Towers Watson

In its sweeping goal of applying risk-adjusted solvency requirements, Solvency II represents both a challenge and an opportunity for European insurers and reinsurers.

It is forcing the industry to fully implement essential risk and capital management processes that, in effect, let them realize the potential of enterprise risk management (ERM).

But embedding ERM isn’t easy. For example, most insurers find that significant work is required to use economic capital in decision making and performance management.

Operational risk remains a particular weak spot.