Solvency II To Theresa, a brave and faithful heart Solvency II Stakeholder Communications and Change Second Edition Gabrielle O’Donovan ROUTLEDGE Routledge Taylor & Francis Group LONDON AND NEW YORK First published 2014 by Gower Publishing Published 2016 by Routledge Park Square, Milton Park, Abingdon, Oxon OX14 4RN 711 Third Avenue, New York, NY 10017, USA Routledge is an imprint of the Taylor & Francis Group, an informa business Copyright © Gabrielle O’Donovan 2014 All rights reserved No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers Notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe Gabrielle O’Donovan has asserted her right under the Copyright, Designs and Patents Act, 1988, to be identified as the author of this work British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data O’Donovan, Gabrielle Solvency II : stakeholder communications and change / by Gabrielle O’Donovan pages cm Revised edition of the author’s Solvency II, published in 2011 Includes bibliographical references and index ISBN 978-1-4724-4090-7 (paperback) Business communication Organizational change I Title HF5718.O34 2014 658.4'5–dc23 2014008411 ISBN 9781472440907 (pbk) Contents List of Figures vii List of Tables ix About the Author xi About this Book xiii Forewords: Trevor Matthews and Paul Freeman xv Acknowledgementsxvii Testimonialsxix Glossary of Terms xxi 1 Introduction 1.1 EU Solvency Regime Change 1.2 Chapter Summary 1 11 Industry Impact and Response 2.1 Solvency II and Affected Entities 2.2 Solvency II and the EU Market 2.3 Beyond the EU 2.4 Chapter Summary 13 13 20 21 23 Framing the Stakeholder Challenge 3.1 The External Stakeholder Challenge 3.2 The Internal Stakeholder Challenge 3.3 Chapter Summary 25 27 30 33 The Solvency II ‘Culture Test’ 4.1 Understanding Culture 4.2 Embedding a Risk Conscious Culture 4.3 Strategy and Tactics 4.4 Chapter Summary 35 35 42 56 59 vi Solvency II Change Management 5.1 An Evolving Workplace 5.2 Communications and Change 5.3 Chapter Summary 61 61 69 77 Stakeholder Analysis 6.1 Stakeholder Identification 6.2 Stakeholder Profiling 6.3 Stakeholder Prioritization 6.4 Chapter Summary 79 79 80 88 88 The Stakeholder Communications Strategy 7.1 Introduction 7.2 Goals and Objectives 7.3 Core Principles 7.4 Audiences and Stakeholder Management 7.5 Key Messages 7.6 Branding 7.7 Consultation and Communications Planning 7.8 The RAID Log 7.9 Resourcing 7.10 Key Measures 7.11 Chapter Summary 89 91 95 96 97 99 100 101 112 115 116 117 Communication Plans 8.1 Strategic Consultation Plans 8.2 Internal Communications Plan 8.3 External Communications Plan 8.4 Chapter Summary 119 119 122 127 132 Appendices133 Bibliography139 Index143 List of Figures 1.1 1.2 The three pillars of Solvency II Progressive levels of sophistication in capital assessment 2.1 Solvency II programme status: July 2013 19 3.1 Solvency II stakeholders 26 4.1 4.2 4.3 4.4 4.5 Understanding culture embedding mechanisms The risk culture framework The Solvency II Directive and culture Characteristics of a risk culture Solvency II risk culture philosophy statement 37 39 41 43 44 5.1 The stakeholder buy-in escalator 5.2 When change is bad news 5.3 Reactions to channel mix 63 66 76 6.1 6.2 6.3 80 85 87 Solvency II programme stakeholders Classic Stakeholder Power/Interest Grid Solvency II Regulatory Stakeholder Grid 7.1 Responses to Solvency II: tactical to strategic 7.2 The Central