ENGLISH VERSION
Insurance Forum
IN THE OCCASION OF ARGENTINA’S G20 PRESIDENCY 2018
1
Insurance Forum Argentina 2018 Published by: © Superintendence of Insurance of Argentina, SSN. Superintendence of Insurance of Argentina. Authorities Ministry of Treasury, Argentine Republic. This booklet compiles contributions of panellists from the Insurance Forum 2018, held in San Carlos General Coordination: de Bariloche, Argentine Patagonia. Camila Silva. Ing. Mauricio Macri Bianca Orlandini. President of the Argentine Republic We thank everyone who made this event possible, Malena Kramer. which will remain in history for being the first Insu- rance Forum held in the occasion of the G20. Translations: Lic. Nicolás Dujovne Communication Team of the Ministry of Treasury of Minister of Treasury of the Argentine Republic the Argentine Republic.
Photography: Dr. Juan A. Pazo Superintendence of Insurance of Argentina. Superintendent of Insurance of the Argentine Republic
Booklet design: Martín Velazquez Dauga.
- This book or any portion thereof may not be reproduced or used in any manner whatsoever without the express written permission of the publisher: [email protected]
Superintendence of Insurance of Argentina www.argentina.gob.ar/snn Printed in Buenos Aires, Argentina//2019
Prologue
The Insurance Forum 2018 was held in the City of Bariloche, in the Argentine Patagonia, on September 24-26 and gathered more than 350 representatives from the national and international insurance markets and included the participation of the Minister of Transport, Guillermo Dietrich, and the Secretary of Finance, Santiago Bausili, and a speech given by President Mauricio Macri
It was the first insurance event conducted within the framework of the G20 and organized by the Argentine Government through its Insurance Authority (Superintendencia de Seguros de la Nación) and the Argenti- ne presidency of the G20. The event promoted the value of the insuran- ce sector as a key actor for the development of economies and as the center of the discussions of global leaders.
The agenda of the Insurance Forum 2018 focused on four central points: the promotion of long-term investment in infrastructure, the construction of resilient economies, insurance 2.0: towards digital disruption, and the insurance globalization.
“An event of these characteristics constitutes a milestone for the insu- rance sector. G20 priorities –under the Argentine presidency- are the
8 9 future of work, the infrastructure for development and a sustainable food future, areas directly connected to the insurance industry. This increa- ses the importance of the event”, said Juan Pazo, Superintendent of the Argentine Insurance Authority.
The organization of the Insurance Forum 2018 has been carried out with the assistance of the OECD (Organisation for Economic Co-opera- tion and Development), which acted as Secretariat during the regulators event. The meetings held on September 25-26 were organized thanks Ministerio de Hacienda to the collaboration and cooperation of the local and international in- Presidencia de la Nación surance industry represented by the Geneve Association, the Global Federation of Insurance Associations (GFIA), the Argentine Insurance Committee and its chambers (ADIRA, AVIRA, AACS and UART). To that end, an Executive Committee was created. It was chaired by Adrián Werthein from Grupo Werthein and co-chaired by Alejandro Simón (Sancor Seguros), Recaredo Arias (Vice President GFIA), José Cardo- so (President IRB Brasil RE) and Toyonari Sasaki (Vice President of Life Insurance Association of Japan).
10 11 12 13 G20 Argentina 2018 INSURANCE FORUM ARGENTINA 2018 INSURANCE FORUM ARGENTINA 2018
14 15 G20 ARGENTINA 2018
G20 Argentina Priorities
The future of work Unleashing people’s potential.
Infrastructure for development Mobilizing private resources to reduce the infrastructure deficit.
INSURANCE FORUM ARGENTINA 2018 A sustainable food future INSURANCE FORUM ARGENTINA 2018 Improving solid and increasing productivity.
16 17 G20 ARGENTINA 2018
The future of work: Unleashing We will seek to pin down the impact that technological Infrastructure for development: Priorities: making peoples’ potential change is having on productivity, growth, jobs, and in- Mobilizing private resources to equality. Following a diagnostics phase, we will also ex- reduce the infrastructure deficit our contribution Technological change is extraordinary in its magni- plore the policies needed to embrace the opportunities tude and speed. The emergence of new technolo- and address the challenges presented by technology. Infrastructure is critical to development. Investment Our presidency will focus on three key issues: the gies has led to the development of new forms of in infrastructure boosts growth and productivity. future of work, infrastructure for development, and work that are rapidly changing production processes Education is at the crux of this debate. Education em- Moreover, infrastructure provides the physical and a sustainable food future. worldwide. This offers huge opportunities to accom- powers people to shape their own futures. It enables digital access necessary for our citizens to seize plish fair and sustainable development; yet it also them to create their own endeavours and form an ac- the opportunities of the future economy. presents challenges that are putting pressure on the tive citizenship able to contribute to the development employment, welfare and education agendas. of a world that is both fairer and more sustainable. Despite its importance, investment in infrastructu- re is far less than what is needed to sustain vigo- Policy responses need to ensure that embracing Making the new wave of technological breakthrou- rous growth and make it truly inclusive. The global technological change will not engender exclusion, ghs as inclusive as possible will require conside- infrastructure gap projected from now to the year social disintegration, or backlash. Providing these rable investment in training and skills for life and 2035 amounts to USD 5.5 trillion according to responses in a coordinated manner will also help work. It may also require an adaptation in our fiscal some estimates. Meanwhile, institutional investors
INSURANCE FORUM ARGENTINA 2018 prevent excessive gaps in technology adoption policies or structural reforms. Now is the moment around the world have USD 80 trillion in assets INSURANCE FORUM ARGENTINA 2018 across countries and surging inequality among them. to shape the opportunities and skills that prepare under management, typically offering low returns. our citizens for change. We need to create the conditions for more and be- Mobilizing private investment toward infrastructure tter jobs. We need to provide tools and skills to tho- is crucial to closing the global infrastructure gap. It se people looking for a job and those whose jobs can also ensure a better return for those who today are at risk of being replaced by automation. We save and invest. This is a win-win objective and it should explore global initiatives that ensure that requires international cooperation. everyone has a chance to develop their full poten- tial so as to benefit from the new technological era.
18 19 G20 ARGENTINA 2018
We will seek to develop infrastructure as an asset A sustainable food future: of the land available for food production causes an management. The work in this field will be oriented class by improving project preparation, addressing Improving soils and increasing irreversible degradation to the ecosystem which to explore how the G20 can provide the internatio- data gaps on their financial performance, impro- productivity becomes dramatic in developing countries or re- nal coordination necessary to foster public-private ving the instruments designed to fund infrastruc- gions with high food insecurity. collaboration between industries, governments, ture projects, and seeking greater homogeneity Food security is an important link in the process of international agencies, farmers’ associations and among them. achieving stability and peace. In no other case are We have a valuable opportunity to promote a civil society. security and development more evidently interlinked broad debate on the importance of sustainable soil Developing infrastructure as an asset class holds and mutually reinforced as in food. Meeting the die- great promise to channel the savings of today into tary needs of future populations requires a sustai- public infrastructure, efficient transportation ser- nable way of increasing agricultural productivity. vices, basic sanitation, energy flows and digital connectivity that will make each person of today a The G20 countries are key players in the global Reaching out global citizen and worker of tomorrow. food system. Our territories account for about 60% of all agricultural land and account for almost 80% Argentina has invited Spain, Chile and the Netherlands to attend the G20 meetings. We have of world trade in food and agricultural commodities. also invited the chairs of the Caribbean Community (Jamaica), ASEAN (Singapore), African Soils are a key part of the natural environment and Union (Rwanda) and NEPAD (Senegal). Given its strong focus on infrastructure investment, our presidency has invited the Inter-American Development Bank and CAF-Development Bank
INSURANCE FORUM ARGENTINA 2018 from where most of the food consumed by man- INSURANCE FORUM ARGENTINA 2018 kind is produced. As a limited and non-renewable of Latin America. We are also looking forward to the continuing contributions of international resource, they require the greatest attention. Heal- organizations, including the United Nations, IMF, World Bank, WTO, OECD, Financial Stability thy, fertile and productive soils are necessary for Board and ILO. food security and human health, and their preser- vation is crucial for sustainable development and Global solutions call for broader, stronger engagement. Building consensus for fair and sustai- life on our planet. nable development requires the commitment not only of governments but also of all sectors of society. We will continue to foster a comprehensive and pluralistic dialogue with Business20, Approximately 10 million hectares of cropland are Women20, Labour20, Think20, Civil20, Science20 and Youth20. lost every year due to soil erosion. The reduction
20 21 G20 ARGENTINA 2018
President Mauricio Macri President of the Argentine Republic Reproducir video
Hello and welcome to Argentina. I really hope you are having a good time in Bariloche, one of the many wonders of our beau- tiful country.
As you know, insurance companies are one of the largest institutional investors. Their capacity to become source of financing projects in the real economy, is an opportunity that we must sei- ze to the fullest extent. Our challenge is to provide fair and stable conditions to investors so that they can fund profitable projects that contribute to the development of our economies, especially by reducing infrastructure gaps and creating jobs. We are strongly committed to improving the living conditions and opportunities of our citizens, especially, the most vulnerable. To achieve this goal, we need to secure long term financing and build sustainable and resilient economies.
I hope that this forum will strengthen our bonds and our capacity to work as a team on the challenges ahead. INSURANCE FORUM ARGENTINA 2018 INSURANCE FORUM ARGENTINA 2018
Thank you very much for being here!
22 23
INSURANCE FORUM 2018
Insurance Forum 2018 INSURANCE FORUM ARGENTINA 2018 INSURANCE FORUM ARGENTINA 2018
24 25 INSURANCE FORUM 2018
Why a G20 insurance forum? We are driven by the belief that insurance is a pillar of social Our goals are: and economic resilience. The outcome of our Side Meeting will be of fundamental value to the G20 agenda. In light of G2B engagement
the aforementioned three pivots of our G20 Presidency, we We want to show how government and business can work together towards a common good. Listening to our mutual concerns and seeking synergies for believe the Insurance industry has much to contribute. Not sustainable development. only in its creative capacity for developing innovative solutions A legacy for future G20 meetings for people and countries, but also as a catalyst of financial Insurance can play a strategic role in addressing global challenges. resources for enterprises all across the economy. It is the time of creative solutions, of engaging in private public dialogue. Leveraging our voice to the G20 leadership INSURANCE FORUM ARGENTINA 2018 INSURANCE FORUM ARGENTINA 2018 We aim to achieve a tangible contribution to global policy making. The G20 Insurance Forum is precisely that.
26 27 INSURANCE FORUM 2018
Share of world market - G20 members
Federal Financial Supervisory Authority (BAFIN) - Germany
Share of worl market Billons Denederlansdschebank (DNB) - The Netherlands 4.54% USD 215
1.69% Share of worl market USD 80.1 Billion Bank of Russia
O ce of Superintendent of Financial 0.37% Share of worl market USD 17.6 Billons Institutions (OSFI) - Canada Financial Services Agency (FSA) - Japan 2.42% Share of worl market USD 114.5 Billion 9.96% Share of worl market USD 471.3 Billons National Association of Insurance Commissioners (NAIC) - United States Financial Supervisory Service (FSS) and 28.58% Share of worl market USD 1.3 Trillon Financial Service Comission (FSA), South Korea 3.61% Share of worl market USD 170.8 Billons Comisión Nacional de Seguros y Fianzas (CNSF) - Mexico Undersecretariat of Treasury, Turkey 0.52% Share of worl market USD 24.4 Billons 0.28% Share of worl market USD 13.1 Billons
Bank of England / Prudential Regulation Authority (PRA) - UK Instituto per la Vigilanza Sulle Assicurazioni (IVASS) - Italy 6.4% Share of worl market USD 304.2 Billons 3.43% Share of worl market USD 162.4 Billons INSURANCE FORUM ARGENTINA 2018 INSURANCE FORUM ARGENTINA 2018 Superintendence of Private Insurance (SUSEP) - Brazil Saudi Arabian Monetary Authority (SAMA)
1.54% Share of worl market USD 72.6 Billons 0.21% Share of worl market USD 9.9 Billons
Financial Market Comission (CMF) - Chile Prudential Authority, South African Reserve Bank Australian Prudential Regulation Authority (APRA)
0.25% Share of worl market USD 11.7 Billons 0.89% Share of worl market USD 42 Billons 1.74% Share of worl market USD 82.2 Billons
Confirmed member Not Confirmed member Not Confirmed guest Not Confirmed guest Financial guest
28 29 INSURANCE FORUM 2018
The Insurance Forum, held in the occasion of Argentina’s G20 presidency, was the first of its kind. We intended to bring a pragmatical and hands-on approach to the global perspective of the G20 leadership’s agenda. With that in mind, we have
identified four topics which served to convey the industry’s but also the most vulnerable population, is the first step towards a more inclusive financial system. message to a higher policy making level:
Insurance 2.0: Facing digital Promoting long-term investment to underserved population and natural disaster disruption in infrastructure prone areas. Risk sharing and risk transfer me- chanisms will be important in helping communities The insurance industry and policy-makers should As a risk bearer and investor, the insurance activity and economies meet these threats. promote the best use of digital technology for con- is a systemic component of financial stability. A re- sumers, insurance industry as a provider of cove- gulatory framework that allows for sound and sus- Financial Inclusion is a critical component of sus- rage and protection for cyber risk, development of tainable investment, can pave the way to economic tainable economic development. internationally consistent cyber risk related data, growth, job creation and inclusive development. sound policy measures on data protection and
INSURANCE FORUM ARGENTINA 2018 Approximately 2 billion people do not use formal data usage, cross-sector and cross-border coordi- INSURANCE FORUM ARGENTINA 2018 financial services, and the majority are women. At nation and cooperation. Building resilient economies present, women have only 77 percent of the ac- cess than men do to financial services. Globalizing Business Insurance can play a key role in transitioning to a sustainable economic model by promoting finan- Combating poverty and increasing economic grow- In order to achieve a solid industry that can serve cial inclusion, therefore building a social and envi- th require increased availability of basic financial as a systemic tool for the many challenges discus- ronmentally resilient world for future generations. products and services for all people. Microinsuran- sed, business should maximize resources by proper By improving fair and affordable insurance, finan- ce understood as a financial tool that helps people diversification of risk. For this, policy makers should cial protection services can broaden their outreach to access the formal economy, not only women, promote fairness and open market approaches.
30 31 INSURANCE FORUM 2018
Dr. Juan Pazo
Mr. Pazo is the Superintendent of Insurance of the Republic of Argentina. Before his currents appointment in early 2017, Mr. Pazo served as Chief of Staff of the Financial Information Unit, Argentina`s supervisor and regulating agency of AML/ FT. He served in this role from late 2015 to early 2017.
Prior to joining the public sector, Mr. Pazo worked as a corporate attorney advising in a wide range of business and INSURANCE FORUM ARGENTINA 2018 INSURANCE FORUM ARGENTINA 2018 corporate transactions. He also served as executive director in local companies.
32 33 G20 - INSURANCE REGULATORS
G20 - Insurance Regulators INSURANCE FORUM ARGENTINA 2018 INSURANCE FORUM ARGENTINA 2018
34 35 G20 - INSURANCE REGULATORS
“Insurance can provide Insurance is the new and creative res- answer The insurance sector, as an essential institutio- nal investor, plays a critical role in supporting the ponses to many of the resilience and stability of the real economy, and also, acts as an important instrument of protection for individuals and societies. Discussions related challenges faced by the to sustainable development, barriers to long-term investment in infrastructure, technological innova- tion and financial stability, cannot be fully addres- G20 leaders” sed without the voice of the insurance sector. Insu- rance can provide new and creative responses to many of the challenges faced by the G20 leaders, not only through the development of innovative Juan A. Pazo products to improve economic resilience, but also Superintendent of Insurance of Argentina as a supplier of resources for long-term goals. INSURANCE FORUM ARGENTINA 2018 INSURANCE FORUM ARGENTINA 2018 The moment we decided to carry out the Insurance Forum, we did it with one clear purpose: to position the insurance sector, government and business, as a unique and distinct stakeholder in future G20 events, strengthening policy leaderships through international engagement. The impact we aimed to make, both locally and globally, was to convey a message of awareness to leaders of the risks ari- sing from an increasingly volatile world in terms of
36 37 G20 - INSURANCE REGULATORS
future G20 meetings, positioning the insurance “I would like to specially highlight sector in global talks on the challenges of future policy-making. the joint nature of this effort. This We are at a turning point in history, where tradi- Forum has been the result of the tional political, economic and social structures are undergoing changes. This situation forces different government and private sector political and economic actors to work together to facilitate long-term sources of financing in infras- working together”. tructure that contribute to creating development and resilience in increasingly volatile scenarios. Insurance can and should be the answer. financial stability, natural events, health and tech- ciples for the Infrastructure Project Preparation nological advancements, and how insurance can Phase. We are taking actions to achieve greater Looking forward to meeting you all again in Tokyo! be an instrument of social and economic resilien- contractual standardization, address data gaps ce to cap the potentially negative consequences of and improve risk mitigation instruments. In line such volatility. I believe we succeeded. with the Roadmap, we look forward to progress in 2019 on quality infrastructure.” The Insurance Forum was undoubtedly influential.
