Twenty Third Floor

Figuring out the future and the now

Category: Actuarial and Risk

Actuarial and Risk, capital, capital structure, Emerging Markets, insurance, life insurance, measurement, regulatory risk, Solvency Assessment and Management, Solvency II

The relevance of Insurance Capital Standards

14 May 2024

David Kirk

The world of group supervision for South African insurers is surprisingly immature for regulations that have been in place for 6 years. [All of this post applies as of May 2024. Regulations may have changed between then and the time you are reading this.] I started this journey investigating Insurer Capital Standards (ICS) as a…
Read more: The relevance of Insurance Capital Standards
Actuarial and Risk, creating value, customer value, distribution, Featured, financial risk, insight, InsurTech, life insurance, marketing, microinsurance, product & pricing

40,000

13 May 2024

David Kirk

40,000. That’s the ballpark figure I usually work with as the minimum number of micro insurance policies required for scale. The expenses of running even a micro insurer are not that trivial. For underwritten products within a full life licence? Larger premiums per policy but definitely more complexity. Competition is tougher too. Hyper local brands…
Read more: 40,000
Actuarial and Risk, insurance, life insurance, Solvency Assessment and Management, Solvency II

LACDT still perplexes many

7 May 2024

David Kirk

It’s been years since I helped author the ASSA Information Note on Loss Absorbing Capacity of Deferred Taxes (LACDT). Yet I still see fundamental errors and misunderstanding recurring, especially when it comes to ORSA scenarios and LACDT. Weirdly, for life insurance, despite the complexities of multiple tax funds, it’s usually relatively simple. The large Deferred…
Read more: LACDT still perplexes many
Actuarial and Risk, capital, insurance, life insurance, Solvency Assessment and Management

FAQ on APN116 – Life IBNR stresses

9 April 2024

David Kirk

APN116 was recently issued and is effective for reporting periods starting on or after 31 March 2024. This therefore applies to all South Africa life insurers’ quarterly QRT for March and all annual QRTs for those with a March year end. It outlines the requirement to stress life IBNR provisions using the standard life underwriting…
Read more: FAQ on APN116 – Life IBNR stresses
Actuarial and Risk, climate change, complexity, future studies, insurance

How pressing is climate change for South African non-life insurers?

31 March 2024

David Kirk

The reality of international insurers withdrawing coverage or exiting specific regions is not just speculative fiction—it’s happening now. In Louisiana, insurers have departed due to heightened storm and flood risks, while in California, wildfires have prompted similar actions. Even State Farm, a major insurer, is suspending new sales and opting not to renew some of…
Read more: How pressing is climate change for South African non-life insurers?
Actuarial and Risk, Featured, financial reporting, IFRS17, insight, life insurance, measurement, microinsurance, Solvency Assessment and Management

A wild idea

20 March 2024

David Kirk

I’ve been brewing a wild idea for a while. Insurance regulations weren’t written with IFRS17 in mind. This causes some head scratching when it comes to premium volume measure for non-life insurance, but common sense gets you to the right answer without much trouble. Those who say otherwise seem to be looking for problems where…
Read more: A wild idea
Actuarial and Risk, competition, complexity, creating value, currency risk, distribution, Emerging Markets, inflation, insurance, investments, life insurance

Familiarity breeds Complexity

7 March 2024

David Kirk

I’ve had reasons to think about Nigeria recently, in general but also from an insurance market and acquisition environment. I’ve helped several investors looking at Nigerian insurers over the years. Familiarity with the market and the expectations of these investors has bred complexity rather than contempt. This isn’t an easy diagnosis of land of plenty…
Read more: Familiarity breeds Complexity
Actuarial and Risk

Guidance for actuaries making decisions with Covid-19

11 June 2020

David Kirk

Actuaries need to update estimates, contribute to the discussion on appropriate bonus levels and help make calls on new and existing products and pricing. There is usually more than enough uncertainty and we’ve developed a set of tools and heuristics and ways to go about this under normal conditions. What happens when the conditions are…
Read more: Guidance for actuaries making decisions with Covid-19

About David Kirk

Featured Posts

The Complexities of Comparing SCR Cover Ratios Across Insurers
by David Kirk
In the insurance industry, we often use Solvency Capital Requirement (SCR) cover ratios as a key metric for comparing insurers’ financial strength. While these ratios… Read more: The Complexities of Comparing SCR Cover Ratios Across Insurers
One answer could be pet insurance
by David Kirk
I firmly believe major demographics shifts are going to have massive social, political, economic, financial market and commercial impacts in the coming decades. The balance… Read more: One answer could be pet insurance
A piece of the failure puzzle – decreasing insurer failure rates through Skilled Person Reviews
by David Kirk
Every failure hits policyholders’ savings or cover, impact their lives and their livelihoods. They destroys shareholder value and decrease confidence in the entire financial sector.… Read more: A piece of the failure puzzle – decreasing insurer failure rates through Skilled Person Reviews
How and why insurers fail
by David Kirk
I’ve been updating my presentation from 2021 on “How and Why Insurers Fail”. I now estimate the annual failure rate (or at least getting into… Read more: How and why insurers fail
The hidden dangers of opinion shopping and trusting good news.
by David Kirk
I had a recent discussion on the value of getting a second opinion. There’s the old line that “if you want five opinions, ask three… Read more: The hidden dangers of opinion shopping and trusting good news.
40,000
by David Kirk
40,000. That’s the ballpark figure I usually work with as the minimum number of micro insurance policies required for scale. The expenses of running even… Read more: 40,000
IFRS17 may not kill off EV
by David Kirk
Will IFRS17 kill off Embedded Value (EV) reporting in Africa? Or will it finally bring Market Consistent Embedded Value (MCEV) to life? I gave a… Read more: IFRS17 may not kill off EV

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