Investment Risks Working Party report
An insurance company must maintain sufficient reserves and provisions to cover the following risks: Technical Risks; Investment Risks and Other Risks. There were three working parties, each one concentrating on one of the above three categorisations. The position of reinsurers should be considered as well as direct insurers. Bearing in mind the impact of inflation on all the risks described above, each working party considered the steps which the management of the company should take to assess the magnitude of each risk and the reserve which should be maintained to cover such risks, either singly or in combination. It is for subsequent consideration as to how the company should consider whether the actual reserves are sufficient to cover all the above risks, bearing in mind the need to avoid building margin upon margin.