INSURANCE FORUM ARGENTINA 2018 The G20 Leader´s declaration – Building consen- I would like to specially highlight the joint nature of INSURANCE FORUM ARGENTINA 2018 sus for fair and sustainable development - states: this effort. This Forum has been the result of the government and private sector working together. “Infrastructure is a key driver of economic prospe- We hope this is an example for other sectors of the rity, sustainable development and inclusive grow- economy as well. We are proud of what we have th. To address the persistent infrastructure finan- accomplished through mutual respect and unders- cing gap, we reaffirm our commitment to attract tanding between regulators and the industry. more private capital to infrastructure investment. To achieve this, we endorse the Roadmap to In- The Japan Insurance Forum is proof of this effort frastructure as an Asset Class and the G20 Prin- and the continuity we need to ensure a legacy for
38 39 G20 - INSURANCE REGULATORS
MODERATOR
Astrid Zwick | Head of Secretariat, Building InsuResilience
Resilient SPEAKERS
Thomas Sullivan | Associate Director, Gordon Ito | NAIC Secretary-Treasurer Federal Reserve Board, United States and Commissioner, Hawaii Department of Economies Commerce & Consumer Affairs Insurance Christiaan Henning | Analyst, Risk Division Support Department, Prudential Authority, South African Reserve Bank Hannah Grant | Head of the Secretariat, Access to Insurance Initiative (A2ii) Deputy Commissioner for INSURANCE FORUM ARGENTINA 2018 Hiroshi Ota | INSURANCE FORUM ARGENTINA 2018 International Affairs, Financial Services Kevin Cowan Logan | Commissioner of Agency, Japan the Chilean Financial Market Commission (CMF)
G20 Regulators Summit
40 41 BUILDING RESILIENT ECONOMIES G20 - INSURANCE REGULATORS
“Reinsurance was emphasised due to its solvency capacity”.
The role of insurance in global Highlights from the session The Insurance Forum as a policy discussions precedent for the future The distinctive session panelists agreed that with Insurance can play a key role for economic growth increasing longevity and disaster risks, the protec- Recognising the crucial role that insurance can with its risk carrier capacity and as large institutio- tion gap is a growing challenge that must be ad- play in building resilient economies and promoting nal investor. Impacts of natural disasters, for exam- dressed. The role of supervisors in the promotion sustainable economic development, such a forum ple, may cause significant reductions in national of fair, safe and stable insurance markets for the could be taken up by other jurisdictions in an effort GDP deviating budget for economic growth to re- benefit and protection of policyholders is crucial to position Insurance Supervision and the Insu- covery. While in high-income countries almost half and proportionate and appropriate approaches for rance Industry as a crucial contributor to global of all economic losses from disasters are covered access to insurance for the millions of unprotected discussions. by insurance, less than 5% of losses are covered individuals and business are needed. Further re- Insurance Forum Highlights in poorer countries, with the poorest people suffe- commendations for example covered holistic risk ring the largest “protection gap”. Risk transfer can management, an accessible data repository and The Argentine Superintendency took leadership in highlighting the crucial role of insurance as part of INSURANCE FORUM ARGENTINA 2018 be cost-effective and efficient, it incentivises risk the benefit of Public Private Partnerships. Reinsu- INSURANCE FORUM ARGENTINA 2018 management and adaptation efforts - especially rance was emphasised due to its solvency capaci- the G20 Presidency. A key takeaway was the va- effective in combination with preparedness, early ty and panelists considered a broad education of lue of on-going engagement and discussion at a warning systems, risk reduction, safety nets, res- consumers in financial literacy and risk awareness global level on economic resilience, infrastructure ponse, recovery. as a key topic. It was consensus that especially investment and innovation. Dr. Astrid Zwick in low- and mid-income countries the definition of Head of Secretariat, InsuResilience appropriate regulation for microinsurance and its integration into regulatory processes as well as in- centivising the design of products for low-income people can contribute to close the protection gap.
42 43 BUILDING RESILIENT ECONOMIES G20 - INSURANCE REGULATORS
“Protecting the health and livelihoods of society – I recently had the honour of being invited to partici- the devastating effects of climate change as well as pate in a panel discussion in the beautiful town of climate-related (and other) catastrophes. Although one of the cornerstones of San Carlos de Bariloche, a jewel located in Argenti- insurance is such an important risk mitigation ins- na’s Patagonia region. trument for these risks, it is largely underutilised and the economy – is crucial unappreciated by the low income market (i.e. those The Superintendent of Insurance of Argentina hos- that probably need it the most). The lack of finan- in maintaining economic ted a first-of-its-kind event in parallel with Argenti- cial education and the limited availability of low-cost na’s G20 presidency – an event aimed at bringing insurance products tailored to the needs of these growth and stability”. a pragmatic and hands-on approach to the global markets are two important contributors to this unfor- perspective of the G20 leadership’s agenda with re- tunate situation. gard to sustainability. Financial education remains one of the main ob- Financial education provided to the low income The panel discussion in which I participated, dis- jectives of an inclusive regulatory framework as it market will be redundant if there is no supply of cussed various aspects of the theme “Building Re- aims to create an increased appetite for insurance low-cost insurance products that meet the needs silient Economies” and succeeded in bringing va- products amongst the uninsured by demonstrating of customers in this segment. Although justified, re- luable views and discussions to light regarding this their long-term value. It is also supposed to create gulatory and supervisory requirements are getting interesting topic. As a result, I would like to share awareness around appropriately priced insurance more complex, and by implication more expensive. some of my views on financial inclusion, specifica- products that meet the needs of those that are part lly, in the insurance context, as it is in my view a of the low income market. The resultant costs involved in satisfying these re-
INSURANCE FORUM ARGENTINA 2018 critical component in building a resilient economy. quirements might therefore hinder insurance pro- INSURANCE FORUM ARGENTINA 2018 In South Africa, the need to provide financial educa- viders to design and market such tailored low-cost Protecting the health and livelihoods of society – tion is enshrined in our overarching financial regula- products. As a result, the insurance sector tends to one of the cornerstones of the economy – is crucial tory framework. Clear objectives and responsibilities focus more on the products and services provided in maintaining economic growth and stability. Unfor- are written into our legislation, formalising and embe- to those already insured and very often forget about Christiaan Henning tunately, there are many people around the world dding accountability. I believe this is a crucial step for those that are not. Analyst, Risk Support Department, that are either underinsured or not insured at all. any jurisdiction to take in order to make sure financial Prudential Authority, South African These financially excluded people are exposed not education, and in turn appropriate financial products In South Africa, progress has been made to address Reserve Bank only to the general effects of being uninsured du- and services, reach those that need it the most. the issue of the availability of suitable low-cost pro- ring periods of adverse circumstances, but also to ducts as a result of the introduction of the new Insu
44 45 BUILDING RESILIENT ECONOMIES G20 - INSURANCE REGULATORS
“Let us therefore not turn a blind eye to certain parts of society, but let us work together to
ensure we provide adequate and appropriate Let us come together as supervisors and industry participants to lay a solid foundation for future so- protection to the poorest and most vulnerable cieties and generations, and start building a more sustainable economy brick by brick and cement our members of society”. actions into a more robust and resilient insurance sector that ultimately contributes to a more robust and resilient economy – one that is fair and non-dis- rance Act, 2017 that became effective on 1 July Bariloche. Overlooking the lush greenery and un- criminating – in order to improve the livelihoods of 2018. The Act introduces a focused prudential fra- touched forestry lay a vast lake with the cleanest, all citizens of our amazing planet. mework for microinsurers that provides for a pro- purest water I have ever seen and tasted. In the dis- portional approach to the prudential supervision of tance, a mountain range draped in a coat of white Thank you to the Superintendent of Insurance of entities licenced as such. Microinsurance business snow seemed to be suspended above the lake and Argentina for hosting such an exciting and life-chan- is defined in the Act and includes a limited scope of it made me think… ging event. I hope this forum can continue on such insurance products that meet very strict rules in ter- a high note and that various jurisdictions around the ms of complexity, design, distribution and benefits. Suppose the economy is the lake: it is filled not only world can continue to share such insightful and me- The prudential framework has also been developed by the largest rivers and streams at the lowest parts aningful views on topics related to sustainability and in such a way that it allows for lower capital require- of the mountain range, but also from the smallest financial inclusion. ments while also placing a limitation on investments. streams originating at the highest peaks, there whe- This is important to ensure the risks undertaken by re it is often difficult and costly to get to. Wouldn’t
INSURANCE FORUM ARGENTINA 2018 these microinsurers are commensurate with the we want to make sure that even those sources are INSURANCE FORUM ARGENTINA 2018 proportional regulatory approach and remain within protected and looked after given their contribution? the ultimate objective of insurance supervision (i.e. the protection of policyholders). Our economy is only as healthy as those smallest contributors and they can make all the difference! I thought to share a very simple analogy that came to mind when I stared into the distance of one of Let us therefore not turn a blind eye to certain parts the most spectacular views I was ever blessed with. of society, but let us work together to ensure we It occurred to me from the comfort of a reclining provide adequate and appropriate protection to the chair in the warm foyer of my hotel in San Carlos de poorest and most vulnerable members of society.
46 47 BUILDING RESILIENT ECONOMIES G20 - INSURANCE REGULATORS
“Without proper policy protections, recovering from Promoting resilience through insurance has a sig- losses has broader impacts nificant impact on the stability of the real economy. With the growing economic cost of natural disasters on the economy and leaves and other catastrophic events placed on insurers and policyholders, the importance of providing adequate, the most vulnerable without fair and accessible protection for consumers, busi- nesses, and communities becomes crucial. The dis- protections”. cussion on resilience highlighted the need for insu- rance supervisors to help provide policyholders with the options to protect themselves against disaster risk. The session emphasized the key role supervi- We commend the Ministry of Finance of Argentina sors play in effective mitigation by encouraging legis- and its Superintendence of Insurance, for holding latures to be proactive as well as educating uninfor- a meeting of G20 insurance regulators and policy- med consumers to guard against losses. There is a makers, as well as insurance industry stakeholders INSURANCE FORUM ARGENTINA 2018 INSURANCE FORUM ARGENTINA 2018 real need to continue to encourage resilience with on the sidelines of the Insurance Forum in 2018. these on-going global discussions in order to help Insurance is a critical facilitator of economic grow- supervisors, insurers, and policyholders understand th, enhancing financial advancement of economies and be prepared for the risks and financial cost of and consequently of strategic relevance across the Gordon Ito recovering from potentially catastrophic events. Wi- full gamut of the G20 agenda. We believe that such NAIC Secretary-Treasurer and thout proper policy protections, recovering from los- gatherings will be of benefit for G20 leaders, the in- Commissioner, Hawaii Department ses has broader impacts on the economy and leaves ternational community, insurance regulators, and the of Commerce & Consumer Affairs the most vulnerable without protections. global insurance industry. Insurance Division
48 49 BUILDING RESILIENT ECONOMIES G20 - INSURANCE REGULATORS
“Too often in global policy discussions the catalytic role that insurance can play in driving, supporting and sustaining growth is overlooked or not fully acknowledged”. The role of insurance in global policy discussions
Insurance is a key ingredient for sustainable econo- The Insurance Forum as a mic development and the establishment of resilient precedent for the future communities. Too often in global policy discussions the catalytic role that insurance can play in driving, The Insurance Forum set a precedent for more supporting and sustaining growth is overlooked or exchange in the future between key insurance not fully acknowledged. stakeholders and policymakers. It also brought to the forefront the issues at the top of policymakers’ agendas and encouraged discussion on how insu- Highlights from the session rance can contribute to them.
What struck me from the panel discussion was the Highlight about the Insurance breadth of ways that the insurance sector can con- Forum
INSURANCE FORUM ARGENTINA 2018 tribute to building a more resilient economy. Insu- INSURANCE FORUM ARGENTINA 2018 rers both through the products they underwrite as The shared enthusiasm of all involved in the well as through their investment activities can help Forum to help ensure insurance really can make societies deal with challenges they face such as a difference to the lives of individuals, business climate change, natural catastrophes, humanita- and communities. Hannah Grant rian crises and wealth inequalities. The insurance Head of the Secretariat, Access to supervisor has a leading role to play in creating an Insurance Initiative (A2ii) enabling environment which incentivises insuran- ce companies to enter the market whilst also still protecting (vulnerable) consumers.
50 51 BUILDING RESILIENT ECONOMIES G20 - INSURANCE REGULATORS
“Insurance companies can be an important
There is no doubt that the insurance sector plays source of long term stable funding for an important role in supporting the resilience and stability of the economy. By providing financial pro- investment” tection to businesses and individuals it enhances welfare, and increases output and productivity by re- ducing the impact of negative shocks and by freeing resources from costly self-insurance. In addition to supporting resilience, insurance tor (Comisión para el Mercado Financiero -- CMF) This role of insurance in supporting resilience is par- companies can be an important source of long has taken several actions to further facilitate the di- ticularly important in Chile due to its geographic cha- term stable funding for investment, opening an versification of these assets. racteristics. Chile faces several catastrophic risks, in- additional connection between insurance and long cluding high risks of earthquakes and tsunamis. The term growth. Finally, the insurance sector can play a valuable latest earthquake and subsequent tsunami to affect role in supporting robust public sector finances. Chile was in 2010. This was a large (8.8 Richter) and This channel is particularly relevant in Chile, due to Absent insurance, many private sector risks are ul- very costly event. Tragically, it resulted in 500 peo- the important role of annuities in the Chilean private timately transferred to the state. In economies such ple losing their life. Overall costs approached 30,000 pension system. as Chile, that face important catastrophic risks, USD MM or 18% of GDP. this transfer can potentially affect public sector fi- Life insurance companies play a key role in the pri- nances or limit the capacity of the state to respond The insurance sector played a key role in supporting vate pension system. When people retire they have to large scale event. Life expectancy is a second
INSURANCE FORUM ARGENTINA 2018 the recovery of the Chilean economy after the 2010 the option of purchasing an annuity, or can opt to important source of aggregate risk for public sector INSURANCE FORUM ARGENTINA 2018 earthquake. Over 220,000 claims where reported gradually draw their funds from their individual ac- finances in Chile. and paid, with 100% of housing claims inspected in counts. As a result, annuities are the most signifi- 6 months, and 84% liquidated in the same period. cant product for life insurers in Chile (80% of tech- Life expectancy has been progressively increasing Insurance payments reached 6,837 USD million – nical provisions) with Assets Under Management of in Chile in recent decades as a result of improved Kevin Cowan Logan close to 25% of total economic costs1. close to 65 USD billion (around 20% of GDP). As a health, higher income and global trends. The private Commissioner of the Chilean result, the insurance sector plays a relevant role in pension system in Chile transfers a significant part of Financial Market Commission (CMF) the corporate debt and commercial real estate mar- this risk to the private insurance sectors, hence miti-
1 “Terremoto 2010”, Superintendencia de Valores y Seguros (current CMF), 2012; kets in Chile. In recent years, the insurance regula- gating the potential effect on public finances. http://www.svs.cl/portal/publicaciones/610/articles-15031_doc_pdf.pdf
52 53 BUILDING RESILIENT ECONOMIES G20 - INSURANCE REGULATORS
“Despite advances in several Adequate regulation and supervision is a neces- areas, important challenges were associated with reconstruction of uninsured sary condition for these benefits to materialize. households, while SMEs experienced much more On the one hand, prudential regulation must ensure still remain in Chile in the severe shock than larger corporations that where that the insurance sector can adequately absorb and mostly all insured3. In addition, there is also a poten- distribute materialized risk. area of insurance and tial for increasing insurance in certain public sector infrastructure. Private operated concessions in Chile In Chile, a large share of catastrophic risk is reinsu- resilience”. are all fully insured. Public infrastructure – including red in global markets (with companies rated BBB or schools and hospitals is not. The recent issuance of higher). Hence, a key priority for regulation and su- a CAT bond with the support of the World Bank, and pervision in Chile has been this reinsurance of ca- in coordination with Peru, Colombia and México is an tastrophic risks (e.g. issue of rule with key principles interesting development in this area. of an adequate reinsurance management policy, and standardized reporting). lower and where there are still significant number of uninsured households and firms. 3 “Plan de Reconstrucción Terremoto y Maremoto del 27 de febrero de 2010 – Re- sumen Ejecutivo”, Chilean Government, 2010; http://www.ministeriodesarrollosocial. Moreover, the CMF is working closely with the gover- gob.cl/pdf/plan-reconstruccion-resumen-ejecutivo.pdf nment on a draft bill that substantially improves the cu- Despite advances in several areas, important rrent Insurance Law, incorporating International Core challenges still remain in Chile in the area of in- Principles, moving towards risk based capital and surance and resilience. As discussed in the forum, strengthening the supervisory tools of the CMF. By earthquake insurance coverage is low relative to high introducing risk based capital, the new bill could also income countries such as Japan -- in particular in INSURANCE FORUM ARGENTINA 2018 potentially facilitate the role of life insurance compa- homes without mortgages. This lack of coverage is INSURANCE FORUM ARGENTINA 2018 nies in long term finance, by allowing for more flexible more acute in lower income and rural households2. asset allocation than the current limit-based approach. Similarly, only a small share of SMEs are insured On the other, conduct regulation must contribute to against catastrophic risks. As a result, a large share of consumers and firms purchasing affordable insuran- the fiscal costs that arose from the 2010 earthquake ce products that are appropriate for the risks they
face. This is particularly relevant in middle income 2 Encuesta CASEN 2011 “Inclusión Financiera”, http://observatorio.ministeriode- economies such as Chile where financial literacy is sarrollosocial.gob.cl/layout/doc/casen/002_resultados_inclusion_financiera_ca- sen_2011.pdf
54 55 G20 - INSURANCE REGULATORS
MODERATOR
Ignacio Federici | Internal Audit Leader, Promoting Superintendence of Insurance of Argentina
Long-Term and SPEAKERS
Steven Dreyer | Director, Federal Insurance Michael Consedine | Chief Executive Office, Department of the Treasury, United Officer, NAIC, United States Sustainable States Else Bos | Executive Director and Chair for Rakan Bin Dohaish | Member of the G20 Prudential Supervision, De Nederlandsche Program at the Saudi Arabian Monetary Bank N.V. Investment in Authority INSURANCE FORUM ARGENTINA 2018 INSURANCE FORUM ARGENTINA 2018 Jeremy McDaniels | Secretary, Sustainable Infrastructure Insurance Forum (SIF) G20 Regulators Summit
56 57 PROMOTING LONG-TERM AND SUSTAINABLE INVESTMENT IN INFRASTRUCTURE G20 - INSURANCE REGULATORS
“Emphasis on enforcing insurance regulations will also ensure further development and market growth”.
