Global Insurance Regulation and Risk Transformation Training
Solvency II is alive and kicking in! Well... almost. The European Insurance and Occupational Pensions Authority (EIOPA) and national insurance supervisors are expected to impose interim regulation for the capitalization, risk management and risk disclosure of insurance companies as of 2014. Although the delay in full Solvency II implementation until at least 2016 is causing insurance companies to evaluate their Solvency II projects across the market, now is the change to learn the key 'what do I need to do's' in our new Global Insurance Regulation and Risk Transformation training program.
In the last 8 years, we have trained over a thousand insurance and asset management clients and colleagues globally on the Solvency II framework. With the changing regulatory landscape, we have decided to launch a new setup for our successful training program going forward. Part of this new setup is to increase interaction by combining participation from both insurance and asset management companies and EY professionals across the globe. Other objectives are to combine basic content and advanced topics and allowing individuals from clients and EY to participate only for those themes they are most interested in.
The training program consist of six modules of four hours each over three consecutive days covering a range of topics that are most relevant in the area of Insurance Regulation and Risk Transformation. The sessions are aimed to have an interactive character, with case studies and discussions that have a central theme.
Participants can register for one or more training modules. Individuals that have registered for 3 or more modules will not only get a discount, but also get user access to our e-learning module "Solvency II – general overview" to refresh and/or update their knowledge on the Solvency II basics and recent regulatory changes. In addition, participants that have signed up for 3 or more modules will get the benefit of a work place at the EY Amsterdam office with WiFi access and will be welcome to join the lunches and breaks to interact with the other instructors and fellow participants.
Day 1, November 4, 2013
09.00 – 13.00 (Module A)
Models and methods – calculating your MCBS and SCR under Solvency II
14.00 – 18.00 (Module B)
Audit, Finance & Control of the future
Day 2, November 5, 2013
09.00 – 13.00 (Module C)
External reporting and data management
14.00 – 18.00 (Module D)
Data quality and IT in the new regulatory environment
Day 3, November 6, 2013
09.00 – 13.00 (Module E)
Risk management policies, practices and effectiveness – putting the ORSA in practice
14.00 – 18.00 (Module F)
Enterprise risk management and risk transformation
Bonus: Solvency II – general overview (e-learning; Module Z)
A. Models and methods – calculating your MCBS and SCR under Solvency II: 4 November 09.00 – 13.00
In the new regulatory environment that insurance companies are facing, there is a strong focus on market value and risk based capital. During this module, we will discuss the main balance sheet items that are affected by the transition towards market (consistent) values – the market consistent balance sheet (MCBS). Hereby we will illustrate this change via a live case study whereby we will discuss the MCBS of a Life and Non-life insurer. We will set out the approach to derive the own fund items and the restrictions that can be applicable. Next we will discuss the treatment of the different assets and liabilities under the Solvency II Standard Formula framework, and how the Solvency Capital Requirement (SCR) should be derived. Through a Life insurer and Non-life insurer case study the participants gain ‘hands on’ experience in analyzing SCR figures. Furthermore the consolidation of the Life insurer and the Non-life insurer will be discussed, going through the challenges that are faced during this process. Based on the SCR and Solvency ratio that results, decisions can be made with respect to the hedging of risks and how this will impact the Standard Formula SCR.
Agenda module A:
- Market Consistent Balance Sheet
- Own funds
- SCR calculation – checks and balances
- Group consolidation
- Hedging of risks and the impact on the SCR
Following this training module, participants should be able to get a better understanding of their figures, including the MCBS and the SCR. The case study will help non-actuaries to get a better grip on the content. The module is designed for those working in the insurance industry, accountants, risk managers, actuaries as well as middle or senior management.
B. Audit, Finance & Control of the future: 4 November 14.00 – 18.00
In the last decade there has become an increased demand for risk and capital information in financial statements (economic values, market consistent values). These values are not realized gains or losses but values based on future cash flow projections, estimated and sometimes subjective parameters, model choice, (risk)data vendor selection et cetera. The range of possible reasonable outcomes could be, as a result, quite large. Is there a need for different view on 'right or wrong', and hence on materiality?
During this module an overview is given in relation to the Market Consistent Balance Sheet (MCBS) and Economic Capital (EC). EIOPAs view on external assurance will be discussed in relation to the MCBS and EC. Following this, the concept of derived value of change (DVOC) is set out, which can help to evaluate modelling differences. This module will help you dealing with three important questions to ask yourself:
- Is your current audit approach sufficient for auditing economic values and risk model outcomes?
