Risk Appetite Framework for Insurance

Set functional risk limits which are consistent with your overall risk appetite

Designed to meet the needs of management as well as regulatory requirements

Implementing a Risk Appetite Framework entails setting limits on all key risks, regular monitoring of the entity’s risk profile and taking remediation actions in case of breaches. To set the limits consistently across all risks and sub-risks, a top-down approach is typically used, broadly consisting of 2 steps: Defining Risk Appetite Statements and Translating these statements into risk limits across all risks. When risk limits are breached, the entity should define remediation plans. Finalyse has the capacity and expertise to work in co-creation mode to define and implement a Risk Appetite Framework, which will rely on risk limits understood and applied by the 1st and 2nd lines of defence consistently. Such framework will be effectively integrated in your value chain.

How does Finalyse address your challenges?

The Board’s and management’s risk appetite is translated into risk limits which can be used at all levels of the company

Limits are set consistently across all key risks

The high degree of automation for monitoring the entity’s overall risk exposure makes it close to real time

Tailor-made information and metrics ensure faster remediation of risk limit breaches

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How does it work in practice?

Key Features

Besides being a regulatory requirement for insurers since the introduction of Solvency II in January 2016, a Risk Appetite Framework lies at the core of risk management for insurers.
Working with Finalyse on the design of a Risk Appetite Framework, you will benefit from the broad experience we have accumulated in the area of risk management.

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Our subject matter experts

Bence Zaupper

Managing Consultant - Expert in BMA, Solvency II / ICS / Market Risk / Actuarial and Risk Modelling / Internal Models Approval and Validation / Risk Appetite

Bence is a senior actuary with 20+ years of experience in life actuarial science and reporting in Solvency II, IFRS, BMA EBS and ICS regulations. His focus has been on actuarial and risk modelling - including capital projections, market risk management and internal model validation – and ERM framework design. Bence delivers business transformation, reinsurance, new authorisation and M&A projects and is keen on applying machine learning and data analytics for actuarial use cases.

Eóin Stack

Senior Consultant – Expert in Pre-Emptive Recovery Planning / Internal Models Approval and Validation / Risk Appetite

Eoin is a Senior Consultant in the Finalyse risk advisory insurance practice based in Dublin. He is an Associate of the UK Institute and Faculty of Actuaries and a Chartered Enterprise Risk Actuary. He has experience in end-to-end monthly and quarterly statutory valuations, ORSAs, experience investigations and system migrations for clients. He has expertise in Solvency II and strong modelling experience in SAS and Python.