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OIC EXPECTATION ON ACTUARIAL PROFESSIONALISM UNDER THE NEW SOLVENCY REGIME Vasumadi Vasinondha Assistant SecretarySecretary-General Office of Insurance Commission

AGENDA

Roles of Actuaries under Insurance Act

Current Trend and Actuarial Professionalism

Roles of Actuaries under Insurance Act • Actuarial report must be certified by admitted actuary • The Commissioner might require actuaries to submit additional reports or perform other analyses • The Code of Actuarial Professional Ethics

The Code of Actuarial Professional Ethics 1. Professional Integrity

2. Standards of Practice

3. Conflict of Interest

4.Confidentiality

5. Courtesy and Cooperation

6. Advertising

7. Communications and Disclosures

The Coming trends • Increased Asian Participation in Global Economy • Aging Society • Catastrophe • ASEAN Economic Community :AEC

1. Asian Participation in Global Economy By the year of 2030 - Participation of emerging Asia in global GDP will increase from 21% in 2010 to 47% - 45% -./ global growth 01213 emerging Asia Nominal global GDP 2010 USD 62 trn.

Japan 9%

Projected nominal global GDP 2030 USD 308 trn.

China 9% RoW 19%

India 2% Other Asia 10%

EU 27% US 24%

source : IMF, Standard Chartered Research

2. Aging Society Old-age dependency ratio Number of old people per 100 workers 60

Japan 50

EU

40

US China

30

Th 20

World Asia ex jap

10

India 0 1990

1995

2000

2005

2010

2015

2020

2025

2030

Old-age dependency ratio = the ratio of the population aged ≼ 65 years per 100 people aged 15-64 source: Population Division, UN

3. Catastrophe

4. ASEAN Economic Community: AEC • Premium $ 1,657 billion • Insurance Penetration 1.4 % • Insurance Density $ 18.6 • GDP $117 billion • Population 89 million

Thailand • Premium $13,598 billion • Insurance Penetration 4.3 % • Insurance Density $199.4 • GDP $319 billion • Population 68.2 million

Vietnam

Philippines • Premium $ 2,134 billion

• Insurance Penetration 1.1 % • Insurance Density $ 22.8 • GDP $189 billion • Population 93.8 million

Malaysia • Premium $ 11,779 billion

• Insurance Penetration 4.8 % • Insurance Density $421.1 • GDP $246 billion • Population 28 million

Indonesia Singapore • Premium

$ 17,338 billion • Insurance Penetration 6.1 % • Insurance Density $2,823.4 • GDP $223 billion • Population 4.8 million

• Premium $ 10,662 billion

• Insurance Penetration 1.5 % • Insurance Density $45.8 • GDP $ 707 billion • Population 232.8 million

IAIS: ICP 16: Enterprise Risk Management for Solvency Purpose

Reasons for U.S. P&C Insurer Impairments, 1969 - 2010 Reinsurance Failure 4%

Catastrophe Loss 7%

Investment Problem (Overstatement of Assets) 8%

Affiliate Impairment 8%

Misc.

9%

Alleged Fraud 8%

Deficient Loss Reserve / Inadequate Pricing 42%

Rapid Growth 14%

Source: A.M.Best: 1969-2010 Impairment review, Special Report, April 2011

Thank you