04 June 2025
The year 2024 was the fifth consecutive
year of insurance companies submitting actuarial reports under the Actuarial
Work Rules (AWR) issued in March 2020. The primary objective of those Rules is
to enhance the role and responsibilities of actuaries in the insurance sector
in order to facilitate informed decision-making by management and to provide
greater technical support to the business as the market sophistication
continues to grow in the Kingdom.
Under the above Rules, an Appointed Actuary
is obligated to perform a number of actuarial analyses, at least, annually, and
convey to the Senior Management, Board of Directors and the Insurance Authority
(IA) the outcome of those analyses in the form of an actuarial report, prepared
separately on each individual topic.
This document encompasses IA’s observations from its
review of the following actuarial reports, including a concluding section on
the contribution of Internal Actuarial Functions in producing these reports:
1.
Reinsurance
Adequacy
Report 2024 (pages 2-15)
2.
Investment and Asset Liability Management Report
2024 (pages 16-23)
3.
Solvency and Capital Report 2024 (pages 24-31)
4.
Actuarial Function’s Contribution (pages 32-34)
A number of important observations emerged
from our review. We would like to share those observations with the Company’s
management, together with our expectations in respect of those observations, in
anticipation that management will consider each of those observations and
recommendations diligently, internal discussions will be held at the Board of
Directors’ level and with all relevant functions, and appropriate actions will
be taken by management.
Furthermore, similar to last year, a
separate brief document accompanies
this letter that summarizes IA’s expectations on each topic mentioned in this
letter.