 1,233,688.5 81,418.4 GROUP BUSINESS NO. OF NO. OF SUMS PREMIUMS POLICIES LIVES INSURED ($’000) ($’000) NEW BUSINESS: Life (Term) Insurances 1 36 0.0 900.0 5.9 Accident Insurances 0 0 0.0 0.0 0.0 Others 0 0 0.0 0.0 0.0 Total 1 36 0.0 900.0 5.9 BUSINESS IN FORCE: Life (Term) Insurances 1 167 0.0 4,950.0 53.2 Accident Insurances 0 0 0.0 0.0 0.0 Others 0 0 0.0 0.0 0.0 Total 1 167 0.0 4,950.0 53.2 TOTAL GROUP BUSINESS 2 203 0.0 5,850.0 59.1



66

Table 15 CONSOLIDATED SUMMARY AND VALUATION OF POLICIES FOR LIFE COMPANIES AS AT 31 DECEMBER 2008

PARTICULARS OF POLICIES FOR VALUATION ($’000) VALUATION BASIS

TYPE OF INSURANCE NO. OF SUM OFFICE NET YEARLY SUM NET YEARLY NET

POLICIES INSURED BONUSES YRLY PREM. PREMIUMS INSURED BONUSES PREMIUMS LIABILITY

ORDINARY INSURANCE G.P.1 With Immediate Participation in Profits For: Whole Term of Life Insurance 3,470 119,861.1 44,979.6 4,834.6 2,824.2 48,455.4 23,089.8 26,746.8 44,798.4 Endowment Insurance 44,124 659,074.2 143,713.6 43,341.0 25,674.5 366,814.6 92,640.7 206,586.8 252,868.5 Others 27,636 342,863.4 62,140.9 21,193.1 19,615.2 203,179.2 104,291.4 198,931.9 108,538.7 Extra Premium 0 0.0 0.0 690.3 0.0 690.3 0.0 0.0 690.3 Adjustment 0 0.0 0.0 0.0 0.0 13,864.5 0.0 0.0 13,864.5 Total Insurances 75,230 1,121,798.7 250,834.2 70,059.0 48,113.8 633,004.1 220,021.9 432,265.5 420,760.5 Deduct Reinsurances 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Net Insurances 75,230 1,121,798.7 250,834.2 70,059.0 48,113.8 633,004.1 220,021.9 432,265.5 420,760.5 G.P.2 With Deferred Participation in Profits For: Whole Term of Life Insurance 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Endowment Insurance 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Others 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Extra Premium 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Adjustment 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total Insurances 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Deduct Reinsurances 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Net Insurances 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total Net Insurances With Profits 75,230 1,121,798.7 250,834.2 70,059.0 48,113.8 633,004.1 220,021.9 432,265.5 420,760.5 PARTICULARS OF POLICIES FOR VALUATION VALUATION BASIS TYPE OF INSURANCE NO. OF SUM OFFICE NET YEARLY SUM NET YEARLY NET POLICIES INSURED BONUSES YRLY PREM. PREMIUMS INSURED BONUSES PREMIUMS LIABILITY G.P.3 Without Participation in Profits For: Whole Term of Life Insurance 272 740.0 706.4 0.0 0.0 395.3 331.8 0.0 727.1 Endowment Insurance 293 1,230.3 941.0 0.0 0.0 936.4 679.3 0.0 1,615.7 Others 13,326 476,889.8 10,509.7 6,736.9 5,060.3 76,596.0 9,972.8 52,633.1 33,935.7 Extra Premium 0 0.0 0.0 113.8 0.0 113.8 0.0 0.0 113.8 Adjustment 0 0.0 0.0 0.0 0.0 3,436.3 0.0 0.0 3,436.3 Total Insurances 13,891 478,860.2 12,157.1 6,850.8 5,060.3 81,477.9 10,983.9 52,633.1 39,828.6 Deduct Reinsurances 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total Net Insurances Without Profits 13,891 478,860.2 12,157.1 6,850.8 5,060.3 81,477.9 10,983.9 52,633.1 39,828.6 G.P.4 Endowments For: Whole Term of Life Insurance 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Endowment Insurance 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Others 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Extra Premium 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Adjustment 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total Endowments 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Deduct Reinsurances 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total Net Endowments 0 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 G.P.5 Annuities Immediate Annuities on Lives 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Others Total Annuities 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Deduct Reinsurances 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total Net Annuities 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 G.P.6 Accidents Accidents, Deaths, Disablement Benefits 0 909,339.1 0.0 1,993.8 0.0 418.8 0.0 0.0 418.8 Extra premiums 0 0.0 0.0 109.5 0.0 109.5 0.0 0.0 109.5 Total Accidents 0 909,339 0.0 2,103.3 0.0 528.3 0.0 0.0 528.3 Total Net Ordinary Insurances 89,121 2,509,998.0 262,991.3 79,013.1 53,174.1 715,010.3 231,005.8 484,898.7 461,117.4



67

Tabl

e 16

CO

NSO

LIDA

TED

VALU

ATIO

N B

ALAN

CE S

HEE

T FO

R LI

FE C

OMPA

NIE

S

($’0

00)

PART

ICU

LARS

PA

RTIC

IPAT

ING

NON

-PAR

TICI

PATI

NG

Tota

l

2008

20

07

2006

20

05

2004

20

08

2007

20

06

2005

20

04

2008

20

07

2006

20

05

2004

NET

LIA

BILI

TIES

U

NDE

R PO

LICI

ES

(i) O

n Re

gist

ers

in F

iji

427,

379.

5

429,

569.

1

365,

574.

6

387,

624.

0

369,

378.

1

39,3

00.6

31

,563

.9

29,4

32.5

30

,897

.6

23,4

89.0

46

6,68

0.0

46

1,13

3.0

39

5,00

7.0

41

8,52

1.6

39

2,86

7.1

(ii) O

ther

(spe

cify

) 0.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0

0.0

0.

