85% of insurers plan to use internal models
A QIS5 survey has revealed understanding risk is a major concern for insurers.
The Towers Watson survey found a third of insurers believe their investors still do not understand their risk appetite.
Towers Watson director Colin Murray, said: "Risk appetite appears to remain an underdeveloped aspect of many insurers' response not only to the external demands of rating agencies and regulators, but also in relation to achieving a strong foundation for strategic decision making.
"A clearly articulated risk appetite has become essential for businesses to achieve a higher rating and attract investors, which makes it a potential source of real competitive advantage," Murray added.
The survey also revealed:
- 85% of insurers are responding to Solvency II with plans to make use of their own internal models for regulatory purposes.
- Almost half (49%) considered the main benefit of an internal model to be for business purposes, such as for Solvency II, IFRS, and wider business decision making.
- The main challenges for an internal model were perceived to be resources (28%), followed by data issues (22%).
- The majority of insurers identified the risk margin to be the most difficult aspect of the Solvency II balance sheet (67%) to calculate, followed by determining the best estimate (13%).
Hosted by comedian and actor Tom Allen, 34 Gold, 23 Silver and 22 Bronze awards were handed out across an amazing 34 categories recognising brilliance and innovation right across the breadth of UK general insurance.
