OECD Approach to Global Insurance Statistics

1. Improving transparency and monitoring of the insurance sectorPromoting a global framework for insurance statistics . Latin American seminar on insurance statistics Montevideo, Uruguay 26-27 September 2013  .

2. Outline • Background on the OECD and its financial surveillance efforts and statistics • Objectives and key priorities for the OECD’s global insurance statistics (GIS)

3. BACKGROUND

4. OECD mandate and approach • OECD: “Better policies for better lives” • Growth: “”Promoting sustainable economic growth and employment and a rising standard of living while maintaining financial stability” • Development: Contributing to sound economic expansion in member and non-member countries in the process of economic development • Market openness and trade: “Contributing to the expansion of world trade on a multilateral, non-discriminatory basis” • OECD approach • Comparative, multidisciplinary approach to issues • “Evidence-based” policy analysis and recommendations • Benchmarking of performance, peer review • “Soft law” making, e.g., good practices, guidelines, principles • …Some legal agreements, e.g. OECD Codes, anti-bribery convention

5. OECD functioning • Committee-based functioning • Insurance and Private Pensions Committee , Committee on Financial Markets, and key sub-bodies (Working Party on Private Pensions, Working Party on Debt Management) • Ministries of Finance, regulatory authorities, central banks; external stakeholders including the private sector • Key networks of policy experts, with work programmes • Accountable to the OECD Council for activities and outputs

6. OECD and international cooperation • Global cooperation • Key Partners (Brazil, China, India, Indonesia, South Africa) • Regional engagement: Latin America, Asia, MENA, Africa • Latin American involvement set to increase: Chile, Mexico are already members; Colombia on the OECD accession track; cooperation with Costa Rica to be intensified • Engagement with the G20 and other international fora • Institutional investors and long-term financing • Financial education, consumer protection and inclusion • Debt management • Disaster risk financing and insurance • Non-bank financial statistics and national accounts

7. OECD data collection • Data and information a bedrock for comparative and evidence-based policy analysis and recommendations • Information-sharing a key underpinning of international cooperation and analysis • Observation of trends and country practices – a basis for analysis, benchmarking, policy discussion and evaluation • Statistics and qualitative surveys are key instruments • Structural reports: scope for important ad hoc collection of data (e.g., annuities markets, institutional investors)

8. OECD surveillance • Bi-annual roundtables • Industry, academics, NGOs, and other stakeholders • Examples: investment strategies of insurers, annuities, contribution of insurance to growth and stability • Annual monitoring reports • Global Insurance Market Trends • Pension Markets in Focus • Sovereign Borrowing Outlook • Financial statistics • Insurance, private pensions • Banking, institutional investor investments • Central government debt • Financial components of national accounts

9. BUILDING A GLOBAL Framework For INSURANCE STATISTICS Objectives, elements, and key priorities

10. Objectives • Transparency • Promote a better understanding of…: • Main features, structure, and dynamics of insurance markets and the operations and performance of firms • Connections between the insurance sector and the broader financial system and real economy • Global nature of the insurance sector and transfers of risk • Stability • Enable more effective monitoring of insurer and sector risks • Support for micro- and macro-prudential analysis; thus reinforce implementation of relevant IAIS core principles • Support for market disclosure and by extension market discipline, the third pillar of risk-based capital regimes

11. Objectives • Market efficiency and cross-border trade • Enable insurance firms to conduct cross-country analysis and benchmarking and identify opportunities for growth abroad • Enable a better understanding of industry performance and strengthening of competition

12. Elements • Aggregate market data – not firm-level data • Collected by authorities where possible (“official data”) • Global in nature • On-going, timely and adequately comprehensive • Consistency with SNA definitions and approaches • Transparency in definitions and methodologies • Coupled with qualitative information • Ease with which data can be integrated into reports (e.g., Global Insurance Market Trends)

13. Key priorities • Establishing a global insurance statistics exercise • Considerable progress has been made • Asian region, Latin America (ASSAL) • Some key gaps remain: • Some Key Partners • Other key insurance markets • Other regions could be involved, e.g., MENA • Streamlining the framework for some countries may enable further progress, e.g., enabling countries with limited data or capacities to provide key variables • A more global framework not only enhances benchmarking but enables a better understanding of insurance markets • Moving beyond country silos to better understanding international business and the global transfer of risks

14. Key priorities • Ensuring a relevant and high quality framework • Progress has been made – framework was focussed on business volumes, claims, and portfolio investments • Financial crisis prompted changes to the framework – need for more balance sheet information (previously just investments) and great granularity (e.g., government versus corporate bonds) • Need for further development in order to address the needs of various users and strengthen quality • Linkage to G20 data gaps initiative: non-bank financial sector • Promote use of the statistics and enhance scrutiny

15. Planned project on analytical tools and the statistical framework • Stocktaking of analytical / monitoring tools and country needs in regard to global insurance statistics • Analysis of needs and consideration of changes to the global statistical framework • Roundtable(s) • One or two reports • Cooperation with relevant organisations, e.g., IAIS, ASSAL, IAA, World Bank, IMF, BIS, and key users • Re-activation of task force on insurance statistics • Broader (public) consultation • Expected revision to the framework

16. Contact: Timothy Bishop (timothy.bishop@oecd.org) Deputy Head of Division, Financial Affairs Division, OECD