IFA.SOLVENCY2 Flashcards
1
Q
what does the acronym ENID stand for in the context of Solvency 2
A
Events Not In Data
high-severity, low-probability events (often not in historical data)
the BALANCING AMOUNT required to bring the best estimate before ENID up to an amount allowing for all possible future outcomes
2
Q
describe how ENID can be identified (3)
A
- bring together parties who understand the insurer’s exposure
- their discussion should include factors affecting:
- future settlements of past events
- potential future claims relating to current exposures
- SPECIFIC events to consider may include:
- catastrophes, court awards, legislative changes
3
Q
why might it be beneficial for insurers to attempt to identify ENIDs (3)
A
- may increase awareness of potential risks by senior management
- may assist in calculation of loading using frequency/severity methods
- may increase regulator confidence in company’s risk management (due to insights gleaned)