Opening remark of IFOA Asia Conference 2018 On 10 May 2018 (08.50 – 09.10) Dr. Suthiphon Thaveechaiyagarn At the Berkeley Hotel

Good morning, ladies and gentlemen. It is indeed my honor to deliver an opening remark at a very important event today.

First of all, may I take this opportunity to welcome the international delegates as well as distinguished speakers and participants to the Institute and Faculty of Actuaries Asia Conference 2018. The IFOA Asia Conference gathers all actuaries from various countries in this occasion. In addition, I would like to thank executives from the IFOA for hosting this Conference.

Ladies and gentlemen,

The Office of Insurance Commission, Thailand or OIC gives importance to the actuarial profession as it is the key control function of insurance business. Actuary is increasingly required to be the one who take part of enterprise risk management, solvency surveillance, product pricing, and liability valuation. However, the resource of this profession in Thailand is quite limited. Currently, we have 127 certified actuaries in insurance industry with 75 fellowship from internationally adopted Society of Actuary. Out of 127, 76 of actuaries are practicing in 23 life insurance companies while only 51 actuaries are practicing in 60 Non-life insurance companies. It is evident that more certified and qualified actuaries are needed in Thai insurance industry.

To promote the actuarial profession, OIC and insurance industry engage with schools and universities to introduce actuarial profession to the students. OIC is promoting role of The Society of Actuary of Thailand to support the educational and professional arrangement to enhance the standard of actuarial profession in Thailand.

In this regards, I would like to thank IFOA and the Society of Actuary of Thailand to arrange this IFOA Asia Conference in Bangkok because this forum would give opportunity to our actuaries to learn and share experience of actuarial practice in this changing era.

Since the agenda of this Conference deals with the practical issues of transformation, adopting digital capabilities, financial reporting and management of insurance business in Asia. It is necessary for me to share some information about current development of Thai insurance business from a Thai regulator perspective in a nutshell.

With the world’s fast changing technologies, we are now live in the era which digital transformation has changed our way of doing business. In financial industry we often hear the words “FinTech” and “Insurtech” which is the use of technology to build efficiency of business operation and create customer experience in financial sector. However, there are also “RegTech” and “SupTech” which is the use of technology to enhance the proficiency of regulatory compliance of private sector and the use of technology to improve the supervision of regulators. Many countries have adapted themselves to embrace the technology into their function. For example, Monetary Authority of Singapore has collaborated with other governmental agencies to create central database of personal registry called “MyInfo” in order to facilitate persons, who have business with governmental agencies, not to prepare any documentations related to personal registry every time they contact governmental agencies and in the future such database might allow financial institutions such as Banks and insurance companies to access into some information for the purpose of KYC/CDD procedure. Also, some jurisdiction has developed “the Electronic Data Warehouse” which will link data systems of bank and regulator together in order to lessen the burden of private sector to submit reports to the regulator as the regulator can pull the data directly from the linked system. With this forward technology, Thailand has to keep ourselves updated to all coming changes and urgently adopt those technologies for healthier growth, higher efficiency, and better compliance.

In aspect of regulatory transformation, OIC has to keep balance between the necessity of regulation to protect the consumers and the adoption of technology for the growth of the industry. However, technology evolves every day. New technology today might be an outdated one tomorrow, therefore putting walls of rules and regulations on any technology development might not be an effective way and could be hindrance of market innovation. As a result, OIC’s principle of the regulatory transformation is to move prudently with the balance of necessities and flexibility.

An example of recent regulatory development is the Notification on online insurance sale and services that has been effective since 2017. According to this Notification, OIC requires insurance company who provides online insurance services, such as offering insurance policies through electronic channels, issuing policies and paying claims in electronic method, to provide sufficient information to the customers and maintain IT system at the accepted standards.

Another initiative from OIC in adoption of new technology for new insurance products and services, is the Insurance Regulatory Sandbox which will allow insurers and technology firms to create and test new technology-based financial services within the experimental market under less-restriction environment. OIC hopes that this regulatory sandbox would be a “safe space” for startups or insurance companies to come up with more of their insurtech innovations. At present, there are 5 projects that have been approved in the sandbox and many projects are in the process.

For supervisory development, OIC has started the project called “Insurance Bureau System” which will become the Non-life insurance information center to integrate non-life insurance database into the information infrastructure of the insurance industry in Thailand. The digital data from this database would be the key for enhancing insurance development as well as supervisory technology. Another project OIC is working on is to develop capability of IT audit and encourage insurance industry to have internal IT audit. This project would allow for assurance of appropriate and safe IT system of insurance business.

Apart from technology development OIC has updated the Thai Mortality Table, or TMO. This TMO2017 has been effective since September 2017. The revision of TMO is to respond to the change of Thai mortality structure. As Thai population is likely to live longer due to the development of medical treatments, the popularity of fitness trends together with the better access to technologies. It is expected that by 2025, Thailand will enter the aged society completely like Japan. These factors have affected the prior TMO, which is the TMO2008, as it would no longer conform to the rapidly changing social and economic conditions of Thailand. Overall, the update of TMO is the reflection of our current social situation which insurance companies could calculate the insurance premiums of their products more appropriately and consumers could save up more up to 35 percent.

In addition, OIC is preparing for the upcoming Financial Sector Assessment Program (FSAP) which is scheduled at the end of this year. We are working with insurance industry and other regulators to upgrade many regulations such as public disclosure, insurance offering, ERM, and the one that requires significant roles of Actuary is the regulation on ORSA (Own Risk and Solvency Assessment). Actuarial function will be one of the key areas of ORSA process which assess the adequacy of its risk management and projected solvency positions under various stress scenarios. Also, IFRS17 is coming and Thailand has tentative date of adoption in 2022. The preparation of this accounting standard requires professional work from actuaries in both designing and deciding insurance business model as well as the infrastructure. Thailand needs to build actuarial capacity urgently to have sufficient resource for new regulation and the new accounting standard.

Ladies and Gentlemen,

With the dynamic changes of technologies, business conducts and other factors above, it will be a great opportunity for both international and Thai actuary to use this forum to get together and share knowledge and experience from their work, including any new trends or innovations related to their work which will help enhancing the actuary profession as a whole. As one stakeholder in the insurance system, OIC is looking forward to see the upcoming changes in the insurance business as well as continuing our support to you for the better and greater industry. I hope all of you enjoy the rest of the conference and wish you all the best of happiness and success. Thank you.