Indonesia’s Dynamic Insurance Landscape A.M. Best’s Indonesia Seminar 2012 10 July 2012 | Mandarin Oriental, Jakarta

RUNDOWN: Time

Agenda

Speaker

8:15am

Registration and Light Breakfast Registrasi dan Light Breakfast

9:00am

Welcoming Speech Kata Sambutan

Dr Roger Sellek Chief Executive Officer A.M. Best – EMEA & AP

9:05am

Opening Address Kata Pembuka

Ir. Isa Rachmatarwata Head of Insurance Bureau Bapepam – LK

9:15am

Rating Development in High-growth Markets Tingkat Pertumbuhan pada Pasar dengan Pertumbuhan Tinggi

Ms Susanna Lam Managing Director A.M. Best Asia-Pacific Ltd

9:35am

A Practical View for Rating South East Asian Markets Pandangan Praktis untuk menilai Pasar Asia Tenggara

Mr Jeff Yeung Senior Financial Analyst A.M. Best Asia-Pacific Ltd

10:15am

Coffee Break Coffee Break

10:45am

Asia Pacific Economic Outlook and Country Risk Methodology Asia Pacific Economic Outlook dan Metodologi Resiko Negara

Mr James Gillard Senior Managing Economist Economic Research & Analysis A.M. Best Company

11:15am

Panel Discussion: The Development of the South East Asian Insurance Markets: Regulation and Credit Rating, Friend or Foe? Diskusi Panel: Pertumbuhan Asuransi Asia Tenggara Pasar: Regulasi dan Penilaian Kredit, Teman atau Musuh?

Mr Hussain Ahmad Senior Consulting Actuary Risk Consulting and Software Towers Watson Mr George Attard Managing Director Analytics Aon Benfield Asia Mr Kenrick Law Executive Vice President Strategic Business Asia Capital Reinsurance Group Pte Ltd Mr Erwin H. Nokeman Head of Takaful Business Operation PT. Asuransi Jasa Indonesia (Persero) Mr Moungmo Lee General Manager, Analytics A.M. Best Asia-Pacific Ltd Dr Roger Sellek (Moderator) Chief Executive Officer A.M. Best – EMEA & AP

12:30pm

Souvenir Presentation and Group Photo Taking Pemberian suvenir dan Pengambilan Foto Kelompok

12:35pm

Closing Address Kata Penutup

12:45pm

Luncheon Makan Siang

Dr Roger Sellek Chief Executive Officer A.M. Best – EMEA & AP

1

Welcoming Speech Dr Roger Sellek Chief Executive Officer A.M. Best – EMEA & Asia Pacific Roger Sellek is based in London and oversees A.M. Best’s rating, information services and news businesses throughout Europe, the Middle East, Africa and the Asia-Pacific region. Prior to joining A.M. Best, Roger was commercial director for Lloyd’s of London for six years, responsible for the market’s strategic business relationships with its investor base, brokers, the rating agencies and the financial analyst community. Shortly after joining Lloyd’s in 1996, Roger was appointed head of commercial policy and subsequently became managing director of Lloyd’s Market Risk Unit, where he directed the development and application of the market’s risk-based capital system. He had earlier worked as a consultant to the Equitas Project, assuming management responsibility for the analysis of all non-APH liabilities. In addition to 15 years of extensive experience and achievement in the insurance and reinsurance sectors, Roger has a long academic background, graduating with a BSc in mathematical physics from the University of Exeter in 1978 and with a PhD three years later. Roger also holds an MBA in strategic management from Imperial College at the University of London. Between 1981 and 1992, Roger carried out post-doctoral research at the University of Cambridge and worked in a number of academic positions in the United Kingdom and overseas, including as a lecturer in applied mathematics at the University of Sydney, Australia. He also spent 18 months as the National Squash Coach for Thailand.

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Opening Address Ir. Isa Rachmatarwata Head of Insurance Bureau Bapepam - LK Isa Rachmatarwata has been the Head of Insurance Bureau, Bapepam - LK since May 2006. Prior to joining Bapepam – LK, Isa held several positions at the Directorate General of Financial Institutions, including Head of Sub Directorate – Information Services and Development; Head of Sub Directorate Examination and Services; and Head of Section Pension Fund Examination. He has also served as Head of the Supervisory Board for Indonesia Insurance Mediation Body and as a Member of the Board of Management for the ASEAN Insurance Research and Training Institute (AITRI). He graduated from Faculty of Mathematics and Natural Science of Institute Technology Bandung in 1990 and obtained Master of Mathematics degree from the University of Waterloo, Canada in 1994.

3

Rating Development in High-growth Markets Susanna SW Lam Managing Director A.M. Best Asia-Pacific Ltd. Susanna SW Lam is the managing director of A.M. Best Asia-Pacific Ltd.’s operations, where her responsibilities include managing and coordinating A.M. Best’s operations throughout Asia-Pacific region, developing and enhancing the commercial interests of A.M Best and its strategic position within the insurance and reinsurance sectors across Asia-Pacific, managing existing relationships and developing new relationships with key constituents in the insurance and broader financial services sectors in the Asia-Pacific region. Susanna has almost 30 years’ experience in the reinsurance and insurance industry and is the former general manager – reinsurance department of Ping An Property & Casualty Insurance Company of China, Ltd, where, based in Ping An’s Shenzhen headquarters, she managed the company’s outwards and inwards reinsurance portfolios and headed both the treaty and facultative division. Prior to Ping An, Susanna was the director and general manager of Miller Insurance Services (Hong Kong) Ltd, where she set up their Hong Kong office and was responsible for developing and producing business in North Asia, and with Swiss Re, where she worked in the company’s Hong Kong and Sydney offices. Susanna holds an ACII qualification and a diploma in management studies.

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AM Best's Indonesia Seminar 2012 Indonesia’s Dynamic Insurance Landscape Rating Development in High-growth Markets

Jakarta, 10 July 2012

Today’s Agenda

 Introduction to A.M. Best  A Ratings Primer  Drivers of Ratings Demand  The Rating Process

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5

Introduction to A.M. Best

3

A.M. Best Overview  Established in 1899 in the US, pioneered the concept of insurer financial strength ratings in 1906  Provider of ratings, financial data and news relating to the insurance industry  Coverage of approximately 3,500 companies in >70 countries  Regional base in Hong Kong – established in 1999, now with 22 staff  Awarded Best Global Rating Agency at the Reactions Global Awards 2009, 2010 and 2011  Only international rating agency focused on the insurance industry . . .

