2006/12/14 1 人壽保險風險管理 life insurance risk management 南山人壽...
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人壽保險風險管理人壽保險風險管理Life Insurance Life Insurance
Risk ManagementRisk Management
南山人壽 劉禧寧資深副總 南山人壽 劉禧寧資深副總 S.N. LowS.N. Low
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排名Ranking
國家Country
總計Total
壽險業Life
產險業Non-life
排名Ranking
國家Country
總計Total
壽險業Life
1 瑞士 Switzerland 5,558.4 3,078.1 2,480.3 1 台灣 Taiwan 14.10 11.17
2 英國 U.K. 4599.00 3287.10 1311.9 2 南非 South Africa 13.87 10.84
3 愛爾蘭 Ireland 4,177.1 2,759.7 1,417.4 3 英國 U.K. 12.45 8.904 比利時 Belgium 3,985.6 2,988.7 996.9 4 瑞士 Switzerland 11.19 6.20
5 丹麥 Denmark 3,876.2 2,489.9 1,386.3 5 比利時 Belgium 11.15 8.36
6 美國 U.S. 3875.20 1753.20 2122 6 日本 Japan 10.54 8.32
7 日本 Japan 3746.70 2956.30 790.4 7 南韓 South Korea 10.25 7.27
8 荷蘭 Netherlands 3,739.7 1,954.2 1,785.5 8 法國 France 10.21 7.08
9 法國 France 3,568.5 2,474.6 1,093.9 9 香港 Hong Kong 9.92 8.6310 芬蘭 Finland 3,389.2 2,707.8 681.4 10 荷蘭 Netherlands 9.79 5.12
11 挪威 Norway 3,302.3 2,043.1 1,259.2 11 芬蘭 Finland 9.18 7.33
12 瑞典 Sweden 3,092.0 2,105.2 986.8 12 美國 U.S. 9.15 4.1413 盧森堡 Luxembourg 2,756.3 1,112.5 1,643.8 13 葡萄牙 Portugal 9.07 6.20
14 澳洲 Australia 2,569.9 1,366.7 1,203.2 14 愛爾蘭 Ireland 8.55 5.65
15 香港 Hong Kong 2544.90 2213.20 331.7 15 那米比亞 Namibia 8.27 5.81
16 加拿大 Canada 2,449.0 1,071.9 1,377.1 16 丹麥 Denmark 8.08 5.19
17 奧地利 Austria 2,342.8 1,095.1 1,247.7 17 瑞典 Sweden 7.82 5.32
18 德國 Germany 2,310.5 1,042.1 1,268.4 18 千里達 Trinidad-Tobago 7.63 5.61
19 義大利 Italy 2,263.9 1,449.8 814.1 19 義大利 Italy 7.59 4.86
20 台灣 Taiwan 2,145.5 1,699.1 446.4 20 新加坡 Singapore 7.48 6.00
世界總計Total in the World
518.5 299.5 219.0 世界總計Total in the World
7.52 4.34
保險密度 Insurance Density (USD 美元) 保險滲透度 Insurance Penetration %
Insurance Density = Average premium per person Insurance Penetration = %Premium/GDP
Source: “Swiss Re, Sigma No. 5 / 2006”
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Life Insurance in TaiwanLife Insurance in Taiwan
Total Life Ins Co.: 22 (local) +9 (foreign) = 31Total Life Ins Co.: 22 (local) +9 (foreign) = 31
20052005 Total in-house staff (Life: 24,839 in 2005)Total in-house staff (Life: 24,839 in 2005) Total agency (Life 202,737 in 2005)Total agency (Life 202,737 in 2005)
Total asset in industry: Life Ins NT$ 6,574b Total asset in industry: Life Ins NT$ 6,574b Total policies: Basic 44,243,445; Rider 70,874,777Total policies: Basic 44,243,445; Rider 70,874,777 Total Life Ins premium: NT$ 1,457,632mTotal Life Ins premium: NT$ 1,457,632m Total claims: NT$ 498,827mTotal claims: NT$ 498,827m
National Income per Capita: NT$ 438,255National Income per Capita: NT$ 438,255 NT$ spending per person in life insurance: NT$ 64,015NT$ spending per person in life insurance: NT$ 64,015
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Life insurance Life insurance - beyond commercial activities- beyond commercial activities
Institutional investorsInstitutional investors – Source of fund for private/public sectors – Source of fund for private/public sectors Government/Treasury Bond: NT$1,631,285m @ Aug06Government/Treasury Bond: NT$1,631,285m @ Aug06 Insurance Industry holds 20% of total outstanding Gov’t BondsInsurance Industry holds 20% of total outstanding Gov’t Bonds Foreign Investment: NT$ 2,022,944m @ Aug06Foreign Investment: NT$ 2,022,944m @ Aug06 Insurance Industry holding ~2.5% of total market capitalizationInsurance Industry holding ~2.5% of total market capitalization
Financial protectionFinancial protection against premature death or health problems against premature death or health problems Savings vehicles for planned/unplanned events and retirementSavings vehicles for planned/unplanned events and retirement
Contribution to social stabilityContribution to social stability Promote and support community services and welfarePromote and support community services and welfare Promote better employer/employee relationshipPromote better employer/employee relationship Created more job opportunitiesCreated more job opportunities Relieve social welfare systemsRelieve social welfare systems
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Why is Life Insurance Why is Life Insurance Unique?Unique?
