The CRO Forum selects its Chairmanship for 2013
David Cole, Chief Risk Officer of Swiss Re and Vice-Chairman of the CRO Forum during 2012, was elected as the CRO Forum Chairman for 2013.
Towers Watson publishes paper on matching adjustment
Towers Watson published a paper on the matching adjustment and the implications for long-term savings with financial support from the CRO Forum.
CRO Forum Blueprint on Anti Personnel Mines and Cluster Munitions
The purpose of this paper is to raise general awareness of the issues related to APMs and cluster munitions and the consequent reputation risks. In addition, the paper sets out possible ways of how (re-)insurance companies, from a risk management perspective, could address business transactions in relation to APMs and cluster munitions.
Recovery and Resolution
In light of the heightened regulatory interest in Recovery and Resolution, this CRO Forum Paper highlights the good risk management practices that insurers should undertake to avoid the requirement for resolution
CRO Forum Paper on the Own Risk and Solvency Assessment (ORSA)
In this discussion paper the CRO Forum provides a set of standards that could be applied by insurance undertakings with respect to conducting a self assessment of risk and capital solvency called Own Risk and Solvency Assessment (‘ORSA’).
Contingency Planning
The Euro area crisis of 2011 has stirred up a certain amount of thought and publication on how to deal with the potential consequences of a possible break-up of the monetary union. In light of these events, the CRO Forum investigates the potential risk management considerations that companies could take with the objective of limiting the potential impact by providing considerations to improve companies’ responsiveness to adversity.
The CRO Forum selects its Chairmanship for 2012
Robin Spencer, Chief Risk Officer of Aviva PLC and Vice-Chairman of the CRO Forum during 2011, was elected as the CRO Forum Chairman for 2012. Swiss Re’s Chief Risk Officer, David Cole, was elected Vice-Chairman of the CRO Forum for 2012.
Power blackouts pose growing challenge to society and industry: urgent action is needed
A study by the Chief Risk Officer’s (CRO) Forum has found that the risk of large scale power disruptions is set to increase due to the growing interconnectedness of electricity grids, changing mix of power sources and aging infrastructure
Practical application of Liquidity Premium
The CRO Forum believes that the liquidity premium is a fundamental part of the economic valuation of insurance contracts. We support the underlying principles agreed by the Task Force, and the formulaic approach for deriving the liquidity premium adopted in QIS5.
Currency Risk under Solvency II
In this paper we discuss the idea behind currency risk. If the guidance for the required capital calculation for FX risk is based on a shock applied to the Net Asset Value of the entities in their respective reporting currencies, then this can create hedge incentives that endanger the solvency of the group and hence policyholder benefits.
Insurance industry urges EU Commissioner Barnier to correct Solvency II implementing measures
In this press release, Representatives of the European insurance industry have urged the European Commissioner for the Internal Market and Services, Michel Barnier, to ensure that the overly conservative and prescriptive elements still contained in the draft implementing measures for the forthcoming EU regulatory regime, Solvency II, are urgently addressed.
Economic (in)solvency is different from actual (in)solvency
Economic Capital Models (“ECMs”) are a hot topic of discussion within the insurance industry: what is the target level of confidence?
Treatment of Deferred Tax Assets
At the heart of the issue is the complexity of the way deferred tax items are recognized, coupled with all the complexities of a market consistent valuation regime. This combined complexity and uncertainty manifests itself in a conservative assessment of the value of tax and the role it plays in a valuation system.
Principles Governing Transitional Provisions
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.
Nanotechnology
This presents the insurance industry with significant challenges and opportunities. The paper recommends that assessing risk over the life cycle of these nanomaterials should be standard practice for the nanotechnology industry, as well as for their insurers and reinsurers.
Longevity Risk
The longevity paper finds that increased life expectancy will challenge society to provide adequate income to all individuals through old age. Consequently, demand for longevity risk mitigation solutions is growing, and life insurers should play an important role. However, their current capacity to take longevity risk onto their balance sheets is small relative to global longevity risk exposure.
CRO Forum Sustainability Framework August 2010
As a consequence of globalisation, public expectations have risen that businesses should behave responsibly and accountably in terms of minimizing their environmental and social footprint. Even though this footprint is low for the insurance industry due to the service nature of its operations, headline risk has nonetheless increased.
CROF QIS5 Press Release
QIS5: A checkpoint to steer Solvency II. Results will provide a tangible basis to assess potential outcomes of Solvency II. [...]
CRO Forum_Extrapolation of Market Data
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.
QIS5 TS High Level Issues
The CRO Forum and CFO Forum are pleased to be able to provide comment on the QIS5 draft specification, as prescribed in the QIS5 consultation. We welcome the openness to cooperation between us and trust that this is merely a point in our continuous dialogue.
QIS5 Technical input
QIS5 Technical input
QIS5 Detailed Feedback
The CRO Forum and CFO Forum are pleased to be able to provide comment on the QIS5 draft specification, as prescribed in the QIS5 consultation. We welcome the openness to cooperation between us and trust that this is merely a point in our continuous dialogue.
Why ‘expected future profits’ must be treated as tier 1 capital
The role of ‘expected future profits’ in determining a firm’s own funds is attracting much discussion, with suggestions that they should be excluded from tier 1 capital. We believe this is at least in part due to a misunderstanding of their nature – even the term ‘expected future profits’ is misleading and we prefer to refer to them as in-force cashflows.
QIS 5 Technical Specification Risk-free interest rates
We would like to take the opportunity to specify certain aspects of the risk-free interest rate term structure for QIS 5. This technical paper is set out in four sections to cover the aspects of the risk-free interest rate term structure as asked from the European Insurance CFO Forum and CRO Forum.
CRO Forum – CP80
The CRO Forum welcomes the opportunity to comment this consultation paper on pre-application process for Internal Model. The timing for this paper is good as many supervisors are already starting a pre-application process and it will promote necessary harmonization. This paper is of high quality and the CRO Forum strongly supports CEIOPS in aiming for one unique pre-application process led by the lead/group supervisor in cooperation with the other supervisors concerned.