Insurance and reinsurance - Taking measures to face your challenges | Brochure
The financial environment is currently recovering from a global crisis. Yet, for the insurance and reinsurance sectors many challenges are still showing ahead.
While companies will continue to place a permanent focus on business strategies in order to strengthen their business basis and keep on driving profitable growth, the regulatory and reporting frameworks are paving the way for a completely new area in which economic valuations will be the drivers of both capital requirements and financial results.
Positioning for growth
Even in the economic downturn, global insurers are positioning for growth, planning to enter or expand in faster growing markets around the world. Aiming to improve the ‘customer experience’ including driving focus on new product development, distribution models and retail strategies including delivery channels enhancement, and seeking merger and acquisition opportunities.
Capital and solvency
Although we are now recovering, the economic and financial downturns have left behind weakened balance sheets due to the impacts of investment and underwriting losses.
Solvency position and capital planning will play a key role in both strategic and operating models for the future to come.
Combined with the regulatory developments triggered by the Solvency II Directive and the related implementing measures, changes in the way business is operated will be needed.
Such challenges include:
- Demonstrating sound risk management and governance processes
- Enhanced reporting and transparency rules
- Managing data efficiently and improve information systems
- Be able to report in an effective and timely manner
- Moving from a silo’s risk management to an integrated risk management framework
Companies should not be waiting before addressing these issues and gather all chances to manage their business with certainty.
The IAS Board’s new standard for insurance contracts is paving the way for a completely new area regarding the measurement of insurance liabilities, the presentation of insurance activities to the users of the financial statements and the disclosures of business information.
There are areas on which the accounting and the solvency regimes converge and diverge, one of the key issue for insurers and reinsurers will be to be able to leverage on similarities and address discrepancies when considering the implementation of the new rules.
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