This is an example of where a ’roundtable’ approach to risk management is required. The
risks associated with the new strategy will be relevant to a number of departments and will
address (at the minimum) the following risk-related questions:
• Underwriting – do we have historical data on losses upon which we can base the
premiums? Are we familiar with the policy wordings that are used in the pet insurance
market? Do we have a claims handling capability?
• HR – do we have the right staff with pet insurance experience? Should we develop and
roll out a training programme for all staff involved in the project?
• Strategy team – will the projected financial performance of this business sit within our
stated risk appetite and tolerances?
• Marketing – what is the level of competition; who are the main players and is there
capacity for a new insurer?
• IT – do we have the capabilities and experience to set up and manage an internet-based
sales and customer management system?
• Compliance – are we able to provide the product and service levels that will provide fair
treatment for policyholders?
• Finance – have we calculated the additional solvency capital required to support this
business? How will this initiative affect our Solvency II internal model? Have we created a
budget for the set-up and operation of the new product?
