Insurance : Getting the balance right

International Kpmg

Description

While the global insurance industry has been less impacted by the financial crisis, it is still facing the need to reconsider the cornerstones of its business. Capital and risk management have been challenged by volatile asset values and increasing regulatory intervention. This has resulted in an unprecedented need for the industry to refocus upon and find a balance between these key elements.

Sujets

• Crise économique
• KPMG
• Risk
• Management
• Régulation
• Intervention

Informations

• Publié par: kpmg
• Publié le: 07 juin 2011
• Nombre de lectures: 141
• Langue: English
• Poids de l'ouvrage: 3 Mo

Extrait

INSURANCE

Getting the balance right Long-term capital, risk and regulatory challenges for insurers

November 2009

FINANCIAL SERVICES

 

10 © 2009 G  nt tional  tnreanti hG enliset s de cnop laivoranrenoity aus anm har firmeeboNm se vrciGd in bore atgilbo ot ytiroht  G tnreanitG nternationalpooctareevime alons  ia s isn teGo  fokrfirmsber the  of fifa era  detailndpedeinmsfirt en  ynabmemb ro dnil lghri fier rmevd

Getting the balance right

oreord

oreord

str sere

Frank Ellenbürger artner and Global ector Leader, nsurance G in Germany

hile the global insurance industry has been less impacted by the financial crisis, it is still facing the need to reconsider the cornerstones of its business apital and risk management have been challenged by volatile asset values and increasing regulatory intervention his has resulted in an unprecedented need for the industry to refocus upon and find a balance beteen these key elements n conversations ith our member firms’ clients and colleagues around the orld, it is clear that many institutions are no considering their strategic options as they adapt to the ne landscape and increasingly regulated environment o hen undertaking this second of a to-part global survey ith the conomist ntelligence nit, e decided to delve deeper into the themes discussed in A glimmer of hope – the predecessor to this report he first report looked retrospectively at the key elements of capital and risk management and their impact on survival and groth post financial crisis n this survey, e asked respondents of this survey to look to the future o consider the challenges that the industry ill face in the net fe years - particularly capital management, the rising importance of the risk function, the increasing interdependency beteen these to disciplines, along ith groing regulatory changes in and impact upon the industry s the title of this report suggests, Getting the balance right beteen these elements has become even more challenging post financial crisis and ill remain a key focus for the industry  ould therefore urge you to read this timely report and, as alays, my insurance colleagues and  ould elcome the opportunity to discuss the key issues and conclusions as you adapt to today’s challenging environment

nt naeronti oalna rto y rehbmemer firm vis-à-vist ihdrp raitse ,esdor no n G   oitanretevah lan suc anythorh auoto ti yta elbgi

r any other memb tnreanitnolao e at bord inGroht ytio otgilb atioternhavenal  odseon r G n   prdhi t, estiarv mrfi resiv-à-si l lirhgrefi mr any membor bind gilb eta ytio otauh orthny auc s

PM eitorial boar an oentar ontributors   Paul Bishop G in the  Martin an enseen G in the Netherlands uub Arense G in the Netherlands ar Reaer G in the  ai hite G in the  ann Clark G in the  Frank Ellenbürger G in Germany

n une 2009, G nternational launched A glimmer of hope , the first of a to-part global insurance survey series hich it commissioned the conomist ntelligence nit  to undertake on its behalf his follo-up report analyes the findings of the second survey undertaken in ugust 2009, eamining ho the financial crisis is changing the attitude of the global insurance industry to risk and capital management – highlighting some of the key issues that these institutions should address in response ur foremost thanks go to the 92 global respondents from  different countries ho ansered the survey uestionnaire and the  eecutives ho gave their time for intervies e ould also like to thank members of the editorial board and our proect team ho have helped us carry out this research, as ell as the  analyst team

PM proet tea   Li hite G in the  Aber Steart G in the  Freie ospeales G in the  Arian Curtis G in the  Rob Mithell   nalyst, conomist ntelligence nit

cknoledgements

dveeres rts  Gretnitanlano  Gernttina Gi  nht eeNhterlands © 2009 smrfi reb eht fo et nGf  orkoi  snolasi s aeratcoop emivent naerh itGG tn  noit laent firmsindependiltade a era fif beem mNo esicrvua yna sah mrfi rrovial ptionerna tesilneonc ed s  tirhg gni ehtalab ecnleoemdgtsenttGe 20 cnk  eeNhtrealdn  s uub Arense artner  n nasne  nee tnar  er  iGthn  po a iBhs  r  tren  theG in arti   Ml auP

oianl netnrta09 G © 20 0 ber  mem anybindo  ragetboilt  otyrihout achsuy na evah lanoitan G  nter  does ei,sn rori daptrvià-ths m firs-vimem  rebo ynreht eserdevr

ontents

Getting the balance right



age     20 2  

espondents by geography  bout the survey ased in sia acific ntroduction 1 ecutive summary ased in urope 01  uestion of capital 2 02 trengthening risk and  capital management ased in North merica  onclusion ased in the iddle ast and frica G hough    t leadership      ontacts

ontents

mfirll ig rs ht hti detailfifa eioatrntenG  i dn kfotro Gens ar firmdentepene rebmarepevithe t rm fiofs nrtaoian Gnetiss cool is a  ndbir  onG  oitanreta ro lanas arm huthony at  oirytagetboilo  niecl sntviersec oN bmemfi re nal G  nterntaoian lrpvodise

