THE USE OF ADMINISTRATIVE BANKING AND INSURANCE DATA

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Presented by

Hazel CorbinStatistics Adviser, ECCB

Palm Haven Hotel Saint Lucia3 to 7 February, 2014

OUTLINE

• Background• The Advantages of Using Administrative Data• The Financial Sector in the ECCU• Data Presently Available at ECCB on

Commercial Banks• Data available at SRUs on Insurance • Uses of Data for Compiling various aggregates• Conclusion

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Background

• Greater demands are being placed on statistical offices to improve the efficiency of their operations and at the same time reduce the burden placed on respondents to statistical surveys.

• Many non-statistical organizations collect statistical data in various forms and although these data may not be direct substitutes for those collected via surveys, they often offer the possibility to replace, fully or partially, direct statistical data collection .

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Advantages of Administrative Data• Cost

– Statistical Surveys/Censuses are expensive– The running costs of using administrative data is usually

significantly lower– Access to administrative sources is free of charge,

particularly if data originate in the public sector– Administrative data could be used to populate and maintain

statistical registers and thus help to reduce overall costs.• Response Burden

– The use of administrative data helps to reduce the response burden on data suppliers, who often see statistical data request as an extra burden

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Advantages of Administrative Data

• Coverage– Administrative sources often give complete or almost

complete coverage of their target population whereas sample surveys can often cover a relatively small proportion directly.

• Timeliness– The use of administrative data may increase the timeliness

of statistical outputs by allowing access to more up to date information concerning certain variables

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• Financial Corporations: consist of all corporations or quasi corporations principally engaged in financial intermediation or in related auxiliary financial activities.

• These include the central bank, commercial banks, credit unions, mortgage and finance companies, insurance companies, pension funds, building and loan societies, mutual funds, trust companies, offshore banks, money service firms, hire purchase firms, broker dealers/agents, stock/securities exchanges, investment banks and the like.

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Financial Corporations

The Financial Sector in ECCU

In the ECCU the Financial Sector comprises mainly of40 commercial banks61 credit unions

161 insurance companies

The commercial banks are regulated by the Eastern Caribbean Central Bank and a number of surveys are conducted by ECCB on a monthly, quarterly and annual basis.

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Data Available at ECCB on Commercial Banks

• Commercial Banks Liabilities• Commercial Banks Assets• Balance Sheet Analysis• Profit and Loss Statements• Interest Rates• Loans and Deposits by Sectors• Liquidity Ratios• Credit by Sector and by Economic Activity

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Data Obtained from Commercial Banks

• The data presently used to compile the following aggregates:– Gross output– Intermediate consumption– Compensation of employees– Operating Surplus– Taxes on Production– Gross Value AddedNew AreasThe output of FISIM allocated to usersThe output of FISIM calculated on loans and deposits only using interest

rates on deposits and loans and a reference rate of interest

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High Frequency Indicators Compiled by Central Bank

Financial Sector Indicators •6.1 Central Bank net foreign assets •6.2 Central Bank domestic lending •6.3 Central Bank reserve money •6.4 Depository corporations net foreign assets• 6.5 Depository corporations domestic lending  •6.6 Depository corporations broad money liabilities•6.7 Other financial corporations balance sheets, assets and liabilities by sectors

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High Frequency Indicators Compiled by Central Bank

• Financial Sector Indicators (continued)• 6.8 Financial corporate profits• 6.9 Financial corporate debt • 6.10 Nonperforming loans of depository

corporations, capital adequacy ratios, other financial stability indicators,

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High Frequency Indicators Compiled by Central Bank

• Financial Market Indicators• 10.1 Interest rates, as relevant short and long

term money and bond market rates • 10.2 Exchange rates, as relevant spot and

forward markets • 10.3 Nominal and real effective exchange rate • 10.4 Stock market indicators • 10.5 Others as relevant : spreads between

lending and deposit rates, highest-lowest interbank rate; etc.