Lifetime commitmentLifetime commitment Unilateral - Utmost good faithUnilateral - Utmost good faith Aleatory contract (Aleatory contract ( 射倖契約射倖契約 )) Contracts of adhesion (Contracts of adhesion ( 附合契約附合契約 )) Fiduciary roleFiduciary role
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Keys to lifetime Keys to lifetime commitment…commitment…
Governance Governance Risk ManagementRisk ManagementProfessionalismProfessionalism
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Leading to ERM as Leading to ERM as defined…defined…
“… “… a process, effected by an entity's a process, effected by an entity's board of directors, management and board of directors, management and other personnel, applied in strategy other personnel, applied in strategy setting and across the enterprise, setting and across the enterprise, designed to identify potential events that designed to identify potential events that may affect the entity, and manage risks may affect the entity, and manage risks to be within its risk appetite, to provide to be within its risk appetite, to provide reasonable assurance regarding the reasonable assurance regarding the achievement of entity objectives.”achievement of entity objectives.”
Source: Source: COSO Enterprise Risk Management – Integrated FrameworkCOSO Enterprise Risk Management – Integrated Framework. 2004. COSO.. 2004. COSO.
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ERM - objectivesERM - objectives Aligning risk appetite and strategyAligning risk appetite and strategy Enhancing risk response decisionsEnhancing risk response decisions Reducing operational surprises and Reducing operational surprises and
losseslosses Identifying and managing multiple and Identifying and managing multiple and
cross-enterprise riskscross-enterprise risks Seizing opportunitiesSeizing opportunities Improving deployment of capitalImproving deployment of capital
Reference: ERM – Integrated Framework. COSOReference: ERM – Integrated Framework. COSO
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Control
Share/Transfer
Mitigate/Avoid
RiskManagement
ProcessLevel
ActivityLevel
Entity Level
RiskMonitoring
Identification
Measurement
Prioritization
RiskAssessment
Risk management Risk management processprocess
Reference: Applying COSO’s Enterprise Risk Management — Integrated Framework, The Institute of Internal Auditors
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Risk management toolsRisk management tools
1.1. Self-assessment and controlsSelf-assessment and controls(e.g. Audit, claim management, agency disciplinary (e.g. Audit, claim management, agency disciplinary
committee)committee)
2.2. Process descriptions Process descriptions (e.g. Operation manual, company policy, Sarbanes-(e.g. Operation manual, company policy, Sarbanes-
Oxley, ISO)Oxley, ISO)
3.3. Key risk indicators and reportsKey risk indicators and reports(e.g. Efficiency report, regular management reports, IT (e.g. Efficiency report, regular management reports, IT
exception reports) exception reports)
4.4. Specialized techniques, process Specialized techniques, process and organizationand organization
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Financial risk Financial risk
as illustrationas illustration
Capital managementCapital management ALM (e.g. interest, forex)ALM (e.g. interest, forex) Pricing (e.g. assumption vs Pricing (e.g. assumption vs experience)experience) Liquidity (e.g. cash flow)Liquidity (e.g. cash flow)
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Risk Assessment/Mitigation Risk Assessment/Mitigation Impact vs. ProbabilityImpact vs. Probability
High
I M P A C T
Low High
Share/ Transfer
Accept
Mitigate/ Avoid
Control
Medium Risk High Risk
Low Risk Medium Risk
PROBABILITYReference: Applying COSO’s Enterprise Risk Management — Integrated Framework,
The Institute of Internal Auditors
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High
I M P A C T
Low High
Medium Risk High Risk
