The risk of critical infrastructure disruption is constantly present today. In addition to climate change and the threat of cyber attacks, the COVID-19 pandemic and the Russia-Ukraine war are recent examples of how infrastructure that [...]
The paper provides a view for re(insurance) organisations on the risks associated with ransomware, providing insights specific to the insurance industry. The paper discusses ransomware trends, regulatory developments and the threat profile for insurers, it [...]
Increased digitalization in society is leading to increased digitalization in the insurance industry impacting distribution, product design, underwriting and operations. This changing landscape also requires that Governance, Risk Management and Compliance (GRC) activities across [...]
Although insurance companies have always based their management decisions on information about exposures, risks and customers, the entry into force of Solvency II in 2016 represented a key incentive to progress from informal data quality [...]
Solvency 2 represents a step change in the prudential regulation of insurance that promotes the best practice standards of risk management advocated by the CRO Forum. The challenge of implementing a harmonised and risk-based economic approach across the EU should not be underestimated.
This best practice paper details considerations and best practices on how these principles can be applied to the extrapolation of interest rates, equity and interest rate implied volatility and in situation in which an option has been written on a security for which no liquidly traded options exist at all.
The CRO Forum welcomes the opportunity to contribute to the calibration of the standard formula through this paper on market risks. This document is a follow-up to our position papers published respectively last May: ‘Calibration Principles for the Solvency II Standard Formula”; and last December: ‘Calibration recommendation for the correlations in the Solvency II standard formula’.
The CRO Forum's views on the consequences for Enterprise Risk Management and regulation in the insurance industry.
For a long time, many (re)insurance companies have realized the need for risk-based valuations and solvency capital measurement and have started developing internal economic capital models which suit their needs. This is without prompting from regulators and rating agencies. Why? Such models provide a common measurement basis across all risks (e.g. same methodology, time horizon, risk measure, level of confidence, etc.) and are a powerful tool for strategic decision-making, for example in capital allocation and pricing.
Further, European supervisors considered the causes of failures (and near-failures) of a number of insurers and their analysis showed that the causes were mostly associated with inappropriate risk decisions resulting from underlying internal failures rather than inadequate capitalisation per se.
