Approaches to the Changing Insurance Market Environment
This presentation by Dr. Monica M. Chler at the AZN Conference discusses the impacts of various factors such as technology, economy, and ESG awareness on the insurance industry. It also highlights industry responses and regulatory initiatives to address these challenges.
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Presentation Transcript
APPROACHES TO THE CHANGING ENVIRONMENT OF THE INSURANCE MARKET AZN CONFERENCE LJUBLJANA, 6 SEPTEMBER 2022 DR. MONICA M CHLER MONICA.MAECHLER@LAWREG.CH
CHANGING ENVIRONMENT OF THE INSURANCE MARKET Cats Cats Health and demographics Geopolitics Technology (Digitization) Economy (Interest rates, inflation, shortages etc.) Health ESG awareness Behavioral and societal changes MONICA M CHLER - AZN CONFERENCE - LJUBLJANA - 6 - 9 - 2022 2
AFFECTING THE ENTIRE INSURANCE VALUE CHAIN Governance and Risk Management Strategy Constant monitoring, analysis and assessment required Finance and investments (capital and liquidity) Product design and mix Underwriting and reserving Claims MONICA M CHLER - AZN CONFERENCE - LJUBLJANA - 6 - 9 - 2022 3
EXAMPLES OF INDUSTRY RESPONSES TO THESE CHALLENGES Governance and Risk Management Strategy Finance and investments (Capital and liquidity) Pproduct design and mix Strong strategic focus on customer orientation, financial and operational resilience, efficiency and ESG Claims U & R Product design and mix: Constant review of product design, diversification, ev. rebalancing of portfolios Underwriting and reserving: Discipline in pricing, underwriting and reserving Claims: Servicing customers responsively, analysis of inflationary trends, monitoring of reserves, feedback to underwriting Finance and investments: Focus on asset/liability matching, monitoring of capital position, adequate liquidity available, diversification and quality of investments Sound governance as well as comprehensive and vigilant risk management 4 MONICA M CHLER - AZN CONFERENCE - LJUBLJANA - 6 - 9 - 2022
SIMULTANEOUS REGULATORY AND SUPERVISORY INITIATIVES At global, supranational and national At the global level Finalisation or implementation of various projects ongoing IAIS Common Framework for the Supervision of InternationallyActive Insurance Groups (ComFrame 2019) IAIS Holistic framework for the and mitigation of systemic risk in the insurance sector (Holistic Framework, 2019) Insurance Capital Standard (ICS) At the same time, monitoring being strengthened at a global level (e.g. IAIS Global Monitoring Exercise; IAIS Report on Supervisors Use of Key Indicators toAssess Insurer Conduct, 2022) Environmental Social Governance (ESG) incl. Diversity Equity & Inclusion (DE&I) TCFD disclosures incl. climate risk modelling discussion Social and governance reporting and inclusion initiatives Consumer protection Data protection, digitization, resilience, cyber Innovation Reviews and amendments related to capital, liquidity, governance and risk management in various jurisdictions such as Solvency II Review Revision of the Swiss Insurance SupervisoryAct and the related Ordinance Reviews and amendments in UK, Japan, US, Australia, Chile etc. levels At supranational and national levels 5 MONICA M CHLER - AZN CONFERENCE - LJUBLJANA - 6 - 9 - 2022
SUMMARY AND OUTLOOKND OUTLOOK SUMMARY AND OUTLOOK Changing environment requires intensive attention by insurers, regulators and supervisors Industry constantly to (re)assess and act in a targeted and agile manner on changes to the value chain Regulators and supervisors to monitor and instigate adequate (re)action Initiatives and efforts of involved parties to usually generate best results to the extent they complement each other from different perspectives MONICA M CHLER - AZN CONFERENCE - LJUBLJANA - 6 - 9 2022 6
