Improving transparency and

monitoring of the insurance sector

Promoting a global framework for insurance statistics

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Latin American seminar on insurance statistics Montevideo, Uruguay 26-27 September 2013 

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Outline

• Background on the OECD and its financial surveillance efforts and statistics

• Objectives and key priorities for the OECD’s global insurance statistics (GIS)

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BACKGROUND

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OECD mandate and approach

• OECD: “Better policies for better lives”– Growth: “”Promoting sustainable economic growth and

employment and a rising standard of living while maintaining financial stability”

– Development: Contributing to sound economic expansion in member and non-member countries in the process of economic development

– Market openness and trade: “Contributing to the expansion of world trade on a multilateral, non-discriminatory basis”

• OECD approach– Comparative, multidisciplinary approach to issues – “Evidence-based” policy analysis and recommendations– Benchmarking of performance, peer review– “Soft law” making, e.g., good practices, guidelines, principles– …Some legal agreements, e.g. OECD Codes, anti-bribery convention

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OECD functioning

• Committee-based functioning– Insurance and Private Pensions Committee , Committee

on Financial Markets, and key sub-bodies (Working Party on Private Pensions, Working Party on Debt Management)

– Ministries of Finance, regulatory authorities, central banks; external stakeholders including the private sector

– Key networks of policy experts, with work programmes – Accountable to the OECD Council for activities and

outputs

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OECD and international cooperation

• Global cooperation– Key Partners (Brazil, China, India, Indonesia, South Africa)– Regional engagement: Latin America, Asia, MENA, Africa– Latin American involvement set to increase: Chile, Mexico

are already members; Colombia on the OECD accession track; cooperation with Costa Rica to be intensified

• Engagement with the G20 and other international fora

– Institutional investors and long-term financing– Financial education, consumer protection and inclusion– Debt management– Disaster risk financing and insurance– Non-bank financial statistics and national accounts

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OECD data collection

• Data and information a bedrock for comparative and evidence-based policy analysis and recommendations– Information-sharing a key underpinning of international

cooperation and analysis– Observation of trends and country practices – a basis

for analysis, benchmarking, policy discussion and evaluation

– Statistics and qualitative surveys are key instruments – Structural reports: scope for important ad hoc

collection of data (e.g., annuities markets, institutional investors)

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OECD surveillance

• Bi-annual roundtables– Industry, academics, NGOs, and other stakeholders – Examples: investment strategies of insurers, annuities,

contribution of insurance to growth and stability

• Annual monitoring reports– Global Insurance Market Trends– Pension Markets in Focus– Sovereign Borrowing Outlook

• Financial statistics– Insurance, private pensions– Banking, institutional investor investments– Central government debt– Financial components of national accounts

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BUILDING A GLOBAL FRAMEWORK FOR

INSURANCE STATISTICS

Objectives, elements, and key priorities

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Objectives

1. Transparency– Promote a better understanding of…:

o Main features, structure, and dynamics of insurance markets and the operations and performance of firms

o Connections between the insurance sector and the broader financial system and real economy

o Global nature of the insurance sector and transfers of risk

2. Stability– Enable more effective monitoring of insurer and sector risks– Support for micro- and macro-prudential analysis; thus

reinforce implementation of relevant IAIS core principles– Support for market disclosure and by extension market

discipline, the third pillar of risk-based capital regimes

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Objectives

3. Market efficiency and cross-border trade– Enable insurance firms to conduct cross-country

analysis and benchmarking and identify opportunities for growth abroad

– Enable a better understanding of industry performance and strengthening of competition

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Elements

• Aggregate market data – not firm-level data• Collected by authorities where possible (“official

data”)• Global in nature • On-going, timely and adequately comprehensive• Consistency with SNA definitions and approaches• Transparency in definitions and methodologies• Coupled with qualitative information• Ease with which data can be integrated into reports

(e.g., Global Insurance Market Trends)

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Key priorities

1. Establishing a global insurance statistics exercise– Considerable progress has been made

• Asian region, Latin America (ASSAL)– Some key gaps remain:

• Some Key Partners• Other key insurance markets• Other regions could be involved, e.g., MENA

– Streamlining the framework for some countries may enable further progress, e.g., enabling countries with limited data or capacities to provide key variables

– A more global framework not only enhances benchmarking but enables a better understanding of insurance markets

• Moving beyond country silos to better understanding international business and the global transfer of risks 13

Key priorities

2. Ensuring a relevant and high quality framework

– Progress has been made – framework was focussed on business volumes, claims, and portfolio investments

– Financial crisis prompted changes to the framework – need for more balance sheet information (previously just investments) and great granularity (e.g., government versus corporate bonds)

– Need for further development in order to address the needs of various users and strengthen quality

• Linkage to G20 data gaps initiative: non-bank financial sector

• Promote use of the statistics and enhance scrutiny

Relevant for whom?

Policymakers, supervisors, and other users such as insurers, brokers and academics

High quality? Reliable, comparable, complete

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Planned project on analytical tools and the statistical framework

• Stocktaking of analytical / monitoring tools and country needs in regard to global insurance statistics

• Analysis of needs and consideration of changes to the global statistical framework

• Roundtable(s)• One or two reports• Cooperation with relevant organisations, e.g., IAIS,

ASSAL, IAA, World Bank, IMF, BIS, and key users• Re-activation of task force on insurance statistics• Broader (public) consultation• Expected revision to the framework

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Contact: Timothy Bishop (timothy.bishop@oecd.org)

Deputy Head of Division, Financial Affairs

Division, OECD

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