Template and report population 7.3 Solvency II monthly reporting calendar 91 104 105 This page intentionally left blank List of Tables 1.1 1.2 Countdown to Solvency II Comparison of solvency regimes: Solvency II v Basel II 11 4.1 The levels of culture 4.2 Risk and our business 4.3 The nature of risk 4.4 Our approach to risk 4.5 Risk and reward 4.6 Ultimate accountability for risk management 4.7 Ownership of everyday risk management 4.8 The nature of integrity – a moral perspective 4.9 The nature of integrity – whole systems and processes 4.10 The nature of integrity – a sound structure 4.11 Governance 4.12 Leadership 4.13 Risk conscious decision making 4.14 Empowerment 4.15 Teamwork 4.16 Responsibility 4.17 Adaptability 4.18 Culture change: from vision to reality 36 45 46 46 47 48 49 50 50 50 51 52 52 53 54 55 56 57 5.1 Behavioural change: current state v desired state 5.2 Required behavioural outcomes 64 65 6.1 External stakeholders 6.2 Internal stakeholders 81 82 7.1 7.2 7.3 7.4 Solvency II Stakeholder Communications and the EU Directive Stakeholder management team Mapping reporting requirements The programme reporting template 93 98 103 103 136 Solvency II Table A.1 Stakeholder Communications roles and responsibilities (continued) ‘Universe’ Specific Examples Touchpoints Organization-wide and external Reports and packs for meetings with external stakeholders SII activities that involve the risk community (e.g SII focus groups for risk) Customized SII business briefings for directly impacted teams and indirectly impacted teams SII Stakeholder Communications for strategic programme that has organization-wide impact Events, roadshows, publications, blogs, conferences and workshops Risk function and ad-hoc organization‑wide Internal Communications team for e.g Risk division Events, roadshows, publications, blogs, conferences and workshops Risk activities that impact SII activities (e.g certain meetings) Appendices Table A.1 137 Stakeholder Communications roles and responsibilities (concluded) Emergent Issues, Risks Mitigation Boundaries of roles Boundaries of roles need to be clarified Lack of clear boundaries will lead to confusion and impact teamwork Boundaries of roles Get clarity on roles and boundaries and agree on processes that support good boundaries and get sign-off from those who oversee both roles Activity alignment Both roles needs to be aware of activities on either side Lack of alignment will lead to confusion, activities clashing and impact teamwork Activity alignment Monthly calendars of activities created and shared upfront Message alignment SII messages need to go through SII Stakeholder Communications Lead Risk messages need to go through Risk Communications Manager Lack of alignment can lead to inappropriate messaging that can damage perceptions of the programme and of the value of work being carried out by team Message alignment Share key messages Ideal intervention is to establish Centre of Excellence approach to Internal Communications across the organization so as to nullify emergent issues and risks This page intentionally left blank Bibliography Books Argis, C., 1993, Knowledge for Action A Guide to Overcoming Barriers to Organizational Change, Jossey-Bass, San Francisco Bower, M., 1966, The Will to Manage, McGraw-Hill Buckham, D., Wahl, J and Rose, S., 2010, Executives Guide to Solvency II, Wiley, USA Eden, C and Akerman, F., 