Saudi Arabia is in the midst of a broad effort to tran- • Reduce waiting times for appointments with tended to maintain the financial services sector’s sition to a low-carbon economy and reduce the de- specialists and consultants. stability. pendence of the economy on oil production – creating significant investment needs to finance this transition. On April 24, 2017, the Council of Economic and The program will develop a sustainable and thri- Development Affairs (CEDA) launched ten delivery ving insurance sector in Saudi Arabia. In so doing, Our health care system has benefited from subs- programs to realize Vision 2030. The most pro- it focuses on enhancing the existing regulatory tantive investment in recent decades from private minent of these programs is the Financial Sector environment to drive consolidation and strengthen and public sector. Development Program (FSDP) that aims at de- balance sheet capacity. Emphasis on enforcing in- veloping the national economy and contribute to surance regulations will also ensure further deve- The Kingdom of Saudi Arabia is implementing its achieving the remaining VRPs. The FSDP’s role is lopment and market growth. Vision 2030. For insurance to be part of this Vision, to create a diversified and effective financial servi- we have the following goals: ces sector to support the development of the natio- As a regulator, we support the government to nal economy, diversify its sources of income, and achieve its vision targets by setting a broad and
INSURANCE FORUM ARGENTINA 2018 • Intend to provide health care through public stimulate savings, finance, and investment. deep ground to the insurance sector in addition to INSURANCE FORUM ARGENTINA 2018 corporations both to enhance its quality and to ensuring the stability and resilience of the insuran- prepare for the benefits of privatization in the The FSDP will achieve this ambition by enabling ce sector. longer term. financial institutions to support private sector grow- • Develop private medical insurance to improve th, ensuring the formation of an advanced capital In terms of Infrastructure investment I would talk Rakan Bin Dohaish access to medical services. market, and promoting and enabling financial plan- about mainly the opportunities and challenges as Member of the G20 Program at the ning, without impeding the strategic objectives in- Saudi Arabian Monetary Authority
58 59 PROMOTING LONG-TERM AND SUSTAINABLE INVESTMENT IN INFRASTRUCTURE G20 - INSURANCE REGULATORS
follows which compromised through general dis- • Investors could also be deterred by the asso- cussion with Asset Managers: ciated costs for infrastructure investments, na- mely due diligence, governance and reporting Opportunities costs among others. • Solvency 2’s qualifying infrastructure criteria is • Provide long-term risk exposure, matching in- another challenge in particular for European surers’ long-term liabilities. insurers. Lack of public rating and callable fea- • Offer higher yields than other traditional invest- tures further discourage investors when inves- ments and monetize the illiquidity premium, ting in Matching Adjustment portfolios. which insurers could afford with their capital and liquidity capacity. • Provide good diversification to investors with low correlation to traditional markets. • To be supported by the regulators who offer a lower capital charge for infra equity and debt investments meeting certain criteria.
Challenges
• Limited supply of both infra equity and debt INSURANCE FORUM ARGENTINA 2018 makes it difficult to deploy large AUM into in- INSURANCE FORUM ARGENTINA 2018 frastructure investments. • From an ALM perspective, insurers traditiona- lly invest more in Fixed Income, limiting further the potential capital volumes into infra equities. • For Infra debt, the spread pick-up over corpora- te bonds with similar risk profile could be found unattractive due to supply/demand imbalance.
60 61 PROMOTING LONG-TERM AND SUSTAINABLE INVESTMENT IN INFRASTRUCTURE G20 - INSURANCE REGULATORS
“Capital reallocation by insurers to low-carbon or -sustainable- investments may be constrained by the lack of appropriate The 2018 Insurance Forum was an important oc- tigating physical climate change risks through both investment options”. casion to advance discussions among supervisors, underwriting and investment behaviour – but this and with industry, on the critical role of the insuran- can only be truly effective if there are mechanis- ce sector in addressing new and emerging sustai- ms in place to connect risk management and risk nability challenges – especially physical and transi- modelling expertise to investment decision-ma- • Gathering information from market participants tion risks arising from climate change. king. However, capital reallocation by insurers to through surveys and consultations, in order to low-carbon or “sustainable” investments may be target supervisory activities. At the global level, the Sustainable Insurance constrained by the lack of appropriate investment • Examine regulatory frameworks to assess if Forum (SIF) and the International Association of options – which is most cases is beyond the man- barriers exist to the provision of new insurance Insurance Supervisors clarified the relevance of date of supervisors to act upon. products relevant for sustainable investment (i.e. climate change for supervisory practice through its sustainable infrastructure). 2018 Issues Paper on Climate Change Risks. At In this context, there are many ways supervisors • Work with policy authorities to develop cohe- the Insurance Forum, the SIF Secretariat had the can collaborate – both internationally, and locally rent strategies and frameworks to scale up opportunity to share insights from its ongoing en- with market institutions – to create an enabling envi-
INSURANCE FORUM ARGENTINA 2018 sustainable investment. INSURANCE FORUM ARGENTINA 2018 gagement with leading supervisory authorities wor- ronment for sustainable investment. These include: king on climate risk issues. The SIF would like to thank SSN for convening the • Strengthening supervisory engagements with Forum, and for the invitation to participate in its The transition to a low-carbon economy presents firms on climate change issues, including treat- discussions. Jeremy McDaniels a $26 trillion-dollar investment opportunity – which ment of climate change risks within mainstream Secretary, Sustainable Insurance can only be achieved with significant reallocation governance, risk management, underwriting & Forum (SIF) of capital by institutional investors, including insu- investment practices and functions, rance companies. Insurers’ risk management ex- pertise can make a fundamental contribution to mi-
62 63 PROMOTING LONG-TERM AND SUSTAINABLE INVESTMENT IN INFRASTRUCTURE G20 - INSURANCE REGULATORS
“We believe in the positive role of insurance and its Investment in infrastructure is a key contributor to sustainable economic growth, resilience, job crea- significance in addressing tion, and prosperity. Therefore, improving our nation’s infrastructure is an important concern for the United the global challenges that States, as well as members of the G20. This session was valuable in discussing both the perspectives of are relevant to G20 members insurers interested in investing in infrastructure pro- jects as well as the regulatory framework that ena- today”. bles long term infrastructure investments. The ses- sion emphasized the growing interest from insurance companies to directly invest in infrastructure projects and their role in promoting economic growth. In ad- stakeholders during the 2018 Insurance Forum. We dition, the discussion focuses on the importance of believe in the positive role of insurance and its signi- promoting long-term and sustainable investment in ficance in addressing the global challenges that are infrastructure through regulation and the insurance relevant to G20 members today. For that reason, futu- regulators’ role in responding to regulatory impedi- re meetings will not only benefit G20 leaders by pro- ments that reduce the ability of insurers to invest. viding insurance-based solutions to global problems but facilitate development in insurance supervision, These on-going global discussions concerning in-
INSURANCE FORUM ARGENTINA 2018 legislation, and the insurance industry. INSURANCE FORUM ARGENTINA 2018 frastructure investment are important in continuing to address the underfunding of infrastructure in many countries as well as the joint objective of balancing industry investment and the role of regulators. Michael Consedine We want to extend our thanks to the Ministry of Fi- CEO - NAIC nance of Argentina and its Superintendence of Insurance for facilitating a successful dialogue be- tween G20 insurance regulators, policymakers, and
64 65 PROMOTING LONG-TERM AND SUSTAINABLE INVESTMENT IN INFRASTRUCTURE G20 - INSURANCE REGULATORS
“More and better data and the build-up of
The role of insurance in global The evaluation states that although regulatory re- expertise could help boost policy discussions forms may play a role in the availability and attrac- tiveness of infrastructure investments, these are infrastructure investments”. Insurance companies play an important role in the real subordinate to other factors, such as for example economy, for example as institutional investors and the macro-financial environment and government providers of income security through pension and life policy. Insurance Forum participants recognized insurance products. Policy decisions affecting the in- the general lack of suitable infrastructure invest- As a result, I hope future G20 chairs will follow surance sector may therefore also affect the real eco- ment projects, and especially of ones with a sus- this example and continue to organize Insurance nomy. As a result, interaction and engagement with tainable aspect, as a greater obstacle. Moreover, Forum meetings in the future. the industry is essential. investments in infrastructure have proved challen- ging due to their complexity. More and better data Highlight about the Insurance This takes place at different levels: national, regional and the build-up of expertise could help boost in- Forum and also global. The stakeholder meetings of the IAIS frastructure investments. are a great example of the ongoing opportunities for Despite the great variety of participants and the global policy discussions between supervisors and The Insurance Forum as a sometimes divergent views, participants, led by the the insurance sector. precedent for the future Argentinian authorities, managed to bring the main takeaways of the meeting together in a concluding Highlights from the session Yes, the Argentinian authorities did a very good statement for the G20. The statement recognizes job in bringing together both insurance supervisors the evolving risks, challenges and opportunities
INSURANCE FORUM ARGENTINA 2018 As mentioned before, interaction and engagement and the insurance industry. This joint presence around the globe and stresses the important role INSURANCE FORUM ARGENTINA 2018 with the industry is very valuable in policymaking. was very valuable. As a supervisor, I got the chan- insurance can play in this context. A good example are the discussions on infras- ce to get a better understanding of the hot topics in tructure investments. Globally, there is a growing the sector while the sector was able to gain more demand for the insurance sector to engage in in- insight into current policy discussions. frastructure investments. Although the sector is Else Bos willing to play a larger role, actual implementation Executive Director and Chair Moreover, for me personally the Insurance Forum seems to be challenging. In 2018, the FSB evalua- for Prudential Supervision // was a great opportunity to meet my international ted the effects of financial reforms on infrastructure Nederlandsche Bank N.V. counterparts and broaden my network, after joi- investments. ning the Dutch central bank in June 2018.
66 67 G20 - INSURANCE REGULATORS
MODERATOR
Conor Donaldson | Head of Insurance 2.0: Implementation, IAIS
Facing a Digital SPEAKERS
Hesham Tashkandi | Advisor to the Gustavo Adolfo Araujo Caldas | Governor & Director General of Insurance Technical Analyst and Deputy Coordinator at Disruption Control, Saudi Arabian Monetary Authority the Coordination of International Relations of Superintendência de Seguros Privados – SUSPEP. Michael Sicsic | Head of Supervision, General Insurance, Financial Conduct José J. Riesen Alvarado | Superintendent Authority, United Kingdom of Insurance and Reinsurance of Panamá INSURANCE FORUM ARGENTINA 2018 INSURANCE FORUM ARGENTINA 2018 Katharine L. Wade | NAIC International Insurance Relations Committee Chair and Commissioner, Connecticut Insurance Department G20 Regulators Summit
68 69 INSURANCE 2.0: FACING A DIGITAL DISRUPTION G20 - INSURANCE REGULATORS
With the growth of innovative and new technolo- standards that protect consumers. Further discus- gies impacting the insurance sector, the digital dis- sions concerning developing technologies in the in- ruption session highlighted how regulators could surance marketplace are of continuing importance, work with InsurTech startups to see that industry as technological advances and threats evolve and benefits from technological opportunities as well will need on-going dialogue on a global level. as ensures consumers remain protected. We thank the Ministry of Finance of Argentina and The session importantly discussed the desire and its Superintendence of Insurance, on the success development of new technologies that can impro- of the regulator and industry meetings during the ve the business of insurance by more accurately G20 Insurance Forum 2018. Insurance is a crucial pricing risk, meeting policyholder needs with more force in the growth of the global economy, contribu- efficiency and less cost, and bringing insurance tes to the financial advancement of countries, and products to underserved populations. facilitates the globalization of insurance markets. We believe that the sector’s inclusion in future G20 A highlight of the discussion pointed out that the meeting agendas will be to the benefit of both G20 partnership between regulators and InsurTech star- member countries and regulators and markets tups is a balancing act to ensure innovative ideas around the world. come to market while still meeting the regulatory INSURANCE FORUM ARGENTINA 2018 INSURANCE FORUM ARGENTINA 2018 “Insurance is a crucial force in the growth of the global economy, contributes to the financial Katharine L. Wade advancement of countries, and facilitates the NAIC International Insurance Relations Committee Chair and Commissioner // Connecticut Insurance Department globalization of insurance markets”.
70 71 INSURANCE 2.0: FACING A DIGITAL DISRUPTION G20 - INSURANCE REGULATORS
“It´s time governments and other supervisory authorities truly acknowledge the importance of this business to the global economic stability and development”.
