Description
Solvency II introduces stricter capital adequacy requirements and incorporates them into broader enterprise risk management and governance practices. It has far reaching consequences for all insurers. Originally proposed in 2003, full implementation across Europe didn’t take place until 2016. No longer part of the EU, the UK still follows Solvency II but is proposing changes to ease the capital rules. The risk-based capital management principles will still be part of "Solvency UK".
It cannot be the whole story, but this course approaches Solvency II from both the financial and risk management perspectives, so develops both sets of competences in the process.
What you will learn
Who should attend?
This three-hour workshop is designed to take people whose current knowledge of Solvency II is minimal and equip them with the basic survival knowledge for conversations and meetings across the market. It targets technical staff outside Risk and Actuarial who need to understand its impact on business models, decision making, and daily activities.
Objectives
By the end of the briefing, you will be able to:
- explain the background to Solvency II, its evolution and its objectives
- describe its principal components
- demonstrate the application of Solvency II using a simple insurance balance sheet
- explain the principal risk classes
- suggest the operational issues, particularly those created by different business models
- appreciate the current approaches being adopted across the industry
- explore the implications of a greater focus on risk-based capital management
Content
- Solvency II: purpose, objectives, history, rationale and responsibilities
- principles: assets and liabilities: a balance sheet approach to risk-based capital allocation
- key Components: the 3-pillar structure, Solvency Capital Requirement (SCR), Minimum Capital Requirement (MCR), capital tiers and admissible assets, Own Risk Solvency Assessment (ORSA), the concept of Value-at-Risk (VaR), standard formula v internal models
- risks: exploring key financial risk classes and identifying, categorising and quantifying other operational risks.
- Implications for systems of governance
- Explore the UK changes to Solvency II thresholds, capital requirements and reporting
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