Own Risk and Solvency Assessment

Transcription

1 Own Risk and Solvency Assessment Putting an ORSA into practice March 2014

2 Introduction MAS Notice 126 on Enterprise Risk Management (ERM) was released in April Included within this was the introduction of an Own Risk and Solvency Assessment (ORSA) for insurers in Singapore. Insurers have since been busy assessing the requirements and enhancing their ERM activities. While in 2013 the main focus was on ERM compliance, we have also seen insurers making enhancements in areas such as: Increasing the frequency of their risk identification processes and an increase in the resulting level of detail produced for risk reporting Developing a more consistent risk profile reporting mechanism through more complete risk parameters Aligning their risk classification systems with the MAS risk types to ensure completeness and facilitate the assessment of key relationships between material risks Revisiting their key risk indicators to ensure they match the material risks and ensuring that the indicators are monitored in the business Enhancing their risk management framework documentation (such as an overarching risk management framework, a risk management policy and risk reporting) Updating the terms of references for the risk committees to reflect their new responsibilities and updating the job descriptions of employees affected by these developments (e.g. the risk officer, first line risk owners and so on) Developing an appropriate risk management strategy and risk preferences aligned to their corporate objectives Enhancing their risk appetite and tolerance statements to align with their material risks and developing metrics / limits to cascade and report back to key risk committees and the Board Assessing emerging risks that the business may be exposed to in the future for escalation Extending their ERM activities to include all entities within the group Increasing resources devoted to risk management, particularly in the risk management function Undertaking Board and company-wide workshop sessions to cascade the knowledge of these developments throughout the organisation 2 Own Risk and Solvency Assessment 2014 KPMG Services Pte. Ltd. (Registration No: G), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity.

3 Many insurers are starting to see business benefits emerging from these developments. These include: More meaningful discussions and better decision-making at risk committees; Risk management providing insights to support the delivery of the strategy; The development of a greater understanding of the risks and vulnerabilities affecting the business. A number of insurer are now starting to look beyond minimum compliance with a view to gaining a competitive advantage by promoting their ERM activities to external stakeholders (such as rating agencies, key business partners and market analysts) through the public disclosures they are required to make under Notice 124. With many insurers in Singapore now putting the finishing touches to their ERM frameworks, focus is now on fully embedding the required ERM processes and procedures within their organisation to operationalise the designed ERM framework. Insurers have also turned their attention to the ORSA requirements and the various associated activities and processes that are needed to be in place to perform this assessment. This is a natural extension of the ERM work as many firms see ERM as the activities established to manage exposures to expected and unexpected losses from occuring whereas having sufficient capital is viewed as the mitigant should these losses occur. Even though the ORSA report is not due to the MAS until before the end of 2014 for Tier 1 insurers, and before the end of 2015 for Tier 2 insurers, the MAS expects ORSA processes to have been in place from 1 January 2014 (the effective date of Notice 126) and all firms to run an annual ORSA from this date. This expectation was reiterated in the recent Circular Number ID 03/14 on stress testing, where the MAS stated that Changes have been made to streamline the stress testing requirements for the year ended 31 December This is in recognition of the overlap between the Own Risk and Solvency Assessment ( ORSA ) process and the usual annual stress testing exercise. For example, components like stress-to-failure, discussion about key risks and vulnerabilities and actuary s recommendations to mitigate those risks and vulnerabilities will already be covered under ORSA processes, which insurer are expected to put in place with effect from 1 January 2014 under MAS Notice 126 on Enterprise Risk Management. In our previous publication, Revisions to the Risk-Based Capital Framework, we looked at some of the wider considerations that insurers would need to be aware of given the regulatory changes, including ERM, that are being made. This publication aims to build upon some of the theory of the ORSA and then details some of the practical steps an insurer would need to take including new activities, process design, documentation and reporting. Our aim is to provide insights to insurance companies on their ORSA developments by leveraging on ORSA implementation work that we have been involved in both locally and globally. Own Risk and Solvency Assessment 3

