IDEAS home Printed from https://ideas.repec.org/a/pal/gpprii/v34y2009i1p42-46.html
   My bibliography  Save this article

How do We Square the Circle between Accounting and Solvency?

Author

Listed:
  • Jacques Aigrain

    (Swiss Re, Mythenquai 50/60, Zurich 8022, Switzerland.)

Abstract

The paper makes a clear case for economic valuation. Whether it is companies’ internal models, rating agencies, regulators or standard-setting organisations, differing stakeholder views on the required and available capital are converging towards economic and risk-based capital and valuation models. Even though the measurement of insurance liabilities on a fair value basis remains a challenge, there seems to be no viable alternative at this point. Economic valuation will help foster innovation and advance the search for the most efficient risk transfer mechanisms, regardless of their form. Solvency II not only contains a clear commitment to economic valuation. It also effectively addresses some key issues highlighted by the current financial market crisis. Consequently, it should be implemented in the European Union without delay. Full credit should be given for diversification effects on a global scale, which will strengthen the motivation to actively manage portfolio diversification and will encourage stronger risk management. The Geneva Papers (2009) 34, 42–46. doi:10.1057/gpp.2008.38

Suggested Citation

  • Jacques Aigrain, 2009. "How do We Square the Circle between Accounting and Solvency?," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 34(1), pages 42-46, January.
    • Handle: RePEc:pal:gpprii:v:34:y:2009:i:1:p:42-46
    as

    Download full text from publisher

    File URL: http://www.palgrave-journals.com/gpp/journal/v34/n1/pdf/gpp200838a.pdf
    File Function: Link to full text PDF
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: http://www.palgrave-journals.com/gpp/journal/v34/n1/full/gpp200838a.html
    File Function: Link to full text HTML
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:gpprii:v:34:y:2009:i:1:p:42-46. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave-journals.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.