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6

Insurance Specialisation Means …  Methodologies are specific to the insurance industry

 Analysts are insurance specialists and only analyse insurance companies  Ability to provide specific indications as to the main drivers of a rating grounded in industry knowledge

5

No. of ratings

Comparison of Ratings Coverage – Global Insurer Interactive FSRs

Source: NRSRO Web sites and AM Best as at 11th July 2011

Note: Data does not include PD ratings , NR ratings, National ratings with local scales or companies who are under regulatory supervision or in liquidation.

6

7

A Ratings Primer

7

AM Best Financial Strength Rating (FSR)  An independent opinion of an insurer’s financial strength and ability to meet its on-going insurance policy and contract obligations based on a comprehensive quantitative and qualitative evaluation  Forward looking in nature  Value depends upon the market credibility of the rating issuer  Supported by impairment studies  Relates to a legal entity not a group  Not a warranty of a company’s financial strength

8

8

Other Types of A.M. Best Ratings  Issuer Credit Rating (ICR)  an independent opinion of an issuer’s ability to meet its ongoing senior financial obligations

 Debt Rating (DR)  an independent opinion of an issuer’s ability to meet its ongoing financial obligations to security holders when due

 Insurance Linked Securities (ILS) ratings  an independent opinion of an issuer’s ability to meet its ongoing financial obligations to security holders when due

9

Secure

A+ A A-

a-

B++

bbb+ bbb

B+

bbb-

FSR

Vulnerable

A++

ICR aaa aa+ aa aaa+ a

Investment Grade

FSR

ICR

B

bb+ bb

B-

bb-

C++

b+ b

C+

b-

C C-

ccc+ ccc ccccc

D

c

Non-Investment Grade

A.M. Best Rating Scales

E = under regulatory supervision F = in liquidation

FSR = Financial Strength Rating ICR = Issuer Credit Rating

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9

Why Do Insurance Companies Fail? Affiliate Problems 14.9%

Catastrophe Losses 6.4%

Investment Problems/ Overstated Assets 4.3%

Deficient Loss Reserves/ Inadequate Pricing 68.1%

Alleged Fraud 4.3% Rapid Growth 2.1%

Source: U.S. Property/Casualty & Life/Health – Impairment Review, January 23, 2012

11

Why Do Insurance Companies Fail? Affiliate Problems 8% Catastrophe Losses 7% Reinsurance failure 3%

Deficient Loss Reserves (inadequate pricing) 42%

Significant Change in Business 4% Miscellaneous 8%

Investment Problems (overstated assets) 7% Alleged Fraud 8% Notes: Property/Casualty Financially Impaired Companies – Primary Causes (1969-2011) Source: 1969-2011 U.S. P/C Impairment Review, June 25, 2012

Rapid Growth 13%

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10

Why Do Insurance Companies Fail? Affiliate Problems 17.2%

Catastrophe Losses 10.3% Miscellaneous 3.4%

Deficient Loss Reserves (inadequate pricing) 62.1%

Investment Problems (overstated assets) 3.4% Alleged Fraud 3.4% Notes: Property/Casualty Financially Impaired Companies – Primary Causes (2011) Source: 1969-2011 U.S. P/C Impairment Review, June 25, 2012

13

A.M. Best Ratings Track Record Interactive ratings are forward-looking, impairment studies assess historical performance … 1-Year

5-Year

10-Year

15-Year

A++/A+

0.06%

0.65%

1.96%

3.84%

A/A-

0.17%

1.99%

4.86%

7.04%

B++/B+

0.79%

5.51%

10.42%

14.16%

B/B-

2.14%

10.38%

18.97%

26.14%

C++/C+

3.65%

14.50%

27.15%

33.44%

C/C-

5.92%

18.47%

34.77%

46.85%

D

7.56%

26.28%

42.37%

51.21%

Secure

0.24%

2.10%

4.69%

6.98%

Vulnerable

3.73%

14.81%

26.40%

34.26%

All

0.67%

3.61%

7.27%

10.30%

Source: U.S. Property/Casualty & Life/Health: Best’s Impairment Rate and Rating Transition Study 1977 to 2011, Published: March 26, 2012

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11

Best’s One-year Rating Transition Matrix A++/A+

A/A-

B++/B+

B/B-

C++/C+

C/C-

D

Impaired

A++/A+

92.80%

6.77%

0.35%

0.02%

0.00%

0.00%

0.00%

0.06%

A/A-

3.77%

92.12%

3.21%

0.50%

0.08%

0.05%

0.10%

0.17%

B++/B+

0.39%

10.66%

81.47%

5.38%

0.59%

0.28%

0.44%

0.79%

B/B-

0.27%

1.13%

14.50%

75.59%

4.16%

0.96%

1.26%

2.14%

C++/C+

0.24%

0.71%

2.06%

17.86%

66.94%

5.42%

3.12%

3.65%

C/C-

0.00%

0.64%

0.26%

4.12%

14.93%

65.89%

8.24%

5.92%

D/NA-7

0.10%

0.67%

1.03%

2.83%

2.93%

3.45%

81.43%

7.56%

Source: U.S. Property/Casualty & Life/Health: Best’s Impairment Rate and Rating Transition Study 1977 to 2011, Published: March 26, 2012

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Development of A.M. Best Ratings in Asia Pacific

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12

A.M. Best Ratings in South East Asia CRT 1

3

4

Country Singapore

Malaysia

ICR

FSR

a+

Stable

A

Stable

United Overseas Insurance Limited

a+

Positive

A

Positive

First Capital Insurance Limited

a

Stable

A

Stable

Samsung Reinsurance Pte Ltd

a

Stable

A

Stable

Starr Intl Ins (Singapore) Pte. Ltd

a

Stable

A

Stable

Tenet Insurance Company Ltd

a

Stable

A

Stable

Asia Capital Reinsurance Group Pte. Ltd.

a-

Stable

A-

Stable

China Taiping Ins (Singapore) Pte Ltd

a-

Stable

A-

Stable

PARIS RE Asia Pacific Pte Ltd

a-

Negative

A-

Negative

SHC Capital Limited

a-

Stable

A-

Stable

Singapore Reinsurance Corporation Ltd

a-

Stable

A-

Stable

Energas Insurance (L) Limited

a

Stable

A

Stable

ACR ReTakaful SEA Berhad

a-

Stable

A-

Stable

Asia Capital Reinsurance Malaysia Sdn

a-

Stable

A-

Stable

BEST RE (L) Limited

a-

Negative

A-

Negative

BEST RE Family (L) Limited

a-

Stable

A-

Stable

Labuan Reinsurance (L) Ltd

a-

UR / Negative

A-

UR / Negative

Lonpac Insurance Bhd

a-

Stable

A-

Stable

Malaysian Reinsurance Berhad

a-

Stable

A-

Stable

Thailand

Asian Reinsurance Corporation

bbb

Stable

B++

Stable

Indonesia

PT Asuransi Jasa Indonesia (Persero)

bbb

Positive

B++

Stable

Philippines

Malayan Insurance Co., Inc.

