Effective risk management in insurance relies on well-defined risk appetite measures and limits. These frameworks guide organisations in assessing and managing their risk exposure, ensuring alignment with strategic objectives. However, the reasons for adjusting these measures can significantly influence an organisation’s effectiveness in navigating risks. Risk Appetite Measures and Limits Risk appetite articulates the level…
Your experience with IFRS17 over the past couple of years likely depends on the insurers you’ve been closest to—whether they’re predominantly using PAA, GMM, or VFA approaches. The differences between the General Model (GMM) and the Variable Fee Approach (VFA) can be substantial. VFA does away with the awkwardness of locked-in rates on CSM and…
There are many reasons to doubt the perfect applicability of the 6% cost of capital rate used in South Africa for the solvency Risk Margin calculation. Not least of which is the decrease to the rate in Europe and in the UK. However, if we borrow ideas from Embedded Value (TEV/EEV or MCEV) and look…
Will IFRS17 kill off Embedded Value (EV) reporting in Africa? Or will it finally bring Market Consistent Embedded Value (MCEV) to life? I gave a presentation at the Life Assurance Seminar 15 years ago on MCEV. It took off in the UK but didn’t become popular in South Africa. That might be changing. Some insurers…
I’ve been brewing a wild idea for a while. Insurance regulations weren’t written with IFRS17 in mind. This causes some head scratching when it comes to premium volume measure for non-life insurance, but common sense gets you to the right answer without much trouble. Those who say otherwise seem to be looking for problems where…
I have never owned Steinhoff shares. I was surprised then, when going through some old blog uploads (dealing with a separate copyright issue that I may touch on in another post) to find this share price graph of Steinhoff from 2007 I don’t remember looking at this, but the blog entry was actually about insider…
Reading the Financial Soundness Standards for Insurers (FSIs) is an exercise that can only end in madness. I’m sufficiently familiar with them now that I mostly refer back to them for particularly tricky or thorny issues. Without fail, the words fail to clearly communicate exactly what was intended. Take ancillary capital as an example. To…
I’ve had the privilege to straddle life insurance and non-life insurance (P&C, general, short term insurance, take your pick of terms) in my career. On balance, I think having significant exposure to both has increased my knowledge in each rather than lessened the depth of my knowledge in either. I’ve been able to transport concepts…