1998, Making Strategy, The Journey of Strategic Management, Sage Publications Johnson, G and Scholes, K (eds), 2001, Exploring Public Strategy, Pearson Education, Harlow, UK Mendelow, A., 1991, Proceedings of the 2nd International Conference on Information Systems, Cambridge, MA O’Donovan, G., 2006, The Corporate Culture Handbook, The Liffey Press, Ireland Prosci Inc., Creasey, T and Hiatt, J., 2012, Best Practices in Change Management: 575 Organizations Share Lessons and Best Practices in Change Management, Prosci benchmarking report, Loveland, USA Schein, E., 1992, Organisational Culture and Leadership, 2nd Edition, Jossey‑Bass, USA, p. 231 Journal Articles Bryson, J., Cunningham, G and Lokkesmoe, K., 2002, What to Do When Stakeholders Matter: The Case of Problem Formulation for the African American Men Project of Hennepin Country Minnesota, Public Administration Review, 62:5, 568–84 Freeman, R.E and Reed, D.L., 1983, Stockholders and Stakeholders: A New Perspective on Stakeholder Governance, California Management Review, 25:3, 83–94 Mitchell, R.K., Agle, B.R and Wood, D.J., 1997, Towards a Theory of Stakeholder Identification and Salience: Defining the Principle of the Who and What Really Counts, Academy of Management Review, 22:4, October, 53–886 140 Solvency II O’Donovan, G., 2003, Change Management: A Board Culture of Corporate Governance, Corporate Governance International, 6:3, September Online Accenture, 2010 Available at: www.accenture.com/ [Accessed: December 2010] Banana Skins survey, Centre for Financial Services Innovation in association with PricewaterhouseCoopers, 2007 Available at: www.pwc.com/ [Accessed: April 2011] BestWeek Europe, 2010 Available at: www.ambest.com/sales/BestWeek/ [Accessed: December 2010] Countdown to Solvency II, PriceWaterhouse Coopers, 2007 Available at: www.pwc.com/ [Accessed: September 2010] Delivering Solvency II, Issue 1, Financial Services Authority, UK, 2010 Available at: www.fsa.gov.uk/ [Accessed: September 2010] Edwards, T., Solvency II Challenges Facing the Insurance Market, 2010 Available at: https://ktn/innovateuk.org/ [Accessed: February 2011] European Insurance – Key Facts, CEA, 2010 Available at: www.cea.eu/ [Accessed: September 2010] European Insurance – Key Facts, Insurance Europe, 2013 Available at: www.insuranceeurope.eu [Accessed: January 2014] Getting Ready for Solvency II, PricewaterhouseCoopers, Fig 2, p. 12, 2010 Available at: www.pwc.com/ [Accessed: December 2010] Getting Set for Solvency II, PricewaterhouseCoopers, 2010 Available at: www.pwc.com/ [Accessed: December 2010] Lessons Learnt from the Crisis: Solvency II and Beyond, CEIOPS, 2009 Available at: www.eiopa.eu/ [Accessed: December 2010] Media release following ‘ICAS 2007 and the Path to Solvency II’, 2007 Available at: www.abi.co.uk/ [Accessed: April 2011] Ministry of Defence, Project and Programme Management, Introduction to Assumption Management Available at: www.aof.mod.uk [Accessed: November 2010] Moody’s Analytics, 2013 Solvency II Practitioners’ Survey: A Field of Missed Opportunities?, Exhibit 9, p 10 Available at: http://www.moodysanalytics com/2013solvencyiisurvey [Accessed: January 2014] Outlook, Ernst and Young, 2010 Available at: www.ernstandyoung.com/ [Accessed: November 2010] Solvency II Bulletin, vol 19, Association of British Insurers, UK, 2010 Available at: www.abi.co.uk/ [Accessed: January 2014] Solvency II Overview, Scandinavian