Insurance overview
The insurance industry has gone through tough economic times ever since the global financial crisis. Regulators are under pressure to increase scrutiny over insurance companies to ensure their financial soundness whilst there is ongoing pressure on the insurance company to perpetually increase shareholders return. With that, there are very challenging yet exciting times that lie ahead for insurers especially in the Asian market.
PwC is seeing a continuing trend towards mergers and acquisition especially in the developing and emerging markets. Insurers are looking beyond the traditional markets and distribution channels to be more focused on customers’ behavior and needs. C for further insights into the key issues and trends driving the insurance industry and how PwC can work with you to weather the constantly changing social, technological, political and economic environment.
No matter the industry or size of your company, our multi-disciplinary team can help. We have expertise in the following areas:
Successfully GROW your business
Life insurance premium is expected to reach USD575 billion by 2017. Embedded in all insurance company’s objective is to capture a lion’s share of this. Below are PwC services offering that could assist you to achieve this objective.
Commercial due diligence
Commercial due diligence provide the vendor a view of the macro trends of the targeted market. We can examine business models of key competitors and assess profitability drivers related to the market of the potential investment or business initiative.
Financial & operations due diligence
- Financial due diligence uncovers the reality of historical data in order to help you form well-grounded opinions in assessing prospective investments. We can help perform no- access reviews to evaluate and reconstruct the entire set of financial statements.
- Operational due diligence provides and assessment and view of the processes, functions and IT systems on which the target depends. We examine and evaluate operational performance related to a potential investment or business initiative.
Deals structuring
We can offer services to support your project in formulating a deal strategy and extend our services tailored to your need in every stage of the M&A transaction. We will work closely with you to identify key investment criteria, availability, attractiveness and portfolio synergy and can assist you in deal sourcing and execution.
Improve how you RUN and MANAGE your business
Managing a growing insurance business can be very challenging especially with the ever increase regulatory scrutiny. At PwC we could assist you in managing your business more efficiently and effectively.
Internal audit
PwC Internal Audit professionals can help you to improve the performance of your Internal Audit function and provide assurance on your insurance business as it adapts to changes in the regulatory, social, technology and economic environment. Our team will provide insights, observations and recommendations that cut across the organisation departments, functions, lines of business and geographical locations.
Forensic
Where there are allegations or suspected incidents of misappropriation of company assets, financial crimes, other irregularities or where financial statements are fraudulent, our team of specialist can conduct forensic analysis, fraud enquiry, asset tracing and recovery, and a review of internal control breakdowns.
Risk appetite and limits
In pursuing your strategic objective, your company needs to prepare on the amount of risk the willing to accept and the boundary of risk taking. We can conduct assessment and analysis to identify your company’s risk capacity and tolerance tailored to the firm’s product, risk profile and the market conditions that your company is operating in.
Solvency II
Solvency II legislation requires insurance companies to maintain sufficient capital. We will help you turn regulatory obligation into a strategic benefit to imbed Solvency II requirements into your core business process thus providing the opportunity to make smarter risk and economic capital decisions.
Risk base capital
The impending introduction of risk-based capital (“RBC”) in Hong Kong will have a significant impact on insurance company’s solvency requirements. PwC actuarial practice can help you assess the impact of a RBC and recommend an effective strategy to mitigate the effect of RBC on your business and capital requirements.
FATCA
The Foreign Account Tax Compliance Act (FATCA) was released on 17 January 2013 and requires foreign financial institutions, non-financial foreign entities, and U.S. withholding agents to comply with various information reporting and withholding provisions. Complying with the requirements of FATCA will significantly affect the business practices, policies and procedures, and systems for an insurance company. We can assist companies on its journey to be FATCA compliant.