0

TOTA

L NE

T LI

ABIL

ITIE

S 42

7,37

9.5

42

9,56

9.1

36

5,57

4.6

38

7,62

4.0

36

9,37

8.1

39

,300

.6

31,5

63.9

29

,432

.5

30,8

97.6

23

,489

.0

466,

680.

0

461,

133.

0

395,

007.

0

418,

521.

6

392,

867.

1

Incr

ease

(dec

reas

e) in

po

licy l

iabi

litie

s 10

,028

.2

25,8

44.2

18

,400

.3

12,6

34.6

5,

484.

4

2,58

1.9

3,

691.

7

4,00

9.2

6,

123.

5

8,73

9.2

12

,610

.2

29,5

35.9

22

,409

.5

18,7

58.1

14

,223

.6

BALA

NCE

OF

STAT

UTOR

Y FU

ND

437,

407.

7

455,

413.

3

383,

974.

9

400,

258.

6

374,

862.

5

41,8

82.5

35

,255

.6

33,4

41.7

37

,021

.1

32,2

28.2

47

9,29

0.2

49

0,77

7.9

41

7,52

5.6

43

7,38

8.7

40

7,09

0.7

Sour

ce: I

nsur

ance

Com

pani

es


68

Table Seventeen – Profit and Loss Statement

Table Eighteen – Balance Sheet

Table Nineteen – Insurance Broking Account

Table Twenty – Statement of Premiums

Insurance Brokers


69

Table 17 CONSOLIDATED PROFIT AND LOSS STATEMENT FOR BROKERS ($’000)

PARTICULARS 2008 2007 2006 2005 2004 REVENUE

Brokerage Earned:

- as Commission 11,516.2 12,236.2 12,803.6 12,579.5 12,260.0 - as Fees 747.9 101.3 90.3 65.4 39.6 - in Any Other Form 0.0 0.0 0.0 0.0 0.0

Total Brokerage 12,264.1 12,337.4 12,893.9 12,644.9 12,299.6

Interest Income Earned 212.7 268.4 202.1 67.2 48.3Other Investment Income 0.0 0.0 0.0 0.0 0.0Consultancy Fees or Commissions 0.0 10.9 0.0 0.0 0.0Other Revenue 244.0 462.3 388.8 253.6 230.3 0.0 0.0 0.0 0.0 Total Revenue for the Year 12,720.8 13,079.0 13,484.7 12,965.8 12,578.2 EXPENSES

Salaries and Wages 2,371.7 2,675.6 2,430.6 2,526.8 2,248.8Directors’ Fees 78.2 55.0 84.8 45.2 50.0PI and Fidelity Guarantee Insurance 62.4 127.5 139.3 89.4 127.7Rent 555.9 562.8 526.7 447.8 333.7Travel 146.1 199.7 245.1 223.3 209.8Audit fees 60.1 53.4 78.7 65.8 55.5Training 61.2 91.6 80.7 81.4 39.7Other Expenses 4,620.4 4,482.6 3,624.1 3,459.8 3,456.4 Total Expenses for the Year 7,956.2 8,248.1 7,209.9 6,939.5 6,521.6 Abnormal/extraordinary items 0.0 0.0 0.0 0.0 0.0 PROFIT / (LOSS) BEFORE TAX 4,764.7 4,830.8 6,274.8 6,026.2 6,056.6 Taxation Expense 1,606.1 1,431.3 2,148.0 1,910.9 1,985.9 NET PROFIT / (LOSS) FOR THE YEAR 3,158.5 3,399.6 4,126.8 4,115.4 4,070.7

DISTRIBUTION

RETAINED PROFIT / (LOSS) brought forward from last period 7,211.5* 7,139.0• 6,061.6• 6,272.1 4,001.3 DIVIDEND/CAPITAL WITHDRAWALS (paid or proposed) 5,400.0 3,300.0 2,900.0 4,300.0 1,800.0 OTHER TRANSFERS 51.7 0.0 0.0 0.0 0.0 α α α RETAINED PROFIT / (LOSS) carried forward to next period 5,021.8 7,238.5* 7,288.4• 6,087.5• 6,272.1 *Exclusion of one broker •Inclusion of another broker and IFRS Implementation Source: Insurance Companies


70

Table 18 CONSOLIDATED BALANCE SHEET OF BROKERS ($’000) ASSETS 2008 2007 2006 2005 2004 CURRENT ASSETS Cash on Hand 2,412.1 1,939.5 2,157.4 3,100.6 3,524.4Insurance Broking Account 2,412.8 2,339.3 945.6 3,754.8 3,471.2Outstanding Premiums: - - 30 days and under 11,127.4 12,047.5 11,153.1 6,478.2 10,975.5 - over 30 days but less than 3 months 5,647.1 6,035.1 3,384.4 4,338.1 3,213.4 - over 3 months 2,784.4 1,802.3 1,586.0 1,789.1 1,249.5Prepayments 145.7 108.5 204.9 90.1 112.5Sundry Debtors 1,157.7 1,135.7 946.0 1,288.6 650.7Other 4.2 8.5 11.7 0.0 0.0 Total 25,691.4 25,416.4 20,389.1 20,839.6 23,197.2 LOANS Loans: - Secured 0.0 0.0 0.0 0.0 0.0 - Unsecured 0.0 0.0 0.0 0.0 0.0Loans to Related Persons: 0.0 - Secured 0.0 0.0 0.0 0.0 0.0 - Unsecured 0.0 0.0 0.0 0.0 0.0 Total 0.0 0.0 0.0 0.0 0.0 INVESTMENTS Land and Buildings 0.0 0.0 0.0 0.0 0.0Government Securities 0.0 0.0 0.0 0.0 0.0Bank Deposits 4,272.1 2,028.1 2,876.8 21.5 21.2Debentures with: 0.0 - Related persons 0.0 0.0 0.0 0.0 0.0 - Non Related persons 0.0 0.0 0.0 0.0 0.0Shares in: 0.0 - Related persons 0.0 0.0 0.0 0.0 0.0 - Non Related Persons 0.0 0.0 0.0 0.0 0.0 Total 4,272.1 2,028.1 2,876.8 21.5 21.2 FIXED ASSETS Motor Vehicles 327.1 397.1 359.4 358.5 474.3Furniture and Fittings 970.3 1,148.6 1,214.3 1,286.3 378.6Computer Hardware 97.3 74.5 109.8 106.4 169.4Computer Software 0.7 1.8 3.0 5.9 15.8Other 163.7 185.3 193.2 169.1 5.2 Total 1,559.0 1,807.2 1,879.7 1,926.3 1,043.3 OTHER ASSETS Amounts Due from Related Persons 76.1 20.0 483.2 544.9 479.9Other Amounts Due 0.0 0.0 0.0 0.0 0.0Future Income Tax Benefit 140.1 185.6 139.6 178.7 292.0Goodwill 538.0 400.0 500.0 600.0 700.0Establishment Costs 2.0 2.0 1.5 1.0 0.5 Total 756.1 607.6 1,124.3 1,324.6 1,472.4