Capital Solutions, 2010 Available at: www.scandanaviancs.com/ [Accessed: February 2011] Solvency II – Understanding the Process, CEA, 2007 Available at: www.cea.eu/ [Accessed: September 2010] The Same but Different, Deloitte, 2007 Available at: www.deloitte.com/ [Accessed: November 2010] Bibliography 141 Tiwari, A., CEO, Aptivaa Consulting, Solvency II, 2008 Available at: www.aptivaa.com/ [Accessed: November 2011] Why Excessive Capital Requirements Harm Consumers, Insurers and the Economy, CEA, Brussels, 2010 Available at: www.cea.eu/ [Accessed: November 2010] Ziewer, L and Wyman, O., 2009 Adapted from ‘Assess the Business Impact of Solvency II’ [Accessed: December 2010] This page intentionally left blank Index Page numbers in bold refer to tables; page numbers in italic refer to figures; page numbers followed by ‘n’ refer to notes at the bottom of the page accountability 16, 43, 47–8, 114 acquisitions and mergers (M&A) 62, 90, 92, 95, 104 activity owners 131 actuarial functions 14, 83 adaptability 43, 55–6 alignment 100, 107, 108, 111, 113, 121, 124, 125, 137 ambassadors 76 analysts 29, 81, 98 Anchor consultants 99 anger, in change curve 65, 66 Argis, Chris 67 Association of British Insurers (ABI) 21, 29, 98 Association of Mutual Insurers and Insurance Cooperatives in Europe (AMICE) 28, 82 assumptions 41, 44–9, 84, 112–13 attitudes 36, 37, 40, 41, 51, 59 audiences 97–9, 123, 127, 135 audit 14, 48–9, 54, 61, 83, 101, 109, 122, 125 Audit Committee 32, 83, 98 authority 52, 53, 55 automation 19 awareness 14, 20, 62, 63, 64, 72, 74, 77, 96, 97 Bank of England 28, 61 banking industry 7, 10–11, 12 bankruptcy 12 Basel II 10–11, 12 behaviour mapping 64–5 behaviours 36, 37, 40–41, 47, 51, 59, 111 benchmarking 20–21, 62, 68, 72, 89 benefits, business 14, 20, 23 and decision-making 19, 124 and Stakeholder Communications 99, 108, 124, 125, 128, 129, 130 Bermuda 22 bi-laterals 72–3 Binding Technical Standards (BTS) 28 bloggers 128n Board Report 102 Board Risk and Compliance Committee (BRCC) 31, 83, 98, 102 Boards 14, 17, 30–31, 121 education and training 92, 108–109, 110, 115, 117 and risk culture 35, 38, 42, 47–8, 52, 82, 110 and stakeholder analysis 82 and Stakeholder Communications Strategy 98, 101 booklets 69–70 144 Solvency II Bower, Marvin 35–6 branding 82, 100, 128 Bryson, J et al 84, 87–8 budgets 115 Burke-Litwin model 67–8 business briefings 70, 109, 122, 136 Business Change Control report 102 business organization 14–15 business planning 42, 45 business strategies 13, 45, 83, 90, 95, 96, 108 business-as-usual (BAU) 15–16, 32, 82, 108, 114 teams 63, 83 buy-in 26, 26, 63, 64, 84, 117 buy-in escalator 63–4, 77 calendars 105–106, 120, 127, 137 capital assessment 3, 6, 124 capital charges 14 capital efficiency 5, 14 capital management 42, 92, 95, 124, 125, 129, 130 capital models, internal 2, 124 capital requirements 2, 5, 7, 14, 15, 21, 22, 92, 124 capital-aggregation tools 84 cash flows 124 Catastrophe Risk CBT training module 108, 109, 115 Centre for Financial Services Innovation 20 Centre of Excellence 107, 135, 137 change curve 65–7 change management 61–77, 92, 97, 126 change programmes 10, 61 Change Readiness Assessment 62–3 channels 25, 69–76, 77, 122 communication channels 77, 96, 130–31 engagement channels 69, 72–6, 77, 126 information channels 69–72, 76, 100, 106–107, 111, 123, 126, 136 Chief Executive Officers (CEO) 17, 98, 128, 131 Chief