The Chinese insurance sector is experiencing rapid growth, posing particular challenges to effective supervision. The sector has been growing by over 20 percent a year and there are ambitious government targets for further development.
... See More + Many individual, often newer, companies are growing at rates far in excess of the average. New entrants, products and distribution channels, combined with the liberalization of pricing, have increased competition. At the same time, slower economic growth and reduced investment returns are exposing many established life insurers to the risk of loss due to the rising value of their liabilities. Many non-life companies are moving into new lines of business as margins in established lines erode. While their customers continue to benefit from a dynamic market, there are risks to insurance companies’ business models, performance and to solvency as well as risks of misconduct in the treatment of insurance customers. There are particular challenges for insurance supervisors to remain abreast of developing risks, while continuing to strengthen the regulatory and supervisory system for the longer term. The China Insurance Regulatory Commission (CIRC) has been undertaking far-reaching reforms and modernization since the 2011 FSAP. It has focused its work on improving corporate governance, enforcing sound market conduct and reshaping the solvency standards into a modern, risk-based approach. The China-Risk Oriented Solvency Standards (C-ROSS) draw on international practices and experience in the Chinese market to define solvency requirements that generally reflect risk as well as rewarding sound risk management. By linking the framework to an in-depth assessment of risk management, C-ROSS has also equipped CIRC with a strengthened overall supervisory framework for solvency risk. As a result, CIRC has felt confident to relax or remove less risk-based requirements such as new product (and reinsurance contract) approval as well as detailed limits on insurers’ investments. In parallel with regulatory changes, it has been working to reform and develop the insurance market, liberalizing pricing controls and accommodating the development of new products, although restrictions remain on the access of foreign insurers, especially in life insurance.
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The Chinese insurance sector is experiencing rapid growth, posing particular challenges to effective supervision. The sector has been growing by over 20 percent a year and there are ambitious government targets for further development.
... See More + Many individual, often newer, companies are growing at rates far in excess of the average. New entrants, products and distribution channels, combined with the liberalization of pricing, have increased competition. At the same time, slower economic growth and reduced investment returns are exposing many established life insurers to the risk of loss due to the rising value of their liabilities. Many non-life companies are moving into new lines of business as margins in established lines erode. While their customers continue to benefit from a dynamic market, there are risks to insurance companies’ business models, performance and to solvency as well as risks of misconduct in the treatment of insurance customers. There are challenges for insurance supervisors to remain abreast of developing risks, while continuing to strengthen the regulatory and supervisory system for the longer term. The China Insurance Regulatory Commission (CIRC) has been undertaking far-reaching reforms and modernization since the 2011 FSAP. It has focused its work on improving corporate governance, enforcing sound market conduct and reshaping the solvency standards into a modern, risk-based approach. The China-Risk Oriented Solvency Standards (C-ROSS) draw on international practices and experience in the Chinese market to define solvency requirements that generally reflect risk as well as rewarding sound risk management. By linking the framework to an in-depth assessment of risk management, C-ROSS has also equipped CIRC with a strengthened overall supervisory framework for solvency risk. Thus, CIRC has felt confident to relax or remove less risk-based requirements such as new product (and reinsurance contract) approval as well as detailed limits on insurers’ investments. In parallel with regulatory changes, it has been working to reform and develop the insurance market, liberalizing pricing controls and accommodating the development of new products, although restrictions remain on the access of foreign insurers, especially in life insurance.
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The objective of the Catastrophe Risk Insurance Project for Honduras and Nicaragua is to enable the access of Honduras and Nicaragua to efficient sovereign risk insurance associated with tropical cyclones, earthquakes, and/or excess rainfall.
... See More + This restructuring paper seeks the approval of the Executive Directors to adjust the Project Development Objective (PDO) of the Honduras and Nicaragua Catastrophe Risk Insurance Project. The withdrawal of the credit offers to the Republic of Honduras as of January 18, 2017 requires an adjustment of the PDO, effectively removing Honduras from the PDO. The restructuring will also take into consideration the availability of new sovereign risk insurance products for both geophysical and climate‐related events and adjust the PDO accordingly. The restructuring will also result in a number of other changes in the project. These include: (i) change of the project name; (ii) update of the financing plan to reflect the withdrawal of credit No. 55300‐HN; (iii) extension of the closing date of credit No. 55310‐NI from June 30, 2019, to June 30, 2021; (iv) revision of the project’s description, including changes in components and costs to reflect that the project will only provide financing for Nicaragua; (v) reallocation of funds and change in the percentage of expenditures to enable the project to finance 50 percent of the payment for insurance premiums in years five and six of project implementation; (vi) update of disbursement estimates; (vii) removal of the Ministry of Finance of Honduras as an implementing agency; (viii) revision of the results framework to remove any references to Honduras and change the end target date of PDO and intermediate indicators; (xi) reassessment of the project’s risk considering only the context of Nicaragua; and (x) revision of the integrated safeguards data sheet to remove references to Honduras and include the revised PDO and project description.
