Solvency II: Own Risk & Solvency Assessment

ORSA: why it is important

• Firms have to do it – it is a regulatory requirement, and momentum is building. But EIOPA's consultation on Level 3 guidelines is principle based and doesn't give prescriptive guidance.
• Insurers have made huge investments in Solvency II, and ORSA is a way in which they can unlock value from that investment. As the interface between the Board and the firm's risk management and capital model, the ORSA should be used to vastly improve quality and timeliness of management information (MI).
• ORSA spans Pillars 1, 2 and 3 of Solvency II programmes and can ensure alignment if done properly.
• Global dimension – Regulators and supervisors of some 190 jurisdictions have agreed that ORSA principles are something they aspire to.