AFSA: The insurance market improved the reserve coverage indicators during 2020
Insurance companies during 2020 have increased reserve coverage ratios to repay liabilities on time. According to the information of the Financial Supervisory Authority submitted to the Assembly as part of the annual reporting, the indicator of assets covering provisions for premiums and claims has increased for both segments of the insurance market. This indicator reflects the extent to which provisions (reserves) are covered with quality and appropriate assets, which make it possible to repay or cover liabilities on time and without delays.
For the Non-Life market, the asset coverage ratio has increased, from 121.2% in 2019 to 131.6% in 2020. While for the Life market, this indicator has increased from 120.8% in 2019 to 130.2% in end of 2020.
There has also been an improvement in the provision / premium ratio at the market level, which expresses market reserves for the payment of claims in relation to the responsibilities assumed by insurance companies through signed premiums. This ratio reached 126.4% at the end of 2020. It is worth noting that this indicator was at the level of 97.1% in 2018. The improvement of the coverage indicators with provisions for insurance companies was also noted in the World Bank report, published in December last year “Assessment of disaster financing”.
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