Regulation and Capital Management

Intelligent Insurer - Regulation and Capital management

The world is becoming increasingly ‘tightly coupled’, with financial risk and insurance risk more closely interconnected.

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Global Insurance Change Lead Partner

KPMG in Canada

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Regulation and capital management

"We are already seeing the more forward-looking insurers starting to adjust their investment profiles and risk models.  Low interest rates may constrain those who have not already done so."

 Mary Trussell,

Partner, KPMG in Canada

The world is becoming increasingly ‘tightly coupled’, with financial risk and insurance risk more closely interconnected. As a result, current approaches to capital management and risk modeling will need rethinking. A more developed understanding of interconnectivity, particularly of tail risks, may lead to a better understanding of exposures and enable more accurate pricing and more effective loss prevention. This greater clarity and transparency, however, is accompanied by further risk if customers are not prepared to pay for the economic cost of the protection they seek. 

Key business issues that insurers must consider:

  • Is insurance investable?
  • Exposure of increasingly wealthy urban areas to natural catastrophes and emerging risks such as climate change and pandemics
  • Historically low investment yields and volatile markets necessitate a search for innovative long-term investments
  • The regulatory agenda continues to evolve

To stimulate the debate on these complex and far-reaching issues, we invite you to join the conversation

We want to hear your views

  1. Do you feel policy makers and regulators have a good grasp of the industry – and the vital social and economic role played by insurance
  2. What progressive models do you see adapting to a low interest rate environment

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