There is a pressing need for reform of insurance regulation, as well as enhanced use of modern risk management techniques by insurance companies, according to a report prepared by KPMG, for the European Commission on the solvency system within the European insurance industry.
The report is the first to be published as part of the European Commissions review of solvency requirements for insurance undertaking in the EU.
Gerd Geib, chairman of KPMG’s global insurance practice and co-author of the report, said: ‘The golden rule for insurers is always to expect the unexpected. No on could have predicted a tragedy on the scale of the WTC disaster, but these are the eventualities that insurers have to allow for.
‘However we found that many insurers do not have systems to quantify all types of financial risks they ar facing, that their risk management systems ? with some exceptions ? have not evolved in line with advances made by the banking sector.’
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