Insurance Directorate Industry Briefing. 24 October 2017

Transcription

1 Insurance Directorate Industry Briefing 24 October 2017

2 Insurance Industry Briefing 2017 Sylvia Cronin, Director, Insurance Supervision, Central Bank of Ireland 24 October 2017

3 Introduction Increased Industry and Regulatory Challenges Recent Industry Developments Brexit Solvency II Annual Reporting

4 Strategic Challenges - Brexit Authorisations Established Insurers Open Central Bank of Ireland Engagement with Industry Complex Industry Interactions with UK Market Alignment to Solvency II Requirements Contingency Planning and Scenario Analysis

5 Increased Collaboration of EU Supervisors & Industry Enhanced Authorisations Approach Information Sharing Between Home and Host Supervisors Resolution and Recovery Planning

6 Strategic & Operational Challenges Technology Innovation Consumer Demand Legacy Systems Cyber Risk

7 Strategic And Operational Challenges Technology Innovation Increasing Product Expectation: Real-time Understandable Easy-to-Access Value for Money Increasing Industry Capabilities: Telematics Geo-Location Technology Fit-Bit Technology Cyber Risk Onus on Data Protection Implementation of GDPR Increased Operational Risk: System Interdependencies with Group and Third- Parties Ransomware and Phishing attacks Area of Recent CBI Focus Legacy Systems Long-Tail Business Stored on Increasingly Obsolete Systems EIOPA Developing InsurTech Task Force Thematic Reviews of Big Data Assessment of Barriers to Financial Innovation and Cyber Risk

8 Regulatory Challenges Solvency II PRIIPs GDPR Central Bank of Ireland Approach to Solvency II Implementation 2017: IFRS17 Solvency II Annual Reporting Business as Usual

9 Solvency II Annual Returns Central Bank Role Receipt of Annual Solvency II Returns Transparency Safeguarding Stability & Protecting Consumers QRTs, SFCR, RSR Delivering on Key Solvency II Principles Delivering on our Key Objectives

10 Solvency II Supervisory Engagements PRISM Supervisory Framework Monitoring of Capital Outsourcing Risk

11 Looking Forward Evolving Insurance Landscape Supervisory Response Technological Political Societal Risk Based Supervision Proportional Approach Increased Collaboration

12 The Challenges Ahead for Insurance Supervision 2017 Marie Louise Delahunty, Head of Insurance Supervision, Central Bank of Ireland 24 October 2017

13 Challenges Ahead Contribute to the EU Supervisory Practice Supervisory Convergence Consistent European Supervisory Culture

14 Challenges Ahead Communication and Collaboration One Bank Initiatives

15 2018 Priorities Supervisory Focus Branch Inspections Brexit Preparedness Cross Sectoral Review Outcomes

16 2018 Priorities Actuarial Areas of Focus Pricing Discipline Reserve Adequacy Monitoring Assessment of Internal Models

17 2018 Priorities Onsite Inspections Risk Management Framework in Groups Business Model Analysis Cross Border

18 Note: The data in this presentation are aggregates of data submitted to the Central Bank by regulated firms. These data/charts may be subject to revision, as resubmissions from firms are received. Solvency II Data and Insights Dr Allan Kearns, Insurance Analytics, Central Bank of Ireland 24 October 2017

19 Part 1: Illustrative Insights from Solvency II Data 19

20 Figure 1: Geographical Distribution of Business 20

21 Figure 2: Movement in the Excess Assets over Liabilities 45 Excess of Assets over Liabilities ( Bn) Closing Solvency I Day 1 QRT Q Q Q Q Q Q Non Life Life Reinsurance VA 21

22 Figure 3: Evolution of the Solvency Coverage Ratios <Median 22

23 SCR Q Figure 4: A Firm-Level View of Evolution of SCRs 600% 500% Higher 400% 300% 200% 100% Lower 0% 0% 100% 200% 300% 400% 500% 600% SCR Q Reinsurance Non-Life Life 23

24 Figure 5: Monitoring of Claims and Reserve Developments of High Impact Non-life Companies using NST data Long-tailed (liability) lines of business Short-tailed (property) lines of business Data shown relates to Irish claims only. 24

25 Figure 6: Mapping the Insurance Sectors Linkages to Other Sectors Insurance Investment Assets 70% Other Sectors 30% Unit and Index Linked Business 70% Investment Funds (64%) Financial (15%) Non-Financial Sector (21%) Look through to instrument category and country Solvency I View Solvency II Look-Through Source: Central Bank of Ireland Reference Date: Q2 2017

26 Figure 7: Mapping Liquidity of Fixed Income Investments 100% Insurer fixed Income portfolio Markit Liquidity Score* 90% 80% 70% 60% 50% 40% 30% 1 - Highest Lowest Not Available 20% 10% 0% Life Non-Life Reinsurance *Source: Markit liquidity Score Reference Date: Q

27 Figure 8: EIOPA Risk Dashboards 27

28 Figure 9: EIOPA Cross-Country Comparisons of SCR/MCR 28

29 Any Questions?

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31 Insurance Directorate Industry Briefing 24 October 2017