After the Storm: Market-consistent measures of cost and solvency in 2009
Document ID: 2009-1481
Published on: 30th January 2009
Author: Craig Turnbull
Financial market experience in 2008 could have been taken straight from a global insurance group's Board paper on the "perfect storm stress test". This environment has substantially impaired market-consistent measures of the profitability and capital adequacy of insurance groups. This has prompted some revisions to published guidance and accepted implementation practices for a number of global principle-based market-consistent approaches to the assessment of guarantee costs and capital requirements.
This note summarises the 2008 financial market experience, and reviews some of the proposed changes in market-consistent methodologies that have been prompted by it.
