SAS Risk Management for Insurance provides a comprehensive enterprise risk management solution for insurers. It allows for integrated risk assessment and capital calculation across risk types like market, insurance, operational and credit risk. The solution supports regulatory requirements like Solvency II while providing capabilities for risk-based decision making. It offers benefits such as improved risk management, better compliance and strategic insights.

1. SAS RISK MANAGEMENT FOR INSURANCE
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2. PRESSURES FACING
IMPACT ON RISK MANAGEMENT
INSURERS
Volatile
Capital
Markets Saturated
Operational
Markets
Risks / Legal
Market / Demography
underwriting
Risks
Investors /
Solvency II / Rating
Regulatory Increasing Cost
compliance Pressure
Necessity
Volatile Results
to diversify
Risk Management Requirements
Increasing
Loss of
compliance • Embedding risk function in decision taking processes
Confidence
Costs
• Increasing sustainability of risk adjusted performance
• Optimizing compliance costs
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3. CHALLENGES
ISSUE IMPACT
Silo systems and business units Poor business decisions
Incomplete data & data inconsistencies Loss of productivity
Insufficient / excess
Incomplete view of risk capital
Regulatory non-
Limited or non-sophisticated risk tools compliance
Unreliable and inaccurate reporting Loss of insight
Limited resources Increased expenses
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4. VISION STATEMENT SAS RISK MANAGEMENT FOR INSURANCE
• To allow insurance companies to manage risk across the organization in an
integrated fashion.
• Risks are often interlinked and understanding how these links affect the
business is important
• The systems which manage this are not only a part of the regulatory
approach but will also be used to drive business behavior
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5. SAS RISK MANAGEMENT FOR INSURANCE
Reporting Portal
Firmwide Risk
MCR and SCR Solo / Group fund Operational risk Default risk capital
calculations calculation calculation calculation
Market risk capital Life insurance risk Health ins. risk capital P&C insurance risk
calculation capital calculation calculation capital calculation
Market Risk Underwriting Risk - Life Underwriting Risk – P&C
Market risk analysis Insurance risk analysis Loss reserving
Investment mark to valuation Life liability valuation
Data Management – Data Quality, Data Models and Flows – Detail Data Store and Data Marts
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6. FIRMWIDE RISK SAS RISK MANAGEMENT FOR INSURANCE
• Calculation of Solvency II quantitative (Pillar 1) requirements – Solvency
Capital Requirement (SCR) and Minimum Capital Requirement (MCR)
• Aggregation of risk capital charges across all risk modules
• Calculates capital and solvency ratio
• Supports counterparty default risk and operational risk calculations
• Calculates reinsurance receivables
C op yr i g h t © 2 0 1 2 , S A S I n s t i t u t e I n c . A l l r i g h t s r es er v e d .

7. MARKET RISK SAS RISK MANAGEMENT FOR INSURANCE
• Supports configuration of financial instruments and assets, including:
• Bonds (fixed, variable, callable, corporate, etc.)
• Equity – spot
• Derivative instruments with underlying equity, currency and bonds
• Credit derivatives
• Swaps (interest rate and currency)
• Options on swaps, caps and floors
• Property
• Supports stress tests based on interest rates, equity, currency rates and
property rates.
• Calculates and aggregates risk capital charges.
C op yr i g h t © 2 0 1 2 , S A S I n s t i t u t e I n c . A l l r i g h t s r es er v e d .

8. LIFE
UNDERWRITING SAS RISK MANAGEMENT FOR INSURANCE
RISK
• Valuation of life insurance liabilities using a extensive library of function.
• Perform stress testing based on mortality, disability, longevity, expenses
and lapse rates.
• Supports with and without profit and separate account life policies.
• Calculates and aggregates separate risk capital charges
C op yr i g h t © 2 0 1 2 , S A S I n s t i t u t e I n c . A l l r i g h t s r es er v e d .

9. P&C
UNDERWRITING SAS RISK MANAGEMENT FOR INSURANCE
RISK
• Prebuilt framework for estimating loss reserves.
• Calculates loss reserves using:
• Link ratio
• Chain ladder
• Cape Cod
• Bornhuetter-Ferguson
• Calculates and aggregates risk capital charges.
C op yr i g h t © 2 0 1 2 , S A S I n s t i t u t e I n c . A l l r i g h t s r es er v e d .

10. DATA MANAGEMENT SAS RISK MANAGEMENT FOR INSURANCE
• Fully integrated data management platform
• Insurance data model with pre-built data marts
• In-built data quality routines to ensure maximum value to the business
• Insurance data model implemented and used by clients to support an
Enterprise data warehouse.
• Supports integration with existing financial models
• Creation and inquiry of automatic audit control, data lineage and reverse
impact analysis
C op yr i g h t © 2 0 1 2 , S A S I n s t i t u t e I n c . A l l r i g h t s r es er v e d .

