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Solvency - II Programme Setup
 

Solvency - II Programme Setup

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    Solvency - II Programme Setup Solvency - II Programme Setup Presentation Transcript

    • Solvency II A Practical Way of Delivery
    • Gain-Line & Solvency II Solvency II is the biggest ever exercise in bringing together insurers and re-insurers under one regulatory regime Solvency II Programme Slide
      • Solvency II is a set of principles and guidelines leading to best practice in risk management;
      • It is an Enterprise wide initiative that will impact all areas of the business;
      • Early adopters are helping Lloyd’s and the FSA set the bar for what is required in the market;
      • We can’t give you ‘ The Answer ’, but only a framework to help provide ‘ An Answer ’ based on decisions your business need to make;
      • Numerous approaches are being adopted across the market and it is not a case of ‘ one size fits all ’;
      • Resources will be scarce and the deadline is unlikely to move;
      • The range and diversity of insurance operations means that a Solvency II solution will vary from company to company;
      • The eventual solution in each case will require a detailed initial assessment and a range of inputs from a number of different disciplines.
      • Gain-Line is a consortium of companies formed specifically to provide clients with focused Solvency II expertise and resources;
      • The details of the consortium members are contained within the Appendix.
      The Gain-Line Consortium
    • CEO CA CIO CRO CFO Stakeholder Requirements There are many stakeholders with differing priorities that need to be integral to the Solvency II Programme Solvency II Programme Slide Key Objectives:- Chief Actuary – centralised and consistent modelling approach for all actuarial users for realistic ‘what-if’ and scenario planning; Chief Risk Officer – enterprise wide consistent risk management standards and transparent risk modelling approach; Chief Information Officer – robust IT governance with scalable modelling tools and techniques, with consistent approach to data controls and architecture; Chief Financial Officer – faster reporting timetable with consistent approach to financial and management information; Chief Executive Officer – enhanced business performance through risk based decision making and efficient allocation of capital.
    • Solvency II Components Programmes will be challenged to align a variety of different functions as Solvency II will impact all elements of the Business Slide Solvency II Programme (including Programme Office) Governance, Compliance & Comms Balance Sheet & Portfolio Management Governance & Oversight Documentation, Comms & Training External Reporting Standard Formula Portfolio Management Calculation Kernel Technical Provisions Assets & Asset Liability Management Internal Model/Risk Management ORSA & the 6 Tests Data Quality & Governance Solvency II Data Repository IT Systems & Processes Risk Management Systems & Data
    • Programme Workstreams Highlighted below is an indicative Solvency II Programme Plan and the key workstreams that should be included Programme Management/Change Management Business Requirements Governance & Communications Methodology & Approaches SII Systems Architecture SII Implementation Plan Statutory Reporting Risk Based Decision Making SII Strategy Balance Sheet & Portfolio Management Internal Model Connectivity & Integration Risk Management Processes & Controls Management Reporting Targeting Risk Management Reporting Requirements Data Management Systems Testing Business Analytics/ Dashboard Performance Management Systems & Data ORSA Audit, Security & Control Training & Communications Documentation Documentation Gap Analysis SII Project Plan Regulatory Approval SII Technology Infrastructure Risk Management Systems & Processes Review Process Capital Allocations Slide
    • ERM under Solvency II Key Solvency II Principles Solvency II Programme Slide
      • Clear responsibility at senior level for risk management ensuring its use in managing the business, including influence on key decisions;
      • Full integration of risk and capital management – must be embedded sufficiently to pass the Use Test;
      • The ORSA is an integral part of managing the business against the chosen strategy and strategic decision making;
      • Risk appetite is clearly articulated and widely understood as the parameters to manage the business – changes are proactive and based upon the risk and capital framework;
      • The risk and capital framework is clearly documented and evidenced in advance of its use.
    • “ Systemic” / Interdependent Risk Governance E.g.: Risks & Controls Financial markets risk Review & Assurance Currency fluctuations Quantification Market changing events
      • Scenario Analysis
      • Contingency Planning
      • - Operational
      • Market changing events
      • Emerging Risk Management
      • Linkage to Strategy
