insurance – Twenty Third Floor

Actuarial and Risk, emerging risk, insurance, life insurance, managing uncertainty, microinsurance, regulatory risk, Solvency Assessment and Management, Solvency II

Stressed to Kill: Greatest Hits of ORSA Modelling Fails

9 May 2025

David Kirk

ORSA reports are meant to be a strategic cornerstone, connecting capital, risk, and business planning. At their best, they give boards clarity on resilience, regulators confidence in oversight, and executives a compass for navigating uncertainty. At their worst, they become slow, disconnected documents that fail to offer real insight or challenge assumptions. This article outlines…
Read more: Stressed to Kill: Greatest Hits of ORSA Modelling Fails
Actuarial and Risk, alternative investments, banking, complexity, credit risk, currency risk, economics, emerging risk, FinTech, inflation, insurance, InsurTech, legal risk, liquidity risk, managing uncertainty

Inflation, Bitcoin & Financial Risk – Does This Matter for Insurance?

17 March 2025

David Kirk

This is a bit off-topic from my usual discussions on insurance, risk, and capital modelling, but financial and economic risk matters deeply. And for insurers, we’ve seen how things can go very wrong. Hyperinflation, Currency Crises & Insurance Industry Collapse Hyperinflation destroyed Zimbabwe’s insurance sector, and decades later, it still hasn’t recovered. Currency crises in…
Read more: Inflation, Bitcoin & Financial Risk – Does This Matter for Insurance?
financial reporting, insight, insurance, life insurance, managing uncertainty, measurement

Risk Appetite – When is change good?

28 November 2024

David Kirk

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…
Read more: Risk Appetite – When is change good?
Actuarial and Risk, banking, financial risk, insurance, investments, life insurance, liquidity risk, measurement, systemic risk

Liquidity vs Solvency: Understanding Insurance Company Risks

2 November 2024

David Kirk

In this exploration of liquidity and solvency risks in insurance companies, we’ll examine how these risks interact, often in surprising ways. We’ll challenge common assumptions about insurance company risks and explore how modern insurance practices have evolved traditional risk profiles. Understanding the Basics: Banks vs Insurers The classic banking model of liquidity risk is straightforward:…
Read more: Liquidity vs Solvency: Understanding Insurance Company Risks
Actuarial and Risk, alternative investments, capital, capital structure, climate change, insurance, managing uncertainty, measurement, microinsurance, modelling, Solvency Assessment and Management, Solvency II, statistics

Capital Modelling for parametric insurance – intro

21 October 2024

David Kirk

As parametric insurance gains traction, insurers face specific challenges in capital modeling and regulatory capital navigation. I have a longer paper coming out on this, but if you’re looking for an intro, here are some of the interesting and different aspects compared to more traditional insurance. 1. Regulatory Uncertainty: The treatment of parametric insurance under…
Read more: Capital Modelling for parametric insurance – intro
Actuarial and Risk, capital, insurance, investments, life insurance, market risk, measurement, Solvency Assessment and Management, Solvency II

The Equity Symmetric Adjustment: Dispelling Myths and Understanding Market Dynamics

25 September 2024

David Kirk

Introduction In the world of insurance regulation, few mechanisms are as misunderstood as the equity symmetric adjustment (ESA), also known as the equity dampener. This feature, present in both the Solvency II framework in Europe and the Solvency Assessment and Management (SAM) regime in South Africa, is often incorrectly associated with the concept of mean…
Read more: The Equity Symmetric Adjustment: Dispelling Myths and Understanding Market Dynamics
Actuarial and Risk, Demography, distribution, Featured, insurance, product & pricing

One answer could be pet insurance

16 September 2024

David Kirk

I firmly believe major demographics shifts are going to have massive social, political, economic, financial market and commercial impacts in the coming decades. The balance of savers and borrowers, investors, producers and consumers will change with complex effects. For example: 📊 Having fewer children has a temporary impact to boost productivity as resources aren’t spent…
Read more: One answer could be pet insurance
Actuarial and Risk, capital, credit risk, financial risk, insurance, life insurance, market risk, measurement, regulatory risk, Solvency Assessment and Management, Solvency II

Reinsurer credit rating and CQS – sovereign caps and misapplication of regulations

9 September 2024

David Kirk

Does the “sovereign cap” apply to credit ratings for insurer solvency reporting? This came up in a discussion about treatment of reinsurance and choice of Credit Quality Step (CQS) under South African regulations. Usually a local currency, international scale credit rating from a credit rating agency is the most direct way to establish a reliable…
Read more: Reinsurer credit rating and CQS – sovereign caps and misapplication of regulations