- "The objective of Solvency II is not to reduce risks, but to allow companies to properly understand, price and manage the risks they face" - we frequently hear from the EU institutions on what the 'objective' of Solvency is, so I might do a clean-up post on this, particularly as the scare stories on the impact of the LTG assessment outcome on granny and grandad's pensions are increasing the prominence of the topic (the Advisory world being a prime example).
- "Solvency II is more complex than it was originally foreseen" - early contender for understatement of the year...
- Credible timeline is "a must have".
- Insurers should "make sure that Boards of firms keep considering Solvency II a priority" - after 4 years of phoney war, easier said than done Señor!
- EIOPA's interim measures "...an excellent way for all parties to use the extra time of the delay as a way to be better prepared for implementation".
- Internal Models are "a fundamental management toolkit" - quite the opposite take of the wonderful blog post from one of Willis's finest last week, writing that actuarial models "take combinations of assumptions and torture them to come to conclusions"!
- "The ORSA Process must be owned by the company" - without any useful elaboration on what 'ownership' entails and how it should be documented from a system of governance perspective. I would add that the questioner's view that firms are still "struggling" with ORSA feels a touch dated, otherwise what has industry been spending its money on for the last 3 years
The standout comment on p4, for all the wrong reasons, is around the potential use of ORSA supervisory reports for the calculation of capital add-ons, stating "...if we would do so, it would be a one and done exercise". Can't work out if this is a misquote, mistranslation, or if I need a trip to the optician, but if there is any threat of ORSAs being used by national supervisors for this purpose, a direct, plain-English statement to that effect would be appreciated by all.