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SAM Interpretation Series

With just over 4 years into insurers reporting under the Solvency Assessment and Management (SAM) framework, many insurers have changed gear from implementation to capital optimisation. This naturally results in different interpretations of the Financial Soundness Standards for Insurers (FSIs) emerging. Follow our journey as we take you through this insightful series where we share various aspects of the SAM framework including concertation risk, Loss Absorbing Capacity of Deferred Taxes (LACDT) and a whole lot more.

As insurance groups become more familiar in the estimation of the group solvency position, we have seen various interpretations emerge in the application of the FSGs. In this instalment, we delve deeper into the different interpretations relating to the FSGs.

Concentration risk refers to the risk of potential losses on investments over and above the systematic risks arising from the portfolio of investments when the portfolio of investments is not sufficiently diversified. The FSIs require that concentration risk be calculated considering the accumulation of exposures with the same counterparty, or group of related counterparties. In this article, we have specifically considered the interpretations that have emerged in concentration risk. Download for more. 

The recent change to corporate tax rates makes it an opportune time to delve deeper into the Loss Absorbing Capacity of Deferred Taxes (LACDT). Click download to learn more as we continue to share insights on our SAM Interpretation Series.

The FSIs require that insurers consider the underlying characteristics of the instrument and its exposures to various financial variables when assessing which of the above market risk components to apply.

With uncertainty on how to treat specific investment instruments within market risk, in this SAM Interpretation series we delve a bit deeper into different treatments observed in Treatment of Instruments within Market Risk.

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