bbb

Stable

B++

Stable

National Reinsurance Corp of Philippines

bbb

Stable

B++

Stable

General Insurance Corporation of India

a-

Stable

A-

Stable

The New India Assurance Company Limited

a-

Stable

A-

Stable

The Oriental Insurance Company Limited

bbb+

Stable

B++

Stable

United India Insurance Company Limited

bbb+

Stable

B++

Stable

Samsung Vina Insurance Limited

bbb+

Stable

B++

Stable

PVI Insurance Corporation

bbb-

Stable

B+

Stable

PVI Reinsurance Company

bbb-

Stable

B+

Stable

India

5

Company SCOR Reinsurance Asia-Pacific Pte Ltd

Vietnam

All ratings correct as at 28/01/11

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A.M. Best Ratings in SE Asia

Distribution of ICRs 18

13

Relationship Between Financial Strength Rating and Gross Premium Written Best's Financial Strength Rating

Gross Premium Written (USD million) 0–5

5 – 20

20 – 50

50 – 250

250 – 750

5%

A++

750 +

4%

A+

9%

7%

3%

4%

2%

36%

A

9%

20%

20%

22%

67%

50%

A-

73%

37%

43%

43%

25%

6%

B++

23%

14%

18%

6%

3%

B+

10%

14%

7%

9%

3%

6%

1%

11

30

35

B

1%

BSample (total / each tier): 340

111

1% 51

102

Excludes United States, Canada and Bermuda. AM Best data as at October 2011 Note: percentage figures may not sum to 100% due to rounding

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Drivers of Ratings Demand

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The Growing Importance of Credit Quality Growing awareness of credit quality

GFC raised general level of awareness of credit quality across both consumer and commercial sectors

Focus on counterparty credit

Sharpened focus on counterparty credit will continue to embed ratings in the financial fabric of the insurance and reinsurance sectors

Ratings becoming enshrined in legislation

Ratings are increasingly becoming enshrined in insurance legislation around the world as regulatory regimes evolve and their sophistication increases

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Drivers for Continuing Ratings Growth in Asia Pacific  Enhanced insurance regulation, in particular enhanced solvency requirements  Need for statement of credibility (“passport”) when expanding regionally/internationally  Entry to, and development of, credit sensitive market segments e.g. reinsurance, large commercial business  Due-diligence requirements on cross-border mergers, JVs, etc.  Tender-process requirements in which ratings are required for carriers insuring new projects  Increasing involvement of major brokers  Facilitates capital raising and reinsurance purchase  Drive to improve corporate governance practices  Desire for external endorsement of company’s (and CEO’s !) progress 22

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Ratings Fulfil Different Needs … Emerging markets

Developed markets

• Improves competitive positioning





• Access to fronting business





• Meets regulatory requirements





• Access to additional risk classes









• Improves financial flexibility

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Case Studies – Asia Pacific OBJECTIVE

COMPANY

COUNTRY

RATING FIRST ISSUED

CURRENT AMB (FSR) RATING

Develop from national to global reinsurer

China Re

China

2010

A

Improve competitive positioning

PVI Insurance

Vietnam

2011

B+

New market segment entry

SHC Capital

Singapore

2012

A-

Expand use of a captive

Energas

Malaysia (Labuan)

2011

A

Access to inward reinsurance

Asian Re

Thailand

2008

B++

Regulatory compliance

Union Medical Benefits Society

New Zealand

2011

A-

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16

The Rating Process

25

The Interactive Rating Process Year One

Year Two and onwards

1. Exploratory discussions

1. Compile detailed information (on-going)

2. Contract (RSA) signed – formal process commences

2. Hold management meeting

3. Compilation of detailed information

3. Perform comprehensive analysis

4. Hold management meeting 4. Determine rating (via committee) 5. Perform Best’s financial analysis 5. Disseminate rating to the public 6. Determine Best’s rating (via internal committee)

6. Perform on-going surveillance & monitoring

7. Best’s rating to the public (only with company’s approval) 8. Company receives report and commentaries from analytical team 9. Perform on-going surveillance & monitoring

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17

What Kind of Information Will Be Required? Public

Private



Financial Statements





Shareholder/Policyholder Reports

Management Meetings with CEO, COO, CFO, CUO, CIO



Business Plans/Projections



Statutory Filings & Offerings



Best’s Supplemental Rating Questionnaire (SRQ)



Audit Reports



Actuarial Memorandums



Regulatory Filings



Loss Reserve Reports



Cash Flow Testing



Capital Structure and Plans



Investment and Credit Guidelines



Reinsurance Guidelines



Catastrophe Exposures



Enterprise Risk Management Metrics



Internal Capital Models 27

The Management Meeting Agenda           

CEO Strategic Overview Corporate Governance Organisational Structure Capital Structure Underwriting Claims & Loss Reserving Reinsurance Programs Investments Financial Review & Planning Enterprise Risk Management Marketing & Business Production

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THANK YOU Q&A

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Disclaimer © AM Best Company (AMB) and/or its licensors and affiliates. All rights reserved. ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY COPYRIGHT LAW AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT AMB’s PRIOR WRITTEN CONSENT. All information contained herein is obtained by AMB from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. Under no circumstances shall AMB have any liability to any person or entity for (a) any loss or damage in whole or in part caused by, resulting from, or relating to, any error (negligent or otherwise) or other circumstance or contingency within or outside the control of AMB or any of its directors, officers, employees or agents in connection with the procurement, collection, compilation, analysis, interpretation, communication, publication or delivery of any such information, or (b) any direct, indirect, special, consequential, compensatory or incidental damages whatsoever (including without limitation, lost profits), even if AMB is advised in advance of the possibility of such damages, resulting from the use of or inability to use, any such information. The credit ratings, financial reporting analysis, projections, and other observations, if any, constituting part of the information contained herein are, and must be construed solely as, statements of opinion and not statements of fact or recommendations to purchase, sell or hold any securities, insurance policies, contracts or any other financial obligations, nor does it address the suitability of any particular financial obligation for a specific purpose or purchaser. Credit risk is the risk that an entity may not meet its contractual, financial obligations as they come due. Credit ratings do not address any other risk, including but not limited to, liquidity risk, market value risk or price volatility of rated securities. NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY AMB IN ANY FORM OR MANNER WHATSOEVER. Each credit rating or other opinion must be weighed solely as one factor in any investment or purchasing decision made by or on behalf of any user of the information contained herein, and each such user must accordingly make its own study and evaluation of each security or other financial obligation and of each issuer and guarantor of, and each provider of credit support for, each security or other financial obligation that it may consider purchasing, holding or selling.