0 te oligand r binet Goiannrtarm fiermbny aas hirohtua bo ot ytovides no clients reivecsN  oem atrnnaio lG  etntanranoirp l aietfalfira emr snteG th d i kroten G eh fintdeenepnd iofaritev ssc ooeprms of tember fin Gnretlan  aisi ioatl nan G oitanret0920©   sergithdeesvrr firembell rm 

Sure responents b ountr ustralia taly outh frica ustria amaica outh orea elgium apan pain rail Liechtenstein ri Lanka anada Luembourg eden hina alaysia iterland olombia auritius aian ech epublic orocco hailand enmark Netherlands urkey rance Ne ealand kraine Germany Nigeria nited rab mirates ong ong Noray nited ingdom ndia omania nited tates ndonesia ussia ietnam reland ingapore imbabe srael lovenia

n ugust and eptember 2009, the conomist ntelligence nit surveyed, on behalf of G nternational, 92 senior eecutives from insurance companies around the orld he survey returned to the themes of risk and capital management reflected upon in A glimmer of hope  , published in une 2009, hich as the first of a to-phased global insurance thought leadership series his second survey sought to gauge the industry’s outlook around these themes, as ell as their prospects around business performance, groth and regulation espondents ere spread globally, ith  percent from sia-acific, 1 percent from urope, 2 percent from North merica and  percent from the rest of the orld pproimately  percent of respondents represented businesses ith annual revenues in ecess of 00m ore than 0 percent of respondents ere -level or board-level eecutives, and the vast maority had responsibility for finance, risk or general management espondents ere split among life insurance  percent, non-life insurance  percent and reinsurance  percent companies or divisions

bout the survey

bout the survey

1 A glimmer of hope: Growth prospects in the global insurance industry and the escalation of risk and capital management , G nternational, une 2009

Getting the balance right

such autave any itnolah    tnrean and mny otebir bo oagiliroht yt s-à-m vir firemberem o hta yn lroGs oe dor ns,eitrap driht siv

adreon cie spdee   tips orp esim to holde likelycust ,racn erpdorasuinf  olyppsu detimil neeb ng funtiacco on c nonaecsnruroi a d heisblpuo lsrepap noissucsid the valull move i snrunataoi nfoha  actr   ts cihi h es , saeses dtn ssemthesll gulae re rtnoc ec ot stca  mremo a  bat-kear ubisenssa dnc uold affect levels noiti si llsopmcoe s st n    oe th s gnirb osla dlucoy he tut    yittaliv lonisgaenrand tal capi of  c snfi nainaoita sehe rg   o , ss tif eubisenstt  ohtal benefiubstanti  are acaacbro lsroN ni sirem ht ance bal urer  ns ehn dnt asyrcese lyibpi sinllovg vretitne ,nossop or regulatory  in ni ghtmeesvlsef  t hansconsse tussi neen dilooitahe indusded in t eg rna d rt,y m   ren ioitisuacil si ytivitca estrbe r to kelyselua r  dsaiaen fo  t c a itnoniundeg tharf  opicaat,la tlohgu hgaain there ill btpece e ot   snoi ul rhe t pet u e  shthrpaggse eiballet chthatnge alotyrc b  eerugead ill lies ah um sc tssni reruun pero ngha   e  fonoo atitmeneimplthe der onsi c gninrevog selu   r e n, cyenlv  and also arketpatilaa educa,yeddd al    rueorep no tsis tneebm onalnatiount cc   itgntnreeh d ar  a as hnat gnio sdrad ative s cooper s asiitnolai nt naer alGanrenoitGtn 009   © 2 lentrevassp  selsii  ehtopur desiut   o ghuohtla ,noitacola dnr seuocr ela rategic  planning m laledoof sts rec t  omon cicitap tec amkrtsnenoise nos aring  us naeporu rerusni  o flshcay an s siv v-à-rebmmrfi ar pesti tisrdhianitnolaG tnreother me or any lbo ot ytirohtuad in bore atigm me oNciseesvrany has firm ber ernttinaalonro pedivon silc  tne  ith G nteranitnola G   pedeinf firt ennda era smdetailfifr firembef thms oGn  ekro teo ncveol sor ftsenmeriuer no rie ntai mait toemennaga ks m   dir yna pry sueso  tplaptnoceuni se lli uding thry, incl  e niudts ero  nht  mrof tali sihttyintaerhr ve o tani,er neic gga ke l ta hilean mos ac e,sestub  ferm ronkbains  ocsndirebaelu cn    there remains     uo ekstm raicla ssetre aeasuld meitilibail dna s r lamisih it    s   sna dillla sstes are meabilitie ht  n as e rusai de t haanfin me tay  eh2ectpc norkmaf  osion ceti ycnets a  taht s n ratings anoiah letntanr  esG no, dor  o lbgitaroti yotuch authve any sir ll mrfi rebmmey and in bore 

olloing the collapse of Lehman rothers in eptember 200, the ripples from the global financial crisis continue to be felt lthough there is marked variation across financial services, the insurance industry has eathered the storm relatively ell – and certainly emerges from the crisis in a better shape than its close relatives, the banks here are numerous reasons hy the insurance industry has fared relatively ell it typically has a longer-term, more conservative vie of its business than banks it has a longstanding history of managing risks retains relatively strong balance sheets and, although there are notable eceptions, it has not strayed from its core business into more eotic, and risky, financial instruments hile the industry should deservedly breathe a small sigh of relief, this is no time for complacency he coming years ill bring a hole host of challenges and problems ore markets in developed countries are mature, if not saturated, hile emerging markets, here there has historically

ntroduction

espondents by sector  Life insurance  Non-life insurance  einsurance

ntroduction

d

Getting the balance right

erve resghts 0