This report by Milliman consultants covers the capital regimes in 10 markets in Asia plus the 2018 International Capital Standard field test. The report seeks to provide a comparison of key quantitative and qualitative aspects of life insurance capital regimes in Asia and an analysis of key capital results based on information publicly available and other market sources.
As insurance companies prepare themselves for the new International Financial Reporting Standard (IFRS) 17, Takaful companies are facing significant uncertainty in how to interpret and apply the standard to their businesses. Interpreting IFRS 17 for Takaful business is not a straightforward process. This paper by Milliman’s Farzana Ismail, Clement Bonnet, and Philip Simpson highlights several key issues and challenges in implementing IFRS 17 for Takaful business.
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.
Milliman has released the findings of the first known study analysing the general and the family Takaful industries, separately, across all major markets. The full report will be released and discussed at the International Takaful Summit in London today.
‘While there have been a few reports analysing the US$14.9 billion Takaful market, they typically provide a combined analysis,’ said Farzana Ismail, head of Milliman’s Life Insurance and Family Takaful consulting practice in South East Asia. ‘Since drivers for general Takaful can be significantly different from family Takaful, there has been concern around the distortion caused by analysing them together and demand for a separate analysis. This report helps meet that demand.’
‘The GCC region dominates the global market penetration of Takaful, which grew 14% in 2015,’ said Safder Jaffer, Milliman’s managing director for the Middle East & Africa. ‘However, a closer look at the market reveals that there is virtually insignificant penetration of family Takaful, providing a huge opportunity for growth.’
Highlights from the Milliman Global Takaful Report 2017:
• Coverage of the major Takaful markets: South East Asia, Gulf Cooperative Council and Africa and the smaller markets, by country, analysing data from 2011 to 2015
• Market trends including changes in gross written contribution (GWC) and financial ratios
• The regulatory environment and changes in each market and their impact on the industry
• Opportunities for and challenges preventing the growth of Takaful
To download the report, click here.
Authors of this report can be reached on:
• Farzana Ismail in Kuala Lumpur at +603 2722 7181, firstname.lastname@example.org;
• Safder Jaffer in Dubai at +971 386 6990, email@example.com
Milliman has released the findings of a study analysing and comparing participating (par) business across seven Asian insurance markets, notably Singapore, India, Malaysia, Hong Kong, China, Indonesia and Sri Lanka. The report collates in-depth information not otherwise available and provides insight from survey results about par business in Asia.
‘Par products have been a core insurance offering for many decades in many markets across Asia Pacific and in Singapore, Hong Kong and India they remain a cornerstone of the industry,’ said Richard Holloway, managing director for Milliman’s South East Asia and India life consulting practice. ‘However, increased regulatory scrutiny of par business in countries such as Malaysia and the onset of risk based capital solvency regimes in most markets may lead to a gradual decline in the popularity of such products. This report unlocks key considerations for companies offering par products across the region, highlighting differences in performance, investment approach, and governance of par across the seven markets.’
The ‘Milliman Participating Business in Asia’ report includes:
• A regional view of common themes and differences among the seven selected markets
• Detailed country commentary on par business performance, regulatory environments and key challenges
• Results of our survey providing qualitative insights into par business in these countries
• Analysis of the governance frameworks in place and roles of policyholder advocates
To download the report, click here.