Insurance has long been largely disregarded in In light of that, the very first Insurance Forum con- where they can openly discuss their way forward global policy discussions, especially considering nected to a G20 Presidency that the Argentinian and have their voice heard. the role it has in assuring continuity of businesses government put together in 2018 is surely a land- and the wellness of hundreds of millions around mark to be referenced in the future and a bench- The Argentinian 2018 Insurance Forum was a step the world, in addition to managing trillions of do- mark for the G20 Presidencies to come. in that direction – let´s hope it´s just the first of a llars in funds every year. long and fruitful journey! The three roles of insurance as holder of unique
INSURANCE FORUM ARGENTINA 2018 Maybe it´s because it´s a solutions provider rather expertise in risk analysis, institutional investor and INSURANCE FORUM ARGENTINA 2018 than a problems generator! coverage provider put it in a prime position to deal with a world that is being shaped by climate-rela- It´s time governments and other supervisory au- ted issues and technological advances that are as thorities truly acknowledge the importance of this much opportunities as threats. Insurance will more Gustavo Araujo Caldas business to the global economic stability and de- than ever be a necessity! Technical Analyst and Deputy Coordinator velopment, and more so considering the growing at the Coordination of International Relations challenges currently faced by nearly all, if not all, Therefore, its stakeholders need a forum that is of Superintendência de Seguros Privados economic sectors. close to the decision-making core of governments // SUSPEP
72 73 G20 - INSURANCE REGULATORS
MODERATOR
Guillermo Plate | Deputy Superintendent, Globalizing Superintendence of Insurance of Argentina
Business - the SPEAKERS
Manuela Zweimueller | Head of the Norma Alicia Rosas | President, Insurance Policy Department, European Insurance and and Surety National Commission of Mexico role of a global Occupational Pensions Authority (EIOPA) (CNSF)
Roberto Novelli | Head of the Secretariat Eric A. Cioppa | NAIC President-Elect and reinsurance Office and the Board of Directors, IVASS, Italy Superintendent, Maine Bureau of Insurance Principal INSURANCE FORUM ARGENTINA 2018 Mamiko Yokoi-Arai | INSURANCE FORUM ARGENTINA 2018 Administrator and Head of Insurance, Organisation for Economic Co-operation and market Development (OECD) G20 Regulators Summit
74 75 GLOBALIZING BUSINESS - THE ROLE OF A GLOBAL REINSURANCE MARKET G20 - INSURANCE REGULATORS
“Our main challenge is to achieve balance and to guarantee that insurers properly manage their reinsurance,
In order to achieve an inclusive, sustainable and to highlight the key role of rein- avoiding obstacles for the access to efficient development it is crucial to consider the surance in the mitigation of risks insurance industry. We know the risks we are – caused by natural and man-ma- international reinsurance markets”. increasingly often – exposed to and in which way de disasters. insurance and reinsurance are key elements for the mitigation of impacts and for the increase of Our main challenge is to achieve resilience in our society. balance and to guarantee that insurers properly manage their The Insurance Forum highlighted the importan- reinsurance, avoiding obstacles for the access to of the main ideas of this Administration. We are
INSURANCE FORUM ARGENTINA 2018 ce of the Industry for the challenges faced globally international reinsurance markets, with the bene- convinced that the growth of the industry and of INSURANCE FORUM ARGENTINA 2018 nowadays and the way in which insurance must be a fits that a greater diversity brings to the system. the economy as a whole undeniably leads to the key player in finding solutions. During the event, su- To that end, we need to foster international coo- need of having international reinsurers operating pervisors and the industry worked together as a uni- peration sharing opinions and discussions among in the country, for the international capital to provi- que sector in the context of international economy. regulators, for a grater information exchange, with de more reinsurance capacity. Guillermo Plate increasingly open and transparent markets. As a moderator of the panel “Globalizing Business, Deputy Superintendent, Superintendence the role of a global reinsurance market” I would like of Insurance of Argentina To conclude, I would like to emphasize the reope- ning of the reinsurance market in Argentina as one
76 77 GLOBALIZING BUSINESS - THE ROLE OF A GLOBAL REINSURANCE MARKET G20 - INSURANCE REGULATORS
The role of insurance in global Highlights from the session It is the responsibility of the board of directors, policy discussions taking account of the strategic objectives and con- I would like to focus on some strictly prudential to- sistently with the risk management policy, to approve As clearly emerged during the Insurance Forum the pics: reinsurance supervision, as part of the ove- the reinsurance policy and other risk mitigation te- role of the insurance sector “in” and “for” the eco- rall process of supervision over insurance and re- chniques; the management choices made must be nomy is -hopefully- supposed to grow, in order to insurance undertakings, in the context of the IAIS’ consistent with the policy adopted and any departu- tackle important challenges/opportunities. To name guidance on reinsurance and other forms of risk res from such policy must be promptly reported to a few: reduce protection gaps (increasing longevity, transfer (ICP 13). the administrative body; specific tasks are assigned natural events), build resilience and promote sus- to the actuarial function, which is required to express tainable growth in our countries (high quality infras- During the session I was asked: an opinion on the adequacy of reinsurance arrange- tructures, “finance for growth”). ments (I.e. effects of reinsurance on the estimate of if there could be a risk of over-dependence on the technical provisions net of the amounts recovera- There is an ongoing worldwide debate, with some internal oversight of reinsurance arrangements, ble from reinsurance, effectiveness of arrangements peculiarities due to the specific nature of each area and if and when supervisors need to take a lar- underwritten for the purpose of mitigating the volati- of the planet; the debate is intense in Europe in the ge role in examining companies’ reinsurance lity of own funds) both under normal conditions and context of the revision of the European prudential arrangements. under stress conditions (reinsurers’ default, potential regime (Solvency II). exhaustion of reinsurance); additional information I’d say no (over-dependence). The framework of ru- flows towards the supervisor are envisaged in case IVASS’ Chairman recently stated that “…the Solven- les and controls on risk management envisages a the undertaking has recourse to non-traditional re-
INSURANCE FORUM ARGENTINA 2018 cy II review …. gives us the chance to strike a new comprehensive system of checks and balances insurance treaties, such as financial reinsurance or INSURANCE FORUM ARGENTINA 2018 balance between policyholders’ protection, a sound both within the undertaking and in the relations and finite reinsurance (objectives and main features of and prudent management of insurance companies, information flows between insurance undertakings the treaty, accounting procedures, economic and fi- and the role the insurance sector is asked to play in and supervisors. nancial impact, possible relevance for the purposes supporting economic growth in our countries”1. In accordance with the provisions of ICP 13, under of compliance with the requirements of prudential Roberto Novelli the Italian regulatory framework, reinsurance super- supervision). In the context of the ORSA, a specific
Head of the Secretariat Office and the 1 https://www.ivass.it/pubblicazioni-e-statistiche/pubblicazioni/att-sem-conv/2018/0110/ vision is part of the overall process of supervision description of risk mitigation techniques. Board of Directors, IVASS, Italy Rome_1_10_18_SII_3rd_Conference_Rossi.pdf?language_id=3 over insurance and reinsurance undertakings, with Please find below the hyperlink video and documents related to our 3rd Conference on Solvency II where, to some extents, the role of insurance sector for/in the economy has particular regard to governance, the internal control It is our responsibility and power to check the co- been discussed: https://www.ivass.it/pubblicazioni-e-statistiche/pubblicazioni/att-sem- conv/2018/0110/index.html system and the risk management system. rrect functioning of the system of governance and
78 79 GLOBALIZING BUSINESS - THE ROLE OF A GLOBAL REINSURANCE MARKET G20 - INSURANCE REGULATORS
“It is our responsibility and power to check the correct
risk management, including reinsurance and other functioning of the system nerates capital “funding” alternative to the recourse to risk-mitigation techniques, challenge the undertaking the financial market. Pursuant to the regulations in force, the conclusion of and its representatives on the adequacy/appropriate- of governance and risk reinsurance treaties is not subject to a prior notifica- ness of the reinsurance policy and its correct/effecti- The strategic importance of reinsurance and of the tion requirement, however undertakings and IVASS ve implementation (i.e. actual and sufficient transfer management”. other forms of risk transfer has aroused great interest have felt the need to establish an early dialogue of risk) and, where necessary, require corrective me- from insurance and reinsurance undertakings and for the examination, on a case by case basis, of the asures and monitor their implementation. brokers, which are now offering on the market increa- more complex reinsurance treaties. In accordance with the principle of proportionality singly innovative forms of reinsurance. Those that The supervisor has a wide choice of tools avai- underlying the prudential framework of Solvency II have been examined by IVASS concern both life and In some cases the proposed solutions have not been lable: narrative and quantitative supervisory repor- (and our internal supervisory manual), the super- non-life risks. judged adequate to be used as a tool for the transfer ting (QRT - the EIOPA templates which reproduce visor should play an increased role in those situa- of the insurance risk. almost in full the flow of data envisaged by the Italian tions where the outcome of the overall supervisory A key issue for reinsurance contracts is that the legislation until the entry into force of Solvency II), assessment has highlighted critical issues regarding transfer of the insurance risk may be calibrated to The technicality and the complex contractual arran- specific information flows, requests for documents, the financial position (gradual deterioration of the varying degrees, or there can even be no transfer gements raise also a question of level playing field inspections and/or meetings with the management, solvency position) or weaknesses in the governance at all, according to the different contract terms. in the treatment of these instruments as risk-miti- auditors, exchanges/cooperation with other supervi- system (for ex. in the actuarial or risk management gation techniques and, consequently, in the super- sors involved in the supervision over the group and/ function). Specific mention should be made of the These tailor-made solutions are based on the speci- visory practices adopted in the various countries. In or companies linked to the supervised undertaking actual transfer of the risk. fic risk profile of the single undertaking and therefore this framework IVASS has started an exchange of or to the reinsurer (taking also account of the cross must be treated by the supervisor in the same way. information with other Supervisors.
INSURANCE FORUM ARGENTINA 2018 border nature of many reinsurance operations). The prudential regulation fully recognizes the effects An in-depth examination, to be made on a case by INSURANCE FORUM ARGENTINA 2018 of the transfer of risks to the reinsurers and considers case basis, must be done in order to determine the Moving to the second question (Do supervisors need reinsurance as an integral part of the processes un- actual transfer of the insurance risk and the relevant to take a large role in examining companies’ reinsu- derlying risk management and the determination of implications from a financial, organisational and ac- rance arrangements), I would say It depends. the capital requirement. counting point of view. The peculiarities of the national insurance market and/or the specific situation of the single insurers mi- In this context reinsurance may pursue the goal of For this purpose it is essential to examine in-depth ght be the key drivers. optimizing capital requirements through the reduc- the own-risk and solvency assessment (known as tion of risks and may also have significant effects on ORSA), the capital management policy, the medium the strategic management of own funds since it ge- term business plan and the liquidity plan.
80 81 GLOBALIZING BUSINESS - THE ROLE OF A GLOBAL REINSURANCE MARKET G20 - INSURANCE REGULATORS
“This forum session highlighted the important role reinsurance has in helping to mitigate risk and provide resilience”. Due to natural disasters and man-made events having significant losses and costs at both the lo- As the insurance sector plays a significant role in cal and global levels, the need for reinsurance in the discussions related to the political and econo- providing capacity is crucial. This forum session mic problems that G20 members face as well as highlighted the important role reinsurance has in the development of the global economy, it is only helping to mitigate risk and provide resilience. logical that the insurance industry joins the discus- sion agenda of the G20. We believe that continuing More importantly, it emphasized that having a glo- international engagements, like the Insurance bal reinsurance market helps to spread these ris- Forum, are essential for the development and be- ks. This highlights the importance of the event in nefit of the insurance industry and G20 members. that it is necessary for supervisors to understand how reinsurance and other forms of risk transfer operate as well as how insurers use such mecha- nisms. Therefore, having continued international INSURANCE FORUM ARGENTINA 2018 cooperation and exchanges of information helps INSURANCE FORUM ARGENTINA 2018 facilitate these markets and better allows supervi- sors to protect policyholders.
Eric Cioppa We applaud the Ministry of Finance of Argentina NAIC President-Elect and Superinten- and its Superintendence of Insurance for hosting dent, Maine Bureau of Insurance G20 insurance regulators, policymakers, and in- dustry stakeholders in meetings during the Insu- rance Forum 2018.
82 83 G20 - INSURANCE REGULATORS
“The Insurance Forum provided an opportunity to dive deeply into the crucial role of (re)insurance and Closing Remarks protection of policyholders As supervisors, we recognise that our principal ob- in light of evolving risks, jective is to contribute to fair, safe and stable in- surance markets for the benefit and protection challenges and opportunities of policyholders. But increasingly supervisors are strengthening their voice in discussions on key glo- around the globe, such bal policy issues. as economic resilience, The Insurance Forum provided an opportunity to dive deeply into the crucial role of (re)insurance and contributions to the real protection of policyholders in light of evolving risks, challenges and opportunities around the globe, such economy and promotion of as economic resilience, contributions to the real eco- INSURANCE FORUM ARGENTINA 2018 INSURANCE FORUM ARGENTINA 2018 nomy and promotion of sustainable growth, as well sustainable growth, as well as supporting innovation. as supporting innovation”. Going forward, I am hopeful that the importance of Jonathan Dixon insurance for furthering global policy goals under Secretary-General // International the G20 will continue to be recognised and that your Association of Insurance Supervisors (IAIS) efforts to position Insurance Supervision and the Insurance Industry as crucial contributors will find broad support.
84 85 G20 - INSURANCE REGULATORS INSURANCE FORUM ARGENTINA 2018 INSURANCE FORUM ARGENTINA 2018
86 87 INSURANCE FORUM 2018
Insurance Forum 2018 INSURANCE FORUM ARGENTINA 2018 INSURANCE FORUM ARGENTINA 2018
88 89 INSURANCE FORUM 2018
EXECUTIVE Chairman | Adrián Werthein, Shareholder // Grupo Werthein. COMMITTEE
Adrián Werthein is a shareholder of Werthein fourth company in the insurers ranking, having al- Chairman Group, one of the most important locally-owned most one million members and covering more than Adrián Werthein // Grupo Werthein. private holdings of Argentina, which is also directed one-hundred thousand companies. In addition, the and managed by members of the Werthein family. Group owns most of the shares of La Estrella S.A. Between 1960 and 1970, the Werthein family star- Compañía de Seguros de Retiro, and it was one Co-chairman ted to play a part in the insurance business through of the shareholders of Telecom Argentina, one of Alejandro Simón // Sancor Seguros a company called La Defensa Compañía de Segu- the largest telecommunications company of La- ros Generales, which was later sold, and through tin America. Adrián Werthein is also shareholder another one, called El Refugio Compañía de Segu- and Vice-chair of Gregorio, Numo y Noel Werthein Co-chairman ros Generales. Likewise, in the early 1900s, Wer- (GNNW), a group form the agribusiness sector. Mr. Recaredo Arias // GFIA thein Group acquired the state-owned company Werthein was also General Manager and Deputy Caja Nacional de Ahorro y Seguro founded in 1915, Director of Banco Mercantil Argentino. In addition, through a privatization process. Later, together with he is the President of the Inter-American Council Co-chairman
INSURANCE FORUM ARGENTINA 2018 the Italian Group Assicurazioni Generali, Werthein for Trade and Production (CICYP), President of the INSURANCE FORUM ARGENTINA 2018 José Cardoso // IRB Brasil RE. Group jointly managed the companies belonging to Latin American Jewish Congress and a member the Caja group: La Caja de Seguros, La Caja de of the World Jewish Congress (WJC) Executive Seguros de Retiro, la Caja Aseguradora de Riesgos Committee. He is also a member of the Buenos Co-chairman de Trabajo, and La Estrella Seguros de Retiro; thus Aires Stock Exchange Steering Committee and a Toyonari Sasaki // Life becoming the largent insurer group of Argentina. member of the Board of Governors of the Universi- Insurance Association of Japan. Adrián Werthein was the Chariman Presidente ty of Tel Aviv since 1977. Mr. Werthein also held the of La Caja de Ahorro y Seguro for twenty years, Chair of Fundación Ineba (Buenos Aires Institute between 1994 and 2014. Now, Werthein Group of Neurosciences) and of Grupo Joven de Campa- owns 100% of the shares of Experta ART S.A., the ña Unida Argentina - Grupo King David.