- Does your internal audit department possess sufficient and appropriate expertise to do this? Are there enough people who are able to interpret outcomes of mathematical models?
- Are the ‘new’ values and risk metrics accepted within the organization? Quality alone is not enough.
Agenda module B:
- EIOPA view on external assurance
- Sensitivities Market Consistent Balance Sheet (MCBS) and Economic Capital
- Materiality background
- Derived value of change (DVOC) concept
- Model materiality, model uncertainty and parameter uncertainty
- SCR controls and Profit & Loss attribution
C. External reporting and data management: 5 November 09.00 – 13.00
The Solvency II reporting requirements are very demanding, with data requirements that are going far beyond what was asked for under Solvency I regulation. Currently all across the market insurance companies have started with their own reporting and data management projects. This module will give an overview of how insurance companies are actually dealing with these new requirements and challenges that need to be overcome. The basic Solvency II Pillar 3 requirements are assumed to be known by participants. During the training program a parallel will be made with the IFRS 4 reporting. Through a case study you will have ‘hands on’ experience on the reporting requirements.
Agenda module C:
- Pillar 3 requirements
- Narrative reporting in SFCR/RSR
- Quantitative Reporting Templates (QRTs)
- Analysis of Change
- Comparison with IFRS 4
- Case Study: Reporting requirements
- Pillar 3 challenges & project approach
D. Data quality and IT in the new regulatory environment 5 November 14.00 – 18.00
In this module we will discuss the data quality and IT in the new regulatory environment. What does this means for your business? And what do you need to get your data ‘in control’? Through the Case Study: Data quality and data governance you will have ‘hands on’ experience and you can apply in practice what you just have learned.
Agenda module D:
- Data quality requirements
- Internal controls and dealing with Excel usage and other EUC
- IT aspects for data quality
- Getting ‘in control’ of your data
- Market insights & challenges
- Case Study: Data quality and data governance
- Reporting systems and data vendor survey
E. Risk management policies, practices and effectiveness - putting the ORSA in practice: 6 November 09.00 – 13.00
During this module we will discuss the ORSA Process and Report in detail, including emerging leading practices.
Agenda module E:
- ORSA Policy – framework and lessons learned
- Governance requirements for the ORSA Process
- ORSA Process requirements
- Risk management, strategy and capital management for the ORSA report
- Standard Formula and the individual Risk Profile
- Future MCBS and Capital projections
- Scenario setting and performing stress testing
- IMAP and Supervisory instruments
F. Enterprise Risk management and risk transformation: 6 November 14.00 – 18.00
There is hardly any value in having a risk management framework and capability if it is not effective in operation. Most major insurance territories have explicit or implied requirements for having effective systems of governance and effective management of risk. The degree of supervisory pressure/focus on demonstrating compliance varies considerably throughout the world. Regulatory developments suggest a desire to have improved effectiveness but they are not always fully aligned / transparent. The latest guidance from EIOPA (March 2013) emphasizes the high-level “effectiveness” requirement. Both information and action are critical. Even in the absence of regulatory pressure, why would CEOs not want more effective management of risk? During this training module, we will go into detail regarding the integration of risk management.
Agenda module F:
- Integration of risk management
- Risk process alignment
- Risk Transformation
- Structural reform and optimization
- Enterprise Risk Management (ERM)
Each module is designed for all individuals active in the insurance industry. Auditors, controllers, risk managers, actuaries as well as middle or senior management. Even when one topic is not your core focus, having learned the key take aways will significantly improve the much needed cooperation between the various professions.
The training is also interesting for those employed at banks, pension funds or for asset/investment managers given the similarities with Basel II for banks, the potential developments of risk based regulation for pension funds across Europe as well as the impact of Solvency II on asset managers and other asset service providers.
All participants will receive pre-course materials to prepare for the training modules. This is to ensure that all participants have similar starting positions for the modules, and the basic guidelines of Solvency II do not need to be reiterated.
The training modules go beyond the materials covered in the Solvency II training program we have organized for 8 years, and overlap between our Solvency II training program and the Global Insurance Regulation and Risk Transformation training program is limited.
Upon request, we organize the modules set out above, as well as the Solvency II Complete training and the Solvency II Advanced training that we have organized in previous years in house. This way we can further tailor the training program to your needs. Please contact us directly for more details.
The general EY training conditions are applicable on these training modules.
Note that the content of the training modules set out on this website gives an indication of the topics covered. EY has the liberty to make minor changes to the actual content covered, for example to take account of the latest changes in insurance regulations.