sas risk management for insurance
DESCRIPTION
SAS Risk Management for Insurance is a comprehensive solution for performing risk analysis and risk-based capital calculation for insurers. The solution enables life and P&C insurance companies to implement the Solvency II standard model approach for calculating risk-based capital and is built on a robust data management and reporting platform that includes an insurance-specific data model for complex risk analytics.TRANSCRIPT
Copyr i g ht © 2012, SAS Ins t i tu t e Inc . A l l r ights reser ve d .
SAS RISK MANAGEMENT FOR INSURANCE
MORE INFORMATION
Copyr i g ht © 2012, SAS Ins t i tu t e Inc . A l l r ights reser ve d .
PRESSURES FACING
INSURERS IMPACT ON RISK MANAGEMENT
Risk Management Requirements
• Embedding risk function in decision taking processes
• Increasing sustainability of risk adjusted performance
• Optimizing compliance costs
Increasing
compliance
Costs
Volatile Results
Increasing Cost
Pressure
Loss of
Confidence
Necessity
to diversify
Solvency II /
Regulatory
compliance
Market /
underwriting
Risks
Operational
Risks / Legal
Volatile
Capital
Markets Saturated
Markets
Demography
Investors /
Rating
Copyr i g ht © 2012, SAS Ins t i tu t e Inc . A l l r ights reser ve d .
CHALLENGES
Silo systems and business units Poor business decisions
ISSUE IMPACT
Incomplete data & data inconsistencies Loss of productivity
Incomplete view of risk Insufficient / excess
capital
Limited or non-sophisticated risk tools Regulatory non-
compliance
Unreliable and inaccurate reporting Loss of insight
Limited resources Increased expenses
Copyr i g ht © 2012, SAS Ins t i tu t e Inc . A l l r ights reser ve d .
VISION STATEMENT SAS RISK MANAGEMENT FOR INSURANCE
• To allow insurance companies to manage risk across the organization in an
integrated fashion.
• Risks are often interlinked and understanding how these links affect the
business is important
• The systems which manage this are not only a part of the regulatory
approach but will also be used to drive business behavior
Copyr i g ht © 2012, SAS Ins t i tu t e Inc . A l l r ights reser ve d .
SAS RISK MANAGEMENT FOR INSURANCE
Firmwide Risk
MCR and SCR calculations
Reporting Portal
Underwriting Risk - Life
Market risk analysis Insurance risk analysis
Investment mark to valuation Life liability valuation
Underwriting Risk – P&C
Loss reserving
Data Management – Data Quality, Data Models and Flows – Detail Data Store and Data Marts
Solo / Group fund calculation
Operational risk calculation
Default risk capital calculation
Market risk capital calculation
Life insurance risk capital calculation
Health ins. risk capital calculation
P&C insurance risk capital calculation
Market Risk
Copyr i g ht © 2012, SAS Ins t i tu t e Inc . A l l r ights reser ve d .
FIRMWIDE RISK SAS RISK MANAGEMENT FOR INSURANCE
• Calculation of Solvency II quantitative (Pillar 1) requirements – Solvency
Capital Requirement (SCR) and Minimum Capital Requirement (MCR)
• Aggregation of risk capital charges across all risk modules
• Calculates capital and solvency ratio
• Supports counterparty default risk and operational risk calculations
• Calculates reinsurance receivables
Copyr i g ht © 2012, SAS Ins t i tu t e Inc . A l l r ights reser ve d .
MARKET RISK SAS RISK MANAGEMENT FOR INSURANCE
• Supports configuration of financial instruments and assets, including:
• Bonds (fixed, variable, callable, corporate, etc.)
• Equity – spot
• Derivative instruments with underlying equity, currency and bonds
• Credit derivatives
• Swaps (interest rate and currency)
• Options on swaps, caps and floors
• Property
• Supports stress tests based on interest rates, equity, currency rates and
property rates.
• Calculates and aggregates risk capital charges.
Copyr i g ht © 2012, SAS Ins t i tu t e Inc . A l l r ights reser ve d .
LIFE
UNDERWRITING
RISK
SAS RISK MANAGEMENT FOR INSURANCE
• Valuation of life insurance liabilities using a extensive library of function.
• Perform stress testing based on mortality, disability, longevity, expenses
and lapse rates.
• Supports with and without profit and separate account life policies.
• Calculates and aggregates separate risk capital charges
Copyr i g ht © 2012, SAS Ins t i tu t e Inc . A l l r ights reser ve d .
P&C
UNDERWRITING
RISK
SAS RISK MANAGEMENT FOR INSURANCE
• Prebuilt framework for estimating loss reserves.
• Calculates loss reserves using:
• Link ratio
• Chain ladder
• Cape Cod
• Bornhuetter-Ferguson
• Calculates and aggregates risk capital charges.
Copyr i g ht © 2012, SAS Ins t i tu t e Inc . A l l r ights reser ve d .
DATA MANAGEMENT SAS RISK MANAGEMENT FOR INSURANCE
• Fully integrated data management platform
• Insurance data model with pre-built data marts
• In-built data quality routines to ensure maximum value to the business
• Insurance data model implemented and used by clients to support an
Enterprise data warehouse.
• Supports integration with existing financial models
• Creation and inquiry of automatic audit control, data lineage and reverse
impact analysis
Copyr i g ht © 2012, SAS Ins t i tu t e Inc . A l l r ights reser ve d .
