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Session 47 Impact of IFRS/Solvency II Regimes on Reinsurance Accounting
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Agenda
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What will impact reinsurers’ pricing?
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There will be an economic view of the balance sheet
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Solvency 2 requires use of economic capital – use test implies using it to make decisions – use it in pricing!
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Reinsurer diversification matters – All risks are separately analysed and aggregated using the underlying risk drivers
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For life reinsurers, mortality risk will be a key driver of economic capital
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Pandemic modeling will be a key component of any life reinsurer’s economic capital modeling
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How might it affect reinsurers’ pricing?
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How might it affect reinsurers’ pricing?
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A comparison of current state to future state
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Without investment spreads, profit margins on some products may be impaired
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In a risk free rate environment, later durations matter more
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Economic capital will vary based on individual company
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Risk-based performance measures take into account the individual characteristics of business segments
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What are the implications?
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What are the implications across the business?