Finansinspektionen (FI) has conducted a survey of how insurance undertakings are performing their own risk and solvency assessments. FI is of the opinion that many undertakings’ assessments can be improved.
For example, the assessment of the overall solvency needs should be based on the undertaking's own risk profile rather than on the standard formula. The fact that the assessments are not based on the undertakings' own risk profiles may indicate that many undertakings do not have sufficient knowledge of their risks and that boards of directors should become more involved.
The own risk and solvency assessment (ORSA) is the insurance undertaking's own analysis of its risks and how much capital it requires in order to pursue its business in the short and the long term.
The ORSA has to be an integral part of the undertaking's business strategy. This means that the results of the ORSA are taken into account when making strategic decisions and in the undertaking's business planning. FI would also like to stress that an important aim of the ORSA is to improve the undertaking's risk management.