Last week, we published a new white paper on the upcoming Own Risk and Solvency Assessment (ORSA) requirement for insurers in 2015. ORSA is a key part of the Solvency Modernization Initiative of NAIC. For the insurance industry specifically, the ORSA challenges organizations to think about their solvency and risk management processes as part of their overall risk strategy, instead of just once a year when filing the report.
In this white paper, we provide an overview of the ORSA requirement and guide you through the ORSA process and report. We examine the risk management frameworks of leading insurance companies for common traits and issues, such as the lack of integration among various risk frameworks inside organizations. Readers can benefit from several specific suggestions aimed at helping insurers replace the traditional risk management process with a forward-looking one that embraces a more comprehensive enterprise risk management framework, as well as considers the organization’s solvency and capital adequacy. The hope is that by assessing risk in a continuous, future-oriented manner, companies can avoid repeating some of the mistakes and excesses that led to the turmoil of the financial crisis.