session iii: country experiences on data collection and
TRANSCRIPT
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Session III:
Country Experiences on Data Collection and
Monitoring of Insurance Industry
- Malaysia’s perspective
OECD-Asia Regional Seminar:
Enhancing Transparency & Monitoring of Insurance Market
23-24 September 2010
Kuala Lumpur, Malaysia
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Outline of Presentation
1. Overview of Statistical Compilation Framework
at BNM
2. Submission of Insurance Statistics
3. Overview of Insurance & Takaful Statistical
Systems
4. Surveillance of Insurance Industry
5. Challenges and Direction of Statistical
Compilation
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Statistical Compilation Framework at BNM
Scope of Statistics Users
Statistical
Services
Department
…the centre for
all statistical
collection,
compilation and
dissemination
• Banking statistics
• Insurance statistics
• Credit reports
• Development Finance
institutions statistics
• Credit & charge
card operations
• External assets &
liabilities of
banks/corporations
• Cross-border inflow &
outflow of funds External:
• Financial Institutions
• Department of Statistics,
Malaysia
• Government Agencies
• International Organisations
• Public
Internal:
• Regulation Departments
• Supervision Departments
• Monetary and Economic
Departments
• Investment Management and
Foreign Exchange
Administration Departments
• Payment Systems
• Financial intelligence
• Macroeconomic statistics
Compiler
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Commercial
banks
40.9%
Bank Negara
Malaysia
13.1%
EPF & other
pension funds
16.8% Other financial
intermediaries
7.1%
General
insurance funds
0.9%
Life insurance
funds
4.9%
Islamic banks
8.1%
Investment
banks
2.2%
Development
financial
institutions
5.9%
• Total assets of Malaysian financial system as at end-2009 was
RM2.8 trillion
• Insurance & Takaful System accounted for 5.8% of financial
system assets
Assets of the financial system
Size of Malaysian Financial System
(2009 : RM2.8 trillion)
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Insurance & Takaful Industry in Malaysia
Insurance & Takaful Industry in Malaysia
Number of players
0
10
20
30
40
50
1990 2006 2007 2008 2009
Year
No
of p
lay
ers
Life insurer General insurer Composite insurer
Life reinsurer General reinsurer Composite reinsurer
Takaful operator
Insurance & Takaful Fund Assets
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
1990 2006 2007 2008 2009
Year
RM
'm
Life insurance General insurance Family Takaful General Takaful
Source: BNM Annual Insurance & Takaful Statistics 2009
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Insurance & Takaful Industry in Malaysia...con’t
New Business Premium for Life Insurance
(2009: RM 7.5 billion)
Whole life
11%
Endowment
29%
Temporary
17%
Others
14%
Annuity
0%Investment linked
29%
New Business Premium for Family Takaful
(2009: RM 2.2 billion)
Endowment
12%
Temporary
59%
Others
12%
Investment linked
17%
Annuity
0%
Gross Premium for General Takaful
(2009: RM 1.1 billion)
Motor
52%
Fire
21%
PA
11%
MAT
5%
CAR
3%
Misc
8%
Source: BNM Annual Insurance & Takaful Statistics 2009
Gross Premium for General Insurance
(2009: RM11.5 billion)
Motor
45%
Fire
18%
PA
13%
MAT
10%
CAR
4%
Misc
10%
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Legal Provisions on Insurance Statistics
Main provisions under the Insurance and Takaful Acts in relation to statistical compilation include:
• Collection of information and statistics as the Bank may specify
• Ensure confidentiality of individual information collected
• Allowance for public inspection of the statistics collected
• Ability to impose penalty for non-compliance with timeline and inaccurate submission
Insurance Act
1996
Takaful Act
1984
• 47 Insurance Companies (Life, General & Composite) • 82 Insurance intermediaries (Insurance Brokers, Loss Adjusters & Financial
Advisers)
• 13 Takaful Operators (Family, General & Composite)
Applicable to submission by:
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Submission of Insurance Statistics
Reporting Entity Type of Report
Frequency*
Mthly Qtrly 2nd Semi-
Annual Annual
Direct Insurers &
Takaful Operators
• Financial statements
• Capital/solvency adequacy
Reinsurers • Financial statements
• Capital adequacy
Insurance
Intermediaries
• Financial statements
• Activity reports
* Timeline (after end of reporting period): Monthly & Quarterly (21 days), 2nd Semi-Annual (14 days)
and Annual (90 days).
