Risk & capital management

In the wake of the financial crisis, risk & capital management practices have been tested and, in many cases, found incomplete or ineffective. We help insurers identify, assess, manage, and report on the risks specific to their business, and have helped clients develop and implement a broad range of risk, capital and value management frameworks, methodologies and tools. This has helped promote effective risk and capital management and enabled clients to improve their business planning processes, both via assessments of strategic decisions' impact on the business and shareholder value, and enhancements to the quality of management information.

Potential issues

  • Determining risk aggregation, risk mitigation and capital allocation.
  • Changing your organization's risk culture.
  • How to respond to the NAIC's new Own Risk & Solvency Assessment (ORSA) requirements.
  • A common risk language for use in the boardroom.
  • Underwriters, the risk committee, and the board use risk-based value measures and management information that are inadequate for the risks the organization faces.
  • Credit rating agency ERM or financial security rating prevents you from communicating your full strength to regulators and stakeholders.

How we can help

  • Design and implement a robust ERM and risk limits framework with effective change management.
  • Assurance that the existing risk management framework is complete and effective.
  • Specification of risk policies and controls for capital management, underwriting, pricing, ceded reinsurance and investment that provide the crucial link between the day- to-day business processes, business plan and risk appetite.
  • Optimization of risk-adjusted financial performance through effective capital allocation and risk mitigation.
  • Provision of risk training to all personnel to reinforce risk-based decision-making.

Our services

  • Design and implement a robust enterprise risk management framework, encompassing risk identification processes, risk quantification methodologies, risk management policies, and risk reporting against risk appetite, risk tolerances, and risk limits.
  • Support for your ORSA project that leverages existing risk management and reporting processes and tools, as well as PwC accelerators.
  • Design, build, implement and validate internal economic or regulatory capital models and risk aggregation frameworks.
  • Specify key risk and risk-adjusted performance indicators and dashboards for management, reflecting the audience's specific needs in each instance.
  • Preparation and support for discussions with rating agencies and regulators.
  • Support for and advice to capital and modeling teams (e.g., on hedging strategies or technical matters).
  • Support to internal audit and risk reporting functions.
  • Design and delivery of risk training to personnel and board.