OECD Global Insurance Statistics Framework

1. OECD Global Insurance Statistics Framework OECD-Latin America Seminar on enhancing transparency and monitoring of insurance markets Montevideo, Uruguay 26-27 September 2013  . Jean-Marc Salou Financial Affairs Division Directorate for Financial and Enterprise Affairs OECD, Paris .

2. Main long-term goal and objectives To further enhance the monitoring of the insurance markets through sound and reliable comparable international insurance official statistical information To develop high-quality, comparable statistics, with more granularity and long-term perspective To augment the global reach of the statistical exercise by expanding its geographical scope

3. How? • Improve matching against needs and promote more further use of existing data taking into account the various audiences • A stocktaking of existing sources at international level has been revised and extended stocktaking of existing sources (with additional sources examined, eg., ECB, Eurostat). We anticipate to extend the stocktaking to indicators used in publication at international level and to private data sources • Engage with main stakeholders, data suppliers and users • Extensive, transparent, accessible data and metadata • Understanding definitions and methods is essential • Use data for analysis • Disseminate data and analytical outputs

4. Scope and sources • The Global Insurance Statistics framework covers major official insurance statistics, dating back to 1983 covering general information on the insurance markets but also data related to the market share by foreign companies in each country, business written abroad, premiums in terms of risk destination, foreign and domestic investment • Data includes all insurance companies licensed or authorised in each country, including professional reinsurers, whether or not these are controlled, but excluding any statutory system of social security administered by the State • Data are reported on an annual basis mostly by ministries, supervisory agencies or national statistical offices. • The datasets cover OECD countries and non-OECD countries

5. The OECD insurance statistics electronic questionnaire (1/3) • Part 1 (sections 1.1 to 1.5) seeks advanced aggregate statistics, as well as qualitative information, and, • Part 2 (sections 2.1 to 2.15) requests more detailed statistics. (for further details see Tables 4 to 6 of room document 1) • Both Part 1 and Part 2 questionnaires are sent at the same time during the first quarter: • Part 1 component is approximately requested end of May, so as to permit the dissemination of key statistical data and indicators in June; • Part 2 is approximately requested mid- to end of October, so as to permit dissemination of preliminary statistical data in December.

6. The OECD insurance statistics electronic questionnaire (2/3) • Section 1.1 deals with business written in the reporting country • include all business written, whether in respect of domestic or foreign (world-wide) risks, and • analysed according to the categories of insurers (“Domestic Enterprises”, “Foreign-controlled Undertakings” and “Branches and agencies of foreign Undertakings”); • Section 1.2 focuses on premiums of life insurance by type of contracts (i.e. unit-linked, annuities, other life insurance contracts). The latter includes data on pension insurance contracts, collected as a separate item; • Sections 1.3 (and 2.12) collect information pertaining to balance sheet and income statement variables of direct insurers and reinsurers. • These sections compile key aggregate statistics notably relating to total assets, shareholder equity, technical provisions and net income; • Section 1.4 concerns investments by direct insurers, while section 2.13 covers investments by reinsurers. • Both sections cover the breakdown of investments according to the categories of insurance enterprises (“Domestic Enterprises”, “Foreign-controlled Undertakings” and “Branches and agencies of foreign Undertakings”); • Sections 1.5 (and 2.10) seek comments on developments in the insurance sector, by segment, including factors that might explain trends and/or variations.

7. The OECD insurance statistics electronic questionnaire (3/3) • Section 2.1 deals with general information on the reporting country (e.g. number of undertakings and employees); • Section 2.2 specifically deals with business written in the reporting country on risks situated outside the reporting country (=foreign risks) while section 2.3 covers the breakdown of business between domestic and foreign risks on a net premium basis; • Section 2.4 covers business written abroad by branches, agencies and subsidiaries established abroad of domestic undertakings and includes all business written outside a given country by these entities (in both OECD and non-OECD countries) while the geographical breakdown of business written by branches and agencies only (i.e. excluding subsidiaries) for life and non-life segment, respectively, is given under sections 2.5 and 2.6. Premiums written by classes of non-life insurance for the business written is provided by section 2.7; • Sections 2.9, 2.10 and 2.11 concern gross claims payments, gross operating expenses and commissions, respectively.

