Risk Management for Insurers, Second Edition

Book Preface

In 2007, I published a book on risk management for insurers. Its foreword was written by Jos Streppel, the then chief financial officer (CFO) of Aegon and an industry leader on risk management and fair value. He mentioned that the insurance industry was going through turbulent times and undergoing a wide range of developments.

How could we have known then that turbulence of a totally different magnitude was coming our way? In the meantime, the insurance industry has weathered a severe financial crisis that put virtually all insurance companies across the globe under stress. Some insurers faced capital shortages, others experienced solvency erosion and reorganised the risks within their company. This put risk management firmly on the agenda of executive boards of all insurers. CFOs and chief risk officers (CROs) worked day and night to ensure that companies got back on their feet, while explaining to financial stakeholders how they managed it. In the meantime, Solvency II has approached its implementation date at top speed. Since the publication of the first edition of this book, the Solvency II Framework Directive has been published and approved, providing more guidance on the specifics of the regulation. Further guidance has come from the European Insurance and Occupational Pensions Authority (EIOPA) in the form of the Quantitative Impact Study 5 (QIS5) technical specifications and other consultative documents. Insurers have been working hard to implement all these regulatory requirements to a level that satisfies supervisor’s criteria.