4 Background and timeline The concept of the ORSA was first developed through the introduction of the Solvency II regulations in Europe. The concept was then adopted by the International Association of Insurer Supervisors (IAIS) in their Insurance Core Principle (ICP) 16 on Enterprise Risk Management for Solvency Purposes. Since the agreement of ICP16, many global regulators have been aligning their regulatory regimes to this globally agreed best practice. The Monetary Authority of Singapore (MAS) has done this by issuing Notice 126. Notice 126 requires all licensed insurers in Singapore to establish the necessary processes and procedures to undertake an ORSA by 1 January Tier 1 insurers need to submit their ORSA report annually to the MAS within two weeks from the date which the ORSA report is approved by the Board, with the first report being due on or before 31 December Similarly, Tier 2 insurers are required to submit their ORSA report to the MAS within two weeks from the date the ORSA report is approved by the Board, with the first report being due on or before 31 December 2015, and every third year thereafter. However, there is still an expectation for Tier 2 insurers that an annual assessment is performed irrespective of whether this is required to be submitted to the MAS. The objectives of the ORSA The ORSA has often been defined by many as the heartbeat of the risk and solvency consideration in an insurer as it pulls together many different business activities. It has the objective of ensuring that information about the business and its future is well coordinated and consistent in nature. All risks are required to be identified and a sufficient level of solvency maintained given the business objectives and risk profile. To facilitate this, internal silos that may exist in an insurer need to be removed. Global insurers which have already embedded the assessment in their business have found it to be the most value-adding part among the wave of regulatory changes as it has enable better, more consistent decisionmaking. Some global insurers are now using the ORSA as a key tool to monitor and run the business. For this reason, the ORSA has been an area that has received significant Board, management and regulatory attention. To achieve this consistency of analysis, the ORSA is expected to be a top-down forward-looking bespoke process which is required to link together an insurer s ERM, capital management and strategy / business planning. The MAS regulations are purposely high-level in nature, common with those we have seen from other global regulators and ICP16, to allow firms to develop their own assessment that is tailored to their business. In a way, the regulators are stipulating what activities they want to see 4 Own Risk and Solvency Assessment 2014 KPMG Services Pte. Ltd. (Registration No: G), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity.

5 Return undertaken and reported, rather than setting out how to undertake the assessment. Questions an insurer needs to answer to develop an appropriate assessment including: How effective are our risk and capital management activities (including the effectiveness of our key controls around our material risks)? What are our current and future regulatory capital requirements in the business? How much capital do we need to hold, beyond the regulatory capital, given our business plan and risk appetite, now and in the future? What key risks threaten our financial strength and what mitigating actions are in place? What is our future risk profile given our business plan and are we comfortable with this profile? What future emerging risks is our business potentially subject to and what are we doing about them (i.e. does the capability exist to manage them)? What stress tests should we perform (in addition to the regulatory stress tests) that are linked to our specific risk profile, and what is the potential impact of these adverse events on our business and what would we do in these situations? Through reverse stress testing, what would cause the business to become unviable and what are we doing to prevent this? How are strategy, risk management and capital management linked within our business? Is our business plan within our current risk appetite? Through answers to these questions, a number of competing priorities can be drawn out through an ORSA that are required to be balanced by an insurer as illustrated in the diagram. Risk Capital, performance and risk management Performance Solvency Cost of Capital Capital All firms should be aiming to ensure that the main objective from the ORSA work undertaken is that there is an active and engaging dialogue at the Board level at the end of this assessment based on insightful and coordinated analysis from many areas within the business. In our view, these Board discussions should be the ultimate goal of the ORSA, given that the ORSA is expected to be owned by the Board. To support this view, the MAS is expecting to receive the extract of the Board minutes detailing the deliberations made by the Board on the ORSA report. The regulator therefore wants to see evidence of these interactive discussions and not just the Board minutes showing an ORSA report has been signed-off. The ORSA report should be the place where all the assessment work undertaken to fulfil the ORSA requirements is documented. This report is a chance for an insurer to demonstrate it is a well managed integrated firm with regards to risk management, capital management and business planning. Own Risk and Solvency Assessment 5