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SRU Forms for Insurance Companies

• Attestation and Certification• Background Information • Main Financial Statements

– B.1: Balance Sheet– B.2: Income Statement – General Insurance Business– B.3: Income Statement – Life Insurance Business– B.4: Statement of Changes in Capital– B.5: Section 54 Solvency Requirement – B.6: Deposit Requirements – B.7: Insurance Fund Requirements

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SRU Forms for Insurance Companies

• Details on Balance Sheet– C.1: Cash and Deposits– C.2: Government Securities and Company Bonds and Debentures– C.3: Secured Loans– C.4: Investments in Real Estate – C.5: Shares and Investment Schemes– C.6: Related Party Investments– C.7: Policy Loans and Other Investments – C.8: Accounts Receivable – C.9: Fixed Assets– C.10: Details on Unexpired Risk Provision– C.11: Details on Claims and Catastrophic Provision– C.12: Accounts Payable

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SRU Forms for Insurance Companies

• Details on Balance Sheet (continued)– C.13 Foreign Currency Assets and Liabilities– C.14 Life Insurance Term to Maturity – C.15: Claims Development for General Insurance

• Operating Details as Reported in the Income Statement – D.1: Premiums and Underwriting for General Insurance– D.2: Premiums for Life Insurance– D.3: Analysis of Life Insurance Policies– D.4: Investment Income– D.5: Incurred Claims– D.6: Reinsurance Details

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SRU Forms for Insurance Companies

• Operating Details as Reported in the Income Statement (continued)– D.7: Commissions by Class of Insurance– D.8: Management Expenses– D.9: Related Party Operating Transactions– D.10: Other Revenues and Expenses– D.11: General Insurance Summary of Underwriting Performance

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SRU Forms for Insurance Companies

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Form Q.3: Income Statement – Life Insurance Business (EC$ 000s)Year to Date Year to DateCurrent Year Prior Year

1. Gross premiums written

2. Reinsurance assumed

3. Reinsurance ceded

4. Net Premiums written (Row 1 + Row 2 – Row 3) 0 0

5. Investment Income

6. Reinsurance commissions

7. Other Revenue

8. Total Revenue (Rows 4 to 7) 0 0

9. Claims

10. Annuity Payments

11. Policy surrenders

12. Change in life insurance and annuity provisions

13. Interest on policy holder amounts

14. Other policy holder benefits

15. Total Policy Holder Benefits 0 0

16. Commission expense

17. Management expenses

18. Total expenses (Rows 15 + 16 + 17) 0 0

19. Net Operating Income (Row 8 – Row 18) 0 0

20. Extraordinary revenue (expenses)

21. Net Income before tax (Row 19 + Row20) 0 0

22. Tax*

23. Net Income after Tax* 0 0

* Composite insurers are not required to complete rows 22 and 23.

Description

NOTE TO INSURER: Form Q.3 is to be completed by a life insurer and by a composite insurer with respect to its life insurance business.

Sequence of Accounts

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Transaction: Other flows:

Goods and services accountRevaluation

Other volume changesProduction account

Value added/GDP

Generation of income account Key:

Operating surplus Name of accountPrimary distribution of

income account SNA Balancing itemNational income

Secondary distribution of income account

Disposable income

Use of income accountSaving

Opening balance sheet

Closing balance sheet

Nonfinancial assets Capital accountOther changes in

nonfinancial assetsNonfinancial assets

Net lending / net borrowing

Financial assets and liabilities

Financial accountOther changes in financial

assets and liabilitiesFinancial assets and

liabilitiesNet worth Net lending / net borrowing Net other changes Net worth

Arrows represent the contribution of assets to production and generation of income.

Accumulation accounts:

Conclusion

• Using administrative data sources, it is possible to compile the full sequence of accounts for the financial sector

• It is necessary to ensure that formal arrangements such as the establishment of MOUs with SRUs in member states

are in place for sharing of information

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THE ENDThank you for your attention

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