Definition of “market share”

While we appreciate that the list of indicators is non-exhaustive, given that the Act contains specific market share thresholds that would trigger CBTT to make certain decisions or take specific courses of action, the industry may have been hoping for greater transparency with respect to CBTT's approach to/use of indicators in calculating/deriving market share so that there would be a clearer understanding of the decisions/actions taken by CBTT in these situations.

We feel that the factors being considered for defining the market share be laid out in the form of a calculation sheet. Further, these factors be related to the figures being sent for Quarterly reports and/or Act Accounts, to ensure consistency and cross referencing. Thank you,

We feel that the factors being considered for defining the market share be laid out in the form of a calculation sheet. Further, these factors be related to the figures being sent for Quarterly reports and/or Act Accounts, to ensure consistency and cross referencing. Thank you,

Further to the Central Bank’s initial post on this topic, the following should be noted for further clarification.
Currently, there are 2 instances when market share analyses will be contemplated which are outlined below.

1. Applications under the Act

This definition of ‘market share’ is applicable in the context of the Act. It should be remembered that market share is relevant in the Act, where, for. eg.:
(a) A financial entity, e.g., bank, non-bank, broker dealer or a holding company of any of these entities, is acquiring an insurer or financial holding company; or
(b) An insurer is amalgamating with another insurer.

When deciding whether to approve such transactions, the Central Bank has to consider the combined market share of the insurer and any entity affiliated with the insurer. Such affiliated entities may be financial entities that engage in a host of financial services which may not necessary include insurance business. In this context, the appropriate method for calculating market share depends on the specific case at the time as each application will have unique circumstances. As such the specific indicators used will be relevant to the particular circumstances based on the application at the time (some examples of basic indicators are gross premium; total assets; and total policyholders’ liabilities)

The assessment of market share is considered when applications for approval of these come before the Central Bank.

2. Surveys

Sometimes, the Bank may conduct surveys for some stated purpose on an ad hoc basis and these surveys may involve some sort of market analysis. In this scenario, the industry will be informed of the relevant details including the indicators used which will be dependent on the particulars of survey being conducted at the time.

Note that currently there are no standard reporting requirements relating to market share and as such there are no standard market factors/indicators that are to be stipulated. Some of the basic market indicators that are used are gross premiums, total assets, total liabilities and total policyholder liabilities and the Central Bank reserves the right to apply other indicators to assess market share, for example, if the Bank wants to develop a thematic report.

Further, in the event where any market analyses are conducted, the data required may be collected from a number of sources including information provided by insurers in their Quarterly and Annual returns, or in their response to a specific requests of the Central Bank, details of which will be advised accordingly.