1 / 7

FIAR 2010, Sinania PAID: Reconciling Affordability and Financial Sustainability Requirements

FIAR 2010, Sinania PAID: Reconciling Affordability and Financial Sustainability Requirements. May 25, 2010. Ensuring product affordability: consumers. Product appeal to consumers Premium rates are low Deductibles are low Sums insured are low No averaging – first loss .

claude
Télécharger la présentation

FIAR 2010, Sinania PAID: Reconciling Affordability and Financial Sustainability Requirements

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. FIAR 2010, SinaniaPAID: Reconciling Affordability and Financial Sustainability Requirements May 25, 2010

  2. Ensuring product affordability: consumers Product appeal to consumers • Premium rates are low • Deductibles are low • Sums insured are low • No averaging – first loss

  3. Prerequisites of financial sustainability: coverage features Insurance product • Actuarially sound premiums (based on true risk costs). • Deductibles to align incentives of insured with those of insurers and achieve affordable premium rates. • Restricted terms of coverage/no contents. • Automated and easy to administer policy issuance process.

  4. Prerequisites of financial sustainability: insurance market Market capabilities in product distribution and claims settlement • Sustainable insurance commissions achieved through cross-sales and advanced IT infrastructure • Public outreach – agents networks • Fraud control (unique policy IDs and ability to track policies in real time; real time sharing of underwriting data) • Adequate and cost effective claims management

  5. Prerequisites of financial sustainability: reinsurance market Reinsurance • Risk data sharing with the reinsurance market to reduce premium uncertainty. • Meaningful risk retention to reduce the moral hazard premium. • Adequate reinsurance protection • selection of an appropriate return period for PML • avoiding basis risk

  6. Ensuring financial sustainability of PAID: role of government and regulator Role of government • Ensure adequate regulatory framework (amendments to the law) • Effective and ongoing public information campaign • Effective law enforcement mechanisms to ensure coverage take-up (local governments) • Government financial backing for PAID’s retention before and after reinsurance (role of MoF) Role of CSA • Ensure adequate reinsurance protection • Ensure PAID solvency • Ensure adequate pricing of PAID products

  7. World Bank position on the PAID Does the Bank support the PAID? • Absolutely, as long as it manages in the end to strike the right balance between the affordability and financial sustainability requirements! • Although it is not an easy task we are confident that the PAID Team, the CSA and the Romanian market will ultimately find the reconcile these two opposites.

More Related