The Deficiency List: Rethinking the Risk Agenda for Insurers

Create a vendor selection project & run comparison reports
Click to express your interest in this report
Indication of coverage against your requirements
A subscription is required to activate this feature. Contact us for more info.
Celent have reviewed this profile and believe it to be accurate.
21 October 2008


There is little doubt that the financial crisis will spill over into the economy. This will have a profound effect on both sides of the balance sheet of insurers; with potential continued weakness in the credit and equity markets and unexpected changes in the behavior of the existing policyholders as well as the volume and product mix of new business.

The liquidity and credit events of the last few months are unprecedented. We have witnessed the failures of leading investment and commercial banks across North America and Europe. Insurers continue to be under significant pressure as evidenced by widening spreads on credit default swaps and falling equity valuations.

While observing spectacular failures of major banks, many insurers are continuing to take comfort in "false positives" with regard to their own risk management practices. The Deficiency List: Rethinking the risk agenda for Insurers, identifies four deficiencies with respect to the current risk management practices at many insurers:

1) Lack of an effective risk governance structure
2) "The Income Myth" of insurance land
3) Breakdown between risk appetite and management decision-making
4) Lack of robust early warning indicators and poor risk information

While insurers and banks are subject to different risk exposures and liquidity needs, recent experiences have demonstrated that the financial services industry is highly interconnected, often through complex and opaque channels. It may be too early to predict how the regulatory landscape will evolve in the coming years. However, one thing is certain: the US will see a major overhaul of the regulatory framework, and a more approach to regulation will emerge.

Subscription required

Access to this content requires a Celent research subscription.

Subscribers should sign in to access this research.

If you are not a subscriber, register now or contact us to find out more about our subscription options.

Insight details

Capital Markets, Property & Casualty Insurance, Wealth Management
Subscription(s) required to access this Insight:
Insurance, >>Property / Casualty Insurance, Risk, >>Financial Services Risk
Insight Format
Geographic Focus
Asia-Pacific, EMEA, LATAM, North America