Financial Officers (CFO) 29, 98 forums 26, 29, 82 Chief Risk Officers (CRO) 47, 52, 57, 83 forums 26, 28, 82, 98, 128 CIO agenda 84 closed-mindedness 87 Code of Conduct 47, 49, 50, 58 Comité Européen des Assurances (CEA) 8, 20–21, 26, 28, 82, 98, 128, 133–4 commitment 63, 64, 65, 67 Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS) 3, 4, 7–8, 11, 12, 15, 21, 26, 27, 73 communication channels 77, 96, 130–31 communication packages 70, 71 communications 69–76 external 92, 106–107, 111 internal 17, 25, 58, 92, 107, 122 communications, corporate 71, 98, 99, 100, 106–107, 116, 131 communications planning 101–11, 112, 119–32 external communications plan 119, 120, 127–32 internal communications plan 119, 120, 122, 123, 124, 125, 126, 132, 135–7 communications strategy, stakeholders see Stakeholder Communications Strategy competence 87 competency analysis, core 89 competition 3, 20–21, 23, 89, 124 competitive advantage 16, 17 competitors 14, 128, 130 compliance 16, 18–19, 23, 25, 26, 30, 57, 63, 64, 108 compliance function 48–9, 83 ‘compliance mindset’ 90 compromise 20 computer-based training (CBT) module 108 conferences 73 confidence 18, 87, 130, 132 market 8, 26, 51, 72, 95, 111, 125, 127, 128, 129 Index confidentiality 47, 72–3 consolidation 21, 22, 23 consultation 101–11 consultation channels 25, 69–76, 77 consultation documents 73 consumers corporate communications 71, 98, 99, 100, 106–107, 116, 131 corporate strategies 89, 90, 91, 116 costs 17, 108, 112, 115, 124 Council of Ministers countries 21 ‘cultural inventory approach’ 42 cultural tenets 39, 40, 42, 58, 59 culture change see risk culture ‘culture test’ 35–59, 108 Currency Risk customers 44, 89, 114 see also policyholders cyclicity cynics 76, 77 data management decision-making 3, 15, 45, 115 and benefits 19, 124 and governance 14, 82 and risk consciousness 35, 43, 52 defence, lines of 43, 48–9, 55 delegated acts 8, 9, 124 delivery partners 33, 83, 99 denial, in change curve 65, 66 dependencies 7, 90, 112, 114–15 interdependency 10, 40, 59, 94 Design Authority 31–2, 83, 98, 102, 125 disclosure 4, 8, 9, 14, 108, 129, 130 diversification 11, 29, 89–90 documentation 15 double-loop learning 66 ‘drifters’ 76 Dublin Airport 99n Eden, C and Akerman, F 86 education and training 56, 58, 67, 95, 107–109 145 Boards 92, 108–109, 110, 115, 117 stakeholder education programmes 92, 96, 108 effectiveness 41, 67 emails 70 embedding mechanisms 37–8, 39, 40, 41, 42–56, 57–9 empowerment 39, 40, 43, 53, 59 engagement channels 69, 72–6, 77, 126 Enterprise Risk Management (ERM) 17, 124, 129 enthusiasm 53 environment, external 56, 67–8, 90 Equity Risk equivalence 21–2 ‘espoused theory’ 67 ethics 39, 47, 49, 51, 58, 88 European Commission (EC) 1, 10, 27, 81 and Level 3, and stakeholders 26, 33, 86, 87, 98 European Council 26, 27 European Directive 3–4, 11, 92–3, 124 Article 56 Article 40 47, 93 Article 41 94 Article 42 49, 93 Article 43 94 Article 44 40–41, 59 Article 46 94 Article 120 48, 94 see also Solvency II European Insurance and Occupational Pensions Authority (EIOPA) 15, 22, 26, 28, 81, 86, 87, 98 European Insurance and Pensions Committee (EIOPC) 26, 27 European Parliament 8, 12, 25, 26, 27 European Union (EU) 1, 11, 20–21, 22, 124 evaluation 116–17 Everybody, Somebody, Anybody and Nobody adage 54 Executive Sponsor 10, 17, 31, 80, 82, 97, 98–9, 125, 131 146 Solvency II external communications plan 119, 120, 127–32 