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AM Best's Indonesia Seminar 2012 Indonesia’s Dynamic Insurance Landscape Rating Development in High-growth Markets

Jakarta, 10 July 2012

20

A Practical View of Rating South East Asian Markets Jeff Yeung Senior Financial Analyst A.M. Best Asia-Pacific Ltd. Jeff Yeung is a senior financial analyst at A.M. Best Asia-Pacific Ltd. Jeff joined A.M. Best in 2011. Prior to joining A.M. Best, Jeff held the role of senior pricing actuary at Gen Re in Sydney. He has worked in Gen Re’s Hong Kong and Cologne, Germany, offices as well. He has more than 10 years of experience in the property and casualty reinsurance industry in markets that include Australia, Germany and China. Jeff is a Fellow of the Casualty Actuarial Society, Fellow of the Institute of Actuaries of Australia and RMS Certified Catastrophe Risk Analyst. He is a member of the Casualty Actuarial Society Committee on Reinsurance Research. He received his BS in Actuarial Science from the University of Hong Kong.

21

A.M. Best Rating Methodology and Southeast Asia Case Studies

Jeff Yeung Senior Financial Analyst A.M. Best Asia Pacific Ltd July 2012

Today’s Topics  Understanding Best’s Credit Rating Methodology (BCRM) and Best’s Rating Perspective: the example of South East Asia  Catastrophe Analysis  Rating Takaful (Shari’a Compliant) Insurance Companies

2

22

Today’s Topics  Understanding Best’s Credit Rating Methodology (BCRM) and Best’s Rating Perspective: the example of South East Asia  Catastrophe Analysis  Rating Takaful (Shari’a Compliant) Insurance Companies

3

Best’s Rating Evaluation

4

23

A.M. Best Rating Perspective

Business Profile

Operating Performance

Balance Sheet Strength

 Balance-sheet strength holds the highest weight across all rating levels. However, as the rating levels increase so does the emphasis on operating performance and business profile. 5

Best’s Rating Component

Balance Sheet Strength

Obligations to Policyholders

Financial Obligations

6

24

Balance Sheet Strength Company Structure

 Holding Company  Gov’t-owned / Public / Private

Capitalization

 Absolute Size / Leverage  Stress Testing

Adequacy of Reserves

 Development  Stability

Financial Flexibility

 Equity  Subordinated Debt

Liquidity

 Quality  Diversification of Assets

Reinsurance

 Quality  Coverage 7

SEA Portfolio Case Study - Balance Sheet Strength Case Study (Financial Year 2010) India

Singapore

Malaysia

Indonesia

(rated entities)

(rated entities)

(rated entities)

(Non-life Industry)

CRT

4

1

3

4

FSR

B++ to A-

A- to A

A- to A

Net UW leverage

Avg ≈ 40%

Avg ≈ 60%

Avg ≈ 120%

Avg ≈ 68%

(30% ~ 55%)

(15% ~ 85%)

(40% ~ 175%)

Cash, Deposits to Loss Reserves

Avg ≈ 45% (15% ~ 60%)

(25% ~ 180%)

Avg ≈ 55%

Avg ≈ 100%

Avg > 300%

Invested Assets to Total Assets

Avg ≈ 85%

Avg ≈ 75%

Avg ≈ 85%

Avg ≈ 75%

(80% ~ 90%)

(65% ~ 95%)

(75% ~ 200%+) (75% ~ 95%)

Leverage = Net Premium Written / Adjusted Capital

8

25

SEA Portfolio Case Study - Balance Sheet Strength Case Study (Financial Year 2010) India

Singapore

Malaysia

Indonesia

(rated entities)

(rated entities)

(rated entities)

(Non-life Industry)

CRT

4

1

3

4

FSR

B++ to A-

A- to A

A- to A

Loss Reserve to C&S

Avg ≈ 40%

Avg ≈ 60%

Avg ≈ 100%

Total Assets (USD mil)

Avg ≈ $7000 mil

Avg ≈ $350 mil

Avg ≈ $300 mil

C&S (USD mil)

Avg ≈ $4000 mil

Avg ≈ $150 mil

Avg ≈ $100 mil

(35% ~ 50%)

(25% ~ 85%)

(70% ~ 120%)

Avg < 20%

(each rated entity)

(each rated entity)

9

A.M. Best’s Capital Adequacy Model

- Indonesia Non-life Insurance Industry Case Study Case Study: Indonesia P&C Assets Cash Inv: Time Deposits Inv: Bonds Inv: Equities Inv: Other Property, Fixed assets etc Receivables Assets Total

%age 3.3% 28.4% 9.8% 34.1% 0.7% 7.5% 16.2% 100.0%

Liab & Equities Capital & Surplus Claims Reserves Payables UPR Liab & Equities Total

55.2% 8.1% 22.3% 14.4% 100.0%

(FY 2010)

Source: “Indonesian Insurance 2010” Year Book, published by Capital Market and Financial Institutions Supervisory Agency, Ministry of Finance, Republic of Indonesia

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26

A.M. Best’s Capital Adequacy Ratio (BCAR) BCAR =

Insurer’s “Adjusted Policyholder Surplus (APHS)” Insurer’s “Net Required Capital (NRC)”

Asset Risks (B1) Fixed-Income Securities (B2) Equity Securities (B3) Interest Rate (B4) Credit

Underwriting Risks (B5) Loss and LAE Reserves (B6) Net Written Premium Other Risk (B7) Off Balance Sheet

11

A.M. Best’s Capital Adequacy Model

- Indonesia Non-life Insurance Industry Case Study Case Study: Indonesia P&C

(FY 2010)

vs. U.S. P&C Industry (FY 2010)

U.S.