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As a GIIF partner for the development of index insurance in Mali, PlaNet Guarantee has implemented a range of authorized index insurance solutions responding to the demand of agricultural producers for access to drought-risk coverage for their rain-fed crops.
... See More + PlaNet Guarantee supports agricultural cooperatives in their risk management strategies by offering climate-related index insurance policies, as well as providing technical training for their staffs, and raising awareness of index insurance among their members. PlaNet Guarantee’s partnership with the cooperative society ASEDEFE-YDADE (Association pour la Solidarité, l’Entraide, le Développement Economique de la Femme et de l’Enfant) is one concrete example of its activities in Mali.
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As a GIIF partner for the development of index insurance in Burkina Faso, PlaNet Guarantee has implemented authorized index insurance solutions to meet the demands of agricultural producers, in particular cotton producers as their crops often encounter yield drops due to poor climatic conditions.
... See More + PlaNet Guarantee supports groups of cotton producers, which in turn supports the Burkina Textile Fibers Company (Sociéte Burkinabe des Fibres Textiles, or SOFITEX), in their risk management strategy by offering them an insurance policy, as well as providing technical training for their leaders and raising awareness of index insurance among their members. The partnership with the National Union of Cotton Producers (UNPCB) is a concrete example of PlaNet Guarantee’s activities in Burkina Faso.
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As GIIF partners for the development of index insurance in Senegal, PlaNet Guarantee and the National Insurance Company of Senegal (Compagnie Nationale d’Assurance Agricole du Sénégal, or CNAAS) have implemented a range of authorized index insurance solutions responding to the demand of agricultural producers to have access to drought-risk coverage for their rain-fed crops.
... See More + In Senegal, PlaNet Guarantee supports agricultural cooperatives in their risk management strategies by offering climate-related insurance policies, as well as by providing technical training for their staffs, and raising awareness of index insurance among their members. Its partnership with the Mabo Millet Network is a concrete example of its activities in Senegal.
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A landlocked West African country with most of its land in the desert, Mali is sparsely populated, and has a highly undiversified economy. As such, it is vulnerable to commodity price fluctuations and to the consequences of climate change.
... See More + Mali has a population of 15 million and high population growth rates, but droughts have fueled food insecurity, poverty, and instability. While the economy is projected to grow by around 5 percent annually over the next three years, thanks to the continued dynamism of telecommunications and transport activities and the development of trade and financial services, the favorable economic outlook is subject to persistent downside risks including climatic shocks and any further decline in global gold or cotton prices.
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This brief talks about drought index project in Benin. This project started in Benin in 2012. Awareness-raising sessions were held by the GEA for clients of FECECAM.
... See More + Despite huge interest for the product there were no sales in 2012 due to the non-timely authorization of the index product by the DNA. PlaNet Guarantee has designed three drought index products in partnership with EARS: early maize, late maize and cotton. The products are insured by AMAB (insurer). The project’s success depends on the partnership with the national insurance company and the dedication to provide agricultural insurance in Benin. PG is partnering with the largest MFI (Delivery channels) in Benin, with a large network of branches throughout the country, and PG is strengthening its partnership with AMAB (insurer) for the next campaign.
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This assessment provides an update on significant regulatory and supervisory developments in the insurance sector of Turkey since 2011. The assessment was conducted by Charles Michael Grist, Senior Financial Sector Specialist, Finance and Markets Global Practice, the World Bank Group, from April 5 - April 24, 2016.
... See More + The last formal assessment of the Turkish insurance sector was conducted in June 2011 against the Insurance Core Principles (ICPs) issued by the International Association of Insurance Supervisors (IAIS) in 2003. The current assessment is benchmarked against the ICPs issued by the IAIS in October, 2011, including revisions authorized up until December, 2015. The assessment was undertaken as part of the Financial Sector Assessment Program (FSAP) conducted by the IMF and World Bank. The ICPs apply to all insurers, whether private or government controlled. Specific principles apply to the supervision of intermediaries. The institutional arrangements for financial sector regulation and supervision are outlined in section C.
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This technical note covers the insurance sector supervised by the CBR. The analysis was carried out as part of the 2016 Financial Sector Assessment Program (FSAP) of the Russian Federation, and was based on the regulatory framework, supervisory practices and other conditions as they existed in March 2016.
