Serving the Cause of Public Interest Indian

Transcript:Serving the Cause of Public Interest Indian:
Serving the Cause of Public Interest Indian Actuarial Profession Cyber risk and Terrorism risk - Challenges in pricing Supervisor: P.A. Balasubramanian, FIAI 27th India Fellowship Seminar Topic: General Insurance – Changes in reserving methods as per IRDAI ALSM 2016, Impact on solvency and reserving Guide Name: Mr. Palreddy Vishnuvardhan Presenters Names: Girinker Aggarwal Varun Jain Deepanjali Talwar Date: 1st June 2017 Mumbai Serving the Cause of Public Interest Indian Actuarial Profession Agenda Overview of ALSM regulations currently in place (2016) Changes Related to Reserving Changes Related to Solvency Serving the Cause of Public Interest Indian Actuarial Profession Overview of IRDAI ALSM 2016 Key Areas of consideration under ALSM 2016 Serving the Cause of Public Interest Indian Actuarial Profession Valuation of Assets List of specific assets which should be placed with zero value Outstanding balances and premiums in India, not realized within 30 days Premium receivables from State/Central governments, not realized within 180 days Reinsurance balances outstanding for more than 365 days Co-insurer balances outstanding for longer than 90 days Furniture, fixtures, stock and stationary …… etc Valuation of all other assets in accordance with Regulations and instructions issued by the Authority regarding Preparation of Financial Statements, Auditor Reports Other forms of Capital and Investments Any other regulations applicable Serving the Cause of Public Interest Indian Actuarial Profession Estimation of Liabilities (1) CLAIMS RESERVES Set across 28 lines of businesses, classified into Motor Health Personal Accident Travel Outstanding Case Reserve (OS Reserves) Estimated using a ‘case by case method’, and amount is to be provided in full Can use a statistical method Incurred But Not Reported (IBNR) Claims Reserve Estimated using actuarial principles and methods, certified by the AA Calculated by each year of occurrence and summed to total Assessed on both NET and GROSS of reinsurance basis Should not discount the estimated future development of the paid claims Fire Marine Other Miscellaneous Serving the Cause of Public Interest Indian Actuarial Profession Estimation of Liabilities (2) PREMIUM RESERVES Unearned Premium Reserve (UPR) Set using prescribed formula, certified by CFO and Statutory Auditor Premium Deficiency Reserve (PDR) Calculated using actuarial principles Maintained at the entity level Unexpired Risk Reserve (URR) = UPR + PDR OTHER LIABILITIES Provision for bad and doubtful debts Reserves for declared/recommended/outstanding dividends Provision of taxation Foreign Exchange Reserves Sundry creditors and other business expenses Serving the Cause of Public Interest Indian Actuarial Profession Determination of Solvency Margin AVAILABLE