Solvency II

Oliver Wyman has worked extensively with many insurers and reinsurers around the globe on all topics relevant for Solvency II, and we have been one of the principal contributors to the development of state-of-the-art approaches for economic risk management in the insurance industry over the last 10 years.

Wide ranging experience across top-tier clients:

We have carried out over 400 assignments for financial institutions across the globe on strategic financial risk management, working with a vast majority of top global insurers and top global banks. We have also served many small-to-medium sized insurers and reinsurers, asset managers, exchanges, and other financial services companies. Our client base includes a diverse range of institutions, from joint-stock companies to public entities and mutuals.

A large part of our work in both the insurance and banking segments relates to the development and implementation of economic frameworks. For many years, we have developed economic capital and internal modeling frameworks that represent industry best practice and have been used alongside the regulatory and ratings agency requirements. In addition, we have a thorough understanding of the business and strategic impact of Solvency II and have a wealth of expertise in helping insurers position themselves competitively in the new regulatory environment.

Depth of experience in Solvency II implementation for clients:

Our expertise in the field of Solvency II spans every aspect of the implementation and embedding of risk and capital management frameworks, including:

  • Foundation phase, using existing technology and processes, to identify quick-wins and demonstrate business impact
  • Framework definition and objectives
  • Roll-out and model build
  • Management of the business through Solvency Capital, including communication of results to external stakeholders
  • Embedding capital into risk appetite, risk/return optimization (e.g. product design and pricing, investment strategy, outwards reinsurance management, limit-setting etc.) and strategic planning
  • Organizational embedding, including defining the role, mandates, reporting needs and agendas for the various risk committees and decision-making units within an organization
  • Managing the strategic impact of Solvency II, definition and prioritization of initiatives to position the business competitively in the new regulatory world

Role in the development of Solvency II and enterprise risk management:

Our longstanding participation in this area comes in many forms:

  • Over the last five years, we have developed economic capital and/or risk management capabilities for a majority of CRO Forum members and associate members, as well as a number of major European-based global insurers, reinsurers, and banc assurers
  • We have supported industry groups directly, including the CRO Forum and CEA Insurers for Europe, in formulating their policy positions for economic capital and Solvency II
  • Many of our approaches to insurance liability valuation and economic capital determination that we have developed for our clients are now reflected in the European Commission’s draft Solvency II Directive