REPORTING SAS RISK MANAGEMENT FOR INSURANCE
• Flexible reporting capabilities at Group, Division and Product level.
• Pre-built reporting repository including:
• Asset and liability valuation
• Valuation assumption
• Capital adequacy
• Stress testing analysis
• Dashboard capabilities to publish Key Risk Indicators (KRIs) to web,
Excel, Word, PowerPoint or Outlook.
Copyr i g ht © 2012, SAS Ins t i tu t e Inc . A l l r ights reser ve d .
BENEFITS SAS RISK MANAGEMENT FOR INSURANCE
A complete solution to comply with the entire Solvency II regulations
Fast, reliable and forward looking information for making high value
strategic decisions
A basis for risk adjusted / value based management & for optimizing
decisions like reinsurance programs or investment mix
Perform complex analysis on
how the company is invested
Optimize capital allocation
Protect the company against
unwanted future losses and
realize the expected return by
optimizing investment
strategies, taking into account
risk-capital constraints
Improve the company‘s rating
and reduce the costs of capital
in order to increase the profit
Perform market-consistent
valuation of the total balance
sheet
Reduction of earnings volatility
with better risk management
due to the quantification of the
various risk types
CFO
Avoids risk of failure in
implementing a robust risk
management framework
Meets qualitative regulatory
demands like transparency and
full documentation of the models
and the risk management
processes
Supports risk management
beyond Solvency II, i.e.
implementing economic capital
models
Reduces earnings volatility and
improves financial soundness of
company by anticipating future
risks and mitigating them
Prevents losses – identifies,
quantifies and prioritizes risks
facing the company (via risk
dashboards and reporting)
Promote risk culture within
company – measures and
monitors risk adjusted
performance of the company
CRO
Directly align the risk strategies
with the sales and marketing
strategies, i.e. identify
unprofitable customers,
unprofitable products,
unprofitable regions, etc.
Optimize new business
targets, taking into account
risk-capital constraints,
customer segmentation and
customer value management
Improve competitiveness off
the products
Head of Sales/Marketing
Provides a robust technology
for enterprise risk management
– beyond Solvency II, with a
single, integrated and auditable
platform
Reduces implementation
project risks by providing ready
to use and easily customized
solution
Removes integration issues by
providing the entire solution on
single technology platform
Reduces time and cost by
shortening implementation
cycles and delivering faster
ROI
Protects investments already
made by building around the
existing solutions
CIO
Increase shareholder confidence by reducing volatility and
improving profitability of the company
Increase policyholder confidence by improving the financial
soundness and stability of the company
Grow the company by making products and services more
competitive
CEO
Copyr i g ht © 2012, SAS Ins t i tu t e Inc . A l l r ights reser ve d .
WHY SAS? SAS RISK MANAGEMENT FOR INSURANCE
• Integrated risk solution for insurers = Enterprise Risk Management (ERM) -
interlinking, modelling, simulation, transparency
• Remove current variety of point risk solutions
• Reduce Spreadsheet-Risk through improved integration
• Enables standardization across risk infrastructure
• Adapts to individual customer requirements by application of the SAS
technology
• Provides capabilities to support changing requirements to meet future needs
• SAS investing in new developments in technology and solutions for Risk
Copyr i g ht © 2012, SAS Ins t i tu t e Inc . A l l r ights reser ve d .
CUSTOMER STORY HDI ASSICURAZIONI (ITALY)
Customer Quote
We have met the double objective of improving data quality and streamlining information processes
Francesco Massari, Head of Organization and Information Systems
Business Problem
• Meet Solvency II requirements while improving data
quality and decision-making speed
Results
• Improve data quality
• Timely information reaches business users, actuarial
scientists and senior management
Solution
• SAS Risk Management for Insurance
Copyr i g ht © 2012, SAS Ins t i tu t e Inc . A l l r ights reser ve d .
CUSTOMER STORY P & V (BELGIUM)
Customer Quote
Choosing SAS enabled us to convert our dispersed data into consistent and ready-to-use information, available for the implementation of Solvency II, as well as for improving our risk management framework
Raffaele Barbera, Chief Risk Offocer
Business Problem
• Implementing Solvency II Directive
• Embedding risk assessment into daily activities
Results
• Improves P&V Group's decision-making and efficiency
• Meets its statutory obligations under Solvency II.
• Improved risk management through automatically
generated reports (dashboards, KRIs/KPIs, etc.)
Solution
• SAS Risk Management for Insurance
Copyr i g ht © 2012, SAS Ins t i tu t e Inc . A l l r ights reser ve d .
CONCLUSIONS
• SAS empowers a company to be better able to manage its risk across the
insurance enterprise
• By underpinning the solution sets with a common data architecture,
ensures a consistency of approach across the management of risk
• SAS can provide a complete Enterprise Risk Management framework
Copyr i g ht © 2012, SAS Ins t i tu t e Inc . A l l r ights reser ve d .
MORE
INFORMATION
• Contact information:
Stuart Rose, SAS Global Insurance Marketing Director
e-mail: [email protected]
Blog: Analytic Insurer
Twitter: @stuartdrose
• White Papers:
Accelerating Solvency II Compliance
Data Management and Solvency II
Copyr i g ht © 2012, SAS Ins t i tu t e Inc . A l l r ights reser ve d . www.SAS.com
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