Insurance regulators in the U.S. have begun signing up with their international peers to push a new ERM approach called "ORSA"—Own Risk and Solvency Assessment, says Dave Ingram, executive vice president of Willis Re.
With ORSA, "you look at your own risk and decide how much surplus you need to protect your solvency, how much capital you need for your risk," Ingram says.
This is turning the tables on insurers, many of which rely completely on either rating agencies or regulators to determine how much capital they should have, Ingram explains.
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