90 91 INSURANCE FORUM 2018
Co-chairman | Alejandro Simón, Co-chairman | Recaredo Arias, CEO Sancor Seguros Vicepresident, Global Federation of Insurance Associations (GFIA) and General Director, AMIS
Alejandro Simón has an Actuary degree, Cum Since 2009, he has been Deputy Director of the Mr. Arias holds a bachelor’s degree in Business implementation of Solvency II regulation among Laude from Universidad de Buenos Aires and a Actuary career at Universidad of Buenos Aires Administration from Universidad Nacional Autóno- Mexican Insurers, proposed amendments to the Professional Master’s degree in Business Adminis- (UBA). Likewise, in 2010 he became a member of ma de México (UNAM) and a M.B.A. specialized in CNSF in favor of Mexican insurers, as well as he tration, Magna Cum Laude from IAE Universidad the Academic Committee for the Master’s Degree Finance and Marketing from Instituto Tecnológico participated on the negotiation of the new Mexican Austral. in Economic and Financial Risk Management for de Estudios Superiores de Monterrey (ITESM). insurance law (LISF). Also, he has participated in the School of Economics Graduate Studies Divi- the development of Microinsurance in Mexico and Since 1998, he has been working for Sancor Se- sion (UBA). He has written several publications Since the beginning of his career he has been throughout LATAM, additionally he coordinated guros Insurance Group, currently holding the CEO on the social security sector and taught national involved in the financial sector, specifically in the an IDB-FOMIN-MICROINSURANCE project in 6 position. He is President of ADIRA (Aseguradoras and international courses and seminars on insu- insurance sector. He was General Director for the countries including 10 insurance companies. In del Interior de la República Argentina, one of the rance, reinsurance, actuarial science and social first time in AMIS from 1989 to 1992. Also, he was 2008 he was General-Secretary of the Federación main insurance associations in Argentina), Presi- responsibility. General Director in several finance and insurance Iberoamericana de Empresas de Seguros (FIDES) dent of the FISO Superior Council (Latin American companies like in Aseguradora Cuauhtemoc from until 2010. Foundation of Security and Occupational Health) 1992 to 1993, Deputy Director of Administration and member of the Geneva Association Board of and Finance in Banca CREMI from 1993 to 1994, Besides that, he has been Vice-president of Glo- INSURANCE FORUM ARGENTINA 2018 Directors. He also presides over CITES (Centre for and General Director in Seguros La Territorial bal Federation of Insurance Associations (GFIA) INSURANCE FORUM ARGENTINA 2018 Technological, Business and Social Innovation), (nowadays Insurance QBE) from 1994 to 2001. since 2012, which is the main organization that re- the main private incubator of startups in LATAM presents the interests of insurers and reinsurers in following the model “one stop-shop tech incubator”. He came back once again as General Director 61 countries. Additionally, he chairs the Financial He is co-chair of the G20 Insurance Forum. in AMIS in 2003. AMIS represents the insurance Inclusive Working Group. companies at the authorities, public, private and Before joining Sancor Seguros Insurance Group, social sectors and gives support to its associates he worked in the fields of risk rating and social to spread and promote insurance, whereby he security. had participated in NAFTA negotiations, achieved
92 93 INSURANCE FORUM 2018
Co-chairman | José Carlos Cardoso, Co-chairman | Toyonari Sasaki, President, IRB Brasil Re Vice-Chairman, The Life Insurance Association of Japan
Mr. Cardoso holds a Bachelor’s degree in Mechanical Engineering from Mogi das Cruzes University Toyonari Sasaki is the Vice Chairman of the Life te the broad spectrum of interests across relevant (UMC), an Appraisal Engineering degree from the University of São Paulo (USP), and a post graduate Insurance Association of Japan, a trade asso- ministries. degree in Occupational Safety Engineering from the Armando Álvares Penteado Foundation (FAAP). ciation comprised of all life insurers operating in As the Chief Domestic Coordinator for the TPP, he Japan. He also serves as an executive committee oversaw the general coordination of interests ran- Prior to IRB Brasil Re, he was president of SCOR Brasil, where he had technical and operational res- member of the Global Federation of Insurance As- ging from ministries to domestic stakeholders. He ponsibility for reinsurance activities for all of Latin America, and before he was a Technical Director at sociations (GFIA), a trade body representing the participated in the TPP framework from the pre-ne- Munich Re – Brazil. interests of insurers and reinsurers in 60 countries gotiation stages to formal negotiations in close through its 41 member associations. cooperation with the Chief Negotiator, and played He joined the LIAJ in April 2016 after devoting his a key role in reaching the agreement in principle career to public service for 40 years. Prior to the on the TPP. LIAJ, he served at the Cabinet Secretariat for 6 years, first as the Assistant Chief Cabinet Secre- Prior to joining the Cabinet Secretariat, he served tary for domestic affairs from 2010 to 2013, and in the Ministry of Finance, where he gained strong
INSURANCE FORUM ARGENTINA 2018 then as the Chief Domestic Coordinator for the expertise on the budget, tax policy and financial INSURANCE FORUM ARGENTINA 2018 Trans-Pacific Strategic Economic Partnership supervision, combined with all-around skills ne- Agreement (TPP) from 2013 to 2016. cessary to perform general coordination in the As the Assistant Chief Cabinet Secretary for do- ministry. As the founding director of the Banks mestic affairs, he served under both DP (Demo- Division, he supervised commercial banks at the cratic Party) and LDP (Liberal Democratic Party) newly established Financial Services Agency, and administrations, playing a pivotal role in planning played a key role in overcoming the domestic fi- and coordinating key policies for the Cabinet. His nancial crisis, in particular by championing the wri- background in the budget, tax policy and financial te-off of nonperforming debt and restructuring of supervision enabled him to successfully coordina- mega-banks to re-stabilize the financial system.
94 95 INSURANCE FORUM 2018
Building public policies “This meeting The 2018 Insurance Forum gathered together for We have created a precedent which will certainly the first time representatives of insurance markets last for years and this event will be repeated every constituted a from all over the world in Argentina in an event pro- year in the country hosting the G20. moted by the Ministry of Treasury and organized by the Argentine Insurance Authority (SSN), with the I would particularly like to thank the other four milestone for objective of agreeing in the design of public policies. co-chairmen: Alejandro Simon, CEO of Sancor Se- guros; José Cardoso, president of IRB (Institute of The priorities chosen by the Argentine G20 presi- Reinsurance of Brazil); Recaredo Arias, president the insurance dency were the Future of Work, the Infrastructure of GFIA (Global Federation of Insurance Associa- for Development and a Sustainable Food Future. tions); and Toyonari Sasaki, Vice Chairman of the These were the main ideas directly connected to Life Insurance Association of Japan. sector” our Forum.
INSURANCE FORUM ARGENTINA 2018 This meeting constituted a milestone for the in- INSURANCE FORUM ARGENTINA 2018 Adrián Werthein surance sector, an opportunity of dialogue. The Shareholder // Grupo Werthein. conclusions were further used as pragmatic re- Chairman, Insurance Forum. commendations for the agenda of G20 presidents. Likewise, it constituted an opportunity to show the importance of the insurance industry, its capability of developing solutions and enabling financial re- sources for the Government and the companies.
96 97 INSURANCE FORUM 2018
Is very nice to receive you here, in this special pla- bitious infrastructure plan of our history. We must ce, one of the beauty that we have in Patagonia. recover our infrastructure, we must reduce the cost Bariloche is one of the favourite tourist destination of our logistics, because this is a bottle neck for our in our country, both for Argentineans and for those development. We have a goal to construct twice who visit us every year, from all around the world. as many highways, during these 4 or 5 years, as For a lot of you, perhaps, is the first time in our those constructed in the last 65 years. Nowadays, country, and there are a lot of very nice places to there are under construction almost 3.000 km of hi- visit, and we hope you come back once and again. ghways. We are constructing these roads with cost “We are opening reductions of almost 50% of the cost that the State Argentinians choose to change. In 2015, the citizens paid during the former government. We are reco- of this country, decided for a deep change in Argen- vering the freight railways. Argentina used to have our country to the tina. Because of that, Mauricio Macri was elected in one of the biggest freight networks one century ago. 2015 and we began this government 3 years ago. Nowadays there is under construction 16.000 tracks And this conviction of change was reconfirmed last and we have a PPP programme for the construction world,” year in the mid-term election, where again we won of another 8.000 tracks. We launched the first P3 that election. Since that moment in December 2015, programme very successfully. This contract for UDS we began a very deep transformation in our country. 6 billion was signed last 31st of July and the wor- INSURANCE FORUM ARGENTINA 2018 INSURANCE FORUM ARGENTINA 2018 Lic. Guillermo J. Dietrich Argentinians are working to have strong institutions, ks are beginning in these days. We received offers Minister of Transport of we are fighting strongly against corruption, with a from ten joint ventures, seven international compa- Argentine Republic. free corruption policy. We have nowadays, an inde- nies, 32 offers for six concessions, 32 billion USD pendent justice with completely freedom to work. of offers. We are opening our country to the world, tidying relations with most of the countries, working toge- We are improving public transport all around the ther, having a conversation and with a great support country. We have a goal to duplicate domestic air from the most important countries in the world. We passengers during these 4 years. Here also there have free press, and also, we began the most am- is a big room of opportunity. Air companies from all
98 99 INSURANCE FORUM 2018 “Tall of these are very profound changes with which we intend to change Argentina into a more modern country, fairer and better integrated to the world...”
around the world are coming here, investing and in- predictable legal frameworks and market friendly develop a more equal country with opportunities for troducing new air companies in our country. We are conditions, in order to guarantee that these invest- everybody. renewing most of the airports in all the country, land ments are poured into the real economy in the long size and air size. We are modernizing our ports, re- term, thus contributing to the development of our Again, for institutions like yours, being involved in ducing the cost of the ports, making better access country, especially by reducing infrastructure gaps this process, will help us to achieve faster our goals. for the tracks. We know we are one of the big grain and create jobs. Thank you very much. exporters in the world. Here in Argentina there are great opportunities for Because of this, Argentina is a land of opportunity. I all of you. We see the government, the state as fa- am convinced that the next 20 years will be the best cilitator. And we have opening hands to receive you two decades of our country. Because all of these and to help you to develop your business in our are very profound changes with which we intend to country. change Argentina into a more modern country, fai-
INSURANCE FORUM ARGENTINA 2018 rer and better integrated to the world, and above all, I want to finish again saying thanks for being here. INSURANCE FORUM ARGENTINA 2018 a country with great opportunities, with great peo- A lot of you have travelled from far away from Ar- ple, with natural resources, a young country. gentina. I really appreciate that you are here in this moment, seeing with your eyes what is happening There are a lot of opportunities, but also, in the role in our country, how is going this deep transforma- of the insurance companies as institutional inves- tion. We know that we have big challenges ahead, tors. Insurance companies hold approximately 30 but we are convinced that we are in the right direc- trillions of assets and their managements, making tion, doing what is right, always following the rules them one of the largest institutional investors in the of law, fighting against corruption and working to world. Our challenge is to provide fair, stable and
100 101 INSURANCE FORUM 2018
MODERATOR
Jonathan Dixon | Secretary-General, International Association of Insurance Building Supervisors (IAIS).
Resilient SPEAKERS
Rodney Lester | Senior Advisor and Girish Kulkarni | MD&CEO, Star Union Program Director, Non Bank Financial Dai-ichi Life Insurance. Economies Institutions, The World Bank. Shaun Tarbuck | CEO, International Mike McGavick | Deputy Chairman, AXA Cooperative and Mutual Insurance XL, a Division of AXA. Federation (ICMIF).
Vice-Chairman, The Life Marcos Ayerra | Chairman of CNV, INSURANCE FORUM ARGENTINA 2018 Toyonari Sasaki | INSURANCE FORUM ARGENTINA 2018 Insurance Association of Japan (Co-Chair the Argentine Securities & Exchange Insurance Forum). Commission.
Insurance Forum 2018
102 103 BUILDING RESILIENT ECONOMIES INSURANCE FORUM 2018
“An economy’s ability to
Insurance and Economic ket losses. Moreover, insurers’ investment portfolios, absorb risk determines its Resilience which are selected largely to match the underlying characteristics of insurance liabilities, were able to capacity for innovation, and The Government of Argentina is to be congratulated absorb sizeable losses….’1. in recognizing the growing importance of insurance hence the ability to diversify”. in an unstable world through the recent highly suc- Why is this important? Well, an economy’s abili- cessful Insurance Forum in Bariloche. This in turn ty to absorb risk (including long term financial risks reflects the G20’s role post the Great Recession in such as retirement) determines its capacity for in- shows that risk toolkits that do not include insu- directing the IMF and Financial Stability Board to novation, and hence the ability to diversify. A diver- rance lead to sub optimal economic performan- look at the broader financial sector when assessing sified economy is more resilient and as a result has ce. The main classes of insurance involved are financial stability in individual countries. It is to be a more consistent growth path - a virtuous cycle. property and business continuity insurance at hoped that future G20 Summits will be preceded If we focus on external shocks the key source of the enterprise level, catastrophe coverages at by opportunities to showcase the importance of the resilience is flexibility – firstly flexibility in monetary, the sovereign level and crop insurance, lives- non bank sector. fiscal and exchange rate policy; secondly an institu- tock insurance, health insurance and life insu- tional framework available to respond quickly and rance for the working poor. In this regard the International Association of In- effectively –competent first responder organizations • There is less research on funds flow disruptions surance Supervisors has pointed out that insurers including EMAs and an independent central bank; arising from liquidity or business cycle disrup- operating in their traditional areas have a different thirdly efficient infrastructure including transport and tions – but there is recent evidence that strong risk profile to credit institutions and were less affec- communications, and finally a financial sector that long term investors including life insurers and
INSURANCE FORUM ARGENTINA 2018 ted during the crisis: ‘The financial crisis of 2008/09 can provide funds in a crisis as well as in normal pension funds at least maintained aggregate INSURANCE FORUM ARGENTINA 2018 has shown that, in general, the insurance business circumstances. In terms of this last precondition the liquidity for bond markets in both the US and model enabled the majority of insurers to withstand evidence is that insurers are a critical component of Europe during the 2008 financial crisis (althou- the financial crisis better than other financial institu- economic resilience: gh there was a rotation from the South to the tions. This reflects the fact that insurance underwri- North in the EU). Rodney Lester ting risks are, in general, not correlated with the • A substantial body of reviewed research on • In terms of direct insurance sector contribution Senior Advisor and Program economic business cycle and financial market risks both rapid and slow onset natural disasters to systemic risk the Geneva Association found Director, Non Bank Financial and that the magnitude of insurance liabilities are, Institutions, The World Bank. in very broad terms, not affected by financial mar- 1 https://forinsurer.com/files/file00400.pdf
104 105 BUILDING RESILIENT ECONOMIES INSURANCE FORUM 2018
“Cyber risk is an emerging third source of external economic shocks and it seems likely that cyber little cause for concern after a rigorous study2 tions4. The facts are that in the US from 2007 to 2016 insurance will become an important macro and the European Systemic Risk Board has there was only one calendar year (2008) when the determined that linkages between insurers and insurance sector did not contribute to GDP growth, resilience”. banks are not likely to be a major source of sys- while the banking sector only contributed positively temic risk3. in 3 of those 10 years. The rate of impairment of in- surers was also much lower during that period than Cyber risk is an emerging third source of external of banks5. markets and are taking pragmatic rather than overly However the development of a strong insurance sec- economic shocks and it seems likely that cyber in- theoretical approaches. tor is not guaranteed and is dependent on a wide surance will become an important macro resilience The current short term solvency approach in EU range of factors. Some are baked in and cannot be tool. Wired magazine has recently estimated that the countries has already seen life insurers moving away In terms of the larger economic picture the significant changed in the short term if at all. However some can NotPetya virus that closed down a number of major from long term guarantee products (despite the LTG body of panel evidence now available and modern be addressed through policy – low inflation (inflation international firms- including major logistics opera- measures in the Omnibus II package) and a recent econometric methods strongly support the thesis kills long term savings); healthy credit sources; an tions - cost in excess of US$ 1 billion. The cost to politically driven weakening of solvency requirements that insurance supports inclusive economic growth. active capital market including a normal yield curve; FEDEX’s European operations is estimated at $400 for qualifying infrastructure investments. This latter The transmission mechanisms are numerous and in- enforceable property rights and honest courts; su- million and MAERSK suffered a similar loss – not to move has proved to be somewhat futile due to lack clude risk transfer, signaling through risk pricing, the pportive tax policy; strong professional and manage- mention the disruption to their clients operations. of supply and the ability of insurers outside the EU provision risk management services and the assu- ment classes; compulsory social and general liability regime to better take advantage of what is available. rance of ongoing liquidity to long term asset markets insurance; minimal state involvement – except possi- Unfortunately the international insurance market is – and in some cases to banks (for example insurers bly for flood and terrorism insurance; an appropriate facing a fundamental threat to its important roles in The recent focus on activity based supervision and are significant purchasers of covered bonds in some solvency regime; the ability of the supervisor to inter- dealing with risk and supporting growth. This is the recovery/ resolution standardization offer more suita- markets). Insurance is the financial first responder – vene and remove weak players from the system; and INSURANCE FORUM ARGENTINA 2018 push for a short term VAR measure of solvency that ble pathways for insurance oversight and hopefully a but its impact is much deeper - less capital needs to a reasonable consumer protection regime. INSURANCE FORUM ARGENTINA 2018 is reliant on a discredited financial model, ignores the less bank oriented solvency approach can be found be held by households and industry, credit provision superior long term risk return characteristics of equi- as Solvency II undergoes review. Fortunately a num- is freed up, and commerce, trade and innovation are ties and other longer term asset classes and takes ber of the major emerging markets, while moving facilitated. What little evidence is available at a more no account of the more resilient cash flow characte- towards a risk based regulatory model, have deci- granular level, points to property, life and health as ristics of well run insurers compared to credit institu- ded to learn from the experience of more developed being the most important classes supporting short term growth, with motor possibly having a longer 2 https://www.genevaassociation.org/research-topics/financial-stability-and-regula- tion/insurance-sector-investments-and-their-impact 4 see for example https://econpapers.repec.org/paper/iiepbrief/pb15-5.htm term impact. 3 https://www.esrb.europa.eu/pub/pdf/reports/2015-12-16_esrb_report_annex_2. 5 see https://www.iii.org/sites/default/files/docs/pdf/insurance-driver-econ-grow- pdf?750ed37e01e7916c87a28844f7531cbf th-053018.pdf
