The Impact of the Financial Crisis on the Insurance Sector by OECD


This exact record assesses the effect of the main issue at the assurance area and experiences coverage responses inside of OECD international locations. it truly is established to a wide quantity on a quantitative and qualitative questionnaire that used to be circulated to OECD international locations in 2009. The record indicates that mostly the assurance region validated resilience to the drawback, even though with a few edition around the OECD, and concludes with a few coverage conclusions.Table of content material :Introduction impression of the monetary Turmoil-Key stability sheet and funding indicators-Premiums-ClaimsCombined ratio -Profitability-Solvency-Impact of the obstacle on credits assurance markets-Interpretation of statistical dataGovernmental and Supervisory Responses to the predicament within the coverage Sector-Liquidity and momentary financing preparations and the distinct case of AIG-Capital degrees and arrangements-Corporate governance, threat administration, investments, and reporting and disclosure teams and monetary conglomerates-Policy holder safeguard schemes, restructuring and insolvency regimes -Credit coverage marketsKey coverage and Regulatory concerns within the assurance SectorKey coverage Conclusions from the CrisisAnnex A. coverage and Regulatory Responses to the monetary hindrance

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Combined ratio = “Loss ratio” + “Expense ratio”, where Expense ratio = (Gross operating expenses + commissions) / Gross earned premiums. 13. In order to be able to compare figures across countries, a simplified calculation of the loss ratio was used, as follows: gross claims paid as percentage of gross written premiums (the latter used as a proxy for gross earned premiums). 14. Solvency ratio (in %) = (available solvency capital / required solvency capital) x100. The purpose of the table is to highlight trends within a country, not across countries, given differences in solvency regulation.

21. com). 22. 1. 23. com). 24. es). 25. Ibid, p. 2. 26. Ibid, p. 2. 27. See footnote 16. 28. “Credit insurance 17 December 2008. 29. uk). difficulties threaten banks’ lending”, Insurance Daily, THE IMPACT OF THE FINANCIAL CRISIS ON THE INSURANCE SECTOR AND POLICY RESPONSES © OECD 2011 35 Governmental and Supervisory Responses to the Crisis in the Insurance Sector Public authorities, at the outset of the crisis in mid-2007, focused on the liquidity positions of banking institutions given the remarkable and unprecedented seizure of international interbank lending markets in August 2007 and the sudden high risk aversion displayed by capital markets toward banking institutions due to concerns about bank exposures to sub-prime mortgage assets and the ability of some banks to manage their funding and liquidity risks.

10. 11 Capital levels and arrangements In addition to addressing the liquidity problems raised by the market turmoil, governmental and supervisory authorities in OECD countries have focussed on the implications of the turmoil for the solvency position of financial institutions, including insurers, given their potential holdings of toxic assets and the possible impacts of adverse developments in equity and credit market conditions. Supervisory authorities have sought to adopt a pro-active approach, seeking to identify, assess, and anticipate actual and potential losses and, in some cases, taking actions to ensure that sufficient buffers are in place.

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