IAIS Global Seminar 2024
The IAIS welcomed over 1,000 participants during its virtual Global Seminar 2024.
The event commenced with a keynote address by Her Majesty Queen Máxima of the Netherlands, who emphasised the importance of insurance in promoting financial health and sustainable development.
IAIS leadership shared updates about our ambitious work programme and future plans, and distinguished panels explored pivotal topics in the insurance sector on insurers’ asset management in the shifting interest rate environment and on the implications of artificial intelligence.
We invite you to explore these discussions and watch the video replays below.
Sessions
Keynote address
The IAIS Global Seminar 2024 started with an inspiring keynote address by Her Majesty Queen Máxima of the Netherlands, the United Nations Secretary-General’s Special Advocate for Inclusive Finance for Development (UNSGSA).
Queen Máxima emphasised in a pre-recorded keynote speech the pivotal role of insurance in fostering financial resilience, contributing to financial health, and supporting sustainable development. Queen Máxima welcomed the IAIS’ strong commitment to advancing effective supervisory practices that drive financial inclusion. We were honoured to have had Queen Máxima set the stage for this event.
Her Majesty Queen Máxima of the Netherlands
IAIS Executive Committee Dialogue
Speaking to more than 450 stakeholders and IAIS members, the IAIS Executive Committee updated on the work of the Association to deliver on its ambitious work programme.
This includes the key milestone of the adoption of the global Insurance Capital Standard (ICS) in December.
ExCo Chair Shigeru Ariizumi provided an update on the final steps in the IAIS’ work to agree its 2025-2029 Strategic Plan which will have an increased focus on the role that insurance has to play in supporting societal resilience.
The three IAIS Champions updated on the work they have been taking forward at the IAIS:
- Climate change: Daniel Wang provided a preview of the two Application Papers which will be published for consultation later this month. One covers public disclosure and supervisory reporting, while the other considers macroprudential supervision together with cooperation and coordination.
- FinTech: Petra Hielkema mapped out the work the IAIS is undertaking to consider the application of the Insurance Core Principles in the context of the increasing use of artificial intelligence (AI) in the insurance sector. She noted that the IAIS will launch a consultation on an Application Paper towards the end of the year.
- Diversity, equity and inclusion: Gerry Cross updated on the two consultations that show the strong commitment across our membership to advance work on DEI. The consultations cover the topic in light of supporting both better prudential and consumer outcomes.
ExCo members also took a range of questions from stakeholders on issues including implementation of the ICS, discriminatory practices, protection gaps, digitalisation, operational resilience and the role of actuaries.
Shigeru Ariizumi – Chair, IAIS Executive Committee and Vice Minister for International Affairs, Financial Services Agency of Japan
Peter Braumüller – Chair, IAIS Implementation and Assessment Committee and Managing Director of Insurance and Pension Supervision, Austrian Financial Market Authority
Gerry Cross – IAIS Diversity, Equity and Inclusion Champion and Director of Financial Regulation Policy and Risk, Central Bank of Ireland
Charlotte Gerken – Vice Chair, IAIS Executive Committee and Executive Director, Bank of England
Dieter Hendrickx – Chair, IAIS Macroprudential Committee and Head, Prudential Policy Insurance, National Bank of Belgium
Petra Hielkema – IAIS FinTech Champion and Chair, European Insurance and Occupational Pensions Authority
Andrew N. Mais – Vice Chair, IAIS Executive Committee, Insurance Commissioner of Connecticut and President, National Association of Insurance Commissioners
Siham Ramli – Vice Chair, IAIS Executive Committee and Director of Communication and International Relations, Autorité de Contrôle des Assurances et de la Prévoyance Sociale Morocco
Matt Walker – Chair, IAIS Policy Development Committee and Manager, Insurance Supervision and Regulation Section, Federal Reserve Board of the United States
Daniel Wang – Chair, IAIS Climate Risk Steering Group and Executive Director, Insurance Department, Monetary Authority of Singapore
Moderator:
Jonathan Dixon – IAIS Secretary General
Insurers’ asset management in a changing interest rate environment
This panel considered the steps insurers are taking to adjust to the challenging monetary policy landscape, including the risks and opportunities this presents.
