Liquidity Risk: Going with the Flow?
The North Atlantic hurricane season is upon us again, and 2020 is expected to be more demanding than normal. As the industry emerges from the first wave of COVID-19, liquidity risk management should be prominent on board agendas.
In September 2019, the PRA published their Supervisory Statement SS05/19 – “Liquidity risk management for insurers”. Compliance should be straightforward, but as its one-year anniversary approaches, insurers should review progress against its requirements.
Key Areas Recap
Key areas discussed in detail within SS05/19 are:
- Formulation of a Liquidity Risk Appetite Statement;
- Documented policies and procedures;
- Key liquidity driver identification;
- Forward-looking scenario analysis and stress testing;
- Establishment and composition of appropriate liquidity buffers;
- Monitoring and reporting; and
- Contingency planning.
Contact us at firstname.lastname@example.org or email your regular Marcuson Consulting contact if you would like help reviewing your approach or for a health-check on any aspect of your risk management framework.