AON research paper - Solvency II revealed

AON have fired out another worthy paper regarding the changing landscape for insurers during Solvency II implementation, as well as what an "optimal" insurer will look like post-Solvency II.

I enjoy reading anything that looks at post-Solvency II implementation, as well as anything which touches on the reinsurance potential on the capital requirements front, so this was right up my street. I particularly liked;

• Their process for optimising insurance risk and asset strategy in tandem (rather than the two, being the preserve of the actuarial and investment functions respectively, being operated in isolation)
• Articulation of "risk appetite" as a percentage of own funds surplus volatility above and beyond SCR (interesting way to communicate it)
• Table on capital changes for market risk and implications for insurers by sub-module - easy to digest
• Good sections on Catastrophe risk (if that is your cup of tea!)
• Ratings agency drivers, which stress the importance of transitional measures (for orderly transitions to preferred Tier 1 capital vehicles), the likelihood of ORSA-related criteria on future solvency sliding into their assessments.

Nice sales pitch for ReMetrica at the end as well - for all your ORSA needs...