extranet sites 75, 76 face-to-face meetings 73, 108, 122 feedback 62, 63, 69, 73, 74, 117, 123 finance, ministries of 26 Financial Conduct Authority 27 financial crisis 7–8, 12, 20–21, 30 Financial Services Act 28 Financial Services Authority (FSA) 27, 31, 61, 91–2, 129 ‘fire-fighting’ 16, 110 flexibility 13–14 focus groups 73 forums 26, 28, 29, 82, 96, 98, 128 Framework Directive 8, 21 Freeman, R.E and Reed, D.L 85 gap analysis 10, 92 gardening 59 goals 95–6, 97, 123, 125, 126, 128, 130 see also objectives governance 7, 130 and decision-making 14, 82 governance structure 16, 17 and internal communications plans 124, 125 programme governance 10, 30–31, 100, 125 and risk culture 42, 43, 50–51 and stakeholder analysis 82–3, 123 and Stakeholder Communications Strategy 94, 135 Groupe Consultatif (GCAE) 26, 29, 82, 98, 128 homogeneity 3, 124 HSBC Hong Kong 56–9 human factors 37, 38, 40–41, 45–56 Human Resources 107, 108 ICA regime 91–2 identification of stakeholders 79–80, 88 impact teams 32–3 impacts 13–16, 81–4, 96, 100, 125, 130 implementation timetable 8–9 incentives 2, 43, 47, 58, 124 incident reporting 47 independent financial advisors (IFAs) 30 induction training 70, 92, 107–108 inert factors 37, 38, 41, 45–56 information, qualitative and quantitative 14 information channels 69–72, 76, 100, 106–107, 111, 123, 126, 136 innovation 21, 55 Insurance and Reserve Risk insurance associations 26 Insurance Europe insurance industry 1, 17, 22, 23, 26 insuranceday.com insurers, non-EC 23 integrity 43, 49–50 Interest Risk Interface Managers 97, 99, 119 intermediaries 30 internal capital models 2, 124 internal communications 17, 25, 58, 92, 107, 122 internal communications plan 119, 120, 122, 123, 124, 125, 126, 132, 135–7 Internal Control and Compliance Function 83 internal controls 7, 14, 42, 94 Internal Model 5–7, 8, 9, 11, 61 Article 120 48, 58, 94 and business impact 14, 18, 22, 84 and stakeholders 32, 84, 94, 108, 124 International Credit Insurance and Surety Association (ICISA) 26, 28, 82 International Financial Reporting Standards (IFRS) intranet sites 70, 75–6, 117 investment guarantees 14, 89 investment strategy 13, 14, 23 investor relations teams 14, 131 investors 29, 81, 98, 129 issues log 113–14 IT 32, 84 Index Japan 22 job security 62, 63 key messages 69, 71, 72 and Stakeholder Communications plan 124–5, 126, 129–30 and Stakeholder Communications Strategy 90, 99–100, 111, 113, 137 KPMG 99 Kubler-Ross, Elisabeth 65 Lamfalussy process 3–4, 11 language 125 ‘lead supervisor’ approach 3, 124 leadership 93 and change management 61, 68, 77 and risk culture 37–8, 40, 42, 43, 45–7, 49, 50–56, 59 leadership activities 68–9 leadership team 32, 51, 97, 98, 116 Least Square Monte Carlo Modelling 19 legitimacy 87–8 letters 70 life insurance 1, 14 line managers 66, 70, 77 Liquidity Premium 124, 128, 130 Lisbon Treaty 3, 8, 124 lobby groups 28–9, 69, 70, 80, 82, 97, 128, 130 local industry associations 29, 82 local regulators 27–8, 81, 87 loose cannon 76 management information packs 102, 104 manpower 92, 116 mapping 64–5, 84–8, 102–103, 125 market disruption 3, 124 markets 81, 95, 100, 124, 125, 127, 128, 129 media 30, 71, 75, 82, 98, 117 meetings 72–3, 108, 122 Mendelow, A 85–6 mergers and acquisitions (M&A) 62, 90, 92, 95, 104 metrics 117 147 Minimum Capital Requirements (MCR) 5, Mitchell, R.K et al 87–8 Moody’s Analytics 18–19, 23 motivation 68 multiple businesses 18, 