Indonesia

12

27

SEA Portfolio Case Study Balance Sheet Strength

Business Profile

Operating Performance

 Adequate to strong risk-adjusted capitalization  Moderate to high CAT exposure

 Moderate to high Liquidity

 Diverse UW leverage

 High proportion of investments

13

Best’s Rating Component

Operating Performance

Source of Earnings

Track Record

Sustainability

14

28

Operating Performance Profitability

 Stable vs Volatile  High vs Low Fixed Costs

Revenue Composition

 Diversification of Lines  Investment Income

Ability to Meet Plan

 Actual vs Forecast

Sustainability

 Consistency vs Volatility

15

SEA Portfolio Case Study - Operating Performance Case Study (Financial Year 2010) India

Singapore

Malaysia

Indonesia

(rated entities)

(rated entities)

(rated entities)

(Non-life Industry)

CRT

4

1

3

4

FSR

B++ to A-

A- to A

A- to A

Net Loss Ratio

Avg ≈ 95%

Avg ≈ 70%

Avg ≈ 60%

Avg ≈ 53%

Expense Ratio

Avg ≈ 30%

Avg ≈ 20%

Avg ≈ 30%

Avg ≈ 38%

Combined Ratio

Avg ≈ 125%

Avg ≈ 90%

Avg ≈ 90%

Avg ≈ 91%

Operating Ratio

Avg ≈ 95%

Avg ≈ 75%

Avg ≈ 80%

Avg ≈ 76%

16

29

SEA Portfolio Case Study Balance Sheet Strength

Business Profile

Operating Performance

 Some excellent underwriting results, although volatility often observed  Favourable investment return

 Expense management is important

17

Best’s Rating Component

Business Profile

Competitive Advantage

Market Viability

18

30

Business Profile Premium Composition

 Niche vs Diversified  Regional vs Global

Premium Growth

 Premium Rate vs Volume  Profitability

Competiveness

 Distribution Capabilities  Brand Recognition

Management

 Alignment / Expertise  Adaptive to Changes

Insurance Market Risk

 Insurance Industry  Regulations / Economy

Event Risk

 Financial or Catastrophe Impacts  Risk Control 19

SEA Portfolio Case Study - Business Profile Non-Life Insurance Industry GPW growth India

Singapore

Malaysia

Indonesia

(Non-life Industry)

(Non-life Industry)

(Non-life Industry)

(Non-life Industry)

CRT

4

1

3

4

2007

11.7%

11.4%

4.0%

11.6%

2008

21.8%

11.9%

6.9%

21.8%

2009

7.6%

8.9%

5.0%

7.6%

2010

10.6%

15.4%

7.6%

10.6%

20

31

SEA Portfolio Case Study Balance Sheet Strength

Operating Performance

Business Profile

 Moderate to strong premium growth

 Diversified and short-tailed portfolios

 Strong economy  High inflation

21

Enterprise Risk Management

Balance Sheet Strength

Operating Performance

Business Profile

Enterprise RiskManagement Management Enterprise Risk

22

32

Enterprise Risk Management Identify

Measure

 Type of Risk

 Level of Risk

Manage

 Procedure  Control

Goal is NOT to eliminate risk, but to understand and manage it

23

Today’s Topics  Understanding Best’s Credit Rating Methodology (BCRM) and Best’s Rating Perspective: the example of South East Asia  Catastrophe Analysis  Rating Takaful (Shari’a Compliant) Insurance Companies

24

33

Largest Catastrophe Losses in U.S. 2000-2010

 Economic Loss vs. Insurance Loss  Un-modeled Loss; “Black Swan”  Revaluing Historical Cat Losses

25

Largest Catastrophe Losses in Asia Pacific 1990-2009

 Insurance Penetration varies within Country

26

34

Largest Catastrophe Losses in Asia Pacific 2010-2011

    

Insurance Penetration varies by Country Inflation of catastrophe losses: economic & insured Impact on individual company’s result Un-modeled loss; “Black Swan” Post-event: loss adjustment & claims settlement 27

Rating Changes (2010-2012)

28

35

Rating Actions in AP - 2010 Central Re (Taiwan) upgrade from A- to A FMG (NZ) upgrade from A- to A

Tenet (SG) from A- (stable) to A- (UR pos) Jan

Feb

Mar

Korean Re (SK) from A(stable) to A- (pos)

First Net (Guam) upgrade from B+ to B++

CISL (NZ) downgrade from A- to B++

Apr

May

Jun

Hyundai (China) from B++ (stable) to B++ (pos)

Tenet (SG) upgrade from A- to A

Jul

Aug

Sep

Oct

Nov

Dec

Tugu (HK) from B++ (stable) to B++ (pos)

Macau Ins downgrade from A to A-

2010 Canterbury Earthquake

Taiping Re (HK) from A- (stable) to A- (pos)

Macau Life from A- (neg) to A- (stable) LAPP (NZ) from A (stable) to A (UR neg)

29

Rating Actions in AP - 2011 2011 Thailand Floods

LAPP (NZ) downgrade A to B++

Feb 2011 Christchurch Earthquake

Fuji Fire (JP) from B++ (stable) to B++ (UR pos) Korean Re (SK) upgrade A- to A

AMI (NZ) from A- (UR neg) to A- (stable)

LAPP (NZ) downgrade B++ to B

Jan

Feb

2011 Great East Japan Earthquake

Labuan Re (Malaysia) from A(stable) to A(UR neg)

Mar Civic (NZ) from A (stable) to A (UR neg) AMI (NZ) from A+ (stable) to A- (UR neg) CTIM (Macau) from A- (stable) to A- (pos)

Apr

May LAPP (NZ) downgrade B to B-

Jun

June 2011 Christchurch Earthquake Jul

Aug

Sep

Toa Re (JP) from A+ (stable) to A+ (UR neg)

Oct

Nov

Dec

Civic (NZ) downgrade A to B++

Hyundai (SK) from A(stable) to A(positive)

Century (Guam) upgrade B+ to B++

Samsung (SK) upgrade A+ to A++

30

36

Rating Actions in AP - 2012

Pacific Int’l (NZ) upgrade B+ to B++

Jan Taiping Re (HK) A- (pos) to A- (stable)

Feb

Mar

Apr

ACS (NZ) downgrade B++ to B+

New India (India) A(neg) to A(stable)

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Toa Re (JP) from A+ (UR neg) to A+ (stable)

Fuji Fire (JP) upgrade B++ to A-

31

Catastrophe Analysis in A.M. Best Ratings Keys to Strong Catastrophe Risk Management: Controls Monitoring Exposure

Data Quality 32

37

Today’s Topics  Understanding Best’s Credit Rating Methodology (BCRM) and Best’s Rating Perspective: the example of South East Asia  Catastrophe Analysis  Rating Takaful (Shari’a Compliant) Insurance Companies

33

Rating Takaful (Shari’a Compliant) Insurance Companies Overview: Basic Takaful Model

Seed capital

• Management expenses • Commissions

Operator’s Fund

Investment returns on capital

• Admin fees • Share of investment returns (and/or underwriiting results)

Qard’ hasan (interest-free loan, if needed)

Policyholders’ (Takaful) Fund Claims

Premiums (donations) Investment returns

38

34

Rating Takaful (Shari’a Compliant) Insurance Companies Analysing a Takaful Company 2nd Tier Analysis: Operator’s fund BS strength

1st Tier Analysis: Takaful fund BS strength

Consolidated View of Capital • •

Operator’s fund vs. Takaful fund Sufficiency of Qard' Hasan

Capital accumulation trends

Other drivers of BS strength

Operating Performance 35

Rating Takaful (Shari’a Compliant) Insurance Companies After all, factors analysed in conventional insurers applies to takaful companies too …