Key takeaways from the panel discussion on how insurers are adapting to a changing interest rate environment, growing private capital markets, and risk consolidation through asset-intensive reinsurance:
- Higher rates generally improve the pricing of long-term savings products. However, panellists emphasised the need to manage risks like unrealised loss positions in solvency and accounting balance sheets.
- Higher spreads from alternative assets may enhance returns but require stronger risk management. A search for yield has led to increased allocations to alternative assets. Panellists emphasised the importance of effective asset-liability management (ALM). Strong capital and liquidity risk management, along with robust enterprise risk management (ERM) are crucial. Stress testing is necessary to assess asset performance and liquidity needs throughout the credit cycle. The complexity of certain alternative assets underscores the need for asset diversification and in-house investment expertise, especially in securitisations.
- New entrants employ more aggressive risk strategies. The discussion noted higher risk-taking behaviours of private equity-owned insurers, evident in greater allocation to alternative assets and increased use of leverage. In cross-border asset-intensive reinsurance transactions, risks are transferred but remain in the system, requiring careful monitoring, especially with lower-rated or unrated reinsurers. Close oversight is needed of the quality and liquidity of assets backing ceded premiums and potential accumulation risks in reinsurers’ balance sheets.
- The IAIS continues to cover these critical supervisory areas in the life insurance sector. The Global Insurance Market Report (GIMAR) reports from 2021 through 2023 have highlighted supervisory areas of attention related to structural shifts in the life insurance sector. Looking ahead, the IAIS plans to continue these efforts with the 2024 GIMAR and a dedicated Issues Paper scheduled for 2025.
Stefan Holzberger – Chief Rating Officer, A.M. Best
Keisuke Kawasaki – Chief Investment Officer, Nippon Life Insurance
Tim Schmidt – Senior Vice President and Chief Investment Officer, Prudential Financial
Julia Wiens – Chief Executive Director for Insurance and Pension Funds Supervision, German Federal Financial Supervisory Authority
Moderator:
Charlotte Gerken – Vice Chair, IAIS Executive Committee and Executive Director, Bank of England
Poll results
Artificial intelligence in the insurance sector
This panel considered the use of artificial intelligence in the insurance value chain and how supervisory tools can be used to address emerging risks from its deployment.
IAIS FinTech Champion Petra Hielkema updated on the work of the IAIS to develop an Application Paper which will be published for consultation towards the end of the year. The panellists discussed how to ensure effective governance and accountability for AI together with the importance of transparency and explainability in the use of AI systems. They also discussed the importance of ensuring good consumer outcomes that are focused on fairness, ethics and effective redress.
An audience poll showed that 56% of those attending thought that insurers would not be able to effectively explain AI models to supervisors. Supervisors have highlighted the need for explainability and a clear understanding of outcomes. Another poll showed that the audience believed that the wider adoption of AI will lead to quicker handling of underwriting and claims.
In her remarks, Petra emphasised that following a proportionate and risk-based approach, insurers need to adopt a fairness-by-design approach that embeds fairness considerations throughout the AI system life cycle.
Ericson Chan – Group Chief Information and Digital Officer, Zurich Insurance
Petra Hielkema – IAIS FinTech Champion and Chair, European Insurance and Occupational Pensions Authority
Benoît Lallemand – Secretary General, Finance Watch
Henrik Naujoks – Head, APAC Financial Services, Bain & Co
Moderator:
Chlora Lindley-Myers – Director, Missouri Department of Commerce and Insurance
Poll results
Committee dialogue
For the final day of the IAIS Global Seminar 2024, IAIS Committee Chairs provided updates on their work and addressed a wide range of questions from stakeholders.
Macroprudential Committee (MPC): Dieter Hendrickx, MPC Chair, provided an overview of the IAIS’ work relating to financial stability:
- The IAIS has significantly advanced global insurance sector risk monitoring through the Global Monitoring Exercise (GME). A public consultation on ancillary indicators on reinsurance, derivatives and credit risk is in preparation.
