OECD Asia Regional Expert Seminar: Enhancing Transparency and Monitoring of Insurance Markets 27-28 January 2012, Bangkok, Thailand A Stocktaking and Comparative Assessment of Insurance Statistics in Selected Asian Countries: Preliminary Findings Insurance and Pensions Financial Market OECD Paris W. Jean Kwon, Ph.D., CPCU Faculty Chair and Professor OECD External Consultant The School of Risk Management St. John s University New York Disclaimer: The findings are preliminary and subject to reconfirmation by the participating institutions. All government agencies and their delegators responsible for data collection, administration and/or dissemination are welcome to offer their comments to the consultant (Kwonw@stjohns.edu). 2012 Background Importance of Promoting efficient, open, stable and sound markets Maintaining high levels of transparency, confidence and integrity in the markets The OECD Global Insurance Statistics as a unique source of comparable data since 1992. Gaps exist with non-oecd countries 2012 OECD & W. Jean Kwon 2 1
Background Issues of data/statistics availability from and consistency between 1. Public and online sources Often, government agencies and/or industry associations 2. Private statistical agencies 2012 OECD & W. Jean Kwon 3 The Survey The institution responsible A government agency or its delegator Data collection and management Collection method/frequency and data verification Scope of data: company vs. market level Dissemination of the data: collected vs. made public Issues Regional/international harmonization Accounting standards Challenges 2012 OECD & W. Jean Kwon 4 2
15 Participating Countries* * 88.3% response rate ** Two participating institutions Bangladesh Korea Bh Bhutan M l i Malaysia Brunei Pakistan Cambodia The Philippines China, P.R. Singapore Hong Kong, SAR Sri Lanka India Taiwan** Taiwan Indonesia Thailand** Japan** Vietnam 2012 OECD & W. Jean Kwon 5 Survey Findings 3
1. Institutions Responsible for Insurance Statistics All has at least one official agency as the responsible institution The following countries (3) also have: Brunei Japan Korea Economic Planning & Development Dept. Statistics Bureau (Statistical Research & Training Institute) Financial Supervisory Agency 2012 OECD & W. Jean Kwon 7 1. Institutions Responsible for Insurance Statistics Many, if not all, also note industry associations as supporting institutions, commonly: Life Insurance Association Nonlife Insurance Association Remarks: Japan Statistical Research and Training Institute Korea Korea Insurance Development Institute t (KIDI) Taiwan Taiwan Insurance Institute (TII) Government Association Companies 2012 OECD & W. Jean Kwon 8 4
1. Institutions Responsible for Collection and Administration of Insurance Statistics Country Bangladesh Bhutan Brunei Cambodia China, P. R. Hong Kong India Indonesia Japan Institution Insurance Development and Regulatory Authority Royal Monetary Authority of Bhutan Insurance/Takaful and Capital Market Supervision, Autoriti Monetari Brunei Darussalam Ministry of Economy and Finance China Insurance Regulatory Commission Office of the Commissioner of Insurance Insurance Regulatory and Development Authority Capital Market and Financial Institution Supervisory Agency Financial Services Agency 2012 OECD & W. Jean Kwon 9 1. Institutions Responsible for Collection and Administration of Insurance Statistics Country Korea Malaysia Pakistan The Philippines Singapore Sri Lanka Taiwan Thailand Vietnam Institution Financial Supervisory Service Bank Negara Malaysia Securities and Exchange Commission Insurance Division Insurance Commission Monetary Authority of Singapore Insurance Board Financial Supervisory Commission, Executive Yuan Office of Insurance Commissioner Insurance Supervisory Authority Insurance Regulators Globally 2012 OECD & W. Jean Kwon 10 5
2. Primary method(s) for collection of insurance statistics (financial statements) Electronic (9) The Financial Information Exchange System (Korea) Softcopy (11) Hardcopy (11) * Multiple responses permitted 2012 OECD & W. Jean Kwon 11 3. Frequency of Collection Monthly Quarter Yearly Yearly Full Partial Full Partial Full Partial 4 6 5 5 13 1 Monthly (full): Bhutan, India, Korea, Taiwan Quarter yearly (full): Indonesia, India, Japan, Korea Yearly (partial): Cambodia 2012 OECD & W. Jean Kwon 12 6
