|EU Legislative process - not for vegans|
Bearing in mind the exquisite pressures being applied by the EU machinery to quantify risk, this publication is a welcome return to horizon scanning, qualitative assessment and emerging risk, all of which is handy for the ORSA posse, who according to recent surveys, should be all over this during 2013.
Some very interesting snippets emerge from the report, in particular;
- "Conduct Risk" - if ORSA was the new boy in 2012, then its 2013 counterpart is surely Conduct Risk, which I suspect didn't warrant a category of its own in many risk managers thinking until the return of twin peaks regulation in the UK. Conduct Risk has shot up the charts in its significance for insurers, now sitting 4th (from 18th last year)! Specifically, the suggestion that insurers are now "...looking beyond conduct risk as simply a compliance exercise" makes you wonder what some firms through were acceptable products in the last 10 years!
- "Guaranteed Products" - was not listed last time around, now jumps to number 6
- Actuarial Assumptions (which can easily mask the emergence of a number of the risks listed) unchanged at 12th
- Capital availability down from 2nd last time to 16th this year - interim period been spent squirrelling capital away, or happy that the onerous elements of Solvency II are (thanks to Germany) in the distant future?
- Reputational risk still in mid-table, at 14th
- Surprisingly, the Life sector doesn't have actuarial assumptions in its top ten concerns
- Equally surprisingly, the non-life sector doesn't have regulation in its top ten concerns - clearly happy with their proposed Solvency II lot!
- That reputation doesn't feature in reinsurer's top ten - with customers likely to be eager yet more discerning under Solvency II, one would think this is an area for enhancement in order to stand out from the similarly-rated crowd
- The quality of risk management appears to have spiked as a concern largely due to the emergence of emerging market firms into the space playing catch-up (on paper at least), as well as concerns that some firms are playing at risk management without making necessary adaptations to the prevailing risk culture.