Low Risk Medium Risk
PROBABILITY
Risk Assessment/MitigationRisk Assessment/Mitigation
• Catastrophic loss• Jumbo case• Currency mismatch
• Fraud• Irrational competition
• Anti-selection• Risky investment activities
• Assumptions deviations • Expense overrun • Entry error
Share/Transfer
Accept
Mitigate/ Avoid
Control
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Operating Margin
0% 2% 4% 6% 8%
1999
Target
2000
8%
7%
6%
8%
7%6.80%
6.50% 6.60%
3.20%
2.50%
1.90%
3.10%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
1997 1998 1999 2000 YTD
yields-new invmts portfolio yields GNP deflator
0
2
4
6
8
10
12
14
16
1997 1998 1999 2000 YTD
# catastrophes # bad faith lawsuits
Financial scorecard/ risk Financial scorecard/ risk dashboarddashboard
Financial analysisFinancial analysis Capital adequacy level Capital adequacy level Revenue growthRevenue growth Earnings growthEarnings growth ROEROE
Variance analysisVariance analysis Investment performanceInvestment performance Expense ratioExpense ratio Claim ratioClaim ratio PersistencyPersistency Reinsurance profileReinsurance profile
Actuarial analysisActuarial analysis Cash flow testingCash flow testing Asset Liability ManagementAsset Liability Management
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Examples on performance Examples on performance benchmarkbenchmark
1.1. Minimum level of capitalMinimum level of capital Regulatory RBCRegulatory RBC Capital to obtain given rating from rating Capital to obtain given rating from rating
agencyagency Capital to cover operation risk and business Capital to cover operation risk and business
growthgrowth
2.2. Acceptable cash flowAcceptable cash flow Cash flow testing assuming extremely Cash flow testing assuming extremely
negative situation – stress testingnegative situation – stress testing
3.3. Acceptable growth/pattern of profit and Acceptable growth/pattern of profit and ROEROE
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Do we have the structure?Do we have the structure?Corporate Level
Enterprise Risk Mgt Team
Financial Operations OthersProfit Center/
Branches
Accounts
Actuarial
Admin
MIS
PR/ Mkt
Audit/Legal
Life
A&H
HR/ RE Group
Others
Service Mgt
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Summary…Summary… Importance of life insuranceImportance of life insurance Uniqueness of life insuranceUniqueness of life insurance
Major risks exposures…Major risks exposures… Mitigation measures…Mitigation measures…
Most importantly…Most importantly… Continuous growth through providing Continuous growth through providing
value-added products and servicesvalue-added products and services Sustainable long term financial strength to Sustainable long term financial strength to
deliver lifetime commitmentdeliver lifetime commitment
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ReferencesReferences
1.1. Overview of risk management, Casualty Actuarial SocietyOverview of risk management, Casualty Actuarial Society
2.2. Enterprise Risk Management in the Life Insurance Industry, Enterprise Risk Management in the Life Insurance Industry, LOMALOMA
3.3. Enterprise-wide Risk Management for the Insurance Industry: Enterprise-wide Risk Management for the Insurance Industry: Global Study, PricewaterhouseCoopers, 2004Global Study, PricewaterhouseCoopers, 2004
4.4. ERM – Integrated Framework. COSOERM – Integrated Framework. COSO
5.5. Applying COSO’s Enterprise Risk Management — Integrated Applying COSO’s Enterprise Risk Management — Integrated Framework, The Institute of Internal AuditorsFramework, The Institute of Internal Auditors
6.6. Creating value through ERM – A practical approach for the Creating value through ERM – A practical approach for the insurance industry, Tillinghast-Pwers Perrininsurance industry, Tillinghast-Pwers Perrin
7.7. AEGON Risk Management, SOA Risk Management TaskforceAEGON Risk Management, SOA Risk Management Taskforce
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Thank youThank you