According to a release, the survey focused primarily on the setting of biometric risk assumptions, which has been ignored by other ERM research. In addition, the survey addressed hedging and reinsurance, and preparedness for the
On a combined basis, the 26 participants reported having over
Since the bulk of the data was collected prior to the NAIC's finalization of
The survey found the use of ERM work continues to evolve. Many companies started the practice to enhance their demonstration of effective risk management to rating agencies. Today companies are broadening the focus and use of the studies, and several companies reported their senior management and board of directors use ERM to guide their decisions. The survey indicated more companies will begin using ERM for strategic planning including which lines of business the company should emphasize.
In setting biometric assumptions it appears companies tend to use realistic assumptions and then run stress tests to determine the impact on the company of conditions other than expected. Most tests were done on a deterministic basis but some also ran stochastic scenarios. In managing their risk appetite, most companies look to reinsurance as the means to manage their exposures.
A full copy of the report is available to survey participants only. We encourage any life and health insurer interested in participating in future surveys to contact a
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