IMF calls for increased on-site inspection to boost insurance supervision in Denmark

Written by Adam Cadle

17/08/2020

Insurance supervision in Denmark should be further strengthened by increasing on-site inspection frequency, the IMF has said, as well as completing a solid risk assessment framework, and enhancing the oversight of cross-border business.

In its country assessment, the IMF stated: “Going forward, to reduce inaction bias, the institutional arrangements for macroprudential policy can be improved by streamlining the decision-making process.

“The DFSA’s risk-based supervisory approach focuses on traditional financial risks; in particular credit risk in banking and market risks and asset-liability management in insurance. However, its strong traditional focus needs to be complemented with equal rigour in other areas such as governance and risk culture.”

Assets managed by the Danish insurance industry amounted to 146% of the GDP at end-2018, compared to 72% for the EU average.

The three largest life insurance groups account for a market share of 37% in terms of assets and the largest ten groups for 73%.

Concentration in the non-life sector is considerably higher—57% and 88% of the market share is held by the three and ten largest companies, respectively.

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