11. REPORTING SAS RISK MANAGEMENT FOR INSURANCE
• Flexible reporting capabilities at Group, Division and Product level.
• Pre-built reporting repository including:
• Asset and liability valuation
• Valuation assumption
• Capital adequacy
• Stress testing analysis
• Dashboard capabilities to publish Key Risk Indicators (KRIs) to web,
Excel, Word, PowerPoint or Outlook.
C op yr i g h t © 2 0 1 2 , S A S I n s t i t u t e I n c . A l l r i g h t s r es er v e d .

12. BENEFITS SAS RISK MANAGEMENT FOR INSURANCE
CEO
 A complete solution to comply with the entire Solvency II regulations  Increase shareholder confidence by reducing volatility and
 Fast, reliable and forward looking information for making high value improving profitability of the company
strategic decisions  Increase policyholder confidence by improving the financial
 A basis for risk adjusted / value based management & for optimizing soundness and stability of the company
decisions like reinsurance programs or investment mix  Grow the company by making products and services more
competitive
CRO CFO Head of Sales/Marketing CIO
 Avoids risk of failure in  Perform complex analysis on  Provides a robust technology
 Directly align the risk strategies
implementing a robust risk how the company is invested for enterprise risk management
with the sales and marketing
management framework  Optimize capital allocation – beyond Solvency II, with a
strategies, i.e. identify
 Meets qualitative regulatory  Protect the company against single, integrated and auditable
unprofitable customers,
demands like transparency and unwanted future losses and platform
unprofitable products,
full documentation of the models realize the expected return by  Reduces implementation
unprofitable regions, etc.
and the risk management optimizing investment project risks by providing ready
 Optimize new business
processes strategies, taking into account to use and easily customized
targets, taking into account
 Supports risk management risk-capital constraints solution
risk-capital constraints,
beyond Solvency II, i.e.  Improve the company‘s rating  Removes integration issues by
customer segmentation and
implementing economic capital and reduce the costs of capital providing the entire solution on
customer value management
models in order to increase the profit single technology platform
 Improve competitiveness off
 Reduces earnings volatility and  Perform market-consistent  Reduces time and cost by
the products
improves financial soundness of valuation of the total balance shortening implementation
company by anticipating future sheet cycles and delivering faster
risks and mitigating them  Reduction of earnings volatility ROI
 Prevents losses – identifies, with better risk management  Protects investments already
quantifies and prioritizes risks due to the quantification of the made by building around the
facing the company (via risk various risk types existing solutions
dashboards and reporting)
 Promote risk culture within
company – measures and
monitors risk adjusted
performance of the company
C op yr i g h t © 2 0 1 2 , S A S I n s t i t u t e I n c . A l l r i g h t s r es er v e d .

13. WHY SAS? SAS RISK MANAGEMENT FOR INSURANCE
• Integrated risk solution for insurers = Enterprise Risk Management (ERM) -
interlinking, modelling, simulation, transparency
• Remove current variety of point risk solutions
• Reduce Spreadsheet-Risk through improved integration
• Enables standardization across risk infrastructure
• Adapts to individual customer requirements by application of the SAS
technology
• Provides capabilities to support changing requirements to meet future needs
• SAS investing in new developments in technology and solutions for Risk
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14. CUSTOMER STORY HDI ASSICURAZIONI (ITALY)
Business Problem
• Meet Solvency II requirements while improving data
quality and decision-making speed
Customer Quote
We have met the double
objective of improving Solution
data quality and
streamlining information • SAS Risk Management for Insurance
processes
Francesco Massari, Head Results
of Organization and
Information Systems • Improve data quality
• Timely information reaches business users, actuarial
scientists and senior management
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15. CUSTOMER STORY P & V (BELGIUM)
Business Problem
• Implementing Solvency II Directive
Customer Quote • Embedding risk assessment into daily activities
Choosing SAS enabled
us to convert our
dispersed data into
consistent and ready-to- Solution
use information,
available for the • SAS Risk Management for Insurance
implementation of
Solvency II, as well as for
improving our risk
management framework Results
Raffaele Barbera, Chief • Improves P&V Group's decision-making and efficiency
Risk Offocer
• Meets its statutory obligations under Solvency II.
• Improved risk management through automatically
generated reports (dashboards, KRIs/KPIs, etc.)
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16. CONCLUSIONS
• SAS empowers a company to be better able to manage its risk across the
insurance enterprise
• By underpinning the solution sets with a common data architecture,
ensures a consistency of approach across the management of risk
• SAS can provide a complete Enterprise Risk Management framework
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17. MORE
INFORMATION
• Contact information:
Stuart Rose, SAS Global Insurance Marketing Director
e-mail: Stuart.rose@sas.com
Blog: Analytic Insurer
Twitter: @stuartdrose
• White Papers:
Accelerating Solvency II Compliance
Data Management and Solvency II
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18. THANK YOU
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