“Planning for NAIC ORSA,” April 2013
The NAIC's proposed ORSA legislation deliberately provides only broad requirements, leaving major implementation issues to the discretion of insurers; this paper discusses some of the major areas where insurers will need to determine their approach and some of the key considerations involved.
“The Importance of Expert Judgment in Generating Economic Scenarios February 2013 ”
Economic scenario generators are a key component of an enterprise risk management approach. An economic scenario generator simulates future paths of economies and financial markets and essentially illuminates the nature of risk elements within the economy that drive financial variability. Because managements rely on the output for a better understanding of the risks their companies face and to guide business strategy and decision-making accordingly, the precision of results is critical.
“Municipal Credit Research - State of the States Report October 2012 ”
- Conning maintains a cautious outlook on state credit quality
- State credit quality is modestly improving, but is uneven
- State revenue growth has continued, albeit at a slower rate
- States have made many tough choices which have stabilized their fiscal situations for the near term
- As revenues recover, new challenges are emerging that threaten further credit improvement
“Unyielding Yields: Interest Rate Challenges to Insurance Industry Profitability, ” September 2012
Conning’s industry experts address the key interest rate challenges to insurance industry profitability:
“The Correlation Question and Solvency II, ” July 2011
- Central banks in developed economies have driven interest rates down to record low levels
- Investment income has been falling sharply, putting pressure on earnings
- Low likelihood of respite from this in the short run, though long-run threats to capital lurk from future rate increases
- The insurance industry faces an asset-based problem that requires enterprise-wide strategies for its solution
“GEMS® Insights: The 2008 Financial Crisis”
- Correlation between simulated variables is a major theme under Solvency II
- It is a vital aspect in capturing the risk and return profile of assets
- Properly capturing the diversification and concentration effects among assets leads to a more reliable risk or capital calculation
- Implementing correlation represents a major technological challenge for ESG providers
The extreme events of the 2008 financial crisis were characterized by falling equity markets, widening credit spreads, falling yields on government bonds and moderate deflation. These market conditions provided a useful testing ground for all financial markets. In this document the ability of GEMS to capture the crisis is further investigated.