Systemic Risk in Insurance Elise Liebers Acting Chair Financial Stability and Technical Committee IAIS, Old Windsor June 2017

Work to date 2013 The IAIS developed an initial assessment methodology to identify any insurers whose distress or disorderly failure, because of their size, complexity and interconnectedness, would cause significant disruption to the global financial system and economic activity. Under this methodology, the strongest weight in the assessment is put on interconnectedness and what was coined at the time non-traditional, non-insurance (NTNI) activities 2013/2014 Development of G-SII Policy Measures: Basic capital requirement as a basis for HLA, Systemic Risk Management Plan, Liquidity Management Plan 2016 Revision of entity-based G-SII Assessment Methodology Clarification of the notion of NTNI activities Disentangling of conceptual overlap of interconnectedness and NTNI by focussing on the main transmission channels, i.e. asset liquidation and macroeconomic exposure

G-SII Data Collection – An Overview Categories Indicators Process / Phases Phase I: Data Collection Size Phase IIA: Data Validation Global Activity Phase IIB: Data Analysis Interconnectedness Phase III: Discovery Phase Participating insurers: I. Group total assets >= 200 $bn and > 0% GWP outside of home jurisdiction. OR II. Group total assets >= 60 $bn and > 5% GWP outside of home jurisdiction. Asset liquidation Phase IV: Exchange of Information Phase V: Recommendation to FSB + Disclosures Substitutability Currently 9 insurers identified as G-SIIs Assessment based on the 2016 G-SII Updated methodology

2017 Data Collection Exercise Execution of the 2016 Updated Methodology started in March 2017 (Annual Data Collection, Phase I); Smoother process of data collection using clearer definitions; Analysis on-going following the current methodology based on quantitative and qualitative considerations; Pursuant to the current methodology, the IAIS will again release information to the public after the 2017 Data Collection Exercise.

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