KPMG's Insurance practice works with the general insurance, health and life arms of the industry, helping them make better business decisions. We combine a strong local presence with access to a global network of experienced insurance professionals. This helps us to drive forward the issues that really matter to individual clients.
KPMG advises on regulatory issues as they unfold. We can help you fulfill your accounting, reporting, risk management and governance obligations. We help develop strategic and performance oriented business models.
- External and internal audit services
- Actuarial services
- Tax services
- Financial advisory services
- Risk management services
- Sustainability advisory services
- Financial analysis and modelling
Cutting through complexity
If there is one word which sums up the current state of the insurance industry, it must be "complexity." There have been and will continue to be many critical issues to be managed, including those listed below.
Through our team of dedicated specialists, KPMG is committed to “cutting through complexity.”
Current trends and issues
We all knew that the New Zealand insurance sector was heading into a period of unprecedented change.
However, we probably did not realise how far reaching and pervasive these changes would turn out to be. In our view, we can safely say that for New Zealand, the nature and quantum of change has been unprecedented.
In a relatively short period of time, many different aspects of insurance operations in New Zealand will have been deeply affected by a wide range of regulatory and reporting proposals.
The landscape of the insurance sector is facing tremendous pressure on its existing resources.
Will this be the end? Probably not, as New Zealand, as well as other countries, face up to their responsibilities for financial regulation.
New regulatory interventions
The G20, confronted by the need to respond to the Global Financial Crisis, is likely to use regulation to achieve higher standards which will mean that new regulatory interventions will become a routine part of the insurance landscape.
As well as meeting the requirements of prudential supervision, New Zealand life insurers have had to deal with changes to the life taxation regime, the regulation and supervision of financial advisers, as well as complying with their obligations under the Anti-Money Laundering and Countering Financing of Terrorism Act.
Canterbury quake claims
The general insurance sector came out of the last reporting season in a much healthier state than it has in previous years. Then along came September, bringing with it the earthquakes which hit the Canterbury region in September, December, February and again in June. The quantum of claims and the amounts involved are unprecedented.
Traditionally, the New Zealand general insurance claims period has been very short tail in nature, but a number of recent estimates suggest that due to the nature of the claims arising from the earthquakes, and the type of damage caused, there could be a tail that will last for up to 10 years.
This is unheard of in New Zealand and will present new challenges to those responsible for claims management, reinsurance recoveries and claims measurement.
Re-assessment of insurance risk
It is clear that the pricing and cover available of general insurance is set to change dramatically reflecting the re-assessment of the underlying insurance risk in New Zealand by underwriters and reinsurers.
The trend of rising healthcare costs at well above the rate of inflation continues to affect our health insurers and it is predicted that many people may find it harder to afford private health care.
Insurance contracts projects
On the accounting front the IASB and the FASB continue their joint discussions on the insurance contracts projects. The current expectation is that a future standard will be released in the fourth quarter of 2011 by the IASB.