Reporting alignment in the new regulatory environment
Abstract
In many banks and insurers, risk management, capital management and finance often exist as functionally-separate entities, with distinct tools, languages and reporting lines. This status quo is a by-product of differing functional objectives and the divergent reporting and regulatory requirements that institutions face. Regulatory requirements and reporting, however, are converging around a model that emphasises economic reality and is closer than ever before to the internal metrics many companies use to manage themselves. This evolution has some way to run, but it should be welcomed. This paper outlines the drivers and agents of change to the way businesses report, discusses the benefits that institutions can obtain from the changes, the practical steps they can take for implementation and also highlights some of the likely challenges.
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Author's Biography
Bryan Joseph is a partner in the Actuarial & Insurance Management Solutions practice of PricewaterhouseCoopers LLP in the UK, specialising in property and casualty insurance. Bryan has over 25 years’ experience in the insurance industry, including the establishment, structuring and purchase and sale of insurance and reinsurance programmes. Bryan has also worked with commercial companies and reinsurers on the design and capital requirements to support their overseas business, including with rating agencies and regulators on capital management and solvency. Bryan is a Fellow of the Institute of Actuaries, Fellow of the Society of Actuaries in Ireland and Member of the American Academy of Actuaries.
Richard Barfield is a director in PricewaterhouseCoopers’ UK Risk Advisory practice. He has broad-ranging consulting experience from over 15 years at the company, including secondments to major financial institutions as finance director. Richard’s recent engagements include leading teams advising clients on risk appetite formulation, asset and liability management, stress-testing design, capital allocation and performance management, as well as delivering board-level coaching, training and workshops. He also led the design and delivery of training in the Supervisory Review and Evaluation Process of Pillar 2 of Basel II to the UK Financial Services Authority and other international banking supervisors.
Frank Lyhne Hansen is a senior manager in PricewaterhouseCoopers’ Danish Enterprise Risk Management team and an external associate professor at the Copenhagen Business School’s Department of Finance. He conducts reinsurance optimisation, audit support and pricing for insurance companies, and has worked with most Danish banks on their Basel II projects. This work has included validation of models, compliance and documentation, and development of credit and market risk models. He also helps insurance companies with their capital management and Solvency II projects. In addition, Frank has been an adviser for a number of Danish insurance companies and banks regarding strategic decisions in connection with risk-adjusted performance measures.
Citation
Joseph, Bryan, Barfield, Richard and Hansen, Frank Lyhne (2008, October 1). Reporting alignment in the new regulatory environment. In the Journal of Risk Management in Financial Institutions, Volume 2, Issue 1. https://doi.org/10.69554/ZQME7694.
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