Transcript Lysbilde 1

RISIKOSTYRING SOM STRATEGISK VIRKEMIDDEL I
FORSIKRING
SAS Institute ”Risk Forum”, 3. april 2014
Adm. direktør Idar Kreutzer, Finans Norge
Risk management - when risks collide
Global governance failure !
2
Risk management in insurance
”Managing risks
is what we do”
Source: Securityreseach.at
3
Insurance – a key role in society
Protect
Prepare
Understand
4
Key risks insurance must manage
Financial risks
Biometric risks
Property & casualty
5
Regulatory dynamics
Property & casualty
Implications of a changing
climate

Challenge the traditional insurance way
of thinking.
Unknown risks ?
Public Private Partnership
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•
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Claims data - pilot project.
New products
•
•
•

Green covers
Carbon delivery wraps
Forestry & agriculture
New markets
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•
•
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Weather risk
Risk consulting
Cat Bonds
Promote loss prevention
Participate in Carbon markets
Microinsurance
•
6
“Society is simply too vulnerable to weather
impacts “
Biometric risks
Longevity
Migration
•
•
•
•
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Increasing length of the retirement age
Longer pay-out period for pension
providers
Significant reserve requirement in the
private sector
•
Expected life age – Norwegian population 1846-2010
ddddddddddddddddddddd
7
Source: Statistics Norway
•
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New risks in the market
Cultural differences
Living next to the North
pole
Changes in the urban
landscape
Diseases
Financial risks
Low interest rates vs. long term
guarantees
Asset – liability matching
Asset risk and allocation
Financial shocks & market value
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• Long-term contracts
• Annual interest rate guarantee
• Inappropriate capital buffer
• Existing DB and paid-up policies
challenging
• Close-down of municipal pension schemes
• Need for long duration assets
• Low allocation to risky asset classes with
volatility (equities) for DB
• Liquidity in ALM to be prepared for transfer
from DB to DC (or hybrid) schemes
• Focus to obtaining return to cover
guarantee of define benefit schemes (DB)
• Low allocation to risky asset classes with
volatility (equities) for DB. Any surplus of
guarantees used to build buffers in DB
• Reduce market risk
• Hold to maturity management in focus
Low interest rates – consequences
for the industry
14
Norway, Gov. Bonds, 10 Years
12
10
Sweden, Gov. Bonds, 10 Years
8
6
Denmark, Gov. Bonds, 10 Years
4
2
0
Average guaranteed interest
rate in Norwegian life insurance
Source: Finance Norway
1,200,000
400000
350000
300000
250000
200000
150000
100000
50000
0
1,000,000
800,000
600,000
400,000
200,000
0
2005 2006 2007 2008 2009 2010 2011 2012
Defined benefit (DB) – number of insured
2005 2006 2007 2008 2009 2010 2011 2012
Defined contribution (DC) – number of insured
Source: Finance Norway
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Liability driven investments
Valuing liabilities – and matching the duration
5,5
5
4,5
4
3,5
3
2,5
jan. 05
Assets
100
jan. 06
jan. 07
SEK
Liabilities
100
jan. 08
EUR
GBP
2 % point fall
in rates
Source: Bloomberg 20 yrs swap
30% increase
in liabilities
Stylistic example of liabilities
Example:
duration 15
If the liabilities' duration is 15, then a 2 percentage points fall in interest rates
alters the present value of liabilities with 30% if this change is simply carried
through for the purpose of liability valuation
Which assets (apart from too few long dated bonds) yield 30% with certainty over
4 months?
10
?
Assets
100
Liabilities
130
Regulatory dynamics – life &
pensions
Main challenges:
•
•
•
•
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Risk based capital requirements
(Solvency II)
Macro economic prudential
regulation
IFRS 4 phase II (Market Value)
Systemically important (IAIS
global capital standards)
Solvency II:
A new risk management system
ORSA
Internal models
Capital
requirement
calculation
Key implications
Regulatory asset risk will become a key driver
Asset-liability-matching strategically important
Increased focus on liquidity and rating
Affects insurers’ investment decisions
Moving away from long-term assets
Distorting effect on financial markets and the
economy
Higher cost of funding for corporates and
governments
Source: Oliver Wyman, ”Funding the future”, 2013
12
Systemic risk – not just banks?
• IAIS 10 October 2013: Global quantitative capital standards
Peter Braumüller, chair of the IAIS Executive Committee:
“It is undeniable that the business of insurance is global, and global issues demand
global responses,” [...]“This is why the IAIS, whose Members constitute nearly all of
the world’s insurance supervisors, has committed to develop and implement the
first-ever risk based global insurance capital standard.”
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Summary
• The
times and risks are changing
• Understanding and managing risks – ”that’s what we do!”
• We have to deal with a changing regulatory environment
• A well functioning insurance industry is crucial to society
14
TAKK FOR
OPPMERKSOMHETEN
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