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Titel hier. presented by. John Doe. Date here. SOUTH AFRICAN INSURANCE ASSOCIATION. The potential impact of SAM on niche and small insurers. presented by. Nico Esterhuizen Programme Manager: SAM [email protected]. The Insurance Conference 2012. Discussion Points. - PowerPoint PPT PresentationTRANSCRIPT
Titel hierTitel hier
presented bypresented by
John DoeJohn Doe
Date hereDate hereSOUTH AFRICAN INSURANCE ASSOCIATION
The potential impact of SAM on niche and small insurers
presented bypresented by
Nico EsterhuizenNico EsterhuizenProgramme Manager: SAMProgramme Manager: SAM
[email protected] [email protected]
The Insurance Conference 2012The Insurance Conference 2012
Discussion Points
• Understanding small and niche insurers
• Impact of SAM
• Drivers and challenges
• Unknowns
World Insurance Market and Prudential Changes
1.08%=
$20bn
Rankings in Insurance Market
SA rankin
g:Nr. 22
Niche Insurers
Captives Insurers
Small Insurers
Impact, Drivers and Challenges
(Potential) impact of SAM
• Merger and acquisitions• Move to cell-captive environment• Insurers further de-risk their asset
allocations• Reduced competition in higher risk
insurance products • Increase in absolute MCR: R15m• Increase in fixed operating expenses
(Potential) impact of SAM
• Higher reserves• Higher capital adequacy requirement• Change in authorisation classes• Policyholders will ultimately bear the
costs
Improved risk management, transparency, capital adequacy.
Pillar 1 drivers and challenges
• IFRS vs. MCVB• Non-life underwriting risk calibration for SA only at QIS3• Current data quality and availability • Reinsurers data challenges with SAM• Participation in SA-QISs and quality of results• Ring-fenced funds• Segmentation• Group SCR• Documentation• Credit Ratings• Contract boundaries• Loss absorbency• Trade credit insurers
Pillar 2 drivers and challenges
• Independent Non-Executive Chairperson• Appointed Actuary• Board and the Internal Model• ORSA• Use Test• Fit and proper• Control functions• Governance and risk systems
Pillar 3 drivers and challenges
• Competitive information disclosed publically
• Significant increase in auditing-fees because of SAM auditing requirements
• Time and cost of reporting vs. value• Materiality
The real impact of SAM
Unknown
• Defining proportionality• Nature, size and complexity• EIOPA: “The principle of proportionality
is intended to support the consistent application of the principles-based … requirements to all insurers.”– Less disclosures and reporting for small
insurers?– Less onerous governance requirements?
Unknown:
• Principle of Solvency II: “Actuarial and statistical methodologies applied are proportionate to the nature, scale and complexity of the underlying risks”
• Aim not to make the calculation requirements on less complex companies too onerous….
• Simplifications to SCR standard formula allowed…Further guidance still to be issued under SAM….
Unknown
• Reserve Bank and supervisory style• Results of the Economic Impact
Study• Transitional Arrangements• Rand Bands
Titel hierTitel hier
presented bypresented by
John DoeJohn Doe
Date hereDate here
Thank you!