• Electronic submission via statistical systems, namely Insurance
Online Submission System (IOSS) & Takaful Operators Statistical
System (TOSS) Contains main statements, supporting schedules and additional
compliance reports
• Hardcopy submission with declaration from CEO & external auditor Applicable to quarterly, 2nd semi-annual and annual statistics; and involves
main statements only
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Overview of Insurance & Takaful Statistical Systems
Electronic submission systems for insurance/takaful data compilation…
Verification
Packaging
Data Entry / Extraction
Insurers/ Takaful Operators/
Brokers/ Adjusters
Data Quality Assurance
& Analysis by officers
Internal & External
Stakeholders
CD when
necessary
Online via
IOSS/TOSS
website
Verification by
system
BNM
Reports &
Cubes
Insurance & takaful Intermediaries
Accessibility of statistics:
• BI tools i.e. Cognos Powerplay Multidimensional Cube
• Report i.e. Crystal/Excel Powerplay Report
• Extraction of data to secondary systems/databases e.g.
CFIIS (centralised FI reports) & INSIDES (debt securities
database)
Uses of statistics:
1. Surveillance, supervision, regulation and policy formulation
2. Dissemination of statistics to :
• Government agencies e.g DOSM
• International Organizations e.g. IMF, OECD
• Public e.g. Annual Reports, Monthly Statistical Bulletin
Data
Submission
Module
Data
Validation
Module
Data
Processing
Module
Data Coverage (Statements & detailed information)
• Revenue Account
• Income Statement
• Balance Sheet
• Changes in Equity
• Premiums & Claims
• Commissions
• New Policies
• Terminations, Transfers & Revivals
• Investment Linked Business
• Risk-based Capital (insurance)
• Authorised Assets (takaful)
• Income Statement
• Balance Sheet
• Changes in Equity
• Activity Report
• Premiums &
Brokerage
• Training Expenditure
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Financial Stability Surveillance Framework …comprehensive, dynamic, integrated and forward looking
Financial System Risks
• Enable comprehensive coverage and assessment
of risks
• Ensure optimal and efficient allocation of
resources
• Identify transmission channels
• Understanding and monitoring linkages
• Assess contagion and systemic impact
• Payment system oversight
Financial Institution Risks
• Minimise potential risks and vulnerabilities and
subsequent domino effect
Mutually
reinforcing
Mutually
reinforcing
Complementary objectives of macro & micro surveillance
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Financial Surveillance & Macroprudential Analysis
Understanding linkages
Monitoring linkages
Identifying
relevant
indicators
Assessing
implications
on financial
sector
Real sector
Household
sector
Property
market
Corporate
sector
Financial
markets
FINANCIAL SYSTEM
…brings together macroeconomic, monetary, financial market and
supervisory input to detect sources of systemic risk
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Governance & Communication of Risk Assessment
Financial Stability & Payment System Report,
Monthly & Quarterly Statistical Bulletins,
Speeches and Press Statements Public
Horizontal
collaboration
Management
committee
Working and Technical Groups
Financial Stability
Policy Committee
Publication of insurance statistics : www.bnm.gov.my
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Challenges and Direction
• Timeliness of data
Timeliness vs data accuracy
• Reporting burden and cost of doing
business
Data comprehensiveness and
statutory requirements vs.
reporting burden
• Increasing demand of data from
users
• Frequent ad hoc system
enhancements due to policy
changes and adoption of FRS
• Efficient data collection processes
Challenges
Implementation of Enterprise-wide
Statistical Information Architecture
(ESIA), leverage on:
The latest technology to
promote a dynamic and
integrated environment for
efficient information and
systems integration
The eXtensible Business
Reporting Language (XBRL) as
reporting language for
regulatory reporting to BNM
Direction
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Initiatives to improve statistical framework:
1. Implement an end-to-end Integrated Statistical System (ISS) with agile IT
infrastructure and architecture over a period of 2 years (2011 – 2012) with the
following scope and functionalities:
a. A centralised, standard and unified platform for submission of
financial, monetary and economic data to replace the various statistical
submission systems at BNM
b. A centralised data repository for all statistical data from various data
sources, covering the submission system, internal applications, data
sharing partners and commercial databases, etc.