6 Components of the ORSA What are you required to have in place? Key to the ORSA is building links between, for example, economic capital and ERM, business planning and risk appetite statements, regulatory capital and strategy, own stress tests and risk profile etc at both a solo and group level where appropriate. KPMG s ORSA implementation approach is to first focus on the component parts of the ORSA being in place. Ensuring that these inputs are produced means that the assessment required for the ORSA is able to be performed and there are no missing areas to consider. Some of the main inputs include: Emerging risk assessment Capital resources Own capital assessment Current and projected risk profile ORSA governance process Capital resources and requirement projections Current and future liquidity Stress / reverse stress tests Risk appetite and tolerance Regulatory capital requirement Corporate strategy / business plan An Own View of Your Capital Needs As part of the ORSA, an insurer needs to determine the overall level of financial resources needed within the business given its corporate objectives, its risk profile established through its material risks, its risk tolerance / appetite limits that have been set and its business plans. We expect this view to be different from the regulatory capital requirement for the majority of firms. This own capital assessment is required to identify the relationship between risk management and the level and quality of the financial resources needed and available within the business. Risk quantification is therefore paramount. There are many different ways to derive an own view of your capital needs from simple stress and scenario testing to determining an appropriate capital buffer to full stochastic economic capital modelling for the more advanced insurers. Determining own-capital needs assists the insurer to assess the level of capital required given its risks (which are quantifiable) and how best to optimise the capital base, whether to retain or transfer risk, and how to allow for risks in pricing. Being able to demonstrate these facets coherently in an ORSA will provide the Board and supervisors with confidence that risks are being taken within the capital constraints of the insurer so if risks materialise, meaning losses occur, these losses are covered at a certain severity. We have frequently seen this own capital level used within an insurer s risk appetite statement. Business Planning We have seen business plans grow in sophistication over the past few years to include a greater analysis of the market environment, product development, internal initiative, resource assessment and more quantitative metrics. As part of its ORSA, an insurer needs to analyse its ability to continue in business and the financial resources required to do so over a longer time horizon than is typically used to determine regulatory capital requirements. ORSA 6 Own Risk and Solvency Assessment 2014 KPMG Services Pte. Ltd. (Registration No: G), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity.

7 Hence, projections of different metrics are needed across a business plan such as regulatory capital, own capital needs and the corresponding financial resources. A good practice we are seeing emerging in Singapore is to have a planning period of between 3 to 5 years with projections of a corresponding timeframe to support the ORSA. Best-practice therefore is to also include cashflow projections to ensure the management of liquidity risk across the business plan. These, alongside the risk profile projections, should be compared to an insurers risk appetite statement to determine if there are any anticipated risk appetite statement breaches arising across the course of the business plan. Risk Management A comprehensive risk management process is needed (including risk identification, assessment, reporting, measuring and monitoring) to ensure that all risks are fully captured within the ORSA assessment. The ORSA should encompass all reasonably foreseeable and relevant material risk categories including, as a minimum underwriting, credit, market, operational, strategic and liquidity risks and additional risks arising due to membership of a group. Often insurers will use the output of their risk management activities to inform capital management and stress testing, and use the corresponding results within ERM. An important input into the ORSA is the identification of emerging risks which many insurers see as those risks that could impact the business over a longer time horizon than the business plan. Good practice is to identify these risks and then establish regular monitor processes to ensure that if they were to occur, early identification and discussion arises. Stress Tests and Reverse Stress Tests There is a need for insurers to conduct their own stress and scenario tests on material risks identified group-wide. Insurers will need to define the stress tests which are appropriate to their own risk profile and undertake these tests across the same time horizon as their business plan. Effective and robust processes will need to be put in place to determine the appropriate reverse stress tests (also known as stress-to-failure tests) which focus on material risks within the business across the plan. Leading practice for reverse stress tests is to define business failure using a number of different scenarios in addition to a lack of capital. These tests are expected in addition to the regulatory prescribed stress tests as set out in MAS Circular Number ID 03/14. Continuity analysis An insurer s continuity analysis should address a combination of quantitative and qualitative elements in the medium and longer term strategy. These include projections of its future financial position and analysis of its ability to meet future regulatory and economic capital requirements. In carrying out its continuity analysis the insurer should also assess its stress testing to identify scenarios that would be the likely cause of business failure and the actions necessary to manage this. Continuity analysis should identify relevant countervailing measures and offsetting actions that the insurer could realistically take to restore / improve the insurer s capital adequacy and cash flow position after some future stress event. Whether the actions should be taken in advance as precautionary measures should also be addressed. In an insurer s ORSA (and the insurance group s ORSA if applicable), an assessment should be made of the current capital adequacy. Continuity analysis should consider the possibility of relevant changes in group structure in adverse circumstances and the implications this would have for risks, the existence of any group support or demands from the group where applicable. To deliver all these above components, input will be needed from multiple stakeholders. Reliance on them will drive a need for multidisciplinary teams working closely together to deliver the components required for the process. Departments involved should including as a minimum, risk, finance, underwriting, claims, strategy, actuarial, audit, compliance, HR and treasury operations. Own Risk and Solvency Assessment 7