Organization Structure

Corporate Governance

Products, Underwriting

Capital Structure

Loss Reserving

Operating Performance

Investment

Business Profile

ERM

…… etc etc

39

Reinsurance

36

THANK YOU Q&A

37

Disclaimer © AM Best Company (AMB) and/or its licensors and affiliates. All rights reserved. ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY COPYRIGHT LAW AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT AM Best Company PRIOR WRITTEN CONSENT. All information contained herein is obtained by AMB from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. Under no circumstances shall AM Best Company have any liability to any person or entity for (a) any loss or damage in whole or in part caused by, resulting from, or relating to, any error (negligent or otherwise) or other circumstance or contingency within or outside the control of AM Best or any of its directors, officers, employees or agents in connection with the procurement, collection, compilation, analysis, interpretation, communication, publication or delivery of any such information, or (b) any direct, indirect, special, consequential, compensatory or incidental damages whatsoever (including without limitation, lost profits), even if AM Best Company is advised in advance of the possibility of such damages, resulting from the use of or inability to use, any such information. The ratings, financial reporting analysis, projections, and other observations, if any, constituting part of the information contained herein are, and must be construed solely as, statements of opinion and not statements of fact or recommendations to purchase, sell or hold any securities. NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY AM BEST COMPANY IN ANY FORM OR MANNER WHATSOEVER. Each rating or other opinion must be weighed solely as one factor in any investment decision made by or on behalf of any user of the information contained herein, and each such user must accordingly make its own study and evaluation of each security and of each issuer and guarantor of, and each provider of credit support for, each security that it may consider purchasing, holding or selling.

38

40

A.M. Best Rating Methodology and Southeast Asia Case Studies

Jeff Yeung Senior Financial Analyst A.M. Best Asia Pacific Ltd July 2012

41

Asia Pacific Economic Outlook and Country Risk Methodology Mr James Gillard Senior Managing Economist Economic Research & Analysis A.M. Best Company James Gillard, Senior Managing Economist in the Economic Research and Analysis Group, has been with A.M. Best for nearly 5 years. His responsibilities include the development and review of country risk analysis, as well as the analysis of political, economic, regulatory and insurance industry environments of approximately 150 countries. Mr. Gillard and his team formulate the economic assumptions that are integrated into A.M. Best’s capital model and the ratings process. Prior to joining A.M. Best, Mr. Gillard served as the Economic Analyst and District Liaison at the Federal Reserve Bank of Philadelphia. He provided analysis and input on economic issues used in briefings for the Bank’s president including preparation for Federal Open Market Committee (FOMC) meetings. His research work included estimating a time-varying series for the natural rate of unemployment and using a structural model to calculate the international effects of a monetary policy shock in the United States. He received his bachelor’s in economics and finance from Gettysburg College and his master’s in economics from Johns Hopkins University. In addition he has an M.B.A. with a concentration in finance from Temple University’s Fox School of Business.

42

Country Risk Analysis and the Economic Drivers of Insurance Growth in Southeast Asia James Gillard Sr. Managing Economist A.M. Best Company

Country Risk Analysis

2

43

Defining Country Risk •

Country Risk: The risk that country-specific factors could adversely affect an insurer’s ability to pay its financial obligations. Distinct from:

•

Sovereign Default Risk: Probability that a sovereign government does not pay back its debts on time & in their entirety.

•

Transfer and Convertibility Risk: The risk that capital and exchange controls may be imposed by government authorities that would prevent or materially impede the private sector’s ability to convert local currency into foreign currency and/or transfer funds to nonresident creditors.

3

Country Risk Pyramid Sound Insurance Industry

Financial System Stability

Economic Prosperity

Political Security and Transparency 4

44

Country Risk The risk that country-specific factors could adversely affect an insurer’s ability to pay its financial obligations CRT-1 Lowest Risk

Macroeconomy

Economic Risk

Prospects Government Finance Business Environment Government Stability

Political Risk

CRT-3 Moderate Risk

Social Stability Legal System

Financial System Risk Non-Insurance

Banking System Reporting Standards & Regulation Sovereign Debt

CRT-5 Highest Risk

Government & Legislation Insurance

Supervisory Authority Insurer Accountability

5

A.M. Best Country Risk Analysis

6

45

Regional Distribution of CRTs 0

2

4

6

# of Countries 8 10 12

CRT-2

CRT-3

14

16

18

20

North America Latin America Western & Northern Europe Southern Europe Eastern Europe MENA Sub-Saharan Africa Central Asia Southern Asia East Asia Southeast Asia Oceania Caribbean .

CRT-1

CRT-4

CRT-5

21%

22%

% of TOTAL

17%

16%

24%

7

Key Components of Political Risk Political risk is the likelihood that governmental or bureaucratic inefficiencies, societal tensions, an inadequate legal system or international tensions will cause adverse developments for an insurer – Evaluation of Business Environment

• How easy/difficult is it to do business?

– Strength of Legal System

• How prevalent is corruption? • Are the property rights respected? • Are contracts enforceable?

– Government and Social Stability

• How likely is government disruption? • Are there likely to be political/social unrest? 8

46

Rank out of 183 Countries (Higher Rank=More Difficult to Do Business)

Doing Business in Emerging Markets 180 160 140 120 World Average

100 80 60 40 20 0 Caribbean

Central Asia

E Europe

East Asia

Latin America

MENA

N America

Oceania

SE Asia

SubSaharan Africa

W Europe

Source: World Bank

9

Corruption Adds to Uncertainty Corruption Index (Higher=Less Perception of Corruption)

10 Higher Degree of Perceived Corruption

9 8 7

World Average

6 5 4 3 2 1 0 Caribbean

Central Asia

E Europe

East Asia

Latin America

Source: Transparency International

MENA

N America

Oceania

SE Asia

SubSaharan Africa

W Europe

10

47

Key Components of Economic Risk Economic risk is the likelihood that fundamental weaknesses in a country’s economy will cause adverse developments for an insurer – – – –

Economic and political size of the country Wealth of a country Length and depth of business cycles Inflation volatility

11

Economic Growth is More Volatile 10 Advanced Real GDP % Growth Emerging Real GDP % Growth 8

% Growth

6 4 2 0 -2 -4 2001

2002

2003

2004

2005

2006

Source: IMF

2007

2008

2009

2010

2011 12

48

Increased Inflation Volatility 30 Egypt (CRT-5) Jamaica (CRT-5) Nigeria (CRT-5) United States (CRT-1)

Inflation change (%)

