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Representative Engagements

Insurers of all types, as well as reinsurers, are facing unprecedented challenges due to a variety of wide-ranging economic, regulatory and market-related changes. Recent events have been marked by significant property and casualty losses, thin premium pricing, and reserving challenges.

  

The Solvency II regime continues to move forward in Europe, and prudential insurance regulation around the globe is becoming more risk-based, requiring better alignment between firms' specific risk profiles and the quantity of capital allocated against them. Regulatory bodies are becoming more focused on comprehensive corporate governance and disclosure practices.  A complete understanding and sound management of insured risks are crucial to the successful management of insurance portfolios.    

Together with increasing sector and intra-sector competition and continued pressure on policy pricing, these changes have profound implications for the business model and competitiveness of insurance entities globally.   As a result, insurers should continuously review the relevance of their business models, compliance, governance, and risk management strategies within the context of this dynamic and complex environment.  

Globally, many insurance companies have altered their core strategies either by seeking to expand their traditional footprint or by entering new product arenas in an effort to add ever-increasing value to their customer bases. 

There is a global trend of regulators seeking a more comprehensive understanding of insurance activities.  This increased level of regulatory inquiry will be a fixture within the insurance industry for many years to come. The ability to address these inquiries and turn regulatory challenges into competitive advantages is key to creating value.  This requires understanding the regulatory trend, anticipating its impact on the firm internally and on its competitors, developing corresponding strategies, and taking concrete actions.     

Promontory balances practical business knowledge with regulatory wisdom. Promontory’s strength in assisting insurance firms comes from our rich international team of professionals, including senior alumni from national and international supervisory bodies such as CEIOPS (now EIOPA) and the U.K. Financial Services Authority, who oversaw the design and implementation of regulatory frameworks, and former senior industry executives with solid experience in insurance practice.   This mix of high-quality senior public- and private-sector experts combined with the expertise we bring from other financial services sectors enables us to help insurance firms anticipate supervisory expectations and navigate complex issues.    

Promontory provides a wide range of assistance: 

  • Regulatory advice and compliance:  
    • Provide regulatory intelligence and market trends at the domestic and international levels 
    • Address regulatory and compliance issues to meet evolving supervisory expectations  
    • Prepare insurance regulators and firms for Solvency II or Solvency II-equivalent regulation, including training, governance design, internal model pre-application support, and third-party validation of model effectiveness 
    • Develop effective compliance frameworks and functions, as well as support implementation 
     
  • Business strategy: 
    • Provide strategic advice regarding emerging financial and regulatory issues 
    • Develop, analyze, test and implement: 
      • Underwriting and reinsurance strategy  
      • Pricing and reserve methodology  
    • M&A strategy 
     
  • Governance and risk management: 
    • Review and support governance framework and board of directors’ oversight and decision processes 
    • Review enterprise policies  
    • Improve the effectiveness of risk management and internal control  
    • Strengthen data-related processes and quality control and risk measurement methodologies 

 Key contacts: 

  • Stuart King - United Kingdom 

 

Representative Engagements

  • Supported a supervisory authority of a primary jurisdiction in preparing for Solvency II implementation, in particular for the approval of internal models. Promontory also helped develop methodologies and tools for supervisory assessments and provided training to the supervisors.    
  • Assisted a major insurance group facing supervisory enforcement issues. Promontory prepared senior management for interactions with supervisors and defined organizational and operational solutions in response to supervisory assessment. 
  • Advised on the regulatory compliance and Solvency II capital efficiency of a new life insurance product prior to its entry to the marketplace.