NMG Consulting held its annual Insurance Connections event for clients and colleagues within the insurance industry. The Asia consulting team of NMG which is led by Mr Roshan Perera, a Partner based in Kuala Lumpur, Malaysia, hosted the event. This year the spotlight was on IFRS17, the impending new accounting standard that represents the most significant change to insurance accounting in the last 20 years.
Mr Perera kicked off the evening sharing insights from NMG Consulting’s annual global P&C Reinsurance Study highlighting some key industry challenges expressed by insurance professionals across Asia including Sri Lanka. While Asia continues to be a driver for global insurance growth there are increasing concerns around technology and innovation, specifically related to operating in an increasingly digital environment combined with the need for greater innovation. In Sri Lanka and India alone, citations of “technology & innovation” as a challenge increased by 18% in 2019 according to the Study results which have been recently released.
Mr Perera then moved on to discuss trends and expectations for the Sri Lankan general insurance market touching on the performance of the motor and medical classes which are likely to see increasing loss ratios in 2019. The motor market has been impacted by increasing bodily injury claims and rising spare parts costs as a result of the devaluation of the rupee while medical business continues to be a challenge for local insurers with consistently high loss ratios over the last few years. NMG’s expectation for the overall general insurance industry growth in 2019 is modest, estimating a growth rate in line with last year (~8%) if not lower given the various challenges faced by the market including the Easter attacks.
Perera’s opening address was followed by a presentation by Mr Siva Kumar, NMG’s technical lead based in Kuala Lumpur. Kumar shared practical insights from NMG’s consulting work in Sri Lanka around the IFRS17 implementation. Challenges unique to the Sri Lankan general insurance industry include the accounting treatment of multi-year contracts, premium payment warranties, discounting, advancing regulation, data availability & quality, and the integration of legacy systems prevalent in the market. He continued to explain that insurance companies attached to non-insurance groups will also be exposed to several reporting challenges along with the impact of IFRS9 & 16 on the entire industry.
NMG highlighted that companies should take the impending IFRS17 requirements as an opportunity to think more strategically about their underlying business and the consequences rather than taking a purely compliance driven approach which is likely to be sub-optimal given the anticipated investment required for implementation.
NMG has been providing advisory services to the Sri Lankan market for over 20 years and is the largest provider of general insurance actuarial advisory services supporting 10 of the 13 general insurance companies in the market. In addition, NMG provides specialised strategic consulting services to life insurers, banks and conglomerates in Sri Lanka around portfolio segmentation, distribution optimisation and strategy development. In his concluding remarks, Perera spoke of NMG’s investment into ‘Data & Analytics’ globally where NMG Consulting adds value to their clients across life, health and general insurance using a range of capabilities including predictive analytics, data visualisation and advanced modelling & analytics solutions.
NMG Consulting is a leading multinational consultancy focusing solely on investments, insurance and reinsurance markets. They work with financial institutions (insurers, reinsurers, fund managers and pension funds, banks and brokers) to shape strategy, implement change and manage performance.
NMG’s consulting model, an advisory proposition integrating privileged and proprietary information assets is a unique point of difference in a crowded market. NMG Consulting has ~120 employees, spread across offices in Sydney, Perth, Singapore, Kuala Lumpur, Colombo, Cape Town, London, Toronto and Kansas City, and was established in 1992.
NMG Consulting is a subsidiary of NMG Group, which is a privately held company based in Singapore, focusing on non-banking financial services. NMG Group has ~1,000 employees, spread across offices in 18 cities, and on five continents. The group includes industry leading firms such as Boobook, iGo4 and NMG Benefits in South Africa.