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Sep 2019

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Singapore: Insurers have strong capital positions, per IMF

Source: Asia Insurance Review | Aug 2019

Insurance companies in Singapore have strong capital positions, says the IMF in a report issued in July, following a Financial Sector Assessment Program (FSAP) on Singapore that is a comprehensive and in-depth analysis of the country’s financial sector.
 
The report says that insurers in Singapore do not seem to be a source of systemic risk. Insurers have significant capital buffers in excess of minimum requirements. Regulatory capital amounted to 247% of risk-based capital requirements in 2018. 
 
The FSAP looked at findings from bottom-up insurance solvency stress tests by financial institutions from nine largest direct life insurers and 15 largest general insurers; top-down stress tests by the authorities of the four largest direct life insurers and top-down stress tests by the FSAP team covering the four largest life/composite insurers.
 
Nevertheless, the FSAP team found that two out of the four largest direct life/composite insurers breached minimum capital adequacy requirements in the top-down stress tests, and four out of the five smaller direct life/composite insurers also breached minimum capital adequacy requirements in the bottom-up stress tests. However, combined post-stress capital shortfalls at the four largest insurers amount to just 1.3% of GDP. A 
 
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