Risk report

43. Challenges and priorities in risk management for 2022

Environmental Social Governance (ESG)

The topic of sustainability was already of very high importance for UNIQA last year. The focus for risk management is particularly on managing and handling sustainability risks. In 2022, we will therefore work hard to measure the long-term climate scenarios and try to drive further progress and improvements here. The climate scenarios are also to become a constant component of the company’s own risk and assessment process (). After the expansion of the risk catalogue to include ESG risks, the process of identifying these risks will take place with the respective departments. To meet future regulatory requirements, work will also be done next year to integrate sustainability risks into the reporting framework. The risk management process in terms of sustainability with regard to UNIQA’s investment portfolio will also be improved in the coming year. The results of the ESG risk assessment are intended on the one hand to fulfil regulatory requirements and on the other hand to support management decisions about designing new products or about the company’s investment strategy.

Exposure to ESG risks is a new performance characteristic and also a growth driver in the current environment. These have therefore become more significant for both investors and customers. Good ESG performance is defined, among other things, by a lower future cost of capital, as the company is more resilient to long-term risks. As a composite insurer, UNIQA has long-term obligations, which is why a long-term perspective must be considered. The results of the own-risk assessment show that climate risks can have an impact on both investments and technical provisions. UNIQA has a system for evaluating the materiality of individual risks on the relevant balance sheet items with the aim of integrating the sustainability impacts into this existing materiality concept. UNIQA will therefore have a strong focus on the further development and management of climate risks in future, with the clear idea of identifying the need for adjustments in corporate planning and strategy in good time.

Full internal model

The further development of the to a full internal model is one of the most important projects from a risk management perspective. In this way, UNIQA aims to more adequately reflect its own risk profile. This project will last several years. In 2021, the main focus was on developing the model. In 2022, the first model runs of the individual risk modules will take place. Work is also underway on the first validations and the lessons learned. During the year, several feedback loops between employees and advisers are planned from the project perspective. Another important goal is to produce a draft of the documentation necessary for approval of the model. In 2022 there will also be on-site audits by the Financial Market Authority. The objective is to obtain official approval of the full internal model by the end of 2023.

Security & Resilience Management

Companies are increasingly exposed to a range of security risks, from data theft to ransomware and distributed denial of service (DDoS) attacks. UNIQA has planned a strong focus on these topics for 2022 and will implement corresponding measures. UNIQA’s assets that are relevant to its business operations will be identified and classified according to their need for protection. An example would be IT applications and their required IT infrastructure, data centres and key personnel needed to keep them running. One focus in 2022 will be to address the identified vulnerabilities as part of a Group-wide, centrally coordinated IT security programme. The security programme will cover the internally developed framework of security requirements and the security controls already implemented along with any shortfalls.

An insurance company’s equity base.
Own risk and solvency assessment (ORSA)
The company’s own forward-looking risk and solvency assessment process. It forms an integral part of corporate strategy and the planning process – but is also part of the overall risk management strategy.
(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).