Session / Séance 37 ORSA Implementation Kevin A. Taylor Aviva Canada ORSA Implementation – Aviva Canada Agenda Background Aviva’s ORSA Framework ERM Processes = ORSA Processes ERM Supporting the Decision Making Process ORSA Report and DCAT Report Issues and Challenges A presentation by Kevin A. Taylor – Aviva Canada – AVP Enterprise Risk Management Page 1 of 7 ORSA Implementation – Aviva Canada Background One of the largest P&C insurers in Canada, with approximately 9% market share; 3 million clients, 3,300 employees in 40 locations across the country. We provide home, automobile and business insurance, along with healthcare claims service, specialty commercial products and construction surety bonding. A wholly-own subsidiary of Aviva plc, domiciled in the United Kingdom, with global head quarters in The City of London. We are the second largest P&C business unit of the Aviva Group. The Aviva Group is a composite insurer with P&C, Life, Pensions and Asset Management business. Aviva plc has been designated as a global systemically important financial institution. A presentation by Kevin A. Taylor – Aviva Canada – AVP Enterprise Risk Management Page 2 of 7 ORSA Implementation – Aviva Canada Aviva’s ORSA Framework ORSA Aviva risk and capital philosophy Risk governance Risk appetite Risk profile Risk management processes Risk identification & assessment Point in time assessment Stress tests & scenarios Management actions Reverse stress testing Forward looking Capital & liquidity planning assessments RISK FRAMEWORK CAPITAL & SOLVENCY Strategic decisions e.g. reinsurance, M&A, target setting Pricing / underwriting Risk mitigation Monitoring risk appetite Capital allocation Main calculation engine will be internal models for Aviva ORSA regular disclosures ORSA ad hoc event driven disclosures Management information USE TEST A presentation by Kevin A. Taylor – Aviva Canada – AVP Enterprise Risk Management Page 3 of 7 ORSA Implementation – Aviva Canada ERM Processes = ORSA Processes IMMMR - Characteristics Identify Measure • Proportionate • Dynamic Report • Ongoing improvement Risk Aware Culture • Supportive Monitor • Transparent Manage A presentation by Kevin A. Taylor – Aviva Canada – AVP Enterprise Risk Management Page 4 of 7 ORSA Implementation – Aviva Canada ERM Supporting the Decision Making Process ERM Processes st line Appetite 1Risk Risk Identification Risk Monitoring Risk Reporting 2nd line Enhanced Understanding of the interrelationships between the risk profile and the capital needs. 3rd line Integrated considerations of risk and capital in key management decisions, including: Strategic Plan Business Plan Insurance Pricing Strategic Asset Allocation Reinsurance Purchasing Hedging Programmes Report EC Quantification Capital Requirements Stress & Scenario Testing Reverse Testing A presentation by Kevin A. Taylor – Aviva Canada – AVP Enterprise Risk Management Page 5 of 7 ORSA Implementation – Aviva Canada The ORSA Report and the DCAT Report ORSA is embedded in our ERM Framework, which includes a robust, continuous process to identify, measure, manage, monitor 2nd line 3rd line and report on our risks. ORSA adds structure to the measurement step of our ERM. 1st line Identify ReportReport Measure 2014 ORSA Report Risk Aware Culture Manage Monitor YE2013 DCAT Report The report will include a current state of the risk profile as well as a forward looking view of the risks that should be taken into account in the planning process. The report will continue to identify plausible threats to the satisfactory financial condition of the company; actions which lessen the likelihood of those threats and the actions that would mitigate a threat if it materialized. Starting in 2014, the ORSA Report and the DCAT Report will be published just prior to the strategic planning cycle to provide insights to senior management and the Board while they are devising and approving the Strategic Plan, Capital Plan and Business Plan of Aviva Canada. A presentation by Kevin A. Taylor – Aviva Canada – AVP Enterprise Risk Management Page 6 of 7 ORSA Implementation – Aviva Canada Issues and Challenges Completeness of the Risk Assessment Relevance of Metrics Adding Value Alignment of all the Processes Ownership of the Report Developing/Deploying the Internal Model A presentation by Kevin A. Taylor – Aviva Canada – AVP Enterprise Risk Management Page 7 of 7
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