Own Risk and Solvency Assessment (ORSA), part of NAIC’s solvency modernization initiative to help harmonize U.S. solvency requirements with those pending in the European Union, has been the source of much debate over the past couple years. The internal evaluation to determine its ability to remain solvent under various scenarios has received harsh criticism. However, results of a new Towers Watson study show that as insurers begin to implement ORSA processes in advance of the requirements that will become effective in 2015, they’re seeing value.
Half of the 18 survey participants indicated they view the ORSA as a strategic exercise that will be fundamentally linked to their strategic decisions, and will support their company’s long-term vision and capital planning. Another 29 percent see the ORSA as a tactical exercise that will influence some strategic decisions. The remainder see the ORSA as compliance-driven, having undetermined, or little to no, strategic value.
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