Milliman has released its latest report entitled ‘Regulatory diversity across Asia.’ The report is a compilation and insightful analysis of current regulations applicable to life insurers across 14 Asian markets. It provides an analysis of the life insurance regulations in Brunei, China, Hong Kong, India, Indonesia, Japan, Malaysia, the Philippines, Singapore, South Korea, Sri Lanka, Taiwan, Thailand and Vietnam.
The report includes an overview of the main regulations in these 14 markets, governing the following areas:
• Products and pricing
• Capital and solvency requirements
• Policyholder protection
• Enterprise risk management (ERM)
Understanding the different stages of evolution of the regulatory regime across Asia will help life insurers, and other organisations with an interest in the life insurance industry, get a better perspective and help them in strategic business planning, market entry, mergers and acquisitions (M&A) and cross-border activities in these markets.
A few observations from the report:
• The markets in Asia are still very much ‘rules-based’ (as opposed to ‘principle-based’). Detailed rules and regulations govern different aspects of the industry.
• Regulators are increasingly looking at areas such as customer protection and meeting policyholders’ reasonable expectations (PREs), although these areas are still at a nascent stage in many of the markets.
• There is also an increasing focus on strengthening the governance environment through the Appointed Actuary/Chief Actuary systems and the role of board committees.
• There is a clear trend towards adoption of risk-based capital (RBC) regimes and the enhancement of such frameworks, wherever already adopted.
• The regulations in several markets are changing rapidly.
To read the report, click here.
According to the Indonesian Insurance Statistics published by the Financial Services Authority, the Indonesian life insurance industry achieved double-digit growth in 2017. Last year, the industry recorded a net premium of IDR 232.06 trillion, a 44% growth year-on-year over 2016. Total assets grew 30% year-on-year to IDR 512.95 trillion. Milliman’s Richard Holloway, Halim Gunawan, and David Kong offer more perspective in the latest Indonesia Life Insurance Newsletter.
According to the Indonesia Insurance Statistics published by the Financial Services Authority, the Indonesian life insurance industry continued to expand in the third quarter of 2017. For the first nine months of 2017, the industry recorded a total net premium income of IDR 127.07 trillion, a 38% growth year-on-year compared to the same period in 2016. The total technical reserve for the industry as of the third quarter increased by 31% year-on-year to IDR 372.25 trillion. Milliman’s Richard Holloway, Halim Gunawan, and David Kong offer more perspective in the latest Indonesia Life Insurance Newsletter.
Milliman has released its latest report, 2017 Mid-Year Embedded Value Results (excl. Japan), which summarises mid-year 2017 embedded value (EV) results disclosed by Asian insurers in eight key countries. The report examines the results at a company and country level and supplements the 2016 Embedded Value Results: Asia (excl. Japan) report released in August 2017. It also includes an update of the India 2016 full-year results, not available earlier due to the market’s March financial year-end. The findings highlight an overall increase in growth of EV, increase in value of new business (VNB) and improvement in new business margins.
‘As expected, positive performances by Asian equity markets and improving yields have led to an increase in the EV of life insurers within the region,’ said Milliman principal and consulting actuary Paul Sinnott. ‘These favourable economic conditions, combined with refined product strategies and improved distribution channel productivity, continue to drive growth in life insurance premiums, margins and the overall business in Asia.’
Key findings from the report include:
• Overall, insurers have reported positive gains in their 2017 mid-year embedded values over their 2016 mid-year values, with many companies showing single-digit EV growth but some posting larger gains in Hong Kong and mainland China.
• Hong Kong and mainland China insurers continued to report significant increases in VNB in the first half of 2017 compared to the first half of 2016, with over 50% increases in VNB for several companies, primarily driven by strong new business sales.
• Nearly all operating entities reported an increase in their new business margins between the first half of 2016 and the first half of 2017, with single- or double-digit increases in new business margins for many.
• As initial public offering (IPO) activity among insurers continues in India, companies are adopting the market-consistent Indian Embedded Value methodology (which is prescribed for IPO disclosures).
A copy of the report is available for download here.
Join Milliman consultants on this webinar as they consider the implications of the recently published “Asia retirement income report.” The webinar will include a 20-minute presentation led by Wade Matterson, practice leader for Milliman’s Australia office, and Richard Holloway, managing director for Milliman’s South East Asia and India Life consulting practice. A 20-minute Q&A session will follow.
Date: Wednesday, 23 August
Time: 11 a.m. India time
12:30 p.m. Thailand/Indonesia time
1:30 p.m. Singapore/Hong Kong/Taiwan/Malaysia time
3:30 p.m. Sydney time
To confirm your participation, RSVP before 16 August. Registered participants will receive a link to the webinar and local/toll-free numbers for most countries in the Asia-Pacific region a few days prior to the webinar.
Milliman has announced the findings of its study on reported year-end 2016 embedded value (EV) results for 34 major insurance companies operating in Asia, excluding Japan. The report highlights trends among companies reporting EVs and reveals a growth in reported 2016 EV of 15.3% by Asian insurance companies. This was primarily driven by a 40% growth over 2015 in value of new business (VNB) across the region in 2016.
The Milliman 2016 Embedded Value Results: Asia (excl. Japan) report analyses and discusses the EV methodologies and assumptions with the impact of regulations, as well as recent developments in the long-awaited International Financial Reporting Standard (IFRS) 17 reporting regime.
‘The China and Hong Kong markets were the main drivers of the VNB explosion in the region; both having mainland consumers to thank for these results,’ said Milliman principal and consulting actuary Paul Sinnott. ‘Although we have some longer-term concerns about the sustainability of profit margins in the region, recent yield curve rises are relieving some margin pressure in the short term.’
A few key insights from the Asian report include:
• In 2016, total reported Asian EV grew by 15.3%, on a comparable basis, to USD 339 billion from USD 294 billion.
• While some European multinationals reduced their Asian EV reporting last year, there were three companies disclosing EV results for the first time in India, along with the first comprehensive Indian Embedded Value (IEV) disclosure associated with ICICI Prudential’s initial public offering (IPO) in September 2016.
• Life insurance sales continued to rise strongly in the region during 2016. Gross written premium (GWP) is estimated to have increased by 28%, with China’s 43% growth being a major contributor.
• Value of in-force (VIF) increased for all markets. South Korea recorded the largest VIF growth of 31%, mainly from margin-driven growth in VNB across all companies; Hong Kong also posted strong VIF growth of 20%, driven by large volumes of business sold to mainland Chinese visitors.
To download the report, click here.