Make or Buy or Something Else?

Ein Vorschlag zur Stärkung der Internen-Rating-Kompetenz der Versicherungswirtschaft

authored by

Tim Linderkamp, Christoph Schwarzbach, Matthias Korn, Michael Schwalba, Johann Matthias Graf von der Schulenburg

Abstract

Due to a paradigm shift in the insurance supervision the insurers will have to consider internal ratings additionally to external ratings. This already applies specifically to credit risks. Rating know how in this regard is not sufficiently developed in the insurance industry yet. Therefore especially the valuation of so called alternative investments, like infrastructure or renewable energy projects, is a big challenge. This paper makes a contribution by suggesting a cooperative way of implementing a process that generates internal ratings. For this purpose the rating process is disassembled and split up between an external service provider with access to an existing rating tool and the respective insurer. The shared process is designed to meet the requirements for the insurers risk management under Solvency II. Of course the partial outsourcing entails advantages and disadvantages which have to be weighed against each other. Nevertheless the proposed arrangement is likely to be interesting for smaller insurers.

External Organisation(s)

Kompetenzzentrum Versicherungswissenschaften GmbH
Norddeutsche Landesbank – Girozentrale – (Nord/LB)

Type

Article

Journal

Zeitschrift fur die gesamte Versicherungswissenschaft

Volume

104

Pages

271-283

No. of pages

13

ISSN

0044-2585

Publication date

08.2015

Publication status

Published

Peer reviewed

Yes

ASJC Scopus subject areas

Accounting, Finance, Economics and Econometrics

Sustainable Development Goals

SDG 7 - Affordable and Clean Energy

Electronic version(s)

https://doi.org/10.1007/s12297-015-0318-6 (Access: Closed)