Annual Report 2010 Format
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IRISH INSURANCE FEDERATION 10ÓÑ ANNUAL REPORT AboutAbout the IIFthe IIF The IrishThe Insurance Irish Insurance Federation Federation (IIF) was(IIF) wasfounded founded in 1986, in 1986, and and is theis the representative representative body body forfor insuranceinsurance companiescompanies in Ireland. in Ireland. The IIF The has IIF 63 has member 64 member companies, companies, which which employ employ over over 15,000 14,000 people. people. This This includesincludes insurers insurers serving serving both boththe domestic the domestic market market and and writing writing business business in inoverseas overseas markets markets fromfrom a base in Ireland.base Collectively, in Ireland. IIF Collectively, members writeIIF members over 95% write of over all life95% and of allnon–life life and insurance non-life insurancebusiness businessin Ireland. in Ireland. As the Asvoice the voiceof insurance of insurance companies companies in Ireland, in Ireland, IIF’s IIF’skey keyfunctions functions include: include: • • RepresentingRepresenting its members’ interestsinterests to to Government, Government, state state agencies, agencies, regulatory regulatory bodies; bodies, public public representatives,representatives; otherother nationalnational interest interest groups, groups, the the media media and and the thegeneral general public; public; • • RepresentingRepresenting the position ofof membersmembers at at a aEuropean European level, level, particularly particularly via Comitévia Comité Européen Européen des des Assurances,Assurances, the European associationassociation for for national national insurance insurance company company representative representative bodies; bodies; • • KeepingKeeping membersmembers abreast ofof relevant relevant policy policy and and regulatory regulatory developments developments and andproviding providing a forum a forum forfor member member debatedebate on suchsuch issues;issues; • • ProvidingProviding informationinformation toto Government,Government, the the wider wider policy-making policy–making community community and andthe public the public about about insurance.insurance. Irish Insurance Federation 1 Irish Insurance Federation 2 Contents Section A 4 Offi cers and Management 5 Board and Committees 7 President’s Statement 9 Chief Executive’s Report 13 Life and Pensions Issues 15 Non–Life Insurance Issues 17 EU and International Review Section B 21 Directory of Members Irish Insurance Federation 3 Offi cers and Management Brian Forrester Stuart Purdy Michael Kemp President & Life Vice President Chief Executive Committee Chairman Michael Horan Jennifer Hoban Paul MacDonnell Non–Life Insurance Life Assurance Manager Head of EU, Regulatory Manager Affairs & Planning Niall Doyle Ajay Pathak Jane O Driscoll Corporate Affairs Head of Shared Services PR and Communications Manager Manager Irish Insurance Federation 4 Board and Committees Board 2009/10 Brian Forrester (President) Bank of Ireland/New Ireland Brendan Murphy Allianz Gerard Davis Anglo Irish Jim Dowdall Aviva Andrew Langford FBD Rachel Panagiodis Hansard Gerry Hassett Irish Life Philip Smith RSA Patrick Manley Zurich Paul Haran External Board Member (as at 31/12/2009) Irish Insurance Federation 5 InIn additionaddition toto the the Board Board a and wide the range Life andof other Non-Life committeesManagement and Committees, working groups a wide meet range throughout of other thecommittees year, dealing and workingwith specialist groups areas. meet throughout the year, dealing with specialist areas. Board Sub–Committees Board Sub-Committees Codes and Standards, Risk Improvement and Cost Reduction DistributionCodes and and Standards, Intermediary Risk ImprovementRelations and Cost Reduction EUDistribution & International and Intermediary Affairs Relations Political,EU & International Media and Affairs Communications Regulatory, Legislative and Fiscal Political, Media and Communications Regulatory, Legislative and Fiscal Life Committees and Working Groups InternationalLife Committees Life Assurance and CommitteeWorking Groups PensionsInternational Committee Life Assurance Committee Tax, Actuarial and Finance Committee Pensions Committee Underwriting and Claims Committee Tax, Actuarial and Finance Committee Underwriting and Claims Committee Non–Life Committees and Working Groups ClaimsNon-Life and LegalCommittees Committee and Working Groups CommercialClaims and InsurancesLegal Committee Committee Education and Training Advisory Committee Commercial Insurances Committee Personal Insurances Committee Anti–FraudEducation andWorking Training Group Advisory Committee Personal Insurances Committee Anti-Fraud Working Group Irish Insurance Federation Irish Insurance Federation 6 7 President’s Statement 1 