106 107 BUILDING RESILIENT ECONOMIES INSURANCE FORUM 2018
“Today, a broader set of
The G20 Insurance Forum was a valuable step resources, capabilities and • Frictional costs: How they can impact the forward in addressing an increasingly urgent prio- affordability of microinsurance products and rity: creating more resilient economies – locally, expertise also are available the ways they could be reduced. nationally and globally. • Innovations: The opportunity to use new tech- to help mitigate impacts”. nologies, data sources and tools to develop a We only need to scan the headlines to recognize more granular understanding of a given loca- the urgency of the topic and why we need to get tion’s exposure to natural catastrophes. after it. In today’s highly inter-dependent and inter- government, multilateral organizations and the pri- • Opening up markets: How the restrictions re- connected world, events on any given continent can vate sector, along with experts in public policy, law, insurers face in some markets can impede the reverberate rapidly and widely. It was not so long science and related fields, the Insurance Forum ability to spread risk globally and harness al- ago, for instance, that the economic effects of a provided an opportunity to discuss and debate the ternative sources of capital, including Insuran- major earthquake would be confined mainly to the types of actions that can be taken collectively and ce Linked Securities. areas directly impacted by the tremors. Today, we individually to create greater resilience. • Knowledge sharing: The opportunities for trans- read about catastrophes in “distant” lands with hea- ferring the commercial P&C industry’s knowled- vy hearts knowing of the immense human suffering Since this was the first time the G20 explicitly exa- ge and expertise in managing and minimizing of those on the ground and the economic effects not mined the role of insurance in promoting growth risk, e.g., via more stringent building codes and only on the local economy but also on countries and and economic development, the discussions ne- adopting the concept of “build back better”. companies far removed from the destruction. cessarily focused more on establishing a common understanding of the relevant issues and setting Importantly, however, these inter-dependencies
INSURANCE FORUM ARGENTINA 2018 the agenda for future action. In this regard, I was INSURANCE FORUM ARGENTINA 2018 also work in the other direction. While the financial highly encouraged by the emerging consensus consequences of a natural disaster are felt more around a number of critical topics including: widely today, a broader set of resources, capabili- ties and expertise also are available to help mitiga- • Parametric schemes: How they can provide Mike McGavick te impacts. The challenge, of course, is effectively absolute clarity and certainty around what tri- mobilizing these diverse assets to help build more Deputy Chairman, AXA XL, a ggers insurance coverage while also being a resilient and sustainable economies. Division of AXA cost-effective solution for sharing and mitiga- Which is why events like the G20 Insurance Forum ting a wide range of risks. are so essential. By bringing together leaders from
108 109 BUILDING RESILIENT ECONOMIES INSURANCE FORUM 2018
“We, The Life Insurance
The Insurance Forum Argentina was a signifi- plan is one thing, but to understand the difference Association of Japan, have cant milestone for the global insurance industry. between their lifetime asset duration and lifespan, We, The Life Insurance Association of Japan, have and to be prepared for it, is very important. decided to hold another decided to hold another Insurance Forum on June 5 2019 in Tokyo, building on the legacy of Insuran- Protection is another thing. It is important to have Insurance Forum on June ce Forum Argentina. I believe this best evidences appropriate insurance against any unexpected ris- the importance as a precedence. ks that may decrease one’s asset. This has long 5th 2019 in Tokyo, building been the purpose of insurance, but its importance In the session, I highlighted the impact of ageing will be much greater in the coming years. on the legacy of Insurance based on our experience in one of the most aged society entering into “The 100-year life era”. In the As for prevention, it is crucial to maintain good Forum Argentina”. ageing society, it is critically important that people health to go as planned, so people need to be are well-prepared for the risk of shortage of asset conscious to lead a healthy lifestyle. It is an orga- during their lifetime. While we are in transition to nic development for insurers to provide incentives the increasing longevity era, every one of us has a to their policyholders to be healthier, but it has possibility to become in need financially. That is why broader implications on government finance and we must do something to prevent the discrepancy the well-being of the whole society. between one’s lifetime asset duration and lifespan. It would be crucial to have policies or regulations
INSURANCE FORUM ARGENTINA 2018 In avoiding asset shortage, insurers are well-pla- which will support consumers make use of insu- INSURANCE FORUM ARGENTINA 2018 ced to help people in three key areas that I sum- rance easier and allow insurers to develop inno- marize as “three Ps”, namely preparedness, pro- vative ideas and sustainable business models. I tection and prevention. All together, insurance has strongly hope that the insurance industry draw a a unique characteristic to overcome shortage in very strong attention on its contribution towards an Toyonari Sasaki lifetime asset. energetic 100-year life era. Vice-Chairman, The Life Insurance Association of Japan (Co-Chair For preparedness, insurance business has a litera- Insurance Forum) cy facilitation function by its nature, motivating indi- viduals to be prepared. Creating their own financial
110 111 BUILDING RESILIENT ECONOMIES INSURANCE FORUM 2018
“In today’s economic landscape, the role of insurance as a medium of building fundamentally strong economies is an important aspect of global public policy”.
The role of insurance in global Highlights from the session The Insurance Forum as a policy discussions precedent for the future ‘Building Resilient Economies’, as a topic of discus- In the financial services space, insurance is asso- sion has expanse, both in depth and breadth. The Being the first of its kind, the Insurance Forum brou- ciated with financial stability: securing both house- session covered it through multiple facets: security ght to discussion critical subject matters for present holds and institutions against risk, as well as playing against catastrophic risks, managing the longevi- and future- both immediate and long term- for all a role of an investor in economic growth. In today’s ty paradigm and the role played by the industry in stakeholders to consider and act upon. The sector is economic landscape, the role of insurance as a me- enhancing retirement income adequacy, challenges a key participant in shaping the global economy and dium of building fundamentally strong economies is and steps taken by emerging economies learning the responsibilities of policy makers, industry prac- an important aspect of global public policy. This is from the success and mistakes of developed na- titioners and regulators were all discussed covering a key subject of discussion both for developed and tions, environmental factors facilitating the reach and wide-gamut of issues. This may be seen as a much INSURANCE FORUM ARGENTINA 2018 INSURANCE FORUM ARGENTINA 2018 emerging geographies, with exchange of learnings availability of insurance- topics which elicited rumi- needed robust start, with such platforms emerging and experiences fundamentally useful in designing nation from policy-making and execution standpoints. as an important contributor to future economic sum- robust economic policy architecture. Moreover, as The intelligence brought by representatives of mul- mits as well. investors in economic progress, the interconnected- tiple geographies and varied backgrounds ensured Girish Kulkarni ness of insurers with banks, global financial mar- exchange of an exhaustive set of viewpoints, which MD & CEO - Star Union Dai-ichi kets and other financial intermediaries is significant was a good takeaway for participants of the session. Life Insurance from a commercial, economic and risk manage- ment standpoint.
112 113 BUILDING RESILIENT ECONOMIES INSURANCE FORUM 2018
“The sector is a key participant in shaping the global economy and the responsibilities of policy Highlight about the Insurance Forum makers, industry practitioners The Insurance Forum held in Argentina was impec- and regulators were all cably managed: the entire spectrum from adminis- trative management to charting relevant topics of discussed covering wide- discussion were all very well thought out and well executed. Congregation of participants and audien- gamut of issues”. ce from diverse backgrounds ensured meaningful conversations not only formally on-stage but also in- formally off it. All in all, while the organisers have gi- ven a very good account of themselves as excellent hosts, the very idea of having such a forum dedica-
INSURANCE FORUM ARGENTINA 2018 ted to insurance thus ensuring the relevance and INSURANCE FORUM ARGENTINA 2018 importance of the sector as an important contributor to world economy and public policy is praiseworthy.
114 115 INSURANCE FORUM 2018
MODERATOR
Dario Werthein | Grupo Werthein Food Security shareholder and Vice-President, Experta ART
and Agricultural SPEAKERS
Nikhil da Victoria Lobo | Regional Leader Rowan Douglas | Head of Capital, (Americas) and Managing Director (Global Science, & Policy Practice, Willis Towers Issues Partnerships), Swiss Re Watson
Graham Clark | CEO, Asia Affinity Santiago del Solar Dorrego | Chief of Holdings Ltd. Cabinet, Ministry of Agribusiness INSURANCE FORUM ARGENTINA 2018 INSURANCE FORUM ARGENTINA 2018
Insurance Forum 2018
116 117 FOOD SECURITY AND AGRICULTURAL ISSUES INSURANCE FORUM 2018
The role of insurance in global mers often do not have access to risk management policy discussions products such as insurance to protect themselves from shocks. Insurance industry can play a strategic role in addres- sing global challenges. We aim to achieve a tangible The insurance industry is on the forefront of unders- contribution to global policy making. An open dialo- tanding the global risks related to climate change, gue on global challenges cannot be fully addressed natural disasters, and lack of food security. Insurers without the voice of the insurance sector. are turning the world’s attention toward the protec- tion gap—the difference between actual economic The Insurance Forum issues declarations that con- and insured losses. solidate the main conclusion emerging from our discussion. These declarations are conveyed to the Presently, 70 percent of economic losses from natu- Finance Track leaders of the G20 and subsequently ral hazards remain uninsured and in middle/low-in- to the G20’s presidents. come countries the uninsured proportion of econo- mic losses often exceeds 90 percent. Highlights from the session In response, rather than relying on old underwriting Agricultural Development plays a major role in im- models that are increasingly stressed, many insu- proving food security and nutrition (FSN) by increa- rers (which most of them are members of this panel)
INSURANCE FORUM ARGENTINA 2018 sing the quantity and diversity of food as a driver for are thinking forward, promoting a radical rethinking INSURANCE FORUM ARGENTINA 2018 economic transformation, and because agriculture of underwriting practices, encouraging the industry is the main source of income for a majority of those to shift capital flows into climate-resilient assets and who live in the most extreme poverty. resilience-enhancing investments.
Risk is an inherent feature of agriculture around the Darío Werthein globe. The ever-present uncertainties in weather, Grupo Werthein shareholder yields, prices, government policies, global markets, and Vice-President, Experta ART and other factors can cause high volatility in farm income. In developing countries, smallholder far-
118 119 FOOD SECURITY AND AGRICULTURAL ISSUES INSURANCE FORUM 2018
“The insurance industry is on the forefront of understanding the global risks related to climate change, natural disasters, and lack of food security”.
The Insurance Forum as a sponsored by the Ministry of Treasury of Argentina precedent for the future was held as side event of the G20: THE INSURAN- CE FORUM 2018. The Insurance Forum plays a key role as a catalyst for the ideas and interests of the global insurance We highlighted the voice of the insurance sector industry. so that together with governments we can work for the common good of our societies, positioning the The Insurance Forum and subsequent follow-ups insurance sector as a unique and distinct part in that will take place in the framework of the G20 future G20 events and giving the insurance indus- meetings to be held in Japan and Arabia. We trust try a channel of communication with the leadership this initiatives will be a historical milestone for insu- of the G20. rance industry. Destacamos la participación del sector de los segu-
INSURANCE FORUM ARGENTINA 2018 Highlight about the Insurance ros para que, junto con los gobiernos, sea posible INSURANCE FORUM ARGENTINA 2018 Forum trabajar por el bien común de nuestras sociedades, por medio de otorgarle a este sector un lugar pre- For its ability to develop solutions and as a catalyst ferencial como parte única y distinta en los eventos of financial resources for businesses and enterpri- del G20 que tengan lugar en el futuro y darle a la ses, the insurance sector has a fundamental value. industria de los seguros un canal de comunicación For this reason, for the first time in history, an event con los líderes del G20. dedicated exclusively to the insurance sector and
120 121 FOOD SECURITY AND AGRICULTURAL ISSUES INSURANCE FORUM 2018
“The most striking element of the Insurance Forum was the broad range of public and private stakeholders that participated allowing for a robust dialogue and interchange of ideas”.
The role of insurance in global Understanding the importance of proper risk mana- the table as they look for new ways to achieve long- policy discussions gement is key for the agriculture sector worldwide, term economic prosperity and equality. especially in countries where a large portion of the Insurance is a powerful policy tool to help make so- population still earns a living from agricultural acti- Highlight about the Insurance ciety more resilient. It does this by putting a market vities. Insurance could be part of the answer to face Forum based price on risk, by providing critical funding for these hazards as it provides the agriculture sector reconstruction, and by incentivizing preparedness. tangible tools to assess risk, conduct long-term fi- The most striking element of the Insurance Forum Insurance tools also reduce dependency on costly nancial planning and support innovation. was the broad range of public and private stakehol- post-disaster debt therefore diversifying the range of ders that participated allowing for a robust dialogue macro-economic instruments policy makers have at The Insurance Forum as a and interchange of ideas. Having convened these their disposal. precedent for the future stakeholders under one roof, the G20 therefore ac- celerated the journey that will ensure that the insu- Highlights from the session The Insurance Forum has helped global leaders rance sector will play a crucial part in supporting the
INSURANCE FORUM ARGENTINA 2018 better recognize the important role insurance can long-term financial stability of all nations. INSURANCE FORUM ARGENTINA 2018 The frequency and severity of weather events, dri- play to make society more resilient. Many emerging ven especially by climate change is an existential markets face immense challenges recovering after threat to the economic viability of nations. No sector natural disasters which have long lasting negative bears this burden more acutely than agriculture – impacts, such as increased poverty, income in- Nikhil da Victoria Lobo from small farmers who face hardship from volatile equality and lower economic growth. Insurance is a Regional Leader (Americas) crop yields, to governments that must incur painful natural and tested response mechanism to pre-plan and Managing Director (Global fiscal adjustments when harvests fail. against such catastrophes and therefore the G20 Partnerships) // Swiss Re leaders would greatly benefit having the industry at
122 123 INSURANCE FORUM 2018
MODERATOR
Recaredo Arias | Vicepresident, Global Federation of Insurance Associations (GFIA) and General Director, AMIS (Asociación Mexicana de Instituciones de Seguros) (Co- Promoting Chair Insurance Forum)
Long-Term and SPEAKERS
Toshiaki Sumino | President & CEO, DLI Dorian Grey | President, Latin America Sustainable (Dai-ichi Life Holdings) North America Region, Starr Indemnity & Liability Company Juan Pazo | Superintendent of Insurance, Anna Maria D’Hulster | Secretary Argentina General, The Geneva Association
Investment in Antonio Cassio dos Santos | CEO, Southern Europe & Americas, Generali INSURANCE FORUM ARGENTINA 2018 Infrastructure INSURANCE FORUM ARGENTINA 2018 Insurance Forum 2018
124 125 PROMOTING LONG-TERM AND SUSTAINABLE INVESTMENT IN INFRASTRUCTURE INSURANCE FORUM 2018
“Insurers have a natural interest in long-term/illiquid assets, such as infrastructure, that can match their liabilities”.