25

Forecasts underestimate volatility

20

15

10

5

0

-5 1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

Source: IMF

13

Key Components of Financial System Risk Financial system risk (non-insurance) is the risk that financial volatility may erupt due to inadequate reporting standards, weak banking systems or asset markets or poor regulatory structure – Sovereign Credit Risk – Banking System Stability – Selection of Assets 14

49

Equity Market Returns Have “Fat Tails”

Number of Months

90 80

Emerging Market Monthly Returns to MSCI Index

70

Developed Market Monthly Returns to MSCI Index

60 50 40 30 20 10 0 -15

-12.5

-10

-7.5

-5

-2.5

0 2.5 Return (%)

5

7.5

10

12.5

15

Source: MSCI

More 15

Less Developed Bond Markets Developed Average Lebanon Malaysia Thailand Brazil South Africa Poland Philippines Mexico China Emerging Average India Venezuela Colombia Turkey Pakistan Peru Argentina Indonesia 0 Source: BIS and A.M. Best

20

40

60

80

100

120

140

160

180

200

Total Bonds Outstanding as % of GDP 16

50

Country Risk & Market Development 14%

Penetration (%)

12% 10% 8% 6% 4% 2% 0% Country Risk Score (from lower to higher risk) Source: AXCO and A.M. Best

17

Integration of Country Risk Balance Sheet Strength

Operating Performance

Business Profile

Industry Trends & Analysis

Management Team

Company Rating Proposal Peer Analysis / Industry Composite

Country Risk

Enterprise Risk Management 18

51

Integration of Country Risk Key elements of country risk can be managed or mitigated, effectively reducing the impact on an insurer’s rating. As a result, it is possible that A.M. Best’s highest ratings can be achieved in any country.

Company Rating Proposal Country Risk

Country risk is not a ceiling or cap on insurer ratings; it is one of many rating factors

19

Ease of Doing Business Rank (Out of 183 Countries)

Some Countries Are More Challenging 180 160 140 120 100 80 60 40 20 0 CRT-1

CRT-2

CRT-3

Source: World Bank

CRT-4

CRT-5 20

52

Degree of Corruption Varies

Corruption Index (Higher=Less Perception of Corruption)

10 9 8 7 6 5 4 3 2

Higher Degree of Perceived Corruption

1 0 CRT-1

CRT-2

CRT-3

CRT-4

Source: Transparency International

CRT-5

21

Heat Chart Illustrates Relationship

22

53

Relationship Between Financial Strength Rating and Country Risk Tier Best's Financial Strength Rating

Country Risk Tier 1

2

3

A++

6%

1%

2%

A+

20%

15%

A

55%

35%

16%

4%

A-

16%

35%

59%

26%

5%

B++

2%

10%

18%

48%

32%

B+

1%

3%

2%

17%

42%

4%

16%

1%

B B-

2%

C-

2%

Sample (total / each tier): 366

146

117

61

4

5

5%

23

19

Excludes United States, Canada and Bermuda. A.M. Best data as at October 2011 Note: percentage figures may not add due to rounding

23

The Economic Drivers of Insurance Growth in Southeast Asia

24

54

Wealth and Insurance 14%

Penetration (%)

12% 10% 8% 6% 4% 2% 0% $0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

GDP per capita Source: IMF, AXCO and A.M. Best

25

GDP per Capita by Region $60,000 GDP per capita World Average

GDP per Capita ($)

$50,000 $40,000 $30,000 $20,000 $10,000

$3,893 $0 Caribbean

Central Asia

E Europe

East Asia

Latin America

MENA

N America Oceania

SE Asia

SubW Europe Saharan Africa

26

55

Insurance Penetration by Region 12% Premiums as % of GDP World Average

Penetration (%)

10%

8%

6%

4% 2.6% 2%

0% Caribbean

Central Asia

E Europe

East Asia

Latin America

MENA

N America

Oceania

SE Asia

SubSaharan Africa

W Europe

27

Insurance Penetration in SE Asia 7% Premiums as % of GDP 6%

Penetration (%)

5% 4% 3% 2% 1% 0% Indonesia

Malaysia

Philippines

Singapore

Thailand

Vietnam 28

56

Real GDP Growth 12 Indonesia Developing Asia ASEAN-5 World

10

Forecasts

% change

8 6 4 2 0 -2 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

29

GDP per Capita Rising in Indonesia $7,000 Indonesia

$5,000 $4,000 $3,000 $2,000 $1,000

16

15

14

13

12

11

10

09

08

07

06

05

04

03

02

01

17 20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

00

$0 20

GDP per Capita ($)

$6,000

30

57

Projecting Premiums by Country 30,000

Premiums (millions of $)

25,000

Indonesia Malaysia Philippines Singapore Thailand Vietnam

20,000

15,000

10,000

5,000

0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 31

Projecting Premiums in ASEAN 100,000 Total ASEAN Premiums

90,000

Premiums (millions of $)

80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 32

58

Growth Prospects for Southeast Asia • Growth in Southeast Asia is expected to outplace global growth over the next 5 years. • Growth in Indonesia has been and likely will continue to be extremely robust. • Given rising GDP per capita, and improvements in level of country risk, insurance penetration should rise over the next few years in Indonesia. • Solid economic growth and rising insurance penetration will create strong premium growth over the next several years. 33

Thank You Q&A

34

59

© AM Best Company (AMB) and/or its licensors and affiliates. All rights reserved. ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY COPYRIGHT LAW AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT AM Best Company PRIOR WRITTEN CONSENT. All information contained herein is obtained by AMB from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. Under no circumstances shall AM Best Company have any liability to any person or entity for (a) any loss or damage in whole or in part caused by, resulting from, or relating to, any error (negligent or otherwise) or other circumstance or contingency within or outside the control of AM Best or any of its directors, officers, employees or agents in connection with the procurement, collection, compilation, analysis, interpretation, communication, publication or delivery of any such information, or (b) any direct, indirect, special, consequential, compensatory or incidental damages whatsoever (including without limitation, lost profits), even if AM Best Company is advised in advance of the possibility of such damages, resulting from the use of or inability to use, any such information. The ratings, financial reporting analysis, projections, and other observations, if any, constituting part of the information contained herein are, and must be construed solely as, statements of opinion and not statements of fact or recommendations to purchase, sell or hold any securities. NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY AM BEST COMPANY IN ANY FORM OR MANNER WHATSOEVER. Each rating or other opinion must be weighed solely as one factor in any investment decision made by or on behalf of any user of the information contained herein, and each such user must accordingly make its own study and evaluation of each security and of each issuer and guarantor of, and each provider of credit support for, each security that it may consider purchasing, holding or selling.