The last year has been another waiting for Government to follow up its mid–year very diffi cult one for our announcement of outline proposals for reform of members. In the domestic market, the supervisory architecture with fi rm legislative new life and pensions business proposals, and waiting for the start of regulatory fell by 28% for the second reviews scheduled by the Financial Regulator for successive year, with annual 2009 that never got off the ground. premium equivalent (APE) new business at only €1082 million in 2009 (down from €1506 The good news is that, with the appointment million in 2008). Likewise, non–life gross written of Matthew Elderfi eld as the new Head of premium fell by over 7%, after a similar fall the Financial Supervision under the proposed new previous year. Whilst there are signs of some Central Bank Commission and the publication recovery in life business in the fi rst quarter of in late March 2010 of the Central Bank 2010, with an overall increase of 10% in APE Reform Bill, there is now a clear path forward. in the fi rst quarter of 2010, as compared with It is apparent that – albeit at greater cost to 2009/Q1, new regular premium business has regulated fi rms – a more appropriate level of continued to fall, and there is a long way to go resources will be provided to the Regulator to to recover the lost ground of the past 2 years. discharge his functions. It is vital to ensure that the regulatory system is properly resourced to The inextricable link between premium rates meet its objectives, both for the protection of our and claims costs in the non–life classes was customers and for the rehabilitation of Ireland’s demonstrated yet again by the unprecedented international reputation as a centre for insurance property losses our members had to absorb at and other fi nancial services. In addition to the the end of 2009 and the beginning of the current new Bill, it is intended that a second Bill later year. Against a backdrop of signifi cant claims– in 2010 will redefi ne the Regulator’s mission fuelled increases in household insurance costs and extend its powers, and that the by–now through 2009, the insured costs of the recent very diffuse corpus of regulatory law will be fl ood and freeze – happening within a single consolidated by a third piece of legislation 10–week period – were estimated at almost sometime in 2011. These developments are €550m., making them the two most costly all very welcome, but one note of caution is weather events ever to hit the Irish market. appropriate. Whilst there are some “horizontal” Notwithstanding the scale of the losses, issues affecting all parts of the fi nancial services IIF members have been able to meet their sector that can be dealt with by common rules, obligations to policyholders and provided a level one size does NOT fi t all. What may be of professional service under extreme pressure appropriate regulation for banks in the wake which bears comparison with any service of the lessons learned from the fi nancial crisis is industry, and which was generally acknowledged not necessarily appropriate for insurers, whose in the media as exemplary. The ability to deal understanding and management of risk, business with such events is a hallmark of our industry and model and cash fl ows – to mention just three refl ects the strength of the supervisory capital important areas – are utterly different to banks. regime – soon to be further enhanced under We will be monitoring the supervisory reform Solvency II – and the insurers’ competence in measures very closely to ensure that unduly identifying and managing risk. restrictive or inappropriate provisions are not applied to insurers. On the regulatory front, 2009 proved to be a year of waiting – waiting for the appointment of the new head of the Financial Regulator, Irish Insurance Federation 7 The Solvency II Framework Directive was on private pension contributions. These and adopted in the fi rst half of 2009 and there has other reforms are to be introduced over the next been a noticeable increase in activity at EU and 4 years. There are both progressive and less local levels in preparing for its implementation. positive aspects to the proposals which IIF are The Level 2 implementing measures are currently analysing in depth and which we will be expected to be in the form of Regulations discussing in detail with the relevant Government rather than Directives, leaving no scope for Departments and agencies over the coming national interpretation/variation. We have months. been somewhat reassured that earlier fears that expertise and overall staffi ng within the Regulator Elsewhere in this report readers will fi nd would be inadequate to deal with the volume additional detail on all the Federation’s activities of work associated with the implementation