8 What should the ORSA look like in practice? Ensuring production of the components that are required for an ORSA is only half the story. The multiple stakeholders and teams involved should be engaged during the whole ORSA process providing inputs, reviewing content and supporting key decision making. This is especially important given the ORSA is designed to encourage stakeholders across an insurer to work collaboratively in developing their view of their own capital needs given the risks being run in the business now and in the future. In delivering the ORSA, many firms have found that they need to go further than their current practices in certain areas to deliver a process fit for the business and regulatory purposes. The areas involved in the process will feed inputs into the ORSA at different stages of its development, they will be responsible for developing content, reviewing the inputs of others to ensure co-ordination and considering outputs. An ORSA process will need to be designed so as to incorporate the past, present and future prspectives of the ORSA which is then applied across the business. Ownership Training / education Integration - multi disciplinary requirements Frequency Co-ordination of inputs ORSA process design Evaluating the past and present OWN ASSESSMENT Technical provisions Regulatory capital Own solvency needs (economic capital) Liquidity position Risk profile Looking for the future Proportionally Independent challenge / review Documentation / ORSA report Embedding in decision making Application across the business Risk profile projections Solvency and liquidity projections Stress / reverse stress tests Contingency analysis 8 Own Risk and Solvency Assessment 2014 KPMG Services Pte. Ltd. (Registration No: G), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity.

9 Implementation Journey Given the important role that the Board are required to play in the ORSA, Board involvement needs to occur at the very beginning of the implementation journey. The MAS stated in Notice 126 that An insurer shall ensure that its board and senior management take responsibility for the ORSA. We have seen many insurers undertake Board engagement sessions to provide a high-level overview of the regulatory expectations around the ORSA to their Board. This is to explain to them what is expected from them, obtain the Board approval on a common understanding of what the ORSA means for their company, set out the implementation steps involved and agree some of the outputs. For example, by presenting a template ORSA report, the Board can agree the expectation of the final deliverable. During implementation and at the results stage, the Board is expected to challenge and discuss the outputs of the ORSA. As mentioned, the Board minutes of the ORSA discussion are to be submitted to the MAS alongside the report as evidence of this thorough engagement. This places a challenge for the Board to get the right level of reporting at correct points to enable them to fully engage and understand the ORSA process and results. Senior management also face a challenge in presenting insightful information to their Board in the ORSA report to support the facilitation of a meaningful discussion. After the initial project set up (and Board engagement), there is no singular approach to designing an ORSA reflecting the intent by regulators who have been deliberate in not providing prescription. This has been done this in an effort to keep this very much the firm s own assessment, which itself provides implementation challenges. The development of a suitable bespoke ORSA process will be key. However, after this Board engagement and initial design, We believe there are three generic steps which will need to be considered: Step 1 Step 2 Step 3 POLICY DESIGN PROCESS REPORTING Own Risk and Solvency Assessment 9