TOTAL ASSETS 32,278.7 29,859.4 26,269.9 24,111.9 25,734.1



71

Table 18 (cont’d) CONSOLIDATED BALANCE SHEET OF BROKERS

($’000)

LIABILITIES 2008 2007 2006 2005 2004

Borrowings:

- Borrowings from Related Persons 284.8 147.9 0.0 11.8 38.1

- Other Borrowings 52.1 0.0 0.0 0.0 0.0

Overdraft 9.8 9.1 9.4 8.6 9.0

Other 0.0 6.9 23.0 86.7 129.2

Total 346.7 164.0 32.4 107.2 176.3

PROVISIONS

Taxation 1,139.5 824.8 1,366.4 907.4 1,125.2

Dividends / Proprietor Withdrawals 3,000.0 13.2 0.2 1,500.0 0.0

Doubtful Debts 72.4 29.4 11.5 38.9 4.6

Other 305.5 365.1 292.8 474.8 435.1

Total 4,517.4 1,232.5 1,670.9 2,921.2 1,564.9

OTHER LIABILITIES

Amounts Due:

- to Insurers 19,260.0 18,444.4 14,702.9 11,963.4 15,418.0

- to Reinsurers 0.0 0.0 0.0 0.0 0.0

- to Related Persons 1,223.1 976.6 817.9 798.4 941.2

Sundry Creditors 284.3 253.8 351.5 906.7 429.2

Other 994.8 872.7 878.7 838.2 473.0

Total 21,762.2 20,547.5 16,751.0 14,506.8 17,261.4

TOTAL LIABILITIES 26,626.3 21,944.0 18,454.3 17,535.1 19,002.6

NET ASSETS 5,652.4 7,915.4 7,815.8 6,576.8 6,731.5

OWNERS’ FUNDS

Paid-up Capital 172.0 182.0 82.0 72.0 42.0

Retained Profits 5,021.8 7,238.5 7,288.4 6,087.4 6,272.1

Balance of Head Office Account 0.0 -9.0 27.9 0.0 0.0

Other 458.6 503.9 417.5 417.5 417.4

TOTAL OWNERS’ FUNDS 5,652.4 7,915.4 7,815.8 6,576.8 6,731.5



72

Tabl

e 19

CO

NSO

LIDA

TED

INSU

RAN

CE B

ROKI

NG

ACCO

UN

T OF

BRO

KERS

($’0

00)

PART

ICU

LARS

GE

NER

AL IN

SURA

NCE

BU

SIN

ESS

LIFE

INSU

RAN

CE B

USI

NES

S TO

TAL

INSU

RAN

CE B

USI

NES

S

2008

20

07

2006

20

05

2004

20

08

2007

20

06

2005

20

04

2008

20

07

2006

20

05

2004

BROU

GHT

FORW

ARD

FROM

LA

ST Y

EAR

2,1

41.0

9

43.3

*

1,8

97.2

*

3,3

09.8

4,

122.

5 2

.2

2.2

*

1.1

*

161

.5

115

.4

2,1

43.3

9

45.6

*

1,8

98.3

*

3,4

71.2

4,

237.

9

MON

EY R

ECEI

VED

DURI

NG

THE

YEAR

Prem

ium

s fro

m o

r on

beha

lf of

insu

reds

or in

tend

ing

insu

reds

for

or o

n ac

coun

t of

licen

sed

insu

rers

7

5,55

5.7

7

3,50

0.7

7

2,48

9.2

6

5,83

1.8

66

,245

.7

521

.1

112

.7

176

.7

226

.8

267.

2 7

6,07

6.8

7

3,61

3.4

7

2,66

5.9

6

6,05

8.7

66

,512

.9

Prem

ium

s fro

m o

r on

beha

lf of

insu

reds

or in

tend

ing

insu

reds

fo

r or o

n ac

coun

t of

un

licen

sed

insu

rers

1

8,51

8.7

1

6,74

9.6

2

4,61

8.7

2

8,14

0.1

23

,157

.9

179

.6

181

.3

35.

2

104

.9

258.

1 1

8,69

8.3

1

6,93

0.9

2

4,65

3.8

2

8,24

4.9

23

,415

.9

Clai

ms

mon

eys

from

or

on

beha

lf of

licen

sed

insu

rers

for

or o

n ac

coun

t of

insu

reds

0

9

8.6

6

6.6

1

13.4

16

9.4

0 0.

0

0.0

0.

