08 December 2024
The year 2023 was the fourth 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 carry out technical reserving using best estimates on a
quarterly basis, and report to the Senior Management, Board of Directors and
the Insurance Authority (IA) the outcome of those exercises. The technical
reserving exercise is required to be supported by an experience study,
performed at least annually, aimed at deriving certain key assumptions used in
technical reserving. Moreover, in order to support the growing standards of
actuarial practice in the kingdom, the IA conducts an annual survey of actuarial
resources, level of support granted, and extent of involvement of in-house
Actuarial functions in producing statutory reports on Technical Provisions,
Experience Studies, and other actuarial areas. This document encompasses IA’s observations from its review
of the following actuarial reports and survey:
- ActuarialReserving at Year-End 2023 Report (pages 3-34)
- ExperienceStudies Report 2023 (pages 35-45)
- ActuarialResources Survey 2023 (pages 46-55)
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 the
IA’s expectations on each topic mentioned in this letter.