The role of insurance in global extent to which regulatory proposals support (or the fundamental role of efficient risk transfer and policy discussions hinder) insurers’ investment potential. the opportunities that partnership with insurers can provide in meeting societal needs. I look forward to Despite institutional investors around the world ha- Highlights from the session Japan continuing this. ving $80trn in assets under management. Insurers account for almost a third of that total — $26trn. Insurers have a natural interest in long-term/illi- Highlight about the Insurance With $4.6trn to invest annually and mostly long- quid assets, such as infrastructure, that can match Forum term liabilities their liabilities. Insurers are looking for alternative investments in the context of the low interest rate It was the first time that the Insurance Industry had In several jurisdictions, policymakers have develo- environment, as they have a duty to policyholders a slot/forum in An international G20 event. I am deli- ped tools aimed at fostering private investment in to search for yield. Insurers are looking to diversify ghted that this happened and hope that Japan, and infrastructure. their portfolios. next G20 presidencies, will continuing to do so. INSURANCE FORUM ARGENTINA 2018 INSURANCE FORUM ARGENTINA 2018 The regulatory environment, including prudential The Insurance Forum as a rules for the industry, creates barriers to infrastruc- precedent for the future ture investment in several jurisdictions. Similarly, Recaredo Arias there are growing concerns at global level around I had the honour of moderating a session on pro- Vicepresident, Global Federation of the development of the global Insurance Capital moting long-term and sustainable investment in in- Insurance Associations (GFIA) and Standard, and any unintended consequences for frastructure. I believe the Forum and the statement General Director, AMIS (Asociación insurers’ ability to invest. Given the key role that transmitted afterwards to G20 Finance Ministers is Mexicana de Instituciones de Seguros). insurers play in such investments, supervisors, re- a positive step towards increasing the awareness of Co-Chair Insurance Forum. gulators and standard setters should assess the G20 leaders and the Financial Stability Board about
126 127 PROMOTING LONG-TERM AND SUSTAINABLE INVESTMENT IN INFRASTRUCTURE INSURANCE FORUM 2018
“We could unanimously reconfirm that insurance companies, with long-dated liabilities by nature, can It was a great pleasure for me to attend the Insu- rance Forum 2018, and to join the panel on “Pro- play a significant role in infrastructure investments”. moting long-term and Sustainable Investment in Infrastructure”. I believe this was exactly the right theme to be discussed at such an occasion. Dis- cussion among the panelists, whose backgrounds and organizations they represented were very much diverse, started from how insurance industry the panel shed light on the need to rethink about I am convinced that Insurance Forum 2018 in Bari- can play a role in efforts to establish resilient global the best balance between sometimes conflicting loche, Argentina was a significant step for the global economy, and particularly in long-term infrastruc- policy considerations; financial soundness of insu- insurance industry to demonstrate its mission and ture investments. We could unanimously reconfirm rers and a set of regulations associated with it on willingness to contribute to the social good world- that insurance companies, with long-dated liabili- the one hand, and mission and capability of insu- wide. I highly appreciate all the efforts and devotion ties by nature, can play a significant role in infras- INSURANCE FORUM ARGENTINA 2018 rers to contribute to society and economy in gene- made by people engaged in organizing the event, INSURANCE FORUM ARGENTINA 2018 tructure investments. ral through “sustainable finance” on the other hand. and hope that this move would continue to evolve going forward, 2019 in Japan and onwards. Suggestions and implications for further facilita- Aside from the panel, the Forum itself provided an tion of such initiatives, as pointed out by many pa- excellent opportunity for all participants across the nelists, including need for data collection, removal Toshiaki Sumino globe, including insurance companies, regulators, va- of any disincentives in respective capital regimes, President & CEO, DLI (Dai-ichi Life rious industry associations, and consultants, to gather and governmental support mechanism, should be Holdings) North America together and to exchange information and opinions. noted by all attendees at the Forum. In addition,
128 129 INSURANCE FORUM 2018
MODERATOR
Pilar Gonzalez de Frutos | President, UNESPA (Spanish Association of Insurance Insurance 2.0: and Reinsurance Institutions)
Facing a Digital SPEAKERS
Luis Enrique Bandera | President, Julie McPeak | NAIC President and Federación Interamericana de Empresas de Commissioner, Tennessee Department of Disruption Seguros, FIDES Commerce & Insurance
Claudia Dill | CEO, Latin America, Zurich Romain Launay | Group COO, SCOR
Bernard Spitz | President, French Eduardo Martelli | Secretary of Insurance Federation (FFA) Administrative Modernization, Argentina INSURANCE FORUM ARGENTINA 2018 INSURANCE FORUM ARGENTINA 2018
Insurance Forum 2018
130 131 INSURANCE 2.0: FACING A DIGITAL DISRUPTION INSURANCE FORUM 2018
“The really important thing is not to know what is going to happen, but to be able to react when it happens”.
It was a pleasure for me to be present in the 2018 to discuss strategic options about how to cope with know what is going to happen, but to be able to Insurance Forum as the moderator of its panel on new environments and their tasks. react when it happens. Probably nobody has today Insurance 2.0. It was, as well, an invaluable oppor- the capacity to watch ahead and describe how our tunity to be conscious of the unlimited future that This can be easily stated about the whole meeting, lives, and our tasks and tools as insurers, will be in global insurance industry has ahead. but was of special importance in the case of digita- twenty or thirty years. lization. This is so because digitalization it is some- The panelists, chosen amongst those of more ex- thing that is partly happening already, but will basi- However, the discussion allowed us to understand pertise in a so crucial issue as is digitalization, con- cally occur in the future, which means that insurers, that this lack of knowledge is not problematic. The INSURANCE FORUM ARGENTINA 2018 veyed to all of us opinions and analyses with the regulators and supervisors need to have a clear real problem for insurers will come the day they lost INSURANCE FORUM ARGENTINA 2018 highest added value. I think that, through this, In- idea of its consequences. We have to be imagina- their ability to stick to reality, and be able to react to surance Forum demonstrated its role as an open tive, to open our minds, and the Insurance Forum new environments. A core message that I think is discussion forum, made of the best experts in each made its work precisely as mind opener. embedded to this Insurance Forum DNA. Pilar González de Frutos issue. The goal of Insurance Forum is mainly the fu- President, UNESPA (Spanish Association ture, and how it affects the present. I see this forum One thing I think was made clear during our dis- of Insurance and Reinsurance Institutions) as an opportunity to make contact with the state of cussion was this: we do not have to obsess our- the art in several matters related to insurance, and selves with the task of knowing how the future is going to be. The really important thing is not to
132 133 INSURANCE 2.0: FACING A DIGITAL DISRUPTION INSURANCE FORUM 2018
“We need to move and evolve
The role of insurance in global our approach from product to protection to prevention and mitigation. This is a con- policy discussions ceptual and fundamental change that the industry customer, from operations to needs to undergo to remain relevant and in effect. Big and conceptual topics and matters that need to be addressed globally and by all key players. Custo- services and from protection Highlights from the session mer understanding is, to me, the most relevant one. to prevention and mitigation. Digital disruption and building resilient economies How can we really engage in a relationship with our were two main topics that were very well addres- customers? A relationship based not only on a policy This is a conceptual and sed by the different panellists. Also, the panel that or a brand promise but rather on a service that adds I had the pleasure to join in (Facing Digital Dis- value to the customer’s real and changing needs. A fundamental change that the ruption. The future of Insurance.) was also a very bond based on trust and on added value. We need to good platform to start discussing the issues and take a step back –or actually a step forward- and stop industry needs to undergo to themes that really matter, such as the ones men- discussing underwriting and risk management as the tioned above. only issues under our responsibility. remain relevant and in effect”. There was also a common understanding that pro- We need to innovate in the way the see ourselves as tectionism is not the best way to foster the develo- an industry. What do we provide? Protection before pment of our sector. And that both protectionism an event only? Or is it something deeper, less tran- and populism are clear symptoms of not enough people having access to services and goods and
INSURANCE FORUM ARGENTINA 2018 sactional and much more linked to the customer’s INSURANCE FORUM ARGENTINA 2018 needs, condition, lifestyle, etc. Innovation seems to that something needs to be done in that sense. So- be the word. But the real question is what do we need mething needs to change so that social and eco- to innovate on? On product underwriting and deve- nomic growth is not just a possibility for just a few. lopment only? Or is it the result of a much deeper Claudia Dill innovation approach? We need a clear and dramatic The Insurance Forum as a CEO - Zurich Latin America shift in the way we think about ourselves and in the precedent for the future way we position our industry in the current world. We need to move and evolve our approach from product I think it has. We need to continue discussing the- to customer, from operations to services and from mes and issues that we have in common, as I men-
134 135 INSURANCE 2.0: FACING A DIGITAL DISRUPTION INSURANCE FORUM 2018
tioned above. Regulation. Customer understan- Highlight about the Insurance ding. Product and service innovation development. Forum Transparency. And many other topics that are rele- vant to our industry and specially to our customers The amount of people that joined the meeting. It and business partners. It was also pretty clear that was remarkable. A good balance of industry repre- insurance plays a critical role in the development sentatives and regulators. Also, the lively spirit of of society at large. There’s a clear social role of the audience who seemed to have enjoyed both what we do that needs to be further highlighted. In- the content of the forum as well as the beauty of surance provides certainty in an uncertain world. It the surroundings and the excellent service we re- helps social mobility as it creates the basis for sa- ceived from the organization. It all seemed to fit vings and protection of the growing middle class, very well. that it is clearly seen in Latin America. INSURANCE FORUM ARGENTINA 2018 INSURANCE FORUM ARGENTINA 2018
136 137 INSURANCE 2.0: FACING A DIGITAL DISRUPTION INSURANCE FORUM 2018
“The actions implemented by
insurance is/can be in global cing for these needs. These are but a few examples the Argentinian government to policy discussions? of topics in which insurance has a leading role to play in driving discussions between governments, digitalize their public services Through committed and collaborative efforts, insu- regulators and industry players. rance has the potential to provide solutions to the were particularly impressive”. largest and most important challenges that the Highlights from the session world is currently facing. and keep up the positive momentum that it has The panel discussion “Insurance 2.0: Facing Digital created. Global warming is expected to increase the fre- Disruption” provided a fascinating look into how so- quency and intensity of natural disasters, which will cieties are advancing. Highlight about the Insurance call for robust insurance coverage, particularly for Forum populations in the most vulnerable regions of the The actions implemented by the Argentinian gover- world. nment to digitalize their public services were par- Through its in-depth discussions and the allotted ticularly impressive. Having served in the adminis- time for informal talk between sessions, the Insu- These changing weather patterns, combined with tration of my own country during the past decade, rance Forum enables participants to create lasting the world’s increasing population, will put pressure I know first-hand how challenging it can be to drive bonds. The coming-together of industry representa- on agricultural production and raise concerns about such a cultural change. tives, Government officials and regulators is exactly food security. Insurance can help farmers withstand what is needed to drive global policy forward. the consequences of bad crop seasons by provi- The Insurance Forum as a
INSURANCE FORUM ARGENTINA 2018 ding the funding necessary until better crops are precedent for the future INSURANCE FORUM ARGENTINA 2018 harvested. The new format inaugurated by the Insurance As healthcare costs will represent an increasingly Forum is highly relevant. Coordinating the event greater share of the world’s GDP, insurance will be with a G20 meeting sends a strong signal that in- Romain Launay instrumental in helping government find lasting so- surance belongs on the agenda of all world lea- COO // SCOR lutions to combat the significant pressure on fiscal ders, given that it can offer solutions to some of policy. The world’s ageing population will also result their biggest challenges. I sincerely hope that the in new needs for long-term care and without insu- Insurance Forum continues its valuable actions rance, governments will lack the necessary finan-
138 139 INSURANCE 2.0: FACING A DIGITAL DISRUPTION INSURANCE FORUM 2018
“Insurers are one of the main institutional investors in
The insurance activity fulfills an irreplaceable role the world. With their reserves and own capital, they in the world. Thanks to the protection granted to individuals, families and businesses, all activities finance people, companies and states in shortand can be developed, generating continuous growth. Insurers are one of the main institutional investors long-term investment projects”. in the world. With their reserves and own capital, they finance people, companies and states in short- and long-term investment projects. That is why they in recent decades. The Forum allowed us to share are global and relevant actors at the time that go- presentations, proposals and future plans to more vernments and the private sector design long-term than 300 members of the insurance world for two development policies. and a half days. Participants from the private and public sectors represented by the supervisors of In the sessions of the Forum organized by the various countries. Go the FIDES congratulations to Ministry of Finance and the Superintendence of Superintendent Juan Pazo. Insurance of Argentina, crucial issues related to the construction of resilient economies were ad- We hope that this event constitutes the beginning of dressed; aspects of agricultural development and a permanent participation and collaboration of the its importance in providing the necessary food for global insurance industry with the countries and rele- the world’s population; investments in infrastructu- vant topics in each of the future meetings of the G20.
INSURANCE FORUM ARGENTINA 2018 re and the contribution that insurers can make in INSURANCE FORUM ARGENTINA 2018 the growth of countries; digital disruption, panel in which I had the honor of participating along with prominent speakers and the role of reinsurers in a global market. Luis Enrique Bandera President, Federación Interamericana This is the first time that the global insurance sector de Empresas de Seguros, FIDES participates in the framework of a G20 event. This fact is not only remarkable, but it constitutes, in my opinion, one of the most relevant insurance events
140 141 INSURANCE FORUM 2018
MODERATOR
Eric A. Cioppa | NAIC President-Elect and Globalizing Superintendent, Maine Bureau of Insurance
Business: the SPEAKERS
José Carlos Cardoso | President, IRB Francis Bouchard | Group Head of role of a global Brasil Re (Co-Chair Insurance Forum) Communication and Public Affairs, Zurich Anja Biendarra | CEO, Munich Re Bogotá, Jonathan Dixon | Secretary General, Munich RE’s Regional Centre South America International Association of Insurance Supervisors (IAIS) reinsurance John M. Huff |President & CEO, Association of Bermuda Insurers & Reinsurers INSURANCE FORUM ARGENTINA 2018 INSURANCE FORUM ARGENTINA 2018
Alejandro Simón | CEO, Sancor Seguros market (Co-Chair Insurance Forum) Insurance Forum 2018
142 143 GLOBALIZING BUSINESS: THE ROLE OF A GLOBAL REINSURANCE MARKET INSURANCE FORUM 2018
The role of insurance in global Highlights from the session policy discussions For me, the highlight of the meeting was the recog- The insurance industry plays a fundamental so- nition that the insurance sector can and should be cietal role in assessing and managing risk, be it at contributing to more than simply regulatory and ca- an individual, firm or community level. As such, the pital regime debates. sector has immense insight into a range of policy “The insurance sector is discussions currently being debated at a local, re- This was particularly evident in the sessions ad- gional and global level. From climate change and poised to play a deeply dressing resilient economies, infrastructure and cyber risk to the future of work and ageing issues, globalization, where we touched on the need to the insurance sector has objective risk-based analy- impactful role in helping overcome regulatory fragmentation and recognize sis that blends cutting-edge data analytics with a the role multinational insurance programs plan in first-hand understanding of consumer preferences policymakers address some facilitating global value chains. and regulatory environments. of the most complex risk Speakers effectively identified both the opportuni- We are improving our forecasting and risk mode- ties for impact as well as the challenges we face lling, deepening our commitment to societal issues challenges facing the world in optimizing our role as societal risk managers. In and escalating our engagement with policymakers. addition, the digital session raised some profound And we are increasingly exerting our role as ma- today”. questions about the impact of new data, mobility
INSURANCE FORUM ARGENTINA 2018 jor institutional investors to encourage sustainable and computational capabilities on the traditional INSURANCE FORUM ARGENTINA 2018 practices. In short, the insurance sector is poised to compensation-after-event model, and the promising play a deeply impactful role in helping policymakers customer value we can create by moving to more of address some of the most complex risk challenges a prevention-of-risk model. facing the world today. To do so we must transcend our traditional focus on parochial regulatory matters Francis Bouchard and fully embrace the broader role we play in foste- Group Head of Communication ring a more inclusive and resilient society. and Public Affairs, Zurich
144 145 GLOBALIZING BUSINESS: THE ROLE OF A GLOBAL REINSURANCE MARKET INSURANCE FORUM 2018
The Insurance Forum as a Highlight about the Insurance precedent for the future Forum
Yes I certainly do. The industry has been increasing First and foremost the collaborative spirit and ac- its engagement with multi-lateral institutions, parti- tion-oriented focus set a tone of “we-own-these-is- cularly in the climate space. Take, for example, the sues-together”. That’s a major accomplishment, and G20 Global InsuResilience Partnership and its am- it’s exactly how both the public and private sector bitious targets for expanding the use and impact of participants will need to view their respective roles if insurance mechanisms. What the Insurance Forum we’re going to advance meaningful solutions to the- has done, though, is extend that relevance to a se- se challenges. ries of other global issues including infrastructure investment, digitization, economic resilience and Of course Bariloche was quite memorable too, and global trade. These are not typically issues that the left me with a taste of wanting to get back soon, just
INSURANCE FORUM ARGENTINA 2018 insurance sector has collectively engaged multi-la- without a busy conference schedule!. INSURANCE FORUM ARGENTINA 2018 teral organizations on, and hopefully the Forum de- monstrated the value that such dialogues can have . . . both for the sector and policy makers.
