Insurance is a dynamic industry operating in a world of risk and
uniquely exposed to uncertainty. To succeed, it needs to be
flexible and innovative. In parallel, regulatory change is
transforming the face of insurance regulation. The Solvency II
Project which originated some 13 years ago aims for a robust
framework which captures the economic reality of the
asset-liability position of insurers and brings capital closer to
the insurers' risk profile.
The framework promotes a strong risk culture embedded in the
insurers' organisation and nurtures strong risk management
capabilities. This is a steep shift from the fragmented and
outdated approach of the current rules based Solvency I regime
which primarily focuses on the capital adequacy for insurers
without catering for risk management and governance within
firms.
