The insurance industry today faces a unique set of long-term and short-term challenges. Underwriting risks are impacted by well-known long-term trends such as greater longevity and an increasingly unpredictable climate. In the short term other factors are in play. Chief among these is the current turmoil in the financial markets, which is impacting the insurance industry in multiple ways, eroding value in the investment portfolio, increasing default risk and making it harder to raise capital.

Against this background, the industry must meet the new challenge of implementing Solvency 2. Currently planned for full implementation late in 2012, Solvency 2 is nevertheless not comfortably distant. Banks implementing Basel 2 took several years to plan, mobilise and complete the changes that were required – but in our view Solvency 2 presents significantly greater difficulties. For those firms intending to make use of internal models for determining regulatory capital needs, the timelines will prove very demanding. It is no surprise that regulators, like the UK’s FSA, already expect to see insurers’ Solvency 2 programmes under way.

With our deep financial services and risk experience, we are well placed to help firms plan for and address the multiple challenges now faced by the insurance industry. We are already working with clients to help mobilise their Solvency 2 effort, and can draw on many years of experience in implementing regulatory-driven change in financial services. Our proprietary Integrated Risk and Performance Measurement (IRPM)^TM tool is available now to help assess how an insurer’s risk and capital management capabilities measure up to the new requirements, and to benchmark capabilities against best-practice and peers both firmwide and at business unit level. Clients can draw on our key service offerings:

Organisation and Governance Performance measurement and monitoring Regulatory compliance and reporting Business Processes and People Business process improvement Training and people change Information Management System selection and implementation Data quality management Measurement and Analytics Specialised risk measurement and management Portfolio risk management

If you would like a demonstration of the IRPM tool or details on any of our solutions, click here.