Monday, 16 September 2019

Generali confirmed in the Dow Jones Sustainability World Index and added to the Dow Jones Sustainability Europe Index

Generali has been confirmed in the Dow Jones Sustainability World Index (DJSI) for the second year running and also added, for the first time, to the Dow Jones Sustainability Europe Index (DJSI Europe).
This important recognition is testament to the Group’s commitment to sustainability, which plays a fundamental role in the Generali 2021 strategy. Some examples of Generali’s initiatives in this sector include: the commitment to allocate € 4.5 billion by 2021 to green and sustainable investments and to increase the number of products with social and environmental impacts; a Responsible Consumer programme to meet the expectations of sustainability-focused consumers; and the Enterprise award for sustainable SMEs.
The DJSI, launched in 1999 as a global sustainability benchmark, tracks the leading sustainability-driven companies based on RobecoSAM’s analysis of financially material Environmental, Social, and Governance (ESG) factors and S&P DJI’s robust index methodology.

Wednesday, 11 September 2019

IFRS 17: EU insurers say some improvements welcome, but major issues still to be addressed

Insurance Europe and the CFO Forum have issued a joint call for further improvements to be made to International Financial Reporting Standard (IFRS) 17 — insurance contracts — and have raised concerns over its timing.
European insurers submitted a joint response to a draft comment letter written by the European Financial Reporting Advisory Group (EFRAG) in response to the International Accounting Standards Board's (IASB) proposed amendments to IFRS 17.
In their response, Insurance Europe and the CFO Forum argue that while the IASB has proposed several helpful improvements in its IFRS 17 exposure draft, unfortunately a number of issues remain unaddressed and further changes are needed.
Three issues — level of aggregation, transition and presentation — were given particular emphasis because they will have the largest overall impact on the operational complexity and costs of implementing IFRS 17.
European insurers also commented on other areas of concern that were identified by the industry during EFRAG’s field testing exercise and implementation process, but which have not been fully or only partially addressed by the IASB.
The joint response also included Insurance Europe’s view that a two-year delay is needed, which therefore leads to a global effective date of 1 January 2023 for IFRS 17 (and IFRS 9 — financial instruments, for insurers).

The full letter is available here and the appendices here

Monday, 9 September 2019

Global insurers reiterate concerns about Canadian reinsurance proposals

Global Federation of Insurance Associations has again raised serious concerns about proposed capital rules from the Canadian Office of the Superintendent of Financial Institutions (OFSI), which the industry fears could lead to a lack of coverage in Canada.

Proposed rules from the OSFI would require P&C insurers to be fully capitalised against three extremely remote loss scenarios. However, the stress scenarios are far too extreme and the capital gap is too large to be afforded by these companies.

The ultimate outcome could be a shortage of capacity for specialised types of risks and industries, such as aviation, nuclear, oil and gas, and large construction projects.
The full letter is available here.

Friday, 6 September 2019

Groupama’s 2019 Half-Year Results

  • Premium income of €9.5 billion
  • – Increase in premium income from property and casualty insurance (+1.1%) and from life and health insurance (+1.0%)
    – Mixed performance with an increase in France (+1.9%) and a decline in the international market (-3.9%)
    • Economic operating income from insurance of €224 million
    – Combined non-life ratio of 97.9%
    – Continued transformation of the life insurance portfolio with a share of unit-linked outstandings in individual savings of 27.1% in France
    • Solvency ratio of 152%
    – Ratio of 269% with transitional measure on technical reserves
    – Increase in Group’s IFRS equity to €9.7 billion
    – Mutual certificate outstandings of €567 million at 30 June 2019, including €27 million collected during the 1st half of 2019
"Groupama's results show the group's resilience in a complex financial environment. This performance confirms the relevance of the group's economic efficiency strategy based on mutualist values of proximity to its policyholders."
Jean-Yves Dagès
Chairman of the Board of Directors of Groupama Assurances Mutuelles
"This first half confirmed the growth momentum of our activities as well as the increase in our operating profitability, particularly in France, in an environment marked by historically low rates and numerous international uncertainties."
Thierry Martel
CEO of Groupama Assurances Mutuelles

