It is important for insurers to develop effective risk and capital
management to achieve target returns for the insurer's capital providers and
for their policyholders. Capital management tools can also be used to ensure
that the incentives and behaviours of managers are aligned with the overall
creation of shareholder value.
PwC specialises in developing and implementing a range of capital management
and modelling approaches to assess capital requirements. These approaches are
used for internal capital assessments, determining optimal reinsurance
programmes and investment strategies, capital allocation and for assessing the
impact of strategic decisions on shareholder value.
Our approach is flexible to ensure that each company’s requirements are met,
rather than providing one-size-fits-all solutions. These solutions assist
management in improving their business planning processes, as well as improving
the quality of management information, in order to ensure effective capital
management.
How we can support
you
More about this
service
Potential issues
- You want to determine your risk-based capital requirements and determine
the most efficient use of your capital
- You want to improve your business planning process and link this to your
management of capital
- You want to improve your risk identification and quantification, including
operational risk
- You need to understand the Financial Services Authority’s (FSA)
requirements for regulatory capital under CP190, including production of an
internal capital assessment for the FSA
- You want to determine the optimal approach including pricing, underwriting,
reinsurance and investment
- You need improved management information that builds on your modelling
work
How we can support you
- You will be able to define your risk-based capital requirements by business
line
- Your risk management will be linked, through risk identification and
measurement, to your risk-based capital requirement
- You will have a robust and repeatable process to produce an internal
capital assessment that will satisfy the FSA
- You will have improved business decision support for pricing, underwriting,
reinsurance and investment strategies, which will maximise your shareholder
value
- Your management information will be comprehensive yet understandable,
support business decisions based on the risks analysis and modelling work
undertaken, and monitor your solvency position with respect to pre-defined
trigger points
- You will have trained staff who can support and repeat the risk and capital
process
PwC's risk & capital management services include
- Risk assessment
- Assistance in setting up a risk control framework and risk register
- Advice on the implementation and embedding of modelling tools into the
management process, or review of current systems and models
- Technical advice on the scoping, choice, design and setting of parameters
for capital models as well as training staff in the use and capabilities of
such tools
- Assistance in tailoring outputs from capital models to suit the needs of
stakeholders and the development of good practice management information
- Assistance in developing methodology for the calculation of the individual
capital assessment
- Advice on the measurement and monitoring of operational, liquidity, systems
and control risks
- Management of the process of communication with the FSA regarding increased
regulatory capital requirements
- Negotiation (in conjunction with our regulatory experts) with the FSA for
waivers to enhanced capital requirement
- Assistance in developing a capital management framework to improve economic
capital management including risk adjusted performance
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