Risk report

42. Challenges and priorities in risk management for 2020

Solvency II review

One of the topics that will continue to accompany UNIQA in 2020 is the ongoing review of the Directive. EIOPA already published extensive consultation papers in 2019, containing a total of 19 topics, which are divided into two consultation waves. These waves dealt with both qualitative (e.g. Group supervision, macro-prudential issues, reporting and disclosure) and quantitative topics (e.g. risk-free rate, , , own funds). The review of II does not yet have a binding character because the focus is still on consultation and proposals for amendments. These initial proposals will determine the direction in which the entire framework will change. This topic therefore represents a great challenge for UNIQA. There will also be a project to go with it in 2020: a group of experts will analyse the effects of this review on the company. This will ensure timely mitigation of the risk of being unable to meet future regulatory requirements.

New risk strategy

The current corporate strategy UNIQA 2.0 expires in 2020. At present UNIQA is working intensively on the design of the new corporate strategy under the working title “UNIQA 3.0”. With this, the company aims to put a strong focus on the customer and try to become more efficient and deliver relevant innovations quickly. In conjunction with the revision of the corporate strategy, the current risk strategy will also have to be revised and adjusted accordingly in order to adequately reflect the adjusted circumstances.

GRC tool implementation

As mentioned in the section on activities, work was done on designing the internal control system. As a further step, this will be realised in an IT solution. In order to support the implementation of the ICS from a systemic point of view, the introduction of a governance, risk and compliance (GRC) tool will be one of the focal points in 2020. The implementation challenges are mainly due to the fact that the requirements of four areas (compliance, security management, data protection and risk management) have to be coordinated and then mapped in the GRC tool.

The new heat map project

UNIQA has started a project to revise the Group-wide tool for risk reporting (“heat map”). The goal of the project is to create an intuitive overview of UNIQA’s current and overall risk profile and to ensure comparability with the risk strategy. One challenge in 2020 will be to map and test the developed concept in the IT tool risk2value and to implement it throughout the Group.

Solvency II
European Union Directive on publication obligations and solvency rules for the equity base of an insurance company.
Risk margin
Under Section 161 of the Austrian Insurance Supervision Act 2016, the risk margin is an add-on to the best estimate to ensure that the value of technical provisions equates to the amount that insurers and reinsurers would need so that they are able to assume and satisfy their insurance and reinsurance obligations.
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.
An insurance company’s equity base.
Solvency II
European Union Directive on publication obligations and solvency rules for the equity base of an insurance company.