Reinsurance intermediary and capital advisor Aon Benfield has launched the ‘CRO Guide to Solvency II’ to help chief risk officers (CROs) maintain a competitive position and boost financial strength while meeting regulatory compliance. The report aims to unravel the complexities of Solvency II and provide practical advice for a successful implementation.
The guide provides an overview of the current Solvency II landscape and highlights the key areas of best practice. Equally, all insurance company professionals involved in Solvency II can benefit from the insight to help better understand the demands of the CRO and how to optimise the flow of information to the board level.
The publication is structured around the three pillars of Solvency II under the themes of capital management, risk management and data quality. Key pieces of advice in the guide include:
- Reinsurance remains the best mechanism for mitigating the risks and associated capital charges under Solvency II. Since most firms target a Solvency II ratio substantially above 100%, the effect of leverage on required capital makes reinsurance more cost efficient than raising additional equity in today’s market.
- Making the link between optimising return on capital, managing the volatility of results and delivering within risk appetite is a good way to incentivise senior management to use the results of internal models in strategic decision making.
- Operational risk management should be developed for business rather than for regulatory considerations. Accurate and complete risk information, as well as a good capital model and insurance mitigation programme, can really add value.
“Regardless of the actual implementation date of Solvency II, the CRO will still be accountable for driving the success of risk management within an insurance company,” said Marc Beckers, head of Aon Benfield Analytics for Europe, Middle East and Africa (EMEA). “The CRO’s responsibility reaches across the three pillars and their role is crucial in shaping the business to be successful under the forthcoming new regime.
“Furthermore, the CRO connects and collaborates with the roles across an insurance company – from board to actuary or catastrophe modeller – that are involved in achieving and embedding regulatory compliance. Our guide highlights some of the key challenges firms face, setting out best practice to overcome these hurdles in the most effective way.”
The US money market fund reforms came into effect in 2016 and are already dramatically shaping US fund industry with investors flooding out of prime funds and into government securities. While the reforms are similar, they are not the same. GTNews interviews Yeng Bulter, global head of the cash business at State Street Global Advisors on the differences.
Far and away, the largest financial market on the planet is the foreign exchange currencies market, where on average individuals and organisations trade more than $5 trillion daily. In the FX world, the ability to master the market isn't considered a luxury for treasury officers–it's a necessity.
As the May 25 deadline for Europe’s General Data Protection Regulation (GDPR) inches closer, many treasurers are being lumped with the task of ensuring their wider company is compliant.
APIs may be a solution to MT940 challenges, says Karen Fagan, treasury operation manager, for British television company, ITV.