Group-Wide Risk and Capital Management of Internationally Active Insurance Groups - Current Practices and Challenges

With the 2012 ComFrame draft, the International Association of Insurance Supervisors (IAIS) on 1 July 2012 presented a comprehensive version of the envisaged framework for the supervision of internationally active insurance groups (IAIGs). In the subsequent discussion and consultation, it became apparent that, although the industry was supporting the overall objectives of this endeavour, concerns have been raised in particular with regard to Module 2 of the 2012 ComFrame draft, dealing mainly with enterprise risk management and the assessment of the groups’ financial condition.

The importance of these issues encouraged The Geneva Association to prepare a contribution to the ComFrame discussion by analysing existing IAIG risk and capital management practices across the globe. Based on a questionnaire explicitly developed by a working group for this purpose, The Geneva Association conducted an empirical survey in this area with contributions from 19 insurance groups. The main purpose of the present report will be achieved if the survey findings assist the International Association of Insurance Supervisors (IAIS) to better understand current practices and gain a better appreciation of the variety of approaches and methods used, reflecting the different set-up of IAIGs and their aspiration to have appropriate risk and capital management tools in place.