INTERAMERICAN is one of the very few organisations in Greece that have incorporated social responsibility in their business strategy and their daily operations in social responsibility. As part of its strategy, INTERAMERICAN has entered into commitments and develops actions whose purpose is to ensure a successful path towards Sustainable Development. Taking into consideration that the needs and expectations of Interested Parties inform the design of the Company’s corporate strategy, the main axis of the demands of INTERAMERICAN stakeholders is the optimal management of business decisions and risks, the governance and transparency practices it implements and the protection of its clients - insurance holders.
In order for the Company to respond to the demands of its stakeholders and to optimise its grasp, evaluation and management of the risks it takes, as well as to achieve optimal management of business decisions, it has moved to the development and implementation of the Partial Internal Model.
The development of the Internal Model in particular allows INTERAMERICAN to optimise the management of the risks it takes in non-life sectors and to set itself apart from the average European -and Greek- insurance company, which uses the “Standard Formula” Through the use of the Model INTERAMERICAN expects to commit the most representative height of the required shareholder capital and to further shield its clients, while at the same time remaining competitive.
It should be pointed out that recently the Company has also received the approval of the Bank of Greece for the use of a Partial Internal Model for the calculation of the capital requirement for solvency.
The possibility to gain the approval for the development and use of an Internal Model is an innovation of Solvency II.
It should be pointed out that: Solvency II is the most recent institutional framework which regulates capital adequacy, operation and supervision requirements for insurance companies which operate in the European Union. One on the principal objectives of Solvency II is the introduction of new governance and transparency practices that will ensure the sound operation of the market and the appropriate level of protection for European citizens - insurance policy holders!
The Model, which was developed these past years in the Netherlands and in Greece, has been evaluated by auditors and found to meet the requirements of the Solvency II directive, and INTERAMERICAN is the first - and to this day only- company operating in the Greek insurance market to have received the relevant approval.
In particular, the Partial Internal Model provides INTERAMERICAN with coverage against the category of risks directly related to Non-Life Underwriting Risk. The category in question focuses on two types of risk:
- The Premium & Reserve Risk, where
-the Premium Risk Model quantifies uncertainty concerning losses to incur in the near future, either due to increased frequency or to increased average cost, or to both
-the Reserve Risk Model quantifies uncertainty in terms of time and of the final cost of the company’s outstanding claims.
- CAT Risk, which following one or several incidents that bring about losses in more that one insured items, leads to a significant deviation in real losses in relation to anticipated losses. In Greece, CAT Risk is linked to natural disasters (resulting from climate change) and above all to earthquake activity.