IAIS published the Global Insurance Market Report (GIMAR) for 2019. The report discusses the global insurance and reinsurance sectors, with focus on the performance of the sector, key risks facing the sector, and key developments in the global insurance market from a supervisory perspective. The report also presents the results of the Global Reinsurance Market Survey covering 47 reinsurers in nine jurisdictions in North America, Europe, and Asia while linking the financial position of reinsurers to the broader financial economy.
The GIMAR report discusses the performance of life insurance sector within a prolonged low-yield environment. It highlights that the sector may be subject to various risks and challenges, given a potential rate increase or a sluggish growth of guaranteed rate products sales. The report for this year also focuses on the specificities of cyber insurance and how insurers tackle risk pricing in light of the lack of historical data sets. The report presents the key challenges and regulatory considerations associated with cyber insurance. The report recommends that supervisors need to share information and best practices to enhance their own ability to evaluate the pricing and exposure of insurers within their jurisdictions. They also need to consider how they can support an integrated approach to cyber risk that will adequately reflect the risk in insurers’ strategy and risk appetite. Initiatives are under way in several countries to foster greater risk awareness and to push insurers to adopt conscious risk management and supervision, but additional efforts are required by both supervisors and insurers.
One key finding of the Global Reinsurance Market Survey is that the reinsurance market is still recovering and further consolidating its capacity following the series of severe natural catastrophes that took place in 2017. However, capital has proven an effective loss buffer when held at sufficient levels. The Survey demonstrates the extent to which the reinsurance industry relies on retrocession as a tool to reduce and diversify risk. If the trend of declining retrocession persists, the industry may experience a shift toward other risk-mitigating mechanisms. Equity and debt securities still remain the largest asset classes for investment in the reinsurance industry, cumulatively accounting for 77.5%. Short-term portfolios tend to be invested in highly liquid securities, while reinsurers’ exposures are mainly concentrated in the insurance market.
Keywords: International, Insurance, Reinsurance, GIMAR, Macro-Prudential Policy, Cyber Insurance, Life Insurance, Regtech, Global Market Reinsurance Survey, IAIS
The Bank of England (BoE) published the Statistical Notice 2021/09 requiring additional information from firms and software vendors to assist in the onboarding and testing phases for migrating statistical reporting to the BEEDS portal.
The Financial Conduct Authority (FCA) published the final rules on the Investment Firms Prudential Regime (IFPR) to streamline and simplify the prudential requirements for solo-regulated UK firms authorized under the Markets in Financial Instruments Directive (MiFID).
The working groups of the Climate Financial Risk Forum (CFRF) published a second round of guides (or Session 2 guides), written by the industry for the industry, to help financial firms manage climate-related financial risks.
The Prudential Regulation Authority (PRA) published the final Policy Statement PS24/21 that contains the new Non-Performing Exposures Securitization Part of the PRA Rulebook and an updated Supervisory Statement SS10/18 on the general requirements and capital framework with respect to securitizations.
The European Banking Authority (EBA) published version 5.1 of the filing rules for supervisory reporting.
The European Central Bank (ECB) Guideline 2021/1829 on the procedures for the collection of granular credit and credit risk data has been published in the Official Journal of European Union.
The European Banking Authority (EBA) published the final draft regulatory technical standards on disclosure of investment policy by investment firms, under the Investment Firms Regulation (IFR).
The European Council adopted conclusions inviting the European Union (EU) and the member states to further develop the cybersecurity crisis management framework.
The European Commission (EC) adopted the work program for 2022.