Friday, 30 August 2019


As the financial services industry continues to grow more complex, thousands of MDRT members from all over the world are facing more challenges than ever. With industry-renowned Main Platform presentations, insightful Focus Sessions and extensive networking opportunities, the 2019 MDRT Global Conference will be a unique occasion for MDRT members to come together and celebrate their success, share innovative ideas and learn the most applicable global solutions to their local industry challenges.

Wednesday, 28 August 2019

Allianz strengthens its presence in Brazil

  • Allianz to acquire automobile and other Property-Casualty operations from SulAmérica and become one of the top 3 insurers in Property-Casualty insurance in Brazil.
  • The transaction to position Allianz as the number 2 in automobile insurance.
  • The acquisition supports Allianz’s growth strategy in key markets.
  • Pending regulatory approvals, closing is expected within the next 12 months.
  • Allianz has agreed to acquire automobile and other Property-Casualty operations from SulAmérica.
    The acquisition will strengthen the competitive position of Allianz in Brazil, making it one of the top 3 insurers with a market share of around 15 percent in motor and 9 percent in Property-Casualty insurance and establishing Allianz as the number 2 in motor insurance. The purchase price is 3 billion Brazilian real (667 million euros).
  • The total premium income from the acquired entity totaled approximately 806 million euros in 2018, with 762 million euros stemming from motor and 45 million euros stemming from other Property-Casualty operations. Pro-forma premium income of the combined entity is 1.5 billion euros with 1.2 billion euros related to Motor business. With a premium volume of approximately 16 billion euros and a growth rate of 6.0 percent in 2018 alone, the market for Property-Casualty insurance in Brazil is very attractive.
    The transaction enlarges the service offering for customers and provides an opportunity to grow Allianz’s geographical footprint in Brazil. It also allows further investment in digital and disruptive technologies to energize the industry and continue to deliver first-class solutions for local brokers and customers.
    “With the acquisition of SulAmérica’s Property-Casualty operations, we have taken another major step in the strategic repositioning of our Latin American insurance businesses,” says Oliver Bäte, Chief Executive Officer of Allianz SE. “We are attaining a clear leadership position to effectively compete in the growing Property-Casualty market of the largest economy in South America.”
    “We are creating a new Allianz combining the best people of both sides and forming an outstanding team that will embrace the opportunities of the Brazilian market with full commitment and confidence,” says Eduard Folch Rue, Chief Executive Officer of Allianz Seguros S.A. (Allianz Brasil). “Our trademark will be the innovation, digitalization, and the service to our customers through our main partners, the brokers and advisors. We will combine the local know-how of SulAmérica with all the strengths that an international Group like Allianz has.”
    The transaction is scheduled to be completed within the next 12 months, pending regulatory approvals.

EU insurers call on IAIS to ensure level playing field with ICS

Two advocacy groups representing EU insurers and reinsurers have written a joint letter to the European Commission highlighting their views on the development of the Insurance Capital Standard (ICS).
As version 2.0 of the ICS is scheduled to be adopted in November 2019, Insurance Europe and the Pan-European Insurance Forum (PEIF) wrote to Commission vice-president, Valdis Dombrovskis, to stress the need for a global level playing field for all internationally active insurance groups and all participating jurisdictions in the monitoring period of ICS 2.0. This means that all concerned jurisdictions should respect the commitments made in the Kuala Lumpur Agreement.
The letter called for decisions on key aspects of the ICS to be made before the adoption of ICS 2.0 to ensure that convergence and agreement within the supervisory community is achievable. The upcoming five year monitoring period should identify potential flaws in the ICS and fix them as and where needed.
In addition, Europe is engaged in the Solvency II 2020 review, which will consider a range of improvements, in particular addressing flaws in the treatment of long-term business. The work done on the Solvency II 2020 review should inform the contributions by the European national supervisory authorities and the European Insurance and Occupational Pensions Authority to the ICS project.
European stakeholders engaged in the ICS project should also ensure that the ICS does not:
  • Create competitive disadvantages for Europe vis-à-vis other jurisdictions.
  • Endanger the availability and raise the cost of products that are highly valued by consumers.
  • Threaten the ability of insurers to continue to invest in long-term economic growth.
  • Create macroprudential and financial stability risks, including pro-cyclical investment behaviour.

