37. Challenges and priorities in risk management for 2024

Sustainability (ESG)

In recent years, UNIQA has created a solid foundation for managing sustainability risks. There are several areas of emphasis for 2024. Early identification of sustainability risks will continue to be a key approach. The aim is to recognise and address potential causes in operational risk management at an early stage and to continuously monitor industry regulations and best practices. UNIQA will adapt its risk management strategies with the latest information on new sustainability guidelines and regulations. The development of climate scenarios will be expanded. This will also include quantitative estimates for areas that have not yet been fully analysed. A comprehensive understanding of the effects of different climate scenarios will enable UNIQA to be better prepared for long-term climate-related risks. Implementation of changes in legislation is essential for sustainability risk management. UNIQA will disclose new key indicators for physical and transitory risks and perform a materiality analysis to review regulatory requirements and their financial implications. The goal here is to further develop limit monitoring through additional automation of data analysis. This will enable a more comprehensive assessment of sustainability risks and promote responsible investment practices.

Full internal model

Due to the many challenges in 2023 – both for UNIQA and the Financial Market Authority – the decision was taken to temporarily suspend any ambition to obtain regulatory approval for the full internal model by 2024. In 2024, the project will focus on implementing the full internal model in the defined lines of business, as originally planned. However, there will be no regulatory review or approval activities. An alternative date for the application of the full internal model is currently unknown. For the time being, UNIQA will only use the model for internal purposes.

Cyber risk

The increasing dependence on digital technologies and the associated cyber threats is proving to be a constantly growing risk for UNIQA. As a result, UNIQA has developed a holistic cyber security strategy that includes various measures. These include regular reviews of the IT infrastructure, implementation of two-factor authentication (2FA), introduction of a security information and event management system (SIEM) and training for employees. Despite these measures, UNIQA is aware that cyber risks are extremely dynamic and require continuous monitoring and adjustments.

Capital market environment and inflation

Inflation and its impact on insurance companies in 2024 is a topic of particular importance. In view of the developments in interest rates, credit spreads and similar factors, UNIQA and its products will continue to be significantly affected by this. The topic of inflation will also be very important for as long as the observed inflation rates remain high. It is therefore necessary to identify the potential impact of all these risks on the various business lines at an early stage and take appropriate steps. Overall, inflation in 2024 will require UNIQA to plan carefully, adapt and be flexible in order to meet customer needs and still remain profitable.

(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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