0

0.0

0

98.

6

66.

6

113

.4

169.

4

Clai

ms

mon

eys

from

or

on

beha

lf of

unlic

ense

d in

sure

rs fo

ror

on

acco

unt o

f:

-in

sure

ds

0 7

8.2

8

6.3

5

9.5

33

6.9

0 0.

0

0.0

0.

0

0.0

0

78.

2

86.

3

59.

5

336.

9

-Inte

rest

1

24.3

1

39.8

9

6.4

3

7.5

30

.3

0 0.

0

0.0

0.

0

0.0

1

24.3

1

39.8

9

6.4

3

7.5

30

.3

-Oth

er

220

.4

0.6

8

.6

2.2

11

.0

0 0.

0

0.0

0.

0

0.0

2

20.4

0

.6

8.6

2

.2

11.0

Tota

l 94

,419

.1

90,5

67.5

97

,365

.9

94,1

84.5

89

,951

.2

700.

7 29

4.0

211.

9 33

1.7

525.

3 95

,119

.8

90,8

61.6

97

,577

.7

94,5

16.1

90

,476

.5

MON

EYS

WIT

HDR

AWN

DU

RIN

G TH

E YE

AR

Fo

r pay

men

ts to

or o

n be

half

of li

cens

ed in

sure

rs

63,4

52.8

57

,864

.7

63,0

55.2

56

,808

.4

56,7

02.3

45

4.3

112.

7 17

6.7

199.

1 23

2.3

63,9

07.0

57

,977

.4

63,2

31.9

57

,007

.5

56,9

34.6

Fo

r pay

men

ts to

or o

n be

half

of u

nlic

ense

d in

sure

rs

17,4

39.5

18

,544

.5

21,5

39.5

24

,524

.0

20,8

71.6

11

1.8

181.

3 34

.0

92.9

16

0.8

17,5

51.3

18

,725

.8

21,5

73.5

24

,616

.9

21,0

32.4

Fo

r pay

men

ts to

or o

n be

half

of a

n in

sure

d

or in

tend

ing

insu

red

569.

5 91

0.4

567.

8 78

6.1

1,43

7.3

0.0

0.0

0.0

0.0

0.0

569.

5 91

0.4

567.

8 78

6.1

1,43

7.3

Fo

r pay

men

ts to

sel

f 12

,778

.8

11,8

54.2

13

,003

.8

11,6

01.3

11

,560

.4

0.0

0.0

0.0

0.0

86.1

12

,778

.8

11,8

54.2

13

,003

.8

11,6

01.3

11

,646

.5

For r

epay

men

ts o

f m

oney

s pa

id in

to th

e

acco

unt i

n er

ror

43.5

0.

0 5.

5 22

0.9

192.

3 0.

0 0.

0 0.

0 0.

0 0.

0 43

.5

0.0

5.5

220.

9 19

2.3

Pa

ymen

ts a

ppro

ved

by th

e Re

serv

e Ba

nk u

nder

se

ctio

n 65

(4)

0.0

0.0

147.

9 0.

0 0.

0 0.

0 0.

0 0.

0 0.

0 0.

0 0

0.0

147.

9 0.

0 0.

0

Tota

l 94

,284

.2

89,1

73.8

98

,319

.8

93,9

40.6

90

,763

.8

566.

1 29

4.0

210.

7 29

2.1

479.

2 94

,850

.3

89,4

67.8

98

,530

.5

94,2

32.6

91

,243

.0

BALA

NCE

OF A

CCOU

NT

2,27

6.0

2,33

7.1

943.

3 3,

553.

7 3,

309.

9 13

6.8

2.2

2.2

201.

1 16

1.5

2,41

2.8

2,33

9.3

945.

6 3,

754.

7 3,

471.

3AT

YEA

R EN

D

*Adj

ustm

ent b

y a

n In

sura

nce

brok

er

Sour

ce: I

nsur

ance

Com

pani

es


73

Table 20 CONSOLIDATED STATEMENT OF PREMIUMS ($’000)

PARTICULARS 2008 2007 2006 2005 2004

PREMIUMS HANDLED DURING YEAR

GENERAL INSURANCE BUSINESS

Fire 40,954.0 39,999.3 37,192.1 33,960.6 37,544.9

Householders 2,293.7 2,045.2 1,895.1 1,789.1 1,852.8

Motor vehicle 10,198.0 9,855.6 9,618.4 8,011.0 8,279.4

Marine Hull 2,555.7 2,389.9 2,151.8 2,191.6 1,865.2

Marine Cargo 1,219.7 1,460.0 1,595.3 1,336.2 1,504.4

CIT & Burglary 602.2 512.1 569.5 570.7 525.5

Motor - CTP 0.0 0.0 214.9 97.0 159.9

Personal Accident 764.1 637.9 920.9 709.5 1,340.8

Professional Indemnity 1,706.2 1,803.1 2,085.7 2,088.1 1,794.8

Public Liability 3,002.6 2,682.7 3,357.8 3,210.3 2,875.9

Workers Compensation 4,884.4 5,461.9 6,011.7 5,120.0 5,088.9

Medical 9,287.9 9,814.8 10,668.0 11,378.5 9,172.5

Term Life 3,610.1 3,685.6 4,016.6 4,146.9 4,065.6

Other 8,966.5 9,983.9 16,369.2 14,257.5 14,184.6

Total 90,045.1 90,332.0 96,667.0 88,867.0 90,255.2

LIFE INSURANCE BUSINESS

Whole of Life 0.0 0.0 0.0 0.0 0.0

Endowment 0.0 0.0 0.0 0.0 0.0

Term Life 0.0 0.0 0.0 0.0 0.0

Other 0.0 0.0 0.0 0.0 0.0

Total 0.0 0.0 0.0 0.0 0.0

TOTAL PREMIUMS HANDLED 90,045.1 90,332.0 96,667.0 88,867.0 90,255.2

Brokerage received or receivable on premium handled 12,264.1 12,337.4 12,893.9 12,644.9 12,299.6



74

Insurance Agents

List of Insurance Agents

Licensed as at 31 December 2008


75

N0. AGENT NAME LIC. NO*.