- Interim GME findings for 2023 show stability in solvency, liquidity and profitability. Some insurers anticipate slight deteriorations due to global economic uncertainties.
- 2024 themes focus on interest rate, liquidity and credit risks in a challenging macroeconomic environment and structural shifts in the life insurance sector. The IAIS is also preparing an issues paper on the latter topic.
- A deep dive into natural catastrophe protection gaps is also in the works as a special topic Global Insurance Market Report.
Policy Development Committee (PDC): Matt Walker, PDC Chair, gave an overview of the PDC’s work overseeing the development and maintenance of IAIS standards and supporting supervisors to implement them:
- The Insurance Capital Standard is on track to be finalised as a prescribed capital requirement by end-2024.
- Consultation feedback on the proposed recovery and resolution standard changes is being analysed with the intention to finalise the revisions also by year-end.
- Several consultations of supporting material have been and continue to be underway this year on the topics of operational resilience, climate risk and DEI.
- Other member-only materials and discussions have focussed on the topics of insurer remuneration and the use of data in outcomes-based approaches to conduct supervision.
- The IAIS’ engagement with consumer groups is an essential input to our work.
Implementation and Assessment Committee (IAC): The upcoming 2025-2029 Strategic Plan will reaffirm a focus on implementation assessment and support. Peter Braumüller, IAC Chair, provided key highlights of current efforts:
- Development of supporting material on financial inclusion, protection gaps and the use of AI in the insurance sector remains a priority.
- Significant progress has been made in the in-depth assessment of observance of ICPs in the Sultanate of Oman, the peer review of ICP 16 (on ERM), and the second wave of Targeted Jurisdictional Assessments on the implementation of the Holistic Framework.
- Collaboration with implementation partners to support members remains a top priority, focusing on sharing supervisory practices and fostering capacity building.
Peter Braumüller – Chair, IAIS Implementation and Assessment Committee
Dieter Hendrickx – Chair, IAIS Macroprudential Committee
Matt Walker – Chair, IAIS Policy Development Committee
Moderator:
Jonathan Dixon – IAIS Secretary General
Speakers
Her Majesty Queen Máxima of the Netherlands
United Nations Secretary-General’s Special Advocate for Inclusive Finance for Development
Chair, IAIS Executive Committee and Vice Minister for International Affairs, Financial Services Agency of Japan
Chair, IAIS Implementation and Assessment Committee and Managing Director of Insurance and Pension Supervision, Austrian Financial Market Authority
Group Chief Information and Digital Officer, Zurich
IAIS Diversity, Equity and Inclusion Champion and Director of Financial Regulation Policy and Risk, Central Bank of Ireland
Secretary General, IAIS
Vice Chair, IAIS Executive Committee and Executive Director, Bank of England
Chair, IAIS Macroprudential Committee and Head, Prudential Policy Insurance, National Bank of Belgium
IAIS FinTech Champion and Chair, European Insurance and Occupational Pensions Authority
Chief Rating Officer, A.M. Best
Executive Officer, Chief Investment Officer, Nippon Life Insurance Company
Secretary General, Finance Watch
Director, Missouri Department of Commerce and Insurance
Vice Chair, IAIS Executive Committee, Insurance Commissioner, Connecticut and President, NAIC
Head, APAC Financial Services, Bain & Co
Vice Chair, IAIS Executive Committee and Director of Communication and International Relations, Autorité de Contrôle des Assurances et de la Prévoyance Sociale Morocco
Chief Investment Officer, Prudential Financial, Inc.
Chair, IAIS Policy Development Committee and Manager, Insurance Supervision and Regulation Section, Federal Reserve Board of the United States
Chair, IAIS Climate Risk Steering Group and Executive Director, Insurance Department, Monetary Authority of Singapore
Chief Executive Director for Insurance and Pension Funds Supervision, German Federal Financial Supervisory Authority