Risk report

41. Activities and objectives in 2019

Based on external and internal developments, activities in 2019 focused on the following:

  • Further expansion of UNIQA 4WARD (Shared Service Centres (SSCs) in Bratislava)
  • Security awareness
  • Rollout of the new concept for the Internal Control System (ICS)
  • Applying for the for the market risk

UNIQA took a crucial step towards a “shared services” model in March 2018 with the establishment of UNIQA 4WARD as a branch of UNIQA Insurance Group AG. The purpose of this branch located in Bratislava is to overcome resource shortages more effectively, to pool know-how and support the local companies, especially with regard to Group requirements. UNIQA 4WARD forms the basis for meeting future additional requirements in good time and based on the requisite quality. In 2019 the main focus was on the further expansion of UNIQA 4WARD’s areas of activity. In addition to the activities in the areas of actuarial, risk and security management, the scope of UNIQA 4WARD’s activities was expanded to include financial services in the second half of 2019.

The topic of security and the associated risks are of great importance to UNIQA. Therefore, a campaign launched by UNIQA aiming at deepening the understanding of the topic was started in 2019 under the title “UNIQA Protection”. It covers the areas of security management, data protection, compliance and IDD. The campaign served primarily to raise awareness of the above-mentioned issues within the company. The focus was on security (of UNIQA, employees, customers and business partners), data protection and the correct implementation of compliance and insurance guidelines in the context of e-learning, classroom training and a competition.

The major structural changes in the Group (UIP, TOM) and adjustments in the value chain associated with these resulted in the need to restructure the ICS within the Group and adapt it to the new conditions.

As part of the ICS project launched subsequently, an analysis of the current situation was carried out at an initial stage in order to identify the essential action areas. Building on this, the concept of the “New ICS” was then developed as part of a design phase. The key alteration involves the harmonisation of a Group-wide risk catalogue and a focus on the operational risks and controls relevant to the Group and the Group companies.

In 2019 the focus was on the roll-out of the new concept throughout the Group. The first processes were started in Austria, Poland, Hungary, Serbia and Russia. The challenges were due in particular to the fact that a large number of processes within the Group are affected by the ICS, and the rollout therefore required appropriate coordination effort on the one hand, along with assurances that the knowledge and expertise was passed onto the employees of the relevant companies on the other.

In recent years UNIQA also worked intensively on developing the partial internal model (which was approved in December 2017 for property and casualty insurance). Specifically, the model was expanded to include the market risk module. Following the successful completion of the model in 2018, the focus in 2019 was on integrating it into the regular risk assessment process. The model was submitted to the FMA in 2019 for approval, which was granted at the end of 2019. This means the official calculation now includes the results of the for the market risk module.

(Partial) internal model
Internally generated model developed by the insurance or reinsurance entity concerned and at the instruction of the FMA to calculate the solvency capital requirement or relevant risk modules (on a partial basis).
SCR
Solvency Capital Requirement. The eligible own funds that insurers or reinsurers must hold to enable them to absorb significant losses and give reasonable assurance to policyholders and beneficiaries that payments will be made as they fall due. It is calculated to ensure that all quantifiable risks (such as market risk, credit risk, life underwriting risk) are reliably taken into account. It covers both current operating activities and the new business expected in the subsequent twelve months.
(Partial) internal model
Internally generated model developed by the insurance or reinsurance entity concerned and at the instruction of the FMA to calculate the solvency capital requirement or relevant risk modules (on a partial basis).