... See More + Relevant information including laws, by-laws and regulations as well as responses to a questionnaire sent out in advance were provided by the Central Bank of Russia (CBR) before and during the mission. The assessment has been supported by discussions with the CBR and the insurance market participants. the Russian insurance industry ranked 27th in the world. Non-life insurance premium accounted for 89 percent of GPW while life insurance for only 11 percent. Another factor that further undermined the profitability of the insurance industry in 2013-2015 has been the raising claims inflation in the MTPL segment of the market. In 2015, the industry also faced with the consequences of the Western economic sanctions which effectively closed access to the high quality Western reinsurance capacity for the Russian insurers that provide coverage for 1500 large Russian companies that were put on the sanctions list. In the past, the Western reinsurers provided over 80 percent of reinsurance capacity for such risks. The further consolidation of the sector will lead to a better performing insurance market.In the case of Russia, the main objective of insurance supervision is to ensure that insurers fully comply with core regulatory norms fixed by the law in the following four areas of insurance operations: (a) solvency (capital adequacy); (b) insurance reserves; (c) assets covering own funds; and (d) assets covering reserves. The most profound implications of the current rule-based insurance supervision is a likely underestimation of the sector’s solvency. While the dispersion of insurance supervisory functions among numerous CBR departments with various reporting lines carries certain advantages (such as a reduced potential for the conflict of interest), it also has a potential for major drawbacks.
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Financial Sector Assessment Program (FSAP) 108088 JUL 01, 2016
This activity snapshop brief summarizes facilitating dialogue on index insurance between the public and private sector is to discuss best practices and share their knowledge and expertise on index insurance, particularly livestock insurance and agriculture insurance.
... See More + The discussions were quite timely, as the Government of Kenya recently allocated USD 6 million for crop and livestock insurance for smallholder producers for next year, as one of the key government flagship projects to drive the transformative agenda. This is a five-fold increase in budget from the previous years with strong allocations toward data systems and premium subsidies.This was Kenya’s first training event on index insurance that brought together the public and private sectors and international stakeholders.
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This report proposes a toolkit which can be used to produce national assessments in MENA countries. The toolkit consists of a series of four questionnaires to be completed by institutions delivering specific programs in the areas of Social Assistance, Social Insurance, Health and Education.
... See More + A first attempt was made to collect primary information from a selected group of countries in the region, but the level of response was low and it resulted evident that systematic collection of data from widespread sources can be best achieved if supported by field work, possibly in connection with ongoing operations, as in the case of a recent assessment produced by the World Bank in Palestine. Social Insurance programs are probably the ones where information is most readily available. In addition, there may be important learning for other programs if further analysis is conducted for these programs. Better understanding and improvements in critical related processes such as disability assessment, costs and the links with rehabilitation programs in Social Insurance may render important lessons for the better implementation of other programs addressed to PWD. The logical sequence of to present our findings should start from a system’s level, down to specific programs. However, given the relatively better availability of data on Social Insurance programs, we have adopted an alternative sequence, and present a discussion of disability pensions in section two, followed by a presentation of the toolkit to assess programs from a system’s perspective in section three. Specifically, the toolkit is included as annexes one to four.
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Morocco has suffered significantly from a variety of shocks, including due to natural hazards, and in response has started to develop risk management programs and initiatives, supported by the World Bank.
... See More + Since 2009 the World Bank has worked with the Government of Morocco (GoM) to enhance risk management activities, including in the areas of natural disaster risk, commodity (energy) price volatility risk and risk in the agricultural sector, through a program of Technical Assistance. Particular focus has been put on investing in disaster risk analytical capacity by developing the Morocco Natural Hazards Probabilistic Risk Assessment tool (MnhPRA) and on disaster risk financing and insurance. The World Bank also supported the Government in starting to develop a more comprehensive approach to managing risks in a more integrated manner which culminated in a report in 2013 on ‘Building Morocco’s Resilience: Inputs into an Integrated Risk Management Strategy’. In 2012, the Government requested the World Bank to support the implementation and operationalization of a more integrated risk and resilience management approach through a new lending operation in the form of a ‘Program for Results’ (PforR) loan, with a focus on initial subset of risk, starting with natural hazards first. This document provides the Technical Assessment of the proposed operation along all its dimensions, including: i) program description; ii) program strategic relevance; iii) technical soundness; iv) program expenditure framework and financial sustainability; v) program results framework and disbursement linked indicators; vi) program economic impact; vii) input into the program action plan; viii) technical risks and mitigation measures; and ix) input into the implementation support plan.
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