4. Closing Date for Financial Statements March 31 (4) India, Japan, Korea, Vietnam December 31 (11) Bangladesh, Bhutan, Brunei, Cambodia, Indonesia, Pakistan, the Philippines, Singapore, Taiwan, Thailand Flexible (1) Malaysia (Companies are free to set their FYE.) 2012 OECD & W. Jean Kwon 13 Question! How flexible are you to move the closing date to, for example, December 31? India Japan Korea Malaysia Vietnam 2012 OECD & W. Jean Kwon 14 7
5. Data Validation Has a formal procedure (11) Conducts a random validation (2) India, Pakistan Treats the submission as final and complete (2) Bangladesh, Japan Remarks: Built-in check & manual trend analysis (Malaysia) Built-in check of business data only, not including financials of nonlife companies (Taiwan) 2012 OECD & W. Jean Kwon 15 6. From Receipt to Making Public, It Takes 1 month (Korea, Taiwan-life, Pakistan) Up to 2 months (Singapore, Thailand, Taiwan-nonlife) 3 months (Malaysia) 6 months (India, the Philippines) 10 months (Indonesia) No reply (5) 2012 OECD & W. Jean Kwon 16 8
7. Revision Plan for Data Collection Method Yes (11) Brunei (new system in September 2011 ) India (examines an electronic filing system) Indonesia (develops an electronic filing system) Malaysia (develops an Integrated Statistical System) Singapore (examines further streamline of the process) Thailand (plans IT improvement) No (4) Cambodia, Japan, Korea, Pakistan 2012 OECD & W. Jean Kwon 17 8. Webpage for Insurance Statistics Yes (10) Cambodia India Indonesia Korea Malaysia Pakistan The Philippines Singapore Taiwan Thailand Not Making Public Online (5) Bangladesh Bhutan Brunei Japan (via LIA & GIA) Vietnam 2012 OECD & W. Jean Kwon 18 9
9. Making Public of Data/Statistics All Collected Data At the company level (1) Vietnam Partial Data At the company/market level (9) Cambodia, India, Indonesia, Malaysia, Pakistan, the Philippines, Singapore, Taiwan, Thailand At the market level (3) Korea, Taiwan, Thailand Premium Loss (Claims) Expenses Reinsurance 2012 OECD & W. Jean Kwon 19 9bc. Data Collected vs. Made Available * Limited data collected ** Not available online (softcopy) All publishing years to be verified Country Has Collected Data Since Currently Makes Available Since Cambodia* 2003 2007 [2008] India 2005 2005 Indonesia 1998 1998 Korea 1979 1998 Malaysia 1990 2005 Pakistan 2006 2006 The Philippines 1980 2004 Singapore 1980s 1999 Taiwan 1990 (L); 1985 (N) 1990 (L); 1985 (N) Thailand 2003 2003 Vietnam** 2002 2004 2012 OECD & W. Jean Kwon 20 10
11. Online Data Available Free of Fee? When available (10), it is commonly free of fee Remarks May also be available in hard copy (with a fee) Korea (membership/registration required for online access to the KIDI-administrated statistics) 2012 OECD & W. Jean Kwon 21 13. Collection of Data Separately for New Business All countries (12) collect such data except: Cambodia, Malaysia Remarks Brunei (premium data only) Japan (selected as stipulated in the law) Singapore (premium and distribution for life and life reinsurance) 2012 OECD & W. Jean Kwon 22 11
14. Use of Statistical Sources No countries are known to use other sources directly. Some materials for reference only, for example: Sigma (4) ASEAN Insurance Statistics (1) 2012 OECD & W. Jean Kwon 23 15. Strengths and Weaknesses Strengths Well-designed submission forms System infrastructure Centralized database management system Continuous investigation for system improvement Weaknesses Data quality & reliability Small insurance market Timeliness Comparison between markets as well as among different types of insurers 2012 OECD & W. Jean Kwon 24 12
16. Accounting Principle Generally Accepted Accounting Principle (10)* Bhutan, Brunei, India, Indonesia, Japan, Malaysia, Pakistan, the Philippines, Taiwan, Vietnam Statutory Accounting Principle (8) Bangladesh, Cambodia, Indonesia, Japan**, Korea, Malaysia, the Philippines, Thailand Other (1) Singapore (Singapore Financial Reporting Standard) * Bhutan, Brunei, and the Philippines in line with the International Accounting Standard or the IFRS. ** GAAP is reflected in SAP (Japan) 2012 OECD & W. Jean Kwon 25 17. Difficulty in Implementing Local Accounting Standard/Principle Information technology and expertise Availability of data to support accounting/disclosure requirements 2012 OECD & W. Jean Kwon 26 13