Tax services
Our Tax advisors can assist you to manage your local tax exposures and cross-border tax issues, and identify opportunities. Such services include, but not limited to, handling the tax compliance works, resolving tax disputes with local tax authorities, advising on tax efficient corporate restructuring, providing tax due diligence support on M&A transactions, advising on investment acquisition and holding structures as well as post-deal integration, advising on the tax implications of insurance products, devising appropriate transfer pricing methodologies on regional expense recharge and other intra-group transactions (including group reinsurance arrangements), preparing transfer pricing documentation around the region, and advising on shared service centre structure and recharge model across Asia.
Anti-Money Laundering
The insurance industry is subject to increasing anti-money laundering regulations and a higher level of scrutiny from regulators. PwC AML specialists can help design effective solutions and mitigate the risks associated with possible unlawful money activities through developing effective approaches for reducing risk, enhancing risk management and implementing operational solutions. We can also work with you to help you gain greater confidence that your AML compliance controls are specifically designed, efficiently implemented, and sufficiently robust to effectively manage related risk and regulatory requirements.
Audit and assurance services
Our audit and assurance group provides assurance on the financial performance and operations of your business. We can also help your business improve its external financial reporting and adapt to new regulatory requirements, including Sarbane-Oxley, International Financial Reporting Standards (“IFRS”) and US GAAP.
Data privacy
Data privacy introduces new challenges to insurance companies in meeting the ever-changing laws and regulations especially for insurers with e-business operations. At PwC we could help your organisation to develop a privacy governance framework, effective privacy compliance programme, together with proper monitoring, training, policies and procedures.
Compliance Reviews
We provide regulatory compliance services in order to help insurance companies minimise their regulatory exposure, effectively monitor regulatory obligations under various regulatory requirements.
Asset liability management
Asset liability management (“ALM”) is a core risk management function to any insurer. PwC’s actuarial practice has extensive experience assisting our clients to develop an ALM policy and approach and develop the infrastructure and models to enable management to make informed optimal decisions.
Embedded value
Embedded value (“EV”) remains one of the key matrices being used by insurance companies as a driver of expected value, whether this is as part of its financial statement or as part of an appraisal value. As one of the leading audit firms in the region we are ideally placed to review and provide you with an opinion on the appropriateness of your embedded value, as part of an audit or as part of a due diligence exercise. In addition, PwC can also provide you with benchmarking analysis and advise you on the appropriateness of your current assumptions and methodologies, not only based on what we see in the region but also leveraging our international network.
Bring ideas and help you CHANGE your business
Change in your organisation will be imminent due to environmental changes, technological obsolesce or regulatory requirement. At PwC we have assisted numerous organisations in their change journey from project management support to implementing a new policy administration system to setting up a shared service centre. Below are further service offerings.
Change and project management
In situations when a company goes through business transformation your organisation will need project structure and a framework to develop a plan, drive the execution and manage the risk during the change process. We can help you develop and set up a project structure, governance and framework to ensure the success of the project. PwC’s project management and communication tools will help to promote the right behaviour amongst those involved in the project and ensuring all stakeholders’ expectations are managed throughout the change program.
Target operating model
PwC’s Target operating model Framework provides a means of describing your company’s current and future Operating Model. We use this framework to work with you to design, implement, and coordinate the sequence of transformational change to remove complexity from the Operating Models; assess and evaluate alternative options to improve performance; and, articulate the value of change and demonstrate our unique value proposition.
Finance Function Effectiveness
As finance function seeks to keep pace with mounting business and regulatory demands, PwC’s finance assessment framework; can help your organisation balance the competing demands of insight, efficiency and control in your finance function. In addition, PwC’s benchmarking analysis can provide a clear assessment of strengths, weaknesses and areas of improvement while providing a baseline from which to measure progress.
System upgrade or replacement of legacy system
In situations where your organisation recognises that the existing system can no longer support the vast amount of data processing or there is a need to improve the effectiveness and efficiency in which data is stored and used PwC can help your organisation in the vendor selection, system implementation and re-engineering of the associated processes.
Share services centres and out-sourcing
There is an optimal point in which insurers could gain greater efficiency and cost savings by the use of shared service or out-sourcing certain functions within your organisation. PwC can help assess the optimal point and implement the shared service centres in standardised processes.
