Risk Management Outlook
Sampo Group continuously develops its risk management framework and systems. This work is based on internal needs and future Solvency II requirements. The new Solvency II regulation is expected to be implemented by 2014.
In If P&C a separate program was introduced in 2007 to prepare If P&C for the anticipated changes. The program has encompassed involvement in the Solvency II debate and a thorough review of If P&C’s corporate governance and internal control structure, the risk management framework as well as the internal capital model.
In the beginning of 2011 If P&C entered a so-called pre-application process with the Swedish and Finnish Financial Supervisory Authorities. The process will continue during 2012 with the goal of having a partial internal model approved when the Solvency II legal framework enters into force. Also Mandatum Life further develops its corresponding models.
Based on a judgment by Court of Justice of the European Union, gender of the insured person cannot be used in the future as a basis in the pricing of insurance contracts. Gender neutral pricing has to be followed in the contracts coming into force at 21 December 2012 or after. This is a crucial change especially in the life insurance business because in pension insurances and life insurances the gender has been one of the key pricing factors. According to the actuarial statistics, males and females have different risk levels in different insurance products. Thus gender-neutral pricing is not in line with the risk-based principles of Solvency II and best actuarial practices.