01 December 2022
The
year 2022 was the third 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.
This document encompasses SAMA’s
observations from its review of the following actuarial reports:
- Actuarial Reserving (IFRS 4 and IFRS17) at year-end 2022 (pages 2-20)
- Actuarial Pricing reports 2022 forHealth and Motor businesses (pages 21-32)
- Reinsurance Appropriateness andAdequacy report 2022 (pages 33-37)
- Solvency and Capital report 2022(pages 38-41)
- Experience Studies report 2022 (pages42-49)
- Investment and Asset LiabilityManagement report 2022 (pages 50-53)
- Actuarial Resources Survey 2022 (pages54-57)
A
number of important observations emerged from the above reviews performed by
SAMA. We would like to share those observations with the Company’s management,
along 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.
It
is also important to note that, compared to previous years, this year’s letter
has been enriched significantly with additional insights in each section, and
therefore, it is expected that, not only management and actuarial, but all
functions of the Company will find it useful.
Moreover,
it is for the first time that this letter includes a section on the outcome of
regulatory initiatives to promote growth of actuarial skills in the Kingdom in
anticipation that it will be used by management of insurance companies to
further encourage new talent and align their policies with emerging market best
practices.
Furthermore,
similar to last year, a separate brief document accompanies
this letter that summarizes SAMA’s expectations on each topic mentioned in this
letter.