35

Country Risk Analysis and the Economic Drivers of Insurance Growth in Southeast Asia James Gillard Sr. Managing Economist A.M. Best Company

60

Panel Discussion: The Development of the South East Asian Insurance Markets: Regulation and Credit Rating, Friend or Foe? Mr Hussain Ahmad Senior Consulting Actuary, Southeast Asia Towers Watson Hussain Ahmad is a Senior Consulting Actuary in Towers Watson’s Singapore office. He has spent over 7 years working in various countries in Asia, with particular focus on Southeast Asia, including Indonesia. Hussain currently has responsibility for Towers Watson’s General Insurance M&A work across Asia, and Capital Management business in Southeast Asia. In Indonesia, his experience includes work on market entry strategy, Motor distribution strategy, loss reserving and M&A due diligence. Prior to his move back to Asia, Hussain worked with Towers Watson in the U.S., primarily involved with reserving work for US and Bermudan insurance and reinsurance companies. Hussain holds a Master of Finance degree in Financial Engineering and a Bachelor of Science in Business Administration degree in Actuarial Science. He is a Fellow of the Casualty Actuarial Society, Singapore Actuarial Society and the Actuarial Society of Malaysia.

Mr George Attard Managing Director, Analytics Aon Benfield Asia George joined Aon Re in July 2008 and is based in Singapore. As Managing Director, Analytics, George is responsible for business development, coordination and provision of Aon Benfield’s analytical capabilities, along with providing operational support for Aon Benfield Asia. George has almost 20 years of experience in financial services including property & casualty (re)insurance, banking and finance, life (re)insurance and pensions in various roles including consulting, pricing & product actuarial, management and underwriting. Prior to joining Aon Benfield, George worked in various actuarial roles. He was a Senior Actuary and Underwriter for Imagine Group in Sydney for five years, responsible for originating business in Asia Pacific as well as structuring and pricing transactions globally. He was also the Director for Centre Re for two years where he supported the underwriting team providing structure and pricing advice. George also acted as Pricing and Product Actuary for two years with Gerling Global Life Reinsurance where he was involved in all aspects of actuarial work in a life reinsurance environment; and he was a Consulting Actuary with Mercer Human Resource Consulting for nine years managing portfolio of small to medium size clients and provides direct consulting support. George holds a Bachelor of Economics degree and he is also a Fellow of the Institute of Actuaries of Australia.

61

Panel Discussion: The Development of the South East Asian Insurance Markets: Regulation and Credit Rating, Friend or Foe? Mr Kenrick Law Executive Vice President, Strategic Business Asia Capital Reinsurance Group Pte Ltd Kenrick Law joined the reinsurance industry in 1996 with Swiss Re Zurich. After received extensive training on various reinsurance products in both Switzerland and South Africa, he returned to Hong Kong in 1998 as a casualty treaty underwriter. In 2000, he was promoted to be responsible for the casualty treaty business for the Greater China Region. He then relocated to Singapore in 2003 to manage the Casualty Treaty portfolio of South East Asia. In July 2006, he returned to Hong Kong to head up the Casualty Treaty Underwriting Desk for Asia for Swiss Re. Kenrick joined Asia Capital Reinsurance Group in March 2007 to head up the Casualty Underwriting team. His expertise includes Motor, Personal Accident, Workmen’s Compensation and General Liability. As from April 2010, he is in charge of the Strategic Business Unit, which spearheads new strategic business opportunities, as well as manages the relationship with key clients. During his years in Asia, Kenrick has represented Swiss Re and the reinsurance industry in various insurance associations, e.g. the Convenor of the Liability Subcommittee of Reinsurers’ Forum in Hong Kong, and member of Motor committee in Malaysia. He holds a Master Degree in Economics from University of Toronto (Canada) as well as Bachelor’s Degree in Economics from McGill University (Canada).

Mr Erwin H. Nokeman Head of Takaful Business Operation PT. Asuransi Jasa Indonesia (Persero) Erwin is a (re)insurance and (re)takaful practitioner with more than a decade of in-depth experience giving him a sound knowledge of Indonesian and regional non-life (re)insurance and (re)takaful market and regulation. He is responsible for developing the Takaful Business Unit (takaful window) at PT. Asuransi Jasa Indonesia (Persero), a leading insurance company in Indonesia. He oversees all activities and operations of the business, including underwriting, retakaful, claims handling, marketing planning, shariah and regulatory compliance, budgeting, investment, and IT systems. Erwin is a chartered insurance practitioner from CII (ACII) and holds an Associateship from the Malaysian Insurance Institute (AMII) and also an Associateship from the Indonesian Insurance Instutute (AAAIK). He graduated with an MBA from the University of Liverpool, England and also holds a Bachelor of Engineering Degree from Trisakti University in Jakarta.

62

Panel Discussion: The Development of the South East Asian Insurance Markets: Regulation and Credit Rating, Friend or Foe? Mr Moungmo Lee General Manager, Analytics A.M. Best Asia-Pacific Ltd MoungMo Lee has been with A.M. Best since 2000. He is responsible for the analytics of A.M. Best’s ratings in the Asia-Pacific region. Prior to assuming his current role, MoungMo served as the lead analyst for numerous companies in A.M. Best’s AsiaPacific portfolio. Before joining A.M. Best, Moungmo worked for Siemens AG and Hypo Bank in Germany. MM received his bachelor’s degree in economics from ChungAng University and his master’s in economics from Seoul National University.

Dr Roger Sellek Chief Executive Officer A.M. Best – EMEA & Asia Pacific Roger Sellek is based in London and oversees A.M. Best’s rating, information services and news businesses throughout Europe, the Middle East, Africa and the Asia-Pacific region. Prior to joining A.M. Best, Roger was commercial director for Lloyd’s of London for six years, responsible for the market’s strategic business relationships with its investor base, brokers, the rating agencies and the financial analyst community. Shortly after joining Lloyd’s in 1996, Roger was appointed head of commercial policy and subsequently became managing director of Lloyd’s Market Risk Unit, where he directed the development and application of the market’s risk-based capital system. He had earlier worked as a consultant to the Equitas Project, assuming management responsibility for the analysis of all non-APH liabilities. In addition to 15 years of extensive experience and achievement in the insurance and reinsurance sectors, Roger has a long academic background, graduating with a BSc in mathematical physics from the University of Exeter in 1978 and with a PhD three years later. Roger also holds an MBA in strategic management from Imperial College at the University of London. Between 1981 and 1992, Roger carried out post-doctoral research at the University of Cambridge and worked in a number of academic positions in the United Kingdom and overseas, including as a lecturer in applied mathematics at the University of Sydney, Australia. He also spent 18 months as the National Squash Coach for Thailand.

63

Notes

64