1 Abdul Ifraan 2136

2 Abishek Singh 2183

3 Air Fiji Ltd 1406

4 Air New Zealand Ltd 2072

5 Air Pacific Ltd 2002

6 Aisake Emmanuel 922

7 Akuila Curu 1623

8 Akuila Vakuruivalu 960

9 Alan Tuinasoni 2143

10 Alan Veeran 1911

11 Alanieta Verevou 2177

12 Alesi Radalau 2166

13 Alice Heffernan 1525

14 Alisi Qutei 2152

15 Aloysius Prasad 1048

16 Ambika Nand 1447

17 Amrul Rishiram 1053

18 Anandilal Amin & Associates 589

19 Anasofaia Bari 2049

20 Andrew Adams 978

21 ANZ Banking Group 1480

22 Apisai Natinavou 1627

23 Apisai Samuta 1408

24 Apisalome Loganimasi 1740

25 Areesh Chand 1912

26 Arishma Kumar 2010

27 Arveen Anand 2064

28 Asco Motors 1589

29 Asena Tuvukona 2061

30 Ashok Kumar 1874

31 Ashwin Bahadur 2175

32 Ashwin Prasad 1968

33 Asilika Lalakohai 2167

34 Ateca Vucunivavalagi 1933

35 Atish Lal 2100

36 Atunaisa Davuiqalita 1400

37 Atunaisa Nailatica 1551

38 Autoworld Trading (Fiji) Ltd 2073

39 Avinesh Ram 2077

40 Avinesh Singh 1913

41 Betanaqori Ciwasagavulu 1610

42 Bimal Jagrup 2219

43 Bipin Patel 952

44 Bishwa Nathan 1477

45 Bruce Emberson 1031

46 Chandar Deo 1051

47 Chandar Shah 1393

48 Chengaiya Naidu 2132

49 Colonial National Bank 1693




52 Cyril Fong 1238

53 Daniel Taufaga 1247

54 Darrel Rajcharan 1701

55 Debra Gucake 2217

56 Desmond Kumar 2093

57 Dharam Singh 1028

58 Dharmendra Prasad 1822

59 Dhirendra Maharaj 2088

60 Dhirendra Prasad 2042

61 Dhurup Chand 930

62 Dineshwar Lal 1960

63 Dip Chand 2107

64 Dorine Charan 1950

65 Dorothy Ah Yuk 1476

66 Edward Ram 1722

67 Elesi Vonotabua 2227

68 Ema Tabuya 2206

69 Emele Nayacalevu 1829

70 Emosi Seduadua 1654

71 Epeli Tarai 2210

72 Fabian Corrie 920

73 Fazleen Ali 2098

74 Fereti Fesaitu 2208

75 Fiji Development Bank 1944

76 Filipe Cokanasiga 1803

77 Finance Pacific Corporation Ltd 2089

78 Francis Waqasaqa 2140

79 Frank Vatubai 1660

80 Girja Prasad 1171

81 Gopal Naidu 1417

82 Gyanendra Shandil 1981

83 Hafiz Din 1758

84 Hari Sharma 1293

85 Harry Berwick 1234

86 Harry Chute 1752

87 Hema Kumar 1868

88 Hemant Kumar 1588

89 Hemant Kumar 651

90 Home Finance Company Ltd 1599

91 Ifereimi Tikoivatukoula 1768

92 Inoke Rokobui 1413

93 Ioane Koroveibau 1492

94 Iowana Ravea 2060

95 Ishwari Prasad 2174

96 Isikeli Tawailasa 873

97 Jacob Chute 2142

98 Jagdish Sharma 1030

99 Jai Maharaj ** 2148

100 Jainand Maharaj 1498


76


101 James Krishna 1409

102 James Zinck 2220

103 Janendra Kumar 1276

104 Janendra Prasad 1285

105 Jang Bahadur 1112

106 Jed Peterson 540

107 Jenny Fiu 2182

108 Jeremaia Dakui 1495

109 Jifa Tupua 1268

110 Jiten Singh 1908

111 Jitendra Kissun 2137

112 Jiutaisa K. Wiliame 2191

113 Joan Bulamaisolomone 1813

114 Joeli Pulu 2131

115 Joeli Qio 2070

116 Joeli Rabo 929

117 Joeli Taliai 1412

118 John Alexender 2214

119 John Elder 1073

120 Joji Rokosuka 1390

121 Jona Saukilagi 2145

122 Jope Buinimasi 1628

123 Jope Tuivanuavou 1705

124 Jope Vugakoto 2113

125 Josaia Tawake 1884

126 Josefa Navusolo 983

127 Josefa Tamani 1321

128 Josese Tokalau 1885

129 Joseva Turagavakacava 2135

130 Jovilisi Nakarawa 1711

131 Kaiafa Ledua 2082

132 Kala Singh 2074

133 Kalpana Sharma 1345

134 Kamla Prasad 1147

135 Kamlesh Lata 2022

136 Karam Chand 1671

137 Karmesh Kumar 1176

138 Karun Gandhi 1106

139 Karuna Sharma 2090

140 Kasanita Kuruyawa 2196

141 Kelevi Nagone 2212

142 Kiniviliame Waqairawai 1568

143 Kishorbhai Patel 1415

144 Krishna Dutt 1052

145 Krishna f/n Kali 1142

146 Krishna Naidu 1983

147 Laijia Momo 1849

148 Laisiasa Kevu 1852

149 Lalin Prasad 2029

150 Lavenia Tavola 2016


151 Litia Luvunakoro 1606

152 Litia Tipou 2185

153 Litiana Maramaniaisokula 2165

154 Livai Tagicakibau 2146

155 Livia Uluiviti 1902

156 Lorima Baba 2032

157 Losalini Marama 2181

158 Lui Talesalusalu 1842

159 Lusia Koroiqacia 2200

160 Macquaire Travel Ltd 1997

