Insurance Capital and Liquidity
In this video Ted outlines how insurance companies are funded and how that capital is then regulated, including outlining key points of the Solvency II framework. Finally he outlines how insurance companies can prevent liquidity risk which could prevent it from paying out claims.
Overview
Insurance companies use equity to fund their business – providing a ‘cushion’ to absorb any losses that might be incurred on contracts. Regulatory focus is therefore around solvency rather than liquidity. Insurance companies further manage their exposure to risk by taking out reinsurance contracts. Credit rating agencies provide an independent assessment of the strength of individual companies.
Key learning objectives:
How are insurance companies funded?
What is the role of the regulators?
Does an insurance company face liquidity risks?
Summary
Expert
Ted Wainman
Ted Wainman trained and qualified as an Associate Chartered Accountant (ACA) with Ernst & Young before joining JPMorgan on the Investment Management side of the business. He since has over 17 years of experience in designing, developing and delivering financial & business skills training workshops for over 275 clients in more than 35 countries.
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