C - IFOA (Solvency II)

Question 1

IFOA SOLVENCY II

ENID : Acronym definition

Usual Definition of ENID

Proposed Definition of ENID

Answer 1

Events not in Data

High-Severity, low-probability events

The BALANCING AMOUNT required to ring the best estimate before ENID up to an amount allowing for all possible future outcomes

Question 2

IFOA SOLVENCY II

Describe how ENID can be identified

Answer 2

bring together parties who understand the insurer’s exposure (Underwriters, Claims managers, Reserving and pricing actuaries, reinsurance managers) to brainstorm of possible future events that could affect the future CFs

their discussion should include factors affecting :

• future settlement of past events
• potential future claims relating to current exposures
• SPECIFIC events to consider may include : (CATs, court awards, legislative changes, potential large one-off claims)

Question 3

IFOA SOLVENCY II

ENID loading does not necessarily have to be a positive loead, it could allow for both positive and negative future outcomes not already allowed for.
Provide examples of positive outcomes

Answer 3

lower claims experience due to successful implementation of a new claim process

court award in insurer’s favor

change in legislation in insurer’s favor