161 Maharaj Insurance Services 2009

162 Mahendra Deepak 1919

163 Mahendra Sharma 1154

164 Mahesh Kumar 2163

165 Maikali Dimuri 1608

166 Makipani Goneleve 2215

167 Makuaro Itintau 2168

168 Manoj Jeet 1597

169 Maraia Naituku 2012

170 Mareta Tavola 2108

171 Mariana Ranadi 2205

172 Marika Gata 1178

173 Mark Acraman 2180

174 Mary A Koi 2203

175 Maureen Laveki 2204

176 Melania Fesaitu 2207

177 Melania Tibika 2197

178 Merchant Finance Ltd 2162

179 Merewairita Butani 2104

180 Mesake Biumaiwai 1231

181 Michael Chand 2003

182 Michael Reuben 1906

183 Mikaele Radrodro 1434

184 Mikaele Tabalala 1934

185 Mikito N Tabailagi 2213

186 Miliakere Senivau 2209

187 Milika Likutabua 2228

188 Mirima Vueta 2193

189 Mirza Ahemad 1946

190 Misiviliame Nakavou 2184

191 Mohammed Aiyub 1440

192 Mohammed Ifran 1922

193 Mohammed Maqbool 1990

194 Mohammed Rafik 1158

195 Mohammed Rizwan 2123

196 Mohammed Sheik 2023

197 Mosese Ravutu 1815

198 Mosese Uluinaceva 2130

199 Mubarak Mohammed 2176

200 Nadi Plumbing Works Ltd 2036


77


201 Nand Lal 1646

202 Narayan Murti 1670

203 Naresh Prasad 2038

204 Natasha Simadri 2170

205 Naveen Chand 2216

206 Naveen N Chand 1502

207 Nikolau Vulaca 1347

208 Nimilote Bogonisoko 2222

209 Niranjans Autoport 1453

210 Noa Moce 1961

211 Odhauji Raniga 934

212 Oliver Brown 921

213 Pacific Agencies 1844

214 Palas Auto Services Ltd 2026

215 Palu Whippy 2158

216 Paras Sukul 1733

217 Parvin Kaur 2134

218 Paul Tang 2156

219 Paul Vakatoto 1789

220 Paul Yee 1931

221 Pauliasi Masitabua 1927

222 Paulo Tatu 2187

223 Peniasi Vanacerewele 2155

224 Penisoni Khan 1848

225 Peter Sharma 1894

226 Pio Tikoisuva 2218

227 Pita Tamanikaisawa 2178

228 Pita Vuloaloa 2094

229 Pradeep Kumar 1776

230 Prakash Singh 1666

231 Pratap Singh 1019

232 Praveen Sharma 1700

233 Pravin Kaur 2134

234 Pravir Rattan 2201

235 Prem Chand 2050

236 Prem Naidu 2172

237 Pushpa Kumar 2024

238 Rahool Sharma 1267

239 Rajan Murti 1709

240 Rajay K Nand 2186

241 Rajendra Prasad 2086

242 Rajesh R Singh 1467

243 Rajesh Singh 1928

244 Rajneel Singh 2164

245 Rajnesh Prasad 2053

246 Rakesh Nair 2161

247 Rakesh Narayan 1872

248 Ramesh Kumar 933

249 Ranjanna Sharma 2226

250 Ravendra Prabhu 1624


251 Ravikash Maharaj 2035

252 Ravin Chand 1503

253 Ravindra Deo 2151

254 Ravindra Mohan 1622

255 Ravinesh Prakash 2097

256 Raymond Stoddart 1723

257 Renuka Chandra 2122

258 Rick Croker 1930

259 Rishi Ram 1054

260 Rita Singh 1995

261 Ritesh Maharaj 1515

262 Ritesh Nand 2085

263 Ritesh Nand 2189

264 Robert Johansen 2194

265 Rohini Narayan 839

266 Rohit N Chand 2171

267 Rohitesh Sumer 2210

268 Romita Singh 2192

269 Ron Gounder 1454

270 Ronald Ritesh Lal 2190

271 Rosalia Donuvakayanuyanu 2224

272 Roselyn Roy 2081

273 S K Davey Ltd 1294

274 Sachin Lakhan 1563

275 Saiasi Maisema 1391

276 Sailosi Baleisolomoni 1683

277 Saimoni Kaloukigau 1726

278 Sainiana Nakovi 2051

279 Sainivalati Laukau 2007

280 Saiyad Ali 2157

281 Saiyad Harun 1479

282 Sajnil Prasad 2127

283 Sale Sorovaki 1786

284 Salesi Temo 1449

285 Salome Lewatabua 1982

286 Salote Bitarau 2202

287 Samarasam Pillay 1645

288 Sambhu Datt 1056

289 Samuel Veeran 1159

290 Samuela Katamaiwai 1734

291 Samuela Vodo 1777

292 Samuela Waqanisau 1791

293 Sandhir Kumar 1854

294 Sanjay Kumar 1923

295 Sanjesh Prasad 2179

296 Sarojni Devi 1896

297 Sarwan Sharma 1778

298 Satendra Nath 1123

299 Satendra Sharma 1070

300 Satish Kumar 1262


78


301 Satya Nand 2169

302 Senimelia Serusaivou 1529

303 Sepesa Moce 2013

304 Seru Makutu 2075

305 Serupepeli Ratuvukivuki 2124

306 Shalesh Prasad 1360

307 Sham Narayan 836

308 Shamma Roy 2141

309 Shaneel Prasad 1992

310 Sharma’s Insurance Services 2015

311 Shayam Narayan 916

312 Shiu Narayan 1131

313 Shivlesh Prasad 1888

314 Shri Reddy 1156

