South Africa's Cabinet Approves White Paper on Health Insurance

1. in December 2015 South Africa’s cabinet approved a policy white paper on a compulsory health- insurance plan.

Managing General Insurance Management Expenses

BACKGROUND

Management Expense ratios for an insurance company refers to the percentage of premium used to pay the costs of acquiring, writing and servicing insurance and reinsurance products. It can either be obtained by dividing expenses by total written premium or earned premium.

Underwriters sometimes factor in management expense ratios when pricing premiums. Here is an articles reporting regulator's concerns on increasing expense ratios and what has caused a surged in expenses which has the tendency to spiral out of control if left unchecked especially for companies on an aggressive business expansion plan. 

Insurance Financial Ratios

BACKGROUND
Below are some financial ratios relevant to the insurance management process and provides a rough idea of how management are running the companies and a possible indication of companies’ direction. We will discuss the ratios in-depth in subsequent posts. I have organized them into three main categories as follow:-

1. Underwriting Management Indicators

2. Profitability Indicators

3. Liquidity Measurement Indicators

Interest Rate Models for Insurers

BACKGROUND
This post briefly describes how interest rates affects life and general insurers and plausible models to predict future short term rates or spot rates movements. Interest rates has minimal impact on General Insurers but nevertheless is discussed for comparison purposes.

Cultivating a Healthy Insurance Market

BACKGROUND

How do we prevent undercutting in the insurance market and instead promote a healthy and growing insurance industry.

How do we avoid a price war where insurance companies hemorrhage capital in order to retain existing market share without resorting to collusion or price fixing (apart from tariffs)?

[Products] 3-in-1 Liablity Product Bundle for SME

BACKGROUND

A Melbourne underwriting agency has unveiled a product combining 3 key policies for SMEs.

The Product covers Professional Indemnity (PI), Public Liability (PL) and Management Liability (ML) and is not limited to particular occupation.

What are the benefits and impacts? Any risks & weaknesses involved?

Understanding & Managing Reinsurance Risks

I was reading an article on managing reinsurance risks and found a few points that I would like to share.

[Framework] Solvency II - Part 4 - ORSA

BACKGROUND
A continuation from previous post, this post covers ORSA’s components, processes and how each stake holders contribute.

ORSA requires a joint approach across the company as it encompasses the following:-

1. All pillars of Solvency II

2. Risk Outputs

3. Capital and Strategic Planning

4. Report to the Board on Company's Operation

5. Capital Requirements

6. Risk appetite and external environment.

[Framework] Solvency II - Part 3 - ERM

BACKGROUND
 Solvency II requires insurers to prepare and implement assessments of the company’s own risks.

Under Pillar 2’s Own Risk and Solvency Assessment (ORSA), insurers are to define and create value for the stakeholders and embed an Enterprise Risk Management Frameworks into governance and decision making processes.

[Framework] Solvency II - Part 2 - SCR & MCR

SCR & MCR

This post is a continuation from my previous article on Solvency II  discussing capital requirement,  differences in Solvency I and Solvency II and how different countries are handling capital requirements.

[Framework] Solvency II - Part 1 - Introduction

BACKGROUND 

Solvency II is scheduled to come into effect on 1 January 2016  and will affect all insurers in the EU under the EU Directive that codifies and harmonises the EU insurance regulation with possible adoption by insurers in other regions subsequently.

[Framework] SOX vs J-SOX

This posts will discuss the key differences between Japan's J-SOX and US's SOX Framework.


BACKGROUND
Sarbanes Oxley Act of 2002 was enacted in esponse to accounting frauds and scandals. Below are key effects of SOX:-
1. Top management must individually certify the accuracy of financial information.
2. Severe penalties for fraudulant financial activity.
3. SOX increased the oversight role of boards of directors.
4. Independence of external auditors who review the accuracy of corporate financial statements are increased.

[Framework] J-SOX - Designing Internal Controls

BACKGROUND
J-SOX’s main objective  is to ensure the reliability of financial reporting therefore the internal controls prescribed are only limited to financial reports with four key objectives:-

• Effective and efficient operations
• Compliance with law & regulations
• Safeguarding of Assets
• Reliability of Financial Reports

[Framework] Financial Instruments and Exchange Act (JAPAN)

BACKGROUND

The Financial Instruments and Exchange Act (金融商品取引法) promulgated on June 14th, 2006. It codifies securities law and regulates securities companies in Japan.

This law covers the following:- 

• Registration and regulation of broker dealers and their registered representatives
• Disclosure obligations applicable to public companies, investment trusts and similar entities
• Tender offer rules
• Disclosure obligations applicable to large shareholders in public companies
• Internal controls in public companies;

ObamaCare - Part 2 - End of Subsidies?

A continuation from previous article titled  “ObamaCare Part 1” discussing Mr. Obama’s initiative to overhaul the U.S. Healthcare System. Link below.

http://levelnineatwork.blogspot.com/2014/01/obamacare-part-1.html

This article will discuss how the Obamacare’s subsidies handout was put to test in 2 circuit courts (District areas) with different outcomes and impact. 

Obamacare - Part 1- Implementation

The Patient Protection and Afforable Care Act signed in 2010 dubbed the ObamaCare.

The concept is to increase the size of insurance pool money (to everyone) easing  premium price and everyone enjoys insurance coverage.

Postal Code Profiling In a Motor Detariff Market

A continuation from previous article titled “Motor Detariffed West Side Stories” highlighting how two areas in a city are charged different premium rates.Link as follow:-

http://levelnineatwork.blogspot.com/2014/06/motor-detariffed-west-side-stories.html

Insurance Miss-Selling

BUYING BLINDLY?

Back in January 2014, The Guardian reported in the UK that “six well-known agencies had sold personal accident policies to workers who were already covered by their employers' insurance.”

Source:- www.theguardian.com

This posts will discuss key factors & views in miss-selling.

Insurance Coverage For Your Dwelling/House

This post will provide info on factors to consider when you purchase an insurance coverage for dwelling/house.

Note: Most of the info are found around the web, forums and word of mouth.

Data For Premium Discounts

Would you allow insurance companies to track/monitor/gather data on your lifestyle in return for cheaper premiums?

There are devices installed in the vehicles by insurers  that provides such incentives for a better understanding of their drivers.