ORSA: why it is important
- Firms have to do it – it is a regulatory requirement, and momentum is building. But EIOPA's consultation on Level 3 guidelines is principle based and doesn't give prescriptive guidance.
- Insurers have made huge investments in Solvency II, and ORSA is a way in which they can unlock value from that investment. As the interface between the Board and the firm's risk management and capital model, the ORSA should be used to vastly improve quality and timeliness of management information (MI).
- ORSA spans Pillars 1, 2 and 3 of Solvency II programmes and can ensure alignment if done properly.
- Global dimension – Regulators and supervisors of some 190 jurisdictions have agreed that ORSA principles are something they aspire to.
How can we help you?
The appropriate support will to some extent depend upon the progress you have made in the development of your ORSA.
Our credentials
PwC has actively contributed to shaping industry understanding of the requirements of the ORSA, including delivering Board level training, providing thought leadership publications and delivering industry briefings. PwC Malta has dedicated resources specialising in Solvency II matters and also benefits from access to the PwC network, as appropriate.
PwC's view of the ORSA
The purpose of the ORSA process is to enable management to:
- understand and manage the company's risks (and associated controls) and capital against appetite; and
- make informed strategic decisions that impact the firm's risk profile.
It is a bespoke process for management to:
- refine business planning and strategy;
- define its capital needs;
- continuously monitor regulatory capital; and
- have a joined up view of risk profile, risk tolerance limits and business strategy.
It is a process not just a report.
Example of Board decisions
The ORSA moves Solvency II from compliance burden into business benefit
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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