Insurance Risk & Actuarial

In Germany, key provisions of the second pillar of Solvency II have already been anticipated in the Minimum Requirements for Risk Management of Insurance Companies (MaRisk VA). In addition, the third pillar of Solvency II requires significantly higher risk reporting requirements to be met by the supervisory authority and the public.

In addition to these direct effects on Risk management, reporting and management concepts, extensive changes are pending in a large number of business decisions such as actuarial product development, reinsurance requirements, investment selection and acquisitions/disposals of companies as well as in the further development of management concepts.

Regulatory innovations are intended to better arm insurers against risks in the long term. First, however, the various regulatory requirements (Solvency II, MaRisk VA, SST) require preparatory and accompanying adjustment efforts in the companies. Exemplified by the need for

• Design and implementation of suitable methods and processes
• Development of appropriate risk models and risk/performance-based management systems
• Revaluation of insurance products and more ambitious methods for the valuation of insurance portfolios, capital or investment portfolios.

KPMG supports you in all phases of the development, implementation and optimisation of integrated Risk management.

• Gap analysis and derivation of measures: Review of existing structures/processes/methods, particularly in the areas of risk, actuarial, controlling and accounting. Comparison of the current situation with regulatory requirements (Solvency II, MaRisk VA, SST). Development, optimisation and implementation of appropriate risk governance and control structures (including MaRisk-compliant emergency and recovery plans). Preparation and support for regulatory approvals and audits of internal (partial) risk models (including model documentation).
• Qualitative Risk management: support in the development and formulation of risk strategies, alignment with the business strategy. Review, benchmarking and description of risk-bearing capacity in accordance with regulatory requirements. Further development of internal controls. Preparation of all necessary documentation.
• Risk modelling: Review and benchmarking of risk models. Review of standard model calculations. Development and adjustment of internal models, including partial approaches, with regard to processes, data, assumptions, parameters and the underlying formulae. Carrying out calculations. Preparation of model results for decisions (use test).
• Reporting and integration of risk and management reporting: conceptualisation, adaptation and further development of risk reporting. Design of risk management systems. Creating consistency between (external) risk and (internal) management information. Design of risk/value-oriented corporate management (including capital management control and optimisation of asset liability management systems).
• Product development / pricing: Support in the development of innovative products in the life insurance sector (including variable annuities) and in the property-casualty sector (bundled products).
• Embedded Value: Further development of methods for the valuation of insurance portfolios and risk capital according to Market Consistent Embedded Value (MCEV) for life and health insurance companies (including software implementation).
• IFRS for insurance companies: KPMG is up to date with the latest discussions on an IFRS standard for insurance companies, with particular reference to issues relating to the accounting treatment of technical provisions.