315 Simione Kuruvoli 1853

316 Sinta Naidu 1344

317 Sofaia Tupou 1792

318 Stephen Conrad 1153

319 Stephen Wong 522

320 Subramani 1135

321 Sujita Prasad 2017

322 Sulueti Vunibola 1932

323 Sunia Radovu 2040

324 Sunil Kumar 1232

325 Sunita Reddy 1502

326 Surujmati Nand 1794

327 Susan Rusia 2199

328 Susana Tagilala 2223

329 Sushita Sharma 2139

330 Susie Emberson 2133

331 Susie Kumar 2021

332 Swastika Gounder 2091

333 Taitusi Cakau 2112

334 Tarsen Singh 2046

335 Tashvinandran Murthi 2055

336 Teinaieta Taake 2067

337 Tevita Baleinamaka 1550

338 Timoci Namuaira 1471

339 Timoci Osborne 2118

340 Timoci Tamanisokula 1422

341 Tomasi Baleilomaloma 1567

342 Tomasi Lovo 2195

343 Torika Ranadi 1979

344 Tukana Temo 1841

345 Uatesoni Seruvatu 2101

346 Ujagar Singh 1369

347 Usman Ali 2004

348 Vani Vuibau 1014

349 Varinava Tikoduadua 1828

350 Venina Qiolevu 2221


351 Venkat Naidu 1036

352 Vidya Rattan 1157

353 Vignas Rao 1637

354 Vijay Kumar 1425

355 Vijay Nair 1138

356 Vijay Sharma 1540

357 Vijay Singh 1958

358 Vijendra Prasad 626

359 Vika Ali 1632

360 Vika Tuiketei 2128

361 Vikash Reddy 1320

362 Viliame Cegumalua 2225

363 Viliame Civoniceva 2198

364 Viliame Masilidi 1038

365 Viliame Tabualevu 1953

366 Vilitati Qumivutia 1045

367 Vimlesh Kumar 2188

368 Vinesh Kumar 2109

369 Viniana Ratuvou 1469

370 Vinod Chand 1699

371 Vinod Kumar 1207

372 Vishwa Nand 1544

373 Vueti Maraiwai 1465

374 Wally David 1354

375 Warden Krishna 1184

376 Watisoni Waqacece 2092

377 Westpac Banking Corp 1890

378 Wili Veivutuni 1545

*Licence number

**Licence withdrawn during the course of the year


79

FIJI: KEY ECONOMIC AND FINANCIAL INDICATORS

2008 2007 2006 2005 2004

I. GROSS DOMESTIC PRODUCT

GDP at Market Price ($m) 5,895.9(e) 5,435.9(p) 5,483.3(r) 5,010.0 4,726.8

Per Capita GDP at Current Factor Cost ($m) 5,898.3(e) 5,462.7(p) 5,602.8(r) 5,030.2 4,777.6

Constant Price GDP Growth Rate (%) 0.2(e) -6.6(p) 3.4(r) 0.6(r) 5.5(r)

II. LABOUR MARKET

Labour Force 329,755(e) 326,988(r) 324,607(r) 321,336(r) 318,628(r)

Wage and Salary Earners (mid-year) 130,200(e) 128,800(r) 126,000(r) 123,900(r) 121,900

III. INFLATION (year-on-year % change)

All Items 6.6 4.3 3.1 2.7 3.3

IV. GOVERNMENT FINANCE ($ Million)

Total Revenue and Grants 1,435.9(r) 1,288.2 1,401.3 1,221.9 1,176.2

Total Expenditure (excluding loan repayments) 1,527.9(r) 1,384.4 1,558.5 1,391.0 1322.5

V. EXTERNAL TRADE ($ Million)

Current Account Balance -1253.6 (e) - 941.3 (e) - 1238.1 - 670.3 - 641.9

Capital & Financial Account Balance 373.9 (e) 237.6 (e) 941.3 402.9 242.7

Current Account Balance as a percentage of GDP -21.0 (e) - 17.3 (e) - 22.6 - 13.4 - 13.6

VI. FOREIGN EXCHANGE RESERVES

Foreign Reserves ($ Million) 558.7 804.6 515.4 549.1 786.2

VII. MONEY AND CREDIT (year-on-year % change)

Narrow Money - 19.67 43.47 - 4.57 17.59 13.11

Currency in Circulation 8.40 - 1.32 5.04 11.01 11.57

Quasi-Money 5.58 - 9.79 42.01 12.76 8.07

Domestic Credit 1 4.85 3.16 23.59 26.59 12.53

VIII. INTEREST RATES (% p.a.)

Lending Rate 7.72 8.46 7.90 6.63 7.03

Savings Deposit Rate 0.64 0.64 0.84 0.40 0.36

Time Deposit Rate 3.00 4.45 9.05 2.03 1.77

91-day RBF Note Rate 2 n.i. 4.25 4.25 2.25 1.75

Minimum Lending Rate 6.32 9.25 5.25 2.75 2.25

IX. EXCHANGE RATES (mid rates, F$1 equals: end of period)

United States dollar 0.5669 0.6447 0.6009 0.5731 0.6079

Real Effective Exchange Rate (January 1999 = 100) 107.45 104.34 102.29 100.31 100.43

Sources: Fiji Islands Bureau of Statistics, Reserve Bank of Fiji, Ministry of Finance and National Planning, Commercial Banks

Notes:

1 Credit to the private sector is adjusted for NBF Asset Management Bank’s non-performing loans and advances.

2 In 2006, the rate is for October. In 2007, the rate is for June. There were no issues of 91-day RBF notes in December for both years.

