Central Bank of Ireland - Prudential regulatory agenda for 2013

A pretty meaty speech was delivered last week by the CBoI's head of life insurance supervision, covering the prudential regulatory agenda in Ireland for 2013 and beyond. In essence it is a rather sobering take on the flipside of the Celtic Tiger's death and its impact on what was an effervescent, if still fledgling, cross-border insurance industry, noting that new business volumes recorded in Ireland have declined for the 5th year in a row, and currently aggregate out at a break-even APE/PVNBP margin.

I found there was actually a lot to take from this on the ORSA front, and would recommend any readers on the Emerald Isle pick the bones out of it, in particular that the regulator "expects to see";

• Strategies reflecting "current market realities" - highlighting excessive commission to brokers, swollen lapse/surrender rates and reduced margins from over-competition.
• Tight management of costs
• Increased efforts put in place to retain existing in-force business
• "Credible business plans"
• Viable alternatives to grow business through distribution or product range changes (online facilities highlighted specifically)

While much of this may read as common sense, one can reasonably assume that the CBoI is not seeing enough evidence of this in the Financial Condition Reports and strategic plans that currently cross their desks, and are expecting a much meatier ORSA-type approach to managing strategic risks over the business planning period in the immediate future.