1993 SNA Update Information - Expert comments for issue:
Non-life insurance services | | Issue description | | Issue description in [English] | [French] | [Russian] | [Spanish] | | Several instances of massive insurance claims, notably those from the 11 September terrorist attack, focused attention on the measurement of non-life insurance services when catastrophic losses occur. This necessarily involves considering the treatment of reinsurance also. The output of insurance services as calculated using the 1993 SNA algorithm depends on the balance of premiums and claims (on an accrual basis). Output can therefore be extremely volatile (even negative) following major catastrophes, and this volatility impacts on GDP and balance of payments (reinsurance). The objective of the review is to propose measures that would be more consistent with the perception of production in this activity. In particular, medium- to long-term aspects of non-life insurance are to be taken into consideration. The issue will also cover the measurement of production of non-life insurance services in volume terms. |
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| | Expert comments | | Number of expert comments for selected issue: | 1 | | Date posted | Source | Comment |  | | 8/11/2004 | Fadhil Mahdi (ESCWA) | 1. In reference to what was raised on this issue, we have no objection with the main recommendation proposed which is related to the changes in the way of measuring the output of non-life insurance services according to the formula included in the SNA 1993. However, it is necessary to replace claims and premium supplements with adjusted claims and the adjusted premium supplements (AEG proposed for the underlined item to be optional when applying the formula).
2. As for estimating the adjusted claims, it is proposed to use one of the three approaches:
a. The expectation approach
b. The accounting approach
c. The sum of costs plus "normal" profit
Our views with respect to these approaches depend on the details and explanations of each approach that will be released in the new special annex on non-life insurance. Also an implementation manual needs to be attached to the SNA rev.l by end 2007. We also recommend that such annex and the manual must include numerical examples to clarify the methodology to be used for calculations. |
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