Key:

(e) estimate n.i - no issue (p) provisional (r) revised


80

FIJI: KEY INSURANCE INDICATORS

2008 2007 2006 2005 2004

MARKET STRUCTURE

No. of registered insurers 10 10 10 10 10

Life 2 2 2 2 2

General 8 8 8 8 8

Brokers 4 5 5 4 4

Re-insurers (not insured but locally incorporated) 0 0 0 0 0

No. of licenses issued to insurance agents

Life 304 308 271 260 205

General 145 163 161 130 123

Gross premium

Total ($m) 201.6 192.7 194.1 183.8 173.3

Life ($m) 83.7 80.0 76.6 74.2 70.5

General ($m) 117.9 112.7 117.5 109.6 102.8

Total (% of GDP) 3.4 3.5 3.9(e) 3.9 3.8

Life (% of GDP @ market price) 1.4 1.5 1.5(e) 1.6 1.5

General (% of GDP @ market price) 2.0 2.1 2.3(e) 2.3 2.2

Assets

Total ($m) 804.2 825.9 742.5 728.3 668.2

Life ($m) 556.3 585.6 517.7 513.3 481.3

General ($m) 247.9 240.3 224.8 215.0 186.9

Total Assets (% of per capita GDP) 13.5 14.6 15.0 15.4 14.5



81


LIFE INSURANCE 2008 2007 2006 2005 2004

New Business

Number of Policies 12,017 12,930 13,975 15,094 15,426

Sums Insured ($m) 355.6 360.0 378.9 424.6 428.9

Business in Force

Number of Policies 86,193 87,822 90,833 90,979 92,973

Sums Insured ($m) 2,449.3 2,470.0 2,522.7 2,532.4 2,534.0

Distribution of Sums Insured for Policies in Force (%)

Whole of Life 4.7 4.8 5.1 5.4 5.8

Endowment 45.0 43.8 42.5 41.0 40.0

Temporary 14.4 14.6 15.4 16.4 17.1

Others 35.9 36.8 37.0 37.2 37.1

Gross Premium Income ($m) 83.7 80.0 76.6 74.2 70.5

Benefit Payment ($m)

Total 55.8 59.8 49.8 48.4 45.5

Death 6.0 7.7 8.3 8.1 8.7

Maturity 30.6 28.0 23.7 23.5 21.1

Surrender 18.9 23.8 17.6 16.6 15.4

Sickness and Accidents 0.3 0.3 0.2 0.2 0.3

Forfeiture Rate (No. of policies) (%) 65.7 76.8 59.6 75.4 63.9

Surrender Rate (No. of policies) (%) 5.3 5.9 4.6 4.8 4.7

Investment Income ($m) 31.6 39.0 34.2 38.5 32.1



82


GENERAL INSURANCE 2008 2007 2006 2005 2004

Premium Income ($m)

Gross 117.9 112.7 117.5 109.6 102.8

Net 92.9 88.7 91.7 83.8 77.3

Reinsurance 25.0 24.0 25.8 25.8 25.5

Net Earned Premium Income 91.1 91.1 87.2 80.3 73.0

Retention Ratio (%) 78.8 78.7 78.0 76.5 75.2

Claims ($m)

Gross Claims Paid 45.6 50.1 52.4 40.1 52.7

Net Claims Incurred 45.5 42.4 40.7 39.9 38.4

Distribution of Gross Premiums (%)

Fire 26.4 25.1 23.4 23.1 24.1

Motor Vehicle 20.7 20.8 22.0 23.3 22.5

Marine Hull/Cargo 2.5 2.9 2.9 3.7 3.9

Householders/Burglary 8.3 7.7 7.2 6.9 6.6

Motor CTP 9.8 9.4 8.9 8.3 7.9

Liability* 2.8 3.1 3.2 4.0 4.1

Workers Compensation 5.3 5.6 6.1 6.5 5.9

Medical/Term Life 20.0 20.9 21.4 18.3 20.2

Others 4.2 4.5 4.9 5.9 4.9

Net Claims Ratio (%)

Fire 36.2 45.1 17.8 29.8 66.8

Motor Vehicle 66.5 40.9 62.0 57.5 59.1

Marine Hull/Cargo 70.8 84.5 40.0 25.6 15.5

Householders/Burglary 50.0 57.5 41.0 45.3 39.4

Motor CTP 38.4 41.4 71.8 57.3 42.3

Workmen’s Compensation 26.2 24.1 17.8 39.8 43.7

Medical 58.2 48.6 55.1 81.9 70.8

Term Life 53.8 70.5 63.5 57.5 37.1

Total Business 49.9 46.6 46.7 49.7 52.5

Net Underwriting Results (%)

Expense Ratio 17.5 16.5 18.3 19.7 19.3

Operating Results ($m)

Underwriting Gain/Loss 29.7 33.7 30.4 24.6 20.6

Investment Income 6.9 11.3 7.6 6.5 5.4

Operating Profit/Loss 18.1 23.8 18.6 14.9 12.6

* Personal Accident, Professional Indemnity & Public Liability Source: Insurance Companies

Reserve Bank of Fiji

The great double –

hulled, ocean-going canoes(drua) of the ancient Fijians were remarkablecraft, capable of long voyages. The tagaga(pronounced “tanganga”) or masthead wascrucial for holding in place the sails, wovenfrom the leaves of the pandanus tree. It wasthe tagaga which enabled the navigators to

keep their drua sailing towards theirdestinations.

For the Reserve Bank of Fiji, a logo based onthe tagaga masthead, symbolises the Bank’srole in contributing towards a sure

and steadycourse for Fiji’s economy.

reserve bank of fiji insurance annual report 2008rbf.gov.fj/docs/2008 insurance annual...

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