Insurers must gear up for data collection

Insurers must gear up for data collection | Insurance Business

Insurers must gear up for data collection
The Reserve Bank of New Zealand is seeking submissions from licensed insurers on how best to collect data from them for the purposes of meeting its supervisory requirements while at the same time working to boost public confidence in the sector.

RBNZ is holding special workshops next month to consult directly with insurers to promote the discussion of their proposals, which are being brought in due to the lack of consistency and conformity in data currently available.

Submissions on the methods of data collection are invited to be made before 8 October 2014 and would ideally include insurers’ views on the relative costs and benefits of the proposed data collection, including estimates of the costs of providing the data and how informative the data is likely to be.

In a paper titled ‘Collection of NZ insurer data’ delivered to all licensed insurers this week, the RBNZ stated their intention to start regular data collection in the first half of 2014 with a practice run for familiarisation and to identify any process issues aimed some time after November.

The purpose of the data is for assessing and monitoring insurers’ financial performance, position and compliance.

“Insurers subject to data collection will be issued a notice under section 121 IPSA to formalise their reporting requirements,” said the paper.

“Approximately three months after receiving the notice, insurers will be expected to start regular reporting. Half-year and annual returns will be phased in, based on the financial year balance date of individual insurers.”

Proposed data would include financial, exposure and solvency data with the aim of standardising it for useful comparisons across the industry.

This would mean insurers would have to stick to the provided definitions, return the data in the provided templates and report within a set timeframe, at the set reporting periods and frequency.
RBNZ it was in insurers’ interest to comply properly as the information would be useful to them too.

“Timely and standardised data will benefit insurers, and insurance and financial industry analysts. For example, it would allow benchmarking and analytical assessment of risks, performance and positions,” the RBNZ paper said.

“Furthermore, the availability of aggregate insurance data will enable a wider audience to use the information and offer informed commentary on the sector. It is expected to increase the confidence in the soundness and efficiency of the New Zealand insurance sector.”

Insurers’ feedback will be published in November and any amendments would be made to templates.

Total premiums by type of insurance written during a time period; or financial assets and liabilities by instrument are examples of the kinds of data RBNZ would publish on its website, aimed at late 2015 or early 2016.

RBNZ also plans to consult on new solvency standards planned to be introduced before the data collection becomes effective, with consultation on that also due in September.

The Reserve Bank will host seminars on the consultation (including a question and answer session) in Auckland and Wellington, as follows:
  1. Wellington, at The Reserve Bank Building on Thursday 11 September 2014 from 10am to 12pm
  2. Auckland, tentatively planned for Friday 12 September 2014 from 10am.