Report of the Solvency Working Party - abstract

Document description

The Working Party sets out to challenge the traditional approach to the solvency of a general insurance company based on balance sheet accounting concepts and to apply actuarial concepts of cashflow to the run-off of a portfolio of general insurance business. However, the uncertainties in the amount of the liabilities necessitate a stochastic approach rather than a deterministic one and the difficulty of matching the liabilities with suitable assets presents a similar need to take explicit account of asset variability.