8. Improving its global reach Hong-Kong, Thailand, Malaysia and Singapore already participate actively on an on-going basis. Participating countries at the first and second seminars: Australia, Bhutan, Brunei Darussalam, Cambodia, Hong Kong (China), India, Indonesia, Japan, Lao People's Democratic Republic, Malaysia, Netherlands, Poland, Portugal, Singapore, Thailand, Turkey, Viet Nam, United States. • Through the organisation of seminars and bilateral contacts: In Asia: • 1st seminar held in Kuala Lumpur, Malaysia, co-hosted by Bank Negara Malaysia, held on 23-24 September 2010; • 2nd seminar held in Bangkok, Thailand, and co-hosted by the Office of Insurance Commission, held on 26-27 January 2012; • 3rd seminar to be held in Indonesia, and co-hosted by the Financial Services Authority of Indonesia (OtoritasJasaKeuangan, OJK), 2013, precise date to be confirmed.

9. Improving its global reach (cont.) • Overall, under the OECD GIS framework, electronic questionnaires sent to 59 countries, • Excel questionnaires with 2012 data received so far for: • 19/34 OECD countries • 13/25 non-OECD key partners, of which: • 1/7 Asian key partners • 12/17 ASSAL key partners • Qualitative information was in most cases providedwith Excel questionnaire In Latin America: 1st Joint Seminar on InsuranceStatistics in Latin Americawith ASSAL members and other main stakeholders, 26-27 September2013 in Montevideo, Uruguay

10. Key outcomes from past seminars • Common themes were: • data quality; the need for timely, accurate, consistent, comparable, … statistics • confidentiality; the need for transparency and the unwillingness of insurers to disclose their data • Confidentiality of unit-record data was mentioned and questioned on several occasions • There is a growing appetite for transparency. This is tempered against a keen desire by insurers to keep there data confidential. There does not seem to be as big a push for transparency in insurance markets as there is for banking. Solvency II has a pillar 3 that may address the situation to some extent • A good case for transparency needs to be made and promulgated internationally and pursued nationally.

11. Moving towards enhanced quality and relevance • Accelerating data timeliness through the collection of fast-track data, Year-end data pertaining to the core set of variables are released with about a 6-months lag. Additional detailed year-end variables are released with about a 10-month lag • Engage with national/regional data suppliers and other main stakeholders in order to further improve data quality and completeness with targeted realistic and relevant outputs • Develop a better knowledge of data coverage and try to align with existing standards as much as possible or explain potential departures from existing standards (e.g., national accounts and other accounting standards) • Coherence with other international datasets (eg.: SNA, Financial Accounts, EIOPA, etc.)

12. Status of main statistical outputs • OECD Global Insurance Market Trends, 3rd edition (October 2013) • Insurance Statistics yearbook (forthcoming) • Release of key statistics and indicators for base year 2012 (October 2013) through the OECD data browser • Contribution to G20 data gap initiative under rec 14 • Stocktaking of existing sources (to bepursued and possiblyexpanded)

13. • Trends in gross premiums • Market share • Density • Penetration • Life insurance share • Direct total gross premiums/number of employees of insurance companies • Retention ratio • Ratio of reinsurance accepted • Market share of foreign companies • Market share of branches/agencies of foreign companies • Loss ratio • Expense ratio • Combined ratio (loss ratio + expense ratio) • Return on investment/total investment • Investment ratio • Solvency ratio • Reserve ratio • Structural ratio • Capital and reserves/technical provisions indicators • Profit or loss for the financial year/gross written premiums • Profit of loss for the financial year/capital and reserves (2 years mean) List of selected indicators For disseminationthroughInsuranceStatisticsYearbook For disseminationthrough the Global InsuranceMarket Trends yearly publication

14. Contribution to G20 data gap initiative under rec 14 • Crisis showed lack of data on cross-border exposures of non-financial corporations and the need for cross-border positions • To monitor potential threats to non-bank financial sector stability, and vulnerabilities for NBFI • The OECD (STD and DAF) together with the IMF, BIS and the ECB have developed standard templates covering the international exposures of large NBFI (referred to as the recommendation 14 under the FSB data gaps initiative) • A navigation tool has been developed for publication of the dedicated templates on the PGI website. See http://www.principalglobalindicators.org/default_staging.aspx • The templates provide both a broad sectorization of the whole economy (Template A) and a more detailed sectorization of the reporting economy’s financial corporations (Template B) • They provide key aggregates regularly updated from a number of international databases maintained notably by BIS, ECB, IMF and the OECD

15. Other possible contributions Annuity Products: Improve understanding of the problems facing annuity markets by focusing on the nature of the guarantees provided by annuity products and their costs for insurance companies and consumers Institutional Investors and Long-Term Investment including the collection of detailed investment data starting with large pension funds Catastrophic risk data

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