10 Step 1: ORSA Policy As good practice, we have seen firms develop an ORSA policy defining the areas which need to be completed to enable the ORSA process to occur. We suggest that the ORSA policy should outline the following, as a minimum: Governance Standards / Process Reporting Frequency / Review In setting up the ORSA, a firm will need to consider the structure it intends to put around this process. This will require decisions about the committees which will be involved and the level of senior management commitment. The scope of the governance structure will include a definition of the key roles and responsibilities of those involved in the process and the wider approval process for the different stages. An ORSA process will need to be established and embedded (see below) A description of the ORSA outputs including the reporting and timing should be developed. This will include outputs expected from various assessment stages within the process. The ORSA should be undertaken on an annual basis so that it continues to provide relevant information for decision making puposes. The insurer will need to regularly assess the causes of risk and the extent to which particular risks are material. Significant changes in the risk profile should prompt it to undertake a new ORSA and many insurers have pre-defined what would trigger an ORSA run. A policy can be used to provide staff with guidelines to perform the ORSA and embed relevant controls and processes. When developing the policy it is essential to involve all relevant stakeholders to ensure a common understanding. Step 2: ORSA Process Design In developing the ORSA, we have seen insurers focus on their own internal processes and activities to be able to undertake an ORSA. In its illustrative ORSA report template in Notice 126, the MAS requires the ORSA report to include a Summary of the ORSA process along with a Summary of key changes to its ORSA process and underlying assumptions in subsequent years. To develop a process, insurers have looked at the linkages that should exist between the various components to ensure that they are consistent. In this process design stage, an insurer should, at a minimum, be aiming to ensure full process integration of risk management, capital management, business planning and decision-making processes.often this means that components may need to be reviewed by different departments or used as inputs into other department s activities where they might not have done before. For example, the results of stress tests should be reviewed by finance, risk and actuarial; the business plan should be reviewed by the risk team for future risks; the risk profile should be reviewed by underwriting, finance, actuarial, results of the liquidity projections should be reviewed by the risk function and other relevant teams. This process design ensures a joined up approach to the ORSA and support breaking down internal silos. To support this activity, we have seen insurers use process documentation to look to articulate their ORSA process by mapping activities and links across an annual cycle. Insurers should go through their own process evaluation exercise to derive their relevant processes as part of the ORSA implementation. There are a few other important points to consider here: Co-ordination of reporting points Given the ORSA inputs will come from a multitude of stakeholders and the outputs will be in varied formats / on different reporting bases, ensuring appropriate and timely management information is critical in providing a firm the ability to adequately report on its current status. Usually among insurers, the various components required for the ORSA will be produced at different reporting points in the annual cycle of the insurer. This means that when they are bought together they will not be consistent. This coordination has been a challenge, from our observations worldwide, to produce a consistent ORSA report. 10 Own Risk and Solvency Assessment 2014 KPMG Services Pte. Ltd. (Registration No: G), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity.

11 Independent validation and ORSA approval The MAS stipulated in Notice 126 that Where it is appropriate to the nature, scale and complexity to do so, the effectiveness of the ORSA process should be assured through internal or external independent review by a suitably experienced individual who reports directly to, or is a member of the board of directors. There is therefore a need to independently review the integrity, accuracy and reasonableness of the ORSA process and report. The results of this will need to be reported to the Board and described in supervisory reporting. This validation should be undertaken by people not performing the ORSA itself. Consideration of the timing of this review is required. Given for many this is the first ORSA undertaken, an independent review should be used to benchmark your analysis, identify any missing activities and suggest recommendations for improvement. As a result it is key for both internal and external stakeholders that the ORSA is well documented and tracked. Step 3: ORSA Reporting The ORSA report is the place where the annual assessment undertaken by the insurer is fully documented. This report should provide an explanation of the ORSA process undertaken as well as main findings, conclusions and discussion points. In an ORSA report, we would expect (as a minimum), to see the report cover the following: The ORSA report itself would need to be consistently bought together to ensure a meaningful final analysis is undertaken despite the fact that different sections may be written by different stakeholders. The report itself may be lengthy. For example, we have seen in Europe some ORSA reports for the largest insurers stretch to nearly 200 pages. However, proper consideration should be given to the length and nature of the report given the scale and complexity of the insurer. Careful consideration should also be given to the information shared with the Board for their discussions and deliberations. In 2014 (or 2015 for Tier 2 insurers), and well before the submission deadlines, good practice would suggest the undertaking of an ORSA dry-run to ensure the inputs to the ORSA process can be produced, that the assessments of these inputs can be performed and analysis can be carried out to develop insights, and that the ORSA report can be suitably completed. The Board should have early sight of this report to ensure sufficient time is permitted after their review for any comments to be taken into account in the final draft. Executive Summary Business Overview ORSA Process Business strategy Risk appetite / tolerance Risk profile Current solvency position Projected risk profile Projected solvency position Stress and reverse stress testing Capital requirements Monitoring and control Board discussion and decisions Signoffs / Appendices / Version controls / Assurances Own Risk and Solvency Assessment 11

