reinsurance / reaseguro / resseguro

Reinsurance / Reinsurance / Reaseguro / Resseguro Reaseguro / Resseguro

Dr. Sebastian von DahlenSantiago de Chile15 November 2007

Case Study Reinsurance ScenariosDr. Sebastian von Dahlen, Principal Administrator IAIS

22007 / Santiago de Chile

Introduction / Introduction / IntroducciónIntroducción // IntroduçãoIntrodução

Señoras y señores,

Disculpen que mi presentación sea en inglés. Mis escasos conocimientos de español y portugués solo me permiten decirles que pueden sentirse dichosos de que me esté limitando a esta sola página.¡Muchas gracias!

Estimados senhoras e senhores,

Peço desculpa por proferir a minha conferência somente em língua inglesa, mas os meus escassos conhecimentos das línguas portuguesa e espanhola são apenas suficientes para lhes comunicar que se podem considerar felizes que agora acabo por continuar a falar apenas em língua inglesa.Muito obrigado!



Today‘s schedule on IAIS and reinsuranceToday‘s schedule on IAIS and reinsurance

Index of contents

A) During PANEL (now)

Some background on: – Current IAIS reinsurance work – Selected Latin American data

B) During CASE STUDY (later)

Some basic insights: – Reinsurance supervision– Problems and solutions



Importance of the IAISImportance of the IAIS

IAIS Mandate• Standards and guidance for insurance

supervision• Assist national supervisors• Promote cooperation among insurance

supervisors• Coordinate with other financial sector

and international organizations (Basel Committee, IOSCO, Joint Forum, Financial Stability Forum, etc.)



Reinsurance and the IAISReinsurance and the IAIS Executive

Committee

Technical Committee

Solvency Subcommittee

Accounting Subcommittee (incl.

Insurance Contracts)

Reinsurance Subcommittee

Governance & Compliance

Subcommittee

Market Conduct Subcommittee

Financial Conglomerate Subcommittee

Reinsurance Transparency

Subgroup

Mutual Recognition Subgroup

Pension Coordination Task

Force

Executive Committee

Technical Committee


Reinsurance Transparency Subgroup

Mutual Recognition Subgroup


1. Main focus on

Mutual Recognition Reinsurance Transparency

2. Work also on

Revision of IAIS Papers



Reinsurance Transparency SubgroupReinsurance Transparency Subgroup

Global Reinsurance Market Report

• Participants of report– Supervisors from Bermuda, France, Germany, Japan

Switzerland, the UK and the USA– 56 significant reinsurance entities – Representing a very high proportion of the worldwide

reinsurance market • Aim of report

– Increase transparency concerning worldwide reinsurance market

– Indicate resiliency of the reinsurance market

Source of information for supervisors around the world



IAIS Global Reinsurance Market ReportIAIS Global Reinsurance Market Report

Edition 2007 – new structure & new layout

Insights to relevant reinsurance market developments New in the report: more reference to the overall capital market

Example:Average CDS spreads for reinsurance, insurance and banks

0

10

20

30

40

50

60

BanksInsuranceReinsurance



IAIS Global Reinsurance Market Report …IAIS Global Reinsurance Market Report …

… Edition 2007 – some life reinsurance focus …

…“Chapter III” provides assessments on: a) pandemic risks b) mortality risks e.g. potential avian flu e.g. graph below

http://www.iaisweb.org/



Mutual Recognition SubgroupMutual Recognition Subgroup

Mutual Recognition of Reinsurance Supersvision • Reinsurance protection

– Important risk mitigation tool for insurers– Provide economic benefits for primary insurers and their

policyholders

Example: major natural catastrophes (e.g. severe storms)

- Reinsurance provides protection - Global risk diversification is important

Supervisors should support, if possible and appropriate, a worldwide diversification of reinsured risks



Mutual Recognition SubgroupMutual Recognition Subgroup

IAIS aim concerning mutual recognition

• To facilitate a system of efficient insurance and reinsurance supervision: avoid unnecessary burdens

Example: appropriate information sharing among supervisors instead of a duplication of supervisory requests

• Please check IAIS website for the recently published “Discussion Paper on the Mutual Recognition of Reinsurance Supervision”



Reinsurance Subcommittee Reinsurance Subcommittee

Additional work planned for the near future

• Revision and updating of existing reinsurance related IAIS papers

– „Standard on the evaluation of the reinsurance cover of primary insurers“

– „Guidance Paper on finite reinsurance“



Insurance and ReinsuranceInsurance and Reinsurance

Some insights into Latin America

• Premium shares• Premium growth• Market penetration• Growth expectation



Latin AmericaLatin America

Non Life premium shares Latin America

37.8%21.4%

9.2%9.1%

5.6%4.5%

1.5%1.5%1.4%

1.0%1.0%0.8%0.8%0.7%0.7%0.7%0.6%0.6%0.4%0.3%0.2%0.2%

0% 5% 10% 15% 20% 25% 30% 35% 40%

BrazilMexico

VenezuelaArgentinaColombia

ChileEcuador

PeruDominican Republic

JamaicaCosta Rica

PanamaGuatemala

UruguayTrinidad and Tobago

El SalvadorBahamasBarbadosHonduras

BoliviaNicaraguaParaguay

87.6%

87.6%

Source: VERA




Non Life premium growth 2000-2005Non Life premium growth 2000-2005

NL real premium growth 2000-2005*12.5%

12.3%

6.5%

5.4%

4.9%

4.4%

3.9%

2.3%

0% 5% 10% 15%

Venezuela

Chile

Mexico

Argentina

Latin America

World

Colombia

Brazil

Source: Munich ReSource: Munich Re




Insurance market penetration

Venezuela

UK

Singapore

Russia

PhilippinesMexico

S. Korea

Italy

Germany

France

Colombia

China

Chile

Canada

Argentina

USA

TaiwanSouth AfricaNorway

New ZealandJapan

India

Brazil

Australia

0

1

2

3

4

5

6

0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000

GNI per capita in purchasing power parities (PPP-US$)

Pen

etra

tion

Non

-life

(%)

Global trend line

year: 2005

Source: VERA



Chile Chile

Growth expectation for a primary insurance market

source: AACH (history), Munich Re

0

500000

1000000

1500000

2000000

2500000

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

NL Trend BIP nom. (downside) NL Trend (GNI PPP)

Global Trend NL



Reinsurance / Reinsurance / Reaseguro / Resseguro Reaseguro / Resseguro

http://www.iaisweb.org/

A source for further questions und answers:

reinsurance / reaseguro / resseguro

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