For CEOs and CFOs looking to differentiate their company and demonstrate value creation, using a capital model to identify hidden redundancies in reinsurance spend is an easy win. This is especially important as investors have become ever more cynical about the diversified insurance business model and question whether or not Solvency II will deliver any tangible benefits.
The capital models now available, built to meet Solvency II implementation requirements, are a powerful and effective new tool in their armoury:
The gains from making use of the capital models in this way go straight to the bottom line. The tool is already in place and there is a regulatory need to use it.