Integrating Risk and Capital Management into Strategy and Planning - Key to Assessing Risk and Reward for Insurers
Posted: 28 February 2013
Insurers should consider the Own Risk and Solvency Assessment (ORSA) requirement of Solvency II as an opportunity to help implement integrated planning—the alignment of strategy, business and financial planning, capital management, risk and capital modeling, solvency assessment and stress and scenario testing.
This approach will enhance the ability of both the board and management to make better strategic decisions, ultimately helping the company to draw closer to high performance.
Many insurance company board members face the challenge of satisfying the competing interests of various stakeholders such as investors, policyholders and regulators.
Insurers are called upon to increase premium growth, accept more and more risk, provide innovative products, price more competitively, offer differentiated services to policyholders, and maintain a suitable solvency surplus while improving both financial and economic profitability and, ultimately, delivering a higher share price or equivalent measure of success.