Thursday, 22 August 2019

Unlocking new frontiers in P&C insurance

The availability of digital data is growing exponentially as the use of sensor networks and digital platforms becomes increasingly widespread. At the same time, the ongoing development of advanced analytics capabilities affords P&C insurers the means to unlock untapped potential across the insurance value chain, our latest sigma says. By processing structured and unstructured data sources, insurers will be able to price new markets and risk classes, and make existing processes more efficient.
"Most insurers aim for a success rate of one-third in operationalising pilots. Too high a success rate may mean that the use cases are not challenging enough." 
Daniel Knüsli, Swiss Re's Head P&C Analytics, P&C Solutions
Data analytics can support important insurance business needs in the following areas: (1) enable growth by providing insights for insurers to better target markets and also improve understanding of consumer preferences and behaviours; (2) improve in-house portfolio value accumulation and steering through multiple linkages with external datasets. Insurers are targeting 2-5% improvement in loss ratios under real trading conditions; and (3) improve operational efficiency by automating underwriting and claims processing functions.
Commercial lines continue to lag personal lines insurance in the implementation of advanced analytics techniques. This is because personal line insurers have had access to better data quality and higher transaction volumes. Now larger and more stable commercial lines such as property are also benefitting from the explosion in data. They are seeing early signs that incorporating new data sources can reduce the length of risk assessment and improve risk selection. Combining multiple data sources in new ways can fine-tune risk appetite and underwriting strategy.
"There needs to be more investment of time and resources on data curation. Many new data sources are not created for insurance, and owners of the data may neither understand insurance nor how to make the data usable for insurers." 
Daniel Ryan, Head of Insurance Risk Research, Swiss Re Institute
The outlook is promising, but patience is crucial due to the inherent complexity of the insurance value chain. Challenges remain in the form of legacy systems, traditional mind sets and scarce talent at the intersection of data science, risk knowledge and technology. Nevertheless, we believe that as more insurers seek out differentiating capabilities, the ongoing development of industry-specific infrastructure, resources and knowledge will help unlock the full potential of analytics in P&C insurance.
Learn more about the new frontiers in the latest sigma.

Wednesday, 21 August 2019

Response provided to IAIS systemic risk consultation

Insurance Europe has today published its response to a consultation by the International Association of Insurance Supervisors (IAIS) on systemic risk.

Conventional insurance is not systemically risky, and systemic risk can only originate from a very limited number of activities undertaken on a large scale in the wrong conditions. A greater focus by the IAIS on potentially systemic activities of the insurance sector as a whole is therefore warranted, according to Insurance Europe.
In its response to an IAIS consultation on its new holistic framework for assessing systemic risk in insurance, Insurance Europe highlighted the need for every jurisdiction to achieve comparable outcomes when applying the framework, to ensure a global level playing field.
Insurance Europe also stressed the need for a strict and consistent application of the principle of proportionality. It added that proportionality should not be limited to requiring insurers to apply a measure with different expectations of granularity; rather, it means questioning whether an insurer should be subject to a certain measure at all.
Insurance Europe also stressed that the new data collection requirements proposed by the IAIS would significantly increase reporting burdens for both insurers and supervisors. Additional data collection from insurers should in fact be minimised and data that is already available should be taken fully into account.