Posts Tagged ‘Solvency II’



April 3rd, 2014

ERM Benchmark Review, 2013 Update: Part IV

Posted at 1:00 AM ET

Capital Management

Capital management using risk-based capital models and capital allocation is a central component of risk management practices. We have investigated this topic as a new chapter for our 2013 ERM Benchmark update. In this context, Table 3 shows the portion of companies that publish concrete data on their excess capital - the amount of capital retained in excess of a certain target amount. Table 3 also shows both the portion of companies using risk-based capital models in the risk management process and the portion giving some indication of the methodology of the capital allocation process.

Continue reading…

April 2nd, 2014

ERM Benchmark Review, 2013 Update: Part III

Posted at 1:00 AM ET

Risk Types

Table 1 (below) quantifies the proportion of companies in the sample that disclose the method as well as the specific level of various risk quantifications. Compared to our previous ERM benchmark study, a new metric referring to catastrophe risk has been added. Taking advantage of the increased level of disclosure and transparency on catastrophe risk exposure, we have extended our reports to include this in view of its importance in the economic capital approach of (re)insurers.

Continue reading…

April 1st, 2014

ERM Benchmark Review, 2013 Update: Part II

Posted at 1:00 AM ET

2013 Update General Observations

Before focusing on the results of the latest study, we would like to reaffirm the definition of risk profile, risk appetite and risk tolerance found in our previous publications:

Continue reading…

March 31st, 2014

ERM Benchmark Review, 2013 Update: Part I

Posted at 1:00 AM ET

In April and October 2009, Guy Carpenter published two briefings titled “Risk Profile, Appetite and Tolerance: Fundamental Concepts in Risk Management and Reinsurance Effectiveness.” This briefing is an update of those studies that summarizes the information publicly disclosed on enterprise risk management (ERM) measures.

Continue reading…

March 19th, 2014

Increasing External Demands Compel Companies to Improve Risk Management Disclosures

Posted at 11:30 PM ET

Guy Carpenter released its latest Enterprise Risk Management (ERM) Benchmark Review that provides an in-depth analysis of risk management practices and policies of 67 insurance and reinsurance companies located in Europe, United States, Bermuda, and Asia-Pacific. Based on publicly-available data from financial and risk reports, Guy Carpenter’s ERM Benchmark Review reveals that most (re)insurers are managing capital with metric-based frameworks and are publishing more about their risk management targets than seen in Guy Carpenter’s 2009 analysis. Capital market, legislative, and regulatory influences, such as the approaching implementation of Solvency II, are expected to further compel company managements to better recognize and analyze the risks of their enterprises.

Continue reading…

February 5th, 2014

Chart: Prevalence of Annuity Settlements in Europe

Posted at 1:00 AM ET

For bodily injury claim settlements in Europe, the trend is shifting away from lump sums and towards annuity-type settlements, which come with risks related to longevity, inflation and hedging.

Continue reading…

September 11th, 2013

Annuity Settlements Could Crystalize Into Sizeable Risk Margins

Posted at 1:00 AM ET

victoria-jenkinsspeed_morley_bioVictoria Jenkins, Managing Director, and Morley Speed, Managing Director

Contact

For bodily injury claim settlements in Europe, the trend is shifting away from lump sums and towards annuity-type settlements, which come with risks related to longevity, inflation and hedging. Insurance companies with significant casualty business may see their risk profiles transform over time to be more like pensions funds - but without working members and with even longer lasting liabilities. While the insurance industry is beginning to understand the implications of this move to annuity settlements, it does not have a clear understanding of the implications for an increasingly important regulatory balance sheet metric: Risk Margin.

Continue reading…

July 2nd, 2013

The Total Value of Reinsurance for Long-Tail Business

Posted at 1:00 AM ET

victoria-jenkinsleong_jessica_gcciVictoria Jenkins, Managing Director, and Jessica Leong, Lead Casualty Specialty Actuary

Contact

Can we learn from Solvency II to unlock the hidden value of reinsurance for long-tail business?

Reinsurance on a long-tail business such as casualty provides lasting capital benefits until the complete run off of the underlying business. It not only reduces underwriting risk, but also the future reserve risk for that book of business. Yet how many companies are properly considering this multi-year capital relief in their reinsurance decision-making? Solvency II’s one-year risk horizon has the potential to draw attention away from the multi-year risk compared to the current Individual Capital Assessment regime. The complexity of creating a comprehensive multi-year capital model means that in our experience many companies are not focusing on the multi-year risk of long-tail business when considering their reinsurance strategy.

Continue reading…

March 13th, 2013

Solvency II on GC Capital Ideas

Posted at 1:00 AM ET

Here we review recent GC Capital Ideas stories that have touched on issues relating to the Solvency II regime.

Continue reading…

February 20th, 2013

Guy Carpenter Launches MetaRisk® 7.1

Posted at 6:00 AM ET

Guy Carpenter today announced the release of MetaRisk® 7.1, the latest version of the firm’s premier risk and capital management decision making tool. The platform offers access to a variety of new features and enhancements that will improve usability, increase overall functionality and enable the development of more accurate and efficient risk and capital models.

Continue reading…