Data Collection Scope: Collected vs. Making Public (Company Level Only) 12. Data Premium (Number of Responses) (Published/Collected) Life Nonlife Composite Written Premium Amount (15) Direct Business 8/14 8/15 2/5 Reinsurance Accepted 4/12 5/14 2/5 Reinsurance Ceded 5/13 6/14 2/5 Number of Policies (14) Direct Business 6/13 4/13 2/5 Reinsurance Accepted 3/6 2/6 2/4 Reinsurance Ceded 2/6 2/6 1/3 2012 OECD & W. Jean Kwon 28 14
12. Data Loss/Claims (Number of Responses) (Published/Collected) Life Nonlife Composite Loss/Claims Amount (13) Direct Business 6/13 6/14 2/4 Reinsurance Accepted 4/11 5/12 2/4 Reinsurance Ceded 5/12 6/12 2/4 Number of Claims (12) Direct Business 5/12 5/11 2/4 Reinsurance Accepted 1/6 2/7 2/4 Reinsurance Ceded 1/6 2/7 2/4 2012 OECD & W. Jean Kwon 29 12. Data Operating Expense (Number of Responses) (Published/Collected) Life Nonlife Composite Operating Expenses (13) Direct Business 6/12 6/13 2/4 Reinsurance Accepted 1/6 2/8 1/3 Reinsurance Ceded 1/6 2/6 1/3 2012 OECD & W. Jean Kwon 30 15
12. Data Balance Sheet (Assets) (Number of Responses) (Published/Collected) Life Nonlife Composite Cash & Equivalent (15) 8/14 8/15 3/5 Bond (13) 7/12 6/12 2/4 Public (12) 5/11 5/12 2/4 Private (11) 5/11 5/11 2/4 Mortgage Loans (12) 5/11 5/12 1/3 Other Loans (15) 6/14 6/15 2/5 Stock (13) 7/13 7/13 2/5 Public (9) 4/9 4/9 2/3 Real Estate (15) 8/13 6/14 3/5 Other Investments (15) 8/13 8/14 3/5 2012 OECD & W. Jean Kwon 31 12. Data Balance Sheet (Liabilities) (Number of Responses) (Published/Collected) Life Nonlife Composite Unearned Premium Reserve (14) 7/13 8/14 3/5 Loss Reserve (Tech Provision) (14) 8/13 8/14 3/4 Reinsurance Payables (13) 5/13 5/13 2/5 Borrowed Money (13) 3/12 3/12 1/4 Special Reserves (10) 4/10 4/10 1/3 2012 OECD & W. Jean Kwon 32 16
12. Data Balance Sheet (Capital) (Number of Responses) (Published/Collected) Life Nonlife Composite Initial Capital (15) 7/14 7/15 3/5 Additional Contributions (11) 5/11 5/11 2/4 Retained Earnings (15) 6/14 6/15 3/5 Earmarked Surplus (Any) (12) 5/12 5/11 2/3 Solvency Target Ratio* (7) 2/7 2/7 0/2 * Equivalent ratios as well 2012 OECD & W. Jean Kwon 33 12. Data Income Statement (Number of Responses) (Published/Collected) Life Nonlife Composite Earned Premium (14) 6/13 7/14 3/5 Losses Incurred (15) 8/14 8/15 3/5 Loss Adjustment Exp Incurred (10) 4/9 4/10 3/4 Underwriting Exp Incurred (10) 4/9 4/10 3/4 Net Investment Income Earned (13) 7/13 7/13 3/4 Net Realized Capital Gain (13) 7/13 7/14 3/4 Other Income (13) 7/13 7/14 3/4 Interest Paid/Incurred (11) 5/11 5/11 2/4 Taxes Paid (14) 6/14 6/14 3/6 2012 OECD & W. Jean Kwon 34 17
Cambodia Insurance Division Financial Industry Department Ministry of Economy and Finance 18
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Japan Insurance Business Division Supervisory Bureau Financial Services Agency (金融庁) Ministry of Finance (Minister for Financial Services, 財務大臣) 20
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New business premiums by line Simplified income statement Simplified balance sheet New business premiums by line Income statement Balance sheet Full statistics 22
Identical data in English pages Thailand Office of Insurance Commission 23
Insurance Statistics Monthly Data (Life) Monthly Data (Nonlife) 24
Quarter yearly & End of year Year-to-year comparison Annual data only 25
From 1997 Data Scope Comparison: Government vs. vs Other Sources Thailand Nonlife Insurance 26
Data Availability Comparison Public source Private sources Office of Insurance Commission ISIS Database and Company s websites: 1. Bangkok Insurance (public)* 2. Viriyah Insurance (private)* Findings (selected) Much longer period of data in the public source than in private sources Much fuller information in private sources than in the public source * Largest in terms of gross premiums written in 2010 and 2009, respectively. 2012 OECD & W. Jean Kwon 53 Bangkok Insurance Company (ISIS Database) 27
* * The database shows results from 2004 through 2010. 28
Remarks Coordination of data/statistics collection processes Account closing date Codification exercise in line with international development Financial statement entries IT in selected countries Efficiency in data verification in selected countries Systemic approach for data dissemination In the public domain At the regulated company s domain To private statistical agencies No harm from publishing all collected data 2012 OECD & W. Jean Kwon 58 29
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