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.