Chapter 5. v.2 Flashcards
What is the strategy team function
They set the strategy - research on behalf of the board
Who approves the strategy set by the stategy team
the board
Who makes up the strategy team
Senior managers below board level
What is the main tool the strategy team use
SWOT - Strengths, weakness, opportunities and threats
What will the strategy team look at
Mergers and Acquisitions
Launching new products
Research new territories
Distribution channels
if its long term direction, who will be dealing with it
Strategy team
What four things do the actuarial function look at
Pricing, reserving, modelling and solvency capital
What is a pricing actuary
Sets the premiums, predict loss ratios
What is a reserving actuary
Looks at WHOLE set of claims (all motors etc) and see if the company is under or over reserving
What is a modelling actuary
They look at exposures of impact storm or flood could have on portfolio - could be too much in one area
What is a solvency capital actuary
Make sure comply with solvency II. Legal requirement.
What is the risk management function
Look at risks related to insurer. Identification and analysis and control. IAC of all risks relating to the insurer.
Are the risk managers there to eliminate risks
No to control them
What is inherent risks for risk managers
What you start with
What are residual risks for risk managers
where you put controls in place (for example bought more reinsurance because you’re exposed to a claim) done some hedging.
What is the role of risk manager
to understand the frequency and severity of each risk. How bad it will be.
What is risk ranking for risk managers
calculating the frequency and severity of each risk. then give it ranking. Red is priority.
What is a risk register for risk managers
The risk ranking - prioritised in order of red being most important to green.
What risks will a risk manager look at
Strategic risk - what will stop you achieving the risk
Insurance pricing and reserving- making sure not over or under pricing
Investment market risk - prospect of what could happen if shares drop etc. Not put all eggs in one basket
Credit risk - risk of not being paid premium by broker/ reinsurer
Operational risks - not having enough staff etc
Group risk - where the risk could effect other parts of the company
Bob the risk manager is look at risk, he is looking at what is preventing the three year targets, what category would we put that in?
Strategic
Who is the investment manager
Follows rule set by actuary but will buy shares or bonds
Who is the facilities manager
Anything to do with the premises - creates office space. computers etc
