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FINCAD @ Enterprise Risk Management Symposium (Chicago, IL)
By Matthew Streeter CFA | October 5, 2014

This year’s ERM (Enterprise Risk Management) Symposium in Chicago brought together actuaries, CROs, and Enterprise Risk Management teams industry wide and was a great venue to share ideas, hear insurer concerns and get insight into industry best practices. There were a broad range of sessions covering many different insurance topics but here are a  a few that stood out as important points:

  1. ORSA readiness  is a central concern for the many insurers in attendance.  According to the NAIC only a small percentage of impacted insurers have demonstrated readiness while most still have a long way to go, with the build-out of multi-faceted stress-scenario framework capturing multiple stress-factors a key component.
  2. The CRO Panel session on the last day of the conference provided great insight into the regulatory pressures facing insurers.  Increased attention to regulatory matters seemed to be the unanimous response for the CROs as compared to five years earlier. This speaks to the regulatory environment and the complexity that risk teams are facing when adopting technology, systems and processes to keep current with risk related regulatory challenges.
  3. Stress-Testing comes of age and takes a more prominent position for insurers, marking a significant shift.  Across the various break-out sessions on stress-testing it was mentioned how both stress-testing and scenario analysis are being used by best in class insurers to better understand risk exposures and provide information for better decision making. One noted case study example was a life insurer that built an effective scenario and stress-testing framework with the ability to distill criteria and scenarios that are rich and relevant to current market conditions, while also utilizing stress-tests through an evolution of time.

These were many other interesting areas covered at the conference but these were a few of the key areas that stood out, especially when looking at the impact of market risk in today's market environment.