12 Common challenges As there is unlikely to be further prescription from the MAS, at least in the short term, it will be left for firms to embed a bespoke assessment into their business. We foresee a number of key challenges that we have observed globally, that insurers will face in developing an ORSA that need to be addressed. We have split these into Implementation Challenges and Technical Challenges Implementation challenges: A clear strategic view is required by the Board and senior management to establish sponsorship and ownership of the ORSA. Setting clear deliverables and assigning responsibilities for delivery is essential. A clear and well articulated programme plan is necessary to obtain key stakeholder buy-in and support in order to deliver a high quality roadmap for continued stakeholder input and contribution. Failing to appropriately manage the various cultural perspectives and appreciating the differences in approach, input and emphasis amongst group entities can be a considerable weakness of many large group change programmes. Identification of key resources and specific skill sets across all relevant business units will be required in order to ensure that appropriate personnel are fully engaged. Educating and training staff on the ORSA process and their associated role. The requirement to provide evidence of the ORSA will make documentation extremely important particularly for external reporting purposes. The ultimate success of an ORSA is in being able to demonstrate a seamless integration of the process and outputs within business as usual activities. These include Board oversight and responsibilities, strategic planning, risk and capital management, governance and internal controls and reporting and disclosure elements. Technical challenges: Aligning the ORSA with the strategic planning process Testing an ORSA process within business as usual Deriving own capital needs Projecting a risk profile Developing and using robust projection methodologies Undertaking meaningful stress and reverse stress tests Coordinating the timing of the various inputs to the ORSA to ensure alignment in the date of inputs to facilitate a consistent report, such as the date of the capital adequacy assessment, the liquidity positions, the stress testing and the business planning. Providing insights to the Board to allow them to make decisions Obtaining a useful independent review 12 Own Risk and Solvency Assessment 2014 KPMG Services Pte. Ltd. (Registration No: G), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity.

13 Conclusion The ORSA presents one of the newest prudential regulatory challenges globally, including in Singapore. It will require Boards to be fully involved in developing a top-down process which links together risk, capital and strategic planning to determine the current and future regulatory and own capital requirements of their firm. However, the ORSA is also an opportunity for firms who feel that relevant internal processes are not optimally set up to address this and ensure that the heart is effectively pumping the blood around the organisation. Own Risk and Solvency Assessment 13

14 How can we help? Supporting Your Implementation We can help you each step of the way to develop an ORSA from the initial visioning stage to report writing. With our previous experiences in this area gained both locally and globally on ERM and ORSA developments, we can work with you in drafting the final report for your review. We can also work with you to review your ORSA implementation as it develops and suggest improvements, provide relevant templates and guidance, review outputs and discuss ways to overcome challenges. Presenting to Your Key Stakeholders As one of the important first steps an ORSA journey is to ensure all key stakeholders including the Board have a clear understanding of the ORSA. Given KPMG s experience worldwide in undertaking such an assessment, we can assist your understanding of ORSA. We have undertaken a significant number of Board sessions on ERM and ORSA. Independent Review Given there is a MAS requirement for an independent review by a suitably experienced individual where appropriate, we are well placed to undertake such a review having implemented many ERM and ORSA framework along with having seen numerous ORSA reports before. Our professionals can provide you with a meaningful comparison to both local and global leading practice as well as recommendations to achieve minimum regulatory compliance. Working with your internal audit function for example, we can facilitate adequate knowledge transfer in future reviews if these are later required. 14 Own Risk and Solvency Assessment 2014 KPMG Services Pte. Ltd. (Registration No: G), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity.

15 KPMG Thought Leadership We are Thought Leaders in the insurance sector with numerous publications, white papers and surveys published globally. For copies of any of these publication please do not hesitate to contact us. Own Risk and Solvency Assessment 15

16 Contact us Lau Kam Yuen Partner and Head of Insurance, Singapore T: E: Frank Dubois Insurance and Actuarial Partner, Singapore T: E: Paul Brenchley Insurance Advisory Director, Singapore T: E: John Tan Actuarial Director, Singapore T: E: KPMG 16 Raffles Quay #22-00 Hong Leong Building T: F: The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation KPMG Services Pte. Ltd. (Registration No: G), a Singapore incorporated company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity The KPMG name, logo and cutting through complexity are registered trademarks or trademarks of KPMG International.