Mr. Resini Alresini - the Deputy CEO of ReTech, was recently interviewed on Alekhbaria Channel, where he shed light on the recently published 2024 Actuarial Pricing Review Report issued by the Insurance Authority, emphasizing its most prominent findings. One of the key indicators highlighted in the report was the Pricing Adequacy Ratio, which reflects the degree to which insurance companies adhere to actuarial pricing recommendations.
According to the report, the health insurance sector recorded a pricing adequacy ratio of 101%, indicating that companies priced their products slightly more conservatively than recommended by actuaries. In contrast, the motor insurance sector reported a ratio of 89%, suggesting that policies were priced below actuarial recommendations.
The report also presented the main pricing factors currently used within the insurance sector. Mr. Alresini noted that the availability of such data plays a crucial role in enhancing transparency, which he described as one of the most vital tools for improving market performance and attractiveness. He added that periodic reports like this significantly boost information sharing with experts, researchers, and media outlets, and also serve as valuable resources for feasibility studies and strategic planning.
The Deputy CEO emphasized that the insurance industry is fundamentally driven by data, stating that success in this field depends heavily on accurate data analysis and interpretation. This is where the role of actuaries becomes indispensable. Through advanced statistical and mathematical models, actuaries enable insurance companies to manage risks efficiently and professionally.
These actuarial models, based on historical data and predictive analytics, help estimate the probability and magnitude of potential losses, allowing firms to make proactive and informed decisions. Moreover, such models not only support the determination of fair pricing for insurance products but also guide the establishment of appropriate financial reserves, ensuring companies can meet their obligations under various scenarios.
Additionally, Mr. Alresini pointed out that only 33% of insurance companies complied with actuarial recommendations regarding reinsurance arrangements. While this figure may appear low, he explained that it is justifiable due to the influence of other essential factors in reinsurance decisions — particularly the role of reinsurers. Here, reinsurance brokers play a critical role, given their close connection to reinsurance markets and their understanding of local market requirements.