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Interview: Marc Beckers 


22.10.12 MONDAY


Add value through Solvency II


Solvency II presents both challenges and opportunities for insurers, says Marc 


Q What is the current state of play A Certain deadlines have been missed and


for Solvency II? a great deal of uncertainty exists about


  the proposed regulation. Some of the large in- surers, such as Lloyd’s, have continued to push hard towards implementation, as they realise   investment they have already made to being ready for Solvency II.


Q Your new report, The CRO Guide


 important?


A In general, it is the CRO who is account- able for driving the success of an insur-


ance company’s implementation of Solvency II. With responsibility across all three pillars of the protocol, the CRO’s role is crucial in shaping the success of the company under the new regime. Furthermore, the CRO connects and collabo- rates with different functions across an insurance company—from board to actuary or catastro- phe modeller—that are involved in achieving and embedding regulatory compliance.


Q - A In today’s environment of economic and


rently face? regulatory uncertainty, a CRO must in-


vest resources carefully and prudently to en- hance risk management capabilities in synergy with the expected requirements of Solvency II,      - search report offers practical advice to help CROs achieve successful implementation.


Q Does that mean many of the 


Solvency II challenges are com- A Essentially, yes. We structured the publi-


vency II, under the themes of capital manage- ment, risk management and data quality. Within each theme we have compiled a num-


www.intelligentinsurer.com


 


“By highlighting the link between optimising return on capital, managing the volatility of results, and delivering within risk appetite, it is possible for the CRO to generate excitement among senior management.”


ber of short articles that highlight some of the  - ly, all insurance company professionals involved    help them better understand the demands of  - mation all the way to board level.


cation around the three pillars of Sol- Q What key advice can you offer A Taking an objective view of the capital


readers of the guide?


challenges associated with Solvency II, reinsurance remains one of the best mecha-


to Solvency II, focuses on the chief


nisms for mitigating the risks and associated capital charges under the regime. Since most    required capital makes reinsurance more   additional equity or debt capital in the cur- rent market. Also, by highlighting the link between opti-


mising return on capital, managing the volatili- ty of results, and delivering within risk appetite, it is possible for the CRO to generate excite- ment among senior management, who will see the value of using the results of internal models in their strategic decision-making. In addition, CROs can begin adding value


to the business by ensuring that operational risk management is developed for the purpose of helping to run the business better, rather than for regulatory considerations. Accurate and complete risk information, as well as a good capital model and insurance mitigation pro- gramme, can really add value. Furthermore, we see a challenge for the


reinsurance industry as companies aim to pro- vide the CRO with adequate covers. Currently, many risks cannot be mitigated adequately as there are no available hedging solutions—via capital markets or reinsurance.


Q What are the implications for capi- A Model complexity has grown enormous-


tal models under Solvency II? ly in recent years. Companies are realis-


ing that they may need a number of variants of  and also that they need the right software with - - ware has been developing apace. 


new technology called super-components that         requires local subsidiaries of larger European groups to fully understand their risks, so eco- nomic capital modelling is required not only at a group level, but also locally. 


Monday October 22 2012 | INTELLIGENT INSURER —BADEN-BADEN TODAY | 3


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