      Regularly updated, clearly documented Disclosure & Reporting Pillar 1 MCR, SCR Capital Model etc Pillar 3 Disclosure & Market Discipline Pillar 2 ORSA & Supervisory Review Regulatory Risk Governance Risks & Controls Review & Assurance Quantification Group & Capital Risk Governance Risks & Controls Review & Assurance Quantification Liquidity Risk Governance Risks & Controls Review & Assurance Quantification Operational Risk Governance Risks & Controls Review & Assurance Quantification Market Risk Governance Risks & Controls Review & Assurance Quantification Credit Risk Governance Risks & Controls Review & Assurance Quantification Insurance Risk Governance Risks & Controls Review & Assurance Quantification The Risk Management Framework Slide
      • ERM Framework Elements
      • Governance
      • Accountability
        • 1 st line: Line Management
        • 2 nd line: Review & Challenge
        • 3 rd line: Independent assurance / challenge
      • Structure
      • Decision making (inc. Delegation)
      • Risks & Controls
      • Identification & Assessment
      • Systems & controls i.e.:
        • Policy and approach
        • Core processes & systems
        • Risk appetite set
      • Review & Assurance
      • MI / KPI’s
      • Scenario analysis & stress testing
      • Review & challenge
      • Independent assurance
      • Quantification
      • Base Level (solvency / regulatory)
      • Economic
      • Stress testing / tolerance levels
      • Continually refined risk appetite
    • Solvency II Governance Highlighted below is an indicative governance approach which could dovetail into existing governance structures Frequency – Monthly Chair – CEO Purpose – Oversight, Risk Management & Embedding Solvency II Frequency – Monthly Purpose – Progress, Budgets, Risks, Issues Chair – Programme Sponsor Attendees – CFO, CRO, CA, Risk Manager, Programme Director, Business Reps, Programme Manager One For Each Workstream Frequency – Monthly Chair – Programme Director Purpose – Planning & Delivery Attendees – Project Sponsors, Programme Managers, Project Managers, Business Representatives Frequency – As required with Chair – Project Managers Purpose – Operational impact and analysis Attendees – As required Board/EMC/PMC Programme Steering Committee Project Steering Committees Advisory Forums/ Subject Matter Experts Slide
      • The Gain-line Consortium
      • Member Companies
      • Magellan’s Proposition is based on deep Project & Programme Management skills within this sector:-
        • Specific Insurance experience (client references are available);
        • Extensive Project & Programme Management experience within this environment with the Management Team coming from Big-4 consultancies and senior operational roles within industry;
        • A wide range of programme services, including strategy definition, project and programme management, project delivery and QA;
        • An innovative approach to delivering programme services;
        • A collaborative approach to project delivery which has delivered in excess of £30m of savings in the programmes we have worked on with our clients.
      Magellan Consultancy Services Magellan are an independent management consultancy focussing on programme management and project delivery Slide
      • JMR’s Proposition is based on the provision of experienced technical resource who have skills within this sector:-
        • Specific Insurance experience (client references are available);
        • Extensive analysis, design and modelling skills within this environment having delivered individual assignments and fixed price projects for data migration;
        • A strong network of associates that that can join a team to deliver specific assignments;
        • Willing to work on flexible commercial models;
        • A collaborative approach to project delivery with a ‘can do’ attitude;
        • A strong focus on clients requirements and delivery.
      JMR JMR are an independent software services and solutions company that has been providing quality technical resource for 20 years Slide
    • Hillway Consulting Hillway Consulting is an independent organisation focusing on operational and management issues in the London insurance market Hillway Consulting Slide
      • Hillway Consulting has:-
        • Over 30 years experience in the London Insurance market;
        • Operational and management experience in both active and run-off environments with particular knowledge of underwriting, claims and reinsurance operations;
        • Experience at Board Level in regulated environments and in working with regulators;
        • Excellent network and contacts within the UK and overseas;
        • First hand experience of capital markets, risk and capital modelling;
        • Experience in corporate formations, restructuring and M&A in both the direct and reinsurance markets.
      • Summary
        • Key sectors; Insurance, Retail Banking, Investment Banking and Big 4 Consulting and Strategy;
        • Market discipline; Credit, Market and Operational Risk, Solvency II, Liquidity & Capital Management, Basel II, Economic Capital, Quantitative and Risk Strategy;
        • We typically place Senior Managers, Directors, Programme Directors & Managers, Head’s of and Project Managers;
        • We operate a search methodology whether working contingently or retained supported by a dedicated research function providing detailed market mapping and ensuring we stay in regular contact with our candidate community/key people.
      CirclePeople Circle People are a boutique executive search firm operating across the FS Risk Management community Slide