146 147 GLOBALIZING BUSINESS: THE ROLE OF A GLOBAL REINSURANCE MARKET INSURANCE FORUM 2018
The role of insurance in global “We should keep building G2B engagement, policy discussions ensuring the voice of our sector reaches G20 Throughout the different sessions we debated on the significant role of insurance in global policy dis- leadership. This is a quite concrete and direct way of cussions. Insurance supports the resilience and stability of the real economy as it provides financial contributing to global policy making.”. protection to individuals and businesses. It plays a crucial role in agricultural development for the im- provement of Food Security and Nutrition, and it serves as an institutional investor contributing to the real economy. reover, it has increased insurability by opening new Do you think the Insurance Moreover, it holds a challenging and decisive po- possibilities to insure risks that seemed out of reach Forum has set a precedent for sition in digital disruption, since Digitalization of for coverage before. the future? the economy provides a whole spectrum of new opportunities. There are initiatives underway to improve sustaina- I certainly do. I hope that this Insurance Forum beco- bility and promote risk mitigation, and there is no- mes the first of a periodic event. An event that allows Highlights from the session thing better than a reduction in cost to encourage us to get together and discuss the most relevant is-
INSURANCE FORUM ARGENTINA 2018 people to reduce risk. sues of our industry, and that also gives us a chance INSURANCE FORUM ARGENTINA 2018 The reinsurance market contributes to both the to raise issues as an input to feed G20 discussions. affordability of primary insurance and to diversifying In order to increase levels of insurance protection cross border risks. we need better financial literacy and Government We should keep building G2B engagement, ensu- support regarding stable political environment, alig- ring the voice of our sector reaches G20 leadership. Alejandro Simón The outstanding role of technology has brought nment of legal framework and regulation, availabi- This is a quite concrete and direct way of contribu- CEO, Sancor Seguros (Co-Chair about changes in paradigms in terms of relations lity of data on main cat risks, and development of ting to global policy making. Insurance Forum) with reinsurance distribution channels, allowing good public private partnerships. operators to advance towards direct business. Mo-
148 149 GLOBALIZING BUSINESS: THE ROLE OF A GLOBAL REINSURANCE MARKET INSURANCE FORUM 2018
Highlight about the Insurance Forum
This Insurance Forum has been an excellent opportunity not only to discuss these issues among worldwide industry members, but also to have the presence of the regulators among the audience of the panels, listening to these discussions and the different perspectives of the industry.
The possibility of raising conclusions for the consi- deration of the Finance Track leaders of the G20, and as a potential input for their discussions and policy paper is a unique opportunity for our industry and I´m very happy that we took good advantage of this possibility. INSURANCE FORUM ARGENTINA 2018 INSURANCE FORUM ARGENTINA 2018
150 151 INSURANCE FORUM 2018
Closing Remarks
I want to start by thanking you all for coming all ve, the insurance sector is in itself a resilient in- the way down to Bariloche and participating in this dustry. When we bring into the picture the higher event. I cannot emphasise how proud we are and frequency of climatic or geographic events, there how thankful we are for having the opportunity to has not been a single story about the collapse of host this event and how well things have laid out. any major player, no Lehman Brothers, no Bernie Madoffs. So I cannot stop thinking that there is so I think we are wrapping up the event with a long much room for the insurance industry to expand list of great takeaways. To begin with, when Juan and take over new challenges in the financial mar- told me that it might be a good idea to organise an kets, and in a world coordinated fashion I am sure Insurance Forum in the context of the G20, I thou- you can make it. ght it was going to be just another forum. He tried to explain to me that it would be the first time with I liked a lot the panel on Food Security and Agricul- such a gathering and even then, I was no able to ture, confirming how much room there is for growth grasp what that really meant. When I see now what and for an active role for emerging market coun- INSURANCE FORUM ARGENTINA 2018 INSURANCE FORUM ARGENTINA 2018 Juan was able to do, he was able to spark momen- tries, the barns of the world. tum, and for an industry that has a long trajectory in a heavily regulated environment, gathering mo- But for me, the greatest takeaway is the excitement mentum is not a minor thing at all. you all show about this opportunity that has sud- denly come up. Not only you give away this feeling We had very interesting discussions on many to- that you are suddenly looking at each other and pics. I picked a couple as the ones that stroke me thinking how come we have not done this before, Santiago Bausili most, for example, the contribution of the industry let´s make sure that we do it again. You give the Secretary of Finance of the Argentine Republic to resilient economies. From a broader perspecti- feeling that there is a great power about unleash
152 153 INSURANCE FORUM 2018
“I liked a lot the panel and it is welcomed. I leave you the sense that this on Food Security and very clear: we look up to you, we see you as exam- forum has been extremely productive, that is no of- ples to follow, we do not intend to be in a new path, ten the case with forums. Not only the panels have Agriculture, confirming and we just want to follow yours. So, your support is been good, but there has been a series of mee- crucial and extremely comforting. Again, thank you tings on the side lines that went straight to busi- how much room there is for very much for coming, thank you for your individual ness and this has been done on a context of great support. I hope that you enjoy the rest of your stay responsibility. Meetings did not take place in a law growth and for an active in Argentina, and I hope that you go back soon and secret done somewhere. We have shared a couple when you go home you tell everybody about this of days where industry players and regulators has role for emerging market amazing land of confusion. sat hand in hand, not eye to eye to resolve matters. We had the benefit of taking advice from very ex- countries, the barns of the Thank you very much. perienced players. But the greatest contribution is associated with their vision of long term objectives world”. and prosperity and that are the aims of what we all want.
And finally, a little bit about Argentina and what we went through. So many of you have praised our efforts for the change we are trying to implement. Thank you so much for that recognition. We are INSURANCE FORUM ARGENTINA 2018 living through very tough times and change is hard. INSURANCE FORUM ARGENTINA 2018 As President Macri put it a couple of weeks ago, change is hard and change is painful, and this is not just rhetoric, change is painful on an individual basis. Change requires individual sacrifices, wi- thout that we won´t have change. Individual efforts need to be made, one at a time. So in this context your support is extremely valuable, it is humbling and energizing at the same time. Let me make it
154 155 COMMUNIQUÉ 2018
Communiqué Insurance Forum Argentina 2018 INSURANCE FORUM ARGENTINA 2018 INSURANCE FORUM ARGENTINA 2018
156 157 COMMUNIQUÉ 2018
September 25th, 2018. sufficient options for financial products which can Bariloche, Río Negro. Argentina. Building Resilient Economies help deal with the events and risks that arise over The insurance sector plays a critical role in su- a lifetime. With increased longevity, retirement se- pporting the resilience and stability of the real curity is a major concern with significant impacts The Superintendence of Insurance of Argentina hosted the Regulators Insurance economy. Insurers provide financial protection to for the insurance sector. Forum 2018 in the context of Argentina’s G20 Presidency, where insurance supervisors individuals and businesses against the risks they from several jurisdictions, G20 members, and international organizations met in the face, whether it be due to natural disasters that Insurance supervisors have an important role to city of San Carlos de Bariloche, Argentina, on the 24th of September, 2018 to discuss affect their assets and livelihoods, risks related to play in ensuring that the regulatory framework the crucial role of (re)insurance and protection of policyholders in light of evolving insufficient savings for retirement or events that allows the development and offering of insurance risks, challenges and opportunities around the globe. affect income generating capacity. products that meet the needs of consumers and provide a broad level of financial protection against Forum participants would like to thank the Argentine G20 Presidency for their efforts In recent years there has been concerns about these various risks. and leadership in highlighting the crucial role of insurance, with forum participants extreme weather conditions, exposing countries recognizing the value of on-going engagement and discussion at a global level on and their populations to risks associated with na- Forum participants discussed: infrastructure investment, economic resilience and innovation. tural disasters, as well as difficulties in recovering from such catastrophic events. Where insurance • Protection gaps and how these might be ad- The principal objective of insurance supervision is to promote the maintenance of is not available to provide a broad level of protec- dressed, so as to enable the broadening of insu- fair, safe and stable insurance markets for the benefit and protection of policyholders. tion against these risks, covering losses is often rance coverage to those most vulnerable. Insurance supervisors recognize that, in general, regulatory frameworks should strike transferred (implicitly) to the state, posing a risk to public finances and the broader economy and • How to balance the competing aims of su-
INSURANCE FORUM ARGENTINA 2018 an appropriate balance between competing objectives, avoiding potential unintended INSURANCE FORUM ARGENTINA 2018 negative consequences for policyholder protection, financial stability and fair market creating the potential for delays in financial reco- pporting access to and development of insuran- conduct. very. Such situations disproportionately affect the ce markets that meet the needs of underserved bottom of the economic and social pyramid, espe- populations, while maintaining a high standard of The following summarizes the concepts expressed throughout the sessions of the cially in certain emerging markets where the pro- policyholder protection, financial stability and fair Regulators Insurance Forum 2018 tection gap continues to grow. market conduct.
In most countries around the world, standards of • Ways to promote financial literacy and consumer living and advances in healthcare are allowing education about insurance as a risk transfer me- people to live longer. Individuals need to have
158 159 COMMUNIQUÉ 2018
chanism and as a means for creating social and make investments that are not suitable or appro- Innovation and technology tered while maintaining policyholder protection, economic resilience. priate from a risk-reward standpoint or that poten- financial stability and fair market conduct. tially create financial stability issues. Innovation and new technologies are having a • Risk mitigation, risk prevention and the effective- significant impact on the insurance sector. Tech- • The challenges of data security and cyber risk ness of private and public initiatives. Forum participants discussed: nological advancements provide major opportu- mitigation, and the appropriate measures for su- nities, such as increased efficiency, improved de- pervisors and insurers to address such risks. Long term investment in • Experiences on how insurers can contribute to sign and marketing of products and more granular infrastructure long term investments in infrastructure. underwriting and pricing. Such advancement may Participants thank the Argentinean G20 Presiden- also improve the outreach of financial services cy for hosting this forum, where participants recog- Infrastructure is a key contributor to sustainable • The importance of discussing and exchanging to underserved populations, and therefore help nized how fair, safe and stable insurance markets economic growth, resilience, job creation and perspectives on long term investment by insurers increase financial inclusion. However, insurance can contribute to achieving the objectives of the prosperity. Although significant efforts have been and regulatory frameworks, including risk assess- supervisors also recognize that new technologies G20, including resilience and sustainable econo- made, there remains a need for infrastructure in- ment and management, in order to fulfil the ob- may present new challenges to be considered mic growth. vestment in both developed and emerging econo- jectives of policyholder protection and the main- and addressed. Technological innovation that can mies. Insurers, as institutional investors, can be a tenance of financial stability. improve the lives of consumers should be encou- critical stakeholder in this discussion as they ope- raged, while maintaining fair, safe and stable in- rate with a longer time horizon. • Insurance Supervisors’ perspectives on efforts surance markets for the benefit and protection of by the G20 Presidency to address common ba- policyholders. Legal, regulatory, tax, accounting and governance rriers to infrastructure as an asset class such as frameworks play an important role in informing de- limited supply of investable projects, and the una- Forum participants discussed: INSURANCE FORUM ARGENTINA 2018 INSURANCE FORUM ARGENTINA 2018 cision making. Regulatory frameworks applicable vailability of data needed to track asset perfor- to long term investment in infrastructure by insu- mance and assess its risk. • How regulatory frameworks and supervisory rers should include both the risk assessment of practices can take into account the development the asset and the mechanisms (including capital) and use of new technologies in the insurance to mitigate such risk. Regulatory and supervisory sector. frameworks should be risk-based, utilize sound valuation approaches and encourage appropriate • The availability of products and services to con- asset/liability matching and diversification. Insu- sumers and improvements to insurance opera- rers should not be incentivized or encouraged to tions, and how positive developments can be fos-
160 161 COMMUNIQUÉ 2018
The following institutions present at the Regula- South Africa); Insurance Authority of the United tors Insurance Forum 2018: Arab Emirates (United Arab Emirates); Financial Conduct Authority – (United Kingdom); Federal National Superintendence of Insurance (Re- Reserve (United States of America); National As- public of Argentina); Superintendencia de Se- sociation of Insurance Commissioners (United guros Privados - SUSEP (Brazil); Comisión States of America); United States Dept. of Tre- para el Mercado Financiero de Chile (Chile); asury - Federal Insurance Office (United States BaFin - Federal Financial Supervisory Autho- of America); European Insurance and Occupa- rity – (Germany); Guernsey Financial Services tional Pensions Authority - EIOPA (European Commission (Guernsey); Istituto per la Vigi- Union). lanza sulle Assicurazioni - IVASS (Republic of Italy); Financial Services Agency (Japan); Comi- The following International Organisations were sión Nacional de Seguros y Fianzas de México present at the Regulators Insurance Forum 2018: (Mexico); Autorité de Controle des Assurances et de la Prevoyance Sociale (Morocco); Ministry Access to Insurance Initiative (A2ii); InsuRe- of Finance (The Netherlands); De Nederlands- silience Global Partnership; International As- che Bank (Netherlands); Superintendencia de sociation of Insurance Supervisors (IAIS); The Seguros y Reaseguros de Panamá (Panamá); Organization for Economic Cooperation and INSURANCE FORUM ARGENTINA 2018 INSURANCE FORUM ARGENTINA 2018 Saudi Arabian Monetary Authority (Kingdom of Development (OECD); Sustainable Insurance Saudi Arabia); Prudential Authority (Republic of Forum (UN).
162 163 BUILDING ON THE LEGACY: ENSURING CONTINUITY
Building on the legacy: ensuring continuity INSURANCE FORUM ARGENTINA 2018 INSURANCE FORUM ARGENTINA 2018
164 165 BUILDING ON THE LEGACY: ENSURING CONTINUITY
Over the last years, innovative insurance solutions have been the result of the awareness, both from the industry and the regulators, of the economic, social and environmental problems all over the world, as well as of the pivotal role the insurance sector may have in addressing them.
An open-dialogue on global challenges cannot be fully addressed without the voice of the insurance sector. The long-term goal of this event is to position the insurance sector (government and business) as a unique and distinct INSURANCE FORUM ARGENTINA 2018 INSURANCE FORUM ARGENTINA 2018 stakeholder in future G20 events, strengthening policy leaderships through international engagement.
166 167 BUILDING ON THE LEGACY: ENSURING CONTINUITY
2018 marked the first year that the crucial role of insurance was discussed at the G20 toward the long-term goal of positioning the insurance sector as a unique and distinct stakeholder in policy discussions at the G20.
Keeping up the momentum for the insurance dialogue, The Life Insurance Association of Japan (LIAJ) holds the Insurance Forum Japan 2019 under the auspices of the Ja- panese G20 Presidency. This industry side event takes place in Tokyo on 5 June 2019 prior to the G20 Osaka Summit and other related meetings, taking the opportunity for Japan assuming the G20 Presidency for the first time ever.
Toward a better acknowledgement of the critical contributions by the insurance indus- try, the LIAJ aims to revisit various issues in the context of better fulfilment of the in- surers’ social roles and contribution to sustainable economic growth and have forward looking discussion on how insurers can make enhanced contribution by playing vibrant role. The forum will have three panel sessions highlighting critical topics identified in relation to the G20 priorities, namely ageing, digital innovation and resilient economy, followed by the panel on global regulation/supervision reflecting on the discussions in the preceding panels.
It is our great pleasure to extend a cordial invitation to the Insurance Forum Japan INSURANCE FORUM ARGENTINA 2018 2019. We very much look forward to seeing you in Tokyo! INSURANCE FORUM ARGENTINA 2018
Further details such as agenda, speakers, venue, accommodation and logistics infor- mation are available on the webpage. For inquiries, please contact the LIAJ at insuran- [email protected].
168 169 170 171 República Argentina 172