42. Challenges and priorities in risk management for 2023

Sustainability (ESG)

Since sustainability is one of the topics that has become increasingly important in recent years – both in the applicable regulations as well as in terms of public perception – UNIQA is planning to continuously improve processes and further develop the identification and management of sustainability risks. The main goals for 2023 are, on the one hand, to continue work on implementing regulatory requirements in this area and, on the other hand, to successfully incorporate the findings from risk management, in order to support product design and also the investment strategy. Risk management will continue to participate in sustainability-oriented asset management and the timely identification of sustainability risks. An expansion of the quantitative approach to assessing long-term climate risks to all EU subsidiaries is planned.

Full internal model

Due to the diverse challenges in 2022 for both UNIQA and the Financial Market Authority (FMA), some activities had to be reprioritised. This led to the postponement of the planned application for the full internal model by one year. The objective of this multi-year project is to obtain official approval of the full internal model from the Financial Market Authority by the end of 2024. If approved, this would make UNIQA the first Austrian insurance group to have a full internal model. The focus in the next two years will now be mainly on finalising the model. The Solvency II Directive sets out the requirements that must be satisfied. In this regard, discussions and audits by the regulator are planned for 2023 in order to be able to submit the application in 2024.

Security & resilience management

Companies are increasingly exposed to a range of security risks, from data theft and ransomware to the possibility of a power blackout. In addition to preventive measures in the areas of data security and physical security, UNIQA focuses on preparing for the possible effects of the energy crisis. Based on this focus, action plans have already been issued and staff trained. In 2023, these action plans will be generated for all other operationally important sites in UNIQA’s international environment. The plans include both preventive and reactive measures to prepare UNIQA in the best possible way for a large-scale power blackout or pre-announced rolling blackouts or brownouts. UNIQA will continue to monitor the situation and the legal requirements and provide up-to-date information to employees and customers.

Capital market environment and inflation

Due to the development of key benchmarks such as interest rates, credit spreads, etc., the capital market and its impact on UNIQA and UNIQA’s products will be of very high importance. The topic of inflation will also continue to be of high importance as long as the observed inflation rates remain high. It continues to be important to recognise the effects of all these risks on the different business lines early so it is possible to take the appropriate steps.

(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).
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Solvency II
European Union Directive on publication obligations and solvency rules for the equity base of an insurance company.
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