UK insurers’ internal model validation processes 'hugely inefficient'

Firms struggling with validating external models, expert judgement and risk dependencies, say experts

UK insurers are wasting time and resources with inefficient model validation processes that risk underestimating the level of risk inherent in their Solvency II internal models.

A slew of recent surveys have highlighted the significant challenges insurers are facing in creating a validation framework that is both cost-effective and suitably tailored to their model risk.

A survey of Lloyd's of London insurers by actuarial consultancy Lane, Clark and Peacock, published last month, found that half