111 ‘naval gazing’ 92 needs 36, 37, 41 newsletters 70–71, 100, 122 objectives 58, 95–6, 99, 108, 116, 123 and external communications plans 128, 130 and internal communications plans 124, 126 see also goals O’Connor, Rory 108 O’Donovan, Gabrielle 36, 51, 55 Oliver Wyman, consultants 13, 23 Omnibus II Directive 8, 124 one-to-one meetings 108, 122 organizations external 73–4 large 13–14, 124 small 2, 5, 124 outcomes 36, 37, 41, 53, 65 overload, regulatory 20 Own Risk and Solvency Assessment (ORSA) 9, 18, 108 own risk assessment ownership 48–9, 53, 126, 131 parent body board 30–31 Partial Model 5–6, 11 participation of stakeholders 63–4 peers 109, 121, 128, 130 pillars 4–5, 9, 10, 11–12, 18 policyholder protection 2, 3, 21, 124 policyholders 30, 82, 98, 130 portfolios 7, 83, 89 posters 71 power and interest grids 84–7, 88 presentations 71 press releases 71, 130 148 Solvency II PricewaterhouseCoopers 16 pricing 14, 32, 82, 83, 89 prioritization 79, 88 problem-solving 36, 75 products 14, 82, 89 profiling 79, 80–88, 91, 96, 112 profitability 13 programme dashboard 71, 100, 104, 106, 110 Programme Director 97, 98, 101, 116, 135 programme governance 10, 30–31, 100, 125 programme management 10, 90 Programme Management Office (PMO) 104, 106 Programme Manager 98 programme reporting 71, 96, 101–106, 110 programme team 70, 73, 74, 92, 99, 101 project organization 18 Prosci benchmarking report 68 Prudential Financial Inc 131–2 Prudential Regulatory Authority (PRA) 9, 27–8, 98 qualitative requirements 4, 14, 28, 117 quantitative impact studies (QIS) 6–7, 8, 14 quantitative requirements 4, 14, 84, 117 question and answer sessions (Q&As) 74, 75, 130 Quick Fix Directive RAG status (Red, Amber, Green) 103, 120 RAID Log 110–15 ratings agencies 29–30, 81, 98 recruitment 55 recruitment agencies 98 Regulator Report 102 regulators 10, 128 local 27–8, 81, 82, 86, 87, 95, 97 reinsurance 22 Relationship Manager 99n, 120 Relationship Owners 97, 99, 106, 119 relationship with risk 43, 45–9 reporting 15, 47, 71–2, 130 programme reporting 71, 96, 101–106, 110 stakeholder reporting process 92, 110 supervisory reporting 4, 8, 9, 93 reputation 7, 82 resources 15, 18, 88, 96, 110, 115–16, 122 responses to Solvency II 91 responsibility 43, 48–9, 54–5, 92, 102, 108, 114, 135–7 Responsible Actuary 83 reward see incentives risk, compliance, audit and actuarial teams 32, 54, 125 Risk and Compliance report 102 risk appetite 13, 14, 45, 58, 69, 82, 108, 110, 126, 128 risk champions 58 Risk Communications Manager 107, 137 risk consciousness 35, 38, 42–56, 59, 65, 84 risk culture 35–40, 126, 130 and Boards 35, 38, 42, 47–8, 52, 82, 110 culture change 56–9, 97 and governance 42, 43, 50–51 and leadership 37–8, 40, 42, 43, 45–7, 49, 50–56, 59 levels of 36, 41 risk adverse culture 38, 46 risk aggressive culture 38, 46 risk management culture 69, 96, 111 risk culture characteristics 43 risk culture framework 39, 52, 57 Risk Culture Philosophy 44, 47, 49–56, 58 Risk Log 91, 110, 112 risk management 2, 7, 14, 94, 95, 124, 125, 128, 129, 130 culture 69, 96, 111 practices 92 Risk Management Framework 47, 49, 50, 51, 53, 54, 55, 56, 58, 108 Risk Management Function 48–9, 83, 136 system 40–41, 44, 48, 94, 108 Risk Manager 135 risk mitigation 2, 22, 45, 124 risk monitoring 2, 124 risk profile 45, 92, 124 Index risk sensitivity 2, risk transfer tools 2, 124 risk-modelling 11, 12, 84 roadshows 75 role-models 37, 