Insurance Market Development

Defining Characteristics of Industry 
Practices 
Interestingly, almost half of those respond-
ing indicated that insurance companies 
would use pre-established formulas for re-
serving if they were given a choice in their 
market. Other findings with respect to cor-
porate governance are also reinforced: about 
one third of those responding indicated that 
there is no legislation or regulation with re-
spect to corporate governance or internal 
control in their market. The use of catastro-
phic probable maximum loss analysis for 
insurance purposes does not seem to have 
spread to the majority of countries in the re-
gion. With respect to the strength of industry 
practices, the survey indicates that im-
provement is needed in several areas for the 
market to develop. The areas of industry 
practice flagged as weak include: asset-
liability matching, underwriting, marketing 
practices of agents, internal control, man-
agement of insurance fraud, distribution 
networks, and marketing practices of agents 
and brokers. The existence of a code of eth-
ics for the insurance industry does not seem 
to be commonplace in the region.
Consumers or Users of Insurance 
Only about half of those responding indi-
cated there exist dedicated entities that either 
negotiate on behalf of consumers or provide 
them with information on how to make 
claims. It appears that the majority of mar-
kets have consumers with little knowledge 
of insurance products and only weak confi-
dence in the reliability of insurance prod-
ucts.
Collaboration Between Industry and Su-
pervisor 
A formal, transparent process whereby the 
private sector can participate in regulatory 
reform does not seem to exist in more than 
one third of the markets. Less formal par-
ticipation at the discretion of the supervisor 
appears to be more the norm.