c. Facilities for reporting, analysis, data query, data mining and
dashboard capabilities for alert, simulation and projection
d. A common information portal as the gateway for all internal and
external stakeholders
2. Develop and implement Data Governance to instill discipline in managing
structured data from data origination till archiving
Implementation of ESIA…
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Standardised Taxonomy for Reporting
Overview
Objectives
Developed based on the International Financial Reporting
Standards (IFRS) 2008
Leverage on XBRL Taxonomy for FINREP (reporting of financial
statements data) customised to meet BNM’s needs
Streamline the differences in the reporting of financial statements
and other statistical data in terms of description, classification and
definition
Standardise reporting framework and infrastructure for submission
of data by all financial institutions
Facilitate comparative analysis across the regulated industries and
flexible to meet “on demand” data needs
Scope and
Usage
Common across the five regulated industries (with specific data
items by industry):
Banking
Insurance (including intermediaries)
Takaful (including intermediaries)
Development Finance
Payment Systems
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Data Source layer
Data Acquisition
Commercial/
Islamic/
Investment Banks
Development
Financial
Institutions
Insurance /
Reinsurance /
Takaful
Companies
Intermediaries
Other Agencies
Individuals
Card Companies
DOSM, IMF,
KWSP, PIDM,
BURSA, ISM etc.
New Statistical Submission
Data Store
Financial Data
Banking
Insurance / Takaful
Development Finance
Credit Data
External Data
Payment System
Intermediaries
Others
Non Financial Data
Macroeconomic Data
()
Data Repository
Layer
Operational Data
Store (ODS)
Data Warehouse
Credit Data
External
Data
Insurance
Banking
Compliance
Macro
economic
Credit Data
Reporting
Services
Data Mart store
Compliance
Credit Data
Industry &
Institutions
Data Integration
process
management
External Data
Financial
Statement
Macroeconomic
Profile
Data mart
Data mart
Data mart
Data martData mart
Data mart
Data mart
Data mart
Standard Reporting
Ad hoc query
Dashboard
Analytics (Mining)
Event driven
reporting
Data integration
process monitoring
External reporting
Data Dissemination Layer
Data
Integration
Layer
Staging
and
Integration
Non NSSS
Source applications
Overall Information Flow of ISS
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Data Source layer
Data Acquisition
Commercial/
Islamic/
Investment Banks
Development
Financial
Institutions
Insurance /
Reinsurance /
Takaful
Companies
Intermediaries
Other Agencies
Individuals
Card Companies
DOSM, IMF,
KWSP, PIDM,
BURSA, ISM etc.
New Statistical Submission
Data Store
Financial Data
Banking
Insurance / Takaful
Development Finance
Credit Data
External Data
Payment System
Intermediaries
Others
Non Financial Data
Macroeconomic Data
()
Data Repository
Layer
Operational Data
Store (ODS)
Data Warehouse
Credit Data
External
Data
Insurance
Banking
Compliance
Macro
economic
Credit Data
Reporting
Services
Data Mart store
Compliance
Credit Data
Industry &
Institutions
Data Integration
process
management
External Data
Financial
Statement
Macroeconomic
Profile
Data mart
Data mart
Data mart
Data martData mart
Data mart
Data mart
Data mart
Standard Reporting
Ad hoc query
Dashboard
Analytics (Mining)
Event driven
reporting
Data integration
process monitoring
External reporting
Data Dissemination Layer
Data
Integration
Layer
Staging
and
Integration
Non NSSS
Source applications
Overall Information Flow of ISS
Submission of data through BNM Enterprise Portal platform with data quality checks at source
Run data integrity checks and resolve inconsistencies using data transformation
Standard, consistent data elements as per the metadata definition Data stored at atomic level with lowest level of granularity
Information organised as per functional domains Data optimised for performance Compliance with conformed dimensions for cross domain consistency ODS can populate data into the Data Warehouse
Data authorisation according to needs Pre-calculation of aggregates, key figures, time series Dissemination of information via reports, alerts and data feeds
Thank you