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Improving transparency in the insurance sector: progress made and outstanding challenges OECD-ASSAL Regional Expert Semi

Improving transparency in the insurance sector: progress made and outstanding challenges OECD-ASSAL Regional Expert Seminar Montevideo, 26-27 September 2013. Timo Broszeit Monetary & Capital Markets Department International Monetary Fund. Agenda. Introduction

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Improving transparency in the insurance sector: progress made and outstanding challenges OECD-ASSAL Regional Expert Semi

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  1. Improving transparency in the insurance sector: progress made and outstanding challenges OECD-ASSAL Regional Expert Seminar Montevideo, 26-27 September 2013 TimoBroszeit Monetary & Capital Markets Department International Monetary Fund

  2. Agenda • Introduction • G20 Data Gaps Initiative: Overview and Objectives • G20 Data Gaps Initiative: Recent Progress • Outstanding Challenges

  3. Introduction Financial crisis made data gaps more obvious than ever Interconnectedness Liquidity Credit default swaps Cross-border exposures Risk concentrations Tail risks Real estate prices Public sector debt Leverage Derivatives

  4. Agenda • Introduction • G20 Data Gaps Initiative: Overview and Objectives • G20 Data Gaps Initiative: Recent Progress • Outstanding Challenges

  5. G20 Data Gaps Initiative: Overview • April 2009: G20 Finance Ministers and Central Bank Governors call FSB and IMF to explore gaps and provide proposals for strengthening data collection • October 2009: FSB/IMF set up list of 20 recommendations, endorsed by G20 Finance Ministers and Central Bank Governors • Annual progress reports by FSB and IMF (most recent: September 2013)

  6. G20 Data Gaps Initiative: Overview

  7. G20 Data Gaps Initiative: Overview A myriad of institutions working on these recommendations:

  8. G20 Data Gaps Initiative: Objectives • Agenda with regard to insurance statistics: • Recommendation #2: Expand list of FSIs, incl. non-banks • Recommendation #3: FSIs - implementation of measures that cover tail risks, concentrations, variations in distributions, volatility of indicators • Recommendation #4: FSIs - Develop measures of aggregate leverage and maturity mismatches in the financial system • Recommendation #8: Interlinkages between SIFIs • Recommendations #10 and #11: Coordinated Portfolio Investment Survey (CPIS) • Recommendation #13: Cross-border exposures • Recommendation #14: Standardized template covering international exposures of large nonbank financial institutions • Recommendation #15: Sectoral accounts, in particular nonbank financial institutions

  9. Agenda • Introduction • G20 Data Gaps Initiative: Overview and Objectives • G20 Data Gaps Initiative: Recent Progress • Outstanding Challenges

  10. G20 Data Gaps Initiative: Recent Progress • G-SIFIs: • First template for G-SIBs finalized • Phase 1 started in March 2013 (consolidated data on bilateral counterparty credit exposures and aggregated exposures) • Phases 2 and 3 will progressively expand and enhance template • Data hub at the BIS • Cross-border exposures: • Pilot exercise to set up an inventory of existing data on cross-border positions • CPIS: • Semi-annual (instead of annual) data collection since June 2013

  11. Agenda • Introduction • G20 Data Gaps Initiative: Overview and Objectives • G20 Data Gaps Initiative: Recent Progress • Outstanding Challenges

  12. Outstanding Challenges • Expansion of FSIs which currently include: • 25 indicators for deposit takers • 2 indicators for other financial corporations • assets to total financial system assets • assets to GDP • 5 indicators for nonfinancial corporations • 2 indicators for households • 2 indicators for market liquidity • 4 indicators for real estate markets • Quarterly reporting of FSIs • Main challenge: which valuation framework? • => comparison across countries difficult!

  13. Outstanding Challenges • G-SIFI data collection to include G-SIIs: • Main challenge (again…): which valuation framework? • => comparison across companies difficult! • Finally, some remarks on confidentiality: • Some reluctance with regard to sharing data with IMF, BIS and other multilateral institutions • BIS data hub works under strict confidentiality safeguards • Even data sharing at bilateral or regional level can improve supervision!

  14. Outstanding Challenges (beyond G20 DGI) • Consolidated data • Highest level of consolidation, incl. (non-financial) holding companies • Data sharing between home and host authorities • Some more technical stuff: • Interconnectedness with the banking sector • Direct exposures (bonds, equity, deposits, repos…) • Common exposures • Asset-liability matching, interest rate sensitivities • Technical provisions • Risk mitigation (reinsurance, hedging, securitization) • Modeling of catastrophe losses • Pricing patterns and (re)insurance cycle

  15. Outstanding Challenges Probably the biggest challenge…

  16. Questions? TBroszeit@imf.org

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