infonet-economy

In the European insurance industry, regulatory and reporting frameworks are currently subject to far-reaching reforms. We focus on four of these frameworks, namely the Solvency II framework, insurance guaranty systems, the proposed IFRS 4 Phase II international accounting standards, and Market Consistent Embedded Value reporting. We present these frameworks, analyze them from the insurance company's management, investors and policyholder perspectives, and compare them. Our analysis implies that the four frameworks need to be considered jointly, due to various interre- lations and interactions. We argue that a coordinated introduction will be necessary to ensure that the regulatory burden is reduced and synergies can be utilized in the event of all four frameworks being implemented as planned. Furthermore, we analyze the challenges of a holistic, comprehensive approach to insurance reporting and regulation and its implementation in order to achieve the goals set by the frameworks.

Although, cyber risk has become a topic of great importance in today’s risk management and insurance is seen as a powerful means to handle it, the actual cyber insurance market is greatly underdeveloped. Challenges in the insurability of cyber risk were identified to be the central impediments to the market growth. The main goal of this paper is to investigate potential risk transfer schemes for cyber risk, which can improve its insurability and foster market development. The paper is the first approach to systematically discuss and compare different risk transfer options for cyber risk and test them in a numerical simulation approach. Scenario analysis is applied as a meaningful way to probe how the proposed risk transfer options would potentially cope with the financial implications of cyber related scenarios.