Insights from NZ solvency returns for 2015 financial year · New Zealand solvency analysis...

NZSA Conference

November 2016

Robert Cole

Adrian Allott

Insights from NZ solvency

returns for 2015 financial year

Insights from NZ solvency

returns for 2015 financial year

• Introduction

• New Zealand solvency

- requirements

- analysis

- feedback on common issues

- strength?

• Home jurisdiction solvency

• Conclusions

Introduction

• No comment on RBNZ’s policy or

supervision responses

• No discussion of individual insurers

• Information as reported (despite some

issues)

• Mix of year end dates during 2015

• Lots more detail in the paper – please

read it!

Introduction

New Zealand solvency

requirements

New Zealand solvency

analysis (solvency result)

as reported adjusted for

licence

condition

All 2,397.0 1,812.0

General 1,272.3 702.3

Life 684.2 669.2

Health 440.5 440.5

Solvency Margin ($ million)Main type

of

insurance

as reported adjusted for

licence

condition

177% 149%

214% 142%

136% 135%

490% 490%

Solvency Ratio (%)

New Zealand solvency

analysis (effective requirement)

New Zealand solvency

analysis (general insurers)

New Zealand solvency

analysis (life insurers)

New Zealand solvency

analysis (health insurers)

New Zealand solvency

analysis (solvency ratio adjusted)

New Zealand solvency

analysis (general insurers 2015)

New Zealand solvency

analysis (life insurers 2015)

New Zealand solvency

analysis (health insurers 2015)

New Zealand solvency

analysis (capital target %)

New Zealand solvency

analysis (actual vs target)

New Zealand solvency

feedback on common issues

• Compliance with s121 requirements

- late, pdf, no sign-off, wrong version, email

• Completing incorrectly

- e.g. large insurer selecting small insurer

exemption, lack of comments, units, figures

in wrong boxes

• Applying solvency standards

- e.g. non-life cat. risk alternative method

• Solvency standard interpretation

- e.g. discretions, premium liabilities

New Zealand solvency

strength?

Solvency Margin

Adjusted as % of Gross

Annual Premium

Solvency Margin

Adjusted as % of Net

Assets

All 23% 26%

General 14% 20%

Life 34% 23%

Health 40% 73%

Solvency Margin AdjustedMain type

of

insurance

Home jurisdiction solvency

• Hard to directly compare (except

Australia)

• Australian solvency ratios slightly higher

than NZ?

• Some common issues

- compliance, currency, units, multiple

solvency requirements

Home jurisdiction solvency

Australia

Conclusions

• Considerations for insurers & actuaries

• Considerations for RBNZ

- policy

- supervision

- thematic review

- publication

• Invite insurers to follow up with RBNZ

• Questions?

• Thank you