18 October 2017 | 11:45 – 12:45 | Ballroom 2|3|4
Relevant practice area(s):Enterprise and Financial Risk Management (ERM)
Suggested audience knowledge level: All levels
Systemic risk within financial services has remained a major topic since the 2007/2008 Global Financial Crisis. “Too Big To Fail”, “Globally Systemically Important Financial Institutions”, “Recovery and Resolution Planning”, the “Financial Stability Board” and other outcomes clearly indicate a major concern for regulators that systemic risk hasn’t been well managed in the past. Insurance hasn’t escaped this net, with new international capital standards proposed for globally active or systemically important insurers. Our own South Africa regulators seem to support this view and are convinced of the dangers of systemic risk. Our significant “bank owned insurance groups” and arguably market concentration may also contribute to this risk.
Recent UCT research placed Old Mutual, MMI, Sygnia and Coronation as systematically important institutions alongside major banks. Is this a correct reflection of systemic risks within non-bank financial institutions?Perhaps this reflects the risk of “Run on Funds” or other less widely recognised risks.
Several global industry bodies support the view that systemic risk in insurance has been overstated.
This presentation will briefly address the origins of the concerns around systemic risk (perhaps particularly for those entering the working world before 2008), what regulators have been doing since then, and provide an assessment (literature review, surveys, measurement and independent thought) of the extent of systemic risk within insurance in South Africa.