Brief Report - 2016
With mid-year parliamentary elections and a tough economic environment, the 2016 year was challenging in Mongolia but proved to be yet another successful year for Tenger Insurance. The company posted a net profit of MNT 1.5 billion, a fourfold increase over the prior year 2015, while total assets grew by 22% and return on equity was 24.7%. These results were achieved through improved underwriting guidelines, favorable claims development and savings in operating expenses. Gross written insurance premiums totaled MNT 9.0 billion in 2016, a 4.0% increase compared to the same period last year.
There were changes in the share of premiums written by distribution channel in 2016: premiums through intermediaries decreased, with bancassurance reducing by 12.2% due to more restrictive bank lending activities, whereas direct sales from head office increased by 10.0% and sales through branches grew by almost 40% compared to 2015.
During the 2016 year gross written premium by product line increased on average by 10.2% with the exception of liability insurance, due mainly to the limited insurance budgets of legal entities.
Insurance losses across all types of insurance decreased by MNT 76 million, resulting in a fall in the overall paid claims ratio by 6%, the loss ratio for 2016 falling to 37.2% compared to 43.0% last year.
Tenger Insurance LLC is acknowledged in Mongolia as the insurer best able to assess risk and technically price the insurance cover in line with its stated risk appetites. The result has been consistently higher net income than the average for the Mongolian insurance market. Tenger Insurance has made considerable efforts to develop the insurance sector , while our insurance services meet international standards including the quality and financial reliability of reinsurance protection. During the last two years our reinsurance capacity increased from USD 2 million in 2015 to USD 10 million by the end of year 2016. Tenger Insurance is setting the standards for other insurance companies in terms of technical underwriting ability and innovations in the insurance field, including an on-line insurance platform.
Tenger Insurance was the first to introduce new accounting policies and to upgrade core IT systems in accordance with the new requirements of the Financial Regulatory Committee. Monthly analysis of data received from branches has been implemented. The MIIS system finally supported the direct input and import of claims data. By simplifying the processes and production with the bancassurance channel, we have achieved significant reduction in headcount and improved operational risk management, internal reporting and actual expense savings. More granular analysis is now available on the performance of individual insurance products, including product value, product awareness, client satisfaction, and service quality feedback. With new analytical capabilities we are able to recognize trends and leverage those trends to add more value to our customers.
Tenger Insurance provides insurance coverage to 61 corporates from the Top 100 Companies of Mongolia. In the first quarter of 2016, Tenger Insurance held a one-week training workshop on underwriting and actuarial practice for all employees, as well as other market practitioners, including representatives from the regulator, conducted by invited international insurance experts. In May, the company organized the first Financial Insurance Forum of Mongolia, in cooperation with one of the leading international insurance brokers, Willis Towers Watson.
High priority is given to customer service and claim handling; our fast and efficient service is regarded as the best in the market, with settlement conducted on average within three working days. At Tenger Insurance the monitoring of the claim approval and settlement process is based on the principles of clarity and fairness.
During 2016 the company won a number of international awards: Best Insurance Company in Mongolia by International Finance Magazine and Best Online Insurance Company in Mongolia by Global Banking and Finance Review.