Sample projects
- Assessments
- QIS (Quantitative Impact Studies)
- Training in partnership with EFE, a major training provider in France
Solvency 2
Solvency 2 will soon enter into force.
Equinox Consulting offers insurers and mutual benefit societies the support they need to implement the reform.
Implementing transversal solutions to help insurance professionals meet the demands of the new regulatory environment
What Basel II is to the banking industry, Solvency 2 is to the insurance industry. For insurers, the new reform brings with it a new regulatory environment for risk management.
Solvency 2 includes some major innovations with regard to the old regulations:
- Better consideration of the real risks to which insurers are exposed; inspired by Basel II, the reform requires insurers to develop internal models and implement an effective organization to assess and manage risk
- The introduction of the Solvency Capital Requirement (SCR)
- The consideration of operational risk
- Tighter supervision by regulators
• No relationship between assets/liabilities
• Risks taken into account, but:
- Not exhaustively
- Few distinctions made • Requirements concerning risk management and internal controls
• All risks taken into account (underwriting, credit, operational, etc.)
• Standard formula is more detailed; calculation is individualized by internal models • Prudential reserves vary from one country to another and from one organization to another
• Varied supervision practices • Harmonization of prudential reserves according to a quantitative reference (quantile)
• Same supervision practices in different countries
Solvency 2 is slated to come into force in 2010–2012.
The proposed directive is organized around three pillars:
Quantitative Requirements
• Capital
• Standard formula or internal model
• Investment rules
Prudential Supervision Process
• Risk management
• Internal controls
• Supervision process
Transparency and Communication
• Publication of information
• Supervision by market discipline
At Equinox Consulting, our work with leading French banks (most notably supporting their risk and finance divisions through Basel II projects) has allowed us to develop considerable expertise in risk management. We know that the effects of this type of reform go far beyond the direct impacts on calculating required capital and reserves (QIS); we are thus able to plan ahead for impacts on:
- Organization
- Information systems
- Processes that feed into the IS
- Human resources
Preparing your employees for the changes ahead
Modular programs designed for insurance professionals (four modules) are available as classroom.
Solvency 2 assessment
Using an assessment grid deduced from the CEIOPS papers, we compare Solvency 2 requirements with the systems currently in place within the organization.
The assessment is conducted prior to Solvency 2 rollout and is used to gain an understanding of the company’s degree of preparedness and to identify priority projects.
Identify priority projects
Set up project Involve a broad range of expertise
Identify strategy options
QIS (Quantitative Impact Study)
Conducting a QIS serves several purposes. It can be used to:
- Raise the awareness of some of the employees affected by the quantitative pillar of Solvency 2
- Gain an initial view of the company’s capacity to consolidate the required information
- Provide an initial measurement of impacts in terms of required capital and reserves
Equinox Consulting possesses the know-how to provide your teams with end-to-end Solvency 2 consulting services from development and testing to report production.
Coordinate work of various contributors Validate methods
Inform contributors
of needs
Consolidate
Audit
Feed system Analyze results
Generate reports
Sample projects
Assessments
QIS (Quantitative Impact Studies)
Training in partnership with EFE, a major training provider in France