46, 51, 52, 53, 57, 67, 68 roles 135, 137 roll-out 126–7, 131–2 scenario planning 66, 89 Schein, Edgar 37 security, financial 124 seminars 72, 74 shareholders 7, 29, 98 shock, in change curve 65, 66 ‘SMART’ 96 Solvency and Financial Condition Report (SFCR) 129, 130 Solvency Capital Requirements (SCR) 5, Solvency I 2, 11 Solvency II 1–11 Level 3, 8, 12 Level 3, 8, 12, 48, 49, 56, 93, 94, 124 Article 44 40–41, 59 Level 4, 8, 12, 93, 95, 124 Level 4, 12 see also European Directive Solvency II Practitioner Survey 18–19 Special Interest Groups (SIGs) 80, 82, 128 sponsorship, executive 17, 20 Executive Sponsor 10, 17, 31, 80, 82, 97, 98–9, 125, 131 Spread Risk staff directly impacted 83–4, 98, 108, 123, 125, 132 general 33, 84 indirectly impacted 98, 108, 123, 125, 132 stakeholder analysis 79–88, 96, 123 stakeholder comfort 131–2 Stakeholder Communications 69, 106–107, 110 and benefits, business 99, 108, 124, 125, 128, 129, 130 149 communication plans 119–32 external 111 see also communications planning Stakeholder Communications Lead 70, 119, 130, 137 Stakeholder Communications Strategy 71, 72, 89–118, 97, 135–7 stakeholder education programmes 92, 96, 108 stakeholder engagement 25, 116–17, 120 Stakeholder Influence Diagrams 86–7 stakeholder management 17, 25–33, 92, 97–9 Stakeholder Management Team 97, 98–9 stakeholder mapping 84–8 stakeholder snapshot 79–80 stakeholders, external 25–6, 33, 63, 80, 81–2 , 90, 98, 127, 136 stakeholders, internal 26, 30–33, 70, 80, 82–3, 98, 101, 123 stakeholders, missing 80 Standard Model 5–6, 11, 32 standard-setting 47 Steering Committee 57, 93, 98, 99n, 100 and communications plans 112, 119, 125, 130, 131 and Stakeholder Communications Strategy 101, 110, 116, 135 Steering Committee Pack 102 Steering Group 17, 31, 82 Steffen, Thomas 35 Strategic Consultation Plans 106, 119–22 strategic planning 56–9 strategy assessment methodology 89 strength, financial 13–14 subsidiaries, non-EU 22, 23 supervision 2, 3, 21, 124 supervisors 15, 26, 30 supervisory reporting 4, 8, 9, 93 surveys 72 Switzerland 22 tax office 98 team leaders 56 150 Solvency II team-building 54, 58 teamwork 43, 53–4, 137 technical standards 8, 94 technology 20 templates 103–105, 127 Terms of Reference 74 theory-in-action/use 67 three lines of defence system 43, 48–9, 55 ‘Three Pillar Approach’ 4–5, 9, 10, 11–12, 18 time-based competition 89 timelines 100, 124, 126–7 trade unions 63 tradition 36, 55 transparency 7, 15 ‘Treating Customers Fairly’ strategy 89 trust 7, 53, 68 understanding 19, 63, 64 United Kingdom 9, 31, 61, 91–2, 97–9, 101 United States 22 updating 102, 103–104, 105–106 urgency 87–8 ‘use test’ 6, 42, 108, 131 value analysis, shareholder 89 values 58, 84 wallet cards 72 wanderers 76 websites 75 whistle-blowing 47, 50 workshops 75 Year End reports 130 yearning 65, 66–7 .. .Solvency II To Theresa, a brave and faithful heart Solvency II Stakeholder Communications and Change Second Edition Gabrielle O’Donovan ROUTLEDGE Routledge Taylor & Francis Group LONDON AND. .. values and behaviours This approach provides optimal support for the Solvency II approval process and life in the Solvency II world The focus of Solvency II: Stakeholder Communications and Change... 103 103 x Solvency II 7.5 7.6 The Stakeholder Communications risk log Stakeholder Communications dependencies 8.1 Solvency II Strategic Consultation Plan for the Board 8.2 Solvency II key messages: